Document:

EXHIBIT 4.2

 

HARLEY-DAVIDSON
MOTORCYCLE TRUST 2005-1,

as Issuer,

and

BNY MIDWEST TRUST
COMPANY,

not in its individual
capacity but solely in its capacity

as Indenture
Trustee

INDENTURE

Dated as of
February 1, 2005

$437,000,000          3.28% 
Harley-Davidson Motorcycle Contract Backed Notes, Class A-1

$249,200,000          3.76% 
Harley-Davidson Motorcycle Contract Backed Notes, Class A-2

$43,800,000            3.66%  Harley-Davidson Motorcycle Contract Backed
Notes, Class B

 

 

 

CROSS-REFERENCE TABLE

 

	
  TIA Section 

  	
   

  	
   

  	
  Indenture Section 

  
	
  310(a)(1)

  	
  6.11

  
	
               (a)(2)

  	
  6.11

  
	
               (a)(3)

  	
  6.10

  
	
               (a)(4)

  	
  N.A.

  
	
               (a)(5)

  	
  6.11

  
	
               (b)

  	
  6.08; 6.11; 11.04

  
	
               (c)

  	
  N.A.

  
	
  311(a)

  	
  6.13

  
	
               (b)

  	
  6.13

  
	
               (c)

  	
  N.A.

  
	
  312(a)

  	
  7.01; 7.02

  
	
               (b)

  	
  7.02

  
	
               (c)

  	
  7.02

  
	
  313(a)

  	
  7.04

  
	
               (b)

  	
  7.04

  
	
               (c)

  	
  7.04

  
	
               (d)

  	
  7.04

  
	
  314(a)

  	
  7.03

  
	
               (b)

  	
  3.06

  
	
               (c)(1)

  	
  2.02; 6.02; 11.01

  
	
               (c)(2)

  	
  11.01

  
	
               (c)(3)

  	
  11.01

  
	
               (d)

  	
  11.01

  
	
               (e)

  	
  11.01

  
	
               (f)

  	
  N.A.

  
	
  315(a)

  	
  6.01

  
	
               (b)

  	
  6.05

  
	
               (c)

  	
  6.01

  
	
               (d)

  	
  5.12; 6.01

  
	
               (e)

  	
  5.14

  
	
  316(a)(1)(A)

  	
  5.12

  
	
               (a)(1)(B)

  	
  5.02

  
	
               (a)(2)

  	
  N.A.

  
	
               (b)

  	
  5.08

  
	
               (c)

  	
  N.A.

  
	
  317(a)

  	
  5.03; 5.04

  
	
               (b)

  	
  3.03

  
	
  318(a)

  	
  11.18

  
					

*           N.A. means Not Applicable

*           This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.

 

i

 

TABLE OF CONTENTS

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  ONE

  	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  	
   

  
	
  SECTION 1.01.

  	
  DEFINITIONS.

  	
   

  
	
  SECTION
  1.02.

  	
  INCORPORATION
  BY REFERENCE OF TRUST INDENTURE ACT

  	
   

  
	
  SECTION 1.03.

  	
  RULES OF
  CONSTRUCTION

  	
   

  
	
  ARTICLE TWO

  	
  THE NOTES

  	
   

  
	
  SECTION
  2.01.

  	
  FORM

  	
   

  
	
  SECTION
  2.02.

  	
  EXECUTION,
  AUTHENTICATION AND DELIVERY

  	
   

  
	
  SECTION 2.03.

  	
  TEMPORARY NOTES

  	
   

  
	
  SECTION
  2.04.

  	
  REGISTRATION;
  REGISTRATION OF TRANSFER AND EXCHANGE

  	
   

  
	
  SECTION
  2.05.

  	
  MUTILATED,
  DESTROYED, LOST OR STOLEN NOTES

  	
   

  
	
  SECTION 2.06.

  	
  PERSONS DEEMED
  OWNER

  	
   

  
	
  SECTION
  2.07.

  	
  PAYMENT
  OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.

  	
   

  
	
  SECTION 2.08.

  	
  CANCELLATION

  	
   

  
	
  SECTION 2.09.

  	
  BOOK-ENTRY NOTES

  	
   

  
	
  SECTION 2.10.

  	
  NOTICES TO
  CLEARING AGENCY

  	
   

  
	
  SECTION 2.11.

  	
  DEFINITIVE NOTES

  	
   

  
	
  SECTION 2.12.

  	
  RELEASE OF
  COLLATERAL

  	
   

  
	
  SECTION 2.13.

  	
  TAX TREATMENT

  	
   

  
	
  ARTICLE THREE

  	
  COVENANTS

  	
   

  
	
  SECTION
  3.01.

  	
  PAYMENT
  OF PRINCIPAL AND INTEREST

  	
   

  
	
  SECTION
  3.02.

  	
  MAINTENANCE
  OF OFFICE OR AGENCY

  	
   

  
	
  SECTION
  3.03.

  	
  MONEY
  FOR PAYMENTS TO BE HELD IN TRUST

  	
   

  
	
  SECTION 3.04.

  	
  EXISTENCE

  	
   

  
	
  SECTION 3.05.

  	
  PROTECTION OF
  COLLATERAL

  	
   

  
	
  SECTION 3.06.

  	
  OPINIONS AS TO
  COLLATERAL.

  	
   

  
	
  SECTION
  3.07.

  	
  PERFORMANCE
  OF OBLIGATIONS; SERVICING OF CONTRACTS.

  	
   

  
	
  SECTION
  3.08.

  	
  NEGATIVE
  COVENANTS

  	
   

  
	
  SECTION
  3.09.

  	
  ANNUAL
  STATEMENT AS TO COMPLIANCE

  	
   

  
	
  SECTION
  3.10.

  	
  ISSUER
  MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.

  	
   

  
	
  SECTION 3.11.

  	
  SUCCESSOR OR
  TRANSFEREE.

  	
   

  
	
  SECTION 3.12.

  	
  NO OTHER BUSINESS

  	
   

  
	
  SECTION 3.13.

  	
  NO BORROWING

  	
   

  
	
  SECTION 3.14.

  	
  SERVICER’S
  OBLIGATIONS

  	
   

  
	
  SECTION
  3.15.

  	
  GUARANTEES,
  LOANS ADVANCES AND OTHER LIABILITIES

  	
   

  
	
  SECTION 3.16.

  	
  CAPITAL
  EXPENDITURES

  	
   

  
	
  SECTION 3.17.

  	
  RESTRICTED PAYMENTS

  	
   

  
	
  SECTION
  3.18.

  	
  NOTICE OF
  EVENTS OF DEFAULT

  	
   

  
	
  SECTION
  3.19.

  	
  FURTHER
  INSTRUMENTS AND ACTS

  	
   

  
	
  SECTION 3.20.

  	
  COMPLIANCE WITH
  LAWS

  	
   

  

 

ii

 

	
  SECTION
  3.21.

  	
  AMENDMENTS
  OF SALE AND SERVICING AGREEMENT AND TRUST AGREEMENT

  	
   

  
	
  SECTION 3.22.

  	
  REMOVAL OF
  ADMINISTRATOR

  	
   

  
	
  ARTICLE FOUR

  	
  SATISFACTION
  AND DISCHARGE

  	
   

  
	
  SECTION
  4.01.

  	
  SATISFACTION
  AND DISCHARGE OF INDENTURE

  	
   

  
	
  SECTION 4.02.

  	
  APPLICATION
  OF TRUST MONEY

  	
   

  
	
  SECTION
  4.03.

  	
  REPAYMENT
  OF MONEYS HELD BY PAYING AGENT

  	
   

  
	
  SECTION 4.04.

  	
  RELEASE OF
  COLLATERAL

  	
   

  
	
  ARTICLE FIVE

  	
  REMEDIES

  	
   

  
	
  SECTION 5.01.

  	
  EVENTS OF DEFAULT

  	
   

  
	
  SECTION
  5.02.

  	
  RIGHTS UPON
  EVENT OF DEFAULT.

  	
   

  
	
  SECTION
  5.03.

  	
  COLLECTION
  OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE; AUTHORITY OF
  INDENTURE TRUSTEE.

  	
   

  
	
  SECTION 5.04.

  	
  REMEDIES

  	
   

  
	
  SECTION
  5.05.

  	
  OPTIONAL
  PRESERVATION OF THE CONTRACTS

  	
   

  
	
  SECTION 5.06.

  	
  PRIORITIES.

  	
   

  
	
  SECTION 5.07.

  	
  LIMITATION OF SUITS

  	
   

  
	
  SECTION
  5.08.

  	
  UNCONDITIONAL
  RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST

  	
   

  
	
  SECTION
  5.09.

  	
  RESTORATION
  OF RIGHTS AND REMEDIES

  	
   

  
	
  SECTION
  5.10.

  	
  RIGHTS
  AND REMEDIES CUMULATIVE

  	
   

  
	
  SECTION
  5.11.

  	
  DELAY OR
  OMISSION NOT A WAIVER

  	
   

  
	
  SECTION 5.12.

  	
  CONTROL BY
  NOTEHOLDERS

  	
   

  
	
  SECTION 5.13.

  	
  WAIVER OF PAST
  DEFAULTS

  	
   

  
	
  SECTION 5.14.

  	
  UNDERTAKING FOR COSTS

  	
   

  
	
  SECTION
  5.15.

  	
  WAIVER
  OF STAY OR EXTENSION LAWS

  	
   

  
	
  SECTION 5.16.

  	
  ACTION ON NOTES

  	
   

  
	
  SECTION
  5.17.

  	
  PERFORMANCE
  AND ENFORCEMENT OF CERTAIN OBLIGATIONS.

  	
   

  
	
  ARTICLE SIX

  	
  THE INDENTURE
  TRUSTEE

  	
   

  
	
  SECTION
  6.01.

  	
  DUTIES OF
  INDENTURE TRUSTEE.

  	
   

  
	
  SECTION
  6.02.

  	
  RIGHTS OF
  INDENTURE TRUSTEE.

  	
   

  
	
  SECTION
  6.03.

  	
  INDIVIDUAL
  RIGHTS OF INDENTURE TRUSTEE

  	
   

  
	
  SECTION
  6.04.

  	
  INDENTURE
  TRUSTEE’S DISCLAIMER

  	
   

  
	
  SECTION 6.05.

  	
  NOTICE OF DEFAULTS

  	
   

  
	
  SECTION
  6.06.

  	
  REPORTS
  BY INDENTURE TRUSTEE TO HOLDERS

  	
   

  
	
  SECTION
  6.07.

  	
  COMPENSATION
  AND INDEMNITY

  	
   

  
	
  SECTION
  6.08.

  	
  REPLACEMENT
  OF INDENTURE TRUSTEE

  	
   

  
	
  SECTION
  6.09.

  	
  SUCCESSOR
  INDENTURE TRUSTEE BY MERGER

  	
   

  
	
  SECTION
  6.10.

  	
  APPOINTMENT
  OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE.

  	
   

  
	
  SECTION 6.11.

  	
  ELIGIBILITY.

  	
   

  
	
  SECTION
  6.12.

  	
  PENNSYLVANIA
  MOTOR VEHICLE SALES FINANCE ACT LICENSES

  	
   

  
	
  SECTION
  6.13.

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST ISSUER

  	
   

  
	
  ARTICLE
  SEVEN

  	
  NOTEHOLDERS’
  LISTS AND REPORTS

  	
   

  

 

iii

 

	
  SECTION
  7.01.

  	
  ISSUER
  TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS

  	
   

  
	
  SECTION
  7.02.

  	
  PRESERVATION
  OF INFORMATION: COMMUNICATION TO NOTEHOLDERS.

  	
   

  
	
  SECTION 7.03.

  	
  REPORTS BY ISSUER.

  	
   

  
	
  SECTION
  7.04.

  	
  REPORTS
  BY INDENTURE TRUSTEE

  	
   

  
	
  ARTICLE
  EIGHT

  	
  ACCOUNTS,
  DISBURSEMENTS AND RELEASES

  	
   

  
	
  SECTION 8.01.

  	
  COLLECTION OF MONEY

  	
   

  
	
  SECTION 8.02.

  	
  TRUST ACCOUNTS.

  	
   

  
	
  SECTION
  8.03.

  	
  GENERAL
  PROVISIONS REGARDING ACCOUNTS.

  	
   

  
	
  SECTION 8.04.

  	
  RELEASE OF
  COLLATERAL.

  	
   

  
	
  SECTION 8.05.

  	
  OPINION OF COUNSEL

  	
   

  
	
  ARTICLE NINE

  	
  SUPPLEMENTAL
  INDENTURES

  	
   

  
	
  SECTION
  9.01.

  	
  SUPPLEMENTAL
  INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.

  	
   

  
	
  SECTION
  9.02.

  	
  SUPPLEMENTAL
  INDENTURES WITH CONSENT OF NOTEHOLDERS

  	
   

  
	
  SECTION
  9.03.

  	
  EXECUTION
  OF SUPPLEMENTAL INDENTURES

  	
   

  
	
  SECTION
  9.04.

  	
  EFFECT
  OF SUPPLEMENTAL INDENTURE

  	
   

  
	
  SECTION
  9.05.

  	
  CONFORMITY
  WITH TRUST INDENTURE ACT

  	
   

  
	
  SECTION
  9.06.

  	
  REFERENCE
  IN NOTES TO SUPPLEMENTAL INDENTURES

  	
   

  
	
  ARTICLE TEN

  	
  REDEMPTION OF NOTES

  	
   

  
	
  SECTION 10.01.

  	
  REDEMPTION.

  	
   

  
	
  SECTION
  10.02.

  	
  FORM OF
  REDEMPTION NOTICE.

  	
   

  
	
  SECTION
  10.03.

  	
  NOTES
  PAYABLE ON REDEMPTION DATE

  	
   

  
	
  ARTICLE ELEVEN

  	
  MISCELLANEOUS

  	
   

  
	
  SECTION
  11.01.

  	
  COMPLIANCE
  CERTIFICATES AND OPINIONS, ETC.

  	
   

  
	
  SECTION
  11.02.

  	
  FORM
  OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE

  	
   

  
	
  SECTION 11.03.

  	
  ACTS OF
  NOTEHOLDERS.

  	
   

  
	
  SECTION 11.04.

  	
  NOTICES

  	
   

  
	
  SECTION
  11.05.

  	
  NOTICES
  TO NOTEHOLDERS; WAIVER

  	
   

  
	
  SECTION
  11.06.

  	
  ALTERNATE
  PAYMENT AND NOTICE PROVISIONS

  	
   

  
	
  SECTION
  11.07.

  	
  EFFECT
  OF HEADINGS AND TABLE OF CONTENTS

  	
   

  
	
  SECTION 11.08.

  	
  SUCCESSORS AND
  ASSIGNS

  	
   

  
	
  SECTION 11.09.

  	
  SEPARABILITY

  	
   

  
	
  SECTION 11.10.

  	
  BENEFITS OF
  INDENTURE

  	
   

  
	
  SECTION 11.11.

  	
  LEGAL HOLIDAYS

  	
   

  
	
  SECTION 11.12.

  	
  GOVERNING LAW

  	
   

  
	
  SECTION 11.13.

  	
  COUNTERPARTS

  	
   

  
	
  SECTION 11.14.

  	
  RECORDING OF
  INDENTURE

  	
   

  
	
  SECTION 11.15.

  	
  TRUST OBLIGATION

  	
   

  
	
  SECTION 11.16.

  	
  NO PETITION

  	
   

  
	
  SECTION 11.17.

  	
  INSPECTION

  	
   

  
	
  SECTION
  11.18.

  	
  CONFLICT
  WITH TRUST INDENTURE ACT

  	
   

  
	
  SECTION
  11.19.

  	
  DISCLAIMER
  AND SUBORDINATION

  	
   

  

 

iv

 

	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A - Reserved

  	
   

  
	
  Exhibit B - Form of
  Class A-1 Note

  	
   

  
	
  Exhibit C - Form of
  Class A-2 Note

  	
   

  
	
  Exhibit D - Form of Class B Note

  	
   

  
	
  Exhibit E - Form of Assignment

  	
   

  
	
  Exhibit F - Form of Note Depository
  Agreement

  	
   

  

 

v

 

INDENTURE

Indenture, dated as of February
1, 2005 (this “Indenture”), between Harley-Davidson Motorcycle Trust 2005-1, a
Delaware statutory trust (the “Issuer”) and BNY Midwest Trust Company, in its
capacity as indenture trustee (the “Indenture Trustee”) and not in its
individual capacity.

Each party agrees as
follows for the benefit of the other parties and for the equal and ratable
benefit of the Holders of the Issuer’s 3.28% Harley-Davidson Motorcycle
Contract Backed Notes, Class A-1 (the “Class A-1 Notes”), 3.76% Harley-Davidson
Motorcycle Contract Backed Notes, Class A-2 (the “Class A-2 Notes”) and 3.66%
Harley-Davidson Motorcycle Contract Backed Notes, Class B (the “Class B Notes”)
and, together with the Class A-1 Notes and the Class B Notes, the “Notes”):

GRANTING CLAUSE

The Issuer hereby grants,
transfers, assigns and otherwise conveys to the Indenture Trustee on the
Closing Date, on behalf of and for the benefit of the Holders of the Notes,
without recourse, all of the Issuer’s right, title and interest (exclusive of
the amount, if any, allocable to any rebatable insurance premium financed by
any Contract) in, to and under: (i) the Initial Contracts and Subsequent
Contracts secured by the Motorcycles (which Contracts shall be listed in the
List of Contracts and Subsequent List of Contracts); (ii) certain monies due
under the Initial Contracts and Subsequent Contracts after the Initial Cutoff
Date and Subsequent Cutoff Date, respectively, including, without limitation,
all payments of principal and interest with respect to any Motorcycles to which
a Contract relates received after the Initial Cutoff Date or Subsequent Cutoff
Date and all other proceeds received on or in respect of such Contracts (other
than payments of principal and interest due on or prior to the Initial Cutoff
Date or Subsequent Cutoff Date); (iii) security interests in the Motorcycles;
(iv) amounts on deposit in the Collection Account, the Note Distribution
Account, the Reserve Fund, the Pre-Funding Account and the Interest Reserve
Account, including all Eligible Investments therein and all income from the
investment of funds therein and all proceeds therefrom; (v) proceeds from
claims under certain insurance policies, debt insurance policies or debt
cancellation agreements in respect of individual Motorcycles or obligors under
the Contracts; (vi) its rights under the Sale and Servicing Agreement; (vii)
the protective security interest in certain of the above-described property
granted by the Trust Depositor in favor of the Issuer; (viii) all present and
future claims, demands, causes of and choses in action in respect of any or all
of the foregoing; (ix) all rights to certain 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 (x) all payments on or under and all proceeds of every kind
and nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash of other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at 

 

 

any time constitute all
or part of or are included in the proceeds of any of the foregoing (as each
such defined term is defined in Section 1.01) (collectively, the “Collateral”).

The foregoing Grant is
made in trust to secure the payment of principal of and interest on, and any
other amounts owing in respect of, the Notes, equally and ratably without
prejudice, priority or distinction, except for the subordination of the Class B
Notes provided herein and all other sums owing by the Issuer hereunder or under
any other Transaction Document, and to secure compliance with the provisions of
this Indenture, all as provided in this Indenture.

The Indenture Trustee, as
Indenture Trustee on behalf of the Holders of the Notes, acknowledges such
Grant, accepts the trust under this Indenture in accordance with the provisions
of this Indenture and agrees to perform its duties required in this Indenture
in accordance with its terms and the terms of the other Transaction Documents
to which it is a party.

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.        Definitions.

(a)           Except as otherwise specified herein
or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Indenture.

“Act” shall have the meaning specified in Section 11.03(a).

“Administration
Agreement” means
the Administration Agreement, dated as of the date hereof, among the
Administrator, the Issuer, the Trust Depositor and the Indenture Trustee.

“Administrator” means Harley-Davidson Credit Corp. or
any successor Administrator under the Administration Agreement.

“Affiliate” means, with respect to any specified
Person, any other Person controlling or controlled by or under common control
with such specified Person.  For the
purposes of this definition, “control” when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

“Authorized
Officer” means,
with respect to the Issuer, any officer of the Owner Trustee who is authorized
to act for the Owner Trustee in matters relating to the Issuer and who is
identified on the list of Authorized Officers delivered by the Owner Trustee to
the Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter) and, so long as the Administration
Agreement is in effect, any Vice 

2

 

President
or more senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).

“Book
Entry Notes”
means a beneficial interest in the Notes, ownership and transfers of which
shall be made through book entries by a Clearing Agency as described in Section
2.09.

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

“Certificate
of Trust” means
the Certificate of Trust of the Issuer substantially in the form of Exhibit A to the Trust Agreement.

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

“Class
A-1 Final Distribution Date” has the meaning set forth in the Sale and Servicing
Agreement.

“Class
A-1 Rate” has the
meaning set forth in the Sale and Servicing Agreement.

 “Class A-1 Notes” means the Class A-1 Notes, substantially
in the form of Exhibit B.

“Class
A-2 Final Distribution Date” has the meaning set forth in the Sale and Servicing
Agreement.

“Class
A-2 Rate” has the
meaning set forth in the Sale and Servicing Agreement.

“Class
A-2 Notes” means
the Class A-2 Notes, substantially in the form of Exhibit C.

“Class B
Final Distribution Date” has the meaning set forth in the Sale and Servicing Agreement.

“Class B
Rate” has the
meaning set forth in the Sale and Servicing Agreement.

“Class B
Notes” means the
Class B Notes, substantially in the form of Exhibit D.

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

3

 

“Clearing
Agency Participant”
means a broker, dealer, bank, other financial institution or other Person for
whom from time to time a Clearing Agency effects book-entry transfers and
pledges of securities deposited with the Clearing Agency.

“Closing Date” has the meaning set forth in the Sale and
Servicing Agreement.

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

“Collateral” means the Collateral Granted to the Indenture
Trustee under this Indenture, including all proceeds thereof.

“Commission” means the Securities and Exchange
Commission.

“Corporate
Trust Office”
means the principal office of the Indenture Trustee at which at any particular
time its corporate trusts business shall be administered which office at date
of the execution of this Agreement is located at 2 North LaSalle Street, Suite
1020, Chicago, Illinois 60602, Attention: Corporate Trust Administration; or at
such other address as the Indenture Trustee may designate from time to time by
notice to the Noteholders and the Issuer, or the principal corporate trust
office of any successor Indenture Trustee (the address of which the successor
Indenture Trustee will notify the Noteholders and the Issuer).

“Default” means any occurrence that is, or with
notice or the lapse of time or both would become, an Event of Default.

“Definitive
Notes” shall have
the meaning specified in Section 2.09.

“Distribution
Date” has the
meaning set forth in the Sale and Servicing Agreement.

“DTC” means The Depository Trust Company, and
its successors and assigns.

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

“Event of
Default” shall
have the meaning specified in Section 5.01.

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

“Executive
Officer” means,
with respect to any corporation, the Chief Executive Officer, Chief Operating
Officer, Chief Financial Officer, President, Executive Vice President, any Vice
President, the Secretary or the Treasurer of such corporation; and with respect
to any partnership, any general partner thereof.

 “Grant” means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create and grant a lien
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to this Indenture. 
A Grant of the Collateral or of any other agreement or instrument shall
include all rights, powers and options (but none of the obligations) of the
granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal 

4

 

and
interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.

“Harley-Davidson
Credit” means
Harley-Davidson Credit Corp., and its successors and assigns.

                “Holder”
or “Noteholder” or “Note Owner”
means, with respect to a Book-Entry Note, the Person who is the owner of such
Book-Entry Note, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency) and with respect to a
Definitive Note the Person in whose name a Note is registered on the Note
Register.

“Indebtedness” means, with respect to any Person at any
time, (i) indebtedness or liability of such Person for borrowed money whether
or not evidenced by bonds, debentures, notes or other instruments, or for the
deferred purchase price of property or services (including trade obligations);
(ii) obligations of such Person as lessee under leases which should have been
or should be, in accordance with generally accepted accounting principles,
recorded as capital leases; (iii) current liabilities of such Person in respect
of unfunded vested benefits under plans covered by Title IV of ERISA; (iv)
obligations issued for or liabilities incurred on the account of such Person;
(v) obligations or liabilities of such Person arising under acceptance facilities;
(vi) obligations of such Person under any guaranties, endorsements (other than
for collection or deposit in the ordinary course of business) and other
contingent obligations to purchase, to provide funds for payment, to supply
funds to invest in any Person or otherwise to assure a creditor against loss;
(vii) obligations of such Person secured by any lien on property or assets of
such Person, whether or not the obligations have been assumed by such Person;
or (viii) obligations of such Person under any interest rate or currency
exchange agreement.

“Indenture” means this Indenture, as amended or
supplemented from time to time.

“Indenture
Securities” means
the Notes.

“Indenture
Security Holder”
means a Noteholder.

“Indenture
Trustee” means
BNY Midwest Trust Company, as Indenture Trustee under this Indenture, or any
successor Indenture Trustee under this Indenture.

“Independent” means, when used with respect to any
specified Person, that the Person (i) is in fact independent of the Issuer, any
other obligor upon the Notes, the Trust Depositor, the Seller and any of their
respective Affiliates, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller or any of their respective Affiliates, and (iii) is not connected with
the Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an 

 

5

 

officer,
employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.

“Independent
Certificate”
means a certificate or opinion to be delivered to the Indenture Trustee under
the circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01, made by an Independent appraiser or other expert
appointed by an Issuer Order and approved by the Indenture Trustee in the
exercise of reasonable care, and such opinion or certificate shall state that
the signer has read the definition of “Independent”
in this Indenture and that the signer is Independent within the meaning
thereof.

“Interest
Period” means,
with respect to any Distribution Date and any Class of Notes, the period from
and including the fifteenth day of the month of the Distribution Date
immediately preceding such Distribution Date (or, in the case of the first
Distribution Date, from and including the Closing Date) to but excluding the
fifteenth day of the month of such Distribution Date.

“Interest
Rate” means the
Class A-1 Rate, the Class A-2 Rate and the Class B Rate, as applicable.

“Issuer” means Harley-Davidson Motorcycle Trust
2005-1 until a successor replaces it and, thereafter, means the successor and,
for purposes of any provision contained herein and required by the TIA, each
other obligor on the Notes.

“Issuer
Order” and “Issuer Request” means a written order or request signed in
the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.

“Note” means, as the context requires, a Class
A-1 Note, a Class A-2 Note or a Class B Note.

“Note
Depository Agreement” means the agreement dated as of the Closing Date, among the Issuer,
the Administrator, the Indenture Trustee and DTC, as the initial Clearing
Agency, relating to the Notes, substantially in the form of Exhibit F hereto.

“Note
Register” and “Note Registrar” have the respective meanings specified in
Section 2.04.

“Officer’s
Certificate” means
a certificate signed by any Authorized Officer of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.01, and delivered to, the Indenture Trustee.  Unless otherwise specified, any reference in
this Indenture to an Officer’s Certificate shall be to an Officer’s Certificate
of any Authorized Officer of the Issuer.

“Opinion
of Counsel” means
one or more written opinions of counsel who may, except as otherwise expressly
provided in this Indenture, be employees of or counsel to the Issuer and who
shall be satisfactory to the Indenture Trustee and which shall comply with 

 

6

 

any
applicable requirements of Section 11.01, and shall be in form and substance
satisfactory to the Indenture Trustee.

“Outstanding” means, as of the date of determination,
all Notes theretofore authenticated and delivered under this Indenture except:

(i)            Notes
theretofore cancelled by the Note Registrar or delivered to the Note Registrar
for cancellation;

(ii)           Notes
or portions thereof the payment for which money in the necessary amount has
been theretofore deposited with the Indenture Trustee or any Paying Agent in
trust for the Holders of such Notes (provided, however,
that if such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision for such notice has been made,
satisfactory to the Indenture Trustee, has been made); and

(iii)          Notes
in exchange for or in lieu of other Notes which have been authenticated and
delivered pursuant to this Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Notes are held by a protected purchaser,
within the meaning of § 8-303 of the UCC;

 

provided, however, that in determining whether the Holders
of the requisite Outstanding Amount have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
other Transaction Document, Notes owned by the Issuer, any other obligor upon
the Notes, the Trust Depositor, Harley-Davidson Credit or any of their
respective Affiliates shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes that the Indenture Trustee knows to be so owned
shall be so disregarded.  Notes so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Trust Depositor, Harley-Davidson
Credit or any of their respective Affiliates.

“Outstanding
Amount” means the
aggregate principal amount of all Notes of one Class or of all Classes, as the
case may be, Outstanding at the date of determination.

“Owner
Trustee” means
Wilmington Trust Company, not in its individual capacity but solely as Owner
Trustee under the Trust Agreement, or any successor trustee under the Trust
Agreement.

“Paying
Agent” means the
Indenture Trustee or any other Person that meets the eligibility standards for
the Indenture Trustee specified in Section 6.11 and is authorized by the Issuer
to make the distributions from the Note Distribution Account, including payment
of principal of or interest on the Notes on behalf of the Issuer.

 

7

 

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

“Plan” means an employee benefit plan, as
defined in Section 3(3) of ERISA, that is subject to Title I of ERISA or a
plan, as defined in Section 4975(e)(1) of the Code.

“Predecessor
Note” means, with
respect to any particular Note, every previous Note evidencing all or a portion
of the same debt as that evidenced by such particular Note; and for the purpose
of this definition, any Note authenticated and delivered under Section 2.05 in
lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Note.

“Proceeding” means any suit in equity, action at law
or other judicial or administrative proceeding.

“Rating
Agency” means
each of Moody’s and Standard & Poor’s.

“Rating
Agency Condition” means,
with respect to any action, that each Rating Agency shall have been given ten
days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each Rating Agency shall have notified the Trust
Depositor, the Servicer and the Issuer in writing that such action will not
result in a qualification, reduction or withdrawal of its then-current rating
of any Class of Notes.

“Rating
Event” means the
qualification, reduction or withdrawal by either Rating Agency of its
then-current rating of any Class of Notes.

“Record
Date” means, with
respect to a Redemption Date, the close of business on the last Business Day of
the immediately preceding month and, with respect to a Distribution Date, the
close of business on the day immediately preceding such date.

“Redemption
Date” means
(a) in the case of a redemption of the Notes pursuant to Section 10.01(a)
or a payment to Noteholders pursuant to Section 10.01(b), the Distribution Date
specified by the Servicer or the Issuer pursuant to Section 10.01(a) or
10.01(b), as the case may be and (b) in the case of a redemption of Notes
pursuant to Section 10.01(c), the Distribution Date specified in
Section 7.07 of the Sale and Servicing Agreement on which the Indenture
Trustee shall withdraw any amount remaining in the Pre-Funding Account and
deposit the applicable amount in the Note Distribution Account.

“Redemption
Date Amount”
means (i) in the case of a redemption of the Notes pursuant to Section
10.01(a), an amount equal to the unpaid principal amount of the Notes redeemed
plus accrued and unpaid interest thereon at the weighted average of the
Interest Rate for each Class of Notes being so redeemed to but excluding the
Redemption Date, or (ii) in the case of a payment made to Noteholders pursuant
to Section 10.01(b), the amount on deposit in the Note Distribution Account,
but not in excess of the amount specified in clause (i) above.

 

8

 

“Registered
Holder” means the
Person in whose name a Note is registered on the Note Register on the
applicable Record Date.

“Responsible
Officer” means,
with respect to the Indenture Trustee, any officer within the Corporate Trust
Office (or any successor group of the Indenture Trustee), including any Vice
President, assistant secretary or other officer or assistant officer of the
Indenture Trustee customarily performing functions similar to those performed
by the people who at such time shall be officers, respectively, or to whom any
corporate trust matter is referred at the Corporate Trust Office of the
Indenture Trustee because of his knowledge of and familiarity with the
particular subject.

“Sale and
Servicing Agreement”
means the Sale and Servicing Agreement, dated as of the date hereof, among the
Issuer, the Trust Depositor, the Indenture Trustee and the Servicer.

“Seller” 
means Harley-Davidson Credit, in its capacity as Seller under the
Transfer and Sale Agreement, and any successors and assigns.

“Servicer”
means
Harley-Davidson Credit, in its capacity as Servicer under the Sale and
Servicing Agreement, and any Successor Servicer thereunder.

“Similar
Law” means any
foreign, federal, state or local law with provisions substantially similar to
Title I of ERISA or Section 4975 of the Code.

“State” means any one of the 50 states of the
United States or any of its territories, or the District of Columbia.

“Termination
Date” means the
date on which the Indenture Trustee shall have received payment and performance
of all amounts and obligations which the Issuer may owe to or on behalf of the
Indenture Trustee for the benefit of the Noteholders under this Indenture or
the Notes.

“Trust
Agreement” means
the Trust Agreement, dated as of January 25, 2005, between the Trust Depositor
and the Owner Trustee.

“Trust
Depositor” shall
mean Harley-Davidson Customer Funding Corp., in its capacity as trust depositor
under the Sale and Servicing Agreement.

“Trust
Indenture Act” or
“TIA” means the Trust Indenture Act of
1939, as amended.

“UCC” means the Uniform Commercial Code as in
effect on the date hereof and from time to time in the State of Illinois, provided
that if by reason of mandatory provisions of law, the perfection or the effect
of perfection or non-perfection or priority of the security interests in any
collateral or the availability of any remedy hereunder is governed by the
Uniform Commercial Code as in effect on or after the date hereof in any other
jurisdiction, “UCC” means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection or priority or availability of such remedy.

 

9

 

 “United States” means the United States of America.

(b)           Except as otherwise specified herein
or as the context may otherwise require, capitalized terms used herein that are
not otherwise defined shall have the meanings ascribed thereto in the Sale and
Servicing Agreement.

Section
1.02.        Incorporation by Reference of
Trust Indenture Act.  Whenever this Indenture refers to a
provision of the TIA, the provision is incorporated by reference in and made a
part of this Indenture.  The following
TIA terms used in this Indenture have the following meanings:

“Commission” means the Securities and Exchange
Commission.

“indenture
securities” means
the Notes.

“indenture
security holder”
means a Noteholder.

“indenture
to be qualified”
means this Indenture.

“indenture
trustee” or “institutional trustee” means the Indenture Trustee.

“obligor” on the indenture securities means the
Issuer and any other obligor on the indenture securities.

All other TIA
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rule have the meaning
assigned to them by such definitions.

Section
1.03.        Rules of Construction. 
Unless the context otherwise requires:

(i)            a term has the meaning assigned to
it;

(ii)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;

(iii)          “or” is not
exclusive;

(iv)          “including”
means including without limitation;

(v)           words in the singular include the
plural and words in the plural include the singular;

(vi)          any agreement, instrument or statute
defined or referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns; and

 

10

 

(vii)         the words “hereof,”
“herein” and “hereunder”
and words of similar import when used in this Indenture shall refer to this
Indenture as a whole and not to any particular provision of this Indenture;
Section and subsection references contained in this Indenture are references to
Sections and subsections in or to this Indenture unless otherwise specified.

ARTICLE TWO

THE NOTES

Section 2.01.        Form. 
The Class A-1 Notes, the Class A-2 Notes and the Class B Notes, in each
case together with the Indenture Trustee’s certificate of authentication, shall
be in substantially the forms set forth as Exhibits to this Indenture with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes.  Any portion of the text of any Note may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Note.

Each Note shall be
dated the date of its authentication. 
The terms of the Notes set forth in Exhibits hereto are part of the
terms of this Indenture.

Section
2.02.        Execution, Authentication and
Delivery.  The Notes shall be executed on behalf of the
Issuer by any of its Authorized Officers. 
The signature of any such Authorized Officer on the Notes may be manual
or facsimile.  Notes bearing the manual
or facsimile signature of individuals who were at any time Authorized Officers
of the Issuer shall bind the Issuer, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Notes or did not hold such offices at the date of such Notes.

The Indenture
Trustee shall, upon receipt of an Issuer Order, authenticate and deliver for
original issue (i) Class A-1 Notes in an aggregate principal amount of
$437,000,000, (ii) Class A-2 Notes in an aggregate principal amount of
$249,200,000 and (iii) Class B Notes in an aggregate principal amount of $43,800,000.  The aggregate principal amount of such
Classes of Notes Outstanding at any time may not exceed such respective
amounts, except as otherwise provided in Section 2.05.

Each Note shall be
dated the date of its authentication. 
The Notes shall be issuable as registered Notes in the minimum
denomination of $1,000 and in integral multiples of $1,000 in excess thereof.

No Note shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose, unless there appears on such Note a certificate of authentication
substantially in the form provided for herein by the Indenture Trustee by the
manual signature of one of its authorized signatories, and such certificate
upon any Note shall be 

 

11

 

conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.

Section 2.03.        Temporary Notes. 
Pending the preparation of Book-Entry Notes or Definitive Notes, the
Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee
shall authenticate and deliver, temporary Notes that are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the definitive
Notes in lieu of which they are issued and with such variations not
inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.

If temporary Notes
are issued, the Issuer will cause Book-Entry Notes or Definitive Notes to be
prepared without unreasonable delay. 
After the preparation of Book-Entry Notes or Definitive Notes, the
temporary Notes shall be exchangeable for Book-Entry Notes or Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.02, without charge to the Holder.  Upon surrender for cancellation of any one or
more temporary Notes, the Issuer shall execute and the Indenture Trustee shall
authenticate and deliver in exchange therefor a like tenor and principal amount
of definitive Notes of authorized denominations.  Until so exchanged, the temporary Notes shall
in all respects be entitled to the same benefits under this Indenture as
Book-Entry Notes or Definitive Notes.

Section
2.04.        Registration; Registration of
Transfer and Exchange.  The Issuer shall cause to be kept a register
(the “Note Register”) in which, subject to such reasonable regulations as it
may prescribe, the Note Registrar shall provide for the registration of Notes
and the registration of transfers of Notes. 
The Indenture Trustee shall be “Note Registrar” for the purpose of
registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar,
the Issuer shall promptly appoint a successor or, if it elects not to make such
an appointment, assume the duties of Note Registrar.

If a Person other
than the Indenture Trustee is appointed by the Issuer as Note Registrar, the
Issuer will give the Indenture Trustee prompt written notice of the appointment
of such Note Registrar and of the location, and any change in the location, of
the Note Register, and the Indenture Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof, and the
Indenture Trustee shall have the right to rely upon a certificate executed on
behalf of the Note Registrar by an Executive Officer thereof as to the names
and addresses of the Holders of the Notes and the principal amounts and the
amounts and number of such Notes.

Upon surrender for
registration of transfer of any Note at the office or agency of the Issuer to
be maintained as provided in Section 3.02, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, in the name of the designated transferee or transferees, one
or more new Notes of the same Class in any authorized denominations, of a like
aggregate principal amount.

At the option of
the Holder, Notes may be exchanged for other Notes of the same Class in any
authorized denominations, of a like aggregate principal amount, upon surrender 

 

12

 

of the
Notes to be exchanged at such office or agency. 
Whenever any Notes are so surrendered for exchange, the Issuer shall
execute, and the Indenture Trustee shall authenticate and the Noteholder shall
obtain from the Indenture Trustee, the Notes which the Noteholder making the
exchange is entitled to receive.

All Notes issued
upon any registration of transfer or exchange of Notes shall be the valid
obligations of the Issuer, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such registration
of transfer or exchange.

Every Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed by, or be accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder thereof or
such Holder’s attorney duly authorized in writing, with such signature
guaranteed by a commercial bank or trust company located, or having a
correspondent located in the city in which the Corporate Trust Office is
located, or by a member firm of a national securities exchange, and such other
documents as the Indenture Trustee may require.

No service charge
shall be made to a Holder for any registration of transfer or exchange of
Notes, but the Issuer or the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.03 not involving any transfer.

Each Person that
acquires a Note shall be required to represent, or in the case of a Note in
book-entry form, will be deemed to represent by its acceptance of the Note,
that (i) it is not, and is not acquiring the Note on behalf of or with “plan
assets” (as determined under Department of Labor Regulation Section 2510.3-101
or otherwise) of a Plan, or any employee benefit plan subject to Similar Law,
or (ii) its acquisition and holding of the Note do not give rise to a nonexempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code,
or any Similar Law.  Any transfer with
respect to which the representation in clause (i) or (ii) above is not true
shall be void ab initio.

The Notes may not
be purchased with the assets of a Plan if the Issuer, the Indenture Trustee,
the Owner Trustee, the Servicer or the Underwriters or any of their affiliates
has investment or administrative discretion with respect to those Plan assets;
has authority or responsibility to give, or regularly gives, investment advice
with respect to those Plan assets for a fee and pursuant to an agreement or
understanding that the advice will serve as a primary basis for investment
decisions with respect to those Plan assets and will be based on the particular
investment needs for the Plan; or is an employer maintaining or contributing to
the Plan.

The preceding
provisions of this Section notwithstanding, the Issuer shall not be required to
make and the Note Registrar need not register transfers or exchanges of Notes
selected for redemption or of any Note for a period of 15 days preceding the
due date for any payment with respect to the Note.

 

13

 

(i)            the Note Registrar and the Indenture
Trustee will be entitled to deal with the Clearing Agency for all purposes of
this Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder of
the Notes, and shall have no obligation to the Noteholders;

(ii)           the rights of Noteholders will be
exercised only through the Clearing Agency and will be limited to those
established by law and agreements between such Noteholders and the Clearing
Agency and/or the Clearing Agency Participants pursuant to the Depository
Agreement;

(iii)           whenever this Indenture requires or
permits actions to be taken based upon instructions or directions of Holders of
Notes evidencing a specified percentage of the Outstanding Amount of the Notes,
the Clearing Agency will be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Noteholders and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has delivered
such instructions to the Indenture Trustee; and

(iv)          without the consent of the Issuer and
the Indenture Trustee, no such Note may be transferred by the Depository except
to a successor Depository that agrees to hold such Note for the account of the
Owners or except upon the election of the Owner thereof or a subsequent transferee
to hold such Note in physical form.

Neither the Indenture
Trustee nor the Registrar shall have any responsibility to monitor or restrict
the transfer of beneficial ownership in any Note an interest in which is
transferable through the facilities of the Depository.

Section
2.05.        Mutilated, Destroyed, Lost or
Stolen Notes.  If (i) any mutilated Note is surrendered to
the Indenture Trustee, or the Indenture Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Note, and (ii) there is
delivered to the Indenture Trustee such security or indemnity as may be
required by them to hold the Issuer and the Indenture Trustee harmless, then,
in the absence of notice to the Issuer, the Note Registrar or the Indenture
Trustee that such Note has been acquired by a protected purchaser, within the
meaning of § 8-303 of the UCC, the Issuer shall execute and upon its
request the Indenture Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement
Note of the same Class and denomination; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or
within seven days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof.  If,
after the delivery of such replacement Note or payment of a destroyed, lost or
stolen Note pursuant to the proviso to the preceding sentence, a protected
purchaser, within the meaning of § 8-303 of the UCC, of the original Note
in lieu of which such replacement Note was issued presents for payment such original
Note, the Issuer, and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, 

 

14

 

except a protected purchaser, within
the meaning of § 8-303 of the UCC, and shall be entitled to recover upon
the security or indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.

Upon the issuance
of any replacement Note under this Section, the Issuer or the Indenture Trustee
may require the payment by the Holder of such Note of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto
and any other reasonable expenses (including the fees and expenses of the
Indenture Trustee or the Note Registrar) connected therewith.

Every replacement
Note issued pursuant to this Section in replacement of any mutilated,
destroyed, lost of stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the mutilated, destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes duly issued hereunder.

The provisions of
this Section are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes.

Section
2.06.        Persons Deemed Owner.  Prior to due presentment for registration of
transfer of any Note, the Issuer, the Indenture Trustee, and any of their
respective agents may treat the Person in whose name any Note is registered (as
of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and none of
the Issuer, the Indenture Trustee nor any of their respective agents shall be
affected by notice to the contrary.

Section
2.07.        Payment of Principal and
Interest; Defaulted Interest.

(a)           Each Class of Notes shall accrue
interest at the related Interest Rate, and such interest shall be payable on
each Distribution Date as specified therein, subject to Section 3.01.  Any installment of interest or principal, if
any, payable on any Note which is punctually paid or duly provided for by the
Issuer on the applicable Distribution Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered on the Record
Date, by wire transfer in immediately available funds to the account designated
by such nominee and except for the final installment of principal payable with
respect to such Note on a Distribution Date or on the related Final
Distribution Date, as the case may be (and except for the Redemption Price for
any Note called for redemption pursuant to Section 10.01(a)), which shall be
payable as provided below.  The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.03.

(b)           The principal of each Note shall be
payable on each Distribution Date to the extent provided in the form of the
related Note set forth as an Exhibit hereto. 
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due 

 

15

 

and payable, if not
previously paid, on the date on which the maturity of the Notes has been
accelerated in the manner provided in Section 5.02.  All principal payments on each Class of Notes
shall be made pro rata to the Noteholders of such Class entitled thereto.  The Indenture Trustee shall notify the Person
in whose name a Note is registered at the close of business on the Record Date
preceding the Distribution Date on which the Issuer expects that the final
installment of principal of and interest on such Note will be paid.  Such notice shall be mailed within five
Business Days of receipt of notice of termination of the Trust pursuant to
Section 9.01(c) of the Trust Agreement and shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered
for payment of such installment.  Notices
in connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.02.

(c)           If the Issuer defaults in a payment
of interest on the Notes, the Issuer shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) at the applicable
Interest Rate in any lawful manner.  The
Issuer may pay such defaulted interest to the Persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the related payment date.  The
Issuer shall fix or cause to be fixed any such special record date and payment
date and, at least 15 days before any such special record date, the Issuer
shall mail to the Indenture Trustee and each Noteholder a notice that states
the special record date, the payment date and the amount of defaulted interest
to be paid.

Section 2.08.        Cancellation. 
All Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Indenture
Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled
by the Indenture Trustee.  The Issuer may
at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Indenture Trustee.  No
Notes shall be authenticated in lieu of or in exchange for any Notes cancelled
as provided in this Section, except as expressly permitted by this Indenture.  All cancelled Notes may be held or disposed
of by the Indenture Trustee in accordance with its standard retention or
disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it; provided that such
Issuer Order is timely and the Notes have not been previously disposed of by
the Indenture Trustee.

Section 2.09.        Book-Entry Notes. 
The Notes, upon original issuance, will be issued in the form of a
typewritten Note or Notes representing the Book-Entry Notes, to be delivered to
DTC, the initial Depository, by, or on behalf of, the Issuer.  Such Notes shall initially be registered on
the Note Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Noteholder will receive a Definitive Note representing
such Noteholder’s interest in such Note, except as provided in Section
2.11.  Unless and until definitive, fully
registered Notes (the “Definitive Notes”) have been issued to Noteholders
pursuant to Section 2.11:

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

 

16

 

(ii)           the Note Registrar and the Indenture
Trustee shall be entitled to deal with the Clearing Agency for all purposes of
this Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder of
the Notes, and shall have no obligation to the Noteholders;

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

(iv)          the rights of Noteholders shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Noteholders and the Clearing
Agency and/or the Clearing Agency Participants. 
Pursuant to the Note Depository Agreement, unless and until Definitive
Notes are issued pursuant to Section 2.11, the Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such Clearing
Agency Participants; and

(v)           whenever this Indenture requires or
permits actions to be taken based upon instructions or directions of
Noteholders evidencing a specified percentage of the Outstanding Amount, the
Clearing Agency shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Noteholders and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has delivered
such instructions to the Indenture Trustee.

Section
2.10.        Notices to Clearing Agency. 
Whenever a notice or other communication to the Noteholders is required
under this Indenture, unless and until Definitive Notes shall have been issued
to Noteholders pursuant to Section 2.11, the Indenture Trustee shall give all
such notices and communications specified herein to be given to Noteholders of
the Notes to the Clearing Agency, and shall have no obligation to the
Noteholders.

Section 2.11.        Definitive Notes. 
If (i)(A) the Administrator advises the Indenture Trustee in writing
that the Clearing Agency is no longer willing or able to properly discharge its
responsibilities as described in the Note Depository Agreement, and (B)
Indenture Trustee or the Administrator is unable to locate a qualified
successor, (ii) the Administrator or the Owner Trustee, as applicable, notifies
the Clearing Agency of its intent to terminate the book-entry system through
the Clearing Agency and requests a withdrawal of the Book-Entry Notes held by
the Clearing Agency, and after receipt by the Clearing Agency Participants of
an important notice issued by the Clearing Agency notifying the Clearing Agency
Participants of such withdrawal request, the Clearing Agency Participants
holding beneficial interests in the Book-Entry Notes agree to initiate such
termination, or (iii) after the occurrence of an Event of Default, the Modified
Required Holders advise the Indenture Trustee and the Clearing Agency through
the Clearing Agency Participants in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of the related Noteholders, then the Indenture Trustee shall notify
all Noteholders of the related Class or Classes of Notes, through the Clearing
Agency, of the occurrence of any such event and of the availability of
Definitive Notes of the related Class 

 

17

 

of Notes to Noteholders requesting
the same.  Upon surrender to the
Indenture Trustee of the Note or Notes representing the Book-Entry Notes by the
Clearing Agency, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Clearing Agency.  None of the Issuer, the Note Registrar or the
Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions.  Upon the issuance of
Definitive Notes of a Class, the Indenture Trustee shall recognize the
Noteholders of the Definitive Notes as Noteholders hereunder.

The Indenture
Trustee shall not be liable if the Indenture Trustee or the Administrator is
unable to locate a qualified successor Clearing Agency.  The Definitive Notes shall be typewritten,
printed, lithographed or engraved or produced by any combination of these
methods (with or without steel engraved borders), all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes.

Section
2.12.        Release of Collateral. 
Subject to Sections 4.04, 8.04 and 11.01 and the terms of the
Transaction Documents, the Indenture Trustee shall release property from the
lien of this Indenture only upon receipt of an Issuer Request accompanied by an
Officer’s Certificate.

Section 2.13.        Tax Treatment. 
The Issuer and the purchasers of the Notes intend, and will take all
actions consistent with the intention, that the Notes be treated as
indebtedness which is solely secured by the Collateral for all federal, state,
local, and foreign income and franchise tax purposes and that, pursuant to
Treasury Regulations Section 301.7701-3(b)(1)(ii) as in effect for periods
after January 1, 1997, the Trust be disregarded as a separate entity from
the Trust Depositor for federal income tax purposes.  The Issuer, by entering into this Indenture,
and each Noteholder, by its acceptance of its Note agree to treat the Notes for
federal, state and local income, single business and franchise tax purposes as
indebtedness of the Issuer.

ARTICLE THREE

COVENANTS

Section
3.01.        Payment of Principal and
Interest.  The Issuer will duly and punctually pay the
principal of and interest, if any, on the Notes in accordance with the terms of
the Notes and this Indenture.  Without
limiting the foregoing, subject to Section 8.02(c), the Issuer and the
Indenture Trustee will cause to be deposited into the Note Distribution Account
amounts allocated pursuant to Section 7.05 of the Sale and Servicing Agreement,
and cause to be distributed all such amounts on a Distribution Date as
deposited therein (i) for the benefit of the Class A-1 Notes, to the
Class A-1 Noteholders, (ii) for the benefit of the Class A-2 Notes,
to the Class A-2 Noteholders and (iii) for the benefit of the Class B
Notes, to the Class B Noteholders, in each case as further specified
herein.  Amounts properly withheld under
the Code by any Person from a payment to any Noteholder of interest and/or
principal shall be considered as having been paid by the Issuer to such
Noteholder for all purposes of this Indenture.

 

18

 

Section
3.02.        Maintenance of Office or Agency. 
The Issuer will maintain in Wilmington, Delaware, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and
this Indenture may be served.  The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes.  The Issuer will give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency.  If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Indenture
Trustee with the address thereof, such surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints
the Indenture Trustee as its agent to receive all such surrenders, notices and
demands.

Section
3.03.        Money for Payments to be Held
in Trust.  As provided in Section 8.02, all payments of
amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Collection Account and the Note Distribution Account
pursuant to Section 8.02(b) shall be made on behalf of the Issuer by the
Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from
the Collection Account and the Note Distribution Account for payments of Notes
shall be paid over to the Issuer except as provided in this Section.

On or before the
Business Day immediately preceding each Distribution Date and Redemption Date,
the Issuer shall deposit or cause to be deposited in the Note Distribution
Account an aggregate sum sufficient to pay the amounts then becoming due, such
sum to be held in trust for the benefit of the Persons entitled thereto and
(unless the Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee of its action or failure so to act.

The Issuer will
cause each Paying Agent other than the Indenture Trustee to execute and deliver
to the Indenture Trustee an instrument in which such Paying Agent shall agree
with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent,
it hereby so agrees), subject to the provisions of this Section, that such
Paying Agent will:

(i)            hold all sums held by it for the
payment of amounts due with respect to the Notes in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such Persons as
herein provided;

(ii)           give the Indenture Trustee notice of
any default by the Issuer (or any other obligor upon the Notes) in the making
of any payment required to be made with respect to the Notes;

(iii)          at any time during the continuance of
any such default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

(iv)          immediately resign as a Paying Agent
and forthwith pay to the Indenture Trustee all sums held by it in trust for the
payment of Notes if at any time it ceases 

 

19

 

to meet the standards
required to be met by a Paying Agent at the time of its appointment; and

(v)           comply with all requirements of the
Code with respect to the withholding from any payments made by it on any Notes
of any applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.

The Issuer may at
any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, by Issuer Order direct any Paying Agent to
pay to the Indenture Trustee all sums held in trust by such Paying Agent, such
sums to be held by the Indenture Trustee upon the same trusts as those upon
which the sums were held by such Paying Agent; and upon such payment by any
Paying Agent to the Indenture Trustee, such Paying Agent shall be released from
all further liability with respect to such money.

Subject to
applicable laws with respect to escheat of funds, any money held by the Indenture
Trustee or any Paying Agent in trust for the payment of any amount due with
respect to any Note and remaining unclaimed for two years after such amount has
become due and payable shall be discharged from such trust and upon receipt of
an Issuer Request shall be deposited by the Indenture Trustee in the Collection
Account; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof, and all liability of the
Indenture Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that if such
money or any portion thereof had been previously deposited by the Issuer with
the Indenture Trustee for the payment of principal or interest on the Notes;
and provided, further, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to or for the account of the
Issuer.  The Indenture Trustee may also
adopt and employ, at the expense of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but not have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).

Section 3.04.        Existence.  The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and preserve
its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Collateral.

 

20

 

Section
3.05.        Protection of Collateral. 
The Issuer intends the security interest Granted pursuant to this
Indenture in favor of the Indenture Trustee on behalf of the Noteholders to be
prior to all other liens in respect of the Collateral, and the Issuer shall
take all actions necessary to obtain and maintain, for the benefit of the
Indenture Trustee on behalf of the Noteholders, a first lien on and a first
priority, perfected security interest in the Collateral.  The Issuer will from time to time execute and
deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, all as prepared by the Servicer and delivered to the Issuer, and
will take such other action necessary or advisable to:

(i)            Grant more effectively all or any
portion of the Collateral;

(ii)           maintain or preserve the lien and
security interest (and the priority thereof) created by this Indenture or carry
out more effectively the purposes hereof;

(iii)          perfect, publish notice of or protect
the validity of any Grant made or to be made by this Indenture;

(iv)          enforce any of the Collateral;

(v)           preserve and defend title to the
Collateral and the rights of the Indenture Trustee and the Noteholders in such
Collateral against the claims of all persons and parties; and

(vi)          pay all taxes or assessments levied or
assessed upon the Collateral when due.

The Issuer shall
file the initial financing statements on Form UCC1.  All financing statements filed or to be filed
against the Issuer in favor of the Indenture Trustee in connection herewith
describing the 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 Indenture, will violate the rights of the Secured Party.”  The Issuer hereby authorizes the Indenture
Trustee to file all continuation statements or other instruments required to be
executed pursuant to this Section and hereby designates the Indenture Trustee
its agent and attorney-in-fact for such purpose.

Section
3.06.        Opinions as to Collateral.  On the Closing Date, the Issuer shall furnish to the Indenture Trustee
an Opinion of Counsel to the effect that, in the opinion of such counsel,
either (i) all financing statements and continuation statements have been
executed and filed that are necessary to create and continue the Indenture
Trustee’s first priority perfected security interest in the Collateral for the
benefit of the Noteholders, and reciting the details of such filings or (ii) no
such action shall be necessary to perfect such security interest.

Section
3.07.        Performance of Obligations;
Servicing of Contracts.

(a)           The Issuer will not take any action
and will use its best efforts not to permit any action to be taken by others
that would release any Person from any such Person’s 

 

21

 

material covenants or
obligations under any instrument or agreement included in the Collateral or
that would result in the amendment, hypothecation, subordination, termination
or discharge of, or impair the validity or effectiveness of, any such
instrument or agreement, except as expressly provided in the Transaction
Documents or such other instrument or agreement.

(b)           The Issuer may contract with other
Persons to assist it in performing its duties and obligations under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee in an Officer’s Certificate shall be deemed to be action
taken by the Issuer.  The Indenture
Trustee shall not be responsible for the action or inaction of the Servicer or
the Administrator.  Initially, the Issuer
has contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.

(c)           The Issuer will punctually perform
and observe all of its obligations and agreements contained in this Indenture,
the other Transaction Documents and in the instruments and agreements included
in the Collateral, including but not limited to filing or causing to be filed
all UCC financing statements and continuation statements required to be filed
by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and
therein.  Except as otherwise expressly
provided therein, the Issuer shall not waive, amend, modify, supplement or
terminate any Transaction Document or any provision thereof without the consent
of the Indenture Trustee or the Required Holders.

(d)           If the Issuer shall have knowledge of
the occurrence of an Event of Termination, the Issuer  shall promptly notify the Indenture Trustee
and each Rating Agency thereof.  Upon any
termination of the Servicer’s rights and powers pursuant to the Sale and
Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee.  As soon as a Successor Servicer
is appointed, the Issuer shall notify the Indenture Trustee and the Rating
Agencies of such appointment, specifying in such notice the name and address of
such Successor Servicer.

(e)           The Issuer agrees that it will not
waive timely performance or observance by the Servicer or the Seller of their
respective duties under the Transaction Documents if the effect thereof would
adversely affect the Holders of the Notes.

Section
3.08.        Negative Covenants. 
Until the Termination Date, the Issuer shall not:

(i)            except as expressly permitted by the
Transaction Documents, sell, transfer, exchange or otherwise dispose of any of
the properties or assets of the Issuer, including those included in the
Collateral, unless directed to do so by the Indenture Trustee;

(ii)           claim any credit on, or make any
deduction from the principal or interest payable in respect of, the Notes
(other than amounts properly withheld from such payments under the Code or
applicable state law) or assert any claim against any present or former
Noteholder by reason of the payment of the taxes levied or assessed upon any
part of the Collateral;

 

22

 

(iii)          (A) 
permit the validity or effectiveness of this Indenture to be impaired,
or permit the lien created by this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenant; or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Collateral or any part thereof or any interest therein
or the proceeds thereof (other than tax liens, mechanics’ liens and other liens
that arise by operation of law, in each case on a Motorcycle and arising solely
as a result of an action or omission of the related Obligor), (C) permit the
lien created by this Indenture not to constitute a valid first priority (other
than with respect to any such tax, mechanics’ or other lien) security interest
in the Collateral, or (D) amend, modify or fail to comply with the provisions
of the Transaction Documents without the prior written consent of the Indenture
Trustee, except where the Transaction Documents allow for amendment or
modification without the consent or approval of the Indenture Trustee;

(iv)          dissolve or liquidate in whole or in
part; or

(v)           change its name or state of
formation.

Section
3.09.        Annual Statement as to
Compliance.  The Issuer will deliver to the Indenture
Trustee, on or before January 31 of each year commencing January 31, 2006, an
Officer’s Certificate stating, as to the Authorized Officer signing such
Officer’s Certificate, that:

(i)            a review of the activities of the
Issuer during the prior calendar year and of performance under this Indenture
has been made under such Authorized Officer’s supervision; and

(ii)           to the best of such Authorized
Officer’s knowledge, based on such review, the Issuer has complied with all
conditions and covenants under this Indenture throughout such year, or, if
there has been a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the nature
and status thereof.

Section
3.10.        Issuer May Consolidate, etc.
Only on Certain Terms.

(a)           The Issuer shall not consolidate or
merge with or into any other Person, unless:

(i)            the Person (if other than the
Issuer) formed by or surviving such consolidation or merger shall be a Person
organized and existing under the laws of the United States or any State and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form and substance satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every agreement and
covenant of this Indenture and each other Transaction Document on the part of
the Issuer to be performed or observed, all as provided herein;

 

23

 

(ii)           immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing;

(iii)          the Rating Agency Condition shall have
been satisfied with respect to such transaction;

(iv)          the Issuer shall have received an
Opinion of Counsel which shall be delivered to and shall be satisfactory to the
Indenture Trustee to the effect that such transaction will not have any
material adverse tax consequence to the Trust, any Noteholder or any
Certificateholder;

(v)           any action as is necessary to
maintain the lien and security interest created by this Indenture shall have
been taken;

(vi)          the Issuer shall have delivered to the
Indenture Trustee an Officer’s Certificate and an Opinion of Counsel (which
shall describe the actions taken as required by clause (v) above or that no
such actions will be taken) each stating that such consolidation or merger and
such supplemental indenture comply with this Article Three and that all
conditions precedent herein provided for relating to such transaction have been
complied with; and

(vii)         the Person (if other than the Issuer)
formed by or surviving such consolidation or merger has a net worth,
immediately after such consolidation or merger, that is (A) greater than zero
and (B) not less than the net worth of the Issuer immediately prior to giving
effect to such consolidation or merger.

(b)           The Issuer shall not convey or
transfer all or substantially all of its properties or assets, including those
included in the Collateral, to any Person (except as expressly permitted by the
Transaction Documents), unless:

(i)            the Person that acquires by
conveyance or transfer the properties and assets of the Issuer shall (A) be a
United States citizen or a Person organized and existing under the laws of the
United States or any State, (B) expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form and substance
satisfactory to the Indenture Trustee, the due and punctual payment of the
principal of and interest on all Notes and the performance or observance of
every agreement and covenant of this Indenture and each other Transaction
Document on the part of the Issuer to be performed or observed, all as provided
herein, (C) expressly agree by means of such supplemental indenture that all
right, title and interest so conveyed or transferred shall be subject and
subordinate to the rights of Holders of the Notes and (D) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify, defend
and hold harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes.

(ii)           immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing;

 

24

 

(iii)          the Rating Agency Condition shall have
been satisfied with respect to such transaction;

(iv)          the Issuer shall have received an
Opinion of Counsel which shall be delivered to and shall be satisfactory to the
Indenture Trustee to the effect that such transaction will not have any
material adverse tax consequence to the Trust, any Noteholder or any
Certificateholder;

(v)           any action as is necessary to
maintain the lien and security interest created by this Indenture shall have
been taken;

(vi)          the Issuer shall have delivered to the
Indenture Trustee an Officer’s Certificate and an Opinion of Counsel (which
shall describe the actions taken as required by clause (v) above or that no
such actions will be taken) each stating that such conveyance or transfer and
such supplemental indenture comply with this Article Three and that all
conditions precedent herein provided for relating to such transaction have been
complied with (including any filings required by Exchange Act); and

(vii)         the Issuer has a net worth, immediately
after such conveyance or transfer, that is (A) greater than zero and (B) not
less than the net worth of the Issuer immediately prior to giving effect to
such conveyance or transfer.

Section
3.11.        Successor or Transferee.

(a)           Upon any consolidation or merger of
the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with same effect as if such Person has been named
as the Issuer herein.

(b)           Upon a conveyance or transfer of all
or substantially all the assets or properties of the Issuer pursuant to Section
3.10(b), the Issuer will be released from every covenant and agreement of this
Indenture to be observed or performed on the part of the Issuer with respect to
the Notes immediately upon the delivery of written notice to the Indenture
Trustee stating that the Issuer is to be so released.

Section 3.12.        No Other Business. 
The Issuer shall not engage in any business other than financing,
purchasing, owning, selling and managing the Contracts in the manner
contemplated by this Indenture and the other Transaction Documents and
activities incidental thereto.

Section 3.13.        No Borrowing. 
The Issuer shall not issue, incur, assume, guarantee or otherwise become
liable, directly or indirectly, for any Indebtedness except for (i) the Notes
and (ii) any other Indebtedness permitted by or arising under the other
Transaction Documents.  The proceeds of
the Notes shall be used exclusively to fund the Issuer’s purchase of the
Contracts and the other assets specified in the Sale and Servicing Agreement,
to fund the Reserve Fund and to pay the transactional expenses of the Issuer.

 

25

 

Section
3.14.        Servicer’s Obligations. 
The Issuer shall cause the Servicer to comply with Article Five and
Article Nine of its obligations under the Sale and Servicing Agreement.

Section
3.15.        Guarantees, Loans Advances
and Other Liabilities.  Except as otherwise contemplated by the
Transaction Documents, the Issuer shall not make any loan or advance or credit
to, or guarantee (directly or indirectly or by an instrument having the effect
of assuming another’s payment or performance on any obligation or capability of
so doing or otherwise), endorse or otherwise become contingently liable,
directly or indirectly, in connection with the obligations, stocks or dividends
of, or own, purchase, repurchase or acquire (or agree contingently to do so)
any stock, obligations, assets or securities of, any other interest in, or make
any capital contribution to, any other Person.

Section
3.16.        Capital Expenditures. 
The Issuer shall not make any expenditure (by long-term or operating
lease or otherwise) for capital assets (either realty or personalty).

Section
3.17.        Restricted Payments. 
Except as permitted by the Transaction Documents, the Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial interest
in the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made, (A)
distributions to the Servicer, the Owner Trustee and the Certificateholder as contemplated
by, and to the extent funds are available for such purpose under, the Sale and
Servicing Agreement or the Trust Agreement and (B) payments to the Indenture
Trustee and the Owner Trustee pursuant to Section 1(a)(ii) of the
Administration Agreement.  The Issuer
will not, directly or indirectly, make payments to or distributions from the
Collection Account except in accordance with this Indenture and the other
Transaction Documents.

Section
3.18.        Notice of Events of Default. 
The Issuer agrees to give the Indenture Trustee and each Rating Agency
prompt written notice of each Event of Default hereunder and an Event of
Termination under the Sale and Servicing Agreement.

Section
3.19.        Further Instruments and Acts. 
Upon request of the Indenture Trustee, the Issuer will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this
Indenture.

Section
3.20.        Compliance with Laws. 
The Issuer shall comply with the requirements of all applicable laws,
the non-compliance with which would, individually or in the aggregate,
materially and adversely affect the ability of the Issuer to perform its
obligations under the Notes, this Indenture or any other Transaction Document.

Section
3.21.        Amendments of Sale and
Servicing Agreement and Trust Agreement.  The Issuer shall not agree to any amendment to
Section 11.01 of the Trust Agreement to 

 

26

 

eliminate the requirements thereunder that the Indenture Trustee or the
Holders of the Notes consent to amendments thereto as provided therein.

 

Section
3.22.        Removal of Administrator. 
So long as any Notes are issued and outstanding, the Issuer shall not
remove the Administrator without cause unless the Rating Agency Condition shall
have been satisfied in connection with such removal.

ARTICLE FOUR

SATISFACTION AND DISCHARGE

Section
4.01.        Satisfaction and Discharge of
Indenture.  This Indenture shall cease to be of further
effect with respect to the Notes except as to (i) rights of registration of
transfer and exchange, (ii) substitution of mutilated, destroyed, lost or
stolen Notes, (iii) rights of Noteholders to receive payments of  principal thereof and interest thereon, (iv)
Sections 3.01, 3.03, 3.04, 3.05, 3.07, 3.08, 3.10, 3.12, 3.13, 3.20 and 3.21,
(v) the rights, obligations and immunities of the Indenture Trustee hereunder
(including the rights of the Indenture Trustee under Section 6.07 and the
obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when

(A)          either

(1)           all Notes therefore
authenticated and delivered (other than (i) Notes that have been destroyed,
lost or stolen and that have been replaced or paid as provided in Section 2.05
and (ii) Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation;

(2)           all Notes not
theretofore delivered to the Indenture Trustee for cancellation

(i)            have
become due and payable, or

(ii)           will
become due and payable at their respective final Distribution Dates within one
year, or

(iii)          are
to be called for redemption within one year under arrangements satisfactory to
the Indenture Trustee for the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the
case of (i), (ii) or (iii) above, has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee 

 

27

 

cash or direct obligations of or obligations
guaranteed by the United States (which will mature prior to the date such
amounts are payable), in trust in an Eligible Account for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such Note not
theretofore delivered to the Indenture Trustee for cancellation when due to the
final scheduled Distribution Date (if Notes shall have been called for
redemption pursuant to Section 10.01(a)), as the case may be;

(B)           the Issuer has paid or performed or
caused to be paid or performed all amounts and obligations which the Issuer may
owe to or on behalf of the Indenture Trustee for the benefit of the Noteholders
under this Indenture or the Notes; and

(C)           the Issuer has delivered to the
Indenture Trustee an Officer’s Certificate and an Opinion of Counsel and (if
required by the TIA or the Indenture Trustee) an Independent Certificate from a
firm of certified public accountants, each meeting the applicable requirements
of Section 11.01(a) and, subject to Section 11.02, stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with and the Rating Agency Condition has been
satisfied.

Section
4.02.        Application of Trust Money. 
All moneys deposited with the Indenture Trustee pursuant to Section 4.01
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and this Indenture, to the payment, either directly or through any
Paying Agent, as the Indenture Trustee may determine, to the Holders of the
particular Notes for the payment or redemption of which such moneys have been
deposited with the Indenture Trustee, of all sums due and to become due thereon
for principal and interest; but such moneys need not be segregated from other
funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.

Section
4.03.        Repayment of Moneys Held by
Paying Agent.  In connection with the satisfaction and
discharge of this Indenture with respect to the Notes, all moneys then held by
any Paying Agent other than the Indenture Trustee under the provisions of this
Indenture with respect to such Notes shall, upon demand of the Issuer, be paid
to the Indenture Trustee to be held and applied according to Section 3.03 and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.

Section
4.04.        Release of Collateral. 
Subject to Section 11.01 and the terms of the Transaction Documents, the
Indenture Trustee shall release property from the lien of this Indenture only
upon receipt of an Issuer Request accompanied by an Officer’s Certificate and
an Opinion of Counsel and Independent Certificates in accordance with TIA
§§314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates.

ARTICLE FIVE

REMEDIES

 

28

 

Section 5.01.        Events of Default. 
“Event of Default,” wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

(i)            default in the payment of any
interest on any Note when the same becomes due and payable, and such default
shall continue for a period of five days;

(ii)           default in the payment of the
principal of or any installment of the principal of any Note when the same
becomes due and payable;

(iii)          default in the observance or
performance of any covenant or agreement of the Issuer made in this Indenture
(other than a covenant or agreement, a default in the observance or performance
of which is elsewhere in this Section specifically dealt with) which default
has a material adverse effect on the Noteholders, or any representation or
warranty of the Issuer made in this Indenture or in any certificate or other
writing delivered pursuant hereto or in connection herewith proving to have
been incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the circumstance
or condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a period of 30
days after there shall have been given, by registered or certified mail, to the
Indenture Trustee by the Holders of at least 25% of the Outstanding Amount of
the Class A-1 Notes and the Class A-2 Notes, taken together as a single class,
or, if there are no Class A-1 Notes or Class A-2 Notes Outstanding, by the
Holders of at least 25% of the Outstanding Amount of the Class B Notes a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder;

(iv)          the filing of a decree or order for
relief by a court having jurisdiction in the premises in respect of the Issuer
or any substantial part of the Collateral in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or for any substantial
part of the Collateral, or ordering the winding-up or liquidation of the Issuer’s
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or

(v)           the commencement by the Issuer of a
voluntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by the Issuer to
the entry of an order for relief in an involuntary case under any such law, or
the consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Collateral, or the
making by the Issuer of any general assignment for the benefit of creditors, or
the failure by the Issuer generally to pay its debts as such debts become due,
or the taking of action by the Issuer in furtherance of any of the foregoing.

 

29

 

The Issuer shall
deliver to the Indenture Trustee within five days after obtaining knowledge of
the occurrence thereof, written notice in the form of an Officer’s Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii) above, its status and what action the
Issuer is taking or proposes to take with respect thereto.

Section
5.02.        Rights Upon Event of Default. 
If an Event of Default shall have occurred and be continuing, other than
an Event of Default described in Section 5.01(iv) or (v) above, the Indenture
Trustee or the Modified Required Holders may declare the principal amount of
the Notes immediately due and payable at par. 
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article Five, provided, the Required Holders may rescind
such declaration if (i) the Issuer has made all payments of principal of and
interest on all Notes when the same becomes due and payable and (ii) the Issuer
has paid all amounts due and payable to the Indenture Trustee.  If an Event of Default described in Section
5.01(iv) or (v) shall have occurred and be continuing, the principal amount of
the Notes shall become immediately due and payable.

Section
5.03.        Collection of Indebtedness
and Suits for Enforcement by Indenture Trustee; Authority of Indenture Trustee.

(a)           The Issuer covenants that if the
Notes are accelerated following the occurrence of an Event of Default, the
Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit
of the Holders of the Notes, the whole amount then due and payable on such
Notes for principal and interest, with interest upon the overdue principal,
and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest, at the applicable Interest
Rate and in addition thereto such further amount as shall be sufficient to
cover costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents
and counsel.

(b)           The Indenture Trustee following the
occurrence of an Event of Default, shall have full right, power and authority
to take, or defer from taking, any and all acts with respect to the
administration, maintenance or disposition of the Collateral.

(c)           If an Event of Default occurs and is
continuing, the Indenture Trustee may in its discretion (except as provided in
Section 5.03(d)), proceed to protect and enforce its rights and the rights of
the Noteholders, by such appropriate Proceedings as the Indenture Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.

(d)           Notwithstanding anything to the
contrary contained in this Indenture, if an Event of Default shall have
occurred and be continuing and if the Issuer fails to perform its obligations
under Section 10.01(b) when and as due, the Indenture Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Noteholders by such 

 

30

 

appropriate Proceedings
as the Indenture Trustee shall deem most effective to protect and enforce any
such rights, whether for specific performance of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law, provided that the Indenture
Trustee shall only be entitled to take any such actions to the extent such
actions (i) are taken only to enforce the Issuer’s obligations to redeem the
principal amount of Notes, and (ii) are taken only against the Collateral any
investments therein and any proceeds thereof.

(e)           In case there shall be pending,
relative to the Issuer or any other obligor upon the Notes or any Person having
or claiming an ownership interest in the Collateral, Proceedings under Title 11
of the United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its property
or such other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Notes, or to the
creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:

(i)            to file and prove a
claim or claims for the whole amount of principal and interest owing and unpaid
in respect of the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred, and
all advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the Noteholders
allowed in such Proceedings;

(ii)  unless prohibited by
applicable law and regulations, to vote on behalf of the Holders of Notes in
any election of a trustee, a standby trustee or Person performing similar
functions in any such Proceedings;

(iii)  to collect and receive any
moneys or other property payable or deliverable on any such claims and to
distribute all amounts received with respect to the claims of the Noteholders
and of the Indenture Trustee on their behalf; and

(iv)  to file such proofs of
claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Indenture Trustee or the Holders of Notes allowed in
any judicial proceedings relative to the Issuer, its creditors and its
property;

 

31

 

and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Indenture Trustee, and, in the event that
the Indenture Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Indenture Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Indenture Trustee except as
a result of negligence or bad faith.

(f)            Nothing herein contained shall be
deemed to authorize the Indenture Trustee to authorize or consent to or vote
for or accept or adopt on behalf of any Noteholder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Noteholder in any such proceeding except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar Person.

(g)           All rights of action and of asserting
claims under this Indenture or under any of the Notes, may be enforced by the
Indenture Trustee without the possession of any of the Notes or the production
thereof in any trial or other Proceedings relative thereto, and any such action
or Proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture Trustee,
each predecessor Indenture Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Holders of the Notes.

(h)           In any Proceedings brought by the
Indenture Trustee (including any Proceedings involving the interpretation of
any provision of this Indenture), the Indenture Trustee shall be held to
represent all of the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such proceedings.

Section 5.04.        Remedies.  If an Event of Default shall have occurred and
be continuing, the Indenture Trustee (subject to Section 5.05) may, and shall
if so directed by the Required Holders in writing:

(i)            institute Proceedings in its own
name and as or on behalf of a trustee of an express trust for the collection of
all amounts then payable on the Notes or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment obtained,
and collect from the Issuer and any other obligor upon such Notes moneys
adjudged due;

(ii)           institute Proceedings from time to
time for the complete or partial foreclosure of this Indenture with respect to
the Collateral;

(iii)          exercise
any remedies of a secured party under the UCC and any other remedy available to
the Indenture Trustee and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee on behalf of the
Noteholders under this Indenture or the Notes; and

 

32

 

(iv)          sell the Collateral or any portion
thereof or rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law; provided, however, that
the Indenture Trustee may not sell or otherwise liquidate the Collateral
following an Event of Default, unless (A) the Holders of 100% of the
Outstanding Amount of the Notes, consent thereto, (B) the proceeds of such sale
or liquidation distributable to the Noteholders are sufficient to discharge in
full all amounts then due and unpaid upon such Notes for principal and
interest, (C) there has been an Event of Default described in Section 5.01(i)
or (ii) and (D) the Indenture Trustee determines that the Collateral will not
continue to provide sufficient funds for the payment of principal of and interest
on the Notes as they would have become due if the Notes had not been declared
due and payable, and the Indenture Trustee provides prior written notice to
each Rating Agency and obtains the consent of the Required Holders.  In determining such sufficiency or
insufficiency with respect to clauses (B) and (C), the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Collateral for such purpose;
provided, however, upon the occurrence of an Event of Default described in
Section 5.01(iv) or (v), caused solely from an event described in such
subparagraphs occurring with respect to the Trust Depositor, the Collateral
will be liquidated by the Indenture Trustee and the Trust will be terminated 90
days after the date of such Insolvency Event, unless, before the end of such
90-day period, the related Trustee shall have received written instructions
from the Required Holders, to the effect that such Required Holders disapprove
of the liquidation of such Collateral and termination of such Trust.

Section
5.05.        Optional Preservation of the
Contracts.  Following an Event of Default and if such Event
of Default has not been rescinded and annulled, the Indenture Trustee may, but
need not, elect to maintain possession of the Collateral.  It is the desire of the parties hereto and
the Noteholders that there be at all times sufficient funds for the payment of
principal and interest on the Notes, and the Indenture Trustee shall take such
desire into account when determining whether or not to maintain possession of
the Collateral.  In determining whether
to maintain possession of the Collateral, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Collateral for such purpose.

Section 5.06.        Priorities.

(a)           If the Indenture Trustee collects any
money or property pursuant to this Article Five, it shall pay out the money or
property in the order and priority set forth in Section 7.05(b) or (c) of the
Sale and Servicing Agreement.

(b)           The Indenture Trustee may fix a
record date and payment date for any payment to Noteholders pursuant to this
Section.  At least 15 days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.

 

33

 

Section
5.07.        Limitation of Suits.  No Holder of any Note shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (and in all events subject to Section 11.16 hereof):

(i)            such Holder has previously given
written notice to the Indenture Trustee of a continuing Event of Default;

(ii)           the Holders of not less than 25% of
the Outstanding Amount of the Class A-1 Notes and the Class A-2 Notes, or, if
there are no Class A-1 Notes or Class A-2 Notes Outstanding, Holders of not
less than 25% of the Outstanding Amount of the Class B Notes have made written
request to the Indenture Trustee to institute such Proceeding in respect of
such Event of Default in its own name as Indenture Trustee hereunder;

(iii)
         such Holder or Holders have
offered to the Indenture Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in complying with such request;

(iv)          the Indenture Trustee for 60 days after
its receipt of such notice, request and offer of indemnity has failed to
institute such Proceedings; and

(v)           no direction inconsistent with such
written request has been given to the Indenture Trustee during such 60-day
period by the Required Holders.

It is
understood and intended that no one or more Holders of Notes shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided.

In the event the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Notes, each representing less
than a majority of the Outstanding Amount of the Class A-1 Notes and the Class
A-2 Notes or the Class B Notes, as the case may be, the Indenture Trustee shall
act at the direction of the group of Holders of Notes with the greater
Outstanding Amount of Class A-1 Notes, Class A-2 Notes, or Class B Notes, as
the case may be; provided, however, if the Indenture Trustee receives
conflicting or inconsistent requests and indemnity from two or more groups of
Holders of Notes representing an equal Outstanding Amount of the Class A-1
Notes, Class A-2 Notes or Class B Notes, the Indenture Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provisions of this Indenture.

Section
5.08.        Unconditional Rights of
Noteholders to Receive Principal and Interest. 
Notwithstanding any other provisions in the Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest on such Note on or after
the respective due dates thereof expressed in such Note or in this Indenture
(or, in the case of redemption, on or after the Redemption Date) and to
institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.

 

34

 

Section
5.09.        Restoration of Rights and
Remedies.  If the Indenture Trustee or any Noteholder
has instituted any Proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason
or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Indenture Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Indenture Trustee and the Noteholders shall
continue as though no such Proceeding had been instituted.

Section
5.10.        Rights and Remedies
Cumulative.  No right or remedy herein conferred upon or
reserved to the Indenture Trustee or to the Noteholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

Section
5.11.        Delay or Omission Not a
Waiver.  No delay or omission of the Indenture Trustee
or any Holder of any Note to exercise any right or remedy accruing upon any
Default of Event of Default shall impair any such right or remedy or constitute
a waiver of any such Default or Event of Default or an acquiescence
therein.  Every right and remedy given by
this Article Five or by law to the Indenture Trustee or to the Noteholders may
be exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.

Section
5.12.        Control by Noteholders.  The Required Holders shall have the right to
direct the time, method and place of conducting any Proceeding for any remedy
available to the Indenture Trustee with respect to the Notes or exercising any
trust or power conferred on the Indenture Trustee; provided that:

(i)            such direction shall not be in
conflict with any rule of law or with this Indenture;

(ii)           subject to the terms of Section 5.04,
any direction to the Indenture Trustee to sell or liquidate the Collateral
shall be by the Holders of Notes representing not less than 100% of the
Outstanding Amount of the Notes;

(iii)
if the conditions set forth in Section 5.05 have been satisfied and the
Indenture Trustee elects to retain the Collateral pursuant to such Section,
then any direction to the Indenture Trustee by Holders of Notes representing
less than 100% of the Outstanding Amount of the Notes to sell or liquidate the
Collateral shall be of no force and effect; and

(iv)
the Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction.

Notwithstanding
the rights of Noteholders set forth in this Section, subject to Section 6.01,
the Indenture Trustee need not take any action that it determines might involve

 

35

 

it in
liability or might materially and adversely affect the rights of any
Noteholders not consenting to such action.

Section
5.13.        Waiver of Past Defaults. 
In the case of any waiver of an Event of Default, the Issuer, the
Indenture Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereto.  Upon any such
waiver, such Event of Default shall cease to exist and be deemed to have been
cured and not to have occurred, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereto.

Section
5.14.        Undertaking for Costs. 
All parties to this Indenture agree, and each Holder of any Note by such
Holder’s acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Indenture Trustee for
any action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to (i) any
suit instituted by the Indenture Trustee, (ii) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Class A-1 Notes and the Class A-2 Notes, or, if
there are no Class A-1 Notes, Class A-2 Notes Outstanding, any Noteholder or
group of Noteholders holding in the aggregate 10% of the Outstanding Amount of
the Class B Notes or (iii) any suit instituted by any Noteholder for the
enforcement of the payment of principal of or interest on any Note on or after
the respective due dates expressed in such Note and in this Indenture (or, in
the case of redemption, on or after the Redemption Date).

Section
5.15.        Waiver of Stay or Extension
Laws.  The Issuer covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead or in
any manner whatsoever, claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Issuer (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantages of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Indenture Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

Section 5.16.        Action on Notes. 
The Indenture Trustee’s right to seek and recover judgment
on the Notes or under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this
Indenture.  Neither the lien of this
Indenture nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Collateral or upon 

 

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any of the assets of the
Issuer.  Any money or property collected
by the Indenture Trustee shall be applied in accordance with Section 5.06.

Section
5.17.        Performance and Enforcement
of Certain Obligations.

(a)           Promptly following a request from the
Indenture Trustee to do so and at the Administrator’s expense, the Issuer shall
take all such lawful action as the Indenture Trustee may request to compel or
secure the performance and observance by the Trust Depositor and the Servicer,
as applicable, of each of their obligations to the Issuer under or in
connection with the Sale and Servicing Agreement in accordance with the terms
thereof, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale and
Servicing Agreement to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on the part of the
Trust Depositor or the Servicer thereunder and the institution of legal of
administrative actions or proceedings to compel or secure performance by the
Trust Depositor or the Servicer of each of their obligations under the Sale and
Servicing Agreement.

(b)           If an Event of Default has occurred
and is continuing, the Indenture Trustee may, and at the direction (which
direction shall be in writing, including facsimile) of the Modified Required
Holders shall exercise all rights, remedies, powers, privileges and claims of
the Issuer against the Trust Depositor or the Servicer under or in connection
with the Sale and Servicing Agreement, including the right or power to take any
action to compel or secure performance or observance by the Trust Depositor or
the Servicer of each of their obligations to the Issuer thereunder and to give
any consent, request, notice, direction, approval, extension or waiver under
the Sale and Servicing Agreement, and any right of the Issuer to take such
action shall be suspended.

ARTICLE SIX

THE INDENTURE TRUSTEE

Section
6.01.        Duties of Indenture Trustee.

(a)           If an Event of Default has occurred
and is continuing, the Indenture Trustee shall exercise the rights and powers
vested in it by this Indenture and in the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.

(b)           Except during the continuance of an
Event of Default:

(i)            the
Indenture Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Indenture Trustee;
and

 

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(ii)           in
the absence of bad faith on its part, the Indenture Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Indenture
Trustee and conforming to the requirements of this Indenture; however, the
Indenture Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture and the other
Transaction Documents to which the Indenture Trustee is a party.

(c)           The Indenture Trustee may not be
relieved from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

(i)            this
paragraph does not limit the effect of Section 6.01(b);

(ii)           the
Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and

(iii)          the
Indenture Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 5.12.

(d)           Every provision of this Indenture
that in any way relates to the Indenture Trustee is subject to paragraphs (a),
(b) and (c) of this Section.

(e)           The Indenture Trustee shall not be
liable for interest on any money received by it except as the Indenture Trustee
may agree in writing with the Issuer.

(f)            Money held in trust by the Indenture
Trustee need not be segregated from other funds except to the extent required
by law or the terms of this Indenture or the Sale and Servicing Agreement.

(g)           No provision of this Indenture shall
require the Indenture Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayments of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.

(h)           The Indenture Trustee shall have no
discretionary duties other than performing those ministerial acts set forth
above necessary to accomplish the purpose of this Trust as set forth in this
Indenture.

(i)            Every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Indenture Trustee shall be subject to the provisions of this section and
to the provisions of the TIA.

Section
6.02.        Rights of Indenture Trustee.

 

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(a)           The Indenture Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Indenture Trustee need not investigate any fact or
matter stated in the document.

(b)           Before the Indenture Trustee acts or
refrains from acting, it may require an Officer’s Certificate (with respect to
factual matters) or an Opinion of Counsel, as applicable.  The Indenture Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on the Officer’s
Certificate or Opinion of Counsel.

(c)           The Indenture Trustee may execute any
of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through Affiliates, agents or attorneys or a custodian or
nominee, and the Indenture Trustee shall not be responsible for any misconduct
or negligence on the part of, or for the supervision of, any such agent,
attorney, custodian or nominee appointed with due care by it hereunder.

(d)           The Indenture Trustee shall not be
liable for any action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers; provided, however, that the
Indenture Trustee’s conduct does not constitute willful misconduct, negligence
or bad faith.

(e)           The Indenture Trustee may consult
with counsel, and the advice of such counsel or any Opinion of Counsel with
respect to legal matters relating to this Indenture and the Notes shall be full
and complete authorization and protection from liability in respect to any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel.

(f)            The Indenture Trustee shall be under
no obligation to institute, conduct or defend any litigation under this
Indenture or in relation to this Indenture, at the request, order or direction
of any of the Holders of Notes, pursuant to the provisions of this Indenture,
unless such Holders of Notes shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; provided, however, that the Indenture
Trustee shall, upon the occurrence of an Event of Default (that has not been
cured), exercise the rights and powers vested in it by this Indenture in a
manner consistent with Section 6.01.

(g)           The Indenture Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless so
requested by the Holders of Notes evidencing not less than 25% of the
Outstanding Amount of the Notes; provided, however, that if the payment within
a reasonable time to the Indenture Trustee of the costs, expenses  or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Indenture Trustee, not
reasonably assured to the Indenture Trustee by the security afforded to it by
the terms of this Indenture or the Sale and Servicing Agreement, the Indenture
Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the Person making such 

 

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request, or, if paid by
the Indenture Trustee, shall be reimbursed by the Person making such request
upon demand.

Section
6.03.        Individual Rights of
Indenture Trustee.  The Indenture Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Issuer or its Affiliates with the same rights it would have if it were
not Indenture Trustee.  Any Paying Agent,
Note Registrar, co-registrar or co-paying agent may do the same with like
rights.  However, the Indenture Trustee
is required to comply with Section 6.11.

Section
6.04.        Indenture Trustee’s
Disclaimer.  The Indenture Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this
Indenture, the Collateral or the Notes, it shall not be accountable for the
Issuer’s use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee’s certificate of authentication.

Section 6.05.        Notice of Defaults.  If a Default occurs and is continuing and if
it is known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder notice of the Default within 90 days
after it occurs.  Except in the case of a
Default in payment of principal of or interest on any Note (including payments
pursuant to the redemption of such Notes), the Indenture Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of Noteholders.

Section
6.06.        Reports by Indenture Trustee
to Holders.  Within the prescribed period of time for tax
reporting purposes after the end of each calendar year during the term of this
Indenture, the Indenture Trustee shall deliver to each Noteholder such
information, including without limitation, IRS Form 1099, as may be required by
applicable law to enable such holder to prepare its federal and state income
tax returns.

Section
6.07.        Compensation and Indemnity.  The Issuer shall pay or shall cause the Administrator
to pay to the Indenture Trustee from time to time reasonable compensation for
its services.  The Indenture Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an
express trust.  The Issuer shall or shall
cause the Administrator to reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
in addition to the compensation for its services.  Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee’s
agents, counsel, accountants and experts. 
The Issuer shall indemnify or shall cause the Administrator to indemnify
the Indenture Trustee against any and all loss, liability or expense (including
attorneys’ fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder.  The Indenture Trustee shall notify the Issuer
and the Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so notify
the Issuer and the Administrator shall not relieve the Issuer or the
Administrator of its obligations hereunder. 
The Issuer shall defend or shall cause the Administrator to defend any
such claim, and the Indenture Trustee may have separate counsel and the Issuer
shall 

 

40

 

pay or shall cause the Administrator
to pay the fees and expenses of such counsel. 
Neither the Issuer nor the Administrator need reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee’s own willful misconduct, negligence or
bad faith.

The Issuer’s
payment obligations and indemnification to the Indenture Trustee pursuant to
this Section shall survive the resignation or removal of the Indenture Trustee
and the termination and discharge of this Indenture; provided that the
Indenture Trustee shall be entitled only to compensation for its services for
the period prior to the date of such resignation or removal of the Indenture
Trustee.  When the Indenture Trustee
incurs expenses after the occurrence of an Event of Default specified in
Section 5.01(iv) or (v) with respect to the Issuer, the expenses are intended
to constitute expenses of administration under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or similar
law.

Section
6.08.        Replacement of Indenture
Trustee.  The Indenture Trustee may resign at any time
by so notifying the Issuer and the Servicer. 
The Issuer shall remove the Indenture Trustee if:

(i)            the Indenture Trustee fails to
comply with Section 6.11;

(ii)           a court having jurisdiction in the
premises in respect of the Indenture Trustee in an involuntary case or
proceeding under federal or state banking or bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, shall have entered a decree or order granting
relief or appointing a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or similar official) for the Indenture Trustee or
for any substantial part of the Indenture Trustee’s property, or ordering the
winding-up or liquidation of the Indenture Trustee’s affairs, provided any such
decree or order shall have continued unstayed and in effect for a period of 30
consecutive days;

(iii)          the Indenture Trustee commences a
voluntary case under any federal or state banking or bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator or other similar official for the Indenture Trustee
or for any substantial part of the Indenture Trustee’s property, or makes any
assignment for the benefit of creditors or fails generally to pay its debts as
such debts become due or takes any corporate action in furtherance of any of
the foregoing; or

(iv)          the Indenture Trustee otherwise
becomes incapable of acting.

If the Indenture
Trustee resigns or is removed, the Issuer shall promptly appoint a successor
Indenture Trustee.  A successor Indenture
Trustee shall deliver a written acceptance of its appointment to the retiring
Indenture Trustee and to the Issuer. 
Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture 

 

41

 

Trustee
under this Indenture.  The Issuer or the
successor Indenture Trustee shall mail a notice of its succession to
Noteholders.  The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

If a successor
Indenture Trustee does not take office within 60 days after the retiring
Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the
Issuer or the Holders of a majority in Outstanding Amount of the Notes may
appoint or petition any court of competent jurisdiction for the appointment of
a successor Indenture Trustee.

If the Indenture
Trustee fails to comply with Section 6.11, any Noteholder may petition any
court of competent jurisdiction for the removal of the Indenture Trustee and
the appointment of a successor Indenture Trustee.

Any resignation or
removal of the Indenture Trustee and appointment of a successor Indenture Trustee
pursuant to any of the provisions of this Section shall not become effective
until acceptance of appointment by the successor Indenture Trustee pursuant to
this Section and payment of all fees and expenses owed to the outgoing
Indenture Trustee.  Notwithstanding the
replacement of the Indenture Trustee pursuant to this Section, the retiring
Indenture Trustee shall be entitled to payment or reimbursement of such amounts
as such Person is entitled pursuant to Section 6.07.

Section
6.09.        Successor Indenture Trustee
by Merger.  If the Indenture Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be
the successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11.  The Indenture Trustee shall provide each
Rating Agency prompt notice of any such transaction.

In case at the
time such successor or successors by merger, conversion or consolidation to the
Indenture Trustee shall succeed to the trusts created by this Indenture, any of
the Notes shall have been authenticated but not delivered, any such successor
to the Indenture Trustee may adopt the certificate of authentication of any
predecessor Indenture Trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Notes either in the
name of any predecessor hereunder or in the name of the successor to the
Indenture Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have.

Section
6.10.        Appointment of Co-Indenture
Trustee or Separate Indenture Trustee.

(a)           Notwithstanding any other provision
of this Indenture, at any time, for the purpose of meeting any legal
requirement of any jurisdiction in which any part of the Collateral may at the
time be located, the Indenture Trustee and the Administrator acting jointly
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-Indenture Trustee or co-Indenture Trustees,
jointly with the 

 

42

 

Indenture Trustee, or
separate Indenture Trustee or separate Indenture Trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Collateral, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee and the
Administrator may consider necessary or desirable.  If the Administrator shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
the Indenture Trustee alone shall have the power to make such appointment.  No co-Indenture Trustee or separate Indenture
Trustee hereunder shall be required to meet the terms of eligibility of a
successor Indenture Trustee under Section 6.11 and no notice to Noteholders of
the appointment of any co-Indenture Trustee or separate Indenture Trustee shall
be required under Section 6.08.

(b)           Every separate Indenture Trustee and
co-Indenture Trustee shall, to the extent permitted by law, be appointed and
act subject to the following provisions and conditions:

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

(ii)           no
Indenture Trustee hereunder shall be personally liable by reason of any act or
omission of any other Indenture Trustee hereunder; and

(iii)          the
Indenture Trustee and the Administrator may at any time accept the resignation
of or remove any separate Indenture Trustee or co-Indenture Trustee.

(c)           Any notice, request or other writing
given to the Indenture Trustee shall be deemed to have been given to each of
the then separate Indenture Trustees and co-Indenture Trustees, as effectively
as if given to each of them.  Every
instrument appointing any separate Indenture Trustee or co-Indenture Trustee
shall refer to this Agreement and the conditions of this Article.  Each separate Indenture Trustee and
co-Indenture Trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
co-appointment, either jointly with the Indenture Trustee or separately, as may
be provided therein, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of or affording protection to, the
Indenture Trustee.  Every such instrument
shall be filed with the Indenture Trustee and a copy thereof given to the
Administrator.

 

43

 

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

Section 6.11.        Eligibility.

(a)           The Indenture Trustee shall at all
times satisfy the requirements of TIA §310(a). 
The Indenture Trustee hereunder shall at all times be a financial institution
organized and doing business under the laws of the United States of America or
any state, authorized under such laws to exercise corporate trust powers, whose
long term unsecured debt is rated at least Baa3 by Moody’s and shall have a
combined capital and surplus of at least $50,000,000 or shall be a member of a
bank holding system the aggregate combined capital and surplus of which is
$50,000,000 and subject to supervision or examination by federal or state
authority, provided that the Indenture Trustee’s separate capital and surplus
shall at all times be at least the amount required by Section 310(a)(2) of the
TIA.  If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of a
supervising or examining authority, then for the purposes of this Section 6.ll,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.

(b)           If a Default occurs and is continuing
and the Indenture Trustee is deemed to have a “conflicting interest” (as
defined in the TIA) as a result of acting as trustee for both the Class A-1
Notes and the Class A-2 Notes and the Class B Notes, the Issuer shall appoint a
successor Indenture Trustee for the Class A-1 Notes and the Class A-2 Notes and
a successor Indenture Trustee for the Class B Notes so that there will be
separate Indenture Trustees for the Class A-1 Notes and the Class A-2 Notes on
the one hand, and for the Class B Notes on the other hand.  No such event shall alter the voting rights
of the Noteholders under this Indenture or under any of the other Transaction
Documents.

(c)           In the case of an appointment
hereunder of a successor Indenture Trustee with respect to any Class of Notes,
the Issuer, the retiring Indenture Trustee and the successor Indenture Trustee
with respect to such Class of Notes shall execute and deliver an indenture
supplement hereto wherein the successor Indenture Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, the successor
Indenture Trustee all rights, powers, trusts and duties of the retiring
Indenture Trustee with respect to the Notes of such Class as to which the
appointment of such Indenture Trustee relates, (ii) if the retiring Indenture
Trustee is not retiring with respect to all Classes of Notes, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the retiring Indenture Trustee with
respect to the Notes of each Class as to which 

 

44

 

the retiring Indenture
Trustee is not retiring shall continue to be vested in the retiring Indenture
Trustee and (iii) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Indenture Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such
Indenture Trustees co-trustees of the same trust and that each such Indenture
Trustee; and upon execution and delivery of such supplemental indenture the
resignation or removal of the retiring Indenture Trustee shall become effective
to the extent provided therein.

(d)           In case at any time the Indenture
Trustee shall cease to be eligible in accordance with the provisions of this
Section 6.11, the Indenture Trustee shall resign immediately in the manner and
with the effect specified in Section 6.08. 
The Indenture Trustee shall comply with TIA §310(b); provided, however,
that there shall be excluded from the operation of TIA §310(b)(1) any indenture
or indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA §310(b)(1) are met.

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

Section
6.13.        Preferential Collection of
Claims Against Issuer.  The Indenture Trustee shall comply with TIA
§311(a), excluding any creditor relationship listed in TIA §311(b).  An Indenture Trustee who has resigned or been
removed shall be subject to TIA §311(a) to the extent indicated.

ARTICLE SEVEN

NOTEHOLDERS’ LISTS AND REPORTS

Section
7.01.        Issuer to Furnish Indenture
Trustee Names and Addresses of Noteholders.  The Issuer will furnish or cause to be
furnished to the Indenture Trustee (i) not more than five days after the
earlier of (a) each Record Date and (b) three months after the last Record
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Noteholders as of such Record Date and (ii) at
such other times as the Indenture Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list of similar form
and content as of a date not more than ten days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.

Section
7.02.        Preservation of Information:
Communication to Noteholders.

(a)           The Indenture Trustee shall preserve,
in as current a form as is reasonably practicable, the names and addresses of
the Noteholders contained in the most recent list furnished to the Indenture
Trustee as provided in Section 7.01 and the names and addresses 

 

45

 

of Noteholders received
by the Indenture Trustee in its capacity as Note Registrar and shall otherwise
comply with TIA §312(a).  The Indenture
Trustee may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.

(b)           Noteholders may communicate pursuant
to TIA § 312(b) with other Noteholders with respect to their rights under this
Indenture or under the Notes.

(c)           The Issuer, the Indenture Trustee and
the Note Registrar shall have the protection of TIA § 312(c).

Section 7.03.        Reports by Issuer.

(a)           The Issuer shall:

(i)            file
with the Indenture Trustee, within 15 days after the Issuer is required (if at
all) to file the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of any
of the foregoing as the Commission may from time to time by rules and
regulations prescribe) that the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;

(ii)           file
with the Indenture Trustee and the Commission in accordance with rules and
regulations prescribed from time to time by the Commission such additional
information, documents and reports with respect to compliance by the Issuer
with the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations;

(iii)          supply
to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to
all Noteholders described in TIA §313(c)) such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to clauses
(i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed
from time to time by the Commission.

(b)           Unless the Issuer otherwise determines,
the fiscal year of the Issuer shall end on December 31 of each year.

Section
7.04.        Reports by Indenture Trustee. 
If required by TIA §313(a), within 60 days after each
January 31st beginning with January 31, 2006, the Indenture Trustee
shall mail to each Noteholder as required by TIA §313(c) a brief report dated
as of such date that complies with TIA §313(a). 
The Indenture Trustee also shall comply with TIA §313(b).

A copy of each
report at the time of its mailing to Noteholders shall be filed by the Indenture
Trustee with the Commission and each stock exchange, if any, on which the Notes
are listed.  The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any stock exchange.

 

46

ARTICLE EIGHT

ACCOUNTS, DISBURSEMENTS AND RELEASES

Section
8.01.        Collection of Money. 
Except as otherwise expressly provided herein, the Indenture Trustee may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Indenture Trustee
pursuant to this Indenture and the Sale and Servicing Agreement.  The Indenture Trustee shall apply all such
money received by it as provided in this Indenture and the Sale and Servicing
Agreement.  Except as otherwise expressly
provided in this Indenture, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the
Collateral, the Indenture Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate Proceedings.  Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article Five.

Section 8.02.        Trust Accounts.

(a)           On or prior to the Closing Date, the
Issuer shall cause the Servicer to establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 5.05 of the Sale
and Servicing Agreement.

(b)           All Available Monies with respect to
each Due Period will be deposited in the Collection Account as provided in
Section 5.05 of the Sale and Servicing Agreement.  On or before each Distribution Date, all
amounts required to be deposited in the Note Distribution Account with respect
to the preceding Due Period pursuant to Section 7.05 of the Sale and Servicing
Agreement will be transferred from the Collection Account and/or the Reserve
Account to the Note Distribution Account.

(c)           On each Distribution Date, the
Indenture Trustee shall distribute all amounts on deposit in the Note Distribution
Account to Noteholders in respect of the Notes to the extent of amounts due and
unpaid on the Notes for principal and interest in the order and priority set
forth in Section 7.05 of the Sale and Servicing Agreement.

Section
8.03.        General Provisions Regarding
Accounts.

(a)           So long as no Default or Event of
Default shall have occurred and be continuing, all or a portion of the funds in
the Trust Accounts shall be invested in accordance with the provisions of
Section 5.05 of the Sale and Servicing Agreement.  Except as otherwise provided in Section 5.05
of the Sale and Servicing Agreement, all income or other gain from investments
of moneys deposited in such Trust Accounts (other than the Reserve Fund and the
Pre-Funding Account) shall be deposited by the Indenture Trustee in the
Collection Account, and any loss resulting from such investments shall be
charged to the related Trust Account. 
The Issuer will not direct the Indenture Trustee to 

 

47

 

make any investment of
any funds or to sell any investment held in any of the Trust Accounts unless
the security interest granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any direction
to the Indenture Trustee to make any such investment or sale, if requested by
the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.

(b)           Subject to Section 6.01(c), the
Indenture Trustee shall not in any way be held liable by reason of any
insufficiency in any of the  Trust
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee’s failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as Indenture Trustee, in
accordance with their terms.

(c)           If (i) the Issuer shall have failed
to give investment directions for any funds on deposit in the Trust Accounts to
the Indenture Trustee by 11:00 a.m., New York City time (or such other time as
may be agreed by the Issuer and Indenture Trustee), on any Business Day or (ii)
a Default or Event of Default shall have occurred and be continuing with
respect to the Notes but the Notes shall not have been declared due and payable
pursuant to Section 5.02 or (iii) if such Notes shall have been declared due and
payable following an Event of Default, but amounts collected or receivable from
the Collateral are being applied in accordance with Section 5.05 as if there
had not been such a declaration, then the Indenture Trustee shall, to the
fullest extent practicable, invest and reinvest funds in the Trust Accounts in
one or more Eligible Investments satisfying the requirements of clause (d) of
the definition thereof.

Section
8.04.        Release of Collateral.

(a)           Subject to the payment of its fees
and expenses pursuant to Section 6.07, the Indenture Trustee may, and when
required by the provisions of this Indenture or the Sale and Servicing
Agreement shall, execute instruments to release property from the lien of this
Indenture, or convey the Indenture Trustee’s interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of this
Indenture.  No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article shall
be bound to ascertain the Indenture Trustee’s authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.

(b)           The Indenture Trustee shall, at such
time as there are no Notes Outstanding and all sums due the Indenture Trustee
pursuant to Section 6.07 have been paid, release any remaining portion of the
Collateral that secured the Notes from the lien of this Indenture and release
to the Issuer or any other Person entitled thereto any funds then on deposit in
the Trust Accounts.  The Indenture Trustee
shall release property from the lien of this Indenture pursuant to this Section
8.04(b) only upon receipt of an Issuer Request accompanied by an Officer’s
Certificate, an Opinion of Counsel and (if required by the TIA as so stated in
the Opinion of Counsel) Independent Certificates in accordance with TIA
§§314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01.

 

48

 

Section 8.05.        Opinion of Counsel. 
The Indenture Trustee shall receive at least seven days notice when
requested by the Issuer to take any action pursuant to Section 8.04(a),
accompanied by copies of any instruments involved, and the Indenture Trustee
shall also require, as a condition to such action, an Opinion of Counsel, in
form and substance satisfactory to the Indenture Trustee, stating the legal
effect of any such action, outlining the steps required to complete the same,
and concluding that all conditions precedent to the taking of such action have
been complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders in contravention of the
provisions for this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the
Collateral.  Counsel rendering any such
opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.

ARTICLE NINE

SUPPLEMENTAL INDENTURES

Section
9.01.        Supplemental Indentures
Without Consent of Noteholders.

(a)           Without the consent of the Holders of
any Notes and with prior notice to each Rating Agency, the Issuer and the
Indenture Trustee, when authorized by an Issuer Order, and the other parties
hereto at any time from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the TIA as in
force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:

(i)            to
correct or amplify the description of any property at any time subject to the
lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien
created by this Indenture, or to subject additional property to the lien
created by this Indenture;

(ii)           to
evidence the succession, in compliance with the applicable provisions hereof,
of another Person to the Issuer, and the assumption by any such successor of
the covenants of the Issuer herein and in the Notes contained;

(iii)          to
add to the covenants of the Issuer, for the benefit of the Holders of the
Notes, or to surrender any right or power herein conferred upon the Issuer;

(iv)          to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;

(v)           to
cure any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture which may be inconsistent with any other provision
herein, in any supplemental indenture, in the Transaction Documents or in 

49

 

the Prospectus or to add any other provisions with
respect to matters or questions arising under this Indenture, in any
supplemental indenture, in the Transaction Documents or in the Prospectus;
provided that such action shall not adversely affect the interests of the
Holders of the Notes;

(vi)          to
evidence and provide for the acceptance of the appointment hereunder by a
successor Indenture Trustee with respect to the Notes and to add to or change
any of the provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one Indenture Trustee,
pursuant to the requirements of Article Six;

(vii)         to
modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualification of this Indenture under the TIA
or under any similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by the TIA; and

(viii)        to
elect into the FASIT provisions of the Code, provided an Opinion of Counsel to
the effect that such election will not adversely affect the Noteholders, is
delivered to the Issuer and Indenture Trustee.

The Indenture
Trustee is hereby authorized to join in the execution of any such supplemental
indenture and to make any further appropriate agreements and stipulations that
may be therein contained.

(b)           The Issuer and the Indenture Trustee,
when authorized by an Issuer Order, may, also without the consent of any of the
Holders of the Notes and with prior notice to each Rating Agency, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that such action shall not,
as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder.

Section
9.02.        Supplemental Indentures With
Consent of Noteholders.  The Issuer and the Indenture Trustee, when
authorized by an Issuer Order, may, with the consent of the Required Holders,
by Act of such Holders delivered to the Issuer and the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each Outstanding
Note affected thereby:

(i)            change the date of payment of any
installment of principal of or interest on any Note, or reduce the principal
amount thereof, the interest rate thereon or the Redemption Date Amount with
respect thereto, change the provisions of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the Collateral
to payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable, or impair the right to 

 

50

institute
suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article Five, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the  Redemption Date);

(ii)           reduce the percentage of the
Outstanding Amount of the Notes, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the Holders of
which is required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided for in
this Indenture;

(iii)
         modify or alter the provisions of
the second proviso to the definition of the term “Outstanding”;

(iv)          reduce the percentage of the
Outstanding Amount of the Notes required to direct the Indenture Trustee to
sell or liquidate the Collateral pursuant to Section 5.04 or amend the
provisions of this Article which specify the percentage of the Outstanding
Amount of the Notes required to amend this Indenture or the other Transaction
Documents;

(v)           modify any provision of this Section except
to increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the other Transaction Documents
cannot be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby; or

(vi)          permit the creation of any lien ranking
prior to or on a parity with the lien created by this Indenture with respect to
any part of the Collateral or, except as otherwise permitted or contemplated
herein, terminate the lien created by this Indenture on any property at any
time subject hereto or deprive the Holder of any Note of the security provided
by the lien created by this Indenture.

The Indenture
Trustee may in its discretion determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of the Notes, whether theretofore or thereafter
authenticated and delivered hereunder. 
The Indenture Trustee shall not be liable for any such determination
made in good faith.

It shall not be
necessary for any Act of Noteholders under this Section to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.

Promptly after the
execution by the parties hereto of any supplemental indenture pursuant to this
Section, the Indenture Trustee shall mail to the Holders of the Notes to which
such amendment or supplemental indenture relates a notice setting forth in
general terms the substance of such supplemental indenture.  Any failure of the Indenture Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.

 

51

 

Section
9.03.        Execution of Supplemental
Indentures.  In executing, or permitting the additional
trusts created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Indenture
Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02
shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture.  The Indenture Trustee may,
but shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee’s own rights, duties, liabilities or immunities
under this Indenture or otherwise.

Section
9.04.        Effect of Supplemental
Indenture.  Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and be
deemed to be modified and amended in accordance therewith with respect to the
Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
parties hereto and the Holders of the Notes shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.

Section
9.05.        Conformity With Trust
Indenture Act.  Every amendment of this Indenture and every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect so long as this
Indenture shall then be qualified under the Trust Indenture Act.

Section
9.06.        Reference in Notes to
Supplemental Indentures.  Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and if
required by the Indenture Trustee shall, bear a notation in form approved by
the Indenture Trustee as to any matter provided for in such supplemental
indenture.  If the Issuer or the
Indenture Trustee shall so determine, new notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.

ARTICLE TEN

REDEMPTION OF NOTES

Section 10.01.      Redemption.

(a)           In the event that the Seller pursuant
to Section 7.10 of the Sale and Servicing Agreement purchases the corpus of the
Trust, the Notes are subject to redemption in whole, but not in part, on the
Distribution Date on which such repurchase occurs, for a purchase price equal
to the outstanding principal, and accrued interest on the Notes; provided,
however, that the Issuer has available funds sufficient to pay such
amounts.  Seller, the Servicer or the
Issuer shall furnish each Rating Agency notice of such redemption.  If the Notes are to be redeemed pursuant to
this Section 10.01(a), the Servicer or the Issuer shall 

 

52

 

furnish notice of such
election to the Indenture Trustee not later than 20 days prior to the
Redemption Date and the Issuer shall deposit with the Indenture Trustee in the
Note Distribution Account the Redemption Price of the Notes to be redeemed
whereupon all such Notes shall be due and payable on the Redemption Date upon
the furnishing of a notice complying with Section 10.02 to each Holder of the
Notes.

(b)           In the event that the assets of the
Trust are sold pursuant to Section 5.03(b) of this Indenture, the proceeds of
such sale shall be distributed as provided in Section 5.06.  If amounts are to be paid to Noteholders pursuant
to this Section 10.01(b), the Servicer or the Issuer shall, to the extent
practicable, furnish notice of such event to the Indenture Trustee not later
than 20 days prior to the Redemption Date whereupon all such amounts shall be
payable on the Redemption Date.

(c)           If (x) the Pre-Funded Amount has not
been reduced to zero on the Distribution Date on which the Funding Period ends
(or, if the Funding Period does not end on a Distribution Date, on the first
Distribution Date following the end of the Funding Period) or (y) the
Pre-Funded Amount has been reduced to $150,000 or less on any Distribution
Date, in either case after giving effect to any reductions in the Pre-Funded
Amount on such Distribution Date pursuant to Section 7.07 of the Sale and
Servicing Agreement, one or more classes of Notes then outstanding will be
redeemed, in whole or in part, as described in Section 7.07(c) of the Sale
and Servicing Agreement, in a principal amount described therein.

Section
10.02.      Form of Redemption Notice.

(a)           Notice of redemption under Section
10.01(a) shall be given by the Indenture Trustee by first-class mail, postage
prepaid, mailed not less than five days prior to the applicable Redemption Date
to each Holder of Notes, as of the close of business on the Record Date
preceding the applicable Redemption Date, at such Holder’s address appearing in
the Note Register.

All notices of
redemption shall state:

(i)            the Redemption Date;

(ii)           the Redemption Date Amount; and

(iii)
the place where such Notes are to be surrendered for payment of the Redemption
Date Amount (which shall be the office or agency of the Issuer to be maintained
as provided in Section 3.02).

Notice of
redemption of the Notes shall be given by the Indenture Trustee in the name and
at the expense of the Issuer.  Failure to
give notice of redemption, or any defect therein, to any Holder of any Note
shall not impair or affect the validity of the redemption of any other Note.

(b)           Prior notice of redemption under
Section 10.01(b) or 10.01(c) is not required to be given to Noteholders.

 

53

 

Section
10.03.      Notes Payable on Redemption
Date.  The Notes or portions thereof to be redeemed
shall, following notice of redemption (if any) as required by Section 10.02, on
the Redemption Date become due and payable at the Redemption Date Amount and
(unless the Issuer shall default in the payment of the Redemption Date Amount)
no interest shall accrue on the Redemption Date Amount for any period after the
date to which accrued interest is calculated for purposes of calculating the
Redemption Date Amount.

 

 

ARTICLE ELEVEN

MISCELLANEOUS

Section
11.01.      Compliance Certificates and
Opinions, etc.

(a)           Upon any application or request by
the Issuer to the Indenture Trustee to take any action under any provision of
this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an
Officer’s Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with,
(ii) an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, and (iii) (if required
by the TIA as so stated in the Opinion of Counsel) an Independent Certificate
from a firm of certified public accountants meeting the applicable requirements
of this Section and TIA §314(c), except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished. 
No additional certificate or opinion need be furnished.

Every certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Indenture shall include:

(i)            a
statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein
relating thereto;

(ii)           a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

(iii)          a
statement that, in the opinion of each such signatory, such signatory has made
such examination or investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

(iv)          a
statement as to whether, in the opinion of each such signatory, such condition
or covenant has been complied with.

 

54

 

(b)           (i)            Prior
to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for authentication and delivery
of the Notes or the release of any property subject to the lien created by this
Indenture, the Issuer shall, in addition to any obligation imposed in Section
11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an
Officer’s Certificate certifying or stating the opinion of the signer thereof
such certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited.

(ii)           Whenever the Issuer is required to
furnish to the Indenture Trustee an Officer’s Certificate certifying or stating
the opinion of any signer thereof as to 
the matters described in clause (i) above, the Issuer shall also deliver
to the Indenture Trustee an Independent Certificate as to the named matters, if
the fair value to the Issuer of the property to be so deposited and of all
other such property made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause (ii), is
10% or more of the Outstanding Amount of the Notes, but such a certificate need
not be furnished with respect to any property so deposited, if the fair value
thereof to the Issuer as set forth in the related Officer’s Certificate is less
than $25,000 or less than one percent of the Outstanding Amount of the Notes.

(iii)          Other than with respect to any release
described in clause (A) or (B) of Section 11.01(b)(v), whenever any property or
securities are to be released from the lien created by this Indenture, the
Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate
certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person the
proposed release will not impair the security created by this Indenture in
contravention of the provisions hereof.

(iv)          Whenever the Issuer is required to
furnish to the Indenture Trustee an Officer’s Certificate certifying or stating
the opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property or securities (other than property
described in clauses (A) or (B) of Section 11.01(b)(v)) released from the lien
created by this Indenture since the commencement of the then current fiscal
year, as set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but
such certificate need not be furnished in the case of any release of property
or securities if the fair value thereof as set forth in the related Officer’s
Certificate is less than $25,000 or less than one percent of the then
Outstanding Amount of the Notes.

(v)           Notwithstanding any other provision
of this Section, the Issuer may, without compliance with the other provisions
of this Section, (A) collect, liquidate, sell or otherwise dispose of the
Contracts as and to the extent permitted or required by the Transaction
Documents, and (B) make cash payments out of the Trust Accounts as and to the
extent permitted or required by the Transaction Documents, so long as the
Issuer shall deliver to the Indenture Trustee every six months, commencing
August 1, 2006, an Officer’s Certificate stating that all the dispositions of
Collateral described in clauses (A) or (B) that 

 

55

 

occurred
during the preceding six calendar months were in the ordinary course of the
Issuer’s business and that the proceeds thereof were applied in accordance with
the Transaction Documents.

Section
11.02.      Form of Documents Delivered to
Indenture Trustee.  In any case where several matters are
required to be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or covered by
only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Person as to other matters,
and any such Person may certify or given an opinion as to such matters in one or
several documents.

Any certificate or
opinion of an Authorized Officer of the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer
or Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or officers
of the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Seller or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.

Where any Person
is required to make, give or execute two or more applications, requests,
consents, certificates, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.

Whenever in this
Indenture, in connection with any application or certificate or report to the
Indenture Trustee, it is provided that the Issuer shall deliver any document as
a condition of the granting of such application, or as evidence of the Issuer’s
compliance with any term hereof, it is intended that the truth and accuracy, at
the time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions stated in
such document shall in such case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report.  The foregoing
shall not, however, be construed to affect the Indenture Trustee’s right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article Six.

Section
11.03.      Acts of Noteholders.

(a)           Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Noteholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
expressly 

 

56

 

required, to the
Issuer.  Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the “Act” of the Noteholders signing such instrument or
instruments.  Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided
in this Section.

(b)           The fact and date of the execution by
any person of any such instrument or writing may be proved in any manner that
the Indenture Trustee deems sufficient.

(c)           The ownership of Notes shall be
proved by the Note Register.

(d)           Any request, demand, authorization,
direction, notice, consent, waiver or other action by the Holder of any Notes
shall bind the Holder of every Note issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Indenture Trustee or the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.

Section 11.04.      Notices. 
All notices, demands, certificates, requests and communications
hereunder (“notices”) shall be in writing and shall be effective (a) upon
receipt when sent through the U.S. mails, registered or certified mail, return
receipt requested, postage prepaid, with such receipt to be effective the date
of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date transmitted
by legible telecopier transmission with a confirmation of receipt, in all cases
addressed to the recipient at the address specified in the Sale and Servicing
Agreement for such recipient.  Each party
hereto may, by notice given in accordance herewith to each of the other parties
hereto, designate any further or different address to which subsequent notices
shall be sent.

Section
11.05.      Notices to Noteholders; Waiver. 
Where this Indenture provides for notice to Noteholders of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to
each Noteholder affected by such event, at his address as it appears on the
Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is
given by mail, neither the failure to mail such notice nor any defect in any
notice so mailed to any particular Noteholder shall affect the sufficiency of
such notice with respect to other Noteholders, and any notice that is mailed in
the manner herein provided shall conclusively be presumed to have been duly
given.

Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by any Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be
filed with the Indenture Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such a waiver.

 

57

 

In case, by reason
of the suspension of regular mail service as a result of a strike, work
stoppage or similar activity, it shall be impractical to mail notice of any
event of Noteholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
of such notice.

Where this
Indenture provides for notice to the Rating Agencies, failure to give such
notice shall not affect any other rights or obligations created hereunder, and
shall not under any circumstance constitute a Default or Event of Default.

Section
11.06.      Alternate Payment and Notice
Provisions.  Notwithstanding any provisions of this
Indenture or any of the Notes to the contrary, the Issuer may enter into any
agreement with any Holder of a Note providing for a method of payment, or
notice by the Indenture Trustee or any Paying Agent to such Holder, that is
different from the methods provided for in this Indenture for such payments or
notices.  The Issuer will furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee will
cause payments to be made and notices to be given in accordance with such
agreements.

Section
11.07.      Effect of Headings and Table
of Contents.  The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

Section
11.08.      Successors and Assigns. 
All covenants and agreements in this Indenture and the Notes
by the Issuer shall bind its successors and assigns, whether so expressed or
not.  All agreements of the Indenture
Trustee in this Indenture shall bind its successors, co-Indenture Trustees and
agents.

Section 11.09.      Separability. 
In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

Section
11.10.      Benefits of Indenture. 
Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders, and any other party secured
hereunder, and any other Person with an ownership interest in any part of the
Collateral, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

Section 11.11.      Legal Holidays.  In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

Section 11.12.      Governing Law.  THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS AND THE OBLIGATIONS, RIGHTS,
AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

 

58

 

Section 11.13.      Counterparts. 
This Indenture may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.

Section
11.14.      Recording of Indenture. 
If this Indenture is subject to recording in any appropriate public
recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel to the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.

Section 11.15.      Trust Obligation. 
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficiary
interest in the Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director, employee or agent of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such
entity.  For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article Six, Seven and Eight of the Trust
Agreement.

Section 11.16.      No Petition. 
The parties hereto, by entering into this Indenture, and each
Noteholder, by accepting a Note or a beneficial interest in a Note, hereby
covenant and agree that they will not at any time institute against the Trust
Depositor or the Issuer, or join in any institution against the Trust Depositor
or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the other Transaction Documents.

Section 11.17.      Inspection. 
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee, during the Issuer’s normal business
hours, to examine all the books of account, records, reports and other papers
of the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by independent certified public accountants, and to discuss the Issuer’s
affairs, finances and accounts with the Issuer’s officers, employees and
independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested, the Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential 

 

59

 

treatment are unavailing) and except
to the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.

Section
11.18.      Conflict with Trust Indenture
Act.  If any provision hereof limits, qualifies or
conflicts with another provision hereof that is required to be included in this
Indenture by any of the provisions of the Trust Indenture Act, such required
provision shall control.

The provisions of
TIA §§310 through 317 that impose duties on any person (including the
provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.

Section
11.19.      Disclaimer and Subordination. 
Each Noteholder by accepting a Note acknowledges and agrees
that such Note represents a debt obligation of the Trust Depositor only and
does not represent an interest in any assets (other than the Trust Assets) of
the Trust Depositor (including by virtue of any deficiency claim in respect of
obligations not paid or otherwise satisfied from the Trust Assets and proceeds
thereof).  In furtherance of and not in
derogation of the foregoing, each Noteholder by accepting a Note acknowledges
and agrees that it shall have no right, title or interest in or to any assets
(or interests therein) (other than Trust Assets) conveyed or purported to be
conveyed by the Trust Depositor to another securitization trust (i.e., other
than the Issuer) or other Person or Persons in connection therewith (whether by
way of a sale, capital contribution or by virtue of the granting of a Lien) (“Other
Assets”).  To the extent that,
notwithstanding the agreements and provisions contained in the preceding
sentences of this Section 11.19, any Noteholder either (i) asserts an interest
in or claim to, or benefit from, Other Assets, whether asserted against or
through the Trust Depositor or any other Person owned by the Trust Depositor,
or (ii) is deemed to have any such interest, claim or benefit in or from Other
Assets, whether by operation of law, legal process, pursuant to applicable
provisions of any applicable insolvency laws or otherwise (including without
limitation by virtue of Section 1111(b) of the federal Bankruptcy Code or any
successor provision having similar effect under the Bankruptcy Code or any
successor provision having similar effect under the Bankruptcy Code), and
whether deemed asserted against or through the Trust Depositor or any other
Person owned by the Trust Depositor, then each Noteholder by accepting a Note
further acknowledges and agrees that any such interest, claim or benefit in or
from Other Assets is and shall be expressly subordinated to the indefeasible
payment in full of all obligations and liabilities of the Trust Depositor
which, under the terms of the relevant documents relating to the securitization
of such Other Assets, are entitled to be paid from, entitled to the benefits
of, or otherwise secured by such Other Assets (whether or not any such
entitlement or security interest is legally perfected or otherwise entitled to
a priority of distribution or application under applicable law, including any
applicable insolvency laws, and whether asserted against the Trust Depositor or
any other Person owned by the Depositor), including, without limitation, the
payment of post-petition interest on such other obligations and
liabilities.  This subordination
agreement shall be deemed a subordination agreement within the meaning of
Section 510(a) of the Bankruptcy Code. 
Each Noteholder further acknowledges and agrees that no adequate remedy
at law exists for a breach of this Section 

 

60

 

11.19 and that the terms and
provisions of this Section 11.19 may be enforced by an action for specific
performance.

[signature page follows]

 

61

 

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

	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE 

  TRUST 2005-1

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST
  COMPANY, not in its individual capacity but solely on behalf of the Issuer as
  Owner Trustee under the Trust Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JANEL R. HAVRILLA

  
	
   

  	
  Printed Name: Janel R. Havrilla

  
	
   

  	
  Title:  Financial
  Services Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BNY MIDWEST TRUST COMPANY, not in its individual
  capacity but solely as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CYNTHIA L. DAVIS

  
	
   

  	
  Printed Name: Cynthia L. Davis

  
	
   

  	
  Title:  Vice
  President

  

 

 

STATE OF ILLINOIS                          )

                                                )               SS

COUNTY OF COOK                            )

 

	
  On

  	
  February 7, 2005

  	
   

  
	
   

  	
  [insert date]

  	
   

  
	
   

  	
   

  	
   

  
	
  before me,

  	
  Michelle Kallick

  	
   

  
	
   

  	
  [Insert name and title of notary]

  	
   

  
	
   

  	
   

  	
   

  
	
  personally appeared

  	
  Cynthia L. Davis

  	
  ,

  
	
   

  	
   

  	
   

  
					

 

ý            personally
known to me, or

 

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

 

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

 

WITNESS my hand and
official seal.

 

 

	
  Signature

  	
  /s/ MICHELLE KALLICK

  	
  [Seal]

  

 

 

My commission expires
8/27/05

 

 

STATE OF DELAWARE                    )

                                                                ) SS

COUNTY OF NEW CASTLE             )

 

	
  On

  	
  February 2, 2005

  	
   

  
	
   

  	
  [insert date]

  	
   

  
	
   

  	
   

  	
   

  
	
  before me,

  	
  Kathleen A. Pedelini

  	
   

  
	
   

  	
  [Insert name and title of notary]

  	
   

  
	
   

  	
   

  	
   

  
	
  personally appeared

  	
  Janel R. Harvila

  	
  ,

  
	
   

  	
   

  	
   

  
					

 

ý            personally
known to me, or

 

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

 

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

 

WITNESS my hand and
official seal.

 

 

	
  Signature

  	
  /s/ KATHLEEN A. PEDELINI

  	
  [Seal]

  

 

 

My commission expires
October 31, 2006

 

 

EXHIBIT
A

 

[RESERVED]

 

A-1

 

EXHIBIT B

 

FORM OF CLASS A-1 NOTE

 

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

THIS SECURITY IS
NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR
ANY AGENCY OR FUND OF THE UNITED STATES.

THE PRINCIPAL OF
THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT
OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

HARLEY-DAVIDSON
MOTORCYCLE TRUST 2005-1

      % HARLEY-DAVIDSON MOTORCYCLE
CONTRACT BACKED NOTES, CLASS A-1

REGISTERED                                                                                                                                                                      $

No. R-                                                                                                                                                 CUSIP
No.                 

Harley-Davidson
Motorcycle Trust 2005-1, a statutory trust organized and existing under the
laws of the State of Delaware (herein referred to as the “Issuer”), for value
received, hereby promises to pay to [                ],
or registered assigns, the principal sum of 
                      
($          ) payable on the
earlier of the Distribution Date occurring in July 2009 (the “Class A-1 Final
Distribution Date”) and the Redemption Date, if any, pursuant to Section 10.01
of the Indenture referred to on the reverse hereof.

The Issuer will
pay interest on this Note at the rate per annum shown above on each
Distribution Date until the principal of this Note is paid or made available
for payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.01 of the Indenture.  Interest
on this Note will accrue for each Distribution Date from the most recent
Distribution Date on which interest 

 

B-1

 

has been paid to
but excluding such Distribution  Date or,
if no interest has yet been paid, from the Closing Date.  Interest will be computed on the basis of a
360-day year of twelve 30-day months. 
Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.

The principal of
and interest on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.  All payments
made by the Issuer with respect to this Note shall be applied first to interest
due and payable on this Note as provided above and then to the unpaid principal
of this Note.

Reference is made
to the further provisions of this Note set forth on the reverse hereof, which
shall have the same effect as though fully set forth on the face of this Note.

Unless the
certificate of authentication hereon has been executed by the Indenture Trustee
whose name appears below by manual signature, this Note shall not be entitled
to any benefit under the indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

 

B-2

 

IN WITNESS WHEREOF, the
Issuer has caused this instrument to be signed, manually or in facsimile, by an
Authorized Officer, as of the date set forth below.

	
  Date:

  	
   

  	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE 

  TRUST 2005-1

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST
  COMPANY, not in its individual capacity but solely on behalf of the Issuer as
  Owner Trustee, under the Trust Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
							

 

B-3

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the
Notes designated above and referred to in the within-mentioned Indenture.

 

	
   

  	
   

  	
   

  	
  BNY MIDWEST TRUST
  COMPANY,

  not in its individual capacity but solely as Indenture Trustee

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized Signatory

  

 

B-4

 

[REVERSE OF CLASS A-1 NOTE]

This Note is one
of a duly authorized issue of Notes of the Issuer, designated as its ___%
Harley-Davidson Motorcycle Contract Backed Notes, Class A-1 (the “Class A-1
Notes”), all issued under an Indenture, dated as of February 1, 2005 (the “Indenture”),
between the Issuer and BNY Midwest Trust Company, as Indenture Trustee (the “Indenture
Trustee”), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the
Notes.  The Class A-1 Notes are subject
to all terms of the Indenture.  All terms
used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.

The Class A-1
Notes and the other Classes of Notes described in the Indenture (collectively,
the “Notes”) are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture subject to the
priorities of allocations as to interest and principal payments as described in
the Sale and Servicing Agreement.

Principal of the
Class A-1 Notes will be payable on the earlier of the Class A-1 Final
Distribution Date and the Redemption Date, if any, selected pursuant to the
Indenture.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Class A-1 Notes shall be
due and payable on the date following the occurrence of an Event of Default on
which the maturity of the Notes shall have been accelerated in the manner
provided in the Indenture.  All principal
payments on the Class A-1 Notes shall be made pro rata to the Class A-1
Noteholders entitled thereto.

Payments of
interest on this Note due and payable on each Distribution Date shall be made
by wire transfer to the account of the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register as of the close of business on each Record Date except that with
respect to Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially, such nominee to be Cede & Co.), payments
will be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks
shall be mailed to the Person entitled thereto at the address of such Person as
it appears on the Note Register as of the applicable Record Date without
requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on
any Distribution Date shall be binding upon all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed within five days of such Distribution Date
and the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Corporate Trust Office of the Indenture 

 

B-5

 

Trustee
or at the office of the Indenture Trustee’s agent appointed for such purposes
located in the City of Chicago, Illinois.

The Issuer shall
pay interest on overdue installments of interest at the Class A-1 Rate to the
extent lawful.

                As provided in the
Indenture, the Notes may be redeemed pursuant to Section 10.01(a) of the
Indenture, in whole, but not in part, at the option of the Seller, on any
Distribution Date on or after the date on which the Pool Balance is less than
10% of the sum of the Pool Balance as of the Initial Cutoff Date plus the
Pre-Funded Amount as of the Closing Date.

 

As provided in the
Indenture and subject to certain limitations set forth therein, the transfer of
this Note may be registered on the Note Register upon surrender of this Note
for registration of transfer at the office or agency designated by the Issuer
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder hereof or his attorney duly authorized in writing, with
such signature guaranteed by an eligible guarantor institution which is a
participant in the Securities Transfer Agent’s Medallion Program (STAMP) or
similar signature guarantee program, and such other documents as the Indenture
Trustee may require, and thereupon one or more new program, and such other
documents as the Indenture Trustee may require, and thereupon one or more new
Class A-1 Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees.  No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

Each Noteholder by
acceptance of a Note or a beneficial interest in a Note covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.

Each Noteholder,
by acceptance of a Note or a beneficial interest in a Note covenants and agrees
that by accepting the benefits of the Indenture and such Note that such
Noteholder will not at any time institute against the Trust Depositor or the
Issuer, or join in any institution against the Trust Depositor or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state 

 

B-6

 

bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Transaction Documents.

The Issuer has
entered into the Indenture, and this Note is issued with the intention that,
for federal, state and local income, single business and franchise tax
purposes, the Notes will qualify as indebtedness secured by the Collateral and
that the Issuer will be disregarded as a separate entity for federal income tax
purposes pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii).  Each Noteholder, by acceptance of a Note or a
beneficial interest in a Note, agrees to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness of the
Issuer.

Prior to the due
presentment for registration of transfer of this Note, the Issuer and the
Indenture Trustee and any agent of the Issuer and the Indenture Trustee may
treat the Person in whose name this Note (as of the day of determination or as
of such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Indenture Trustee nor any such agent shall be affected by
notice to the contrary.

The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Issuer and the rights of
the Noteholders under the Indenture at any time by the Issuer and the Modified
Required Holders.  The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences.  Any such consent or waiver
by the Noteholder  (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Noteholders  and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note.  The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Noteholders issued thereunder.

Each Noteholder,
by acceptance of a Note or a beneficial interest in a Note is deemed to
represent that (i) it is not, and is not acquiring a Note or a beneficial
interest in a Note on behalf of or with “plan assets” (as determined under
Department of Labor Regulation Section 2510.3-101 or otherwise) of a Plan, or
any employee benefit plan subject to Similar Law, or (ii) its acquisition and
holding of a Note or a beneficial interest in a Note do not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code, or any Similar Law.  Each
Noteholder, by acceptance of a Note or a beneficial interest in a Note is
deemed to make one of the foregoing representations.

The Notes are
issuable only in registered form in denominations as provided in the Indenture,
subject to certain limitations therein set forth.

This Note and the
Indenture shall be construed in accordance with the laws of the State of
Illinois, and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.

 

B-7

 

No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on this Note at the times,
place, and rate, and in the coin or currency herein prescribed.

 

B-8

 

EXHIBIT C

FORM OF CLASS A-2 NOTE

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

THIS SECURITY IS
NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR
ANY AGENCY OR FUND OF THE UNITED STATES.

THE PRINCIPAL OF
THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT
OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

HARLEY-DAVIDSON MOTORCYCLE TRUST 2005-1

      %
HARLEY-DAVIDSON MOTORCYCLE CONTRACT BACKED NOTES,

CLASS A-2

 

REGISTERED                                                                                                                                                        $

No. R-                                                                                                                                     CUSIP
No.                   

Harley-Davidson
Motorcycle Trust 2005-1, a statutory trust organized and existing under the
laws of the State of Delaware (herein referred to as the “Issuer”), for value
received, hereby promises to pay to [                      ],
or registered assigns, the principal sum of 
                      
($                    )
payable on the earlier of the Distribution Date occurring in December 2012 (the
“Class A-2 Final Distribution Date”) and the Redemption Date, if any, pursuant
to Section 10.01 of the Indenture referred to on the reverse hereof.  No payments of principal of the Class A-2
Notes shall be made until the principal on the Class A-1 Notes have been paid
in full.

The Issuer will
pay interest on this Note at the rate per annum shown above on each
Distribution Date until the principal of this Note is paid or made available
for payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.01 of the Indenture.  Interest
on this Note will 

 

C-1

 

accrue
for each Distribution Date from the most recent Distribution Date on which
interest has been paid to but excluding such Distribution Date or, if no interest
has yet been paid, from the Closing Date. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months.  Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.

The principal of and
interest on this Note are payable in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts.  All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.

Reference is made
to the further provisions of this Note set forth on the reverse hereof, which
shall have the same effect as though fully set forth on the face of this Note.

Unless the
certificate of authentication hereon has been executed by the Indenture Trustee
whose name appears below by manual signature, this Note shall not be entitled
to any benefit under the indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

 

C-2

 

IN WITNESS WHEREOF, the
Issuer has caused this instrument to be signed, manually or in facsimile, by an
Authorized Officer, as of the date set forth below.

	
  Date:

  	
   

  	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE 

  TRUST 2005-1

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST
  COMPANY, not in its individual capacity but solely on behalf of the Issuer as
  Owner Trustee, under the Trust Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
							

 

 

C-3

 

INDENTURE TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes
designated above and referred to in the within-mentioned Indenture.

 

	
   

  	
   

  	
   

  	
  BNY MIDWEST TRUST COMPANY,

  not in its individual capacity
  but solely as Indenture Trustee

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized Signatory

  

 

C-4

 

[REVERSE OF CLASS A-2
NOTE]

                This Note is one
of a duly authorized issue of Notes of the Issuer, designated as its ___%
Harley-Davidson Motorcycle Contract Backed Notes, Class A-2 (the “Class A-2
Notes”), all issued under an Indenture, dated as of February 1, 2005 (the “Indenture”),
between the Issuer and BNY Midwest Trust Company, as Indenture Trustee (the “Indenture
Trustee”), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the
Notes.  The Notes are subject to all
terms of the Indenture.  All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.

 

                The Class A-2
Notes and the other Classes of Notes described in the Indenture (collectively,
the “Notes”) are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture subject to the
priorities of allocations as to interest and principal payments as described in
the Sale and Servicing Agreement.

 

                Principal of the
Class A-2 Notes will be payable on the earlier of the Class A-2 Final
Distribution Date and the Redemption Date, if any, pursuant to Section 10.01(a)
or 10.01(b) of the Indenture.  Notwithstanding
the foregoing, the entire unpaid principal amount of the Class A-2 Notes shall
be due and payable on the date on which following the occurrence of an Event of
Default on which the maturity of the Notes shall have been accelerated in the
manner provided in the Indenture.  All
principal payments on the Class A-2 Notes shall be made pro rata to the Class
A-2 Noteholders entitled thereto.

 

                Payments of
interest on this Note due and payable on each Distribution Date shall be made
by wire transfer to the account of the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks shall
be mailed to the Person entitled thereto at the address of such Person as it
appears on the Note Register as of the applicable Record Date without requiring
that this Note be submitted for notation of payment.  Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on
any Distribution Date shall be binding upon all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed within five days of such Distribution Date
and the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee’s principal Corporate Trust 

 

C-5

 

Office or at the office of the Indenture Trustee’s agent appointed for
such purposes located in the City of Chicago, Illinois.

 

                The Issuer shall
pay interest on overdue installments of interest at the Class A-2 Rate to the
extent lawful.

 

                As provided in the
Indenture, the Notes may be redeemed pursuant to Section 10.01(a) of the
Indenture, in whole, but not in part, at the option of the Seller, on any
Distribution Date on or after the date on which the Pool Balance is less than
10% of the sum of the Pool Balance as of the Initial Cutoff Date plus the
Pre-Funded Amount as of the Closing Date.

 

                As provided in the
Indenture and subject to certain limitations set forth therein, the transfer of
this Note may be registered on the Note Register upon surrender of this Note
for registration of transfer at the office or agency designated by the Issuer
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder hereof or his attorney duly authorized in writing, with
such signature guaranteed by an eligible guarantor institution which is a
participant in the Securities Transfer Agent’s Medallion Program (STAMP) or
similar signature guarantee program, and such other documents as the Indenture
Trustee may require, and thereupon one or more new program, and such other
documents as the Indenture Trustee may require, and thereupon one or more new
Class A-2 Notes of authorized denomination and in the same aggregate principal
amount will be issued to the designated transferee or transferees.  No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

 

                Each Noteholder,
by acceptance of a Note or  a beneficial
interest in a Note covenants and agrees that no recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of
a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.

 

                Each Noteholder,
by acceptance of a Note or a beneficial interest in a Note covenants and agrees
that by accepting the benefits of the Indenture and such Note that such
Noteholder will not at any time institute against the Trust Depositor or the
Issuer, or join in any institution against the Trust Depositor or the Issuer of
any bankruptcy, reorganization, 

 

C-6

 

arrangement, insolvency or liquidation proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Transaction Documents.

 

                The Issuer has
entered into the Indenture, and this Note is issued with the intention that,
for federal, state and local income, single business and franchise tax
purposes, the Notes will qualify as indebtedness secured by the Collateral and
that the Issuer will be disregarded as a separate entity for federal income tax
purposes pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii).  Each Noteholder, by acceptance of a Note or a
beneficial interest in a Note, agrees to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness of the
Issuer.

 

                Prior to the due
presentment for registration of transfer of this Note, the Issuer and the
Indenture Trustee and any agent of the Issuer, the Indenture Trustee may treat
the Person in whose name this Note (as of the day of determination or as of
such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Indenture Trustee nor any such agent shall be affected by
notice to the contrary.

 

                The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Issuer and the rights of
the Holders of the Notes under the Indenture at any time by the Issuer and the
consent of the Modified Required Holders. 
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences.  Any
such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.

 

Each Noteholder,
by acceptance of a Note or a beneficial interest in a Note is deemed to
represent that (i) it is not, and is not acquiring a Note or a beneficial
interest in a Note on behalf of or with “plan assets” (as determined under
Department of Labor Regulation Section 2510.3-101 or otherwise) of a Plan, or
any employee benefit plan subject to Similar Law, or (ii) its acquisition and
holding of a Note or a beneficial interest in a Note do not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code, or any Similar Law.  Each
Noteholder, by acceptance of a Note or a beneficial interest in a Note is
deemed to make one of the foregoing representations.

                The Notes are
issuable only in registered form in denominations as provided in the Indenture,
subject to certain limitations therein set forth.

 

C-7

 

                This Note and the
Indenture shall be construed in accordance with the laws of the State of
Illinois, and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.

 

                No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on this Note at the times,
place, and rate, and in the coin or currency herein prescribed.

 

C-8

 

EXHIBIT D

FORM OF CLASS B NOTE

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

THIS SECURITY IS
NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR
ANY AGENCY OR FUND OF THE UNITED STATES.

THE PRINCIPAL OF
THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT
OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

HARLEY-DAVIDSON MOTORCYCLE TRUST 2005-1

      %
HARLEY-DAVIDSON MOTORCYCLE CONTRACT BACKED NOTES,

CLASS B

 

REGISTERED                                                                                                                                                        $

No. R-                                                                                                                                     CUSIP
No.                   

Harley-Davidson
Motorcycle Trust 2005-1, a statutory trust organized and existing under the
laws of the State of Delaware (herein referred to as the “Issuer”), for value
received, hereby promises to pay to [                      ],
or registered assigns, the principal sum of 
                      
($                    )
payable on the earlier of the Distribution Date occurring in December 2012 (the
“Class B Final Distribution Date”) and the Redemption Date, if any, pursuant to
Section 10.01 of the Indenture referred to on the reverse hereof.

The Issuer will
pay interest on this Note at the rate per annum shown above on each
Distribution Date until the principal of this Note is paid or made available
for payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date), subject to certain limitations contained in
Section 3.01 of the Indenture.  Interest
on this Note will accrue for each Distribution Date from the most recent
Distribution Date on which interest has been paid to but excluding such
Distribution Date or, if no interest has yet been paid, 

 

D-1

 

from
the Closing Date.  Interest will be
computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note
shall be paid in the manner specified on the reverse hereof.

The principal of
and interest on this Note are payable in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.  All payments
made by the Issuer with respect to this Note shall be applied first to interest
due and payable on this Note as provided above and then to the unpaid principal
of this Note.

Reference is made
to the further provisions of this Note set forth on the reverse hereof, which
shall have the same effect as though fully set forth on the face of this Note.

Unless the
certificate of authentication hereon has been executed by the Indenture Trustee
whose name appears below by manual signature, this Note shall not be entitled
to any benefit under the indenture referred to on the reverse hereof, or be
valid or obligatory for any purpose.

 

D-2

 

IN WITNESS WHEREOF, the
Issuer has caused this instrument to be signed, manually or in facsimile, by an
Authorized Officer, as of the date set forth below.

	
  Date:

  	
   

  	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE 

  TRUST 2005-1

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST
  COMPANY, not in its individual capacity but solely on behalf of the Issuer as
  Owner Trustee, under the Trust Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
							

 

 

D-3

 

INDENTURE
TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes
designated above and referred to in the within-mentioned Indenture.

 

	
   

  	
   

  	
   

  	
  BNY MIDWEST TRUST COMPANY,

  not in its individual capacity
  but solely as Indenture Trustee

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized Signatory

  

 

 

D-4

 

[REVERSE OF CLASS
B NOTE]

                This Note is one
of a duly authorized issue of Notes of the Issuer, designated as its      %
Harley-Davidson Motorcycle Contract, Class B (the “Class B Notes”), all issued
under an Indenture, dated as of February 1, 2005 (the “Indenture”), between the
Issuer and BNY Midwest Trust Company, as Indenture Trustee (the “Indenture
Trustee”), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the
Notes.  The Notes are subject to all
terms of the Indenture.  All terms used
in this Note that are defined in the Indenture, as supplemented or amended,
shall have the meanings assigned to them in or pursuant to the Indenture, as so
supplemented or amended.

 

                The Class B Notes
and the other Classes of Notes described in the Indenture (collectively, the “Notes”)
are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture subject to the priorities of
allocations as to interest and principal payments as described in the Sale and
Servicing Agreement.

 

                Principal of the
Class B Notes will be payable on the earlier of the Class B Final Distribution
Date and the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(b)
of the Indenture.  Notwithstanding the
foregoing, the entire unpaid principal amount of the Class B Notes shall be due
and payable on the date on which following the occurrence of an Event of
Default on which the maturity of the Notes shall have been accelerated in the
manner provided in the Indenture.  All
principal payments on the Class B Notes shall be made pro rata to the Class B
Noteholders entitled thereto.

 

                Payments of
interest on this Note due and payable on each Distribution Date shall be made
by wire transfer to the account of the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Notes registered on the Record Date in the name of nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee.  Such checks
shall be mailed to the Person entitled thereto at the address of such Person as
it appears on the Note Register as of the applicable Record Date without
requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) affected by any payments made on
any Distribution Date shall be binding upon all future Holders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Registered Holder hereof as of the Record Date preceding such
Distribution Date by notice mailed within five days of such Distribution Date
and the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee’s principal Corporate Trust
Office or at the office of the Indenture Trustee’s agent appointed for such
purposes located in the City of Chicago, Illinois.

 

D-5

 

                The Issuer shall
pay interest on overdue installments of interest at the Class B Rate to the
extent lawful.

 

                As provided in the
Indenture, the Notes may be redeemed pursuant to Section 10.01(a) of the
Indenture, in whole, but not in part, at the option of the Seller, on any
Distribution Date on or after the date on which the Pool Balance is less than
10% of the sum of the Pool Balance as of the Initial Cutoff Date plus the
Pre-Funded Amount as of the Closing Date.

 

                As provided in the
Indenture and subject to certain limitations set forth therein, the transfer of
this Note may be registered on the Note Register upon surrender of this Note
for registration of transfer at the office or agency designated by the Issuer
pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder hereof or his attorney duly authorized in writing, with such signature
guaranteed by an eligible guarantor institution which is a participant in the
Securities Transfer Agent’s Medallion Program (STAMP) or similar signature
guarantee program, and such other documents as the Indenture Trustee may
require, and thereupon one or more new program, and such other documents as the
Indenture Trustee may require, and thereupon one or more new Class B Notes of
authorized denomination and in the same aggregate principal amount will be
issued to the designated transferee or transferees.  No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.

 

                Each Noteholder,
by acceptance of a Note or  a beneficial
interest in a Note covenants and agrees that no recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in their individual capacities, (ii) any owner of
a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in their individual capacities, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in their individual
capacities, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.

 

                Each Noteholder,
by acceptance of a Note or a beneficial interest in a Note covenants and agrees
that by accepting the benefits of the Indenture and such Note that such
Noteholder will not at any time institute against the Trust Depositor or the
Issuer, or join in any institution against the Trust Depositor or the Issuer of
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state 

 

D-6

 

bankruptcy or similar law in connection with any obligations relating
to the Notes, the Indenture or the Transaction Documents.

 

                The Issuer has
entered into the Indenture, and this Note is issued with the intention that,
for federal, state and local income, single business and franchise tax
purposes, the Notes will qualify as indebtedness secured by the Collateral and
that the Issuer will be disregarded as a separate entity for federal income tax
purposes pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii).  Each Noteholder, by acceptance of a Note or a
beneficial interest in a Note, agrees to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness of the
Issuer.

 

                Prior to the due
presentment for registration of transfer of this Note, the Issuer and the
Indenture Trustee and any agent of the Issuer, the Indenture Trustee may treat
the Person in whose name this Note (as of the day of determination or as of
such other date as may be specified in the Indenture) is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Issuer, the Indenture Trustee nor any such agent shall be affected by notice
to the contrary.

 

                The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Issuer and the rights of
the Holders of the Notes under the Indenture at any time by the Issuer and the
consent of the Modified Required Holders. 
The Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences.  Any
such consent or waiver by the Holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such Holders and upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.

 

Each Noteholder,
by acceptance of a Note or a beneficial interest in a Note is deemed to
represent that (i) it is not, and is not acquiring a Note or a beneficial
interest in a Note on behalf of or with “plan assets” (as determined under
Department of Labor Regulation Section 2510.3-101 or otherwise) of a Plan, or
any employee benefit plan subject to Similar Law, or (ii) its acquisition and
holding of a Note or a beneficial interest in a Note do not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code, or any Similar Law.  Each Noteholder,
by acceptance of a Note or a beneficial interest in a Note is deemed to make
one of the foregoing representations.

                The Notes are
issuable only in registered form in denominations as provided in the Indenture,
subject to certain limitations therein set forth.

 

D-7

 

                This Note and the
Indenture shall be construed in accordance with the laws of the State of
Illinois, and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.

 

                No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on this Note at the times,
place, and rate, and in the coin or currency herein prescribed.

 

D-8

 

EXHIBIT E

FORM OF ASSIGNMENT

 

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

PLEASE INSERT SOCIAL
SECURITY OR

OTHER IDENTIFYING NUMBER
OF ASSIGNEE

	
   

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

  
	
   

  
	
  the within Note, and all rights thereunder, hereby
  irrevocably constituting and appointing

  
	
   

  
	
  to transfer said Note on the books kept for
  registration thereof, with full power of substitution in the premises.

  
	
  Dated:

  	
   

  	
   

  

 

	
  Signature Guaranteed:

   

   

  
	
   

  
	
  Signature must be guaranteed by an eligible
  guarantor institution which is a participant in the Securities Transfer
  Agent’s Medallion Program (STAMP) or similar signature guarantee program.

  
	
   

   

  
	
  Notice: The signature(s) on this assignment must
  correspond with the name(s) as it appears on the face of the within Note in
  every particular, without alteration or enlargement or any change whatsoever.

  
	
   

  
	
   

  
	
  (Authorized Officer)

  

 

E-1

 

EXHIBIT F

 

FORM OF NOTE
DEPOSITORY AGREEMENT

 

F-1EXHIBIT 10.1

 

 

 

 

 

TRANSFER AND SALE AGREEMENT

by and between

HARLEY-DAVIDSON
CREDIT CORP.,

as Seller

and

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Purchaser

 

 

Dated as of February 1, 2005

 

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE
  I DEFINITION

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION
  1.01.          GENERAL.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II TRANSFER OF CONTRACTS;
  ASSIGNMENT OF AGREEMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
   

  	
  CLOSING.

  	
   

  	
   

  
	
  SECTION 2.02.

  	
   

  	
  CONDITIONS TO
  THE CLOSING.

  	
   

  	
   

  
	
  SECTION 2.03.

  	
   

  	
  ASSIGNMENT OF
  AGREEMENT.

  	
   

  	
   

  
	
  SECTION 2.04.

  	
   

  	
  SUBSEQUENT
  CONTRACTS.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.01.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES REGARDING SELLER.

  	
   

  	
   

  
	
  SECTION
  3.02.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES REGARDING EACH CONTRACT.

  	
   

  	
   

  
	
  SECTION
  3.03.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES REGARDING THE CONTRACTS IN THE AGGREGATE.

  	
   

  	
   

  
	
  SECTION
  3.04.

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES REGARDING THE CONTRACT FILES.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV PERFECTION OF TRANSFER AND
  PROTECTION OF SECURITY INTERESTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
   

  	
  CUSTODY OF
  CONTRACTS.

  	
   

  	
   

  
	
  SECTION
  4.02.

  	
   

  	
  FILING.

  	
   

  	
   

  
	
  SECTION
  4.03.

  	
   

  	
  NAME CHANGE
  OR RELOCATION.

  	
   

  	
   

  
	
  SECTION 4.04.

  	
   

  	
  COSTS AND EXPENSES

  	
   

  	
   

  
	
  SECTION 4.05

  	
   

  	
  SALE TREATMENT

  	
   

  	
   

  
	
  SECTION
  4.06

  	
   

  	
  SEPARATENESS
  FROM TRUST DEPOSITOR

  	
   

  	
   

  
	
  SECTION
  4.07

  	
   

  	
  PROTECTION
  OF SECURITY INTERESTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  V REMEDIES UPON MISREPRESENTATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  5.01.

  	
   

  	
  REPURCHASES
  OF CONTRACTS FOR BREACH OF REPRESENTATIONS AND WARRANTIES.

  	
   

  	
   

  
	
  SECTION 5.02.

  	
   

  	
  SELLER’S
  REPURCHASE OPTION.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI INDEMNITIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
   

  	
  SELLER
  INDEMNIFICATION.

  	
   

  	
   

  
	
  SECTION 6.02.

  	
   

  	
  LIABILITIES TO
  OBLIGORS.

  	
   

  	
   

  
	
  SECTION 6.03.

  	
   

  	
  TAX INDEMNIFICATION

  	
   

  	
   

  
	
  SECTION 6.04.

  	
   

  	
  OPERATION OF
  INDEMNITIES.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  7.01.

  	
   

  	
  PROHIBITED
  TRANSACTIONS WITH RESPECT TO THE TRUST

  	
   

  	
   

  
	
  SECTION 7.02.

  	
   

  	
  MERGER OR
  CONSOLIDATION.

  	
   

  	
   

  
	
  SECTION 7.03.

  	
   

  	
  TERMINATION.

  	
   

  	
   

  
	
  SECTION
  7.04.

  	
   

  	
  ASSIGNMENT
  OR DELEGATION BY SELLER.

  	
   

  	
   

  
	
  SECTION 7.05.

  	
   

  	
  AMENDMENT.

  	
   

  	
   

  
	
  SECTION 7.06.

  	
   

  	
  NOTICES.

  	
   

  	
   

  
	
  SECTION 7.07.

  	
   

  	
  MERGER AND
  INTEGRATION.

  	
   

  	
   

  
	
  SECTION 7.08.

  	
   

  	
  HEADINGS.

  	
   

  	
   

  
	
  SECTION 7.09.

  	
   

  	
  GOVERNING LAW.

  	
   

  	
   

  
	
  SECTION 7.10.

  	
   

  	
  NO BANKRUPTCY
  PETITION

  	
   

  	
   

  
							

 

 

 

 

	
  EXHIBITS

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Assignment

  
	
  Exhibit B

  	
   

  	
  Form of Officer’s
  Certificate

  
	
  Exhibit C

  	
   

  	
  Form of Subsequent
  Purchase Agreement

  

 

 

 

 

THIS
AGREEMENT, dated
as of February 1, 2005, 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 (i) motorcycle conditional sales contracts from
Harley-Davidson motorcycle retailers and (ii) motorcycle promissory note
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
from time to time the “Contract Assets,”
as hereinafter defined; and

WHEREAS, Trust Depositor intends concurrently
with its purchases from time to time of Contract Assets hereunder to convey all
right, title and interest in such Contract Assets to Harley-Davidson Motorcycle
Trust 2005-1 (the “Trust”)
pursuant to the Sale and Servicing Agreement dated as of February 1, 2005 by
and among Trust Depositor, Harley-Davidson Credit, as Servicer, the Trust, as
issuer (the “Issuer”) and BNY Midwest Trust Company,
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 $484,070,863.12 in cash as the purchase price therefor, (i) all the
right, title and interest of Seller in and to the Initial Contracts 

 

 

 

listed
on the initial List of Contracts in effect on the Closing Date (including,
without limitation, all security interests and all rights to receive payments
which are collected pursuant thereto after the Initial Cutoff Date, including
any liquidation proceeds therefrom, but excluding any rights to receive
payments which were collected pursuant thereto on or prior to the Initial
Cutoff Date), (ii) all rights of Seller under any physical damage or other
individual insurance policy (including 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, (iii) all security interests in each such Motorcycle, (iv) all
documents contained in the related Contract Files, (v) all rights of Seller in
the Lockbox, Lockbox Account and related Lockbox Agreement to the extent they
relate to the Contracts, (vi) all rights (but not the obligations) of the
Seller under any motorcycle dealer agreements between the dealers (i.e.
originators of certain Contracts) and the Seller, (vii) all rights of Seller to
certain 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 (viii) all
proceeds and products of the foregoing (items (i) - (viii), together with
the additional assets referred to in Section 2.04 below which may be
transferred from time to time in respect of Subsequent Contracts, 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.

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 initial 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.

 

1

 

(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 the form of Exhibit D to
the Sale and Servicing Agreement.

(d)           A letter or letters from Ernst &
Young LLP, or another nationally recognized accounting firm, addressed to Trust
Depositor and the Issuer and the Trustees and stating that such firm has
reviewed a sample of the Initial Contracts and performed specific procedures
for such sample with respect to certain contract terms and identifying those
Initial 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.

(g)           Evidence of proper filing with the
appropriate office in Nevada of a UCC financing statement naming Seller as
debtor, naming Trust Depositor as assignor secured party and the Issuer as
secured party, and listing the Contract Assets as collateral as well as
evidence of proper filing with the appropriate office in Delaware of a UCC
financing statement naming the Issuer as debtor, naming the Indenture Trustee,
as secured party, and listing the Contract Assets as collateral.

(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 Issuer as may be required to effect the
purposes of the Sale and Servicing Agreement, without further notice to, or
consent of, Seller, and the Issuer 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 Issuer and the Indenture
Trustee for the benefit of the Noteholders. 
Seller agrees that, upon such assignment to the Issuer and the Indenture

 

2

 

Trustee,
such representations will run to and be for the benefit of the Issuer and the
Indenture Trustee and the Issuer and the Indenture Trustee may enforce directly
without joinder of Trust Depositor, the obligations of Seller set forth herein.

 Section 2.04.       Subsequent
Contracts.  (a) Subject to and upon the terms and
conditions set forth in paragraph (b) below and in the related Subsequent
Purchase Agreement, Seller hereby agrees to sell, transfer, assign, set over
and otherwise convey to Trust Depositor, in consideration of Trust Depositor’s
payment on the related Subsequent Transfer Date of the purchase price therefor
(as set forth in the related Subsequent Purchase Agreement), and Trust
Depositor hereby agrees to purchase, (i) all the right, title and interest of
Seller in and to the Subsequent Contracts listed on the related Subsequent List
of Contracts (including, without limitation, all security interests and all
rights to receive payments which are collected pursuant thereto after the
applicable Subsequent Cutoff Date, including any liquidation proceeds
therefrom, but excluding any rights to receive payments which were collected pursuant
thereto on or prior to such Subsequent Cutoff Date), (ii) all rights of Seller
under any physical damage or other individual insurance policy (including a “forced placed” policy, if any), any debt insurance policy
or any debt cancellation agreement relating to any such Subsequent Contract ,
an Obligor or a Motorcycle securing such Subsequent Contract, (iii) all
security interests in each such Motorcycle, (iv) all documents contained in the
related Contract Files, (v) all rights of Seller in the Lockbox, Lockbox
Account and related Lockbox Agreement to the extent they relate to the
Subsequent Contracts, (vi) all rights (but not the obligations) of the Seller
under any motorcycle dealer agreements between the dealers (i.e. originators of certain Subsequent Contracts) and the
Seller, (vii) all rights of Seller to certain 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
Subsequent Contracts and (viii) all proceeds and products of the foregoing
(items (i) - (viii), upon consummation of any above-described
purchase, becoming part of the “Contract Assets”).  Seller agrees, subject to the terms and
conditions herein applicable to transfers of Subsequent Contracts, to sell an
aggregate Principal Balance of Subsequent Contracts at or prior to the end of
the Funding Period equal to the Pre-Funded Amount on the Closing Date.

(b)           Seller shall transfer to Trust
Depositor, and Trust Depositor shall purchase, the Subsequent Contracts and
related assets to be transferred on any Subsequent Transfer Date only upon the
satisfaction of each of the following conditions on or prior to the Subsequent
Transfer Date:

(i)            The Seller shall have provided the
Trustees, the Underwriters and the Rating Agencies with a timely Addition
Notice and shall have provided any information reasonably requested by any of
the foregoing with respect to the Subsequent Contracts;

(ii)           the Funding Period shall not have
terminated;

(iii)          the Seller shall have delivered to the
Trust Depositor a duly executed Purchase Agreement in substantially the form of
Exhibit C hereto (the “Subsequent Purchase Agreement”), which shall include a
Subsequent List of Contracts listing the Subsequent Contracts being purchased;

 

3

 

(iv)          as of each Subsequent Transfer Date,
neither the Seller nor the Trust Depositor was insolvent nor will either of
them have been made insolvent by such transfer nor is either of them aware of
any pending insolvency;

(v)           each Rating Agency shall have
notified the Trust Depositor and the Trustees that following such transfer, and
the transfer immediately thereafter of the Subsequent Contracts to the Trust,
the Class A-1 Notes and the Class A-2 Notes will be rated in the highest rating
category by such Rating Agency and the Class B Notes will be rated at least “A”
by Standard & Poor’s and “A3” by Moody’s;

(vi)          such addition will not result in a
material adverse tax consequence to the Issuer or the Noteholders as evidenced
by an Opinion of Counsel to be delivered by the Seller to the Issuer, the
Trustees, and the Underwriters;

(vii)         the Seller shall have delivered to the
Rating Agencies and to the Underwriters one or more opinions of counsel (or
bring-downs of opinions of counsel delivered on the Closing Date) with respect
to the transfer of the Subsequent Contracts substantially in the form of the
opinions of counsel delivered to such Persons on the Closing Date;

(viii)        the Seller shall have taken any action
necessary to maintain the first perfected ownership interest of the Trust in
the Trust Corpus and the first perfected security interest of the Trust
Depositor in the Contract Assets, the Trust in the Trust Corpus and the
Indenture Trustee in the Reserve Fund Deposits; and

(ix)           no selection procedures believed by
the Seller to be adverse to the interests of the Noteholders shall have been
utilized in selecting the Subsequent Contracts.

(c)           Seller agrees to pay all reasonable
out-of-pocket expenses in connection with any request for the
conveyance of Subsequent Contracts, whether or not such conveyance is actually
consummated.

ARTICLE III

REPRESENTATIONS
AND WARRANTIES

Seller makes the
following representations and warranties, on which Trust Depositor will rely in
purchasing the initial Contract Assets on the Closing Date (and any Subsequent
Contracts on the related Subsequent Transfer Date) and concurrently reconveying
the same to the Trust, and on which the Trust, the Indenture Trustee and the
Noteholders will rely under the Sale and Servicing Agreement.  Such representations speak as of the
execution and delivery of this Agreement and as of the Closing Date in the case
of the Initial Contracts, and as of the applicable Subsequent Transfer Date in
the case of Subsequent Contracts, but shall survive the sale, transfer and
assignment of the Contracts to the Trust and the pledge of the Contracts to the
Indenture Trustee.  The repurchase
obligation of Seller set forth in Section 5.01 below and in Section 7.08 

 

4

 

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, in the
case of the Initial Contracts, and as of the applicable Subsequent Transfer
Date, in the case of Subsequent Contracts, 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 adverse effect on the business, properties, assets, or condition
(financial or otherwise) of Seller or Trust Depositor.  Seller is properly licensed in each
jurisdiction to the extent required by the laws of such jurisdiction to service
the Contracts in accordance with the terms of the Sale and Servicing Agreement.

(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 obligation 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.

 

5

 

(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)           Operations.  Approximately 5.0% of the aggregate principal
balance of contracts financed from time to time by the Seller are secured by
motorcycles manufactured by Buell.

(h)           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, in the case of the Initial Contracts, and as of the applicable
Subsequent Transfer Date, in the case of Subsequent Contracts, that:

(a)           List of Contracts.  The information set forth in the List of
Contracts (or Subsequent List of Contracts, in the case of Subsequent
Contracts) is true, complete and correct in all material respects as of the Initial
Cutoff Date or applicable Subsequent Cutoff Date, as the case may be.

(b)           Payments.  As of the Initial Cutoff Date or applicable
Subsequent Cutoff Date, as the case may be, the most recent scheduled payment
with respect to any Contract either had been made or was not delinquent for
more than 30 days.  To the best of Seller’s
knowledge, all payments made on each Contract were made by the respective
Obligor or under a debt insurance policy or debt cancellation agreement.

(c)           No Waivers.  As of the Closing Date (or the applicable
Subsequent Transfer Date, in the case of Subsequent Contracts), the terms of
the Contracts have not been waived, altered or modified in any respect, except
by instruments or documents included in the related Contract File.

(d)           Binding Obligation.  Each Contract is a legal, valid and binding
payment obligation of the Obligor thereunder and is enforceable in accordance
with its terms, 

 

6

 

except as such
enforceability may be limited by insolvency, bankruptcy, moratorium,
reorganization, or other similar laws affecting the enforcement of creditors’
rights generally.

(e)           No Defenses.  No Contract is subject to any right of
rescission, setoff, counterclaim or defense, including the defense of usury,
and the operation of any of the terms of such Contract or the exercise of any
right thereunder will not render the Contract unenforceable in whole or in part
or subject to any right of rescission, setoff, counterclaim or defense,
including the defense of usury, and no such right of rescission, setoff,
counterclaim or defense has been asserted with respect thereto.

(f)            Insurance.  As of the origination date of each Contract
(or the applicable Subsequent Transfer Date in the case of Subsequent Contracts),
the related Motorcycle securing each Contract is covered by physical damage
insurance (i) in an amount not less than the value of the Motorcycle at the
time of origination of the Contract, (ii) naming Seller as a loss payee and
(iii) insuring against loss and damage due to fire, theft, transportation,
collision and other risks covered by comprehensive coverage, and all premiums
due on such insurance have been paid in full from the date of the Contract’s
origination.

(g)           Origination.  Either (i) Contracts were originated by a
Harley-Davidson motorcycle dealer in the regular course of its business
which dealer had all necessary licenses and permits to originate the Contracts
in the state where such dealer was located, was fully and properly executed by
the parties thereto, and has been purchased by Seller in the regular course of
its business, or (ii) Contracts were originated by Eaglemark Savings Bank in
the regular course of its business which had all necessary licenses and permits
to originate the Contracts in the state where it was located, was fully and
properly executed by the parties thereto, and has been purchased by Seller in
the regular course of its business.  Each
Contract was sold by such motorcycle dealer or Eaglemark Savings Bank, as the case
may be, to the Seller without any fraud or misrepresentation on the part of
such motorcycle dealer or Eaglemark Savings Bank.

(h)           Lawful Assignment.  No Contract was originated in or is subject
to the laws of any jurisdiction whose laws would make the sale, transfer and
assignment of the Contract under this Agreement or under the Sale and Servicing
Agreement or the pledge of the Contract under the Indenture unlawful, void or
voidable.

(i)            Compliance with Law.  None of the Contracts, the origination of the
Contracts by the dealers or Eaglemark Savings Bank, the purchase of the
Contracts by the Seller, the sale of the Contracts by the Seller to the Trust
Depositor or by the Trust Depositor to the Trust, or any combination of the
foregoing, violated at the time of origination or as of the Closing Date or as
of any Subsequent Transfer Date, as applicable, any requirement of any federal,
state or local law and regulations thereunder, including, without limitation,
usury, truth in lending, motor vehicle installment loan and equal credit
opportunity laws, applicable to the Contracts and the sale of Motorcycles.  

 

7

 

Seller shall, for at
least the period of this Agreement, maintain in its possession, available for the
Trust Depositor’s and the Trustees’ 
inspection, and shall deliver to Trust Depositor or  the Trustee 
upon demand, evidence of compliance with all such requirements.

(j)            Contract in Force.  As of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts), no Contract has
been satisfied or subordinated in whole or in part or rescinded, and the
related Motorcycle securing any Contract has not been released from the lien of
the Contract in whole or in part.

(k)           Valid Security Interest.  Each Contract creates a valid, subsisting and
enforceable first priority perfected security interest in favor of Seller or
Eaglemark Savings Bank (as the case may be) in the Motorcycle covered thereby,
and such security interest has been assigned by Eaglemark Savings Bank to
Seller (where applicable) and by Seller to the Trust Depositor.  The original certificate of title,
certificate of lien or other notification or evidence (the “Lien Certificate”) issued by the body responsible for the
registration of, and the issuance of certificates of title or evidence relating
to, motor vehicles and liens thereon (the “Registrar of Titles”)
of the applicable state shows Seller or Eaglemark Savings Bank (as the case may
be) as original secured party under each Contract and as the holder of a first
priority security interest in such Motorcycle. 
With respect to each Contract for which a written Lien Certificate is
provided and has not yet been returned from the Registrar of Titles, the Seller
has received written evidence that such Lien Certificate showing Seller or
Eaglemark Savings Bank as lienholder has been applied for.  Eaglemark Savings Bank’s security interest
has been validly assigned by Eaglemark Savings Bank to Seller.  Seller’s security interest has been validly
assigned by the Seller to the Trust Depositor pursuant to this Agreement and by
the Trust Depositor to the Issuer pursuant to the Sale and Servicing
Agreement.  Immediately after the sale,
each Contract will be secured by an enforceable and perfected first priority
security interest in the Motorcycle in favor of the Trust as secured party,
which security interest is prior to all other liens upon and security interests
in such Motorcycle which now exist or may hereafter arise or be created
(except, as to priority, for any lien for taxes, labor, materials or of any
state law enforcement agency affecting a Motorcycle).

(1)           Capacity of Parties.  All parties to any Contract had the capacity
to execute such Contract and all other documents related thereto and to grant
the security interest purported to be granted thereby.

(m)          Good Title.  Each Contract was purchased by Seller for
value and taken into possession prior to the Initial Cutoff Date (or the
applicable Subsequent Cutoff Date in the case of Subsequent Contracts) in the
ordinary course of its business, without knowledge that the Contract was
subject to a security interest.  No
Contract has been sold, assigned or pledged to any person other than Trust
Depositor and the Issuer as the transferee of Trust Depositor, and prior to the
transfer of the Contract to Trust Depositor, Seller had good and marketable
title to each Contract free and clear of any encumbrance, equity, loan, pledge,
charge, claim or security interest and was the sole owner thereof and

 

8

 

had full right to
transfer the Contract to Trust Depositor and to permit Trust Depositor to
transfer the same to the Issuer, and, as of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts), the Issuer will
have a first priority perfected security interest therein.

(n)           No Defaults.  As of the Initial Cutoff Date (or the
applicable Subsequent Cutoff Date in the case of Subsequent Contracts), no default,
breach, violation or event permitting acceleration existed with respect to any
Contract and no event had occurred which, with notice and the expiration of any
grace or cure period, would constitute such a default, breach, violation or
event permitting acceleration under such Contract.  Seller has not waived any such default,
breach, violation or event permitting acceleration, and Seller has not granted
any extension of payment terms on any Contract. 
As of the Initial Cutoff Date (or the applicable Subsequent Cutoff Date
in the case of Subsequent Contracts), no Motorcycle had been repossessed.

(o)           No Liens.  As of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts) there are, to the
best of Seller’s knowledge, no liens or claims which have been filed for work,
labor or materials affecting the Motorcycle securing any Contract which are or
may be liens prior to, or equal with, the lien of such Contract.

(p)           Installments.  Each 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.

(q)           Enforceability.  Each Contract contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the collateral of the benefits of
the security.

(r)            One Original.  Each Contract is evidenced by only one
original executed Contract, which original has been delivered to the Issuer or
its designee on or before the Closing Date (or the applicable Subsequent
Transfer Date in the case of Subsequent Contracts).

(s)           No Government Contracts.  No Obligor is the United States government or
an agency, authority, instrumentality or other political subdivision of the
United States government.

(t)            Lockbox Bank.  The Lockbox Bank is the only institution
holding any Lockbox Account for receipt of payments from Obligors, and all
Obligors have been instructed to make payments to the Lockbox Account (either
directly by remitting payments to the 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 the Lockbox Account 

 

9

 

other than the Lockbox
Bank; provided, however, that other “Trusts”
(as defined in the Lockbox Agreement) shall have an interest in certain other
collections therein not related to the Contracts.

(u)           Obligor Bankruptcy.  At the Initial Cutoff Date (or the applicable
Subsequent Cutoff Date in the case of Subsequent Contracts), no Obligor was subject
to a bankruptcy proceeding within the one year preceding such Cutoff Date.

(v)           Chattel Paper.  The Contracts constitute tangible chattel
paper within the meaning of the UCC.

(w)          No Impairment.  Neither the Seller nor the Trust Depositor
has done anything to convey any right to any Person that would result in such
Person having a right to payments due under the Contract or otherwise to impair
the rights of the Trust in any Contract or the proceeds thereof.

(x)            Contract Not Assumable.  No Contract is assumable by another Person in
a manner which would release the Obligor thereof from such Obligor’s
obligations to the Trust Depositor with respect to such Contract.

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, in the
case of the Initial Contracts, and, if applicable, as of the applicable
Subsequent Transfer Date, in the case of Subsequent Contracts, that:

(a)           Amounts.  The sum of the aggregate Principal Balances
payable by Obligors under the Contracts as of the Initial Cutoff Date (or the
applicable Subsequent Cutoff Date in the case of Subsequent Contracts), plus
the Pre-Funded Amount as of such date, equals or exceeds the sum of the
principal balance of  the Class A-1
Notes, the Class A-2 Notes  and the Class
B Notes on the Closing Date or the related Subsequent Transfer Date, as
applicable.

(b)           Characteristics.  The Initial Contracts have the following
characteristics: (i) all the Contracts are secured by Motorcycles; (ii) no
Initial Contract has a remaining maturity of more than 84 months; and (iii) the
final scheduled payment on the Initial Contract with the latest maturity is due
no later than February 2012.   
Approximately 76.96% of the Principal Balance of the Initial Contracts
as of the Initial Cutoff Date is attributable to loans for purchases of new
Motorcycles and approximately 23.04% is attributable to loans for purchases of
used Motorcycles.  No Initial Contract
was originated after the Initial Cutoff Date. 
No Initial Contract has a Contract Rate less than 3.962%.  The last scheduled payment date of the
Contracts (including any Subsequent Contracts) is due no later than May
2012.  Approximately 99.14% of the
Principal Balance of the Initial Contracts as of the Initial Cutoff Date is
attributable to loans for purchases of Motorcycles manufactured by
Harley-Davidson or Buell and approximately 0.86% of the Principal Balance of
the Initial Contracts as of the Initial Cutoff Date is

 

10

 

attributable to loans for
purchases of Motorcycles not manufactured by Harley-Davidson or Buell.

(c)           Marking Records.  As of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts), Seller has
caused the Computer File relating to the Contracts sold hereunder and
concurrently reconveyed by Trust Depositor to the Trust and pledged by the
Trust to the Indenture Trustee to be clearly and unambiguously marked to
indicate that such Contracts constitute part of the Trust, are owned by the
Trust and constitute security for the Notes.

(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 Trust of all of Seller’s right, title and interest in the
Contract Assets as of the Closing Date and any Subsequent Transfer Date, as
applicable.

(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 Indenture Trustee a
first priority perfected lien on, or ownership interest in, the Contracts and
the proceeds thereof and the rest of the Trust Corpus have been made, taken or
performed.

(g)           Delta Loans.  No more than 11.00% of the Principal Balance
of the Contracts as of the end of the Funding Period is attributable to Delta
Loans.

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, in the
case of the Initial Contracts, and as of the applicable Subsequent Transfer
Date, in the case of Subsequent Contracts, that:

(a)           Possession.  Immediately prior to the Closing Date or any
Subsequent Transfer 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 or
any Subsequent Purchase Agreement and by Trust Depositor pursuant to the Sale
and Servicing 

 

11

 

Agreement is not subject
to the bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.

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 Trust as the
owner thereof in accordance with the Sale and Servicing Agreement.

Section 4.02.        Filing.  On or prior to the Closing Date and each
Subsequent Transfer Date, Seller shall cause the UCC financing statement(s)
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 Trust may reasonably request to perfect
and protect the Trust Depositor’s and the 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 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 or continuation
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 as may be required to preserve and
protect the Trust Depositor’s and the 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 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 Trust in the Contract Assets have been filed, and reciting
the details of such filing.

 

12

 

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, the Issuer’s and the Indenture
Trustee’s right, title and interest in and to the Contract Assets (including,
without limitation, the security interest 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 made hereunder
(including in respect of Subsequent Contracts) for all purposes (including tax
and financial accounting purposes) as a sale and purchase on all of its
relevant books, records, financial statements and other applicable documents.

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 Winston & Strawn LLP (or in any related
certificate of Seller) delivered on the Closing Date, upon which the
conclusions expressed therein are based.

Section 4.07         Protection of Security Interests.  The Seller
agrees to deliver an Officer’s Certificate to the Owner Trustee and the
Indenture Trustee, as promptly as practicable after the Closing Date (or
Subsequent Transfer Date, as the case may be), and in any event within 60 days
thereof, certifying that the Seller’s compliance officer has reviewed the
original of each Initial Contract and each related Contract File, that each
Initial Contract and related Contract File conforms in all material respects
with the initial List of Contracts and each such Contract File is complete and
that each document required be an original.

ARTICLE V

REMEDIES
UPON MISREPRESENTATION

Section 5.01.        Repurchases of Contracts for Breach of
Representations and Warranties.  Seller hereby agrees, for the benefit of the
Issuer, the Indenture Trustee and the Trust Depositor, that it shall repurchase
a Contract including any Subsequent Contracts (together with all related
Contract Assets), at its Repurchase Price, not later than two Business Days
prior to the first Determination Date after Seller becomes aware, or should
have become aware, or receives written notice from Trust Depositor, either 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 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 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 two Business Days prior to such Determination
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 

 

13

 

Contracts
(without adverse selection) to repurchase such that had such Contracts not been
reconveyed by Trust Depositor and included as part of the 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 Trust’s interest in the Contracts or in the related Contract
Assets.  Notwithstanding any other
provision of this Agreement, the obligation of Seller under this Section 5.01
and under Section 7.08 of the Sale and Servicing Agreement shall not terminate
upon a Service Transfer pursuant to Article VIII of the Sale and Servicing
Agreement.

Section 5.02.        Seller’s Repurchase Option.  On written notice to the Owner Trustee and
the Indenture Trustee at least 20 days prior to a Distribution Date, provided
the Pool Balance is then less than 10% of the Aggregate Principal Balance as of
the Closing Date, Seller may (but is not required to) repurchase from the Trust
on that Distribution Date all outstanding Contracts (and related Contract
Assets) at a price equal to the aggregate unpaid principal balance of the Notes
on the previous Distribution Date plus the aggregate of the Note Interest
Distributable Amount for the current Distribution Date, the Reimbursement
Amount (if any) as well as accrued and unpaid Monthly Servicing Fees and
Indenture Trustee Fee to the date of such repurchase.  Such price will be deposited in the
Collection Account not later than one Business Day before such Distribution
Date, against the Trustees’ release of the Contracts and Contract Files as
described in Section 7.10 of the Sale and Servicing Agreement.

ARTICLE VI

INDEMNITIES

Section 6.01.        Seller Indemnification.  Seller will defend and indemnify Trust
Depositor, the 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 second 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 Service Transfer pursuant to Article VIII of the
Sale and Servicing Agreement and shall survive any termination of that
agreement or this Agreement.

 

14

 

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 Trust or the
Noteholders under or as a result of this Agreement and the transactions
contemplated hereby.

Section 6.03.        Tax Indemnification.  Seller agrees
to pay, and to indemnify, defend and hold harmless the Trust Depositor, the
Trust, the Trustees or the Noteholders from, any taxes which may at any time be
asserted with respect to, and as of the date of, the transfer of the Contracts
to Trust Depositor hereunder and the concurrent reconveyance to the Trust and
the further pledge by the Trust to the Indenture Trustee, including, without
limitation, any sales, gross receipts, general corporation, personal property,
privilege or license taxes (but not including any federal, state or other taxes
arising out of the creation of 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, 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 Service Transfer
pursuant to Article VIII 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.

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.

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 

 

15

 

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 Standard
& Poor’s and Moody’s notice of such merger or consolidation within thirty
(30) days after completion of the same.

Section 7.03.        Termination.  This Agreement shall terminate (after
distribution of any Note Distributable Amount due pursuant to Section 7.05  of the Sale and Servicing Agreement) on the
Distribution Date on which the principal balance of the Class A-1 Notes,  Class A-2 Notes and the Class B 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 Trustees, adversely
affect the interests of any Noteholder.

(b)           This Agreement may also be amended
from time to time by Seller and Trust Depositor, with the consent of the
Modified 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 (a) reduce in any manner the amount of,
or delay the timing of, collections of payments on the Contracts or
distributions which are required to be made on any Note or (b) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of the holders of all Notes then outstanding.

 

16

 

(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, and every holder of Notes theretofore or thereafter
issued hereunder shall be bound thereby.

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. mails, registered or certified
mail, return receipt requested, postage prepaid, with such receipt to be
effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or
(d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient at the address
for such recipient set forth in the Sale and Servicing Agreement.

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

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.

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 

 

17

 

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 or the
Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United State or
any State of the United States.  This
Section 7.10 shall survive termination of this Agreement.

[signature page follows]

 

 

18

 

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 CREDIT
  CORP.

   

  
	
   

  	
  By: /s/ PERRY A
  GLASSGOW

  
	
   

  	
   

  	
  Printed Name: Perry A.
  Glassgow

  
	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
  By: /s/ PERRY A
  GLASSGOW

  
	
   

  	
   

  	
  Printed Name: Perry A.
  Glassgow

  
	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  

 

 

 

Signature Page to
Transfer and 

 Sale Agreement

 

 

19

 

Exhibit A

Transfer and Sale

Agreement

FORM OF ASSIGNMENT

In accordance with
the Transfer and Sale Agreement (the “Agreement”)
dated as of February 1, 2005 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 Initial Contracts listed on the initial List
of Contracts in effect on the Closing Date (including, without limitation, all
security interests and all rights to receive payments which are collected
pursuant thereto after the Initial Cutoff Date, including any liquidation
proceeds therefrom, but excluding any rights to receive payments which were
collected pursuant thereto on or prior to the Initial Cutoff Date), (ii) all
rights of Seller under any physical damage or other individual insurance policy
(including 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, (iii) all
security interests in each such Motorcycle, (iv) all documents contained in the
related Contract Files, (v) all rights of Seller in the Lockbox, Lockbox
Account and related Lockbox Agreement to the extent they relate to the
Contracts, (vi) all rights (but not the obligations) of the Seller under any
motorcycle dealer agreements between the dealers (i.e. originators of certain
Contracts) and the Seller, (vii) all rights of Seller to certain 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 (viii) 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 February 1, 2005 made by
and among the undersigned, as servicer, the Trust Depositor, Harley-Davidson
Motorcycle Trust 2005-1, as issuer, and BNY Midwest Trust Company, as indenture
trustee.

 

A-1

 

IN WITNESS
WHEREOF, the undersigned has caused this Assignment to be duly executed this
___ day of February, 2005.

	
   

   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  
	
   

  	
  By:

  
	
   

  	
   

  	
  Printed Name: Perry A.
  Glassgow

  
	
   

  	
   

  	
  Title: Treasurer

  

 

 

A-2

 

Exhibit B

Transfer and Sale

Agreement

FORM
OF OFFICER’S CERTIFICATE

(See Exhibit C to the Sale and Servicing Agreement)

 

 

B-1

 

 

Exhibit C

Transfer and Sale

Agreement

FORM
OF SUBSEQUENT PURCHASE AGREEMENT

SUBSEQUENT
PURCHASE AGREEMENT (the “Agreement”),
dated as of
            ,
            , by
and among Harley-Davidson Customer Funding Corp., a Nevada corporation (the “Trust Depositor”), and Harley-Davidson Credit Corp., a  Nevada corporation (the “Seller”),
pursuant to the Transfer and Sale Agreement referred to below.

WITNESSETH:

WHEREAS, the Trust
Depositor and the Seller are parties to the Transfer and Sale Agreement, dated
as of February 1, 2005 (the “Transfer and Sale
Agreement”);

WHEREAS, pursuant
to the Transfer and Sale Agreement, the Seller wishes to sell the Subsequent
Contracts to the Trust Depositor, and the Trust Depositor wishes to purchase
the same, for the purchase price set forth in Section 3
below; and

WHEREAS, the
Seller has timely delivered an Addition Notice related to such conveyance as
required in the Sale and Servicing Agreement dated as of February 1, 2005 among
the Seller (in the capacity of Servicer thereunder), the Issuer as defined
therein, the Trust Depositor and the Indenture Trustee as defined therein (the “Sale and Servicing Agreement”).

NOW, THEREFORE,
the Trust Depositor and the Seller hereby agree as follows:

Section
1.              Capitalized
terms used herein shall have the meanings ascribed to them in the Sale and
Servicing Agreement unless otherwise defined herein.

“Subsequent Cutoff Date” shall mean, with respect to the
Subsequent Contracts transferred hereby,
[                    ].

“Subsequent Contracts” shall mean, for purposes of this
Agreement, the Subsequent Contracts listed in the Subsequent List of Contracts
attached hereto as Exhibit A.

“Subsequent Transfer Date” shall mean, with respect to the
Subsequent Contracts transferred hereby,
[                     ].

Section
2.              Subsequent List of
Contracts.  The Subsequent List of Contracts attached
hereto as Exhibit A is a supplement to the initial List of Contracts attached
as Exhibit H to the Sale and Servicing
Agreement.  The Contracts listed in the
Subsequent List of Contracts constitute the Subsequent Contracts 

 

C-1

 

to be
transferred pursuant to this Agreement on the subsequent Transfer Date.

Section
3.              Transfer of Subsequent
Contracts.  Subject to and upon the terms and conditions
set forth in Section 2.04(b) of the Transfer and Sale Agreement and this
Agreement, Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to Trust Depositor, in consideration of Trust Depositor’s payment of
$[            ] as
the purchase price therefor, (i) all the right, title and interest of Seller in
and to the Subsequent Contracts listed on the related Subsequent List of
Contracts (including, without limitation, all security interests and all rights
to receive payments which are collected pursuant thereto after the applicable
Subsequent Cutoff Date, including any liquidation proceeds therefrom, but
excluding any rights to receive payments which were collected pursuant thereto
on or prior to such Subsequent Cutoff Date), (ii) all rights of Seller under
any physical damage or other individual insurance policy (including a “forced placed” policy, if any), any debt insurance policy
or any debt cancellation agreement relating to any such Subsequent Contract, an
Obligor or a Motorcycle securing such Subsequent Contract, (iii) all security
interests in each such Motorcycle, (iv) all documents contained in the related
Subsequent Contract Files, (v) all rights of Seller in the Lockbox, Lockbox Account
and related Lockbox Agreement to the extent they relate to the Subsequent
Contracts, (vi) all rights (but not the obligations) of the Seller under any
motorcycle dealer agreements between the dealers (i.e.
originators of certain Subsequent Contracts) and the Seller, (vii) all rights
of Seller to certain 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 Subsequent Contracts
and (viii) all proceeds and products of the foregoing.  It is the intention of the Seller and the
Trust Depositor that the transfer contemplated by this Agreement shall
constitute a sale of the Subsequent Contracts from the Seller to the Trust Depositor,
conveying good title thereto free and clear of any Liens, and that the
Subsequent Contracts shall not be part of the Seller’s estate in the event of
the filing of a bankruptcy petition by or against Seller under any bankruptcy
or similar law.

Section
4.              Representations and
Warranties of the Seller.  (a) Seller hereby represents
and warrants to the Trust Depositor that the representations and warranties of
Seller in Section 3.01 of the Transfer and Sale Agreement are true and correct
as of the Subsequent Transfer Date.

(b)           Seller hereby repeats and remakes
with respect to the Subsequent Contracts as of the Subsequent Transfer Date (i)
the representations and warranties of Seller in Sections 3.02, 3.03 and 3.04 of
the Transfer and Sale Agreement, except that, with respect to subsection (b) of
Section 3.03, (A) approximately
        % of the Principal Balance of
the Contracts as of the Subsequent Cutoff Date is attributable to loans for
purchases of new Motorcycles and approximately
         % is attributable to
loans for purchases of used Motorcycles, and (B) no Contract was originated
after the Subsequent Cutoff Date, as well as (ii) covenants to provide the
certificate required by Section 2.02(h) (solely with respect to the Subsequent
Contracts).

(c)           Seller hereby represents and warrants
that (a) the aggregate Principal Balance of the Subsequent Contracts listed on
the Subsequent List of Contracts and conveyed to the Trust 

 

C-2

 

Depositor
pursuant to this Agreement is
$[                   ]
as of the Subsequent Cutoff Date, and (b) the conditions set forth in Section
2.04(b) of the Transfer and Sale Agreement have been satisfied as of the
Subsequent Transfer Date.

Section
5.              Ratification of Agreement. 
As supplemented by this Agreement, the Transfer and Sale Agreement is in
all respects ratified and confirmed and, as so supplemented by this Agreement,
shall be read, taken and construed as one and the same instrument.

Section
6.              Counterparts. 
This Agreement may be executed in two or more counterparts (and by
different parties in separate counterparts), each of which shall be an original
but all of which together shall constitute one and the same instrument.

Section
7.              Governing Law. 
This Agreement shall be construed in accordance with the laws of the
State of Illinois, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.

 

C-3

 

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:

  	 

	
   

  	
   

  	
  Printed
  Name:    Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Title: Treasurer

  	 

	
   

  	
   

  	 

	
   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	 

	
   

  	
   

  	
  Printed Name:    Perry
  A. Glassgow

  	 

	
   

  	
   

  	
  Title: Treasurer

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