Document:

Exhibit
4.2

 

AMENDMENT
NO. 1

TO

RIGHTS AGREEMENT

 

AMENDMENT NO. 1 to RIGHTS
AGREEMENT (this “Amendment”) between Veritas DGC Inc., a Delaware corporation
(the “Company”), and Mellon Shareholder Services, L.L.C., previously known as
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company, as Rights Agent (the “Rights Agent”) is effective this 31st day of
May, 2005.

 

W I T N E S S E T H:

 

WHEREAS, on May 23, 1997, the Company and Rights Agent
entered into that one certain Rights Agreement (the “Rights Agreement”);

 

WHEREAS, the Board, having considered, among other things,
certain legal precedents established since enactment of the Rights Agreement,
is of the opinion that the Rights Agreement should be amended; and

 

WHEREAS, the Distribution Date (as defined in the Rights
Agreement) has not yet occurred and the Company has met all requirements for
amendment of the Rights Agreement;

 

NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein set forth, the parties hereto agree as follows:

 

Section 1.               Amendments.  The Rights Agreement is amended as follows:

 

(a)           ChaseMellon Shareholder
Services, L.L.C. has, since execution of the Rights Agreement, changed its name
to Mellon Shareholder Services, L.L.C. 
All references in the Rights Agreement to ChaseMellon Shareholder
Services, L.L.C. are amended to refer to Mellon Shareholder Services, L.L.C.
and all references to Rights Agent in the Rights Agreement shall mean Mellon
Shareholder Services, L.L.C.

 

(b)           Section 1 (a) is
deleted in its entirety and replaced with the following:

 

(a)           “Acquiring Person” means any
Person who or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, other than pursuant to a Qualifying Tender Offer; provided, however, that, an Acquiring Person shall not
include an (i) Exempt Person, or (ii) any Person, together with all
Affiliates and Associates of such Person, who or which would be an Acquiring
Person solely by reason of (A) being the Beneficial Owner of shares of
Common Stock of the Company, the Beneficial Ownership of which was acquired by
such Person pursuant to any action or transaction or series of related actions
or transactions approved by the Board of Directors before such Person otherwise
became an Acquiring Person, or (B) a reduction in the number of issued and
outstanding shares of Common Stock of the Company pursuant to a transaction or
a series of related transactions approved by the Board; and provided
further, that in the event that such Person described in this clause
(ii) does not become an Acquiring Person by reason of subclause (A) or
(B) of this clause (ii), such Person nonetheless shall become an Acquiring
Person in the event

 

 

such Person thereafter acquires Beneficial Ownership of an
additional 1% of the Common Stock of the Company, unless the acquisition of
such additional Common Stock would not result in such Person becoming an
Acquiring Person by reason of subclause (A) or (B) of this clause
(ii). Notwithstanding the foregoing, if the Board determines in good faith that
a Person who would otherwise be an “Acquiring Person” as defined pursuant to
the foregoing provisions of this paragraph (a) has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer be an “Acquiring
Person” as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed an “Acquiring Person” for any purposes of
this Agreement.

 

(b)           Section 1(h) is
deleted in its entirety.

 

(c)           Section 1(i) is
deleted in its entirety and replaced with the following language and is further
re-numbered as Section 1(h):

 

(h)           “Distribution Date” means the earlier of (i) the
close of business on the tenth day after the Stock Acquisition Date; or (ii) the
close of business on the tenth Business Day (or such later date as may be
determined by action of the Board of which the Company shall provide prompt
written notice to the Rights Agent) after the date of the commencement by any
Person (other than an Exempt Person) of, or the first public announcement of
the intent of any Person (other than an Exempt Person) to commence a tender offer
or exchange offer upon the successful completion of which such Person, together
with its Affiliates and Associates, would be the Beneficial Owner of 15% or
more of the then outstanding Common Stock of the Company, regardless of whether
any shares are actually purchased pursuant to such offer.

 

(d)           Sections 1(j) through (p) are
re-numbered as Sections 1(i) through (o).

 

(e)           Section 1(p) is deleted
in its entirety and replaced with the following language and is further
re-numbered as Section 1(q):

 

(q)           “Qualifying Tender Offer”
shall mean a tender or exchange offer for all outstanding shares of Common
Stock of the Company determined by a majority of the Board, after receiving
advice from one or more investment banking firms to be (i) at a price
which is fair to the Company’s shareholders (taking into account all factors
which members of the Board deem relevant including, without limitation, the
potential long-term value of the Company and the prices which could reasonably
be attained if the Company or its assets were sold on an orderly basis designed
to realize maximum value, and (ii) otherwise in the best interests of the
Company and its shareholders.

 

(f)            Sections 1(s) through (z) are
re-numbered as Sections 1(r) through (y).

 

(g)           Section 11(b)(i) is
deleted in its entirety and replaced with the following:

 

(b)(i) For the purpose of any
computation hereunder, the “current market price” per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the 30 consecutive

 

2

 

Trading Days immediately prior to such date; provided, however, that if the current market price per
share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities exercisable for or convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the 30
Trading Day period, as set forth above, after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the “current market price”
shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular sway, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no market maker is
making a market in the Common Stork, the fair value of such shares on such date
as determined in good faith by the Board of Directors of the Company shall be
used. If the Common Stock is not publicly held or not so listed or traded, the “current
market price” per share means the fair value per share as determined in good
faith by the Board of Directors of the Company, which determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.

 

(h)           Section 11(b)(ii) is
deleted in its entirety and replaced with the following:

 

(ii)           For the purpose of any
computation hereunder, the “current market price” of the Preferred Stock shall
be determined in the same manner as set forth above for the Common Stock in Section 11(b)(i).
If the current market price for the Preferred Stock cannot be determined in the
manner provided above, the “current market price” of the Preferred Stock shall
be conclusively deemed to be the current market price of the Common Stock
(appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date hereof), multiplied by one thousand. For
the purpose of any computation hereunder, the value of any securities or assets
other than the Preferred Stock or Common Stock of the Company shall be the fair
value as determined in good faith by the Board of Directors of the Company,
which determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

 

(i)            Section 20(c) is
deleted in its entirety and replaced with the following:

 

3

 

(c)           The Rights Agent shall be
liable hereunder only for its own negligence, bad faith or willful
misconduct.  Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage.  Any liability of the Rights Agent under this Agreement
will be limited to the amount of annual fees paid by the Company to the Rights
Agent.

 

(j)            Section 23(a) is
deleted in its entirety and replaced with the following:

 

Section 23.             Redemption.  (a) The Board of
Directors of the Company may, at its option, at any time prior to the earlier
of (i) the close of business on the tenth day after the Stock Acquisition
Date (or such later date as the Board may determine) and (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding Rights
at a redemption price of $.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). Notwithstanding anything in this
Agreement to the contrary, the Rights shall not be exercisable after a Person
has become an Acquiring Person until such time as the Company’s right of
redemption hereunder has expired.

 

(k)           Section 24(a) is
deleted in its entirety and replaced with the following:

 

Section 24.             Exchange.  (a) The Board of
Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, mandatorily exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to Section 7(e)) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend, or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). If the Board of Directors of the Company elects to exchange
all the Rights for Common Stock pursuant to this Section 24 prior to the
physical distribution of the Rights Certificates, the Corporation may
distribute the Common Stock issuable in the exchange in lieu of distributing
Right Certificates, in which case for purposes of this Rights Agreement holders
of Rights shall be deemed to have simultaneously received and surrendered for
exchange Right Certificates on the date of such distribution. Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any of its
Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries, or any entity holding shares of Common Stock for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the shares of
Common Stock then outstanding.

 

(l)            The Company’s address for
notices in Section 26 is deleted in its entirety and replaced with the
following address:

 

4

 

Veritas DGC Inc.

10300 Town Park Drive

Houston, Texas 77072

Attention: Secretary

 

The Rights Agent’s address for notices in Section 26 is
deleted in its entirety and replaced with the following address:

 

Mellon Investor Services LLC

600 N. Pearl Street – Suite 1010

Dallas, TX 75201

Attention:  Client
Relationship Executive

 

(m)          Section 27 is deleted in
its entirety and replaced with the following:

 

Section 27.             Supplements and Amendments.  Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of the Rights. From and after the Distribution Date,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Right
Certificates in order (a) to cure any ambiguity, (b) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (c) to shorten or lengthen
any time period hereunder or (d) to change or supplement the provisions
hereof in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Notwithstanding the foregoing, no supplement or amendment
pursuant to clause (c) may lengthen (x) a time period relating to when the
Rights may be redeemed at such time as the Rights are not then redeemable or
(y) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section, the Rights Agent shall execute
such supplement or amendment. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Capital Stock.

 

(n)           Section 29 is deleted in
its entirety and replaced with the following:

 

Section 29.             Determinations and Actions by the Board of Directors, etc.  For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(l)(i) under
the Exchange Act as in effect on the date of this Agreement. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed

 

5

 

necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for the purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parries, and (y) not subject the
Board of Directors of the Company to any liability to the holders of the
Rights.  Unless otherwise notified, the
Rights Agent shall always be entitled to assume that the Board of Directors of
the Company acted in good faith and the Rights Agent shall be fully protected
and shall incur no liability in reliance thereon.

 

(o)           Exhibit C of the Rights
Agreement is deleted in its entirety and replaced by the new Exhibit C
attached to this Amendment.

 

Section 2.               Effect of this Amendment.  It is the intent of the parties that this
Amendment constitutes an amendment of the Rights Agreement as contemplated by Section 27
of that agreement.  Except as expressly
provided in this Amendment, the terms of the Rights Agreement remain in full
force and effect.

 

Section 3.               Counterparts.  This Amendment may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute one and
the same instrument.

 

Section 4.               Descriptive Headings. The captions herein and
table of contents hereto are included for convenience of reference only, do not
constitute a part of this Agreement and shall be ignored in the construction
and interpretation hereof.

 

[Signatures on following
page]

 

6

 

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

 

	
   

  	
  VERITAS DGC INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ STEPHEN J. LUDLOW

  	
   

  
	
   

  	
   

  	
  Stephen J. Ludlow

  
	
   

  	
   

  	
  Vice Chairman

  
	
   

  	
   

  
	
  By:

  	
  /s/ LARRY L. WORDEN

  	
   

  	
   

  
	
   

  	
  Larry L. Worden

  	
   

  
	
   

  	
  Vice President, General Counsel

  	
   

  
	
   

  	
    & Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MELLON SHAREHOLDER SERVICES,

  L.L.C. (previously known as “ChaseMellon

  Shareholder Services, L.L.C.), AS RIGHTS

  AGENT

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia T. Knight

  	
   

  
	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  
	
  By:

  	
  /s/ David M. Cary

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
  Patricia T. Knight

  	
   

  
	
   

  	
   

  	
  (Typed or Printed Name)

  
	
  David
  M. Cary

  	
   

  	
   

  
	
   

  	
  (Printed or Typed Name)

  	
  Client Relationship Executive

  	
   

  
	
   

  	
   

  	
  (Title)

  
	
  Vice President & Client
  Relationship Executive

  	
   

  	
   

  
	
   

  	
  (Title)

  	
   

  
								

 

7

 

EXHIBIT C

 

[Form of Right Certificate]

 

	
  Certificate No. R-

  	
   

  	
   

  	
              

  	
  Rights

  

 

This Certificate is Transferable in

Dallas, Texas or

New York, New York

 

NOT EXERCISABLE AFTER MAY 15, 2007 OR EARLIER IF REDEEMED
OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. IF THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY
A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME OR MAY HAVE
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF
THE RIGHTS AGREEMENT.

 

RIGHT CERTIFICATE

 

This certifies that                                                         ,
or registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of May 15,
1997, as amended, (the “Rights Agreement”) between Veritas DGC Inc., a Delaware
corporation (the “Company”), and ChaseMellon Shareholder Services, L.L.C., a
New Jersey limited liability company (the “Rights Agent”), to purchase from the
Company at any time after the Distribution Date and prior to the Expiration
Date at the office or offices of the Rights Agent designated for such purpose,
or its successors as Rights Agent, one one-thousandth (1/1,000th) of a fully
paid, nonassessable share of Preferred Stock-Junior Participating Series A,
par value $.01 per share, (the “Preferred Stock”) of the Company, at a cash
purchase price of $100 per one one-thousandth (1/1,000th) of a share (the “Purchase
Price”), payable in cash upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and the related
Certificate duly executed.

 

Terms used herein and not otherwise defined have the meanings
assigned to them in the Rights Agreement.

 

The number of rights evidenced by this Right Certificate, the
Purchase Price and the number and kind of shares which may be purchased upon
exercise thereof are the number of Rights, Purchase Price, and the number and
kind of shares which may be so purchased as of June 12, 1997. As provided
in the Rights Agreement, the number of Rights represented by this Rights
Certificate, the Purchase Price and the number and kind of shares of Preferred
Stock or other securities which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.

 

From and after the time when any person first becomes an
Acquiring Person, other than pursuant to a Qualifying Tender Offer, any Rights
beneficially owned by (i) an Acquiring Person or an Associate

 

8

 

or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring; Person becomes
such, (iii) a transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose of effect the avoidance of Section 7(e) of
the Rights Agreement shall become null and void without any further action, and
no holder of such Rights (including any purported transferee or subsequent
holder) shall have any rights whatsoever with respect to such Rights, whether
under any provision of the Rights Agreement or otherwise.

 

This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth in
the Rights Agreement. Copies of the Rights Agreement are on file with the
Rights Agent and are also available upon written request to the Company.

 

This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number and kind of shares as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.

 

Subject to the provisions of
the Rights Agreement, the Board of Directors of the Company may, at its option,
(a) at any time prior to the earlier of (i) the close of business on
the tenth day after the Stock Acquisition Date and (ii) the Final
Expiration Date, redeem all but not less than all the Rights evidenced by this
Certificate at a redemption price of $.001 per Right; or (b) at any time
after any Person becomes an Acquiring Person (but before any Person becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding), exchange all or part of the Rights evidenced by this Certificate
for shares of Common Stock at an exchange ratio of one share of Common Stock
per Right. If the Rights shall be exchanged in part, the holder of this Right
Certificate shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of Rights not exchanged.

 

The Company may issue fractions of Preferred Stock or
distribute certificates which evidence fractions of Preferred Stock upon the
exercise of any Right or Rights evidenced hereby. In lieu of issuing fractional
shares, the Company may elect to make a cash payment as provided in the Rights
Agreement or fractions of a share other than one one-thousandth (1/1,000th) of
a share or any integral multiple thereof or to issue certificates or utilize a
depository arrangement as provided in the terms of he Rights Agreement and the
Preferred Stock.

 

No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein

 

9

 

be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Com any
or any right to vote for the election of directors or upon any matter submitted
to stockholder at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced b this Right Certificate shall have been exercised as provided in the
Rights Agreement.

 

This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.

 

WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.

 

	
  Dated as of:

  	
   

  	
   

  	
  VERITAS DGC INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Countersigned:

  	
   

  
	
   

  	
   

  
	
  Mellon Shareholder Services, L.L.C.,

  	
   

  
	
  as Rights Agent,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Officer

  	
   

  
											

 

10Exhibit
4.1

 

 

TRUST AGREEMENT

 

by and between

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Trust Depositor,

 

and

 

WILMINGTON TRUST COMPANY,

as Owner Trustee

 

 

Dated as of April 29, 2005

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE ONE

  	
  DEFINITIONS

  	
   

  
	
  Section 1.01.

  	
  Capitalized Terms

  	
   

  
	
  Section 1.02.

  	
  Other Definitional Provisions

  	
   

  
	
  Section 1.03.

  	
  Usage of Terms

  	
   

  
	
  Section 1.04.

  	
  Section References

  	
   

  
	
  Section 1.05.

  	
  Accounting Terms

  	
   

  
	
  ARTICLE TWO

  	
  ORGANIZATION

  	
   

  
	
  Section 2.01.

  	
  Name

  	
   

  
	
  Section 2.02.

  	
  Office

  	
   

  
	
  Section 2.03.

  	
  Purposes and Powers

  	
   

  
	
  Section 2.04.

  	
  Appointment of Owner Trustee

  	
   

  
	
  Section 2.05.

  	
  Initial Capital Contribution of Owner Trust
  Estate

  	
   

  
	
  Section 2.06.

  	
  Declaration of Trust

  	
   

  
	
  Section 2.07.

  	
  Liability of Trust Depositor

  	
   

  
	
  Section 2.08.

  	
  Title to Trust Property

  	
   

  
	
  Section 2.09.

  	
  Situs of Trust

  	
   

  
	
  Section 2.10.

  	
  Representations and Warranties of the Trust
  Depositor

  	
   

  
	
  Section 2.11.

  	
  Federal Income Tax Treatment

  	
   

  
	
  ARTICLE THREE

  	
  TRUST CERTIFICATE AND TRANSFER OF
  INTERESTS

  	
   

  
	
  Section 3.01.

  	
  Initial Ownership

  	
   

  
	
  Section 3.02.

  	
  The Trust Certificate

  	
   

  
	
  Section 3.03.

  	
  Authentication and Delivery of Trust
  Certificate

  	
   

  
	
  Section 3.04.

  	
  Registration of Transfer and Exchange of
  Trust Certificate

  	
   

  
	
  Section 3.05.

  	
  Mutilated, Destroyed, Lost or Stolen Trust
  Certificate

  	
   

  
	
  Section 3.06.

  	
  Person Deemed Owner

  	
   

  
	
  Section 3.07.

  	
  Access to List of Certificateholder’s Name
  and Address

  	
   

  
	
  Section 3.08.

  	
  Maintenance of Office or Agency

  	
   

  
	
  Section 3.09.

  	
  Trust Certificate

  	
   

  
	
  Section 3.10.

  	
  Appointment of Paying Agent

  	
   

  
	
  Section 3.11.

  	
  Ownership by Trust Depositor of Trust
  Certificate

  	
   

  
	
  ARTICLE FOUR

  	
  ACTIONS BY OWNER TRUSTEE

  	
   

  
	
  Section 4.01.

  	
  Prior Notice to Owner with Respect to
  Certain Matters

  	
   

  
	
  Section 4.02.

  	
  Action by Owner with Respect to Certain
  Matters

  	
   

  
	
  Section 4.03.

  	
  Action by Owner with Respect to Bankruptcy

  	
   

  
	
  Section 4.04.

  	
  Restrictions on Owner’s Power

  	
   

  
	
  ARTICLE FIVE

  	
  APPLICATION
  OF TRUST FUNDS; CERTAIN DUTIES

  	
   

  
	
  Section 5.01.

  	
  Application of Trust Funds

  	
   

  
	
  Section 5.02.

  	
  Method of Payment

  	
   

  
	
  Section 5.03.

  	
  Accounting and Reports to the
  Certificateholder, Owner, the Internal Revenue Service and Others

  	
   

  
	
  Section 5.04.

  	
  Signature on Returns; Tax Matters Partner

  	
   

  
	
  ARTICLE SIX

  	
  AUTHORITY
  AND DUTIES OF OWNER TRUSTEE

  	
   

  
	
  Section 6.01.

  	
  General Authority

  	
   

  
	
  Section 6.02.

  	
  General Duties

  	
   

  
	
  Section 6.03.

  	
  Action Upon Instruction

  	
   

  
	
  Section 6.04.

  	
  No Duties Except as Specified in this
  Agreement or in Instructions

  	
   

  
	
  Section 6.05.

  	
  No Action Except Under Specified Documents
  or Instructions

  	
   

  
	
  Section 6.06.

  	
  Restrictions

  	
   

  

 

 

	
  Section 6.07.

  	
  Pennsylvania Motor Vehicle Sales Finance
  Act Licenses

  	
   

  
	
  ARTICLE SEVEN

  	
  CONCERNING
  THE OWNER TRUSTEE

  	
   

  
	
  Section 7.01.

  	
  Acceptance of Trusts and Duties

  	
   

  
	
  Section 7.02.

  	
  Furnishing of Documents

  	
   

  
	
  Section 7.03.

  	
  Representations and Warranties

  	
   

  
	
  Section 7.04.

  	
  Reliance; Advice of Counsel

  	
   

  
	
  Section 7.05.

  	
  Not Acting in Individual Capacity

  	
   

  
	
  Section 7.06.

  	
  Owner Trustee Not Liable for Trust
  Certificate, Notes or Contracts

  	
   

  
	
  Section 7.07.

  	
  Owner Trustee May Own Trust
  Certificate and Notes

  	
   

  
	
  ARTICLE EIGHT

  	
  COMPENSATION
  OF OWNER TRUSTEE

  	
   

  
	
  Section 8.01.

  	
  Owner Trustee’s Fees and Expenses

  	
   

  
	
  Section 8.02.

  	
  Indemnification

  	
   

  
	
  Section 8.03.

  	
  Payments to the Owner Trustee

  	
   

  
	
  ARTICLE NINE

  	
  TERMINATION
  OF TRUST AGREEMENT

  	
   

  
	
  Section 9.01.

  	
  Termination of Trust Agreement

  	
   

  
	
  ARTICLE TEN

  	
  SUCCESSOR
  OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

  	
   

  
	
  Section 10.01.

  	
  Eligibility Requirements for Owner Trustee

  	
   

  
	
  Section 10.02.

  	
  Resignation or Removal of Owner Trustee

  	
   

  
	
  Section 10.03.

  	
  Successor Owner Trustee

  	
   

  
	
  Section 10.04.

  	
  Merger or Consolidation of Owner Trustee

  	
   

  
	
  Section 10.05.

  	
  Appointment of Co-Trustee or Separate
  Trustee

  	
   

  
	
  ARTICLE ELEVEN

  	
  MISCELLANEOUS

  	
   

  
	
  Section 11.01.

  	
  Supplements and Amendments

  	
   

  
	
  Section 11.02.

  	
  No Legal Title to Trust Estate in Owner

  	
   

  
	
  Section 11.03.

  	
  Limitations on Rights of Others

  	
   

  
	
  Section 11.04.

  	
  Notices

  	
   

  
	
  Section 11.05.

  	
  Severability of Provisions

  	
   

  
	
  Section 11.06.

  	
  Counterparts

  	
   

  
	
  Section 11.07.

  	
  Successors and Assigns

  	
   

  
	
  Section 11.08.

  	
  Covenants of the Trust Depositor

  	
   

  
	
  Section 11.09.

  	
  No Petition

  	
   

  
	
  Section 11.10.

  	
  No Recourse

  	
   

  
	
  Section 11.11.

  	
  Headings

  	
   

  
	
  Section 11.12.

  	
  Governing Law

  	
   

  
	
  Section 11.13.

  	
  Trust Certificate Transfer Restrictions

  	
   

  
	
  Section 11.14.

  	
  Trust Depositor Payment Obligation

  	
   

  
	
   

  	
  [signature page follows]

  	
   

  

 

EXHIBITS

 

	
  Exhibit A -
  Form of Certificate of Trust

  	
   

  
	
  Exhibit B -
  Form of Trust Certificate

  	
   

  

 

ii

 

TRUST AGREEMENT dated as of April 29, 2005,
between HARLEY-DAVIDSON CUSTOMER FUNDING CORP., a Nevada corporation, as Trust
Depositor (the “Trust Depositor”), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as owner trustee (the “Owner Trustee”).

 

WHEREAS, in connection herewith, the Trust Depositor
is willing to assume certain obligations pursuant hereto; and

 

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

 

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

 

ARTICLE ONE

DEFINITIONS

 

Section 1.01.                         Capitalized Terms. 
Except as otherwise provided in this Agreement, whenever used in this Agreement
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:

 

“Administration 
Agreement”
means the Administration Agreement, dated as of May 1, 2005, among the
Trust, the Trust Depositor, the Indenture Trustee and Harley-Davidson Credit,
as administrator.

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

“Closing
Date” shall have the meaning assigned to such term in the
Sale and Servicing Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Indenture”  means the
Indenture dated as of May 1, 2005 between the Trust and The Bank of New
York Trust Company, N.A.

 

“Note Depository Agreement” means the Agreement dated as of the
Closing Date among the Trust, the Indenture Trustee, the Administrator and DTC,
as the Clearing Agency, relating to the Notes, as the same may be amended and
supplemented from time to time.

 

“Notes” means the Class A-1 Notes, the Class A-2
Notes and the Class B Notes, in each case issued pursuant to the
Indenture.

 

“Owner”
means the Holder of the Trust Certificate.

 

“Owner Trustee” means Wilmington Trust Company, a Delaware
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.

 

“Owner Trustee Corporate Trust Office” means the office of the Owner Trustee at
which its corporate trust business shall be administered, which initially shall
be Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001
Attn: Corporate Trust Administration, or such other office at such other
address as the Owner Trustee may designate from time to time by notice to the
Certificateholder, the Servicer, the Indenture Trustee, the Trust Depositor and
Harley-Davidson Credit.

 

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

 

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

 

“Record Date” means, with respect to any Distribution Date, the
last Business Day of the preceding calendar month.

 

2

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement,
dated as of May 1, 2005, among the Trust, as Issuer, the Trust Depositor,
Harley-Davidson Credit, as servicer, and The Bank of New York Trust Company,
N.A., as Indenture Trustee, as the same may be amended or supplemented from
time to time.

 

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

 

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

 

“Tax Matters Partner” shall have the meaning provided in Section 5.04(b) hereof.

 

“Treasury Regulations” means regulations, including proposed or
temporary regulations, promulgated under the Code.  References herein to specific provisions of
proposed or temporary regulations shall include analogous provisions of final Treasury
Regulations or other successor Treasury Regulations.

 

“Trust”
means the trust established by this Agreement.

 

“Trust Certificate” means the trust certificate evidencing the beneficial
equity interest of  the Owner,
substantially in the form of Exhibit B
hereto.

 

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

 

“Trust Estate” means all right, title and interest of the Trust in
and to the property and rights assigned to the Trust pursuant to Article Two
of the Sale and Servicing Agreement, all funds on deposit from time to time in
the Trust Accounts and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Sale and
Servicing Agreement and the Administration Agreement.

 

“Underwriters” shall have the meaning set forth in the Sale
and Servicing Agreement.

 

Section 1.02.                         Other Definitional Provisions. 
Capitalized terms used that are not otherwise defined herein shall have
the meanings ascribed thereto in the Sale and Servicing Agreement or, if not
defined therein, in the Indenture.

 

Section 1.03.                         Usage of Terms. 
With respect to all terms in this Agreement, the singular includes the
plural and the plural the singular; words importing any gender include the
other genders; references to “writing”
include printing, typing, lithography and other means of reproducing words in a
visible form; references to agreements and other contractual instruments
include all amendments, modifications and supplements thereto or any changes
therein entered into in accordance with their respective terms and not
prohibited by this Agreement; references to Persons include their permitted
successors and assigns; and the term “including” means “including without limitation”.

 

Section 1.04.                         Section References. 
All section references, unless otherwise indicated, shall be to
Sections in this Agreement.

 

3

 

Section 1.05.                         Accounting Terms. 
All accounting terms used but not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States.

 

ARTICLE TWO

ORGANIZATION

 

Section 2.01.                         Name. 
The Trust created hereby shall be known as “Harley-Davidson  Motorcycle Trust 2005-2”, in which
name the Owner Trustee may conduct the activities of the Trust, make and
execute contracts and other instruments on behalf of the Trust and sue and be
sued.

 

Section 2.02.                         Office. 
The office of the Trust shall be in care of the Owner Trustee at the
Owner Trustee Corporate Trust Office or at such other address in Delaware as
the Owner Trustee may designate by written notice to the Owner and the Trust
Depositor.

 

Section 2.03.                         Purposes and Powers.

 

(a)                                  The sole purpose of the Trust is to
manage the Trust Estate and collect and disburse the periodic income therefrom
for the use and benefit of the Owner, and in furtherance of such purpose to
engage in the following ministerial activities:

 

(i)                                     to issue the Notes pursuant to the
Indenture and the Trust Certificate pursuant to this Agreement and to sell the
Notes;

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

Section 2.04.                         Appointment of Owner Trustee. 
The Trust Depositor hereby appoints the Owner Trustee as trustee of the
Trust effective as of the date hereof, to have all the rights, powers and
duties set forth herein, and the Owner Trustee hereby accepts such appointment.

 

Section 2.05.                         Initial Capital Contribution of
Owner Trust Estate.  The Trust Depositor hereby sells, assigns,
transfers, conveys and sets over to the Owner Trustee, as of the date hereof,
the sum of $1,000.  The Owner Trustee
hereby acknowledges receipt in trust from the Trust Depositor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial Trust
Estate.  The Trust Depositor shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.

 

Section 2.06.                         Declaration of Trust. 
The Owner Trustee hereby declares that it will hold the Trust Estate in
trust upon and subject to the conditions set forth herein for the sole purpose
of conserving the Trust Estate and collecting and disbursing the periodic
income therefrom for the use and benefit of the Owner, subject to the
obligations of the Trust under the Transaction Documents.  It is the intention of the parties hereto
that the Trust constitute a statutory trust under the Statutory Trust Statute
and that this Agreement constitute the governing instrument of such statutory
trust.  Effective as of the date hereof,
the Owner Trustee shall have all rights, powers and duties set forth herein and
in the Statutory Trust Statute for the sole purpose and to the extent necessary
to accomplish the purpose of this Trust as set forth in the introductory
sentence of Section 2.03.

 

Section 2.07.                         Liability of Trust Depositor.

 

(a)                                  All liabilities of the Trust, to the
extent not paid by a third party, are and shall be obligations of the Trust and
when due and payable shall be satisfied out of the Trust Estate.

 

(b)                                 Except as provided in the Statutory Trust
Statute, the Certificateholder shall not be personally liable for any liability
of the Trust.

 

Section 2.08.                         Title to Trust Property. 
Legal title to the Trust Estate shall be vested at all times in the
Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Estate to be vested in
an  Owner Trustee or Owner Trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.

 

Section 2.09.                         Situs of Trust. 
The Trust will be located and administered in the State of
Delaware.  All bank accounts maintained
by the Owner Trustee on behalf of the Trust shall be located in the State of
Illinois or the State of Delaware.  The
Trust shall not have any employees in any state other 

 

5

 

than Delaware; provided, however, that nothing herein shall restrict or
prohibit the Owner Trustee from having employees within or without the State of
Delaware.  Payments will be received by
the Trust only in Delaware and payments will be made by the Trust only from
Delaware.  The only office of the Trust
will be at the Owner Trustee Corporate Trust Office.

 

Section 2.10.                         Representations and Warranties of
the Trust Depositor.

 

The Trust Depositor hereby represents and warrants to
the Owner Trustee that:

 

(i)                                     The Trust Depositor is duly organized and
validly existing as a corporation organized and existing and in good standing
under the laws of the State of Nevada, with power and authority to own its
properties and to conduct its business and had at all relevant times, and has,
power, authority and legal right to acquire and own the Contracts.

 

(ii)                                  The Trust Depositor is duly qualified to
do business as a foreign corporation in good standing and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business requires such qualifications.

 

(iii)                               The Trust Depositor has the power and authority to
execute and deliver this Agreement and to carry out its terms; the Trust
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Owner Trustee on behalf of the
Trust as part of the Trust Estate and has duly authorized such sale and
assignment and deposit with the Owner Trustee on behalf of the Trust by all
necessary corporate action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Trust Depositor by all necessary
corporate action.

 

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

 

(v)                                 There are no proceedings or
investigations pending, or to the Trust Depositor’s best knowledge threatened,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Trust Depositor or its properties:
(A) asserting the invalidity of this Agreement, any of the other
Transaction Documents or the Trust Certificate, (B) seeking to prevent the
issuance of the Trust Certificate or the consummation of any of the
transactions contemplated by this Agreement or any of the other Transaction
Documents, (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Trust Depositor of its obligations
under, or the validity or enforceability of, this Agreement, any of the other
Transaction Documents or the Trust Certificate

 

6

 

or (D) involving
the Trust Depositor and which might adversely affect the federal income tax or
other federal, state or local tax attributes of the Trust Certificate.

 

Section 2.11.                         Federal Income Tax Treatment.

 

It is the intention of the Trust Depositor that the
Trust be disregarded as a separate entity pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii) as
in effect for periods after January 1, 1997.  The Trust Certificate constitutes the sole
equity interest in the Trust and must at all times be held by either the Trust
Depositor or its transferee as sole owner. 
The Trust Depositor agrees not to take any action inconsistent with such
intended federal income tax treatment. 
Because for federal income tax purposes the Trust will be disregarded as
a separate entity, Trust items of income, gain, loss and deduction for any
month as determined for federal income tax purposes shall be allocated entirely
to the Trust Depositor (or subsequent purchaser of the Trust Certificate) as
the sole Certificateholder.

 

ARTICLE THREE

TRUST CERTIFICATE AND TRANSFER OF INTERESTS

 

Section 3.01.                         Initial Ownership.

 

(a)                                  Upon the formation of the Trust by the
contribution by the Trust Depositor pursuant to Section 2.05 and until the
issuance of the Trust Certificate, the Trust Depositor shall be the sole
beneficiary of the Trust.  The Trust
Certificate must at all times be held by either the Trust Depositor or its
transferee as sole owner.

 

(b)                                 No transfer of the Trust Certificate
shall be made unless such transfer is made in a transaction which does not
require registration or qualification under the Securities Act of 1933 or
qualification under any state securities or “Blue Sky” laws.  Neither the Owner Trustee nor the Certificate
Registrar shall effect the registration of any transfer of the Trust
Certificate unless, (i) prior to such transfer the Owner Trustee shall
have received a Tax Opinion, and (ii) following such transfer, there would
be no more than one holder of the Trust Certificate and the holder of the Trust
Certificate would not be a Foreign Person, a partnership, Subchapter S
corporation or grantor trust.

 

7

 

Section 3.02.                         The Trust Certificate. 
The Trust Certificate shall be substantially in the form of Exhibit B hereto. 
The Trust Certificate shall be executed by the Owner Trustee on behalf
of the Trust by manual or facsimile signature of an authorized officer of the
Owner Trustee and shall be deemed to have been validly issued when so
executed.  The Trust Certificate bearing
the manual or facsimile signature of individuals who were, at the time when
such signatures were affixed, authorized to sign on behalf of the Owner Trustee
shall be a valid and binding obligation of the Trust, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Trust Certificate or did not hold such
offices at the date of such Trust Certificate. 
The Trust Certificate shall be dated the date of its authentication.

 

Section 3.03.                         Authentication and Delivery of
Trust Certificate.  The Owner Trustee shall cause to be
authenticated and delivered upon the order of the Trust Depositor, in exchange
for the Contracts and the other Trust Assets, simultaneously with the sale,
assignment and transfer to the Trust of the Contracts and other Trust Assets,
and the constructive delivery to the Owner Trustee of the Contract Files and
the other Trust Assets, a Trust Certificate duly authenticated by the Owner
Trustee, evidencing the entire ownership of the Trust, and Notes issued by the
Owner Trustee and authenticated by the Indenture Trustee in aggregate principal
amount of, in the case of (i) Class A-1 Notes, $487,000,000, (ii) Class A-2
Notes, $251,180,000 and (iii) Class B Notes, $36,820,000, or be valid
for any purpose, unless there appears on such Trust Certificate a certificate
of authentication substantially in the form set forth in the form of Trust
Certificate attached hereto as Exhibit B,
executed by the Owner Trustee or its authenticating agent, by manual signature,
and such certificate upon any Trust Certificate shall be conclusive evidence,
and the only evidence, that such Trust Certificate has been duly authenticated
and delivered hereunder.  Upon issuance,
authorization and delivery pursuant to the terms hereof, the Trust Certificate
will be entitled to the benefits of this Agreement.

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

Section 3.05.                         Mutilated, Destroyed, Lost or
Stolen Trust Certificate.  If (i) any mutilated
Trust Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Trust Certificate, and (ii) there is delivered to the
Certificate Registrar and the Owner Trustee such security or indemnity as may
be required by them to save each of them harmless, then, in the absence of
notice that such Trust Certificate has been acquired by a bona fide purchaser,
the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee or
its authenticating agent shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a new
Trust Certificate of like tenor and fractional undivided interest.  In connection with the issuance of any new
Trust Certificate under this Section, the Owner Trustee may require the payment
by the Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto. 
Any duplicate Trust Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.

 

Section 3.06.                         Person Deemed Owner. 
Prior to due presentation of a Trust Certificate for registration of
transfer, the Owner Trustee, the Certificate Registrar and any of their
respective agents may treat the Person in whose name any Trust Certificate is
registered as the owner of such Trust Certificate for the purpose of receiving
distributions pursuant to Section 5.01 and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar, any
Paying Agent or any of their respective agents shall be affected by any notice
of the contrary.

 

Section 3.07.                         Access to List of Certificateholder’s
Name and Address.  The Owner Trustee shall furnish or cause to
be furnished to the Servicer and the Trust Depositor, within 15 days after
receipt by the Certificate Registrar of a written request therefor from the
Servicer or the Trust Depositor, the name and address of the Certificateholder
as of the most recent Record Date in such form as the Servicer or the Trust
Depositor may reasonably require.  The
Certificateholder, by receiving and holding the Trust Certificate, agrees with
the Servicer, the Trust Depositor and the Owner Trustee that none of the
Servicer, the Trust Depositor or the Owner Trustee shall be held accountable by
reason of the disclosure of any such information as to the name and address of
the Certificateholder hereunder, regardless of the source from which such
information was derived.

 

Section 3.08.                         Maintenance of Office or Agency. 
The Owner Trustee shall maintain in Wilmington, Delaware, an office or
offices or agency or agencies where the Trust Certificate may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Owner Trustee in respect of the Trust Certificate and this Agreement
may be served.  The Owner Trustee hereby
designates the Owner Trustee Corporate Trust Office as its office for such
purposes.  The Owner Trustee shall give
prompt written notice to the Trust Depositor, the Servicer and to the
Certificateholder of any change in the location of the Certificate Register or
any such office or agency.

 

9

 

Section 3.09.                         Trust Certificate. 
The Owner Trustee, on behalf of the Trust, shall execute, authenticate
and deliver, a Trust Certificate.

 

Section 3.10.                         Appointment of Paying Agent. 
The Paying Agent shall make distributions to the Certificateholder
pursuant to Section 5.01(a) and shall report the amounts of such
distributions to the Owner Trustee.  The
Paying Agent initially shall be The Bank of New York Trust Company, N.A., and
any co-paying agent chosen by the Paying Agent that is acceptable to the Owner
Trustee.  Each Paying Agent shall be
permitted to resign as Paying Agent upon 30 days’ written notice to the Owner
Trustee.  In the event that The Bank of
New York Trust Company, N.A.shall no longer be the Paying Agent, the Owner
Trustee shall appoint a successor to act as Paying Agent (which shall be a bank
or trust company).  The Owner Trustee
shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Owner Trustee to execute and deliver to the Owner Trustee an
instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Owner Trustee that, as Paying Agent, such successor Paying
Agent or additional Paying Agent will hold all sums, if any, held by it for
payment to the Certificateholder in trust for the benefit of the
Certificateholder entitled thereto until such sums shall be paid to such
Certificateholder.  The Paying Agent
shall return all unclaimed funds to the Owner Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Owner Trustee.  The provisions of
Sections 7.01, 7.03, 7.04 and 8.01 shall apply to the Owner Trustee also in its
role as Paying Agent, for so long as the Owner Trustee shall act as Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder.  Any reference in this
Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.

 

Section 3.11.                         Ownership by Trust Depositor of
Trust Certificate.  The Trust Depositor shall on the Closing Date
hold the Trust Certificate.

 

ARTICLE FOUR

ACTIONS BY OWNER TRUSTEE

 

Section 4.01.                         Prior Notice to Owner with
Respect to Certain Matters.  Subject to
the provisions and limitation of Section 4.04, with respect to the
following matters, the Owner Trustee shall not take action unless at least 30
days before the taking of such action, the Owner Trustee shall have notified
the Certificateholder in writing of the proposed action, the Indenture Trustee
shall have consented to such action in the event any Notes are outstanding and
the Owner shall not have notified the Owner Trustee in writing prior to the
30th day after such notice is given that the Owner has withheld consent or
provided alternative direction:

 

(a)                                  the initiation of any claim or lawsuit by
the Trust (except claims or lawsuits brought in connection with the collection
of the Contracts) and the compromise of any action, claim or lawsuit brought by
or against the Trust (except with respect to the aforementioned claims or
lawsuits for collection of the Contracts);

 

(b)                                 the election by the Trust to file an
amendment to the Certificate of Trust (unless such amendment is required to be
filed under the Statutory Trust Statute);

 

10

 

(c)                                  the amendment of the Indenture by a
supplemental indenture in circumstances where the consent of any Noteholder is
required;

 

(d)                                 the amendment of the Indenture by a
supplemental indenture in circumstances where the consent of any Noteholder is
not required and such amendment materially and adversely affects the interest
of the Owner;

 

(e)                                  the amendment, change or modification of
the Administration Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that would not
materially and adversely affect the interests of the Owner; or

 

(f)                                    the appointment pursuant to the Indenture
of a successor Note Registrar or Indenture Trustee or pursuant to this
Agreement of a successor Certificate Registrar, or the consent to the
assignment by the Note Registrar, Indenture Trustee or Certificate Registrar of
its obligations under the Indenture or the Agreement, as applicable.

 

Section 4.02.                         Action by Owner with Respect to Certain
Matters.  Subject to the provisions and limitations of Section 4.04,
the Owner Trustee shall not have the power, except upon the direction of the
Owner, to (a) remove the Administrator pursuant to Section 8 of the
Administration Agreement, (b) appoint a successor Administrator pursuant
to Section 8 of the Administration Agreement, (c) except as expressly
provided in the Transaction Documents, sell the Contracts or other Trust Assets
after the termination of the Indenture, (d) initiate any claim, suit or
proceeding by the Trust or compromise any claim, suit or proceeding brought by
or against the Trust, (e) authorize the merger or consolidation of the
Trust with or into any other statutory trust or entity (other than in
accordance with Section 3.10 of the Indenture) or (f) amend the
Certificate of Trust.  The Owner Trustee
shall take the actions referred to in the preceding sentence only upon written
instructions assigned by the Owner.

 

Section 4.03.                         Action by Owner with Respect to
Bankruptcy.  The Owner Trustee shall not have the power to
commence a voluntary proceeding in a bankruptcy relating to the Trust without
the prior approval of Owner and the delivery to the Owner Trustee by such Owner
of a certificate certifying that such Owner reasonably believes that the Trust
is insolvent.

 

Section 4.04.                         Restrictions on Owner’s Power. 
The Owner shall not direct the Owner Trustee to take or to refrain from
taking any action if such action or inaction would be contrary to any
obligation of the Trust or the Owner Trustee under this Agreement or any of the
Transaction Documents or would be contrary to the purpose of this Trust as set
forth in Section 2.03, nor shall the Owner Trustee be obligated to follow
any such direction, if given.

 

11

 

ARTICLE FIVE

APPLICATION OF TRUST FUNDS;

CERTAIN DUTIES

 

Section 5.01.                         Application of Trust Funds.

 

(a)                                  On each Distribution Date, the Paying
Agent will distribute to the Certificateholder amounts received pursuant to Section 7.05
of the Sale and Servicing Agreement with respect to such Distribution Date.

 

(b)                                 On each Distribution Date, the Paying
Agent shall send to the Certificateholder the statement or statements provided
to the Owner Trustee by the Servicer pursuant to Section 9.01 of the Sale
and Servicing Agreement with respect to such Distribution Date.

 

(c)                                  In the event that any withholding tax is
imposed on the Trust’s payment (or allocation of income) to the
Certificateholder, such tax shall reduce the amount otherwise distributable to
the Certificateholder  in accordance with
this Section.  The Paying Agent is hereby
authorized and directed to retain from amounts otherwise distributable to the Owner
sufficient funds for the payment of any tax that is legally owed by the Trust
(but such authorization shall not prevent the Owner Trustee from contesting any
such tax in appropriate proceedings, and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings).  The amount of any withholding tax imposed
with respect to the Certificateholder shall be treated as cash distributed to
such Certificateholder at the time it is withheld by the Trust and remitted to
the appropriate taxing authority.  If
there is a possibility that withholding tax is payable with respect to a
distribution, the Paying Agent may in its sole discretion withhold such amounts
in accordance with the paragraph (c).

 

Section 5.02.                         Method of Payment. 
Subject to Section 9.01(c) respecting the final payment upon
retirement of the Trust Certificate, distributions required to be made to the
Certificateholder of record on the related Record Date shall be made by check
mailed to such Certificateholder at the address of such Holder appearing in the
Certificate Register.

 

Section 5.03.                         Accounting and Reports to the
Certificateholder, Owner, the Internal Revenue Service and Others. 
The Administrator shall (a) maintain (or cause to be maintained)
the books of the Trust on a calendar year basis and the accrual method of
accounting, (b) deliver to the Owner, as may be required by the Code and
applicable Treasury Regulations, such information as may be required to enable
the Owner to prepare its federal and state income tax returns, (c) file
such tax returns relating to the Trust and make such elections as from time to
time may be required or appropriate under any applicable state or federal
statute or any rule or regulation thereunder so as to maintain the federal
income tax treatment for the Trust as set forth in Section 2.11, (d) cause
such tax returns to be signed in the manner required by law and (e) collect
or cause to be collected any withholding tax as described in and in accordance
with Section 5.01(c) with respect to income or distributions to
Owner.  The Owner Trustee shall elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Contracts.  If applicable, the Owner Trustee shall not
make the election provided under Section 754 or Section 761 of the
Code.

 

Section 5.04.                         Signature on Returns; Tax Matters
Partner.

 

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

 

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

 

12

 

ARTICLE SIX

AUTHORITY AND DUTIES OF OWNER TRUSTEE

 

Section 6.01.                         General Authority. 
Subject to the provisions and limitations of Sections 2.03 and 2.06, the
Owner Trustee is authorized and directed to execute and deliver the Transaction
Documents to which the Trust is to be a party and each certificate or other
document attached as an exhibit to or contemplated by the Transaction Documents
to which the Trust is to be a party and any amendment or other agreement, as
evidenced conclusively by the Owner Trustee’s execution thereof.  In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust pursuant to the Transaction Documents.  The Owner Trustee is further authorized from
time to time to take such action as the Administrator recommends with respect
to the Transaction Documents.

 

Section 6.02.                         General Duties. 
Subject to the provisions and limitations of Sections 2.03 and 2.06, it
shall be the duty of the Owner Trustee to discharge (or cause to be discharged
through the Administrator) all of its responsibilities pursuant to the terms of
this Agreement and the Transaction Documents to which the Trust is a party and
to administer the Trust in the interest of the Owner, subject to the
Transaction Documents and in accordance with the provisions of this Agreement.  Without limiting the foregoing, the Owner
Trustee shall on behalf of the Trust file and prove any claim or claims that
may exist against Harley-Davidson Credit in connection with any claims paying
procedure as part of an insolvency or receivership proceeding involving
Harley-Davidson Credit.  Notwithstanding
the foregoing, the Owner Trustee shall be deemed to have discharged its duties
and responsibilities hereunder and under the Transaction Documents to the
extent the Administrator has agreed in the Administration Agreement to perform
any act or to discharge any duty of the Owner Trustee hereunder or under any
Transaction Document, and the Owner Trustee shall not be held liable for the
default or failure of the Administrator to carry out its obligations under the
Administration Agreement.

 

Section 6.03.                         Action Upon Instruction.

 

(a)                                  Subject to Article Four, in
accordance with the terms of the Transaction Documents the Owner may by written
instruction direct the Owner Trustee in the management of the Trust.

 

(b)                                 The Owner Trustee shall not be required
to take any action hereunder or under any other Transaction Document if the
Owner Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the part of the
Owner Trustee or is contrary to the terms hereof or of any other Transaction
Document or is otherwise contrary to law.

 

(c)                                  Whenever the Owner Trustee is unable to
decide between alternative courses of action permitted or required by the terms
of this Agreement or under any other Transaction Document, the Owner Trustee
shall promptly give notice (in such form as shall be appropriate under the
circumstances) to the Owner requesting instruction as to the course of action
to be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Owner received, the Owner
Trustee shall not be liable on account of such action to any Person.  If the Owner Trustee shall not have received
appropriate instruction within ten days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be
necessary under the 

 

13

 

circumstances) it
may, but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Agreement and the other Transaction Documents, as it
shall deem to be in the best interests of the Owner, and shall have no
liability to any Person for such action or inaction.

 

(d)                                 In the event that the Owner Trustee is
unsure as to the applicability of any provision of this Agreement or any other
Transaction Document or any such provision is ambiguous as to its application,
or is, or appears to be, in conflict with any other applicable provision, or in
the event that this Agreement permits any determination by the Owner Trustee or
is silent or is incomplete as to the course of action that the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
may give notice (in such form as shall be appropriate under the circumstances)
to the Owner requesting instruction and, to the extent that the Owner Trustee
acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person.  If
the Owner Trustee shall not have received appropriate instruction within ten
days of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Agreement or the other Transaction Documents, as it
shall deem to be in the best interests of the Owner, and shall have no
liability to any Person for such action or inaction.

 

Section 6.04.                         No Duties Except as Specified in
this Agreement or in Instructions.  The Owner
Trustee shall not have any duty or obligation to manage, make any payment with
respect to, register, record, sell, dispose of or otherwise deal with the Trust
Estate, or to otherwise take or refrain from taking any action under, or in
connection with, any document contemplated hereby to which the Owner Trustee is
a party, except as expressly provided by the terms of this Agreement or any
document or written instruction received by the Owner Trustee pursuant to Section 6.03;
and no implied duties or obligations shall be read into this Agreement or any
other Transaction Document against the Owner Trustee.  The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Commission filing for the Trust or to record this Agreement or any other
Transaction Document.  The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take
all action as may be necessary to discharge any liens on any part of the Trust
Estate that result from actions by, or claims against, the Owner Trustee that
are not related to the ownership or the administration of the Trust Estate.

 

Section 6.05.                         No Action Except Under Specified
Documents or Instructions.  The Owner Trustee shall not
manage, control, use, sell, dispose of or otherwise deal with any part of the
Trust Estate except (i) in accordance with the powers granted to and the
authority conferred upon the Owner Trustee pursuant to this Agreement, (ii) in
accordance with the other Transaction Documents and (iii) in accordance
with any document or instruction delivered to the Owner Trustee pursuant to Section 6.03.

 

Section 6.06.                         Restrictions. 
The Owner Trustee shall not take any action (i) that is inconsistent
with the purposes of the Trust set forth in Section 2.03 or (ii) that,
to the actual knowledge of the Owner Trustee, would result in the Trust’s
becoming taxable as a corporation for federal or state income tax
purposes.  The Owner shall not direct the
Owner Trustee to take actions that would violate the provisions of this
Section.

 

14

 

Section 6.07.                         Pennsylvania Motor Vehicle Sales
Finance Act Licenses.  The Owner Trustee shall use its best
efforts to maintain the effectiveness of all licenses required under the
Pennsylvania Motor Vehicle Sales Finance Act in connection with the
transactions contemplated by the Transaction Documents until the lien and
security interest of the Indenture shall no longer be in effect in accordance
with its terms.

 

ARTICLE SEVEN

CONCERNING THE OWNER TRUSTEE

 

Section 7.01.                         Acceptance of Trusts and Duties. 
The Owner Trustee accepts the trusts hereby created and agrees to
perform its duties hereunder with respect to such trusts but only upon the
terms of this Agreement.  The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Trust Estate upon the terms of the Transaction Documents and this
Agreement.  The Owner Trustee shall not
be answerable or accountable hereunder or under any other Transaction Document
under any circumstances, except (i) for its own willful misconduct or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Owner
Trustee.  In particular, but not by way
of limitation (and subject to the exceptions set forth in the preceding
sentence):

 

(a)                                  the Owner Trustee shall not be liable for
any error of judgment made by a responsible officer of the Owner Trustee;

 

(b)                                 the Owner Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in accordance
with the instructions of the Administrator or any Owner;

 

(c)                                  no provision of this Agreement or any
other Transaction Document shall require the Owner Trustee to expend or risk
funds or otherwise incur any financial liability in the performance of any of
its rights or powers hereunder or under any Transaction Document if the Owner
Trustee shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured or provided to it;

 

(d)                                 under no circumstances shall the Owner
Trustee be liable for indebtedness evidenced by or arising under any of the
Transaction Documents, including the principal of and interest on the Notes;

 

(e)                                  the Owner Trustee shall not be
responsible for or in respect of the validity or sufficiency of this Agreement
or for the due execution hereof by the Trust Depositor or for the form,
character, genuineness, sufficiency, value or validity of any of the Trust
Estate, or for or in respect of the validity or sufficiency of the Transaction
Documents, other than the certificate of authentication on the Trust
Certificate, and the Owner Trustee shall in no event assume or incur any
liability, duty, or obligation to any Noteholder or to any Owner, other than as
expressly provided for herein or expressly agreed to in the Transaction
Documents;

 

(f)                                    the Owner Trustee shall not be liable for
the default or misconduct of the Administrator, the Trust Depositor, the
Indenture Trustee or the Servicer under any of the Transaction 

 

15

 

Documents or
otherwise and the Owner Trustee shall have no obligation or liability to
perform the obligations of the Trust under this Agreement or the other
Transaction Documents that are required to be performed by the Administrator
under the Administration Agreement, the Indenture Trustee under the Indenture,
or the Servicer or the Trust Depositor under the Sale and Servicing Agreement;
and

 

(g)                                 the Owner Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by the
Agreement, or to institute, conduct or defend any litigation under this
Agreement or otherwise or in relation to this Agreement or any other
Transaction Document, at the request, order or direction of the Owner, unless
the Owner has offered to the Owner Trustee security or indemnity satisfactory
to it against the costs, expenses and liabilities that may be incurred by the
Owner Trustee therein or thereby.  The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any other Transaction Document shall not be construed as a
duty, and the Owner Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act.

 

Section 7.02.                         Furnishing of Documents. 
The Owner Trustee shall furnish to the Owner promptly upon receipt of a
written request therefor, duplicates or copies of all reports, notices,
requests, demands, certificates, financial statements and any other instruments
furnished to the Owner Trustee under the Transaction Documents.

 

Section 7.03.                         Representations and Warranties. 
The Owner Trustee hereby represents and warrants to the Trust Depositor
and the Owner that:

 

(a)                                  It is a banking corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware.  It has all requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement.

 

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

 

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

 

Section 7.04.                         Reliance; Advice of Counsel.

 

(a)                                  The Owner Trustee shall incur no
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. 
The Owner Trustee may accept a certified copy of a resolution of the
board of directors or other

 

16

 

governing body of
any corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect.  As to any fact or matter the method of
determination of which is not specifically prescribed herein, the Owner Trustee
may for all purposes hereof rely on a certificate, signed by the president or
any vice president or by the treasurer or other authorized officers of the
relevant party, as to such fact or matter and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon.

 

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

 

Section 7.05.                         Not Acting in Individual Capacity. 
Except as provided in this Article Seven, in accepting the trusts
hereby created, Wilmington Trust Company acts solely as Owner Trustee hereunder
and not in its individual capacity, and all Persons having any claim against
the Owner Trustee by reason of the transactions contemplated by this Agreement
or any other Transaction Document shall look only to the Trust Estate for
payment or satisfaction thereof.

 

Section 7.06.                         Owner Trustee Not Liable for
Trust Certificate, Notes or Contracts.  The recitals
contained herein and in the Trust Certificate (other than the signature and
countersignature of the Owner Trustee and the certificate of authentication on
the Trust Certificate) shall be taken as the statements of the Trust Depositor,
and the Owner Trustee assumes no responsibility for the correctness
thereof.  The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, any other
Transaction Document or the Trust Certificate (other than the signature and
countersignature of the Owner Trustee and the certificate of authentication on
the Trust Certificate) or the Notes, or of any Contract or related
documents.  The Owner Trustee shall at no
time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Contract, or the perfection and priority of
any security interest created by any Contract in any Motorcycle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to the Certificateholder under this Agreement or the Noteholders
under the Indenture, including, without limitation, the existence, condition
and ownership of any Motorcycle; the existence and enforceability of any
insurance thereon; the existence and contents of any Contract on any computer
or other record thereof; the validity of the assignment of any Contract to the
Trust or of any intervening assignment; the completeness of any Contract; the
performance or enforcement of any Contract; the compliance by the Trust
Depositor or the Servicer with any warranty or representation made under any
Transaction Document or in any related document or the accuracy of any such
warranty or representation; or any action of the Administrator, the Indenture
Trustee or the Servicer or any subservicer taken in the name of the Owner
Trustee.

 

Section 7.07.                         Owner Trustee May Own Trust
Certificate and Notes.  The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of the Trust
Certificate or Notes and 

 

17

 

may deal with the
Trust Depositor, the Administrator, the Indenture Trustee and the Servicer in
banking transactions with the same rights as it would have if it were not Owner
Trustee.

 

ARTICLE EIGHT

COMPENSATION OF OWNER TRUSTEE

 

Section 8.01.                         Owner Trustee’s Fees and Expenses. 
The Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon between the Owner
Trustee and the Trust Depositor. 
Additionally, the Owner Trustee shall be entitled to be reimbursed by
the Trust Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder.

 

Section 8.02.                         Indemnification. 
The Trust Depositor shall be liable as primary obligor for, and shall
indemnify the Owner Trustee and its successors, assigns and servants
(collectively, the “Indemnified Parties”) from and
against, any and all liabilities, obligations, losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, “Expenses”)
which may at any time be imposed on, incurred by or asserted against the Owner
Trustee or any Indemnified Party in any way relating to or arising out of this
Agreement, the other Transaction Documents, the Trust Estate, the
administration of the Trust Estate or the action or inaction of the Owner
Trustee hereunder, except only that the Trust Depositor shall not be liable for
or required to indemnify an Indemnified Party from and against Expenses arising
or resulting from any of the matters described in the third sentence of Section 7.01.  The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the termination
of this Agreement.  In the event of any
claim, action or proceeding for which indemnity will be sought pursuant to this
Section, the Owner Trustee’s choice of legal counsel shall be subject to the
approval of the Trust Depositor, which approval shall not be unreasonably
withheld.

 

Section 8.03.                         Payments to the Owner Trustee. 
Any amounts paid to the Owner Trustee pursuant to this Article shall
be deemed not to be a part of the Trust Estate immediately after such payment.

 

ARTICLE NINE

TERMINATION OF TRUST AGREEMENT

 

Section 9.01.                         Termination of Trust Agreement.

 

(a)                                  This Agreement (other than Article Eight)
and the Trust shall terminate and be of no further force or effect upon the
earlier of (i) final distribution by the Owner Trustee of all moneys or
other property or proceeds of the Trust Estate in accordance with the terms of
the Indenture, the Sale and Servicing Agreement and Article Five and (ii) the
expiration of 21 years from the death of the survivor of the descendants of
Joseph P. Kennedy, the late Ambassador of the United States to the Court of 

 

18

 

St. James’s,
living on the date hereof.  The
bankruptcy, liquidation, dissolution, death or incapacity of any Owner shall
not (i) operate to terminate this Agreement or the Trust, (ii) entitle
such Owner’s legal representatives or heirs to claim an accounting or to take
any action or proceeding in any court for a partition or winding up of all or
any part of the Trust or Trust Estate or (iii) otherwise affect the
rights, obligations and liabilities of the parties hereto.

 

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

 

(c)                                  Notice of any termination of the Trust,
specifying the Distribution Date upon which the Certificateholder shall
surrender the Trust Certificate to the Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter to
the Certificateholder mailed within five Business Days of receipt of notice of
such termination from the Servicer given pursuant to Section 10.01 of the
Sale and Servicing Agreement, stating (i) the Distribution Date upon or
with respect to which final payment of the Trust Certificate shall be made upon
presentation and surrender of the Trust Certificate at the office of the Paying
Agent therein designated, (ii) the amount of any such final payment and (iii) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of the
Trust Certificate at the office of the Paying Agent therein specified.  The Owner Trustee shall give such notice to
the Certificate Registrar (if other than the Owner Trustee) and the Paying
Agent at the time such notice is given to the Certificateholder.  Upon presentation and surrender of the Trust
Certificate, the Paying Agent shall cause to be distributed to the
Certificateholder amounts distributable on such Distribution Date pursuant to Section 5.01.

 

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

 

ARTICLE TEN

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

 

Section 10.01.                  Eligibility Requirements for
Owner Trustee.  The Owner Trustee shall at all times be a
corporation satisfying the provisions of Section 3807(a) of the
Statutory Trust  Statute; authorized to
exercise corporate trust powers; and (a) having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authorities; and having (or having a parent that has) a rating
of at least Baa3 by Moody’s; or (b) which the Rating Agencies have
otherwise indicated in writing is an entity acceptable to act as Owner Trustee
hereunder.  If such corporation shall
publish reports of condition at least annually pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
In case at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.02.

 

19

 

Section 10.02.                  Resignation or Removal of Owner
Trustee.  The Owner Trustee may at any time resign and
be discharged from the trusts hereby created by giving written notice thereof
to the Administrator.  Upon receiving
such notice of resignation, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee.  If no
successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for
the appointment of a successor Owner Trustee.

 

If at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of Section 10.01 and shall fail
to resign after written request therefor by the Administrator, or if at any
time the Owner Trustee shall be legally unable to act, or shall be adjudged
bankrupt or insolvent, or a receiver of the Owner Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Owner Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Administrator, may remove the Owner
Trustee.  If the Administrator shall
remove the Owner Trustee under the authority of the immediately preceding
sentence, the Administrator shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the
successor Owner Trustee, and shall pay all fees owed to the outgoing Owner
Trustee.

 

Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until acceptance of appointment by
the successor Owner Trustee pursuant  to Section 10.03
and payment of all fees and expenses owed to the outgoing Owner Trustee.  The Administrator shall provide notice of
such resignation or removal of the Owner Trustee to each Rating Agency.

 

Section 10.03.                  Successor Owner Trustee. 
Any successor Owner Trustee appointed pursuant to Section 10.02
shall execute, acknowledge and deliver to the Administrator, and to its
predecessor Owner Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective, and such successor Owner Trustee, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor under this Agreement, with
like effect as if originally named as Owner Trustee.  The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Administrator and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor Owner Trustee all such
rights, powers, duties and obligations.

 

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

 

Upon acceptance of appointment by a successor Owner
Trustee pursuant to this Section, the Administrator shall mail notice thereof
to the Certificateholder, the Indenture Trustee, the Noteholders and each
Rating Agency.  If the Administrator
shall fail to mail such notice within ten days after acceptance of such
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Administrator.

 

20

 

Section 10.04.                  Merger or Consolidation of Owner
Trustee.  Any corporation into which the Owner Trustee
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Owner Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Owner Trustee, shall
be the successor of the Owner Trustee hereunder, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided,
that such corporation shall be eligible pursuant to Section 10.01 and, provided, further, that the Owner Trustee shall mail notice
of such merger or consolidation to each Rating Agency.

 

Section 10.05.                  Appointment of Co-Trustee or
Separate Trustee.  Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust Estate or any financed
Motorcycle may at the time be located, the Administrator and the Owner Trustee
acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by the Administrator and
Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or separate trustees, of all or any part of the Trust Estate,
and to vest in such Person, in such capacity, such title to the Trust or any
part thereof and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Administrator and the Owner Trustee
may consider necessary or desirable.  If
the Administrator shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, the Owner Trustee alone shall
have the power to make such appointment. 
No co-trustee or separate trustee under this Agreement shall be required
to meet the terms of eligibility as a successor Owner Trustee pursuant to Section 10.01
and no notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.03.

 

Each separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:

 

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

 

(b)                                 no trustee under this
Agreement shall be personally liable by reason of any act or omission of any
other trustee under this Agreement; and

 

(c)                                  the Administrator and
the Owner Trustee acting jointly may at any time accept the resignation of or
remove any separate trustee or co-trustee.

 

Any notice, request or other writing given to the
Owner Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate
trustee or co-trustee shall refer to this Agreement and the conditions of this
Article.  Each separate trustee and
co-trustee, upon its acceptance of the trusts 

 

21

 

conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of or affording
protection to, the Owner Trustee.  Each
such instrument shall be filed with the Owner Trustee and a copy thereof given
to the Administrator.

 

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

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section 11.01.                  Supplements and Amendments.

 

(a)                                  The Agreement may be amended by the Trust
Depositor, and the Owner Trustee, without the consent of any of the Noteholders
or the Certificateholder, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or to add any other provisions with respect to
matters or questions arising under this Agreement that shall not be
inconsistent with the provisions of this Agreement; provided,
however, that any such action shall not, as evidenced by an Opinion
of Counsel, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.

 

(b)                                 This Agreement may also be amended from
time to time by the Trust Depositor, and the Owner Trustee, 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 Noteholders or the
Certificateholder; provided, however,
that no such amendment shall increase or reduce in any manner the amount of, or
accelerate or delay the timing of, (i) collections of payments on
Contracts or distributions that shall be required to be made for the benefit of
the Noteholders or the Certificateholder, or (ii) eliminate the
Certificateholder consent or reduce the aforesaid percentage of the Outstanding
Amount of the Notes required to consent to any such amendment, without the
consent of the Holder of all outstanding Notes and the Trust Certificate.

 

(c)                                  Prior to the execution of any such
amendment or consent, the Trust Depositor shall furnish written notification of
the substance of such amendment or consent, together with a copy thereof, to
the Indenture Trustee, the Administrator and each Rating Agency.

 

(d)                                 Promptly after the execution of any such
amendment or consent, the Owner Trustee shall furnish written notification of
the substance of such amendment or consent to each Certificateholder.  It shall not be necessary for the consent of
Certificateholder, Noteholders or the Indenture Trustee pursuant to this Section to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof.  The manner of 

 

22

 

obtaining such
consents (and any other consents of the Certificateholder provided for in this
Agreement or in any other Transaction Document) and of evidencing the authorization
of the execution thereof by the Certificateholder shall be subject to such
reasonable requirements as the Owner Trustee may prescribe.

 

(e)                                  Promptly after the execution of any
amendment to the Certificate of Trust, the Owner Trustee shall cause the filing
of such amendment with the Secretary of State.

 

(f)                                    Prior to the execution of any amendment
to this Agreement or the Certificate of Trust, the Owner Trustee shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement.  The Owner Trustee may, but shall not be
obligated to, enter into any such amendment that affects the Owner Trustee’s
own rights, duties or immunities under this Agreement or otherwise.

 

Section 11.02.                  No Legal Title to Trust Estate in
Owner.  The Owner shall not have legal title to any
part of the Trust Estate.  The Owner
shall be entitled to receive distributions with respect to their undivided
ownership interest herein only in accordance with Articles Five and Nine.  No transfer, by operation of law or
otherwise, of any right, title or interest of the Owner to and in their
ownership interest in the Trust Estate shall operate to terminate this Agreement
or the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of legal title to any part of the Trust Estate.

 

Section 11.03.                  Limitations on Rights of Others. 
Except for Section 2.07, the provisions of this Agreement are
solely for the benefit of the Owner Trustee, the Trust Depositor, the Owner,
the Administrator and, to the extent expressly provided herein, the Indenture
Trustee and the Noteholders, and nothing in this Agreement (other than Section 2.07),
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Trust Estate or under or in
respect of this Agreement or any covenants, conditions or provisions contained
herein.

 

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 for such
recipient set forth in the Sale and Servicing Agreement.

 

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

 

Section 11.05.                  Severability of Provisions. 
If any one or more of the covenants, agreements, provisions, or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Trust Certificate or the rights of the Holder  thereof.

 

Section 11.06.                  Counterparts. 
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.

 

23

 

Section 11.07.                  Successors and Assigns. 
All covenants and agreements contained herein shall be binding upon, and
inure to the benefit of, each of the Trust Depositor, and the Owner Trustee and
their respective successors and permitted assigns and each Owner and its
successors and permitted assigns, all as herein provided.  Any request, notice, direction, consent,
waiver or other instrument or action by an Owner shall bind the successors and
assigns of such Owner.

 

Section 11.08.                  Covenants of the Trust Depositor. 
In the event that any litigation with claims in excess of $1,000,000 to
which the Trust Depositor is a party which shall be reasonably likely to result
in a material judgment against the Trust Depositor that the Trust Depositor
will not be able to satisfy shall be commenced, during the period beginning
immediately following the commencement of such litigation and continuing until
such litigation is dismissed or otherwise terminated (and, if such litigation
has resulted in a final judgment against the Trust Depositor, such judgment has
been satisfied), the Trust Depositor shall not pay any dividend to the
Servicer, or make any distribution on or in respect of its capital stock to the
Servicer, or repay the principal amount of any indebtedness of the Trust
Depositor held by the Servicer, unless (i) after giving effect to such
payment, distribution or repayment, the Trust Depositor’s liquid assets shall
not be less than the amount of actual damages claimed in such litigation or (ii) the
Rating Agencies shall not downgrade the then existing rating on the Certificate
with respect to any such payment, distribution or repayment.

 

Section 11.09.                  No Petition.

 

(a)                                  The Trust Depositor will not at any time
institute against the Trust any bankruptcy proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Trust Certificate, the Notes, this Agreement or any of the
other Transaction Documents.

 

(b)                                 The Owner Trustee, by entering into this
Agreement, each Certificateholder, by accepting a Trust Certificate, and the
Indenture Trustee and each Noteholder, by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Trust Depositor or the Trust, or join in any institution against
the Trust Depositor, or the Trust of, any bankruptcy proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificate, the Notes, this Agreement or any
of the other Transaction Documents.

 

Section 11.10.                  No Recourse. 
The Certificateholder by accepting the Trust Certificate acknowledges
that such Certificateholder’s Trust Certificate represents beneficial interests
in the Trust only and does not represent interests in or obligations of the
Trust Depositor, the Servicer, the Seller, the Administrator, the Owner
Trustee, the Indenture Trustee or any of the respective Affiliates (other than
the Trust) and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated in this Agreement, the
Trust Certificate or the other Transaction Documents.

 

Section 11.11.                  Headings. 
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.

 

Section 11.12.                  Governing Law. 
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO 

 

24

 

ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 11.13.                  Trust Certificate Transfer
Restrictions.  The Trust Certificate may not be acquired by
or for the account of a Benefit Plan.  By
accepting and holding a Trust Certificate, the Holder thereof shall be deemed
to have represented and warranted that it is not a Benefit Plan and that it is
not acquiring and will not hold such Trust Certificate for the account of, or
with plan assets of, a Benefit Plan.

 

Section 11.14.                  Trust Depositor Payment
Obligation.  The Trust Depositor shall be responsible for payment
of the Administrator’s compensation pursuant to Section 3 of the
Administration Agreement and shall reimburse the Administrator for all expenses
and liabilities of the Administrator incurred thereunder.

 

[signature page follows]

 

25

 

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

 

	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING

  
	
   

  	
  CORP., as Trust
  Depositor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PERRY A.
  GLASSGOW

  	
   

  
	
   

  	
  Printed Name: Perry
  A. Glassgow

  
	
   

  	
  Title: Vice
  President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JANEL R.
  HAVRILLA

  	
   

  
	
   

  	
  Printed Name:
  Janel R. Havrilla

  
	
   

  	
  Title: Financial
  Services Officer

  

 

 

Signature Page to Trust

Agreement

 

 

EXHIBIT A

 

FORM OF CERTIFICATE OF TRUST OF

 

Harley-Davidson Motorcycle Trust 2005-2

 

This Certificate of Trust of Harley-Davidson
Motorcycle Trust 2005-2 (the “Trust”), dated
                       ,
2005, is being duly executed and filed by Wilmington Trust Company, a Delaware
banking corporation, as Owner Trustee, to form a statutory trust under the
Delaware Statutory Trust Act (12 Del. Code, § 3801
et seq.).

 

1.                                       Name. 
The name of the statutory trust formed hereby is Harley-Davidson
Motorcycle Trust 2005-2.

 

2.                                       Delaware Trustee. 
The name and business address of the Owner Trustee of the Trust in the
State of Delaware is Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware l9890.

 

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

 

	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  not in its
  individual capacity but solely as

  
	
   

  	
  Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

EXHIBIT B

 

FORM OF TRUST CERTIFICATE

 

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

 

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

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2005-2 CERTIFICATE

 

	
  NO.

  	
                       

  	
   

  	
  Initial Trust
  Certificate

  
	
   

  	
  Fractional
  Interest 100%

  

 

THIS CERTIFIES THAT Harley-Davidson Customer Funding
Corp. is the registered owner of  100% of
the non-assessable, fully-paid, fractional undivided beneficial interest in the
Harley-Davidson Motorcycle Trust 2005-2 (the “Trust”)
formed by Harley-Davidson Customer Funding Corp., a Nevada corporation (the “Trust Depositor”).

 

The Trust was created pursuant to a Trust Agreement,
dated as of April 29, 2005 (as amended and supplemented from time to time,
the “Trust Agreement”), between the Trust
Depositor, and Wilmington Trust Company, as owner trustee (the “Owner Trustee”), a summary of certain of the pertinent
provisions of which is set forth below. 
To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in (i) the Trust Agreement, (ii) the
Sale and Servicing Agreement, dated as of May 1, 2005 (the “Sale and Servicing Agreement”), among the Trust, the Trust
Depositor, Harley-Davidson Credit Corp. (“Harley-Davidson Credit”),
as Servicer (in such capacity, the “Servicer”) and
The Bank of New York Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”) or (iii) the
Indenture, dated as of May 1, 2005 (the “Indenture”),
between the Trust and the Indenture Trustee.

 

This Trust Certificate is the duly authorized Trust
Certificate designated as “Harley-Davidson
Motorcycle Trust 2005-2 Certificate”  (the “Trust Certificate”).  Issued under the Indenture are three classes
of notes designated as “         %
Harley-Davidson Motorcycle Contract Backed Notes, Class A-1”, “         %
Harley-Davidson Motorcycle Contract Backed Notes, Class A-2”
and “         %
Harley-Davidson Motorcycle Contract Backed Notes, Class B” (collectively,
the “Notes”).  This Trust Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Trust Certificate by virtue of its
acceptance hereof assents and by which

 

 

such Holder is bound. 
The property of the Trust includes, among other things, (i) all the
right, title and interest of the Trust Depositor in and to the Initial
Contracts listed on the initial List of Contracts delivered 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 the Trust Depositor under any
physical damage or other individual insurance policy (and rights under a “forced placed” policy, if any), any debt insurance policy
or any debt cancellation agreement relating to any such Contract, an Obligor or
a Motorcycle securing such Contract, (iii) all security interests in each
such Motorcycle, (iv) all documents contained in the related Contract
Files, (v) all rights (but not the obligations) of the Trust Depositor
under any related motorcycle dealer agreements between dealers (i.e., the
originators of such Contracts) and Harley-Davidson Credit, (vi) all rights
of the Trust Depositor in the Lockbox, the Lockbox Account and related Lockbox
Agreement to the extent they relate to such Contracts, (vii) all rights
(but not the obligations) of the Trust Depositor under the Transfer and Sale
Agreement, including but not limited to the Trust Depositor’s rights under Article V
thereof, (viii) the remittances, deposits and payments made into the Trust
Accounts from time to time and amounts in the Trust Accounts from time to time
(and any investments of such amounts), (ix) all rights of the Trust
Depositor 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 proceeds and products of the foregoing.

 

Under the Trust Agreement, there will be distributed
on the fifteenth day of each month or if such day is not a Business Day the
next succeeding Business Day commencing June 15, 2005 (each, a “Distribution Date”) to the person in whose name this Trust
Certificate is registered as of the last Business Day immediately preceding the
calendar month in which such Distribution Date occurs (each, a “Record Date”), such Certificateholder’s fractional
undivided beneficial interest in the amount to be distributed to the
Certificateholder on such Distribution Date.

 

The holder of this Trust Certificate acknowledges and
agrees that its rights to receive distributions in respect of this Trust
Certificate are subordinated to the rights of the Noteholders to the extent
described in the Sale and Servicing Agreement and the Indenture.

 

It is the intention of Harley-Davidson Credit, the
Servicer, the Trust Depositor, Owner Trustee, Indenture Trustee and the
Certificateholder that the Trust be disregarded as a separate entity pursuant
to Treasury Regulations Section 301.7701-3(b)(1)(ii) as in effect for
periods after January 1, 1997.  The
Trust Certificate constitutes the sole equity interest in the Trust and must at
all times be held by either the Trust Depositor or its transferee as sole
owner.  The Trust Depositor agrees not to
take any action inconsistent with such intended federal income tax treatment.  Because for federal income tax purposes the
Trust will be disregarded as a separate entity, Trust items of income, gain,
loss and deduction for any month as determined for federal income tax purposes
shall be allocated entirely to the Trust Depositor (or subsequent purchaser of
the Trust Certificate) as the sole Certificateholder.

 

Each Certificateholder, by its acceptance of a Trust
Certificate or  beneficial interest in a
Trust Certificate, covenants and agrees that such Certificateholder will not at
any time institute against the Trust or the Trust Depositor, or join in any
institution against the Trust or the Trust Depositor, Harley-Davidson Credit or
the Servicer any bankruptcy, reorganization, arrangement, insolvency or
liquidation 

 

 

proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificate, the Notes, the Trust Agreement
or any of the other Transaction Documents.

 

Distributions on this Trust Certificate will be made
as provided in the Sale and Servicing Agreement by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon.  Except as otherwise
provided in the Trust Agreement and notwithstanding the above, the final
distribution on this Trust Certificate will be made after due notice by the
Owner Trustee of the pendency of such distribution and only upon presentation
and surrender of this Trust Certificate at the office or agency maintained for
that purpose by the Owner Trustee in the City of Wilmington, Delaware.

 

Reference is hereby made to the further provisions of
this Trust Certificate set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place.

 

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

 

THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

 

[REVERSE OF CERTIFICATE]

 

The Trust Certificate does not represent an obligation
of, or an interest in the Trust Depositor, Harley-Davidson Credit, as the
Seller or Servicer, the Owner Trustee, the Indenture Trustee or any of their
respective Affiliates (other than the Trust) and no recourse may be had against
such parties or their assets, except as expressly set forth or contemplated
herein or in the Trust Agreement or the other Transaction Documents.  In addition, this Trust Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Contracts and certain other amounts, in each case as more specifically set
forth herein and in the Sale and Servicing Agreement.  A copy of each of the Sale and Servicing
Agreement and the Trust Agreement may be examined by any Certificateholder upon
written request during normal business hours at the principal office of the
Trust Depositor and at such other places, if any, designated by the Trust
Depositor.

 

The Trust Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Trust Depositor and the rights of the Certificateholder
under the Trust Agreement at any time by the Trust Depositor and the Owner
Trustee with the consent of the Holder of the Trust Certificate and the Modified
Required Holders.  Any such consent by
the Holder of this Trust Certificate shall be conclusive and binding on such
Holder and on all future Holders of this Trust Certificate and of any Trust
Certificate issued upon the transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent is made upon this Trust
Certificate.  The Trust Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holder of any of the Trust Certificate.

 

As provided in the Trust Agreement and subject to
certain limitations therein set forth, the transfer of this Trust Certificate
is registerable in the Certificate Register upon surrender of this Trust
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar, accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed
by the Holder hereof or such Holder’s attorney duly authorized in writing, and
thereupon the new Trust Certificate of authorized denominations evidencing the
same aggregate interest in the Trust will be issued to the designated
transferee.  The initial Certificate
Registrar appointed under the Trust Agreement is the Owner Trustee.

 

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

 

The obligations and responsibilities created by the
Trust Agreement and the Trust created thereby shall terminate upon the payment
to the Certificateholder of all amounts required to be paid to it pursuant to
the Trust Agreement and the Sale and Servicing Agreement and the disposition of
all property held as part of the Trust Estate. 
Harley-Davidson Credit may at its option purchase the Trust Estate at a
price specified in the Sale and Servicing Agreement, and such purchase of the
Contracts and other property of the Trust will affect early retirement of the
Trust Certificate; however, such right of purchase is exercisable only as of
any Distribution Date on which the Pool Balance has declined to less than 10% of

 

 

the sum of (i) the initial Pool Balance on the
Initial Cutoff Date and (ii) the Pre-Funded Amount as of the Closing Date.

 

The Trust Certificate may not be acquired by a Benefit
Plan.  The Holder hereof, by accepting a
beneficial interest in this Trust Certificate, shall be deemed to have
represented and warranted that it is not a Benefit Plan and is not acquiring
this Trust Certificate or an interest therein for the account of, or with plan
assets of, a Benefit Plan.

 

 

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

 

	
  Dated:

  	
  Harley-Davidson
  Motorcycle Trust 2005-2

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  WILMINGTON TRUST
  COMPANY, not in its individual

  capacity but solely as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
					

 

OWNER TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
  WILMINGTON TRUST
  COMPANY,

  	
   

  
	
  not in its
  individual capacity but solely

  	
   

  
	
  as Owner Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  

 

 

ASSIGNMENT

 

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

 

PLEASE INSERT SOCIAL
SECURITY OR

OTHER IDENTIFYING NUMBER
OF ASSIGNEE

 

 

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

  
	
   

  
	
   

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

  
	
   

  
	
   

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

  
	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  
	
  Signature
  Guaranteed:

  

 

 

	
   

  	
   

  	
   

  
	
  NOTICE: 
  Signature(s) must be guaranteed by an eligible guarantor institution.

  	
   

  	
  NOTICE:  The
  signature to this assignment must correspond with the name of the registered
  owner as it appears on the face of the within Trust Certificate in every
  particular, without alteration or enlargement or any change whatever.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00085-of-00352.parquet"}]]