Document:

Exhibit 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 January 30, 2004

 

 

 

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 January 30, 2004, 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 February 1, 2004, 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 February 1, 2004 between the Trust
and BNY Midwest Trust Company.

 

“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 February 1, 2004, among the Trust, as Issuer, the Trust
Depositor, Harley-Davidson Credit, as servicer, and BNY Midwest Trust Company,
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 2004-1”,
in which name the Owner Trustee may conduct the activities of the Trust, make
and execute contracts and other instruments on behalf of the Trust and sue and
be sued.

 

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,
$379,000,000, (ii) Class A-2 Notes, $214,750,000 and (iii) Class B Notes,
$31,250,000, 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 BNY
Midwest Trust Company, 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 BNY Midwest Trust Company 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 St. James’s,

 

18

 

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:  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Patricia A. Evans

  	
   

  
	
   

  	
  Printed Name: Patricia A. Evans

  
	
   

  	
  Title: Assistant Vice President

  

 

 

Signature Page to Trust

Agreement

 

 

EXHIBIT A

 

FORM OF CERTIFICATE OF TRUST OF

Harley-Davidson Motorcycle Trust 2004-1

 

This Certificate
of Trust of Harley-Davidson Motorcycle Trust 2004-1 (the “Trust”), dated
                       
2004, 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 2004-1.

 

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 2004-1
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 2004-1 (the “Trust”) formed by Harley-Davidson Customer Funding Corp., a
Nevada corporation (the “Trust Depositor”).

 

The Trust was
created pursuant to a Trust Agreement, dated as of January 30, 2004 (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 February 1, 2004 (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 BNY Midwest
Trust Company, as Indenture Trustee (the “Indenture
Trustee”) or (iii) the Indenture, dated as of February 1, 2004
(the “Indenture”),
between the Trust and the Indenture Trustee.

 

This Trust
Certificate is the duly authorized Trust Certificate designated as “Harley-Davidson
Motorcycle Trust 2004-1 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) 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
March 15, 2004 (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 on 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 2004-1

  
	
   

  	
   

  	
   

  
	
   

  	
  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.Exhibit 4.2

 

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2004-1,

as Issuer,

 

and

 

BNY MIDWEST TRUST COMPANY,

not in its individual capacity but solely in its capacity

as Indenture Trustee

 

INDENTURE

 

Dated as of February 1, 2004

 

 

	
  $379,000,000

  	
   

  	
  1.40%  Harley-Davidson
  Motorcycle Contract Backed Notes, Class A-1

  
	
   

  	
   

  	
   

  
	
  $214,750,000

  	
   

  	
  2.53%  Harley-Davidson
  Motorcycle Contract Backed Notes, Class A-2

  
	
   

  	
   

  	
   

  
	
  $31,250,000

  	
   

  	
  2.00%  Harley-Davidson
  Motorcycle Contract Backed Notes, Class B

  

 

 

 

CROSS-REFERENCE TABLE

 

	
  TIA

  Section

  	
   

  	
   

  	
  Indenture

  Section

  
	
  310

  	
  (a)(1)

  	
  6.11

  
	
   

  	
  (a)(2)

  	
  6.11

  
	
   

  	
  (a)(3)

  	
  6.10

  
	
   

  	
  (a)(4)

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
  6.11

  
	
   

  	
  (b)

  	
  6.08; 6.11; 11.04

  
	
   

  	
  (c)

  	
  N.A.

  
	
  311

  	
  (a)

  	
  6.13

  
	
   

  	
  (b)

  	
  6.13

  
	
   

  	
  (c)

  	
  N.A.

  
	
  312

  	
  (a)

  	
  7.01; 7.02

  
	
   

  	
  (b)

  	
  7.02

  
	
   

  	
  (c)

  	
  7.02

  
	
  313

  	
  (a)

  	
  7.04

  
	
   

  	
  (b)

  	
  7.04

  
	
   

  	
  (c)

  	
  7.04

  
	
   

  	
  (d)

  	
  7.04

  
	
  314

  	
  (a)

  	
  7.03

  
	
   

  	
  (b)

  	
  3.06

  
	
   

  	
  (c)(1)

  	
  2.02; 6.02; 11.01

  
	
   

  	
  (c)(2)

  	
  11.01

  
	
   

  	
  (c)(3)

  	
  11.01

  
	
   

  	
  (d)

  	
  11.01

  
	
   

  	
  (e)

  	
  11.01

  
	
   

  	
  (f)

  	
  N.A.

  
	
  315

  	
  (a)

  	
  6.01

  
	
   

  	
  (b)

  	
  6.05

  
	
   

  	
  (c)

  	
  6.01

  
	
   

  	
  (d)

  	
  5.12; 6.01

  
	
   

  	
  (e)

  	
  5.14

  
	
  316

  	
  (a)(1)(A)

  	
  5.12

  
	
   

  	
  (a)(1)(B)

  	
  5.02

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (b)

  	
  5.08

  
	
   

  	
  (c)

  	
  N.A.

  
	
  317

  	
  (a)

  	
  5.03; 5.04

  
	
   

  	
  (b)

  	
  3.03

  
	
  318

  	
  (a)

  	
  11.18

  
					

 

*    N.A. means Not Applicable

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

 

i

 

TABLE OF CONTENTS

 

	
  ARTICLE
  ONE

  	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  DEFINITIONS.

  	
   

  
	
  SECTION
  1.02.

  	
  INCORPORATION BY REFERENCE OF TRUST
  INDENTURE ACT

  	
   

  
	
  SECTION 1.03.

  	
  RULES OF CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  TWO

  	
  THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.01.

  	
  FORM

  	
   

  
	
  SECTION
  2.02.

  	
  EXECUTION, AUTHENTICATION AND DELIVERY

  	
   

  
	
  SECTION 2.03.

  	
  TEMPORARY
  NOTES

  	
   

  
	
  SECTION
  2.04.

  	
  REGISTRATION; REGISTRATION OF TRANSFER AND
  EXCHANGE

  	
   

  
	
  SECTION
  2.05.

  	
  MUTILATED, DESTROYED, LOST OR STOLEN NOTES

  	
   

  
	
  SECTION 2.06.

  	
  PERSONS DEEMED OWNER

  	
   

  
	
  SECTION
  2.07.

  	
  PAYMENT OF PRINCIPAL AND INTEREST;
  DEFAULTED INTEREST.

  	
   

  
	
  SECTION 2.08.

  	
  CANCELLATION

  	
   

  
	
  SECTION 2.09.

  	
  BOOK-ENTRY
  NOTES

  	
   

  
	
  SECTION 2.10.

  	
  NOTICES TO CLEARING AGENCY

  	
   

  
	
  SECTION 2.11.

  	
  DEFINITIVE
  NOTES

  	
   

  
	
  SECTION 2.12.

  	
  RELEASE OF COLLATERAL

  	
   

  
	
  SECTION 2.13.

  	
  TAX
  TREATMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  THREE

  	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  PAYMENT OF PRINCIPAL AND INTEREST

  	
   

  
	
  SECTION 3.02.

  	
  MAINTENANCE OF OFFICE OR AGENCY

  	
   

  
	
  SECTION 3.03.

  	
  MONEY FOR PAYMENTS TO BE HELD IN TRUST

  	
   

  
	
  SECTION 3.04.

  	
  EXISTENCE

  	
   

  
	
  SECTION 3.05.

  	
  PROTECTION OF COLLATERAL

  	
   

  
	
  SECTION 3.06.

  	
  OPINIONS AS TO COLLATERAL.

  	
   

  
	
  SECTION
  3.07.

  	
  PERFORMANCE OF OBLIGATIONS; SERVICING OF
  CONTRACTS.

  	
   

  
	
  SECTION 3.08.

  	
  NEGATIVE COVENANTS

  	
   

  
	
  SECTION 3.09.

  	
  ANNUAL STATEMENT AS TO COMPLIANCE

  	
   

  
	
  SECTION
  3.10.

  	
  ISSUER MAY CONSOLIDATE, ETC. ONLY ON
  CERTAIN TERMS.

  	
   

  
	
  SECTION 3.11.

  	
  SUCCESSOR OR TRANSFEREE.

  	
   

  
	
  SECTION 3.12.

  	
  NO
  OTHER BUSINESS

  	
   

  
	
  SECTION 3.13.

  	
  NO
  BORROWING

  	
   

  
	
  SECTION 3.14.

  	
  SERVICER’S OBLIGATIONS

  	
   

  
	
  SECTION
  3.15.

  	
  GUARANTEES, LOANS ADVANCES AND OTHER
  LIABILITIES

  	
   

  
	
  SECTION 3.16.

  	
  CAPITAL EXPENDITURES

  	
   

  
	
  SECTION 3.17.

  	
  RESTRICTED PAYMENTS

  	
   

  
	
  SECTION 3.18.

  	
  NOTICE OF EVENTS OF DEFAULT

  	
   

  
	
  SECTION 3.19.

  	
  FURTHER INSTRUMENTS AND ACTS

  	
   

  
	
  SECTION 3.20.

  	
  COMPLIANCE WITH LAWS

  	
   

  

 

ii

 

	
  SECTION
  3.21.

  	
  AMENDMENTS OF SALE AND SERVICING AGREEMENT
  AND TRUST AGREEMENT

  	
   

  
	
  SECTION 3.22.

  	
  REMOVAL OF ADMINISTRATOR

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  FOUR

  	
  SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.01.

  	
  SATISFACTION AND DISCHARGE OF INDENTURE

  	
   

  
	
  SECTION 4.02.

  	
  APPLICATION OF TRUST MONEY

  	
   

  
	
  SECTION
  4.03.

  	
  REPAYMENT OF MONEYS HELD BY PAYING AGENT

  	
   

  
	
  SECTION 4.04.

  	
  RELEASE OF COLLATERAL

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  FIVE

  	
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  EVENTS
  OF DEFAULT

  	
   

  
	
  SECTION 5.02.

  	
  RIGHTS UPON EVENT OF DEFAULT.

  	
   

  
	
  SECTION
  5.03.

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

  	
   

  
	
  SECTION 5.04.

  	
  REMEDIES

  	
   

  
	
  SECTION
  5.05.

  	
  OPTIONAL PRESERVATION OF THE CONTRACTS

  	
   

  
	
  SECTION 5.06.

  	
  PRIORITIES.

  	
   

  
	
  SECTION 5.07.

  	
  LIMITATION OF SUITS

  	
   

  
	
  SECTION
  5.08.

  	
  UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE
  PRINCIPAL AND INTEREST

  	
   

  
	
  SECTION 5.09.

  	
  RESTORATION OF RIGHTS AND REMEDIES

  	
   

  
	
  SECTION 5.10.

  	
  RIGHTS AND REMEDIES CUMULATIVE

  	
   

  
	
  SECTION 5.11.

  	
  DELAY OR OMISSION NOT A WAIVER

  	
   

  
	
  SECTION 5.12.

  	
  CONTROL BY NOTEHOLDERS

  	
   

  
	
  SECTION 5.13.

  	
  WAIVER OF PAST DEFAULTS

  	
   

  
	
  SECTION 5.14.

  	
  UNDERTAKING FOR COSTS

  	
   

  
	
  SECTION 5.15.

  	
  WAIVER OF STAY OR EXTENSION LAWS

  	
   

  
	
  SECTION 5.16.

  	
  ACTION
  ON NOTES

  	
   

  
	
  SECTION
  5.17.

  	
  PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  SIX

  	
  THE INDENTURE TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  DUTIES OF INDENTURE TRUSTEE.

  	
   

  
	
  SECTION 6.02.

  	
  RIGHTS OF INDENTURE TRUSTEE.

  	
   

  
	
  SECTION
  6.03.

  	
  INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE

  	
   

  
	
  SECTION 6.04.

  	
  INDENTURE TRUSTEE’S DISCLAIMER

  	
   

  
	
  SECTION 6.05.

  	
  NOTICE OF DEFAULTS

  	
   

  
	
  SECTION
  6.06.

  	
  REPORTS BY INDENTURE TRUSTEE TO HOLDERS

  	
   

  
	
  SECTION 6.07.

  	
  COMPENSATION AND INDEMNITY

  	
   

  
	
  SECTION 6.08.

  	
  REPLACEMENT OF INDENTURE TRUSTEE

  	
   

  
	
  SECTION
  6.09.

  	
  SUCCESSOR INDENTURE TRUSTEE BY MERGER

  	
   

  
	
  SECTION
  6.10.

  	
  APPOINTMENT OF CO-INDENTURE TRUSTEE OR
  SEPARATE INDENTURE TRUSTEE.

  	
   

  
	
  SECTION 6.11.

  	
  ELIGIBILITY.

  	
   

  
	
  SECTION 6.12.

  	
  PENNSYLVANIA MOTOR VEHICLE SALES FINANCE
  ACT LICENSES

  	
   

  
	
  SECTION 6.13.

  	
  PREFERENTIAL COLLECTION OF CLAIMS AGAINST
  ISSUER

  	
   

  

 

iii

 

	
  ARTICLE
  SEVEN

  	
  NOTEHOLDERS’ LISTS AND REPORTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  ISSUER TO FURNISH INDENTURE TRUSTEE NAMES
  AND ADDRESSES OF NOTEHOLDERS

  	
   

  
	
  SECTION 7.02.

  	
  PRESERVATION OF INFORMATION: COMMUNICATION
  TO NOTEHOLDERS.

  	
   

  
	
  SECTION 7.03.

  	
  REPORTS BY ISSUER.

  	
   

  
	
  SECTION 7.04.

  	
  REPORTS BY INDENTURE TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  EIGHT

  	
  ACCOUNTS, DISBURSEMENTS AND RELEASES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  COLLECTION OF MONEY

  	
   

  
	
  SECTION 8.02.

  	
  TRUST ACCOUNTS.

  	
   

  
	
  SECTION 8.03.

  	
  GENERAL PROVISIONS REGARDING ACCOUNTS.

  	
   

  
	
  SECTION 8.04.

  	
  RELEASE OF COLLATERAL.

  	
   

  
	
  SECTION 8.05.

  	
  OPINION OF COUNSEL

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  NINE

  	
  SUPPLEMENTAL INDENTURES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
  NOTEHOLDERS.

  	
   

  
	
  SECTION 9.02.

  	
  SUPPLEMENTAL INDENTURES WITH CONSENT OF
  NOTEHOLDERS

  	
   

  
	
  SECTION 9.03.

  	
  EXECUTION OF SUPPLEMENTAL INDENTURES

  	
   

  
	
  SECTION 9.04.

  	
  EFFECT OF SUPPLEMENTAL INDENTURE

  	
   

  
	
  SECTION 9.05.

  	
  CONFORMITY WITH TRUST INDENTURE ACT

  	
   

  
	
  SECTION 9.06.

  	
  REFERENCE IN NOTES TO SUPPLEMENTAL
  INDENTURES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  TEN

  	
  REDEMPTION OF NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  REDEMPTION.

  	
   

  
	
  SECTION 10.02.

  	
  FORM OF REDEMPTION NOTICE.

  	
   

  
	
  SECTION 10.03.

  	
  NOTES PAYABLE ON REDEMPTION DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  COMPLIANCE CERTIFICATES AND OPINIONS, ETC.

  	
   

  
	
  SECTION 11.02.

  	
  FORM OF DOCUMENTS DELIVERED TO INDENTURE
  TRUSTEE

  	
   

  
	
  SECTION 11.03.

  	
  ACTS OF NOTEHOLDERS.

  	
   

  
	
  SECTION 11.04.

  	
  NOTICES

  	
   

  
	
  SECTION 11.05.

  	
  NOTICES TO NOTEHOLDERS; WAIVER

  	
   

  
	
  SECTION 11.06.

  	
  ALTERNATE PAYMENT AND NOTICE PROVISIONS

  	
   

  
	
  SECTION 11.07.

  	
  EFFECT OF HEADINGS AND TABLE OF CONTENTS

  	
   

  
	
  SECTION 11.08.

  	
  SUCCESSORS AND ASSIGNS

  	
   

  
	
  SECTION 11.09.

  	
  SEPARABILITY

  	
   

  
	
  SECTION 11.10.

  	
  BENEFITS OF INDENTURE

  	
   

  
	
  SECTION 11.11.

  	
  LEGAL HOLIDAYS

  	
   

  
	
  SECTION 11.12.

  	
  GOVERNING LAW

  	
   

  
	
  SECTION 11.13.

  	
  COUNTERPARTS

  	
   

  
	
  SECTION 11.14.

  	
  RECORDING OF INDENTURE

  	
   

  
	
  SECTION 11.15.

  	
  TRUST OBLIGATION

  	
   

  
	
  SECTION 11.16.

  	
  NO PETITION

  	
   

  
	
  SECTION 11.17.

  	
  INSPECTION

  	
   

  
	
  SECTION 11.18.

  	
  CONFLICT WITH TRUST INDENTURE ACT

  	
   

  
	
  SECTION 11.19.

  	
  DISCLAIMER AND SUBORDINATION

  	
   

  
				

 

iv

 

	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A - Reserved

  	
   

  
	
  Exhibit B - Form of Class A-1 Note

  	
   

  
	
  Exhibit
  C - Form of Class A-2 Note

  	
   

  
	
  Exhibit
  D - Form of Class B Note

  	
   

  
	
  Exhibit
  E - Form of Assignment

  	
   

  
	
  Exhibit
  F - Form of Note Depository Agreement

  	
   

  

 

v

 

INDENTURE

 

Indenture, dated as of February 1, 2004 (this “Indenture”), between
Harley-Davidson Motorcycle Trust 2004-1, a Delaware statutory trust (the
“Issuer”) and BNY Midwest Trust Company, in its capacity as indenture trustee
(the “Indenture Trustee”) and not in its individual capacity.

 

Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Issuer’s 1.40%
Harley-Davidson Motorcycle Contract Backed Notes, Class A-1 (the “Class A-1
Notes”), 2.53% Harley-Davidson Motorcycle Contract Backed Notes, Class A-2 (the
“Class A-2 Notes”) and 2.00% Harley-Davidson Motorcycle Contract Backed Notes,
Class B (the “Class B Notes”) and, together with the Class A-1 Notes and the
Class B Notes, the “Notes”):

 

GRANTING CLAUSE

 

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

 

 

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

 

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

 

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

 

ARTICLE ONE

 

DEFINITIONS
AND INCORPORATION BY REFERENCE

 

Section
1.01.        Definitions.

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

“Commission” means the Securities and
Exchange Commission.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

“Indenture Securities” means the Notes.

 

“Indenture Security Holder” means a
Noteholder.

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

“Issuer” means Harley-Davidson Motorcycle
Trust 2004-1 until a successor replaces it and, thereafter, means the successor
and, for purposes of any provision contained herein and required by the TIA,
each other obligor on the Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Trust Agreement” means the Trust
Agreement, dated as of January 30, 2004, between the Trust Depositor and the
Owner Trustee.

 

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

 

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

 

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

 

9

 

“United States” means the
United States of America.

 

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

 

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

 

“Commission” means the
Securities and Exchange Commission.

 

“indenture securities”
means the Notes.

 

“indenture security holder”
means a Noteholder.

 

“indenture to be qualified”
means this Indenture.

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)          “or”
is not exclusive;

 

(iv)          “including”
means including without limitation;

 

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

 

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

 

10

 

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

 

ARTICLE TWO

 

THE
NOTES

 

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

 

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

 

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

 

The Indenture
Trustee shall, upon receipt of an Issuer Order, authenticate and deliver for
original issue (i) Class A-1 Notes in an aggregate principal amount of
$379,000,000, (ii) Class A-2 Notes in an aggregate principal amount of
$214,750,000 and (iii) Class B Notes in an aggregate principal amount of
$31,250,000.  The aggregate principal
amount of such Classes of Notes Outstanding at any time may not exceed such
respective amounts, except as otherwise provided in Section 2.05.

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

Section
2.11.        Definitive
Notes.  If (i)(A)
the Administrator advises the Indenture Trustee in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
as described in the Note Depository Agreement, and (B) Indenture Trustee or the
Administrator is unable to locate a qualified successor, (ii) the Administrator
at its option advises the Indenture Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency, or (iii) after the
occurrence of an Event of Default, the Modified Required Holders advise the
Indenture Trustee and the Clearing Agency through the Clearing Agency Participants
in writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of the related Noteholders, then the
Indenture Trustee shall notify all Noteholders of the related Class or Classes
of Notes, through the Clearing Agency, of the occurrence of any such event and
of the availability of Definitive Notes of the related Class of Notes to
Noteholders requesting the same.  Upon
surrender to the Indenture Trustee of the Note or Notes representing the Book-Entry
Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the
Definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuer, the Note

 

17

 

Registrar
or the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions.  Upon the issuance
of Definitive Notes of a Class, the Indenture Trustee shall recognize the
Noteholders of the Definitive Notes as Noteholders hereunder.

 

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

 

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

 

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

 

ARTICLE THREE

 

COVENANTS

 

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

 

Section
3.02.        Maintenance
of Office or Agency.  The Issuer
will maintain in Wilmington, Delaware, an office or agency where Notes may be
surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

Section 3.05.        Protection
of Collateral.  The Issuer
intends the security interest Granted pursuant to this Indenture in favor of
the Indenture Trustee on behalf of the

 

20

 

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

 

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

 

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

 

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

 

(iv)          enforce any of the Collateral;

 

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

 

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

 

The Issuer
shall file the initial financing statements on Form UCC1.  All financing statements filed or to be
filed against the Issuer in favor of the Indenture Trustee in connection
herewith describing the Collateral shall contain a statement to the following
effect:  “A purchase of or security
interest in any collateral described in this financing statement, except as
permitted in the Indenture, will violate the rights of the Secured Party.”  The Issuer hereby authorizes the Indenture
Trustee to file all continuation statements or other instruments required to be
executed pursuant to this Section and hereby designates the Indenture Trustee
its agent and attorney-in-fact for such purpose.

 

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

 

Section
3.07.        Performance of Obligations; Servicing of Contracts.

 

(a)           The Issuer will not
take any action and will use its best efforts not to permit any action to be
taken by others that would release any Person from any such Person’s material
covenants or obligations under any instrument or agreement included in the
Collateral or that would result in the amendment, hypothecation, subordination,
termination

 

21

 

or discharge of,
or impair the validity or effectiveness of, any such instrument or agreement,
except as expressly provided in the Transaction Documents or such other
instrument or agreement.

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

(iii)          (A) 
permit the validity or effectiveness of this Indenture to be impaired,
or permit the lien created by this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any

 

22

 

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

 

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

 

(v)           change its name or state of
formation.

 

Section
3.09.        Annual
Statement as to Compliance.  The Issuer
will deliver to the Indenture Trustee, on or before January 31 of each year
commencing January 31, 2005, an Officer’s Certificate stating, as to the
Authorized Officer signing such Officer’s Certificate, that:

 

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

 

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

 

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

 

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

 

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

 

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

 

23

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

Section
3.11.        Successor
or Transferee.

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
3.21.        Amendments of Sale and Servicing Agreement and Trust Agreement.  The Issuer
shall not agree to any amendment to Section 11.01 of the Trust Agreement to
eliminate the requirements thereunder that the Indenture Trustee or the Holders
of the Notes consent to amendments thereto as provided therein.

 

26

 

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

 

ARTICLE FOUR

 

SATISFACTION
AND DISCHARGE

 

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

 

(A)          either

 

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

 

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

 

(i)            have become due and payable, or

 

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

 

(iii)          are to be called for redemption within one
year under arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at the expense,
of the Issuer, and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the United
States (which will mature prior to the date such amounts are payable), in trust
in an Eligible Account for such purpose, in an amount sufficient to pay and

 

27

 

discharge the entire indebtedness on such Note not theretofore
delivered to the Indenture Trustee for cancellation when due to the final
scheduled Distribution Date (if Notes shall have been called for redemption
pursuant to Section 10.01(a)), as the case may be;

 

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

 

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

 

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

 

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

 

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

 

ARTICLE FIVE

 

REMEDIES

 

Section
5.01.        Events of
Default.  “Event of
Default,” wherever used herein, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any

 

28

 

judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):

 

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

 

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

 

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

 

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

 

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

 

The Issuer
shall deliver to the Indenture Trustee within five days after obtaining
knowledge of the occurrence thereof, written notice in the form of an Officer’s
Certificate of any event which with the giving of notice and the lapse of time
would become

 

29

 

an Event of Default under clause (iii) above, its status and what
action the Issuer is taking or proposes to take with respect thereto.

 

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

 

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

 

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

 

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

 

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

 

(d)           Notwithstanding
anything to the contrary contained in this Indenture, if an Event of Default
shall have occurred and be continuing and if the Issuer fails to perform its
obligations under Section 10.01(b) when and as due, the Indenture Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Noteholders by such appropriate Proceedings as the Indenture Trustee shall
deem most effective to protect and enforce any such rights, whether for
specific performance of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other

 

30

 

proper remedy or legal or equitable right vested in
the Indenture Trustee by this Indenture or by law, provided that the Indenture
Trustee shall only be entitled to take any such actions to the extent such
actions (i) are taken only to enforce the Issuer’s obligations to redeem the
principal amount of Notes, and (ii) are taken only against the Collateral any
investments therein and any proceeds thereof.

 

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

 

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

 

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

 

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

 

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

 

and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Indenture Trustee, and, in the event that
the Indenture Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Indenture Trustee such amounts as shall

 

31

 

be sufficient to cover reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture Trustee
except as a result of negligence or bad faith.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iv)          sell
the Collateral or any portion thereof or rights or interest therein, at one or
more public or private sales called and conducted in any manner permitted by
law; provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Collateral following an Event of Default, unless (A) the Holders
of 100% of the Outstanding

 

32

 

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

 

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

 

Section
5.06.        Priorities.

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
5.09.        Restoration
of Rights and Remedies.  If the
Indenture Trustee or any Noteholder has instituted any Proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason or has been determined adversely to
the Indenture Trustee or to such Noteholder, then and in every

 

34

 

such case the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding the rights of Noteholders set forth in this Section,
subject to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in liability or might materially and adversely
affect the rights of any Noteholders not consenting to such action.

 

Section
5.13.        Waiver of
Past Defaults.  In the case
of any waiver of an Event of Default, the Issuer, the Indenture Trustee and the
Holders of the Notes shall be restored to

 

35

 

their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereto.  Upon any such waiver, such Event of Default
shall cease to exist and be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.

 

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

 

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

 

Section
5.16.        Action on Notes.  The Indenture Trustee’s right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture.  Neither the lien of
this Indenture nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Collateral or upon any of the assets of the
Issuer.  Any money or property collected
by the Indenture Trustee shall be applied in accordance with Section 5.06.

 

36

 

Section
5.17.        Performance and Enforcement of Certain Obligations.

 

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

 

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

 

ARTICLE SIX

 

THE
INDENTURE TRUSTEE

 

Section
6.01.        Duties
of Indenture Trustee.

 

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

 

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

 

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

 

(ii)           in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the requirements
of this Indenture; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or

 

37

 

not they conform to the requirements of this Indenture and the other
Transaction Documents to which the Indenture Trustee is a party.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
6.02.        Rights
of Indenture Trustee.

 

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

 

(b)           Before the Indenture
Trustee acts or refrains from acting, it may require an Officer’s Certificate
(with respect to factual matters) or an Opinion of Counsel, as

 

38

 

applicable. 
The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Officer’s Certificate or Opinion
of Counsel.

 

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

 

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

 

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

 

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

 

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

 

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

 

39

 

may do the same with like
rights.  However, the Indenture Trustee
is required to comply with Section 6.11.

 

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

 

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

 

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

 

Section
6.07.        Compensation
and Indemnity.  The Issuer
shall pay or shall cause the Administrator to pay to the Indenture Trustee from
time to time reasonable compensation for its services.  The Indenture Trustee’s compensation shall
not be limited by any law on compensation of a trustee of an express
trust.  The Issuer shall or shall cause
the Administrator to reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Indenture Trustee’s agents,
counsel, accountants and experts.  The
Issuer shall indemnify or shall cause the Administrator to indemnify the
Indenture Trustee against any and all loss, liability or expense (including
attorneys’ fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder.  The Indenture Trustee shall notify the Issuer and the
Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so
notify the Issuer and the Administrator shall not relieve the Issuer or the
Administrator of its obligations hereunder. 
The Issuer shall defend or shall cause the Administrator to defend any
such claim, and the Indenture Trustee may have separate counsel and the Issuer
shall pay or shall cause the Administrator to pay the fees and expenses of such
counsel.  Neither the Issuer nor the
Administrator need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Indenture Trustee through the Indenture
Trustee’s own willful misconduct, negligence or bad faith.

 

The Issuer’s
payment obligations and indemnification to the Indenture Trustee pursuant to
this Section shall survive the resignation or removal of the Indenture Trustee
and

 

40

 

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

 

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

 

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

 

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

 

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

 

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

 

If the
Indenture Trustee resigns or is removed, the Issuer shall promptly appoint a
successor Indenture Trustee.  A
successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon the resignation or removal of the
retiring Indenture Trustee shall become effective, and the successor Indenture
Trustee shall have all the rights, powers and duties of the Indenture Trustee
under this Indenture.  The Issuer or the
successor Indenture Trustee shall mail a notice of its succession to
Noteholders.  The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

 

If a successor
Indenture Trustee does not take office within 60 days after the retiring
Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the
Issuer or the

 

41

 

Holders of a majority in Outstanding Amount of the Notes may appoint or
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.

 

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

 

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

 

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

 

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

 

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

 

(a)           Notwithstanding any
other provision of this Indenture, at any time, for the purpose of meeting any
legal requirement of any jurisdiction in which any part of the Collateral may
at the time be located, the Indenture Trustee and the Administrator acting
jointly shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-Indenture Trustee or co-Indenture
Trustees, jointly with the Indenture Trustee, or separate Indenture Trustee or
separate Indenture Trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Collateral, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee and the Administrator may consider
necessary or desirable.  If the
Administrator shall not have joined in such appointment within 15 days after
the receipt by it of a request

 

42

 

so to do, the Indenture Trustee alone shall have the
power to make such appointment.  No
co-Indenture Trustee or separate Indenture Trustee hereunder shall be required
to meet the terms of eligibility of a successor Indenture Trustee under Section
6.11 and no notice to Noteholders of the appointment of any co-Indenture
Trustee or separate Indenture Trustee shall be required under Section 6.08.

 

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

 

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

 

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

 

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

 

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

 

(d)           Any separate Indenture
Trustee or co-Indenture Trustee may at any time constitute the Indenture
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. 
If any separate Indenture Trustee or co-Indenture Trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture

 

43

Trustee, to the extent permitted by law, without the
appointment of a new or successor Indenture Trustee.  Notwithstanding anything to the contrary in this Indenture, the
appointment of any separate Indenture Trustee or co-Indenture Trustee shall not
relieve the Indenture Trustee of its obligations and duties under this
Indenture.

 

Section 6.11.        Eligibility.

 

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

 

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

 

(c)           In the case of an
appointment hereunder of a successor Indenture Trustee with respect to any
Class of Notes, the Issuer, the retiring Indenture Trustee and the successor
Indenture Trustee with respect to such Class of Notes shall execute and deliver
an indenture supplement hereto wherein the successor Indenture Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, the
successor Indenture Trustee all rights, powers, trusts and duties of the
retiring Indenture Trustee with respect to the Notes of such Class as to which
the appointment of such Indenture Trustee relates, (ii) if the retiring
Indenture Trustee is not retiring with respect to all Classes of Notes, shall
contain such provisions as shall be deemed necessary or desirable to confirm that
all the rights, powers, trusts and duties of the retiring Indenture Trustee
with respect to the Notes of each Class as to which the retiring Indenture
Trustee is not retiring shall continue to be vested in the retiring Indenture
Trustee and (iii) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Indenture Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute such
Indenture Trustees co-trustees of the same trust and that each such Indenture
Trustee; and upon execution and delivery of such supplemental

 

44

 

indenture the
resignation or removal of the retiring Indenture Trustee shall become effective
to the extent provided therein.

 

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

 

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

 

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

 

ARTICLE SEVEN

 

NOTEHOLDERS’
LISTS AND REPORTS

 

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

 

Section 7.02.        Preservation of Information: Communication to
Noteholders.

 

(a)           The Indenture Trustee shall
preserve, in as current a form as is reasonably practicable, the names and
addresses of the Noteholders contained in the most recent list furnished to the
Indenture Trustee as provided in Section 7.01 and the names and addresses of
Noteholders received by the Indenture Trustee in its capacity as Note Registrar
and shall otherwise comply with TIA §312(a). 
The Indenture Trustee may destroy any list furnished to it as provided
in such Section 7.01 upon receipt of a new list so furnished.

 

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

 

45

 

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

 

Section 7.03.        Reports by Issuer.

 

(a)           The Issuer shall:

 

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

 

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

 

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

 

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

 

Section 7.04.        Reports by Indenture Trustee.  If required
by TIA §313(a), within 60 days after each January 31st beginning
with January 31, 2005, the Indenture Trustee shall mail to each Noteholder as
required by TIA §313(c) a brief report dated as of such date that complies with
TIA §313(a).  The Indenture Trustee also
shall comply with TIA §313(b).

 

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

 

ARTICLE EIGHT

 

ACCOUNTS,
DISBURSEMENTS AND RELEASES

 

Section 8.01.        Collection of Money.  Except as
otherwise expressly provided herein, the Indenture Trustee may demand payment
or delivery of, and shall receive and collect, directly and without
intervention or assistance of any fiscal agent or other intermediary, all money
and other property payable to or receivable by the Indenture Trustee pursuant
to this

 

46

 

Indenture
and the Sale and Servicing Agreement. 
The Indenture Trustee shall apply all such money received by it as
provided in this Indenture and the Sale and Servicing Agreement.  Except as otherwise expressly provided in
this Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the Collateral,
the Indenture Trustee may take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate Proceedings.  Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article Five.

 

Section 8.02.        Trust Accounts.

 

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

 

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

 

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

 

Section 8.03.        General Provisions Regarding Accounts.

 

(a)           So long as no Default
or Event of Default shall have occurred and be continuing, all or a portion of
the funds in the Trust Accounts shall be invested in accordance with the
provisions of Section 5.05 of the Sale and Servicing Agreement.  Except as otherwise provided in Section 5.05
of the Sale and Servicing Agreement, all income or other gain from investments
of moneys deposited in such Trust Accounts (other than the Reserve Fund and the
Pre-Funding Account) shall be deposited by the Indenture Trustee in the
Collection Account, and any loss resulting from such investments shall be
charged to the related Trust Account. 
The Issuer will not direct the Indenture Trustee to make any investment
of any funds or to sell any investment held in any of the Trust Accounts unless
the security interest granted and perfected in such account will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person, and, in connection with any direction
to the Indenture Trustee to make any such investment or sale, if requested by
the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an
Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.

 

47

 

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

 

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

 

Section 8.04.        Release of Collateral.

 

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

 

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

 

Section 8.05.        Opinion of Counsel.  The
Indenture Trustee shall receive at least seven days notice when requested by
the Issuer to take any action pursuant to Section 8.04(a), accompanied by
copies of any instruments involved, and the Indenture Trustee shall also
require, as a condition to such action, an Opinion of Counsel, in form and
substance satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with and such action will not materially and

 

48

 

adversely
impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions for this Indenture; provided, however, that
such Opinion of Counsel shall not be required to express an opinion as to the
fair value of the Collateral.  Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.

 

ARTICLE NINE

 

SUPPLEMENTAL
INDENTURES

 

Section 9.01.        Supplemental Indentures Without Consent of
Noteholders.

 

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

 

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

 

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

 

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

 

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

 

(v)           to
cure any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture which may be inconsistent with any other provision
herein, in any supplemental indenture, in the Transaction Documents or in the
Prospectus or to add any other provisions with respect to matters or questions
arising under this Indenture, in any supplemental indenture, in the Transaction
Documents or in the Prospectus; provided that such action shall not adversely
affect the interests of the Holders of the Notes;

 

(vi)          to
evidence and provide for the acceptance of the appointment hereunder by a
successor Indenture Trustee with respect to the Notes and to add to or

 

49

 

change any of
the provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one Indenture Trustee,
pursuant to the requirements of Article Six;

 

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

 

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

 

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

 

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

 

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

 

(i)            change the date of
payment of any installment of principal of or interest on any Note, or reduce
the principal amount thereof, the interest rate thereon or the Redemption Date
Amount with respect thereto, change the provisions of this Indenture relating
to the application of collections on, or the proceeds of the sale of, the
Collateral to payment of principal of or interest on the Notes, or change any
place of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the application of
funds available therefor, as provided in Article Five, to the payment of any
such amount due on the Notes on or after the respective due dates thereof (or,
in the case of redemption, on or after the 
Redemption Date);

 

(ii)           reduce the percentage
of the Outstanding Amount of the Notes, the consent of the Holders of which is
required for any such supplemental indenture, or the

 

50

 

consent of the Holders of which
is required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided for in
this Indenture;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

51

 

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

 

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

 

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

 

ARTICLE TEN

 

REDEMPTION
OF NOTES

 

Section 10.01.      Redemption.

 

(a)           In the event that the
Seller pursuant to Section 7.10 of the Sale and Servicing Agreement purchases
the corpus of the Trust, the Notes are subject to redemption in whole, but not
in part, on the Distribution Date on which such repurchase occurs, for a purchase
price equal to the outstanding principal, and accrued interest on the Notes;
provided, however, that the Issuer has available funds sufficient to pay such
amounts.  Seller, the Servicer or the
Issuer shall furnish each Rating Agency notice of such redemption.  If the Notes are to be redeemed pursuant to
this Section 10.01(a), the Servicer or the Issuer shall furnish notice of such
election to the Indenture Trustee not later than 20 days prior to the
Redemption Date and the Issuer shall deposit with the Indenture Trustee in the
Note Distribution Account the Redemption Price of the Notes to be redeemed
whereupon all such Notes shall be due and payable on the Redemption Date upon
the furnishing of a notice complying with Section 10.02 to each Holder of the
Notes.

 

(b)           In the event that the
assets of the Trust are sold pursuant to Section 5.03(b) of this Indenture, the
proceeds of such sale shall be distributed as provided in Section 5.06.  If amounts are to be paid to Noteholders
pursuant to this Section 10.01(b), the Servicer or the

 

52

 

Issuer shall, to
the extent practicable, furnish notice of such event to the Indenture Trustee
not later than 20 days prior to the Redemption Date whereupon all such amounts
shall be payable on the Redemption Date.

 

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

 

Section 10.02.      Form of Redemption Notice.

 

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

 

All notices of
redemption shall state:

 

(i)            the Redemption Date;

 

(ii)           the Redemption Date
Amount; and

 

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

 

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

 

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

 

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

 

53

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section 11.01.      Compliance Certificates and Opinions, etc.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

54

 

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

 

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

 

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

 

(v)           Notwithstanding any
other provision of this Section, the Issuer may, without compliance with the
other provisions of this Section, (A) collect, liquidate, sell or otherwise
dispose of the Contracts as and to the extent permitted or required by the
Transaction Documents, and (B) make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Transaction Documents, so long
as the Issuer shall deliver to the Indenture Trustee every six months,
commencing August 1, 2004, an Officer’s Certificate stating that all the
dispositions of Collateral described in clauses (A) or (B) that occurred during
the preceding six calendar months were in the ordinary course of the Issuer’s
business and that the proceeds thereof were applied in accordance with the
Transaction Documents.

 

Section 11.02.      Form of Documents Delivered to Indenture Trustee.  In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one

 

55

 

document,
but one such Person may certify or give an opinion with respect to some matters
and one or more other such Person as to other matters, and any such Person may
certify or given an opinion as to such matters in one or several documents.

 

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

 

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

 

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

 

Section 11.03.      Acts of Noteholders.

 

(a)           Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the “Act” of the
Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section.

 

56

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

57

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

58

 

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

 

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

 

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

 

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

 

Section 11.18.      Conflict with Trust Indenture Act.  If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this

 

59

 

Indenture
by any of the provisions of the Trust Indenture Act, such required provision
shall control.

 

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

 

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

 

[signature page follows]

 

60

 

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

 

	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE

  TRUST 2004-1

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST COMPANY, not in 

  its individual capacity but solely on behalf of 

  the Issuer as Owner Trustee under the Trust 

  Agreement

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Patricia A.
  Evans

  	
   

  
	
   

  	
  Printed Name: Patricia A. Evans

  
	
   

  	
  Title: Assistant Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/  Cynthia Davis

  	
   

  
	
   

  	
  Printed Name:  Cynthia Davis

  
	
   

  	
  Title:  Assistant Vice President

  
					

 

 

	
  STATE OF
  ILLINOIS

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
  SS

  
	
  COUNTY OF COOK

  	
  )

  	
   

  	
   

  

 

	
  On

  	
   

  
	
  [insert date]

  
	
  before me,

  	
   

  	
   

  
	
  [Insert name and title of notary]

  
	
   

  
	
  personally appeared

  	
   

  	
  ,

  
						

 

o            personally known to me, or

 

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

 

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

 

WITNESS my hand and official seal.

 

	
  Signature

  	
   

  	
   

  	
  [Seal]

  

 

 

	
  STATE OF
  DELAWARE

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
   

  	
  SS

  
	
  COUNTY OF NEW CASTLE

  	
  )

  	
   

  	
   

  

 

	
  On

  	
   

  
	
  [insert date]

  
	
  before me,

  	
   

  	
   

  
	
  [Insert name and title of notary]

  
	
   

  
	
  personally appeared

  	
   

  	
  ,

  
						

 

o            personally known to me, or

 

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

 

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

 

WITNESS my hand and official seal.

 

	
  Signature

  	
   

  	
   

  	
  [Seal]

  

 

 

EXHIBIT A

 

[RESERVED]

 

 

A-1

 

 

EXHIBIT B

 

FORM OF CLASS A-1 NOTE

 

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

 

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

 

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

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2004-1

 

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

 

	
  REGISTERED

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  No. R-

  	
   

  	
  CUSIP
  No.               

  

 

 

Harley-Davidson Motorcycle Trust 2004-1, a
statutory trust organized and existing under the laws of the State of Delaware
(herein referred to as the “Issuer”), for value received, hereby promises to
pay to
[                    ],
or registered assigns, the principal sum of 
                        
($               )
payable on the earlier of the Distribution Date occurring in October 2008 (the
“Class A-1 Final Distribution Date”) and the Redemption Date, if any, pursuant
to Section 10.01 of the Indenture referred to on the reverse hereof.

 

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

 

B-1

 

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

 

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

 

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

 

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

 

B-2

 

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

 

	
  Date:

  	
   

  	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE

  
	
   

  	
  TRUST 2004-1

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST COMPANY, 

  not in its individual capacity but solely 

  on behalf of the Issuer as Owner 

  Trustee, under the Trust Agreement

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
								

 

B-3

 

INDENTURE TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

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

 

	
   

  	
  BNY MIDWEST TRUST COMPANY, 

  not in its individual capacity but solely as 

  Indenture Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized Signatory

  

 

B-4

 

[REVERSE OF CLASS A-1 NOTE]

 

This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its       % Harley-Davidson
Motorcycle Contract Backed Notes, Class A-1 (the “Class A-1 Notes”), all issued
under an Indenture, dated as of February 1, 2004 (the “Indenture”), between the
Issuer and BNY Midwest Trust Company, as Indenture Trustee (the “Indenture
Trustee”), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the
Notes.  The Class A-1 Notes are subject
to all terms of the Indenture.  All
terms used in this Note that are defined in the Indenture, as supplemented or
amended, shall have the meanings assigned to them in or pursuant to the
Indenture, as so supplemented or amended.

 

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

 

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

 

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

 

B-5

 

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

 

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

 

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

 

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

 

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

 

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

 

B-6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

B-7

 

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

 

B-8

 

EXHIBIT C

 

FORM OF CLASS A-2 NOTE

 

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

 

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

 

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

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2004-1

 

     % HARLEY-DAVIDSON MOTORCYCLE CONTRACT
BACKED NOTES, CLASS A-2

 

	
  REGISTERED

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  No. R-

  	
   

  	
  CUSIP No.                   

  

 

 

Harley-Davidson Motorcycle Trust 2004-1, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
“Issuer”), for value received, hereby promises to pay to
[                     ],
or registered assigns, the principal sum of                      ($                     )
payable on the earlier of the Distribution Date occurring in November 2011 (the
“Class A-2 Final Distribution Date”) and the Redemption Date, if any, pursuant
to Section 10.01 of the Indenture referred to on the reverse hereof.  No payments of principal of the Class A-2
Notes shall be made until the principal on the Class A-1 Notes have been paid
in full.

 

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

 

C-1

 

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

 

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

 

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

 

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

 

C-2

 

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

 

	
  Date:

  	
   

  	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE

  
	
   

  	
  TRUST 2004-1

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST COMPANY, 

  not in its individual capacity but solely 

  on behalf of the Issuer as Owner 

  Trustee, under the Trust Agreement

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
								

 

C-3

 

INDENTURE TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

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

 

	
   

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

  Indenture Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

C-4

 

[REVERSE OF CLASS A-2 NOTE]

 

This Note is one of a duly authorized issue
of Notes of the Issuer, designated as its       %
Harley-Davidson Motorcycle Contract Backed Notes, Class A-2 (the “Class A-2
Notes”), all issued under an Indenture, dated as of February 1, 2004 (the
“Indenture”), between the Issuer and BNY Midwest Trust Company, as Indenture
Trustee (the “Indenture Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes.  The Notes are
subject to all terms of the Indenture. 
All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or
pursuant to the Indenture, as so supplemented or amended.

 

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

 

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

 

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

 

C-5

 

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

 

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

 

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

 

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

 

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

 

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

 

C-6

 

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

 

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

 

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

 

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

 

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

 

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

 

C-7

 

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

 

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

 

C-8

 

EXHIBIT D

 

FORM OF CLASS B NOTE

 

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

 

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

 

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

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2004-1

 

     % HARLEY-DAVIDSON MOTORCYCLE CONTRACT
BACKED NOTES, CLASS B

 

	
  REGISTERED

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  
	
  No. R-

  	
   

  	
  CUSIP
  No.                 

  

 

 

Harley-Davidson Motorcycle Trust 2004-1, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
“Issuer”), for value received, hereby promises to pay to
[                     ],
or registered assigns, the principal sum of                      ($                     )
payable on the earlier of the Distribution Date occurring in November 2011 (the
“Class B Final Distribution Date”) and the Redemption Date, if any, pursuant to
Section 10.01 of the Indenture referred to on the reverse hereof.

 

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

 

D-1

 

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

 

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

 

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

 

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

 

D-2

 

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

 

	
  Date:                     

  	
  HARLEY-DAVIDSON MOTORCYCLE

  TRUST 2004-1

  
	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST COMPANY, 

  not in its individual capacity but solely 

  on behalf of the Issuer as Owner 

  Trustee, under the Trust Agreement

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						

 

D-3

 

INDENTURE TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

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

 

	
   

  	
  BNY MIDWEST TRUST COMPANY, 

  not in its individual capacity but solely as 

  Indenture Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

D-4

 

[REVERSE OF CLASS B NOTE]

 

This Note is one of a duly authorized issue
of Notes of the Issuer, designated as its       %
Harley-Davidson Motorcycle Contract, Class B (the “Class B Notes”), all issued
under an Indenture, dated as of February 1, 2004 (the “Indenture”), between the
Issuer and BNY Midwest Trust Company, as Indenture Trustee (the “Indenture
Trustee”), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Notes are subject to all terms of the
Indenture.  All terms used in this Note
that are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture, as so supplemented
or amended.

 

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

 

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

 

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

 

D-5

 

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

 

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

 

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

 

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

 

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

 

D-6

 

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

 

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

 

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

 

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

 

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

 

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

 

D-7

 

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

 

D-8

 

EXHIBIT E

 

FORM OF ASSIGNMENT

 

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

 

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

	
   

  	
   

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

  
	
   

  	
   

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

  
	
   

  	
   

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

  
	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guaranteed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Authorized Officer)

  	
   

  
				

 

E-1

 

EXHIBIT F

 

FORM OF NOTE DEPOSITORY AGREEMENT

 

F-1

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