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 May 2, 2006

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE ONE

  	
  DEFINITIONS

  	
  1

  
	
  Section
  1.01.

  	
  Capitalized
  Terms

  	
  1

  
	
  Section
  1.02.

  	
  Other
  Definitional Provisions

  	
  3

  
	
  Section
  1.03.

  	
  Usage of
  Terms

  	
  3

  
	
  Section
  1.04.

  	
  Section
  References

  	
  3

  
	
  Section 1.05.

  	
  Accounting Terms

  	
  10

  
	
  ARTICLE TWO

  	
  ORGANIZATION

  	
  11

  
	
  Section 2.01.

  	
  Name

  	
  11

  
	
  Section 2.02.

  	
  Office

  	
  11

  
	
  Section
  2.03.

  	
  Purposes
  and Powers

  	
  11

  
	
  Section 2.04.

  	
  Appointment of Owner Trustee

  	
  14

  
	
  Section 2.05.

  	
  Initial Capital Contribution of Owner Trust Estate

  	
  15

  
	
  Section
  2.06.

  	
  Declaration
  of Trust

  	
  15

  
	
  Section
  2.07.

  	
  Liability
  of Trust Depositor

  	
  16

  
	
  Section
  2.08.

  	
  Title to
  Trust Property

  	
  16

  
	
  Section 2.09.

  	
  Situs of Trust

  	
  17

  
	
  Section 2.10.

  	
  Representations and Warranties of the Trust Depositor

  	
  18

  
	
  Section 2.11.

  	
  Federal Income Tax Treatment

  	
  22

  
	
  ARTICLE THREE

  	
  TRUST
  CERTIFICATE AND TRANSFER OF INTERESTS

  	
  23

  
	
  Section 3.01.

  	
  Initial Ownership

  	
  23

  
	
  Section 3.02.

  	
  The Trust Certificate

  	
  25

  
	
  Section 3.03.

  	
  Authentication and Delivery of Trust Certificate

  	
  26

  
	
  Section 3.04.

  	
  Registration of Transfer and Exchange of Trust Certificate

  	
  27

  
	
  Section 3.05.

  	
  Mutilated, Destroyed, Lost or Stolen Trust Certificate

  	
  29

  
	
  Section 3.06.

  	
  Person Deemed Owner

  	
  30

  
	
  Section 3.07.

  	
  Access to List of Certificateholder’s Name and Address

  	
  31

  
	
  Section 3.08.

  	
  Maintenance of Office or Agency

  	
  32

  
	
  Section 3.09.

  	
  Trust Certificate

  	
  33

  
	
  Section 3.10.

  	
  Appointment of Paying Agent

  	
  33

  
	
  Section 3.11.

  	
  Ownership by Trust Depositor of Trust Certificate

  	
  34

  
	
  ARTICLE FOUR

  	
  ACTIONS BY OWNER
  TRUSTEE

  	
  35

  
	
  Section 4.01.

  	
  Prior Notice to Owner with Respect to Certain Matters

  	
  35

  
	
  Section 4.02.

  	
  Action by Owner with Respect to Certain Matters

  	
  37

  
	
  Section 4.03.

  	
  Action by Owner with Respect to Bankruptcy

  	
  38

  
	
  Section 4.04.

  	
  Restrictions on Owner’s Power

  	
  38

  
	
  ARTICLE FIVE

  	
  APPLICATION OF
  TRUST FUNDS; CERTAIN DUTIES

  	
  39

  
	
  Section 5.01.

  	
  Application of Trust Funds

  	
  39

  
	
  Section 5.02.

  	
  Method of Payment

  	
  41

  
	
  Section 5.03.

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

  	
  41

  
	
  Section 5.04.

  	
  Signature on Returns; Tax Matters Partner

  	
  42

  
	
  ARTICLE SIX

  	
  AUTHORITY
  AND DUTIES OF OWNER TRUSTEE

  	
  43

  
	
  Section 6.01.

  	
  General Authority

  	
  43

  
	
  Section 6.02.

  	
  General Duties

  	
  44

  
	
  Section 6.03.

  	
  Action Upon Instruction

  	
  45

  
	
  Section 6.04.

  	
  No Duties Except as Specified in this Agreement or in Instructions

  	
  48

  
	
  Section 6.05.

  	
  No Action Except Under Specified Documents or Instructions

  	
  50

  
	
  Section 6.06.

  	
  Restrictions

  	
  50

  
	
  Section 6.07.

  	
  Pennsylvania Motor Vehicle Sales Finance Act Licenses

  	
  51

  

 

 

	
  ARTICLE SEVEN

  	
  CONCERNING
  THE OWNER TRUSTEE

  	
  51

  
	
  Section 7.01.

  	
  Acceptance of Trusts and Duties

  	
  51

  
	
  Section 7.02.

  	
  Furnishing of Documents

  	
  55

  
	
  Section 7.03.

  	
  Representations and Warranties

  	
  56

  
	
  Section 7.04.

  	
  Reliance; Advice of Counsel

  	
  57

  
	
  Section 7.05.

  	
  Not Acting in Individual Capacity

  	
  59

  
	
  Section 7.06.

  	
  Owner Trustee Not Liable for Trust
  Certificate, Notes or Contracts

  	
  60

  
	
  Section 7.07.

  	
  Owner Trustee May Own Trust Certificate and
  Notes

  	
  62

  
	
  ARTICLE EIGHT

  	
  COMPENSATION OF OWNER TRUSTEE

  	
  62

  
	
  Section 8.01.

  	
  Owner Trustee’s Fees and Expenses

  	
  62

  
	
  Section 8.02.

  	
  Indemnification

  	
  63

  
	
  Section 8.03.

  	
  Payments to the Owner Trustee

  	
  64

  
	
  ARTICLE NINE

  	
  TERMINATION OF TRUST AGREEMENT

  	
  65

  
	
  Section 9.01.

  	
  Termination of Trust Agreement

  	
  65

  
	
  ARTICLE TEN

  	
  SUCCESSOR OWNER TRUSTEES AND
  ADDITIONAL OWNER TRUSTEES

  	
  68

  
	
  Section 10.01.

  	
  Eligibility Requirements for Owner Trustee

  	
  68

  
	
  Section 10.02.

  	
  Resignation or Removal of Owner Trustee

  	
  69

  
	
  Section 10.03.

  	
  Successor Owner Trustee

  	
  71

  
	
  Section 10.04.

  	
  Merger or Consolidation of Owner Trustee

  	
  73

  
	
  Section 10.05.

  	
  Appointment of Co-Trustee or Separate
  Trustee

  	
  74

  
	
  ARTICLE ELEVEN

  	
  MISCELLANEOUS

  	
  78

  
	
  Section 11.01.

  	
  Supplements and Amendments

  	
  78

  
	
  Section 11.02.

  	
  No Legal Title to Trust Estate in Owner

  	
  82

  
	
  Section 11.03.

  	
  Limitations on Rights of Others

  	
  82

  
	
  Section 11.04.

  	
  Notices

  	
  83

  
	
  Section 11.05.

  	
  Severability of Provisions

  	
  84

  
	
  Section 11.06.

  	
  Counterparts

  	
  84

  
	
  Section 11.07.

  	
  Successors and Assigns

  	
  84

  
	
  Section 11.08.

  	
  Covenants of the Trust Depositor

  	
  85

  
	
  Section 11.09.

  	
  No Petition

  	
  86

  
	
  Section 11.10.

  	
  No Recourse

  	
  87

  
	
  Section 11.11.

  	
  Headings

  	
  88

  
	
  Section 11.12.

  	
  Governing Law

  	
  88

  
	
  Section 11.13.

  	
  Trust Certificate Transfer Restrictions

  	
  88

  
	
  Section 11.14.

  	
  Trust Depositor Payment Obligation

  	
  89

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  A  - 
  Form of Certificate of Trust

  	
  A-1

  
	
  Exhibit
  B  - 
  Form of Trust Certificate

  	
  B-1

  

 

ii

 

TRUST AGREEMENT dated as
of May 2, 2006, between HARLEY-DAVIDSON CUSTOMER FUNDING CORP., a Nevada
corporation, as Trust Depositor (the “Trust Depositor”),
and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as owner trustee
(the “Owner Trustee”).

 

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

 

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

 

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

 

ARTICLE ONE

DEFINITIONS

 

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

 

“Administration  Agreement” means the Administration Agreement, dated as of May
1, 2006, among the Trust, the Trust Depositor, the Indenture Trustee and
Harley-Davidson Credit, as administrator.

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Indenture” 
means the Indenture dated as of May 1, 2006 between the Trust and The
Bank of New York Trust Company, N.A.

 

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

 

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

 

“Owner”
means the Holder of the Trust Certificate.

 

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

 

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

 

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

 

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

 

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

 

2

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement,
dated as of May 1, 2006, among the Trust, as Issuer, the Trust Depositor,
Harley-Davidson Credit, as servicer, and The Bank of New York Trust Company,
N.A., as Indenture Trustee, as the same may be amended or supplemented from
time to time.

 

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

 

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

 

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

 

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

 

“Trust”
means the trust established by this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

ARTICLE TWO

ORGANIZATION

 

Section 2.01.                         Name. The Trust created hereby shall be known
as “Harley-Davidson 
Motorcycle Trust 2006-2”, in which name
the Owner Trustee may conduct the activities of the Trust, make and execute
contracts and other instruments on behalf of the Trust and sue and be sued.

 

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

 

Section 2.03.                         Purposes and Powers.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

Section 2.07.                         Liability of Trust Depositor.

 

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

 

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

 

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

 

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

 

5

 

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

 

Section 2.10.                         Representations and Warranties of
the Trust Depositor.

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

Section 2.11.                         Federal Income Tax Treatment.

 

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

 

ARTICLE THREE

TRUST CERTIFICATE AND TRANSFER OF INTERESTS

 

Section 3.01.                         Initial Ownership.

 

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

 

(b)                                 No transfer of the Trust Certificate
shall be made unless such transfer is made in a transaction which does not
require registration or qualification under the Securities Act of 1933 or
qualification under any state securities or “Blue Sky” laws. Neither the Owner Trustee
nor the Certificate Registrar shall effect the registration of any transfer of
the Trust Certificate unless, (i) prior to such transfer the Owner Trustee
shall have received an opinion of counsel to the Owner Trustee that the
transfer of the Trust Certificate is being made pursuant to an effective
registration under the Securities Act of 1933 or is exempt from the
registration requirements of the Securities Act of 1933, and (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,
$450,000,000, (ii) Class A-2 Notes, $302,000,000 and (iii) Class B Notes,
$48,000,000, or be valid for any purpose, unless there appears on such Trust
Certificate a certificate of authentication substantially in the form set forth
in the form of Trust Certificate attached hereto as Exhibit B,
executed by the Owner Trustee or its authenticating agent, by manual signature,
and such certificate upon any Trust Certificate shall be conclusive evidence,
and the only evidence, that such Trust Certificate has been duly authenticated
and delivered hereunder. Upon issuance, authorization and delivery pursuant to
the terms hereof, the Trust Certificate will be entitled to the benefits of
this Agreement.

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

ARTICLE FOUR

ACTIONS BY OWNER TRUSTEE

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE FIVE

APPLICATION OF TRUST FUNDS;

CERTAIN DUTIES

 

Section
5.01.                         Application
of Trust Funds.

 

11

 

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

 

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

 

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

 

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

 

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

 

Section 5.04.                         Signature on Returns; Tax Matters
Partner.

 

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

 

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

 

12

 

ARTICLE SIX

AUTHORITY AND DUTIES OF OWNER TRUSTEE

 

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

 

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

 

Section 6.03.                         Action Upon Instruction.

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

ARTICLE SEVEN

CONCERNING THE OWNER TRUSTEE

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.04.                         Reliance; Advice of Counsel.

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

ARTICLE EIGHT

COMPENSATION OF OWNER TRUSTEE

 

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

 

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

 

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

 

ARTICLE NINE

TERMINATION OF TRUST AGREEMENT

 

Section 9.01.                         Termination of Trust Agreement.

 

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

 

18

 

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

 

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

 

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

 

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

 

ARTICLE TEN

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

ARTICLE ELEVEN

MISCELLANEOUS

 

Section 11.01.                  Supplements and Amendments.

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

Section 11.09.                  No Petition.

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

[signature page
follows]

 

25

 

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

 

	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING

  
	
   

  	
  CORP., as Trust
  Depositor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PERRY A.
  GLASSGOW

  	
   

  
	
   

  	
  Printed Name: Perry
  A. Glassgow

  
	
   

  	
  Title:  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOANNE A.
  ROZELL

  	
   

  
	
   

  	
  Printed Name:
  Joann A. Rozell

  
	
   

  	
  Title: Assistant
  Vice President

  
					

 

 

Signature Page to Trust

Agreement

 

 

EXHIBIT A

 

FORM OF CERTIFICATE OF TRUST OF

Harley-Davidson Motorcycle Trust 2006-2

 

This Certificate of Trust
of Harley-Davidson Motorcycle Trust 2006-2 (the “Trust”),
dated                ,
2006, 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 2006-2.

 

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

 

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

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  not in its individual capacity but solely as

  
	
   

  	
  Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
						

 

 

EXHIBIT B

 

FORM OF TRUST CERTIFICATE

 

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

 

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

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2006-2 CERTIFICATE

 

	
  NO.

  	
   

  	
  Initial Trust
  Certificate

  
	
   

  	
   

  	
  Fractional
  Interest 100%

  

 

THIS CERTIFIES THAT
Harley-Davidson Customer Funding Corp. is the registered owner of  100% of the non-assessable, fully-paid,
fractional undivided beneficial interest in the Harley-Davidson Motorcycle
Trust 2006-2 (the “Trust”) formed by
Harley-Davidson Customer Funding Corp., a Nevada corporation (the “Trust Depositor”).

 

The Trust was created
pursuant to a Trust Agreement, dated as of May 2, 2006 (as amended and
supplemented from time to time, the “Trust Agreement”),
between the Trust Depositor, and Wilmington Trust Company, as owner trustee
(the “Owner Trustee”), a summary of certain
of the pertinent provisions of which is set forth below. To the extent not
otherwise defined herein, the capitalized terms used herein have the meanings
assigned to them in (i) the Trust Agreement, (ii) the Sale and Servicing
Agreement, dated as of May 1, 2006 (the “Sale and Servicing
Agreement”), among the Trust, the Trust Depositor, Harley-Davidson
Credit Corp. (“Harley-Davidson Credit”), as
Servicer (in such capacity, the “Servicer”) and
The Bank of New York Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”) or (iii) the
Indenture, dated as of May 1, 2006 (the “Indenture”),
between the Trust and the Indenture Trustee.

 

This Trust Certificate is
the duly authorized Trust Certificate designated as “Harley-Davidson
Motorcycle Trust 2006-2 Certificate”  (the “Trust Certificate”).
Issued under the Indenture are three classes of notes designated as “5.36% Motorcycle Contract Backed Notes, Class A-1”, “5.35% Motorcycle
Contract Backed Notes, Class A-2” and “5.58%
Motorcycle Contract Backed Notes, Class B” (collectively, the “Notes”). This Trust Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Trust Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound. The property of

 

 

the Trust includes, among other things, (i) all the right, title and
interest of the Trust Depositor in and to the Initial Contracts listed on the
Initial List of Contracts delivered on the Closing Date (including, without
limitation, all security interests and all rights to receive payments which are
collected pursuant thereto after the Initial Cutoff Date, including any
liquidation proceeds therefrom, but excluding any rights to receive payments
which were collected pursuant thereto on or prior to the Initial Cutoff Date),
(ii) all rights of the Trust Depositor under any physical damage or other
individual insurance policy (and rights under a “forced
placed” policy, if any), any debt insurance policy or any debt
cancellation agreement relating to any such Contract, an Obligor or a
Motorcycle securing such Contract, (iii) all security interests in each such
Motorcycle, (iv) all documents contained in the related Contract Files, (v) all
rights (but not the obligations) of the Trust Depositor under any related
motorcycle dealer agreements between dealers (i.e., the originators of such
Contracts) and Harley-Davidson Credit, (vi) all rights of the Trust Depositor
in the Lockbox, the Lockbox Account and related Lockbox Agreement to the extent
they relate to such Contracts, (vii) all rights (but not the obligations) of
the Trust Depositor under the Transfer and Sale Agreement, including but not
limited to the Trust Depositor’s rights under Article V thereof, (viii) the
remittances, deposits and payments made into the Trust Accounts from time to
time and amounts in the Trust Accounts from time to time (and any investments
of such amounts), (ix) all rights of the Trust Depositor to certain rebates of
premiums and other amounts relating to insurance policies, debt cancellation
agreements, extended service contracts or other repair agreements and other
items financed under such Contracts and (x) all proceeds and products of the
foregoing.

 

Under the Trust
Agreement, there will be distributed on the fifteenth day of each month or if
such day is not a Business Day the next succeeding Business Day commencing June
15, 2006 (each, a “Distribution Date”) to the
person in whose name this Trust Certificate is registered as of the last
Business Day immediately preceding the calendar month in which such
Distribution Date occurs (each, a “Record Date”),
such Certificateholder’s fractional undivided beneficial interest in the amount
to be distributed to the Certificateholder on such Distribution Date.

 

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

 

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

 

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

 

 

connection with any obligations relating to the Trust Certificate, the
Notes, the Trust Agreement or any of the other Transaction Documents.

 

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

 

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

 

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

 

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

 

 

[REVERSE OF CERTIFICATE]

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

 

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

 

	
  Dated:

  	
  Harley-Davidson
  Motorcycle Trust 2006-2

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WILMINGTON TRUST
  COMPANY, not in its individual

  capacity but solely as Owner Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
					

 

OWNER TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
  WILMINGTON TRUST
  COMPANY,

  
	
  not in its
  individual capacity but solely

  
	
  as Owner Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  

 

 

ASSIGNMENT

 

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

 

PLEASE INSERT SOCIAL
SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

 

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

  
	
   

  
	
   

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

  
	
   

  
	
   

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

  
	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  
	
  Signature Guaranteed:

  

 

 

	
   

  	
   

  	
   

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

  	
   

  	
  NOTICE:  The signature to this assignment must correspond
  with the name of the registered owner as it appears on the face of the within
  Trust Certificate in every particular, without alteration or enlargement or
  any change whatever.Exhibit 4.2

 

 

HARLEY-DAVIDSON
MOTORCYCLE TRUST 2006-2,

as Issuer,

 

and

 

THE BANK OF NEW
YORK TRUST COMPANY, N.A.,

not in its
individual capacity but solely in its capacity

as Indenture
Trustee

 

 

INDENTURE

 

Dated as of May 1,
2006

 

 

$450,000,000  5.36%  Motorcycle Contract Backed Notes, Class A-1

 

$302,000,000  5.35% 
Motorcycle Contract Backed Notes, Class A-2

 

$48,000,000  5.58% 
Motorcycle Contract Backed Notes, Class B

 

 

 

CROSS-REFERENCE
TABLE

 

	
  TIA

  	
   

  	
  Indenture

  	
   

  
	
  Section

  	
   

  	
  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

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE ONE

  	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
  6

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  DEFINITIONS

  	
  6

  
	
  SECTION 1.02.

  	
  INCORPORATION BY REFERENCE
  OF TRUST INDENTURE ACT

  	
  34

  
	
  SECTION 1.03.

  	
  RULES OF CONSTRUCTION

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  	
  THE NOTES

  	
  37

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  FORM

  	
  37

  
	
  SECTION 2.02.

  	
  EXECUTION, AUTHENTICATION
  AND DELIVERY

  	
  38

  
	
  SECTION 2.03.

  	
  TEMPORARY NOTES

  	
  40

  
	
  SECTION 2.04.

  	
  REGISTRATION; REGISTRATION
  OF TRANSFER AND EXCHANGE

  	
  42

  
	
  SECTION 2.05.

  	
  MUTILATED, DESTROYED, LOST
  OR STOLEN NOTES

  	
  50

  
	
  SECTION 2.06.

  	
  PERSONS DEEMED OWNER

  	
  53

  
	
  SECTION 2.07.

  	
  PAYMENT OF PRINCIPAL AND
  INTEREST; DEFAULTED INTEREST

  	
  54

  
	
  SECTION 2.08.

  	
  CANCELLATION

  	
  57

  
	
  SECTION 2.09.

  	
  BOOK-ENTRY NOTES

  	
  59

  
	
  SECTION 2.10.

  	
  NOTICES TO CLEARING AGENCY

  	
  61

  
	
  SECTION 2.11.

  	
  DEFINITIVE NOTES

  	
  62

  
	
  SECTION 2.12.

  	
  RELEASE OF COLLATERAL

  	
  65

  
	
  SECTION 2.13.

  	
  TAX TREATMENT

  	
  65

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  	
  COVENANTS

  	
  66

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  PAYMENT OF PRINCIPAL AND
  INTEREST

  	
  66

  
	
  SECTION 3.02.

  	
  MAINTENANCE OF OFFICE OR
  AGENCY

  	
  67

  
	
  SECTION 3.03.

  	
  MONEY FOR PAYMENTS TO BE
  HELD IN TRUST

  	
  68

  
	
  SECTION 3.04.

  	
  EXISTENCE

  	
  74

  
	
  SECTION
  3.05.

  	
  PROTECTION
  OF COLLATERAL

  	
  75

  
	
  SECTION
  3.06.

  	
  OPINIONS AS
  TO COLLATERAL

  	
  77

  
	
  SECTION
  3.07.

  	
  PERFORMANCE
  OF OBLIGATIONS; SERVICING OF CONTRACTS

  	
  78

  
	
  SECTION 3.08.

  	
  NEGATIVE
  COVENANTS

  	
  81

  
	
  SECTION
  3.09.

  	
  ANNUAL
  STATEMENT AS TO COMPLIANCE

  	
  84

  
	
  SECTION
  3.10.

  	
  ISSUER MAY
  CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS

  	
  85

  
	
  SECTION
  3.11.

  	
  SUCCESSOR
  OR TRANSFEREE

  	
  91

  
	
  SECTION 3.12.

  	
  NO OTHER
  BUSINESS

  	
  92

  
	
  SECTION 3.13.

  	
  NO BORROWING

  	
  92

  
	
  SECTION
  3.14.

  	
  SERVICER’S
  OBLIGATIONS

  	
  93

  
	
  SECTION
  3.15.

  	
  GUARANTEES,
  LOANS ADVANCES AND OTHER LIABILITIES

  	
  93

  
	
  SECTION
  3.16.

  	
  CAPITAL
  EXPENDITURES

  	
  94

  
	
  SECTION 3.17.

  	
  RESTRICTED
  PAYMENTS

  	
  94

  
	
  SECTION
  3.18.

  	
  NOTICE OF
  EVENTS OF DEFAULT

  	
  95

  
	
  SECTION
  3.19.

  	
  FURTHER
  INSTRUMENTS AND ACTS

  	
  96

  
	
  SECTION 3.20.

  	
  COMPLIANCE
  WITH LAWS

  	
  96

  

 

ii

 

	
  SECTION
  3.21.

  	
  AMENDMENTS
  OF SALE AND SERVICING AGREEMENT AND TRUST AGREEMENT

  	
  96

  
	
  SECTION
  3.22.

  	
  REMOVAL OF
  ADMINISTRATOR

  	
  97

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR

  	
  SATISFACTION
  AND DISCHARGE

  	
  97

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.01.

  	
  SATISFACTION
  AND DISCHARGE OF INDENTURE

  	
  97

  
	
  SECTION
  4.02.

  	
  APPLICATION
  OF TRUST MONEY

  	
  102

  
	
  SECTION
  4.03.

  	
  REPAYMENT
  OF MONEYS HELD BY PAYING AGENT

  	
  103

  
	
  SECTION
  4.04.

  	
  RELEASE OF
  COLLATERAL

  	
  103

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  	
  REMEDIES

  	
  104

  
	
   

  	
   

  	
   

  
	
  SECTION
  5.01.

  	
  EVENTS OF
  DEFAULT

  	
  104

  
	
  SECTION
  5.02.

  	
  RIGHTS UPON
  EVENT OF DEFAULT

  	
  109

  
	
  SECTION
  5.03.

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

  	
  110

  
	
  SECTION 5.04.

  	
  REMEDIES

  	
  118

  
	
  SECTION
  5.05.

  	
  OPTIONAL
  PRESERVATION OF THE CONTRACTS

  	
  122

  
	
  SECTION 5.06.

  	
  PRIORITIES

  	
  123

  
	
  SECTION 5.07.

  	
  LIMITATION OF
  SUITS

  	
  123

  
	
  SECTION
  5.08.

  	
  UNCONDITIONAL
  RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST

  	
  127

  
	
  SECTION
  5.09.

  	
  RESTORATION
  OF RIGHTS AND REMEDIES

  	
  127

  
	
  SECTION
  5.10.

  	
  RIGHTS AND
  REMEDIES CUMULATIVE

  	
  128

  
	
  SECTION
  5.11.

  	
  DELAY OR
  OMISSION NOT A WAIVER

  	
  129

  
	
  SECTION
  5.12.

  	
  CONTROL BY
  NOTEHOLDERS

  	
  129

  
	
  SECTION
  5.13.

  	
  WAIVER OF
  PAST DEFAULTS

  	
  131

  
	
  SECTION
  5.14.

  	
  UNDERTAKING
  FOR COSTS

  	
  132

  
	
  SECTION
  5.15.

  	
  WAIVER OF
  STAY OR EXTENSION LAWS

  	
  134

  
	
  SECTION 5.16.

  	
  ACTION ON NOTES

  	
  134

  
	
  SECTION
  5.17.

  	
  PERFORMANCE
  AND ENFORCEMENT OF CERTAIN OBLIGATIONS

  	
  135

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  	
  THE INDENTURE TRUSTEE

  	
  137

  
	
   

  	
   

  	
   

  
	
  SECTION
  6.01.

  	
  DUTIES OF
  INDENTURE TRUSTEE

  	
  137

  
	
  SECTION
  6.02.

  	
  RIGHTS OF
  INDENTURE TRUSTEE

  	
  142

  
	
  SECTION
  6.03.

  	
  INDIVIDUAL
  RIGHTS OF INDENTURE TRUSTEE

  	
  146

  
	
  SECTION
  6.04.

  	
  INDENTURE
  TRUSTEE’S DISCLAIMER

  	
  146

  
	
  SECTION 6.05.

  	
  NOTICE OF
  DEFAULTS

  	
  147

  
	
  SECTION
  6.06.

  	
  REPORTS BY
  INDENTURE TRUSTEE TO HOLDERS

  	
  148

  
	
  SECTION
  6.07.

  	
  COMPENSATION
  AND INDEMNITY

  	
  148

  
	
  SECTION
  6.08.

  	
  REPLACEMENT
  OF INDENTURE TRUSTEE

  	
  151

  
	
  SECTION
  6.09.

  	
  SUCCESSOR
  INDENTURE TRUSTEE BY MERGER

  	
  155

  
	
  SECTION
  6.10.

  	
  APPOINTMENT
  OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE

  	
  157

  
	
  SECTION 6.11.

  	
  ELIGIBILITY

  	
  162

  
	
  SECTION
  6.12.

  	
  PENNSYLVANIA
  MOTOR VEHICLE SALES FINANCE ACT LICENSES

  	
  167

  
	
  SECTION
  6.13.

  	
  PREFERENTIAL
  COLLECTION OF CLAIMS AGAINST ISSUER

  	
  167

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN

  	
  NOTEHOLDERS’
  LISTS AND REPORTS

  	
  167

  

 

iii

 

	
  SECTION
  7.01.

  	
  ISSUER TO
  FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS

  	
  168

  
	
  SECTION
  7.02.

  	
  PRESERVATION
  OF INFORMATION: COMMUNICATION TO NOTEHOLDERS

  	
  168

  
	
  SECTION 7.03.

  	
  REPORTS BY
  ISSUER

  	
  170

  
	
  SECTION
  7.04.

  	
  REPORTS BY
  INDENTURE TRUSTEE

  	
  172

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  	
  ACCOUNTS,
  DISBURSEMENTS AND RELEASES

  	
  172

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  COLLECTION OF
  MONEY

  	
  173

  
	
  SECTION 8.02.

  	
  TRUST ACCOUNTS

  	
  174

  
	
  SECTION
  8.03.

  	
  GENERAL
  PROVISIONS REGARDING ACCOUNTS

  	
  175

  
	
  SECTION
  8.04.

  	
  RELEASE OF
  COLLATERAL

  	
  178

  
	
  SECTION 8.05.

  	
  OPINION OF
  COUNSEL

  	
  180

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  	
  SUPPLEMENTAL INDENTURES

  	
  181

  
	
   

  	
   

  	
   

  
	
  SECTION
  9.01.

  	
  SUPPLEMENTAL
  INDENTURES WITHOUT CONSENT OF NOTEHOLDERS

  	
  181

  
	
  SECTION
  9.02.

  	
  SUPPLEMENTAL
  INDENTURES WITH CONSENT OF NOTEHOLDERS

  	
  186

  
	
  SECTION
  9.03.

  	
  EXECUTION
  OF SUPPLEMENTAL INDENTURES

  	
  191

  
	
  SECTION
  9.04.

  	
  EFFECT OF
  SUPPLEMENTAL INDENTURE

  	
  192

  
	
  SECTION
  9.05.

  	
  CONFORMITY
  WITH TRUST INDENTURE ACT

  	
  192

  
	
  SECTION
  9.06.

  	
  REFERENCE
  IN NOTES TO SUPPLEMENTAL INDENTURES

  	
  193

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  	
  REDEMPTION OF NOTES

  	
  194

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  REDEMPTION

  	
  194

  
	
  SECTION
  10.02.

  	
  FORM OF
  REDEMPTION NOTICE

  	
  196

  
	
  SECTION
  10.03.

  	
  NOTES
  PAYABLE ON REDEMPTION DATE

  	
  198

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
  MISCELLANEOUS

  	
  199

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.01.

  	
  COMPLIANCE
  CERTIFICATES AND OPINIONS, ETC.

  	
  199

  
	
  SECTION
  11.02.

  	
  FORM OF
  DOCUMENTS DELIVERED TO INDENTURE TRUSTEE

  	
  206

  
	
  SECTION
  11.03.

  	
  ACTS OF
  NOTEHOLDERS

  	
  209

  
	
  SECTION 11.04.

  	
  NOTICES

  	
  211

  
	
  SECTION
  11.05.

  	
  NOTICES TO
  NOTEHOLDERS; WAIVER

  	
  212

  
	
  SECTION
  11.06.

  	
  ALTERNATE
  PAYMENT AND NOTICE PROVISIONS

  	
  214

  
	
  SECTION
  11.07.

  	
  EFFECT OF
  HEADINGS AND TABLE OF CONTENTS

  	
  215

  
	
  SECTION
  11.08.

  	
  SUCCESSORS
  AND ASSIGNS

  	
  215

  
	
  SECTION 11.09.

  	
  SEPARABILITY

  	
  215

  
	
  SECTION
  11.10.

  	
  BENEFITS OF
  INDENTURE

  	
  216

  
	
  SECTION 11.11.

  	
  LEGAL HOLIDAYS

  	
  216

  
	
  SECTION 11.12.

  	
  GOVERNING LAW

  	
  217

  
	
  SECTION 11.13.

  	
  COUNTERPARTS

  	
  217

  
	
  SECTION
  11.14.

  	
  RECORDING
  OF INDENTURE

  	
  217

  
	
  SECTION 11.15.

  	
  TRUST
  OBLIGATION

  	
  218

  
	
  SECTION 11.16.

  	
  NO PETITION

  	
  220

  
	
  SECTION 11.17.

  	
  INSPECTION

  	
  220

  
	
  SECTION
  11.18.

  	
  CONFLICT
  WITH TRUST INDENTURE ACT

  	
  221

  
	
  SECTION
  11.19.

  	
  DISCLAIMER
  AND SUBORDINATION

  	
  222

  

 

iv

 

	
   

  	
  Page

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A - Reserved

  	
  A-1

  
	
  Exhibit B - Form
  of Class A-1 Note

  	
  B-1

  
	
  Exhibit C - Form
  of Class A-2 Note

  	
  C-1

  
	
  Exhibit D - Form
  of Class B Note

  	
  D-1

  
	
  Exhibit E - Form
  of Assignment

  	
  E-1

  
	
  Exhibit F - Form of Note Depository Agreement

  	
  F-1

  

 

v

 

INDENTURE

 

Indenture, dated as of
May 1, 2006 (this “Indenture”), between Harley-Davidson Motorcycle Trust
2006-2, a Delaware statutory trust (the “Issuer”) and The Bank of New York
Trust Company, N.A., 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 5.36% Motorcycle Contract Backed Notes,
Class A-1 (the “Class A-1 Notes”), 5.35% Motorcycle Contract Backed Notes,
Class A-2 (the “Class A-2 Notes”) and 5.58% Motorcycle Contract Backed Notes,
Class B (the “Class B Notes”) and, together with the Class A-1 Notes and the
Class B Notes, the “Notes”):

 

GRANTING CLAUSE

 

The Issuer hereby grants,
transfers, assigns and otherwise conveys to the Indenture Trustee on the
Closing Date, on behalf of and for the benefit of the Holders of the Notes,
without recourse, all of the Issuer’s right, title and interest (exclusive of
the amount, if any, allocable to any rebatable insurance premium financed by
any Contract) in, to and under: (i) the Initial Contracts and Subsequent
Contracts secured by the Motorcycles (which Contracts shall be listed in the
List of Contracts and Subsequent List of Contracts); (ii) certain monies due
under the Initial Contracts and Subsequent Contracts after the Initial Cutoff
Date and Subsequent Cutoff Date, respectively, including, without limitation,
all payments of principal and interest with respect to any Motorcycles to which
a Contract relates received after the Initial Cutoff Date or Subsequent Cutoff
Date and all other proceeds received on or in respect of such Contracts (other
than payments of principal and interest due on or prior to the Initial Cutoff
Date or Subsequent Cutoff Date); (iii) security interests in the Motorcycles;
(iv) amounts on deposit in the Collection Account, the Note Distribution
Account, the Reserve Fund, the Pre-Funding Account and the Interest Reserve
Account, including all Eligible Investments therein and all income from the
investment of funds therein and all proceeds therefrom; (v) proceeds from
claims under certain insurance policies, debt insurance policies or debt
cancellation agreements in respect of individual Motorcycles or obligors under
the Contracts; (vi) its rights under the Sale and Servicing Agreement; (vii)
the protective security interest in certain of the above-described property
granted by the Trust Depositor in favor of the Issuer; (viii) all present and
future claims, demands, causes of and choses in action in respect of any or all
of the foregoing; (ix) all rights to certain rebates of premiums and other
amounts relating to insurance policies, debt cancellation agreements, extended
service contracts or other repair agreements and other items financed under
such Contracts and (x) all payments on or under and all proceeds of every kind
and nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion, voluntary or involuntary, into cash of other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (as each such defined term is defined in Section 1.01) (collectively,
the “Collateral”).

 

 

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

 

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

 

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.                         Definitions.

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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.

 

“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.

 

3

 

“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 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 Indenture 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 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.

 

4

 

“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
The Bank of New York Trust Company, N.A., as Indenture Trustee under this
Indenture, or any successor Indenture Trustee under this Indenture.

 

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

 

5

 

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 2006-2 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 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:

 

6

 

(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.

 

“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.

 

7

 

“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.

 

“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

 

8

 

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 May 2, 2006, 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.

 

“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.

 

9

 

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

 

(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.

 

10

 

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 $450,000,000,
(ii) Class A-2 Notes in an aggregate principal amount of $302,000,000 and (iii)
Class B Notes in an aggregate principal amount of $48,000,000. 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 $100,000 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 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

 

11

 

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
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

 

12

 

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 Book Entry Note,
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.

 

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

 

(ii)                                  the
rights of Noteholders will be exercised only through the Clearing Agency and
will be limited to those established by law and agreements between such
Noteholders

 

13

 

and the Clearing Agency and/or the Clearing Agency Participants
pursuant to the Depository Agreement;

 

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

 

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

 

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

 

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

 

14

 

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 or 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 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

 

15

 

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;

 

(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;

 

16

 

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

 

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

 

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

 

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

 

Section 2.11.                         Definitive
Notes. If (i)(A) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities as described in the Note
Depository Agreement, and (B) Indenture Trustee or the Administrator is unable
to locate a qualified successor, (ii) the Administrator or the Owner Trustee,
as applicable, notifies the Clearing Agency of its intent to terminate the book-entry
system through the Clearing Agency and requests a withdrawal of the Book-Entry
Notes held by the Clearing Agency, and after receipt by the Clearing Agency
Participants of an important notice issued by the Clearing Agency notifying the
Clearing Agency Participants of such withdrawal request, the Clearing Agency
Participants holding beneficial interests in the Book-Entry Notes agree to
initiate such termination, or (iii) after the occurrence of an Event of
Default, the Modified Required Holders advise the Indenture Trustee and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the related Noteholders, then the Indenture Trustee shall
notify all Noteholders of the related Class or Classes of Notes, through the
Clearing Agency, of the occurrence of any such event and of the availability of
Definitive Notes of the related Class of Notes to Noteholders requesting the
same. Upon surrender to the Indenture Trustee of the Note or Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in

 

17

 

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 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 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

 

18

 

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

 

(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

 

19

 

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 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

 

20

 

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 or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement,

 

21

 

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 covenant; or obligations with respect to the
Notes under this Indenture except as may be

 

22

 

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, 2007, 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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

32

 

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

 

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

 

Section 5.06.                         Priorities.

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

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

 

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

 

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

 

36

 

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

 

Section 5.17.                         Performance
and Enforcement of Certain Obligations.

 

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

 

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

 

ARTICLE SIX

THE INDENTURE TRUSTEE

 

Section 6.01.                         Duties of
Indenture Trustee.

 

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

 

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

 

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

 

37

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section
6.02.                         Rights
of Indenture Trustee.

 

38

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

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

 

40

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

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

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

Section 6.11.                         Eligibility.

 

(a)                                  The
Indenture Trustee shall at all times satisfy the requirements of TIA §310(a). The
Indenture Trustee hereunder shall at all times be a financial institution
organized and doing business under the laws of the United States of America or
any state, authorized under such laws to exercise corporate trust powers. The
Indenture Trustee or its parent shall have a long term unsecured debt rating of
at least Baa3 by Moody’s and shall have a combined capital and surplus of at
least $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

 

44

 

Indenture Trustee and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Indenture Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Indenture Trustees co-trustees of the same trust and that each
such Indenture Trustee; and upon execution and delivery of such supplemental
indenture the resignation or removal of the retiring Indenture Trustee shall
become effective to the extent provided therein.

 

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

 

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

 

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

 

ARTICLE SEVEN

NOTEHOLDERS’ LISTS AND REPORTS

 

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

 

Section 7.02.                         Preservation
of Information: Communication to Noteholders.

 

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

 

45

 

otherwise comply with TIA §312(a). The Indenture Trustee may destroy
any list furnished to it as provided in such Section 7.01 upon receipt of a new
list so furnished.

 

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

 

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

 

Section 7.03.                         Reports
by Issuer.

 

(a)                                  The
Issuer shall:

 

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

 

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

 

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

 

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

 

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

 

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

 

46

 

ARTICLE EIGHT

ACCOUNTS, DISBURSEMENTS AND RELEASES

 

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

 

Section 8.02.                         Trust
Accounts.

 

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

 

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

 

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

 

Section 8.03.                         General
Provisions Regarding Accounts.

 

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

 

47

 

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

 

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

 

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

 

Section 8.04.                         Release
of Collateral.

 

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

 

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

 

48

 

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

 

ARTICLE NINE

SUPPLEMENTAL INDENTURES

 

Section 9.01.                         Supplemental
Indentures Without Consent of Noteholders.

 

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

 

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

 

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

 

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

 

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

 

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

 

49

 

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

 

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

 

(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.

 

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);

 

50

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

51

 

obligated to, enter into any such supplemental indenture that affects
the Indenture Trustee’s own rights, duties, liabilities or immunities under
this Indenture or otherwise.

 

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

 

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

 

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

 

ARTICLE TEN

REDEMPTION OF NOTES

 

Section 10.01.                  Redemption.

 

(a)                                  In
the event that the Servicer 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. 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.

 

52

 

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

 

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

 

Section 10.02.                  Form of
Redemption Notice.

 

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

 

All notices of redemption
shall state:

 

(i)                                     the
Redemption Date;

 

(ii)                                  the
Redemption Date Amount; and

 

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

 

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

 

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

 

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

 

53

 

accrue on the Redemption Date Amount for any period after the date to
which accrued interest is calculated for purposes of calculating the Redemption
Date Amount.

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section 11.01.                  Compliance
Certificates and Opinions, etc.

 

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

 

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

 

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

 

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

 

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

 

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

 

(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

 

54

 

opinion of the signer thereof as to the fair value (within 90 days of
such deposit) of the Collateral or other property or securities to be so
deposited.

 

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

 

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

 

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

 

(v)                                 Notwithstanding
any other provision of this Section, the Issuer may, without compliance with
the other provisions of this Section, (A) collect, liquidate, sell or otherwise
dispose of the Contracts as and to the extent permitted or required by the
Transaction Documents, and (B) make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Transaction Documents, so long
as the Issuer shall deliver to the Indenture Trustee every six months,
commencing November 1, 2006, 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.

 

55

 

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

 

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

 

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

 

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

 

Section 11.03.                  Acts of
Noteholders.

 

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

 

56

 

to Section 6.01) conclusive in favor of the Indenture Trustee and the
Issuer, if made in the manner provided in this Section.

 

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

 

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

 

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

 

Section 11.04.                  Notices. All notices, demands, certificates, requests and
communications hereunder (“notices”) shall be in writing and shall be effective (a) upon
receipt when sent through the U.S. mails, registered or certified mail, return
receipt requested, postage prepaid, with such receipt to be effective the date
of delivery indicated on the return receipt, or (b) one Business Day after
delivery to an overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date transmitted
by legible telecopier or electronic mail 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

 

57

 

Indenture, then any manner of giving such notice as shall be satisfactory
to the Indenture Trustee shall be deemed to be a sufficient giving of such
notice.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

58

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

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

 

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

 

60

 

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

 

[signature page
follows]

 

61

 

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

 

	
   

  	
  HARLEY-DAVIDSON
  MOTORCYCLE

  
	
   

  	
  TRUST 2006-2

  
	
   

  	
   

  	
   

  
	
   

  	
  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/ JOANN A. ROZELL

  
	
   

  	
  Printed Name: Joann A.
  Rozell

  
	
   

  	
  Title: Assistant Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK
  TRUST COMPANY,

  N.A., not in its individual capacity but solely as

  Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CYNTHIA L. DAVIS

  
	
   

  	
  Printed Name: Cynthia
  L. Davis

  
	
   

  	
  Title: Vice
  President

  
				

 

 

	
  STATE OF
  ILLINOIS

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS

  
	
  COUNTY
  OF COOK

  	
  )

  	
   

  

 

	
  On

  	
  May 30, 2006

  	
   

  
	
   

  	
  [insert date]

  	
   

  
	
   

  
	
  before me,

  	
  Michelle Kallick,
  Paralegal

  	
   

  
	
   

  	
  [Insert name and title
  of notary]

  	
   

  
	
   

  
	
  personally
  appeared

  	
  Cynthia
  L. Davis

  	
   

  
							

 

ý                                    personally
known to me, or

 

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

 

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

 

WITNESS
my hand and official seal.

 

	
  Signature

  	
  /s/
  MICHELLE KALLICK

  	
  [Seal]

  
	
   

  	
   

  
	
   

  
	
   

  	
  Notary
  Public, State of Illinois

  
	
   

  	
   

  
	
   

  	
  My
  Commission Expires 10/13/09

  
				

 

 

	
  STATE OF DELAWARE

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS

  
	
  COUNTY
  OF NEW CASTLE

  	
  )

  	
   

  

 

	
  On

  	
  May 23, 2006

  	
   

  
	
   

  	
  [insert date]

  	
   

  
	
   

  
	
  before me,

  	
  J. Christopher Murphy, Financial
  Services Officer

  	
   

  
	
   

  	
  [Insert name and title
  of notary]

  	
   

  
	
   

  
	
  personally
  appeared

  	
  Joanne
  A. Rozell

  	
   

  
							

 

ý                                    personally
known to me, or

 

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

 

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

 

WITNESS
my hand and official seal.

 

 

	
  Signature

  	
  /s/
  J. CHRISTOPHER MURPHY

  	
    [Seal]

  
	
   

  	
   

  
	
   

  
	
   

  	
  J.
  Christopher Murphy

  
	
   

  	
  Notary
  Public- State of Delaware

  
	
   

  	
   

  
	
   

  	
  My
  Comm. Expires June 23, 2007

  
				

 

 

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 2006-2

 

5.36% MOTORCYCLE
CONTRACT BACKED NOTES, CLASS A-1

 

	
  REGISTERED

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  No. R-

  	
   

  	
  CUSIP No.           

  

 

Harley-Davidson
Motorcycle Trust 2006-2, 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 2010 (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 has been paid to but
excluding such Distribution Date or, if no interest has yet been paid,

 

B-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.

 

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 2006-2

  
	
   

  	
   

  	
   

  
	
   

  	
  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.

 

 

	
   

  	
  THE BANK OF NEW YORK
  TRUST

  
	
   

  	
  COMPANY, N.A.

  
	
   

  	
  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 5.36%
Motorcycle Contract Backed Notes, Class A-1 (the “Class A-1 Notes”), all issued
under an Indenture, dated as of May 1, 2006 (the “Indenture”), between the
Issuer and The Bank of New York Trust Company, N.A., 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 Servicer, on any
Distribution Date on or after the date on which the Pool Balance is less than
10% of the sum of the Pool Balance as of the Initial Cutoff Date plus the
Pre-Funded Amount as of the Closing Date.

 

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

 

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

 

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

 

B-6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

B-7

 

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

 

B-8

 

EXHIBIT C

 

FORM OF CLASS A-2 NOTE

 

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

 

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

 

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

 

HARLEY-DAVIDSON
MOTORCYCLE TRUST 2006-2

 

5.35% MOTORCYCLE
CONTRACT BACKED NOTES,

CLASS A-2

 

	
  REGISTERED

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  No. R-

  	
   

  	
  CUSIP No.        

  

 

Harley-Davidson
Motorcycle Trust 2006-2, 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 March 2013 (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 2006-2

  
	
   

  	
   

  	
   

  
	
   

  	
  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.

 

 

	
   

  	
  THE BANK OF NEW YORK
  TRUST

  
	
   

  	
  COMPANY, N.A.,

  
	
   

  	
  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 5.35%
Motorcycle Contract Backed Notes, Class A-2 (the “Class A-2 Notes”), all issued
under an Indenture, dated as of May 1, 2006 (the “Indenture”), between the
Issuer and The Bank of New York Trust Company, N.A., 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 Servicer, on any
Distribution Date on or after the date on which the Pool Balance is less than
10% of the sum of the Pool Balance as of the Initial Cutoff Date plus the
Pre-Funded Amount as of the Closing Date.

 

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

 

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

 

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

 

C-6

 

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

 

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

 

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

 

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

 

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

 

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

 

C-7

 

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

 

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

 

C-8

 

EXHIBIT D

 

FORM OF CLASS B NOTE

 

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

 

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

 

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

 

HARLEY-DAVIDSON
MOTORCYCLE TRUST 2006-2

 

5.58% MOTORCYCLE
CONTRACT BACKED NOTES,

CLASS B

 

	
  REGISTERED

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  No. R-

  	
   

  	
  CUSIP No.       

  

 

Harley-Davidson
Motorcycle Trust 2006-2, 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 August 2014 (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 2006-2

  
	
   

  	
   

  	
   

  
	
   

  	
  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.

 

 

	
   

  	
  THE BANK OF NEW YORK
  TRUST

  
	
   

  	
  COMPANY, N.A.,

  
	
   

  	
  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 5.58%
Motorcycle Contract, Class B (the “Class B Notes”), all issued under an
Indenture, dated as of May 1, 2006 (the “Indenture”), between the Issuer and
The Bank of New York Trust Company, N.A., 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 Servicer, on any
Distribution Date on or after the date on which the Pool Balance is less than
10% of the sum of the Pool Balance as of the Initial Cutoff Date plus the
Pre-Funded Amount as of the Closing Date.

 

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

 

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

 

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

 

D-6

 

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

 

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

 

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

 

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

 

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

 

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

 

D-7

 

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

 

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

 

D-8

 

EXHIBIT E

 

FORM OF ASSIGNMENT

 

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

 

PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

	
   

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

  
	
   

  
	
   

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

  
	
   

  
	
   

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

  
	
   

  
	
  Dated:

  	
   

  	
   

  

 

 

	
  Signature Guaranteed:

  
	
   

  
	
   

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

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

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Authorized Officer)

  	
   

  

 

E-1

 

EXHIBIT F

 

FORM OF NOTE DEPOSITORY AGREEMENT

 

F-1

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