Document:

EXHIBIT 4.15

 

 

 

TRUST AGREEMENT

 

by and between

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Trust Depositor,

 

and

 

WILMINGTON TRUST COMPANY,

as Owner Trustee

 

 

Dated as of May 1, 2003

 

 

 

 

TABLE OF CONTENTS

 

	

  ARTICLE ONE

  	

  DEFINITIONS

  
	

   

  	

  Section

  1.01.

  	

  Capitalized

  Terms

  
	

   

  	

  Section

  1.02.

  	

  Other

  Definitional Provisions

  
	

   

  	

  Section

  1.03.

  	

  Usage

  of Terms

  
	

   

  	

  Section

  1.04.

  	

  Section

  References

  
	

   

  	

  Section

  1.05.

  	

  Accounting

  Terms

  
	

  ARTICLE TWO

  	

  ORGANIZATION

  
	

   

  	

  Section

  2.01.

  	

  Name

  
	

   

  	

  Section

  2.02.

  	

  Office

  
	

   

  	

  Section

  2.03.

  	

  Purposes

  and Powers

  
	

   

  	

  Section

  2.04.

  	

  Appointment

  of Owner Trustee

  
	

   

  	

  Section

  2.05.

  	

  Initial

  Capital Contribution of Owner Trust Estate

  
	

   

  	

  Section

  2.06.

  	

  Declaration

  of Trust

  
	

   

  	

  Section

  2.07.

  	

  Liability

  of Trust Depositor

  
	

   

  	

  Section

  2.08.

  	

  Title

  to Trust Property

  
	

   

  	

  Section

  2.09.

  	

  Situs

  of Trust

  
	

   

  	

  Section

  2.10.

  	

  Representations

  and Warranties of the Trust Depositor

  
	

   

  	

  Section

  2.11.

  	

  Federal

  Income Tax Treatment

  
	

  ARTICLE THREE

  	

  TRUST CERTIFICATE

  AND TRANSFER OF INTERESTS

  
	

   

  	

  Section

  3.01.

  	

  Initial

  Ownership

  
	

   

  	

  Section

  3.02.

  	

  The

  Trust Certificate

  
	

   

  	

  Section

  3.03.

  	

  Authentication

  and Delivery of Trust Certificate

  
	

   

  	

  Section

  3.04.

  	

  Registration

  of Transfer and Exchange of Trust Certificate

  
	

   

  	

  Section

  3.05.

  	

  Mutilated,

  Destroyed, Lost or Stolen Trust Certificate

  
	

   

  	

  Section

  3.06.

  	

  Person

  Deemed Owner

  
	

   

  	

  Section

  3.07.

  	

  Access

  to List of Certificateholder’s Name and Address

  
	

   

  	

  Section

  3.08.

  	

  Maintenance

  of Office or Agency

  
	

   

  	

  Section

  3.09.

  	

  Trust

  Certificate

  
	

   

  	

  Section

  3.10.

  	

  Appointment

  of Paying Agent

  
	

   

  	

  Section

  3.11.

  	

  Ownership

  by Trust Depositor of Trust Certificate

  
	

  ARTICLE FOUR

  	

  ACTIONS BY OWNER

  TRUSTEE

  
	

   

  	

  Section

  4.01.

  	

  Prior

  Notice to Owner with Respect to Certain Matters

  
	

   

  	

  Section

  4.02.

  	

  Action

  by Owner with Respect to Certain Matters

  
	

   

  	

  Section

  4.03.

  	

  Action

  by Owner with Respect to Bankruptcy

  
	

   

  	

  Section

  4.04.

  	

  Restrictions

  on Owner’s Power

  
	

  ARTICLE FIVE

  	

  APPLICATION OF TRUST

  FUNDS; CERTAIN DUTIES

  
	

   

  	

  Section

  5.01.

  	

  Application

  of Trust Funds

  
	

   

  	

  Section

  5.02.

  	

  Method

  of Payment

  
	

   

  	

  Section

  5.03.

  	

  Accounting

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

  Others

  
	

   

  	

  Section

  5.04.

  	

  Signature

  on Returns; Tax Matters Partner

  
	

  ARTICLE SIX

  	

  AUTHORITY AND DUTIES OF

  OWNER TRUSTEE

  
	

   

  	

  Section

  6.01.

  	

  General

  Authority

  
	

   

  	

  Section

  6.02.

  	

  General

  Duties

  
	

   

  	

  Section

  6.03.

  	

  Action

  Upon Instruction

  
	

   

  	

  Section

  6.04.

  	

  No

  Duties Except as Specified in this Agreement or in Instructions

  
	

   

  	

  Section

  6.05.

  	

  No

  Action Except Under Specified Documents or Instructions

  
	

   

  	

  Section

  6.06.

  	

  Restrictions

  
				

 

i

 

	

   

  	

  Section

  6.07.

  	

  Pennsylvania

  Motor Vehicle Sales Finance Act Licenses

  
	

  ARTICLE SEVEN

  	

  CONCERNING THE OWNER

  TRUSTEE

  
	

   

  	

  Section

  7.01.

  	

  Acceptance

  of Trusts and Duties

  
	

   

  	

  Section

  7.02.

  	

  Furnishing

  of Documents

  
	

   

  	

  Section

  7.03.

  	

  Representations

  and Warranties

  
	

   

  	

  Section

  7.04.

  	

  Reliance;

  Advice of Counsel

  
	

   

  	

  Section

  7.05.

  	

  Not

  Acting in Individual Capacity

  
	

   

  	

  Section

  7.06.

  	

  Owner

  Trustee Not Liable for Trust Certificate, Notes or Contracts

  
	

   

  	

  Section

  7.07.

  	

  Owner

  Trustee May Own Trust Certificate and Notes

  
	

  ARTICLE EIGHT

  	

  COMPENSATION OF

  OWNER TRUSTEE

  
	

   

  	

  Section

  8.01.

  	

  Owner

  Trustee’s Fees and Expenses

  
	

   

  	

  Section

  8.02.

  	

  Indemnification

  
	

   

  	

  Section

  8.03.

  	

  Payments

  to the Owner Trustee

  
	

  ARTICLE NINE

  	

  TERMINATION OF TRUST

  AGREEMENT

  
	

   

  	

  Section

  9.01.

  	

  Termination

  of Trust Agreement

  
	

  ARTICLE TEN

  	

  SUCCESSOR OWNER TRUSTEES

  AND ADDITIONAL OWNER TRUSTEES

  
	

   

  	

  Section

  10.01.

  	

  Eligibility

  Requirements for Owner Trustee

  
	

   

  	

  Section

  10.02.

  	

  Resignation

  or Removal of Owner Trustee

  
	

   

  	

  Section

  10.03.

  	

  Successor

  Owner Trustee

  
	

   

  	

  Section

  10.04.

  	

  Merger

  or Consolidation of Owner Trustee

  
	

   

  	

  Section

  10.05.

  	

  Appointment

  of Co-Trustee or Separate Trustee

  
	

  ARTICLE ELEVEN

  	

  MISCELLANEOUS

  
	

   

  	

  Section

  11.01.

  	

  Supplements

  and Amendments

  
	

   

  	

  Section

  11.02.

  	

  No

  Legal Title to Trust Estate in Owner

  
	

   

  	

  Section

  11.03.

  	

  Limitations

  on Rights of Others

  
	

   

  	

  Section

  11.04.

  	

  Notices

  
	

   

  	

  Section

  11.05.

  	

  Severability

  of Provisions

  
	

   

  	

  Section

  11.06.

  	

  Counterparts

  
	

   

  	

  Section

  11.07.

  	

  Successors

  and Assigns

  
	

   

  	

  Section

  11.08.

  	

  Covenants

  of the Trust Depositor

  
	

   

  	

  Section

  11.09.

  	

  No

  Petition

  
	

   

  	

  Section

  11.10.

  	

  No

  Recourse

  
	

   

  	

  Section

  11.11.

  	

  Headings

  
	

   

  	

  Section

  11.12.

  	

  Governing

  Law

  
	

   

  	

  Section

  11.13.

  	

  Trust

  Certificate Transfer Restrictions

  
	

   

  	

  Section

  11.14.

  	

  Trust

  Depositor Payment Obligation

  
	

   

  	

   

  	

  [signature

  page follows]

  
						

 

EXHIBITS

 

	

  Exhibit

  A  - 

  Form of Certificate of Trust

  
	

  Exhibit

  B  - 

  Form of Trust Certificate

  

 

ii

 

TRUST AGREEMENT dated as of May 1, 2003, 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 Depositor 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 the date hereof, 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.

 

“Applicant” shall have the meaning set forth

in Section 3.07.

 

“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.

 

1

 

“Clearing

Agency” means an organization registered as a “Clearing

Agency” pursuant to Section 17A of the Exchange Act.

 

“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 the date

hereof between the Trust and BNY Midwest Trust Company.

 

“Note

Depository Agreement” means the Agreement dated as of the

Closing Date among the Trust, the Indenture Trustee, the Administrator and DTC,

as the Clearing Agency, relating to the Notes, as the same may be amended and

supplemented from time to time.

 

“Notes”

means the Class A-1 Notes, the Class A-2 Notes and the Class B Notes, in each

case issued pursuant to the Indenture.

 

“Owner” means the Holder of the Trust

Certificate.

 

“Owner

Trustee” means Wilmington Trust Company, a Delaware

corporation, not in its individual capacity but solely as owner trustee under

this Agreement, and any successor Owner Trustee hereunder.

 

“Owner

Trustee Corporate Trust Office” means the office of the Owner

Trustee at which its corporate trust business shall be administered, which initially

shall be Rodney Square North, 1100 North Market Street, Wilmington, Delaware

19890-0001 Attn: Corporate Trust Administration, or such other office at such

other address as the Owner Trustee may designate from time to time by notice to

the Certificateholder, the Servicer, the Indenture Trustee, the Trust Depositor

and Harley-Davidson Credit.

 

“Paying

Agent” means any paying agent or co-paying agent appointed

pursuant to Section 3.10.

 

“Person”

means any individual, corporation, estate, partnership, joint venture,

association, joint stock company, trust (including any beneficiary thereof)

unincorporated organization or government or any agency or political

subdivision thereof.

 

2

 

“Record

Date” means, with respect to any Distribution Date, the last

Business Day of the preceding calendar month.

 

“Sale

and Servicing Agreement” means the Sale and Servicing

Agreement, dated as of the date hereof, among the Trust, as Issuer, the Trust

Depositor, Harley-Davidson Credit, as servicer, and BNY Midwest Trust Company,

as Indenture Trustee, as the same may be amended or supplemented from time to

time.

 

“Secretary

of State” means the Secretary of State of the State of

Delaware.

 

“Statutory

Trust Statute” means Chapter 38 of Title 12 of the Delaware

Code, 12 Del.

Code § 3801 et seq., as the same may be amended from

time to time.

 

“Tax

Matters Partner” shall have the meaning provided in Section

5.04(b) hereof.

 

“Treasury

Regulations” means regulations, including proposed or

temporary regulations, promulgated under the Code.  References herein to specific provisions of proposed or temporary

regulations shall include analogous provisions of final Treasury Regulations or

other successor Treasury Regulations.

 

“Trust” means the trust established by this

Agreement.

 

“Trust

Certificate” means the trust certificate evidencing the

beneficial equity interest of  the

Owner, substantially in the form of Exhibit B hereto.

 

“Trust

Depositor” means Harley-Davidson Customer Funding Corp. in

its capacity as Trust Depositor hereunder, and its successors.

 

“Trust

Estate” means all right, title and interest of the Trust in

and to the property and rights assigned to the Trust pursuant to Article Two of

the Sale and Servicing Agreement, all funds on deposit from time to time in the

Trust Accounts and all other property of the Trust from time to time, including

any rights of the Owner Trustee and the Trust pursuant to the Sale and

Servicing Agreement and the Administration Agreement.

 

“Underwriters”

shall have the meaning set forth in the Sale and Servicing

Agreement.

 

Section

1.02.        Other

Definitional Provisions.  Capitalized terms used that

are not otherwise defined herein shall have the meanings ascribed thereto in

the Sale and Servicing Agreement or, if not defined therein, in the Indenture.

 

Section

1.03.        Usage

of Terms.  With respect to all terms in this Agreement,

the singular includes the plural and the plural the singular; words importing

any gender include the other genders; references to “writing” include printing,

typing, lithography and other means of reproducing words in a visible form;

references to agreements and other contractual instruments include all

amendments, modifications and supplements thereto or any changes therein

entered into in accordance with their

 

3

 

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.

 

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 2003-2”, 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;

 

4

 

(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.

 

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.

 

5

 

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 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.

 

6

 

(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 or (D) involving the Trust Depositor and which might

adversely affect the federal income tax or other federal, state or local tax

attributes of the Trust Certificate.

 

Section

2.11.        Federal

Income Tax Treatment.

 

It is the intention of the Trust Depositor that the

Trust be disregarded as a separate entity pursuant to Treasury Regulations

Section 301.7701-3(b)(1)(ii) as in effect for periods after January 1,

1997.  The Trust Certificate constitutes

the sole equity interest in the Trust and must at all times be held by either

the Trust Depositor or its transferee as sole owner.  The Trust Depositor agrees not to take any action inconsistent

with such intended federal income tax treatment.  Because for federal income tax purposes the Trust will be

disregarded as a separate entity, Trust items of income, gain, loss and

deduction for any month as determined for federal income tax purposes shall be

allocated entirely to the Trust Depositor (or subsequent purchaser of the Trust

Certificate) as the sole Certificateholder.

 

ARTICLE THREE

 

TRUST CERTIFICATE AND TRANSFER OF INTERESTS

 

Section

3.01.        Initial

Ownership.

 

(a)           Upon the formation

of the Trust by the contribution by the Trust Depositor pursuant to Section

2.05 and until the issuance of the Trust Certificate, the Trust Depositor shall

be the sole beneficiary of the Trust. 

The Trust Certificate must at all times be held by either the Trust

Depositor or its transferee as sole owner.

 

(b)           No transfer of the

Trust Certificate shall be made unless such transfer is made in a transaction

which does not require registration or qualification under the Securities Act

of 1933 or qualification under any state securities or “Blue Sky” laws.  Neither the Owner Trustee nor the

Certificate Registrar shall effect the registration of any transfer of the

Trust Certificate unless, (i) prior to such transfer the Owner Trustee shall

have received a Tax Opinion, and (ii) following such transfer, there would be

no more than one holder of the Trust Certificate and the holder of the Trust

Certificate would not be a Foreign Person, a partnership, Subchapter S

corporation or grantor trust.

 

7

 

Section

3.02.        The

Trust Certificate.  The Trust Certificate shall be substantially

in the form of Exhibit B hereto. 

The Trust Certificate shall be executed by the Owner Trustee on behalf

of the Trust by manual or facsimile signature of an authorized officer of the

Owner Trustee and shall be deemed to have been validly issued when so

executed.  The Trust Certificate bearing

the manual or facsimile signature of individuals who were, at the time when

such signatures were affixed, authorized to sign on behalf of the Owner Trustee

shall be a valid and binding obligation of the Trust, notwithstanding that such

individuals or any of them have ceased to be so authorized prior to the

authentication and delivery of such Trust Certificate or did not hold such

offices at the date of such Trust Certificate. 

The Trust Certificate shall be dated the date of its authentication.

 

Section

3.03.        Authentication

and Delivery of Trust Certificate.  The Owner

Trustee shall cause to be authenticated and delivered upon the order of the

Trust Depositor, in exchange for the Contracts and the other Trust Assets,

simultaneously with the sale, assignment and transfer to the Trust of the

Contracts and other Trust Assets, and the constructive delivery to the Owner

Trustee of the Contract Files and the other Trust Assets, a Trust Certificate

duly authenticated by the Owner Trustee, evidencing the entire ownership of the

Trust, and Notes issued by the Owner Trustee and authenticated by the Indenture

Trustee in aggregate principal amount of, in the case of (i) Class A-1 Notes,

$251,000,000, (ii) Class A-2 Notes, $152,750,000 and (iii) Class B Notes,

$21,250,000, or be valid for any purpose, unless there appears on such Trust

Certificate a certificate of authentication substantially in the form set forth

in the form of Trust Certificate attached hereto as Exhibit B, executed by the

Owner Trustee or its authenticating agent, by manual signature, and such

certificate upon any Trust Certificate shall be conclusive evidence, and the

only evidence, that such Trust Certificate has been duly authenticated and

delivered hereunder.  Upon issuance,

authorization and delivery pursuant to the terms hereof, the Trust Certificate

will be entitled to the benefits of this Agreement.

 

Section

3.04.        Registration

of Transfer and Exchange of Trust Certificate.

 

(a)           The Certificate

Registrar shall keep or cause to be kept, a Certificate Register, subject to

such reasonable regulations as it may prescribe.  The Certificate Register shall provide for the registration of

the Trust Certificate and transfers and exchanges of the Trust Certificate as

provided herein.  The Owner Trustee is

hereby initially appointed Certificate Registrar for the purpose of registering

the Trust Certificate and transfers and exchanges of the Trust Certificate as

herein provided.  In the event that,

subsequent to the Closing Date, the Owner Trustee notifies the Servicer that it

is unable to act as Certificate Registrar, the Servicer shall appoint another

bank or trust company, having an office or agency located in the City of

Chicago, Illinois, agreeing to act in accordance with the provisions of this

Agreement applicable to it, and otherwise acceptable to the Owner Trustee, to

act as successor Certificate Registrar hereunder.

 

(b)           Upon surrender for

registration of transfer of the Trust Certificate at the Owner Trustee

Corporate Trust Office, the Owner Trustee shall execute, authenticate and

deliver (or shall cause its authenticating agent to authenticate and deliver),

in the name of the designated transferee, the new Trust Certificate having the

same aggregate principal amount.

 

(c)           Every Trust

Certificate presented or surrendered for registration of transfer shall be

accompanied by a written instrument of transfer in form satisfactory to the

Owner Trustee and the Certificate Registrar duly executed by the Holder thereof

or his attorney duly authorized in writing.

 

8

 

(d)           No service charge

shall be made for any registration of transfer or exchange of the Trust

Certificate, but the Owner Trustee may require payment of a sum sufficient to

cover any tax or governmental charge that may be imposed in connection with any

transfer of the Trust Certificate.

 

(e)           All Trust

Certificates surrendered for registration of transfer shall be canceled and

subsequently destroyed by the Owner Trustee.

 

Section

3.05.        Mutilated,

Destroyed, Lost or Stolen Trust Certificate.  If (i) any

mutilated Trust Certificate is surrendered to the Certificate Registrar, or the

Certificate Registrar receives evidence to its satisfaction of the destruction,

loss or theft of any Trust Certificate, and (ii) there is delivered to the

Certificate Registrar and the Owner Trustee such security or indemnity as may

be required by them to save each of them harmless, then, in the absence of

notice that such Trust Certificate has been acquired by a bona fide purchaser,

the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee or

its authenticating agent shall authenticate and deliver, in exchange for or in

lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a new

Trust Certificate of like tenor and fractional undivided interest.  In connection with the issuance of any new

Trust Certificate under this Section, the Owner Trustee may require the payment

by the Holder of a sum sufficient to cover any tax or other governmental charge

that may be imposed in relation thereto. 

Any duplicate Trust Certificate issued pursuant to this Section shall

constitute complete and indefeasible evidence of ownership in the Trust, as if

originally issued, whether or not the lost, stolen or destroyed Trust

Certificate shall be found at any time.

 

Section

3.06.        Person

Deemed Owner.  Prior to due presentation of a Trust

Certificate for registration of transfer, the Owner Trustee, the Certificate

Registrar and any of their respective agents may treat the Person in whose name

any Trust Certificate is registered as the owner of such Trust Certificate for

the purpose of receiving distributions pursuant to Section 5.01 and for all

other purposes whatsoever, and none of the Owner Trustee, the Certificate

Registrar, any Paying Agent or any of their respective agents shall be affected

by any notice of the contrary.

 

Section

3.07.        Access

to List of Certificateholder’s Name and Address.  The Owner

Trustee shall furnish or cause to be furnished to the Servicer and the Trust

Depositor, within 15 days after receipt by the Certificate Registrar of a

written request therefor from the Servicer or the Trust Depositor, the name and

address of the Certificateholder as of the most recent Record Date in such form

as the Servicer or the Trust Depositor may reasonably require.  The Certificateholder, by receiving and

holding the Trust Certificate, agrees with the Servicer, the Trust Depositor

and the Owner Trustee that none of the Servicer, the Trust Depositor or the

Owner Trustee shall be held accountable by reason of the disclosure of any such

information as to the name and address of the Certificateholder hereunder,

regardless of the source from which such information was derived.

 

Section

3.08.        Maintenance

of Office or Agency.  The Owner Trustee shall maintain in

Wilmington, Delaware, an office or offices or agency or agencies where the

Trust Certificate may be surrendered for registration of transfer or exchange

and where notices and demands to or upon the Owner Trustee in respect of the

Trust Certificate and this Agreement may be served.  The Owner Trustee hereby designates the Owner Trustee Corporate

Trust Office as its office for such purposes. 

The Owner Trustee shall give prompt written notice to the Trust

Depositor, the Servicer and to the Certificateholder of any change in the

location of the Certificate Register or any such office or agency.

 

9

 

Section

3.09.        Trust

Certificate.  The Owner Trustee, on behalf of the Trust,

shall execute, authenticate and deliver, a Trust Certificate.

 

Section

3.10.        Appointment

of Paying Agent.  The Paying Agent shall make distributions to

the Certificateholder pursuant to Section 5.01(a) and shall report the amounts

of such distributions to the Owner Trustee. 

The Paying Agent initially shall be BNY Midwest Trust Company, and any

co-paying agent chosen by the Paying Agent that is acceptable to the Owner

Trustee.  Each Paying Agent shall be

permitted to resign as Paying Agent upon 30 days’ written notice to the Owner

Trustee.  In the event that BNY Midwest

Trust Company shall no longer be the Paying Agent, the Owner Trustee shall

appoint a successor to act as Paying Agent (which shall be a bank or trust

company).  The Owner Trustee shall cause

such successor Paying Agent or any additional Paying Agent appointed by the

Owner Trustee to execute and deliver to the Owner Trustee an instrument in

which such successor Paying Agent or additional Paying Agent shall agree with

the Owner Trustee that, as Paying Agent, such successor Paying Agent or

additional Paying Agent will hold all sums, if any, held by it for payment to

the Certificateholder in trust for the benefit of the Certificateholder

entitled thereto until such sums shall be paid to such Certificateholder.  The Paying Agent shall return all unclaimed

funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent

shall also return all funds in its possession to the Owner Trustee.  The provisions of Sections 7.01, 7.03, 7.04

and 8.01 shall apply to the Owner Trustee also in its role as Paying Agent, for

so long as the Owner Trustee shall act as Paying Agent and, to the extent

applicable, to any other paying agent appointed hereunder.  Any reference in this Agreement to the

Paying Agent shall include any co-paying agent unless the context requires

otherwise.

 

Section

3.11.        Ownership

by Trust Depositor of Trust Certificate.  The Trust

Depositor shall on the Closing Date hold the Trust Certificate.

 

ARTICLE FOUR

 

ACTIONS BY OWNER TRUSTEE

 

Section

4.01.        Prior

Notice to Owner with Respect to Certain Matters.  Subject to

the provisions and limitation of Section 4.04, with respect to the following

matters, the Owner Trustee shall not take action unless at least 30 days before

the taking of such action, the Owner Trustee shall have notified the

Certificateholder in writing of the proposed action, the Indenture Trustee

shall have consented to such action in the event any Notes are outstanding and

the Owner shall not have notified the Owner Trustee in writing prior to the

30th day after such notice is given that such Owner have 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) remove the Servicer pursuant to Section 8.01 of the Sale and

Servicing Agreement, (d) except as expressly provided in the Transaction

Documents, sell the Contracts or other Trust Assets after the termination of

the Indenture, (e) initiate any claim, suit or proceeding by the Trust or

compromise any claim, suit or proceeding brought by or against the Trust, (f)

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 (g) amend the Certificate of Trust.  The Owner Trustee shall take the actions referred to in the

preceding sentence only upon written instructions assigned by the Owner.

 

Section

4.03.        Action

by Owner with Respect to Bankruptcy.  The Owner Trustee

shall not have the power to commence a voluntary proceeding in a bankruptcy

relating to the Trust without the prior approval of Owner and the delivery to

the Owner Trustee by such Owner of a certificate certifying that such Owner

reasonably believes that the Trust is insolvent.

 

Section

4.04.        Restrictions

on Owner’s Power.  The Owner shall not direct the Owner Trustee

to take or to refrain from taking any action if such action or inaction would

be contrary to any obligation of the Trust or the Owner Trustee under this

Agreement or any of the Transaction Documents or would be contrary to the

purpose of this Trust as set forth in Section 2.03, nor shall the Owner Trustee

be obligated to follow any such direction, if given.

 

11

 

ARTICLE FIVE

 

APPLICATION OF TRUST FUNDS;

CERTAIN DUTIES

 

Section

5.01.        Application

of Trust Funds.

 

(a)           On each Distribution

Date, the Paying Agent will distribute to the Certificateholder amounts

received pursuant to Section 7.05 of the Sale and Servicing Agreement with

respect to such Distribution Date.

 

(b)           On each Distribution

Date, the Paying Agent shall send to the Certificateholder the statement or

statements provided to the Owner Trustee by the Servicer pursuant to Section 9.01

of the Sale and Servicing Agreement with respect to such Distribution Date.

 

(c)           In the event that

any withholding tax is imposed on the Trust’s payment (or allocation of income)

to the Certificateholder, such tax shall reduce the amount otherwise distributable

to the Certificateholder  in accordance

with this Section.  The Paying Agent is

hereby authorized and directed to retain from amounts otherwise distributable

to the Owner sufficient funds for the payment of any tax that is legally owed

by the Trust (but such authorization shall not prevent the Owner Trustee from

contesting any such tax in appropriate proceedings, and withholding payment of

such tax, if permitted by law, pending the outcome of such proceedings).  The amount of any withholding tax imposed

with respect to the Certificateholder shall be treated as cash distributed to

such Certificateholder at the time it is withheld by the Trust and remitted to

the appropriate taxing authority.  If

there is a possibility that withholding tax is payable with respect to a

distribution, the Paying Agent may in its sole discretion withhold such amounts

in accordance with the paragraph (c).

 

Section

5.02.        Method

of Payment.  Subject to Section 9.01(c) respecting the

final payment upon retirement of the Trust Certificate, distributions required

to be made to the Certificateholder of record on the related Record Date shall

be made by check mailed to such Certificateholder at the address of such Holder

appearing in the Certificate Register.

 

Section

5.03.        Accounting

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

Others.  The Administrator shall (a) maintain (or

cause to be maintained) the books of the Trust on a calendar year basis and the

accrual method of accounting, (b) deliver to the Owner, as may be required by

the Code and applicable Treasury Regulations, such information as may be

required to enable the Owner to prepare its federal and state income tax

returns, (c) file such tax returns relating to the Trust and make such elections

as from time to time may be required or appropriate under any applicable state

or federal statute or any rule or regulation thereunder so as to maintain the

federal income tax treatment for the Trust as set forth in Section 2.11, (d)

cause such tax returns to be signed in the manner required by law and (e)

collect or cause to be collected any withholding tax as described in and in

accordance with Section 5.01(c) with respect to income or distributions to

Owner.  The Owner Trustee shall elect

under Section 1278 of the Code to include in income currently any market

discount that accrues with respect to the Contracts.  If applicable, the Owner Trustee shall not make the election

provided under Section 754 or Section 761 of the Code.

 

Section

5.04.        Signature

on Returns; Tax Matters Partner.

 

(a)           The Trust Depositor

shall sign on behalf of the Trust the tax returns of the Trust.

 

(b)           If subchapter K of

the Code should be applicable to the Trust, the Certificateholder shall be

designated the “tax matters partner” of the Trust pursuant to Section

6231(a)(7)(A) of the Code and applicable Treasury Regulations.

 

12

 

ARTICLE SIX

 

AUTHORITY AND DUTIES OF OWNER TRUSTEE

 

Section

6.01.        General

Authority.  Subject to the provisions and limitations of

Sections 2.03 and 2.06, the Owner Trustee is authorized and directed to execute

and deliver the Transaction Documents to which the Trust is to be a party and

each certificate or other document attached as an exhibit to or contemplated by

the Transaction Documents to which the Trust is to be a party and any amendment

or other agreement, as evidenced conclusively by the Owner Trustee’s execution

thereof.  In addition to the foregoing,

the Owner Trustee is authorized, but shall not be obligated, to take all

actions required of the Trust pursuant to the Transaction Documents.  The Owner Trustee is further authorized from

time to time to take such action as the Administrator recommends with respect

to the Transaction Documents.

 

Section

6.02.        General

Duties.  Subject to the provisions and limitations of

Sections 2.03 and 2.06, it shall be the duty of the Owner Trustee to discharge

(or cause to be discharged through the Administrator) all of its

responsibilities pursuant to the terms of this Agreement and the Transaction

Documents to which the Trust is a party and to administer the Trust in the

interest of the Owner, subject to the Transaction Documents and in accordance

with the provisions of this Agreement. 

Without limiting the foregoing, the Owner Trustee shall on behalf of the

Trust file and prove any claim or claims that may exist against Harley-Davidson

Credit in connection with any claims paying procedure as part of an insolvency

or receivership proceeding involving Harley-Davidson Credit.  Notwithstanding the foregoing, the Owner

Trustee shall be deemed to have discharged its duties and responsibilities

hereunder and under the Transaction Documents to the extent the Administrator

has agreed in the Administration Agreement to perform any act or to discharge

any duty of the Owner Trustee hereunder or under any Transaction Document, and

the Owner Trustee shall not be held liable for the default or failure of the

Administrator to carry out its obligations under the Administration Agreement.

 

Section

6.03.        Action

Upon Instruction.

 

(a)           Subject to Article

Four, in accordance with the terms of the Transaction Documents the Owner may

by written instruction direct the Owner Trustee in the management of the Trust.

 

(b)           The Owner Trustee

shall not be required to take any action hereunder or under any other

Transaction Document if the Owner Trustee shall have reasonably determined, or

shall have been advised by counsel, that such action is likely to result in

liability on the part of the Owner Trustee or is contrary to the terms hereof

or of any other Transaction Document or is otherwise contrary to law.

 

(c)           Whenever the Owner

Trustee is unable to decide between alternative courses of action permitted or

required by the terms of this Agreement or under any other Transaction

Document, the Owner Trustee shall promptly give notice (in such form as shall

be appropriate under the circumstances) to the Owner requesting instruction as

to the course of action to be adopted, and to the extent the Owner Trustee acts

in good faith in accordance with any written instruction of the Owner received,

the Owner Trustee shall not be liable on account of such action to any

Person.  If the Owner Trustee shall not

have received appropriate instruction within ten days of such notice (or within

such shorter period of time as reasonably may be specified in such notice or

may be necessary under the

 

13

 

circumstances) it

may, but shall be under no duty to, take or refrain from taking such action not

inconsistent with this Agreement and the other Transaction Documents, as it

shall deem to be in the best interests of the Owner, and shall have no

liability to any Person for such action or inaction.

 

(d)           In the event that

the Owner Trustee is unsure as to the applicability of any provision of this

Agreement or any other Transaction Document or any such provision is ambiguous

as to its application, or is, or appears to be, in conflict with any other

applicable provision, or in the event that this Agreement permits any

determination by the Owner Trustee or is silent or is incomplete as to the

course of action that the Owner Trustee is required to take with respect to a

particular set of facts, the Owner Trustee may give notice (in such form as

shall be appropriate under the circumstances) to the Owner requesting

instruction and, to the extent that the Owner Trustee acts or refrains from

acting in good faith in accordance with any such instruction received, the

Owner Trustee shall not be liable, on account of such action or inaction, to

any Person.  If the Owner Trustee shall

not have received appropriate instruction within ten days of such notice (or

within such shorter period of time as reasonably may be specified in such

notice or may be necessary under the circumstances) it may, but shall be under

no duty to, take or refrain from taking such action not inconsistent with this

Agreement or the other Transaction Documents, as it shall deem to be in the

best interests of the Owner, and shall have no liability to any Person for such

action or inaction.

 

Section

6.04.        No

Duties Except as Specified in this Agreement or in Instructions. 

The Owner Trustee shall not have any duty or obligation to manage, make

any payment with respect to, register, record, sell, dispose of or otherwise

deal with the Trust Estate, or to otherwise take or refrain from taking any

action under, or in connection with, any document contemplated hereby to which

the Owner Trustee is a party, except as expressly provided by the terms of this

Agreement or any document or written instruction received by the Owner Trustee

pursuant to Section 6.03; and no implied duties or obligations shall be read

into this Agreement or any other Transaction Document against the Owner Trustee.  The Owner Trustee shall have no

responsibility for filing any financing or continuation statement in any public

office at any time or to otherwise perfect or maintain the perfection of any

security interest or lien granted to it hereunder or to prepare or file any

Commission filing for the Trust or to record this Agreement or any other

Transaction Document.  The Owner Trustee

nevertheless agrees that it will, at its own cost and expense, promptly take

all action as may be necessary to discharge any liens on any part of the Trust

Estate that result from actions by, or claims against, the Owner Trustee that

are not related to the ownership or the administration of the Trust Estate.

 

Section

6.05.        No

Action Except Under Specified Documents or Instructions. 

The Owner Trustee shall not manage, control, use, sell, dispose of or

otherwise deal with any part of the Trust Estate except (i) in accordance with

the powers granted to and the authority conferred upon the Owner Trustee

pursuant to this Agreement, (ii) in accordance with the other Transaction

Documents and (iii) in accordance with any document or instruction delivered to

the Owner Trustee pursuant to Section 6.03.

 

Section

6.06.        Restrictions. 

The Owner Trustee shall not take any action (i) that is inconsistent

with the purposes of the Trust set forth in Section 2.03 or (ii) that, to the

actual knowledge of the Owner Trustee, would result in the Trust’s becoming

taxable as a corporation for federal or state income tax purposes.  The Owner shall not direct the Owner Trustee

to take actions that would violate the provisions of this Section.

 

14

 

Section

6.07.        Pennsylvania

Motor Vehicle Sales Finance Act Licenses. 

The Owner

Trustee shall use its best efforts to maintain the effectiveness of all

licenses required under the Pennsylvania Motor Vehicle Sales Finance Act in

connection with the transactions contemplated by the Transaction Documents

until the lien and security interest of the Indenture shall no longer be in

effect in accordance with its terms.

 

ARTICLE SEVEN

 

CONCERNING THE OWNER TRUSTEE

 

Section

7.01.        Acceptance

of Trusts and Duties.  The Owner Trustee accepts the trusts hereby

created and agrees to perform its duties hereunder with respect to such trusts

but only upon the terms of this Agreement. 

The Owner Trustee also agrees to disburse all moneys actually received

by it constituting part of the Trust Estate upon the terms of the Transaction

Documents and this Agreement.  The Owner

Trustee shall not be answerable or accountable hereunder or under any other

Transaction Document under any circumstances, except (i) for its own willful

misconduct or negligence or (ii) in the case of the inaccuracy of any

representation or warranty contained in Section 7.03 expressly made by the

Owner Trustee.  In particular, but not

by way of limitation (and subject to the exceptions set forth in the preceding

sentence):

 

(a)           the Owner Trustee

shall not be liable for any error of judgment made by a responsible officer of

the Owner Trustee;

 

(b)           the Owner Trustee

shall not be liable with respect to any action taken or omitted to be taken by

it in accordance with the instructions of the Administrator or any Owner;

 

(c)           no provision of this

Agreement or any other Transaction Document shall require the Owner Trustee to

expend or risk funds or otherwise incur any financial liability in the

performance of any of its rights or powers hereunder or under any Transaction

Document if the Owner Trustee shall have reasonable grounds for believing that

repayment of such funds or adequate indemnity against such risk or liability is

not reasonably assured or provided to it;

 

(d)           under no

circumstances shall the Owner Trustee be liable for indebtedness evidenced by

or arising under any of the Transaction Documents, including the principal of

and interest on the Notes;

 

(e)           the Owner Trustee

shall not be responsible for or in respect of the validity or sufficiency of

this Agreement or for the due execution hereof by the Trust Depositor or for

the form, character, genuineness, sufficiency, value or validity of any of the

Trust Estate, or for or in respect of the validity or sufficiency of the

Transaction Documents, other than the certificate of authentication on the

Trust Certificate, and the Owner Trustee shall in no event assume or incur any

liability, duty, or obligation to any Noteholder or to any Owner, other than as

expressly provided for herein or expressly agreed to in the Transaction

Documents;

 

(f)            the Owner Trustee

shall not be liable for the default or misconduct of the Administrator, the

Trust Depositor, the Indenture Trustee or the Servicer under any of the

Transaction

 

15

 

Documents or

otherwise and the Owner Trustee shall have no obligation or liability to

perform the obligations of the Trust under this Agreement or the other

Transaction Documents that are required to be performed by the Administrator

under the Administration Agreement, the Indenture Trustee under the Indenture

or the Servicer, or the Trust Depositor under the Sale and Servicing Agreement;

and

 

(g)           the Owner Trustee

shall be under no obligation to exercise any of the rights or powers vested in

it by the Agreement, or to institute, conduct or defend any litigation under

this Agreement or otherwise or in relation to this Agreement or any other

Transaction Document, at the request, order or direction of the Owner, unless

such Owner have offered to the Owner Trustee security or indemnity satisfactory

to it against the costs, expenses and liabilities that may be incurred by the

Owner Trustee therein or thereby.  The

right of the Owner Trustee to perform any discretionary act enumerated in this

Agreement or in any other Transaction Document shall not be construed as a

duty, and the Owner Trustee shall not be answerable for other than its

negligence or willful misconduct in the performance of any such act.

 

Section

7.02.        Furnishing

of Documents.  The Owner Trustee shall furnish to the Owner

promptly upon receipt of a written request therefor, duplicates or copies of

all reports, notices, requests, demands, certificates, financial statements and

any other instruments furnished to the Owner Trustee under the Transaction

Documents.

 

Section

7.03.        Representations

and Warranties.  The Owner Trustee hereby represents and

warrants to the Trust Depositor and the Owner that:

 

(a)           It is a banking

corporation duly organized and validly existing in good standing under the laws

of the State of Delaware.  It has all

requisite corporate power and authority to execute, deliver and perform its

obligations under this Agreement.

 

(b)           It has taken all

corporate action necessary to authorize the execution and delivery by it of

this Agreement, and this Agreement will be executed and delivered by one of its

officers who is duly authorized to execute and deliver this Agreement on its

behalf.

 

(c)           Neither the

execution nor the delivery by it of this Agreement, nor the consummation by it

of the transactions contemplated hereby nor compliance by it with any of the

terms or provisions hereof will contravene any federal or Delaware law,

governmental rule or regulation governing the banking or trust powers of the

Owner Trustee or any judgment or order binding on it, or constitute any default

under its charter documents or bylaws or any indenture, mortgage, contract,

agreement or instrument to which it is a party or by which any of its

properties may be bound or result in the creation or imposition of any lien,

charge or encumbrance on the Trust Estate resulting from actions by or claims

against the Owner Trustee individually which are unrelated to this Agreement or

the other Transaction Documents.

 

Section

7.04.        Reliance;

Advice of Counsel.

 

(a)           The Owner Trustee

shall incur no liability to anyone in acting upon any signature, instrument,

notice, resolution, request, consent, order, certificate, report, opinion, bond

or other document or paper believed by it to be genuine and believed by it to

be signed by the proper party or parties. 

The Owner Trustee may accept a certified copy of a resolution of the

board of directors or other

 

16

 

governing body of

any corporate party as conclusive evidence that such resolution has been duly

adopted by such body and that the same is in full force and effect.  As to any fact or matter the method of

determination of which is not specifically prescribed herein, the Owner Trustee

may for all purposes hereof rely on a certificate, signed by the president or

any vice president or by the treasurer or other authorized officers of the

relevant party, as to such fact or matter and such certificate shall constitute

full protection to the Owner Trustee for any action taken or omitted to be

taken by it in good faith in reliance thereon.

 

(b)           In the exercise or

administration of the trusts hereunder and in the performance of its duties and

obligations under this Agreement or the other Transaction Documents, the Owner

Trustee (i) may act directly or through its agents or attorneys pursuant to agreements

entered into by any of them, and the Owner Trustee shall not be liable for the

conduct or misconduct of such agents or attorneys as shall have been selected

by the Owner Trustee with reasonable care, and (ii) may consult with counsel,

accountants and other skilled persons to be selected with reasonable care and

employed by it.   The Owner Trustee

shall not be liable for anything done, suffered or omitted in good faith by it

in accordance with the written opinion or advice of any such counsel, accountants

or other such persons.

 

Section

7.05.        Not

Acting in Individual Capacity.  Except as

provided in this Article Seven, in accepting the trusts hereby created,

Wilmington Trust Company acts solely as Owner Trustee hereunder and not in its

individual capacity, and all Persons having any claim against the Owner Trustee

by reason of the transactions contemplated by this Agreement or any other

Transaction Document shall look only to the Trust Estate for payment or

satisfaction thereof.

 

Section

7.06.        Owner

Trustee Not Liable for Trust Certificate, Notes or Contracts. 

The recitals contained herein and in the Trust Certificate (other than

the signature and countersignature of the Owner Trustee and the certificate of

authentication on the Trust Certificate) shall be taken as the statements of

the Trust Depositor, and the Owner Trustee assumes no responsibility for the

correctness thereof.  The Owner Trustee

makes no representations as to the validity or sufficiency of this Agreement,

any other Transaction Document or the Trust Certificate (other than the

signature and countersignature of the Owner Trustee and the certificate of

authentication on the Trust Certificate) or the Notes, or of any Contract or

related documents.  The Owner Trustee

shall at no time have any responsibility or liability for or with respect to

the legality, validity and enforceability of any Contract, or the perfection

and priority of any security interest created by any Contract in any Motorcycle

or the maintenance of any such perfection and priority, or for or with respect

to the sufficiency of the Trust Estate or its ability to generate the payments

to be distributed to the Certificateholder under this Agreement or the

Noteholders under the Indenture, including, without limitation, the existence,

condition and ownership of any Motorcycle; the existence and enforceability of

any insurance thereon; the existence and contents of any Contract on any

computer or other record thereof; the validity of the assignment of any

Contract to the Trust or of any intervening assignment; the completeness of any

Contract; the performance or enforcement of any Contract; the compliance by the

Trust Depositor or the Servicer with any warranty or representation made under

any Transaction Document or in any related document or the accuracy of any such

warranty or representation; or any action of the Administrator, the Indenture

Trustee or the Servicer or any subservicer taken in the name of the Owner

Trustee.

 

Section

7.07.        Owner

Trustee May Own Trust Certificate and Notes.  The Owner

Trustee in its individual or any other capacity may become the owner or pledgee

of the Trust Certificate or Notes and

 

17

 

may deal with the

Trust Depositor, the Administrator, the Indenture Trustee and the Servicer in

banking transactions with the same rights as it would have if it were not Owner

Trustee.

 

ARTICLE EIGHT

 

COMPENSATION OF OWNER TRUSTEE

 

Section

8.01.        Owner

Trustee’s Fees and Expenses.  The Owner

Trustee shall receive as compensation for its services hereunder such fees as

have been separately agreed upon between the Owner Trustee and the Trust

Depositor.  Additionally, the Owner

Trustee shall be entitled to be reimbursed by the Trust Depositor for its other

reasonable expenses hereunder, including the reasonable compensation, expenses

and disbursements of such agents, representatives, experts and counsel as the

Owner Trustee may employ in connection with the exercise and performance of its

rights and its duties hereunder.

 

Section

8.02.        Indemnification. 

The Trust Depositor shall be liable as primary obligor for, and shall

indemnify the Owner Trustee and its successors, assigns and servants

(collectively, the “Indemnified Parties”) from and against, any and all

liabilities, obligations, losses, damages, taxes, claims, actions and suits,

and any and all reasonable costs, expenses and disbursements (including

reasonable legal fees and expenses) of any kind and nature whatsoever

(collectively, “Expenses”) which may at any time be imposed on, incurred by

or asserted against the Owner Trustee or any Indemnified Party in any way

relating to or arising out of this Agreement, the other Transaction Documents,

the Trust Estate, the administration of the Trust Estate or the action or inaction

of the Owner Trustee hereunder, except only that the Trust Depositor shall not

be liable for or required to indemnify an Indemnified Party from and against

Expenses arising or resulting from any of the matters described in the third

sentence of Section 7.01.  The

indemnities contained in this Section shall survive the resignation or

termination of the Owner Trustee or the termination of this Agreement.  In the event of any claim, action or

proceeding for which indemnity will be sought pursuant to this Section, the

Owner Trustee’s choice of legal counsel shall be subject to the approval of the

Trust Depositor, which approval shall not be unreasonably withheld.

 

Section

8.03.        Payments

to the Owner Trustee.  Any amounts paid to the Owner Trustee

pursuant to this Article shall be deemed not to be a part of the Trust Estate

immediately after such payment.

 

ARTICLE NINE

 

TERMINATION OF TRUST AGREEMENT

 

Section

9.01.        Termination

of Trust Agreement.

 

(a)           This Agreement

(other than Article Eight) and the Trust shall terminate and be of no further

force or effect upon the earlier of (i) final distribution by the Owner Trustee

of all moneys or other property or proceeds of the Trust Estate in accordance

with the terms of the Indenture, the Sale and Servicing Agreement and Article

Five and (ii) the expiration of 21 years from the death of the survivor of the

descendants of Joseph P. Kennedy, the late Ambassador of the United States to

the Court of St. James’s,

 

18

 

living on the date

hereof.  The bankruptcy, liquidation,

dissolution, death or incapacity of any Owner shall not (i) operate to

terminate this Agreement or the Trust, (ii) entitle such Owner’s legal

representatives or heirs to claim an accounting or to take any action or

proceeding in any court for a partition or winding up of all or any part of the

Trust or Trust Estate or (iii) otherwise affect the rights, obligations and

liabilities of the parties hereto.

 

(b)           Except as provided

in Section 9.01(a), neither the Trust Depositor nor any Holder shall be

entitled to revoke or terminate the Trust.

 

(c)           Notice of any

termination of the Trust, specifying the Distribution Date upon which the

Certificateholder shall surrender the Trust Certificate to the Paying Agent for

payment of the final distribution and cancellation, shall be given by the Owner

Trustee by letter to the Certificateholder mailed within five Business Days of

receipt of notice of such termination from the Servicer given pursuant to

Section 10.01 of the Sale and Servicing Agreement, stating (i) the Distribution

Date upon or with respect to which final payment of the Trust Certificate shall

be made upon presentation and surrender of the Trust Certificate at the office

of the Paying Agent therein designated, (ii) the amount of any such final

payment and (iii) that the Record Date otherwise applicable to such

Distribution Date is not applicable, payments being made only upon presentation

and surrender of the Trust Certificate at the office of the Paying Agent therein

specified.  The Owner Trustee shall give

such notice to the Certificate Registrar (if other than the Owner Trustee) and

the Paying Agent at the time such notice is given to the Certificateholder.  Upon presentation and surrender of the Trust

Certificate, the Paying Agent shall cause to be distributed to the

Certificateholder amounts distributable on such Distribution Date pursuant to

Section 5.01.

 

(d)           Upon the winding up

of the Trust and its termination, the Owner Trustee shall cause the Certificate

of Trust to be canceled by filing a certificate of cancellation with the

Secretary of State in accordance with the provisions of Section 3810 of the

Statutory Trust Statute.

 

ARTICLE TEN

 

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

 

Section

10.01.      Eligibility

Requirements for Owner Trustee.  The Owner

Trustee shall at all times be a corporation satisfying the provisions of

Section 3807(a) of the Statutory Trust 

Statute; authorized to exercise corporate trust powers; and (a) having a

combined capital and surplus of at least $50,000,000 and subject to supervision

or examination by federal or state authorities; and having (or having a parent

that has) a rating of at least Baa3 by Moody’s; or (b) which the Rating

Agencies have otherwise indicated in writing is an entity acceptable to act as

Owner Trustee hereunder.  If such

corporation shall publish reports of condition at least annually pursuant to

law or to the requirements of the aforesaid supervising or examining authority,

then for the purpose of this Section, the combined capital and surplus of such

corporation shall be deemed to be its combined capital and surplus as set forth

in its most recent report of condition so published.  In case at any time the Owner Trustee shall cease to be eligible

in accordance with the provisions of this Section, the Owner Trustee shall

resign immediately in the manner and with the effect specified in Section

10.02.

 

19

 

Section

10.02.      Resignation

or Removal of Owner Trustee.  The Owner

Trustee may at any time resign and be discharged from the trusts hereby created

by giving written notice thereof to the Administrator.  Upon receiving such notice of resignation,

the Administrator shall promptly appoint a successor Owner Trustee by written

instrument, in duplicate, one copy of which instrument shall be delivered to

the resigning Owner Trustee and one copy to the successor Owner Trustee.  If no successor Owner Trustee shall have been

so appointed and have accepted appointment within 30 days after the giving of

such notice of resignation, the resigning Owner Trustee may petition any court

of competent jurisdiction for the appointment of a successor Owner Trustee.

 

If at any time the Owner Trustee shall cease to be

eligible in accordance with the provisions of Section 10.01 and shall fail to

resign after written request therefor by the Administrator, or if at any time

the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt

or insolvent, or a receiver of the Owner Trustee or of its property shall be

appointed or any public officer shall take charge or control of the Owner

Trustee or of its property or affairs for the purpose of rehabilitation,

conservation or liquidation, then the Administrator, may remove the Owner

Trustee.  If the Administrator shall

remove the Owner Trustee under the authority of the immediately preceding

sentence, the Administrator shall promptly appoint a successor Owner Trustee by

written instrument, in duplicate, one copy of which instrument shall be

delivered to the outgoing Owner Trustee so removed and one copy to the

successor Owner Trustee, and shall pay all fees owed to the outgoing Owner

Trustee.

 

Any resignation or removal of the Owner Trustee and

appointment of a successor Owner Trustee pursuant to any of the provisions of

this Section shall not become effective until acceptance of appointment by the

successor Owner Trustee pursuant  to

Section 10.03 and payment of all fees and expenses owed to the outgoing Owner

Trustee.  The Administrator shall

provide notice of such resignation or removal of the Owner Trustee to each

Rating Agency.

 

Section

10.03.      Successor

Owner Trustee.  Any successor Owner Trustee appointed

pursuant to Section 10.02 shall execute, acknowledge and deliver to the

Administrator, and to its predecessor Owner Trustee an instrument accepting

such appointment under this Agreement, and thereupon the resignation or removal

of the predecessor Owner Trustee shall become effective, and such successor

Owner Trustee, without any further act, deed or conveyance, shall become fully

vested with all the rights, powers, duties and obligations of its predecessor

under this Agreement, with like effect as if originally named as Owner Trustee.  The predecessor Owner Trustee shall upon

payment of its fees and expenses deliver to the successor Owner Trustee all

documents and statements and monies held by it under this Agreement; and the

Administrator and the predecessor Owner Trustee shall execute and deliver such

instruments and do such other things as may reasonably be required for fully

and certainly vesting and confirming in the successor Owner Trustee all such

rights, powers, duties and obligations.

 

No successor Owner Trustee shall accept appointment as

provided in this Section unless at the time of such acceptance such successor

Owner Trustee shall be eligible pursuant to Section 10.01.

 

Upon acceptance of appointment by a successor Owner

Trustee pursuant to this Section, the Administrator shall mail notice thereof

to the Certificateholder, the Indenture Trustee, the Noteholders and each

Rating Agency.  If the Administrator

shall fail to mail such notice within ten days after acceptance of such

appointment by the successor Owner Trustee, the successor Owner Trustee shall

cause such notice to be mailed at the expense of the Administrator.

 

20

 

Section

10.04.      Merger

or Consolidation of Owner Trustee.  Any

corporation into which the Owner Trustee may be merged or converted or with which

it may be consolidated, or any corporation resulting from any merger,

conversion or consolidation to which the Owner Trustee shall be a party, or any

corporation succeeding to all or substantially all of the corporate trust

business of the Owner Trustee, shall be the successor of the Owner Trustee

hereunder, without the execution or filing of any instrument or any further act

on the part of any of the parties hereto, anything herein to the contrary

notwithstanding; provided, that such corporation shall be eligible pursuant

to Section 10.01 and, provided, further, that the Owner Trustee

shall mail notice of such merger or consolidation to each Rating Agency.

 

Section

10.05.      Appointment

of Co-Trustee or Separate Trustee. 

Notwithstanding any other provisions of this Agreement, at any time, for

the purpose of meeting any legal requirements of any jurisdiction in which any

part of the Trust Estate or any financed Motorcycle may at the time be located,

the Administrator and the Owner Trustee acting jointly shall have the power and

shall execute and deliver all instruments to appoint one or more Persons

approved by the Administrator and Owner Trustee to act as co-trustee, jointly

with the Owner Trustee, or as separate trustee or separate trustees, of all or any

part of the Trust Estate, and to vest in such Person, in such capacity, such

title to the Trust or any part thereof and, subject to the other provisions of

this Section, such powers, duties, obligations, rights and trusts as the

Administrator and the Owner Trustee may consider necessary or desirable.  If the Administrator shall not have joined

in such appointment within 15 days after the receipt by it of a request so to

do, the Owner Trustee alone shall have the power to make such appointment.  No co-trustee or separate trustee under this

Agreement shall be required to meet the terms of eligibility as a successor

Owner Trustee pursuant to Section 10.01 and no notice of the appointment of any

co-trustee or separate trustee shall be required pursuant to Section 10.03.

 

Each separate trustee and co-trustee shall, to the

extent permitted by law, be appointed and act subject to the following

provisions and conditions:

 

(a)           all rights, powers, duties and

obligations conferred or imposed upon the Owner Trustee shall be conferred upon

and exercised or performed by the Owner Trustee and such separate trustee or

co-trustee jointly (it being understood that such separate trustee or

co-trustee is not authorized to act separately without the Owner Trustee

joining in such act), except to the extent that under any law of any

jurisdiction in which any particular act or acts are to be performed, the Owner

Trustee shall be incompetent or unqualified to perform such act or acts, in

which event such rights, powers, duties and obligations (including the holding

of title to the Trust Estate or any portion thereof in any such jurisdiction)

shall be exercised and performed singly by such separate trustee or co-trustee,

but solely at the direction of the Owner Trustee;

 

(b)           no trustee under this Agreement shall

be personally liable by reason of any act or omission of any other trustee

under this Agreement; and

 

(c)           the Administrator and the Owner

Trustee acting jointly may at any time accept the resignation of or remove any

separate trustee or co-trustee.

 

Any notice, request or other writing given to the

Owner Trustee shall be deemed to have been given to each of the then separate

trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate

trustee or co-trustee shall refer to this Agreement and the conditions of this

Article.  Each separate trustee and

co-trustee, upon its acceptance of the trusts

 

21

 

conferred, shall be

vested with the estates or property specified in its instrument of appointment,

either jointly with the Owner Trustee or separately, as may be provided

therein, subject to all the provisions of this Agreement, specifically

including every provision of this Agreement relating to the conduct of,

affecting the liability of or affording protection to, the Owner Trustee.  Each such instrument shall be filed with the

Owner Trustee and a copy thereof given to the Administrator.

 

Any separate trustee or co-trustee may at any time

appoint the Owner Trustee as its agent or attorney-in-fact with full power and

authority, to the extent not prohibited by law, to do any lawful act under or

in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall

die, become incapable of acting, resign or be removed, all of its estates,

properties, rights, remedies and trusts shall vest in and be exercised by the

Owner Trustee, to the extent permitted by law, without the appointment of a new

or successor co-trustee or separate trustee.

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section

11.01.      Supplements

and Amendments.

 

(a)           The Agreement may be

amended by the Trust Depositor, and the Owner Trustee, without the consent of

any of the Noteholders or the Certificateholder, to cure any ambiguity, to

correct or supplement any provisions in this Agreement or to add any other

provisions with respect to matters or questions arising under this Agreement

that shall not be inconsistent with the provisions of this Agreement; provided,

however, that any such action shall not, as evidenced by an Opinion

of Counsel, adversely affect in any material respect the interests of any

Noteholder or Certificateholder.

 

(b)           This Agreement may

also be amended from time to time by the Trust Depositor, and the Owner

Trustee, with the consent of the Modified Required Holders, for the purpose of

adding any provisions to or changing in any manner or eliminating any of the

provisions of this Agreement, or of modifying in any manner the rights of the

Noteholders or the Certificateholder; provided, however, that no such amendment

shall increase or reduce in any manner the amount of, or accelerate or delay

the timing of, (i) collections of payments on Contracts or distributions that

shall be required to be made for the benefit of the Noteholders or the

Certificateholder, or (ii) eliminate the Certificateholder consent or reduce

the aforesaid percentage of the Outstanding Amount of the Notes required to

consent to any such amendment, without the consent of the Holder of all

outstanding Notes and the Trust Certificate.

 

(c)           Prior to the

execution of any such amendment or consent, the Trust Depositor shall furnish

written notification of the substance of such amendment or consent, together

with a copy thereof, to the Indenture Trustee, the Administrator and each

Rating Agency.

 

(d)           Promptly after the

execution of any such amendment or consent, the Owner Trustee shall furnish

written notification of the substance of such amendment or consent to each

Certificateholder.  It shall not be

necessary for the consent of Certificateholder, Noteholders or the Indenture

Trustee pursuant to this Section to approve the particular form of any proposed

amendment or consent, but it shall be sufficient if such consent shall approve

the substance thereof.  The manner of

 

22

 

obtaining such

consents (and any other consents of the Certificateholder provided for in this

Agreement or in any other Transaction Document) and of evidencing the

authorization of the execution thereof by the Certificateholder shall be

subject to such reasonable requirements as the Owner Trustee may prescribe.

 

(e)           Promptly after the

execution of any amendment to the Certificate of Trust, the Owner Trustee shall

cause the filing of such amendment with the Secretary of State.

 

(f)            Prior to the

execution of any amendment to this Agreement or the Certificate of Trust, the

Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel

stating that the execution of such amendment is authorized or permitted by this

Agreement.  The Owner Trustee may, but

shall not be obligated to, enter into any such amendment that affects the Owner

Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

Section

11.02.      No

Legal Title to Trust Estate in Owner.  The Owner

shall not have legal title to any part of the Trust Estate.  The Owner shall be entitled to receive

distributions with respect to their undivided ownership interest herein only in

accordance with Articles Five and Nine. 

No transfer, by operation of law or otherwise, of any right, title or

interest of the Owner to and in their ownership interest in the Trust Estate

shall operate to terminate this Agreement or the trusts hereunder or entitle

any transferee to an accounting or to the transfer to it of legal title to any

part of the Trust Estate.

 

Section

11.03.      Limitations

on Rights of Others.  Except for Section 2.07, the provisions of

this Agreement are solely for the benefit of the Owner Trustee, the Trust

Depositor, the Owner, the Administrator and, to the extent expressly provided

herein, the Indenture Trustee and the Noteholders, and nothing in this

Agreement (other than Section 2.07), whether express or implied, shall be

construed to give to any other Person any legal or equitable right, remedy or

claim in the Trust Estate or under or in respect of this Agreement or any

covenants, conditions or provisions contained herein.

 

Section

11.04.      Notices. 

All notices, demands, certificates, requests and communications

hereunder (“notices”)

shall be in writing and shall be effective (a) upon receipt when sent through

the U.S. mails, registered or certified mail, return receipt requested, postage

prepaid, with such receipt to be effective the date of delivery indicated on

the return receipt, or (b) one Business Day after delivery to an overnight

courier, or (c) on the date personally delivered to an Authorized Officer of

the party to which sent, or (d) on the date transmitted by legible telecopier

transmission with a confirmation of receipt, in all cases addressed to the

recipient at the address for such recipient set forth in the Sale and Servicing

Agreement.

 

Each party hereto may, by notice given in accordance herewith to each

of the other parties hereto, designate any further or different address to

which subsequent notices shall be sent.

 

Section

11.05.      Severability

of Provisions.  If any one or more of the covenants,

agreements, provisions, or terms of this Agreement shall be for any reason whatsoever

held invalid, then such covenants, agreements, provisions or terms shall be

deemed severable from the remaining covenants, agreements, provisions or terms

of this Agreement and shall in no way affect the validity or enforceability of

the other provisions of this Agreement or of the Trust Certificate or the

rights of the Holder  thereof.

 

Section

11.06.      Counterparts. 

This Agreement may be executed in several counterparts, each of which

shall be an original and all of which shall constitute but one and the same

instrument.

 

23

 

Section

11.07.      Successors

and Assigns.  All covenants and agreements contained

herein shall be binding upon, and inure to the benefit of, each of the Trust

Depositor, and the Owner Trustee and their respective successors and permitted

assigns and each Owner and its successors and permitted assigns, all as herein

provided.  Any request, notice,

direction, consent, waiver or other instrument or action by an Owner shall bind

the successors and assigns of such Owner.

 

Section

11.08.      Covenants

of the Trust Depositor.  In the event that any

litigation with claims in excess of $1,000,000 to which the Trust Depositor is

a party which shall be reasonably likely to result in a material judgment

against the Trust Depositor that the Trust Depositor will not be able to

satisfy shall be commenced, during the period beginning immediately following

the commencement of such litigation and continuing until such litigation is

dismissed or otherwise terminated (and, if such litigation has resulted in a

final judgment against the Trust Depositor, such judgment has been satisfied),

the Trust Depositor shall not pay any dividend to the Servicer, or make any

distribution on or in respect of its capital stock to the Servicer, or repay

the principal amount of any indebtedness of the Trust Depositor held by the

Servicer, unless (i) after giving effect to such payment, distribution or

repayment, the Trust Depositor’s liquid assets shall not be less than the amount

of actual damages claimed in such litigation or (ii) the Rating Agencies shall

not downgrade the then existing rating on the Certificate with respect to any

such payment, distribution or repayment. 

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 Certificate, the

Notes, the Trust Agreement or any of the Transaction Documents.

 

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 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.

 

24

 

Section

11.12.      Governing

Law.  THIS AGREEMENT 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.

 

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 nor will it hold such Trust Certificate

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.

 

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:

  	

   

  	

   

  
	

   

  	

  Printed  Name:  Perry A. Glassgow

  
	

   

  	

  Title:  Treasurer

  
	

   

  	

   

  
	

   

  	

  WILMINGTON TRUST COMPANY,

  
	

   

  	

  as Owner Trustee

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Printed  Name:

  	

   

  	

   

  
	

   

  	

  Title:

  	

   

  	

   

  
							

 

 

Signature Page to Trust

Agreement

 

 

EXHIBIT A

 

FORM OF CERTIFICATE OF TRUST OF

Harley-Davidson Motorcycle Trust 2003-2

 

This Certificate of Trust of Harley-Davidson

Motorcycle Trust 2003-2 (the “Trust”), dated

               ,

2003, 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 2003-2.

 

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 IN UNLESS THE CONDITIONS SET

FORTH IN SECTION 3.01 AND 3.04 OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH.

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2003-2

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 2003-2 (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 1, 2003 (as amended and supplemented from time to time, the “Trust

Agreement”), between Harley-Davidson Customer Funding Corp., as

Trust Depositor (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, 2003 (the “Sale and

Servicing Agreement”), among the Trust, Harley-Davidson Customer

Funding Corp., as depositor  (the “Trust

Depositor”), Harley-Davidson Credit Corp. (“Harley-Davidson Credit”),

as Servicer (in such capacity, the “Servicer”) and BNY Midwest Trust Company,

as Indenture Trustee (the “Indenture Trustee”) or (iii) the Indenture, dated as

of May 1, 2003 (the “Indenture”), between the Trust and the

Indenture Trustee.

 

This Trust Certificate is the duly authorized Trust

Certificate designated as “Harley-Davidson Motorcycle Trust 2003-2 Certificate”

 (the “Trust Certificate”).  Issued under the Indenture are three classes

of notes designated as “   % Harley-Davidson Motorcycle

Contract Backed Notes, Class A-1”, “   % Harley-Davidson

Motorcycle Contract Backed Notes, Class A-2” and “   %

Harley-Davidson Motorcycle Contract Backed Notes, Class B” (collectively,

the “Notes”).  This Trust Certificate is issued under and

is subject to the terms, provisions and conditions of the Trust Agreement, to

which Trust

 

 

Agreement the Holder of

this Trust Certificate by virtue of its acceptance hereof assents and by which

such Holder is bound.  The property of

the Trust includes, among other things, (i) all the right, title and interest

of the Trust Depositor in and to the Initial Contracts listed on the initial

List of Contracts delivered on the Closing Date (including, without limitation,

all security interests and all rights to receive payments which are collected

pursuant thereto on or after the Initial Cutoff Date, including any liquidation

proceeds therefrom, but excluding any rights to receive payments which were

collected pursuant thereto prior to the Initial Cutoff Date), (ii) all rights

of the Trust Depositor under any physical damage or other individual insurance

policy (and rights under a “forced placed” policy, if any) or any

debt cancellation agreement relating to any such Contract, an Obligor or a

Motorcycle securing such Contract, (iii) all security interests in each such

Motorcycle, (iv) all documents contained in the related Contract Files, (v) all

rights (but not the obligations) of the Trust Depositor under any related

motorcycle dealer agreements between dealers (i.e., the originators of such Contracts)

and Harley-Davidson Credit, (vi) all rights of the Trust Depositor in the

Lockbox, the Lockbox Account and related Lockbox Agreement to the extent they

relate to such Contracts, (vii) all rights (but not the obligations) of the

Trust Depositor under the Transfer and Sale Agreement, including but not

limited to the Trust Depositor’s rights under Article V thereof, (viii) the

remittances, deposits and payments made into the Trust Accounts from time to

time and amounts in the Trust Accounts from time to time (and any investments

of such amounts), (ix) all rights of the Trust Depositor to certain rebates of

premiums and other amounts relating to insurance policies, debt cancellation

agreements, extended service contracts or other repair agreements and other

items financed under such Contracts and (x) all proceeds and products of the

foregoing.

 

Under the Trust Agreement, there will be distributed

on the fifteenth day of each month or if such day is not a Business Day the

next succeeding Business Day commencing June 16, 2003 (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 intent of Harley-Davidson Credit, the

Servicer, the Trust Depositor, Owner Trustee, Indenture Trustee and the

Certificateholder that, for purposes of federal income, state and local income

and single business tax and any other income taxes, the Trust will be treated

as a partnership and the Certificateholder (including the Trust Depositor) will

be treated as partners in that partnership. The Trust Depositor and the

Certificateholder, by acceptance of a Trust Certificate, agree to treat, and to

take no action inconsistent with the treatment of, the Trust Certificate for

such tax purposes as partnership interests in the Trust and the

Certificateholder (including the Trust Depositor) as partners in that

partnership.

 

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 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 Registered Holders.  Any such

consent by the Holder of this Trust Certificate shall be conclusive and binding

on such Holder and on all future Holder 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 maintained by the Owner Trustee in Wilmington, Delaware,

accompanied by a written instrument of transfer in form satisfactory to the

Owner Trustee and the Certificate Registrar in Chicago, Illinois 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 them pursuant to

the Trust Agreement and the Sale and Servicing Agreement and the deposition of

all property held as part of the Trust Estate. 

The Trust Depositor 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 and (ii) the Pre-Funded Amount on the

Closing Date.

 

The Trust Certificate may not be acquired by a Benefit

Plan.  By accepting and holding this

Trust Certificate, 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 such an entity.

 

 

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 2003-2

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  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

4.16

 

 

 

 

HARLEY-DAVIDSON

MOTORCYCLE TRUST 2003-2,

as Issuer,

 

 

and

 

 

BNY MIDWEST TRUST

COMPANY,

not in its individual

capacity but solely in its capacity

as Indenture Trustee

 

 

 

 

INDENTURE

 

Dated as of May 1, 2003

 

 

 

$251,000,000 1.34%  Harley-Davidson Motorcycle Contract Backed

Notes, Class A-1

 

$152,750,000 2.07%  Harley-Davidson Motorcycle Contract Backed

Notes, Class A-2

 

$21,250,000 1.89%  Harley-Davidson Motorcycle Contract Backed

Notes, Class B

 

 

 

 

 

CROSS-REFERENCE TABLE

 

	

  TIA
Section

  	

   

  	

  Indenture
Section

  	

   

  
	

  310(a)(1)

  	

   

  	

  6.11

  	

   

  
	

        (a)(2)

  	

   

  	

  6.11

  	

   

  
	

        (a)(3)

  	

   

  	

  6.10

  	

   

  
	

        (a)(4)

  	

   

  	

  N.A.

  	

   

  
	

        (a)(5)

  	

   

  	

  6.11

  	

   

  
	

        (b)

  	

   

  	

  6.08; 6.11; 11.04

  	

   

  
	

        (c)

  	

   

  	

  N.A.

  	

   

  
	

  311(a)

  	

   

  	

  6.13

  	

   

  
	

        (b)

  	

   

  	

  6.13

  	

   

  
	

        (c)

  	

   

  	

  N.A.

  	

   

  
	

  312(a)

  	

   

  	

  7.01; 7.02

  	

   

  
	

        (b)

  	

   

  	

  7.02

  	

   

  
	

        (c)

  	

   

  	

  7.02

  	

   

  
	

  313(a)

  	

   

  	

  7.04

  	

   

  
	

        (b)

  	

   

  	

  7.04

  	

   

  
	

        (c)

  	

   

  	

  7.04

  	

   

  
	

        (d)

  	

   

  	

  7.04

  	

   

  
	

  314(a)

  	

   

  	

  7.03

  	

   

  
	

        (b)

  	

   

  	

  3.06

  	

   

  
	

        (c)(1)

  	

   

  	

  2.02; 6.02; 11.01

  	

   

  
	

        (c)(2)

  	

   

  	

  11.01

  	

   

  
	

        (c)(3)

  	

   

  	

  11.01

  	

   

  
	

        (d)

  	

   

  	

  11.01

  	

   

  
	

        (e)

  	

   

  	

  11.01

  	

   

  
	

        (f)

  	

   

  	

  N.A.

  	

   

  
	

  315(a)

  	

   

  	

  6.01

  	

   

  
	

        (b)

  	

   

  	

  6.05

  	

   

  
	

        (c)

  	

   

  	

  6.01

  	

   

  
	

        (d)

  	

   

  	

  5.12; 6.01

  	

   

  
	

        (e)

  	

   

  	

  5.14

  	

   

  
	

  316(a)(1)(A)

  	

   

  	

  5.12

  	

   

  
	

        (a)(1)(B)

  	

   

  	

  5.02

  	

   

  
	

        (a)(2)

  	

   

  	

  N.A.

  	

   

  
	

        (b)

  	

   

  	

  5.08

  	

   

  
	

        (c)

  	

   

  	

  N.A.

  	

   

  
	

  317(a)

  	

   

  	

  5.03; 5.04

  	

   

  
	

        (b)

  	

   

  	

  3.03

  	

   

  
	

  318(a)

  	

   

  	

  11.18

  	

   

  

 

*           N.A. means Not

Applicable

*           This Cross-Reference

Table shall not, for any purpose, be deemed to be a part of the Indenture.

 

i

 

TABLE OF CONTENTS

 

	

  ARTICLE ONE

  	

   

  	

  DEFINITIONS AND INCORPORATION BY REFERENCE

  
	

   

  	

   

  	

   

  
	

  SECTION 1.01.

  	

  DEFINITIONS.

  
	

  SECTION 1.02.

  	

  INCORPORATION BY REFERENCE OF TRUST

  INDENTURE ACT

  
	

  SECTION 1.03.

  	

  RULES OF CONSTRUCTION

  
	

   

  	

   

  
	

  ARTICLE TWO

  	

   

  	

  THE NOTES

  
	

   

  	

   

  	

   

  
	

  SECTION 2.01.

  	

  FORM

  
	

  SECTION 2.02.

  	

  EXECUTION, AUTHENTICATION AND DELIVERY

  
	

  SECTION 2.03.

  	

  TEMPORARY NOTES

  
	

  SECTION 2.04.

  	

  REGISTRATION; REGISTRATION OF TRANSFER

  AND EXCHANGE

  
	

  SECTION 2.05.

  	

  MUTILATED, DESTROYED, LOST OR STOLEN

  NOTES

  
	

  SECTION 2.06.

  	

  PERSONS DEEMED OWNER

  
	

  SECTION 2.07.

  	

  PAYMENT OF PRINCIPAL AND INTEREST;

  DEFAULTED INTEREST

  
	

  SECTION 2.08.

  	

  CANCELLATION

  
	

  SECTION 2.09.

  	

  BOOK-ENTRY NOTES

  
	

  SECTION 2.10.

  	

  NOTICES TO CLEARING AGENCY

  
	

  SECTION 2.11.

  	

  DEFINITIVE NOTES

  
	

  SECTION 2.12.

  	

  RELEASE OF COLLATERAL

  
	

  SECTION 2.13.

  	

  TAX TREATMENT

  
	

   

  	

   

  
	

  ARTICLE THREE

  	

   

  	

  COVENANTS

  
	

   

  	

   

  	

   

  
	

  SECTION 3.01.

  	

  PAYMENT OF PRINCIPAL AND INTEREST

  
	

  SECTION 3.02.

  	

  MAINTENANCE OF OFFICE OR AGENCY

  
	

  SECTION 3.03.

  	

  MONEY FOR PAYMENTS TO BE HELD IN TRUST

  
	

  SECTION 3.04.

  	

  EXISTENCE

  
	

  SECTION 3.05.

  	

  PROTECTION OF COLLATERAL

  
	

  SECTION 3.06.

  	

  OPINIONS AS TO COLLATERAL

  
	

  SECTION 3.07.

  	

  PERFORMANCE OF OBLIGATIONS; SERVICING OF

  CONTRACTS

  
	

  SECTION 3.08.

  	

  NEGATIVE COVENANTS

  
	

  SECTION 3.09.

  	

  ANNUAL STATEMENT AS TO COMPLIANCE

  
	

  SECTION 3.10.

  	

  ISSUER MAY CONSOLIDATE, ETC. ONLY ON

  CERTAIN TERMS

  
	

  SECTION 3.11.

  	

  SUCCESSOR OR TRANSFEREE

  
	

  SECTION 3.12.

  	

  NO OTHER BUSINESS

  
	

  SECTION 3.13.

  	

  NO BORROWING

  
	

  SECTION 3.14.

  	

  SERVICER’S OBLIGATIONS

  
	

  SECTION 3.15.

  	

  GUARANTEES, LOANS ADVANCES AND OTHER

  LIABILITIES

  
	

  SECTION 3.16.

  	

  CAPITAL EXPENDITURES

  
	

  SECTION 3.17.

  	

  RESTRICTED PAYMENTS

  
	

  SECTION 3.18.

  	

  NOTICE OF EVENTS OF DEFAULT

  
	

  SECTION 3.19.

  	

  FURTHER INSTRUMENTS AND ACTS

  
	

  SECTION 3.20.

  	

  COMPLIANCE WITH LAWS

  

 

ii

 

	

  SECTION 3.21.

  	

  AMENDMENTS OF SALE AND SERVICING

  AGREEMENT AND TRUST AGREEMENT

  
	

  SECTION 3.22.

  	

  REMOVAL OF ADMINISTRATOR

  
	

   

  	

   

  
	

  ARTICLE FOUR

  	

   

  	

  SATISFACTION AND DISCHARGE

  
	

   

  	

   

  	

   

  
	

  SECTION 4.01.

  	

  SATISFACTION AND DISCHARGE OF INDENTURE

  
	

  SECTION 4.02.

  	

  APPLICATION OF TRUST MONEY

  
	

  SECTION 4.03.

  	

  REPAYMENT OF MONEYS HELD BY PAYING AGENT

  
	

  SECTION 4.04.

  	

  RELEASE OF COLLATERAL

  
	

   

  	

   

  
	

  ARTICLE FIVE

  	

   

  	

  REMEDIES

  
	

   

  	

   

  
	

  SECTION 5.01.

  	

  EVENTS OF DEFAULT

  
	

  SECTION 5.02.

  	

  RIGHTS UPON EVENT OF DEFAULT

  
	

  SECTION 5.03.

  	

  COLLECTION OF INDEBTEDNESS AND SUITS FOR

  ENFORCEMENT BY INDENTURE TRUSTEE; AUTHORITY OF INDENTURE TRUSTEE

  
	

  SECTION 5.04.

  	

  REMEDIES

  
	

  SECTION 5.05.

  	

  OPTIONAL PRESERVATION OF THE CONTRACTS

  
	

  SECTION 5.06.

  	

  PRIORITIES

  
	

  SECTION 5.07.

  	

  LIMITATION OF SUITS

  
	

  SECTION 5.08.

  	

  UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO

  RECEIVE PRINCIPAL AND INTEREST

  
	

  SECTION 5.09.

  	

  RESTORATION OF RIGHTS AND REMEDIES

  
	

  SECTION 5.10.

  	

  RIGHTS AND REMEDIES CUMULATIVE

  
	

  SECTION 5.11.

  	

  DELAY OR OMISSION NOT A WAIVER

  
	

  SECTION 5.12.

  	

  CONTROL BY NOTEHOLDERS

  
	

  SECTION 5.13.

  	

  WAIVER OF PAST DEFAULTS

  
	

  SECTION 5.14.

  	

  UNDERTAKING FOR COSTS

  
	

  SECTION 5.15.

  	

  WAIVER OF STAY OR EXTENSION LAWS

  
	

  SECTION 5.16.

  	

  ACTION ON NOTES

  
	

  SECTION 5.17.

  	

  PERFORMANCE AND ENFORCEMENT OF CERTAIN

  OBLIGATIONS

  
	

   

  	

   

  
	

  ARTICLE SIX

  	

   

  	

  THE INDENTURE TRUSTEE

  
	

   

  	

   

  
	

  SECTION 6.01.

  	

  DUTIES OF INDENTURE TRUSTEE

  
	

  SECTION 6.02.

  	

  RIGHTS OF INDENTURE TRUSTEE

  
	

  SECTION 6.03.

  	

  INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE

  
	

  SECTION 6.04.

  	

  INDENTURE TRUSTEE’S DISCLAIMER

  
	

  SECTION 6.05.

  	

  NOTICE OF DEFAULTS

  
	

  SECTION 6.06.

  	

  REPORTS BY INDENTURE TRUSTEE TO HOLDERS

  
	

  SECTION 6.07.

  	

  COMPENSATION AND INDEMNITY

  
	

  SECTION 6.08.

  	

  REPLACEMENT OF INDENTURE TRUSTEE

  
	

  SECTION 6.09.

  	

  SUCCESSOR INDENTURE TRUSTEE BY MERGER

  
	

  SECTION 6.10.

  	

  APPOINTMENT OF CO-INDENTURE TRUSTEE OR

  SEPARATE INDENTURE TRUSTEE

  
	

  SECTION 6.11.

  	

  ELIGIBILITY

  
	

  SECTION 6.12.

  	

  PENNSYLVANIA MOTOR VEHICLE SALES FINANCE

  ACT LICENSES

  
	

  SECTION 6.13.

  	

  PREFERENTIAL COLLECTION OF CLAIMS AGAINST

  ISSUER

  
	

   

  	

   

  
	

  ARTICLE SEVEN

  	

   

  	

  NOTEHOLDERS’ LISTS AND REPORTS

  

 

iii

 

	

  SECTION 7.01.

  	

  ISSUER TO FURNISH INDENTURE TRUSTEE NAMES

  AND ADDRESSES OF NOTEHOLDERS

  
	

  SECTION 7.02.

  	

  PRESERVATION OF INFORMATION:

  COMMUNICATION TO NOTEHOLDERS

  
	

  SECTION 7.03.

  	

  REPORTS BY ISSUER

  
	

  SECTION 7.04.

  	

  REPORTS BY INDENTURE TRUSTEE

  
	

   

  	

   

  
	

  ARTICLE EIGHT

  	

   

  	

  ACCOUNTS, DISBURSEMENTS AND RELEASES

  
	

   

  	

   

  
	

  SECTION 8.01.

  	

  COLLECTION OF MONEY

  
	

  SECTION 8.02.

  	

  TRUST ACCOUNTS

  
	

  SECTION 8.03.

  	

  GENERAL PROVISIONS REGARDING ACCOUNTS

  
	

  SECTION 8.04.

  	

  RELEASE OF COLLATERAL

  
	

  SECTION 8.05.

  	

  OPINION OF COUNSEL

  
	

   

  	

   

  
	

  ARTICLE NINE

  	

   

  	

  SUPPLEMENTAL INDENTURES

  
	

   

  	

   

  
	

  SECTION 9.01.

  	

  SUPPLEMENTAL INDENTURES WITHOUT CONSENT

  OF NOTEHOLDERS

  
	

  SECTION 9.02.

  	

  SUPPLEMENTAL INDENTURES WITH CONSENT OF

  NOTEHOLDERS

  
	

  SECTION 9.03.

  	

  EXECUTION OF SUPPLEMENTAL INDENTURES

  
	

  SECTION 9.04.

  	

  EFFECT OF SUPPLEMENTAL INDENTURE

  
	

  SECTION 9.05.

  	

  CONFORMITY WITH TRUST INDENTURE ACT

  
	

  SECTION 9.06.

  	

  REFERENCE IN NOTES TO SUPPLEMENTAL

  INDENTURES

  
	

   

  	

   

  
	

  ARTICLE TEN

  	

   

  	

  REDEMPTION OF NOTES

  
	

   

  	

   

  
	

  SECTION 10.01.

  	

  REDEMPTION.

  
	

  SECTION 10.02.

  	

  FORM OF REDEMPTION NOTICE.

  
	

  SECTION 10.03.

  	

  NOTES PAYABLE ON REDEMPTION DATE

  
	

   

  	

   

  
	

  ARTICLE ELEVEN

  	

   

  	

  MISCELLANEOUS

  
	

   

  	

   

  	

   

  
	

  SECTION 11.01.

  	

  COMPLIANCE CERTIFICATES AND OPINIONS,

  ETC

  
	

  SECTION 11.02.

  	

  FORM OF DOCUMENTS DELIVERED TO INDENTURE

  TRUSTEE

  
	

  SECTION 11.03.

  	

  ACTS OF NOTEHOLDERS

  
	

  SECTION 11.04.

  	

  NOTICES

  
	

  SECTION 11.05.

  	

  NOTICES TO NOTEHOLDERS; WAIVER

  
	

  SECTION 11.06.

  	

  ALTERNATE PAYMENT AND NOTICE PROVISIONS

  
	

  SECTION 11.07.

  	

  EFFECT OF HEADINGS AND TABLE OF CONTENTS

  
	

  SECTION 11.08.

  	

  SUCCESSORS AND ASSIGNS

  
	

  SECTION 11.09.

  	

  SEPARABILITY

  
	

  SECTION 11.10.

  	

  BENEFITS OF INDENTURE

  
	

  SECTION 11.11.

  	

  LEGAL HOLIDAYS

  
	

  SECTION 11.12.

  	

  GOVERNING LAW

  
	

  SECTION 11.13.

  	

  COUNTERPARTS

  
	

  SECTION 11.14.

  	

  RECORDING OF INDENTURE

  
	

  SECTION 11.15.

  	

  TRUST OBLIGATION

  
	

  SECTION 11.16.

  	

  NO PETITION

  
	

  SECTION 11.17.

  	

  INSPECTION

  
	

  SECTION 11.18.

  	

  CONFLICT WITH TRUST INDENTURE ACT

  
	

  SECTION 11.19.

  	

  DISCLAIMER AND SUBORDINATION

  

 

iv

 

	

   

  	

  EXHIBITS

  
	

   

  
	

  Exhibit

  A - Reserved

  
	

  Exhibit

  B - Form of Class A-1 Note

  
	

  Exhibit

  C - Form of Class A-2 Note

  
	

  Exhibit

  D - Form of Class B Note

  
	

  Exhibit

  E - Form of Assignment

  
	

  Exhibit

  F - Form of Note Depository Agreement

  

 

v

 

INDENTURE

 

Indenture, dated as of May 1, 2003 (this “Indenture”),

between Harley-Davidson Motorcycle Trust 2003-2, a Delaware statutory trust

(the “Issuer”) and BNY Midwest Trust Company, in its capacity as indenture

trustee (the “Indenture Trustee”) and not in its individual capacity.

 

Each party agrees as follows for the benefit of the

other parties and for the equal and ratable benefit of the Holders of the

Issuer’s 1.34% Harley-Davidson Motorcycle Contract Backed Notes, Class A-1 (the

“Class A-1 Notes”), 2.07% Harley-Davidson Motorcycle Contract Backed Notes,

Class A-2 (the “Class A-2 Notes”) and 1.89% Harley-Davidson Motorcycle Contract

Backed Notes, Class B (the “Class B Notes”) and, together with the Class A-1

Notes and the Class B Notes, the “Notes”):

 

GRANTING CLAUSE

 

The Issuer hereby grants, transfers, assigns and

otherwise conveys to the Indenture Trustee on the Closing Date, on behalf of

and for the benefit of the Holders of the Notes, without recourse, all of the

Issuer’s right, title and interest (exclusive of the amount, if any, allocable

to any rebatable insurance premium financed by any Contract) in, to and under:

(i) the Initial Contracts and Subsequent Contracts secured by the Motorcycles

(which Contracts shall be listed in the List of Contracts and Subsequent List

of Contracts); (ii) certain monies due under the Initial Contracts and

Subsequent Contracts on and 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 on or 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 prior to the Initial Cutoff Date or Subsequent

Cutoff Date); (iii) security interests in the Motorcycles; (iv) amounts on

deposit in the Collection Account, the Note Distribution Account, the Reserve

Fund, the Pre-Funding Account and the Interest Reserve Account, including all

Eligible Investments therein and all income from the investment of funds

therein and all proceeds therefrom; (v) proceeds from claims under certain

insurance policies or debt cancellation agreements in respect of individual

Motorcycles or obligors under the Contracts; (vi) certain rights under the Sale

and Servicing Agreement; (vii) the protective security interest in certain of

the above-described property granted by the Trust Depositor in favor of the

Issuer; (viii) all present and future claims, demands, causes of and choses in

action in respect of any or all of the foregoing; (ix) all rights to certain

rebates of premiums and other amounts relating to insurance policies, debt

cancellation agreements, extended service contracts or other repair agreements

and other items financed under such Contracts and (x) all payments on or under

and all proceeds of every kind and nature whatsoever in respect of any or all

of the foregoing, including all proceeds of the conversion, voluntary or

involuntary, into cash of other liquid property, all cash proceeds, accounts,

accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit

accounts, insurance proceeds, condemnation awards, rights to payment of any and

every kind and other forms of obligations and receivables, instruments and

other property which at any time constitute all

 

 

or part of or are included in the proceeds of any of the foregoing (as

each such defined term is defined in Section 1.01) (collectively, the

“Collateral”).

 

The foregoing Grant is made in trust to secure the

payment of principal of and interest on, and any other amounts owing in respect

of, the Notes, equally and ratably without prejudice, priority or distinction,

except for the subordination of the Class B Notes provided herein and all other

sums owing by the Issuer hereunder or under any other Transaction Document, and

to secure compliance with the provisions of this Indenture, all as provided in

this Indenture.

 

The Indenture Trustee, as Indenture Trustee on behalf

of the Holders of the Notes, acknowledges such Grant, accepts the trust under

this Indenture in accordance with the provisions of this Indenture and agrees

to perform its duties required in this Indenture in accordance with its terms

and the terms of the other Transaction Documents to which it is a party.

 

ARTICLE ONE

 

DEFINITIONS AND

INCORPORATION BY REFERENCE

 

Section

1.01.                         Definitions.

 

(a)                                  Except

as otherwise specified herein or as the context may otherwise require, the

following terms have the respective meanings set forth below for all purposes

of this Indenture.

 

“Act” shall have the meaning specified in

Section 11.03(a).

 

“Administration

Agreement” means the Administration Agreement, dated as of

the date hereof, among the Administrator, the Issuer, the Trust Depositor and

the Indenture Trustee.

 

“Administrator”

means Harley-Davidson Credit Corp. or any successor Administrator under the

Administration Agreement.

 

“Affiliate”

means, with respect to any specified Person, any other Person controlling or

controlled by or under common control with such specified Person.  For the purposes of this definition, “control”

when used with respect to any Person means the power to direct the management

and policies of such Person, directly or indirectly, whether through the

ownership of voting securities, by contract or otherwise; and the terms “controlling”

and “controlled”

have meanings correlative to the foregoing.

 

“Authorized

Officer” means, with respect to the Issuer, any officer of

the Owner Trustee who is authorized to act for the Owner Trustee in matters

relating to the Issuer and who is identified on the list of Authorized Officers

delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as

such list may be modified or supplemented from time to time thereafter) and, so

long as the Administration Agreement is in effect, any Vice

 

2

 

President or more senior officer of the Administrator who is authorized

to act for the Administrator in matters relating to the Issuer and to be acted

upon by the Administrator pursuant to the Administration Agreement and who is

identified on the list of Authorized Officers delivered by the Administrator to

the Indenture Trustee on the Closing Date (as such list may be modified or

supplemented from time to time thereafter).

 

“Book

Entry Notes” means a beneficial interest in the Notes,

ownership and transfers of which shall be made through book entries by a

Clearing Agency as described in Section 2.09.

 

“Business

Day” means any day other than a Saturday, Sunday or other day

on which banking institutions in  the

city of Chicago, Illinois, Wilmington, Delaware or New York, New York are

authorized or obligated by law, executive order or governmental decree to be

closed.

 

“Certificate

of Trust” means the Certificate of Trust of the Issuer

substantially in the form of Exhibit A to the Trust Agreement.

 

“Class”

means all Notes whose form is identical except for variation in denomination,

principal amount or owner.

 

“Class

A-1 Final Distribution Date” has the meaning set forth in the

Sale and Servicing Agreement.

 

“Class

A-1 Rate” has the meaning set forth in the Sale and Servicing

Agreement.

 

 “Class A-1 Notes” means the

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

 

“Class

A-2 Final Distribution Date” has the meaning set forth in the

Sale and Servicing Agreement.

 

“Class

A-2 Rate” has the meaning set forth in the Sale and Servicing

Agreement.

 

“Class

A-2 Notes” means the Class A-2 Notes, substantially in the

form of Exhibit

C.

 

“Class

B Final Distribution Date” has the meaning set forth in the

Sale and Servicing Agreement.

 

“Class

B Rate” has the meaning set forth in the Sale and Servicing

Agreement.

 

“Class

B Notes” means the Class B Notes, substantially in the form

of Exhibit

D.

 

“Clearing

Agency” means an organization registered as a “clearing

agency” pursuant to Section 17A of the Exchange Act.

 

3

 

“Clearing

Agency Participant” means a broker, dealer, bank, other

financial institution or other Person for whom from time to time a Clearing

Agency effects book-entry transfers and pledges of securities deposited with

the Clearing Agency.

 

“Closing Date” has the meaning set forth in

the Sale and Servicing Agreement.

 

“Code” means the Internal Revenue Code of

1986, as amended.

 

“Collateral” means the Collateral Granted

to the Indenture Trustee under this Indenture, including all proceeds thereof.

 

“Commission”

means the Securities and Exchange Commission.

 

“Corporate

Trust Office” means the principal office of the Indenture

Trustee at which at any particular time its corporate trusts business shall be

administered which office at date of the execution of this Agreement is located

at 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602, Attention:

Corporate Trust Administration; or at such other address as the Indenture

Trustee may designate from time to time by notice to the Noteholders and the

Issuer, or the principal corporate trust office of any successor Indenture

Trustee (the address of which the successor Indenture Trustee will notify the

Noteholders and the Issuer).

 

“Default”

means any occurrence that is, or with notice or the lapse of time or both would

become, an Event of Default.

 

“Definitive

Notes” shall have the meaning specified in Section 2.09.

 

“Distribution

Date” has the meaning set forth in the Sale and Servicing

Agreement.

 

“DTC”

means The Depository Trust Company, and its successors and assigns.

 

“ERISA”

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

 

“Event

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

 

“Exchange

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

 

“Executive

Officer” means, with respect to any corporation, the Chief

Executive Officer, Chief Operating Officer, Chief Financial Officer, President,

Executive Vice President, any Vice President, the Secretary or the Treasurer of

such corporation; and with respect to any partnership, any general partner

thereof.

 

 “Grant” means mortgage,

pledge, bargain, sell, warrant, alienate, remise, release, convey, assign,

transfer, create and grant a lien upon and a security interest in and right of

set-off against, deposit, set over and confirm pursuant to this Indenture.  A Grant of the Collateral or of any other

agreement or instrument shall include all rights, powers and options (but none

of the obligations) of the granting party thereunder, including the immediate

and continuing right to claim for, collect, receive and give receipt for

principal

 

4

 

and interest payments in respect of the Collateral and all other moneys

payable thereunder, to give and receive notices and other communications, to

make waivers or other agreements, to exercise all rights and options, to bring

Proceedings in the name of the granting party or otherwise and generally to do

and receive anything that the granting party is or may be entitled to do or

receive thereunder or with respect thereto.

 

“Harley-Davidson

Credit” means Harley-Davidson Credit Corp., and its

successors and assigns.

 

“Holder”

or “Noteholder”

or “Note

Owner” means, with respect to a Book-Entry Note, the Person who is

the owner of such Book-Entry Note, as reflected on the books of the Clearing

Agency, or on the books of a Person maintaining an account with such Clearing

Agency (directly as a Clearing Agency participant or as an indirect

participant, in each case in accordance with the rules of such Clearing Agency)

and with respect to a Definitive Note the Person in whose name a Note is

registered on the Note Register.

 

“Indebtedness”

means, with respect to any Person at any time, (i) indebtedness or liability of

such Person for borrowed money whether or not evidenced by bonds, debentures,

notes or other instruments, or for the deferred purchase price of property or

services (including trade obligations); (ii) obligations of such Person as

lessee under leases which should have been or should be, in accordance with

generally accepted accounting principles, recorded as capital leases; (iii)

current liabilities of such Person in respect of unfunded vested benefits under

plans covered by Title IV of ERISA; (iv) obligations issued for or liabilities

incurred on the account of such Person; (v) obligations or liabilities of such

Person arising under acceptance facilities; (vi) obligations of such Person

under any guaranties, endorsements (other than for collection or deposit in the

ordinary course of business) and other contingent obligations to purchase, to

provide funds for payment, to supply funds to invest in any Person or otherwise

to assure a creditor against loss; (vii) obligations of such Person secured by

any lien on property or assets of such Person, whether or not the obligations

have been assumed by such Person; or (viii) obligations of such Person under

any interest rate or currency exchange agreement.

 

“Indenture”

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

 

“Indenture

Securities” means the Notes.

 

“Indenture

Security Holder” means a Noteholder.

 

“Indenture

Trustee” means BNY Midwest Trust Company, as Indenture

Trustee under this Indenture, or any successor Indenture Trustee under this

Indenture.

 

“Independent”

means, when used with respect to any specified Person, that the Person (i) is

in fact independent of the Issuer, any other obligor upon the Notes, the Trust

Depositor, the Seller and any of their respective Affiliates, (ii) does not

have any direct financial interest or any material indirect financial interest

in the Issuer, any such other obligor, the Seller or any of their respective

Affiliates, and (iii) is not connected with the Issuer, any such other obligor,

the Seller or any Affiliate of any of the foregoing Persons as

 

5

 

an officer, employee, promoter, underwriter, trustee, partner, director

or person performing similar functions.

 

“Independent

Certificate” means a certificate or opinion to be delivered

to the Indenture Trustee under the circumstances described in, and otherwise

complying with, the applicable requirements of Section 11.01, made by an

Independent appraiser or other expert appointed by an Issuer Order and approved

by the Indenture Trustee in the exercise of reasonable care, and such opinion

or certificate shall state that the signer has read the definition of “Independent”

in this Indenture and that the signer is Independent within the meaning

thereof.

 

“Interest

Period” means, with respect to any Distribution Date and any

Class of Notes, the period from and including the fifteenth day of the month of

the Distribution Date immediately preceding such Distribution Date (or, in the

case of the first Distribution Date, from and including the Closing Date) to

but excluding the fifteenth day of the month of such Distribution Date.

 

“Interest

Rate” means the Class A-1 Rate, the Class A-2 Rate and the

Class B Rate, as applicable.

 

“Issuer”

means Harley-Davidson Motorcycle Trust 2003-2 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

 

6

 

any applicable requirements of Section 11.01, and shall be in form and

substance satisfactory to the Indenture Trustee.

 

“Outstanding”

means, as of the date of determination, all Notes theretofore authenticated and

delivered under this Indenture except:

 

(i)                                     Notes

theretofore cancelled by the Note Registrar or delivered to the Note Registrar

for cancellation;

 

(ii)                                  Notes

or portions thereof the payment for which money in the necessary amount has

been theretofore deposited with the Indenture Trustee or any Paying Agent in

trust for the Holders of such Notes (provided, however, that if such Notes are

to be redeemed, notice of such redemption has been duly given pursuant to this

Indenture or provision for such notice has been made, satisfactory to the

Indenture Trustee, has been made); and

 

(iii)                               Notes

in exchange for or in lieu of other Notes which have been authenticated and

delivered pursuant to this Indenture unless proof satisfactory to the Indenture

Trustee is presented that any such Notes are held by a protected purchaser,

within the meaning of § 8-303 of the UCC;

 

provided,

however, that in determining whether the Holders of the

requisite Outstanding Amount have given any request, demand, authorization,

direction, notice, consent or waiver hereunder or under any other Transaction

Document, Notes owned by the Issuer, any other obligor upon the Notes, the

Trust Depositor, Harley-Davidson Credit or any of their respective Affiliates

shall be disregarded and deemed not to be Outstanding, except that, in

determining whether the Indenture Trustee shall be protected in relying upon

any such request, demand, authorization, direction, notice, consent or waiver,

only Notes that the Indenture Trustee knows to be so owned shall be so

disregarded.  Notes so owned that have

been pledged in good faith may be regarded as Outstanding if the pledgee

establishes to the satisfaction of the Indenture Trustee the pledgee’s right so

to act with respect to such Notes and that the pledgee is not the Issuer, any

other obligor upon the Notes, the Trust Depositor, Harley-Davidson Credit or

any of their respective Affiliates.

 

“Outstanding

Amount” means the aggregate principal amount of all Notes of

one Class or of all Classes, as the case may be, Outstanding at the date of

determination.

 

“Owner

Trustee” means Wilmington Trust Company, not in its

individual capacity but solely as Owner Trustee under the Trust Agreement, or

any successor trustee under the Trust Agreement.

 

“Paying

Agent” means the Indenture Trustee or any other Person that

meets the eligibility standards for the Indenture Trustee specified in Section

6.11 and is authorized by the Issuer to make the distributions from the Note

Distribution Account, including payment of principal of or interest on the

Notes on behalf of the Issuer.

 

7

 

“Person”

means any individual, corporation, estate, partnership, limited liability

company, joint venture, association, joint stock company, trust (including any

beneficiary thereof), unincorporated organization or government or any agency

or political subdivision thereof.

 

“Plan”

means an employee benefit plan, as defined in Section 3(3) of ERISA, that is

subject to Title I of ERISA or a plan, as defined in Section 4975(e)(1) of the

Code.

 

“Predecessor

Note” means, with respect to any particular Note, every

previous Note evidencing all or a portion of the same debt as that evidenced by

such particular Note; and for the purpose of this definition, any Note

authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,

destroyed or stolen Note shall be deemed to evidence the same debt as the

mutilated, lost, destroyed or stolen Note.

 

“Proceeding”

means any suit in equity, action at law or other judicial or administrative

proceeding.

 

“Rating

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

 

“Rating

Agency Condition” means, with respect to any action, that

each Rating Agency shall have been given ten days (or such shorter period as is

acceptable to each Rating Agency) prior notice thereof and that each Rating

Agency shall have notified the Trust Depositor, the Servicer and the Issuer in

writing that such action will not result in a qualification, reduction or

withdrawal of its then-current rating of any Class of Notes.

 

“Rating

Event” means the qualification, reduction or withdrawal by

either Rating Agency of its then-current rating of any Class of Notes.

 

“Record

Date” means, with respect to a Redemption Date, the close of

business on the last Business Day of the immediately preceding month and, with

respect to a Distribution Date, the close of business on the day immediately

preceding such date.

 

“Redemption

Date” means (a) in the case of a redemption of the Notes

pursuant to Section 10.01(a) or a payment to Noteholders pursuant to Section

10.01(b), the Distribution Date specified by the Servicer or the Issuer

pursuant to Section 10.01(a) or 10.01(b), as the case may be and (b) in

the case of a redemption of Notes pursuant to Section 10.01(c), the

Distribution Date specified in Section 7.07 of the Sale and Servicing

Agreement on which the Indenture Trustee shall withdraw any amount remaining in

the Pre-Funding Account and deposit the applicable amount in the Note

Distribution Account.

 

“Redemption

Date Amount” means (i) in the case of a redemption of the

Notes pursuant to Section 10.01(a), an amount equal to the unpaid principal

amount of the Notes redeemed plus accrued and unpaid interest thereon at the

weighted average of the Interest Rate for each Class of Notes being so redeemed

to but excluding the Redemption Date, or (ii) in the case of a payment made to

Noteholders pursuant to Section 10.01(b), the amount on deposit in the Note

Distribution Account, but not in excess of the amount specified in clause (i)

above.

 

8

 

“Registered

Holder” means the Person in whose name a Note is registered

on the Note Register on the applicable Record Date.

 

“Responsible

Officer” means, with respect to the Indenture Trustee, any

officer within the Corporate Trust Office (or any successor group of the

Indenture Trustee), including any Vice President, assistant secretary or other

officer or assistant officer of the Indenture Trustee customarily performing

functions similar to those performed by the people who at such time shall be

officers, respectively, or to whom any corporate trust matter is referred at

the Corporate Trust Office of the Indenture Trustee because of his knowledge of

and familiarity with the particular subject.

 

“Sale

and Servicing Agreement” means the Sale and Servicing

Agreement, dated as of the date hereof, among the Issuer, the Trust Depositor,

the Indenture Trustee and the Servicer.

 

“Seller”  means Harley-Davidson Credit, in its

capacity as Seller under the Transfer and Sale Agreement, and any successors

and assigns.

 

“Servicer”

means Harley-Davidson Credit, in its capacity as Servicer

under the Sale and Servicing Agreement, and any Successor Servicer thereunder.

 

“Similar

Law” means any foreign, federal, state or local law with

provisions substantially similar to Title I of ERISA or Section 4975 of the

Code.

 

“State”

means any one of the 50 states of the United States or any of its territories,

or the District of Columbia.

 

“Termination

Date” means the date on which the Indenture Trustee shall

have received payment and performance of all amounts and obligations which the

Issuer may owe to or on behalf of the Indenture Trustee for the benefit of the

Noteholders under this Indenture or the Notes.

 

“Trust

Agreement” means the Trust Agreement, dated as of the date

hereof, between the Trust Depositor and the Owner Trustee.

 

“Trust

Depositor” shall mean Harley-Davidson Customer Funding Corp.,

in its capacity as trust depositor under the Sale and Servicing Agreement.

 

“Trust

Indenture Act” or “TIA” means the Trust Indenture Act of

1939, as amended.

 

“UCC”

means the Uniform Commercial Code as in effect on the date hereof and from time

to time in the State of Illinois, provided that if by reason of

mandatory provisions of law, the perfection or the effect of perfection or

non-perfection or priority of the security interests in any collateral or the

availability of any remedy hereunder is governed by the Uniform Commercial Code

as in effect on or after the date hereof in any other jurisdiction, “UCC”

means the Uniform Commercial Code as in effect in such other jurisdiction for

purposes of the provisions hereof relating to such perfection or effect of

perfection or non-perfection or priority or availability of such remedy.

 

9

 

“United

States” means the United States of America.

 

(b)                                 Except

as otherwise specified herein or as the context may otherwise require,

capitalized terms used herein that are not otherwise defined shall have the

meanings ascribed thereto in the Sale and Servicing Agreement.

 

Section

1.02.                         Incorporation

by Reference of Trust Indenture Act.  Whenever this Indenture refers to a

provision of the TIA, the provision is incorporated by reference in and made a

part of this Indenture.  The following

TIA terms used in this Indenture have the following meanings:

 

“Commission”

means the Securities and Exchange Commission.

 

“indenture

securities” means the Notes.

 

“indenture

security holder” means a Noteholder.

 

“indenture

to be qualified” means this Indenture.

 

“indenture

trustee” or “institutional trustee” means the Indenture

Trustee.

 

“obligor”

on the indenture securities means the Issuer and any other obligor on the

indenture securities.

 

All other TIA terms used in this Indenture that are

defined by the TIA, defined by TIA reference to another statute or defined by

Commission rule have the meaning assigned to them by such definitions.

 

Section

1.03.                         Rules of

Construction. 

Unless the context otherwise requires:

 

(i)                                     a

term has the meaning assigned to it;

 

(ii)                                  an

accounting term not otherwise defined has the meaning assigned to it in

accordance with generally accepted accounting principles as in effect from time

to time;

 

(iii)                               “or”

is not exclusive;

 

(iv)                              “including”

means including without limitation;

 

(v)                                 words

in the singular include the plural and words in the plural include the

singular;

 

(vi)                              any

agreement, instrument or statute defined or referred to herein or in any

instrument or certificate delivered in connection herewith means such

agreement, instrument or statute as from time to time amended, modified or

supplemented and includes (in the case of agreements or instruments) references

to all attachments thereto and instruments incorporated therein; references to

a Person are also to its permitted successors and assigns; and

 

10

 

(vii)                           the

words “hereof,”

“herein”

and “hereunder”

and words of similar import when used in this Indenture shall refer to this

Indenture as a whole and not to any particular provision of this Indenture;

Section and subsection references contained in this Indenture are references to

Sections and subsections in or to this Indenture unless otherwise specified.

 

ARTICLE TWO

 

THE NOTES

 

Section

2.01.                         Form.  The Class

A-1 Notes, the Class A-2 Notes and the Class B Notes, in each case together

with the Indenture Trustee’s certificate of authentication, shall be in

substantially the forms set forth as Exhibits to this Indenture with such

appropriate insertions, omissions, substitutions and other variations as are

required or permitted by this Indenture and may have such letters, numbers or

other marks of identification and such legends or endorsements placed thereon

as may, consistently herewith, be determined by the officers executing such

Notes, as evidenced by their execution of the Notes.  Any portion of the text of any Note may be set forth on the

reverse thereof, with an appropriate reference thereto on the face of the Note.

 

Each Note shall be dated the date of its

authentication.  The terms of the Notes

set forth in Exhibits hereto are part of the terms of this Indenture.

 

Section

2.02.                         Execution,

Authentication and Delivery.  The Notes shall be executed on behalf of the

Issuer by any of its Authorized Officers. 

The signature of any such Authorized Officer on the Notes may be manual

or facsimile.  Notes bearing the manual

or facsimile signature of individuals who were at any time Authorized Officers

of the Issuer shall bind the Issuer, notwithstanding that such individuals or

any of them have ceased to hold such offices prior to the authentication and

delivery of such Notes or did not hold such offices at the date of such Notes.

 

The Indenture Trustee shall, upon receipt of an Issuer

Order, authenticate and deliver for original issue (i) Class A-1 Notes in an

aggregate principal amount of $251,000,000, (ii) Class A-2 Notes in an

aggregate principal amount of $152,750,000 and (iii) Class B Notes in an

aggregate principal amount of $21,250,000. 

The aggregate principal amount of such Classes of Notes Outstanding at

any time may not exceed such respective amounts, except as otherwise provided

in Section 2.05.

 

Each Note shall be dated the date of its

authentication.  The Notes shall be

issuable as registered Notes in the minimum denomination of $1,000 and in

integral multiples of $1,000 in excess thereof.

 

No Note shall be entitled to any benefit under this

Indenture or be valid or obligatory for any purpose, unless there appears on

such Note a certificate of authentication substantially in the form provided

for herein by the Indenture Trustee by the manual signature of one of its

authorized signatories, and such certificate upon any Note shall be

 

11

 

conclusive evidence, and the only evidence, that such Note has been

duly authenticated and delivered hereunder.

 

Section

2.03.                         Temporary

Notes. 

Pending the preparation of Book-Entry Notes or Definitive Notes, the

Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee

shall authenticate and deliver, temporary Notes that are printed, lithographed,

typewritten, mimeographed or otherwise produced, of the tenor of the definitive

Notes in lieu of which they are issued and with such variations not

inconsistent with the terms of this Indenture as the officers executing such

Notes may determine, as evidenced by their execution of such Notes.

 

If temporary Notes are issued, the Issuer will cause

Book-Entry Notes or Definitive Notes to be prepared without unreasonable

delay.  After the preparation of

Book-Entry Notes or Definitive Notes, the temporary Notes shall be exchangeable

for Book-Entry Notes or Definitive Notes upon surrender of the temporary Notes

at the office or agency of the Issuer to be maintained as provided in Section

3.02, without charge to the Holder. 

Upon surrender for cancellation of any one or more temporary Notes, the

Issuer shall execute and the Indenture Trustee shall authenticate and deliver

in exchange therefor a like tenor and principal amount of definitive Notes of

authorized denominations.  Until so

exchanged, the temporary Notes shall in all respects be entitled to the same

benefits under this Indenture as Book-Entry Notes or Definitive Notes.

 

Section

2.04.                         Registration;

Registration of Transfer and Exchange.  The Issuer shall cause to be kept a register

(the “Note Register”) in which, subject to such reasonable regulations as it

may prescribe, the Note Registrar shall provide for the registration of Notes

and the registration of transfers of Notes. 

The Indenture Trustee shall be “Note Registrar” for the purpose of

registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar,

the Issuer shall promptly appoint a successor or, if it elects not to make such

an appointment, assume the duties of Note Registrar.

 

If a Person other than the Indenture Trustee is

appointed by the Issuer as Note Registrar, the Issuer will give the Indenture

Trustee prompt written notice of the appointment of such Note Registrar and of

the location, and any change in the location, of the Note Register, and the

Indenture Trustee shall have the right to inspect the Note Register at all

reasonable times and to obtain copies thereof, and the Indenture Trustee shall

have the right to rely upon a certificate executed on behalf of the Note

Registrar by an Executive Officer thereof as to the names and addresses of the

Holders of the Notes and the principal amounts and the amounts and number of

such Notes.

 

Upon surrender for registration of transfer of any

Note at the office or agency of the Issuer to be maintained as provided in

Section 3.02, the Issuer shall execute, and the Indenture Trustee shall

authenticate and the Noteholder shall obtain from the Indenture Trustee, in the

name of the designated transferee or transferees, one or more new Notes of the

same Class in any authorized denominations, of a like aggregate principal

amount.

 

At the option of the Holder, Notes may be exchanged

for other Notes of the same Class in any authorized denominations, of a like

aggregate principal amount, upon surrender

 

12

 

of the Notes to be exchanged at such office or agency.  Whenever any Notes are so surrendered for

exchange, the Issuer shall execute, and the Indenture Trustee shall

authenticate and the Noteholder shall obtain from the Indenture Trustee, the

Notes which the Noteholder making the exchange is entitled to receive.

 

All Notes issued upon any registration of transfer or

exchange of Notes shall be the valid obligations of the Issuer, evidencing the

same debt, and entitled to the same benefits under this Indenture, as the Notes

surrendered upon such registration of transfer or exchange.

 

Every Note presented or surrendered for registration

of transfer or exchange shall be duly endorsed by, or be accompanied by a

written instrument of transfer in form satisfactory to the Indenture Trustee

duly executed by, the Holder thereof or such Holder’s attorney duly authorized

in writing, with such signature guaranteed by a commercial bank or trust

company located, or having a correspondent located in the city in which the

Corporate Trust Office is located, or by a member firm of a national securities

exchange, and such other documents as the Indenture Trustee may require.

 

No service charge shall be made to a Holder for any

registration of transfer or exchange of Notes, but the Issuer or the Indenture

Trustee may require payment of a sum sufficient to cover any tax or other

governmental charge that may be imposed in connection with any registration of

transfer or exchange of Notes, other than exchanges pursuant to Section 2.03

not involving any transfer.

 

Each Person that acquires a Note shall be required to

represent, or in the case of a Note in book-entry form, will be deemed to

represent by its acceptance of the Note, that (i) it is not, and is not

acquiring the Note on behalf of or with “plan assets” (as determined under

Department of Labor Regulation Section 2510.3-101 or otherwise) of a Plan, or

any employee benefit plan subject to Similar Law, or (ii) its acquisition and

holding of the Note do not give rise to a nonexempt prohibited transaction

under Section 406 of ERISA or Section 4975 of the Code, or any Similar

Law.  Any transfer with respect to which

the representation in clause (i) or (ii) above is not true shall be void ab initio.

 

The Notes may not be purchased with the assets of a

Plan if the Issuer, the Indenture Trustee, the Owner Trustee, the Servicer or

the Underwriters or any of their affiliates has investment or administrative

discretion with respect to those Plan assets; has authority or responsibility

to give, or regularly gives, investment advice with respect to those Plan

assets for a fee and pursuant to an agreement or understanding that the advice

will serve as a primary basis for investment decisions with respect to those

Plan assets and will be based on the particular investment needs for the Plan;

or is an employer maintaining or contributing to the Plan.

 

The preceding provisions of this Section notwithstanding,

the Issuer shall not be required to make and the Note Registrar need not

register transfers or exchanges of Notes selected for redemption or of any Note

for a period of 15 days preceding the due date for any payment with respect to

the Note.

 

13

 

(i)                                     the

Note Registrar and the Trustee will be entitled to deal with the Clearing

Agency for all purposes of this Indenture (including the payment of principal

of and interest on the Notes and the giving of instructions or directions

hereunder) as the sole holder of the Notes, and shall have no obligation to the

Noteholders;

 

(ii)                                  

the rights of Noteholders will be exercised only through the Clearing Agency

and will be limited to those established by law and agreements between such

Noteholders and the Clearing Agency and/or the Clearing Agency Participants

pursuant to the Depository Agreement;

 

(iii)                                whenever this Indenture

requires or permits actions to be taken based upon instructions or directions

of Holders of Notes evidencing a specified percentage of the Outstanding Amount

of the Notes, the Clearing Agency will be deemed to represent such percentage

only to the extent that it has received instructions to such effect from

Noteholders and/or Clearing Agency Participants owning or representing,

respectively, such required percentage of the beneficial interest in the Notes

and has delivered such instructions to the Trustee; and

 

(iv)                              without

the consent of the Issuer and the Trustee, no such Note may be transferred by

the Depository except to a successor Depository that agrees to hold such Note

for the account of the Owners or except upon the election of the Owner thereof

or a subsequent transferee to hold such Note in physical form.

 

Neither the Trustee nor the Registrar shall have any responsibility to

monitor or restrict the transfer of beneficial ownership in any Note an

interest in which is transferable through the facilities of the Depository.

 

Section

2.05.                         Mutilated,

Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to

the Indenture Trustee, or the Indenture Trustee receives evidence to its

satisfaction of the destruction, loss or theft of any Note, and (ii) there is

delivered to the Indenture Trustee such security or indemnity as may be

required by them to hold the Issuer and the Indenture Trustee harmless, then,

in the absence of notice to the Issuer, the Note Registrar or the Indenture

Trustee that such Note has been acquired by a protected purchaser, within the

meaning of § 8-303 of the UCC, the Issuer shall execute and upon its

request the Indenture Trustee shall authenticate and deliver, in exchange for

or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement

Note of the same Class and denomination; provided, however, that if any such

destroyed, lost or stolen Note, but not a mutilated Note, shall have become or

within seven days shall be due and payable, or shall have been called for

redemption, instead of issuing a replacement Note, the Issuer may pay such

destroyed, lost or stolen Note when so due or payable or upon the Redemption

Date without surrender thereof.  If,

after the delivery of such replacement Note or payment of a destroyed, lost or

stolen Note pursuant to the proviso to the preceding sentence, a protected

purchaser, within the meaning of § 8-303 of the UCC, of the original Note

in lieu of which such replacement Note was issued presents for payment such

original Note, the Issuer, and the Indenture Trustee shall be entitled to recover

such replacement Note (or such payment) from the Person to whom it was

delivered or any Person taking such replacement Note from such Person to whom

such replacement Note was delivered or any assignee of such Person,

 

14

 

except

a protected purchaser, within the meaning of § 8-303 of the UCC, and shall

be entitled to recover upon the security or indemnity provided therefor to the

extent of any loss, damage, cost or expense incurred by the Issuer or the

Indenture Trustee in connection therewith.

 

Upon the issuance of any replacement Note under this

Section, the Issuer or the Indenture Trustee may require the payment by the

Holder of such Note of a sum sufficient to cover any tax or other governmental

charge that may be imposed in relation thereto and any other reasonable

expenses (including the fees and expenses of the Indenture Trustee or the Note

Registrar) connected therewith.

 

Every replacement Note issued pursuant to this Section

in replacement of any mutilated, destroyed, lost of stolen Note shall

constitute an original additional contractual obligation of the Issuer, whether

or not the mutilated, destroyed, lost or stolen Note shall be at any time

enforceable by anyone, and shall be entitled to all the benefits of this

Indenture equally and proportionately with any and all other Notes duly issued

hereunder.

 

The provisions of this Section are exclusive and shall

preclude (to the extent lawful) all other rights and remedies with respect to

the replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

Section

2.06.                         Persons

Deemed Owner. 

Prior to due presentment for registration of transfer of any Note, the

Issuer, the Indenture Trustee, and any of their respective agents may treat the

Person in whose name any Note is registered (as of the day of determination) as

the owner of such Note for the purpose of receiving payments of principal of

and interest, if any, on such Note and for all other purposes whatsoever,

whether or not such Note be overdue, and none of the Issuer, the Indenture

Trustee nor any of their respective agents shall be affected by notice to the

contrary.

 

Section

2.07.                         Payment

of Principal and Interest; Defaulted Interest.

 

(a)                                  Each

Class of Notes shall accrue interest at the related Interest Rate, and such

interest shall be payable on each Distribution Date as specified therein,

subject to Section 3.01.  Any

installment of interest or principal, if any, payable on any Note which is

punctually paid or duly provided for by the Issuer on the applicable

Distribution Date shall be paid to the Person in whose name such Note (or one

or more Predecessor Notes) is registered on the Record Date, by wire transfer

in immediately available funds to the account designated by such nominee and

except for the final installment of principal payable with respect to such Note

on a Distribution Date or on the related Final Distribution Date, as the case

may be (and except for the Redemption Price for any Note called for redemption

pursuant to Section 10.01(a)), which shall be payable as provided below.  The funds represented by any such checks

returned undelivered shall be held in accordance with Section 3.03.

 

(b)                                 The

principal of each Note shall be payable on each Distribution Date to the extent

provided in the form of the related Note set forth as an Exhibit hereto.  Notwithstanding the foregoing, the entire

unpaid principal amount of the Notes shall be due

 

15

 

and

payable, if not previously paid, on the date on which the maturity of the Notes

has been accelerated in the manner provided in Section 5.02.  All principal payments on each Class of

Notes shall be made pro rata to the Noteholders of such Class entitled thereto.  The Indenture Trustee shall notify the

Person in whose name a Note is registered at the close of business on the

Record Date preceding the Distribution Date on which the Issuer expects that

the final installment of principal of and interest on such Note will be paid.  Such notice shall be mailed within five

Business Days of receipt of notice of termination of the Trust pursuant to

Section 9.01(c) of the Trust Agreement and shall specify that such final

installment will be payable only upon presentation and surrender of such Note

and shall specify the place where such Note may be presented and surrendered

for payment of such installment. 

Notices in connection with redemptions of Notes shall be mailed to

Noteholders as provided in Section 10.02.

 

(c)                                  If

the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay

defaulted interest (plus interest on such defaulted interest to the extent

lawful) at the applicable Interest Rate in any lawful manner.  The Issuer may pay such defaulted interest

to the Persons who are Noteholders on a subsequent special record date, which

date shall be at least five Business Days prior to the related payment

date.  The Issuer shall fix or cause to

be fixed any such special record date and payment date and, at least 15 days

before any such special record date, the Issuer shall mail to the Indenture

Trustee and each Noteholder a notice that states the special record date, the

payment date and the amount of defaulted interest to be paid.

 

Section

2.08.                         Cancellation.  All Notes

surrendered for payment, registration of transfer, exchange or redemption

shall, if surrendered to any Person other than the Indenture Trustee, be

delivered to the Indenture Trustee and shall be promptly cancelled by the

Indenture Trustee.  The Issuer may at

any time deliver to the Indenture Trustee for cancellation any Notes previously

authenticated and delivered hereunder which the Issuer may have acquired in any

manner whatsoever, and all Notes so delivered shall be promptly cancelled by

the Indenture Trustee.  No Notes shall

be authenticated in lieu of or in exchange for any Notes cancelled as provided

in this Section, except as expressly permitted by this Indenture.  All cancelled Notes may be held or disposed

of by the Indenture Trustee in accordance with its standard retention or

disposal policy as in effect at the time unless the Issuer shall direct by an

Issuer Order that they be destroyed or returned to it; provided that such

Issuer Order is timely and the Notes have not been previously disposed of by

the Indenture Trustee.

 

Section

2.09.                         Book-Entry

Notes. 

The Notes, upon original issuance, will be issued in the form of a

typewritten Note or Notes representing the Book-Entry Notes, to be delivered to

DTC, the initial Depository, by, or on behalf of, the Issuer.  Such Notes shall initially be registered on

the Note Register in the name of Cede & Co., the nominee of the initial

Clearing Agency, and no Noteholder will receive a Definitive Note representing

such Noteholder’s interest in such Note, except as provided in Section 2.11.  Unless and until definitive, fully

registered Notes (the “Definitive Notes”) have been issued to Noteholders

pursuant to Section 2.11:

 

(i)                                     the

provisions of this Section shall be in full force and effect;

 

16

 

(ii)                                  the

Note Registrar and the Indenture Trustee shall be entitled to deal with the

Clearing Agency for all purposes of this Indenture (including the payment of

principal of and interest on the Notes and the giving of instructions or

directions hereunder) as the sole holder of the Notes, and shall have no

obligation to the Noteholders;

 

(iii)                               to

the extent that the provisions of this Section conflict with any other

provisions of this Indenture, the provisions of this Section shall control;

 

(iv)                              the

rights of Noteholders shall be exercised only through the Clearing Agency and

shall be limited to those established by law and agreements between such

Noteholders and the Clearing Agency and/or the Clearing Agency Participants.  Pursuant to the Note Depository Agreement,

unless and until Definitive Notes are issued pursuant to Section 2.11, the

Clearing Agency will make book-entry transfers among the Clearing Agency

Participants and receive and transmit payments of principal of and interest on

the Notes to such Clearing Agency Participants; and

 

(v)                                 whenever

this Indenture requires or permits actions to be taken based upon instructions

or directions of Noteholders evidencing a specified percentage of the

Outstanding Amount, the Clearing Agency shall be deemed to represent such

percentage only to the extent that it has received instructions to such effect

from Noteholders and/or Clearing Agency Participants owning or representing,

respectively, such required percentage of the beneficial interest in the Notes

and has delivered such instructions to the Indenture Trustee.

 

Section

2.10.                         Notices

to Clearing Agency.  Whenever a notice or other communication to the Noteholders is

required under this Indenture, unless and until Definitive Notes shall have

been issued to Noteholders pursuant to Section 2.11, the Indenture Trustee

shall give all such notices and communications specified herein to be given to

Noteholders of the Notes to the Clearing Agency, and shall have no obligation

to the Noteholders.

 

Section

2.11.                         Definitive

Notes. 

If (i)(A) the Administrator advises the Indenture Trustee in writing

that the Clearing Agency is no longer willing or able to properly discharge its

responsibilities as described in the Note Depository Agreement, and (B)

Indenture Trustee or the Administrator is unable to locate a qualified

successor, (ii) the Administrator at its option advises the Indenture Trustee

in writing that it elects to terminate the book-entry system through the

Clearing Agency, or (iii) after the occurrence of an Event of Default, the

Modified Required Holders advise the Indenture Trustee and the Clearing Agency

through the Clearing Agency Participants in writing that the continuation of a

book-entry system through the Clearing Agency is no longer in the best

interests of the related Noteholders, then the Indenture Trustee shall notify

all Noteholders of the related Class or Classes of Notes, through the Clearing

Agency, of the occurrence of any such event and of the availability of

Definitive Notes of the related Class of Notes to Noteholders requesting the

same.  Upon surrender to the Indenture

Trustee of the Note or Notes representing the Book-Entry Notes by the Clearing

Agency, accompanied by registration instructions, the Issuer shall execute and

the Indenture Trustee shall authenticate the Definitive Notes in accordance

with the instructions of the Clearing Agency. 

None of the Issuer, the Note

 

17

 

Registrar

or the Indenture Trustee shall be liable for any delay in delivery of such

instructions and may conclusively rely on, and shall be protected in relying

on, such instructions.  Upon the

issuance of Definitive Notes of a Class, the Indenture Trustee shall recognize the

Noteholders of the Definitive Notes as Noteholders hereunder.

 

The Indenture Trustee shall not be liable if the

Indenture Trustee or the Administrator is unable to locate a qualified

successor Clearing Agency.  The

Definitive Notes shall be typewritten, printed, lithographed or engraved or produced

by any combination of these methods (with or without steel engraved borders),

all as determined by the officers executing such Notes, as evidenced by their

execution of such Notes.

 

Section

2.12.                         Release

of Collateral. 

Subject to Sections 4.04, 8.04 and 11.01 and the terms of the

Transaction Documents, the Indenture Trustee shall release property from the

lien of this Indenture only upon receipt of an Issuer Request accompanied by an

Officer’s Certificate.

 

Section

2.13.                         Tax

Treatment. 

The Issuer and the purchasers of the Notes intend, and will take all

actions consistent with the intention, that the Notes be treated as

indebtedness which is solely secured by the Collateral for all federal, state,

local, and foreign income and franchise tax purposes and that, pursuant to

Treasury Regulations Section 301.7701-3(b)(1)(ii) as in effect for periods

after January 1, 1997, the Trust be disregarded as a separate entity from

the Trust Depositor for federal income tax purposes.  The Issuer, by entering into this Indenture, and each Noteholder,

by its acceptance of its Note agree to treat the Notes for federal, state and

local income, single business and franchise tax purposes as indebtedness of the

Issuer.

 

ARTICLE THREE

 

COVENANTS

 

Section

3.01.                         Payment

of Principal and Interest.  The Issuer will duly and punctually pay the

principal of and interest, if any, on the Notes in accordance with the terms of

the Notes and this Indenture.  Without

limiting the foregoing, subject to Section 8.02(c), the Issuer and the

Indenture Trustee will cause to be deposited into the Note Distribution Account

amounts allocated pursuant to Section 7.05 of the Sale and Servicing Agreement,

and cause to be distributed all such amounts on a Distribution Date as

deposited therein (i) for the benefit of the Class A-1 Notes, to the Class A-1

Noteholders, (ii) for the benefit of the Class A-2 Notes, to the Class A-2

Noteholders and (iii) for the benefit of the Class B Notes, to the Class B

Noteholders, in each case as further specified herein.  Amounts properly withheld under the Code by

any Person from a payment to any Noteholder of interest and/or principal shall

be considered as having been paid by the Issuer to such Noteholder for all

purposes of this Indenture.

 

Section

3.02.                         Maintenance

of Office or Agency.  The Issuer will maintain in Wilmington, Delaware, an office or

agency where Notes may be surrendered for registration of transfer or exchange,

and where notices and demands to or upon the Issuer in respect of

 

18

 

the

Notes and this Indenture may be served. 

The Issuer hereby initially appoints the Indenture Trustee to serve as

its agent for the foregoing purposes. 

The Issuer will give prompt written notice to the Indenture Trustee of

the location, and of any change in the location, of any such office or

agency.  If at any time the Issuer shall

fail to maintain any such office or agency or shall fail to furnish the

Indenture Trustee with the address thereof, such surrenders, notices and

demands may be made or served at the Corporate Trust Office, and the Issuer

hereby appoints the Indenture Trustee as its agent to receive all such

surrenders, notices and demands.

 

Section

3.03.                         Money for

Payments to be Held in Trust.  As provided in Section 8.02, all payments of

amounts due and payable with respect to any Notes that are to be made from

amounts withdrawn from the Collection Account and the Note Distribution Account

pursuant to Section 8.02(b) shall be made on behalf of the Issuer by the Indenture

Trustee or by another Paying Agent, and no amounts so withdrawn from the

Collection Account and the Note Distribution Account for payments of Notes

shall be paid over to the Issuer except as provided in this Section.

 

On or before the Business Day immediately preceding

each Distribution Date and Redemption Date, the Issuer shall deposit or cause

to be deposited in the Note Distribution Account an aggregate sum sufficient to

pay the amounts then becoming due, such sum to be held in trust for the benefit

of the Persons entitled thereto and (unless the Paying Agent is the Indenture

Trustee) shall promptly notify the Indenture Trustee of its action or failure

so to act.

 

The Issuer will cause each Paying Agent other than the

Indenture Trustee to execute and deliver to the Indenture Trustee an instrument

in which such Paying Agent shall agree with the Indenture Trustee (and if the

Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the

provisions of this Section, that such Paying Agent will:

 

(i)                                     hold

all sums held by it for the payment of amounts due with respect to the Notes in

trust for the benefit of the Persons entitled thereto until such sums shall be

paid to such Persons or otherwise disposed of as herein provided and pay such sums

to such Persons as herein provided;

 

(ii)                                  give

the Indenture Trustee notice of any default by the Issuer (or any other obligor

upon the Notes) in the making of any payment required to be made with respect

to the Notes;

 

(iii)                               at

any time during the continuance of any such default, upon the written request

of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so

held in trust by such Paying Agent;

 

(iv)                              immediately

resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums

held by it in trust for the payment of Notes if at any time it ceases to meet

the standards required to be met by a Paying Agent at the time of its

appointment; and

 

19

 

(v)                                 comply

with all requirements of the Code with respect to the withholding from any

payments made by it on any Notes of any applicable withholding taxes imposed

thereon and with respect to any applicable reporting requirements in connection

therewith.

 

The Issuer may at any time, for the purpose of

obtaining the satisfaction and discharge of this Indenture or for any other

purpose, by Issuer Order direct any Paying Agent to pay to the Indenture

Trustee all sums held in trust by such Paying Agent, such sums to be held by

the Indenture Trustee upon the same trusts as those upon which the sums were

held by such Paying Agent; and upon such payment by any Paying Agent to the

Indenture Trustee, such Paying Agent shall be released from all further

liability with respect to such money.

 

Subject to applicable laws with respect to escheat of

funds, any money held by the Indenture Trustee or any Paying Agent in trust for

the payment of any amount due with respect to any Note and remaining unclaimed

for two years after such amount has become due and payable shall be discharged

from such trust and upon receipt of an Issuer Request shall be deposited by the

Indenture Trustee in the Collection Account; and the Holder of such Note shall

thereafter, as an unsecured general creditor, look only to the Issuer for

payment thereof, and all liability of the Indenture Trustee or such Paying

Agent with respect to such trust money shall thereupon cease; provided,

however, that if such money or any portion thereof had been

previously deposited by the Issuer with the Indenture Trustee for the payment

of principal or interest on the Notes; and provided, further, that the Indenture

Trustee or such Paying Agent, before being required to make any such repayment,

may at the expense of the Issuer cause to be published once, in a newspaper

published in the English language, customarily published on each Business Day

and of general circulation in The City of New York, notice that such money

remains unclaimed and that, after a date specified therein, which shall not be

less than 30 days from the date of such publication, any unclaimed balance of

such money then remaining will be repaid to or for the account of the

Issuer.  The Indenture Trustee may also

adopt and employ, at the expense of the Issuer, any other reasonable means of

notification of such repayment (including, but not limited to, mailing notice

of such repayment to Holders whose Notes have been called but not have not been

surrendered for redemption or whose right to or interest in moneys due and

payable but not claimed is determinable from the records of the Indenture

Trustee or of any Paying Agent, at the last address of record for each such

Holder).

 

Section

3.04.                         Existence.  The Issuer

will keep in full effect its existence, rights and franchises as a statutory trust

under the laws of the State of Delaware (unless it becomes, or any successor

Issuer hereunder is or becomes, organized under the laws of any other state or

of the United States, in which case the Issuer will keep in full effect its

existence, rights and franchises under the laws of such other jurisdiction) and

will obtain and preserve its qualification to do business in each jurisdiction

in which such qualification is or shall be necessary to protect the validity

and enforceability of this Indenture, the Notes, the Collateral and each other

instrument or agreement included in the Collateral.

 

Section

3.05.                         Protection

of Collateral. 

The Issuer intends the security interest Granted pursuant to this

Indenture in favor of the Indenture Trustee on behalf of the

 

20

 

Noteholders

to be prior to all other liens in respect of the Collateral, and the Issuer

shall take all actions necessary to obtain and maintain, for the benefit of the

Indenture Trustee on behalf of the Noteholders, a first lien on and a first

priority, perfected security interest in the Collateral.  The Issuer will from time to time execute

and deliver all such supplements and amendments hereto and all such financing

statements, continuation statements, instruments of further assurance and other

instruments, all as prepared by the Servicer and delivered to the Issuer, and

will take such other action necessary or advisable to:

 

(i)                                     Grant

more effectively all or any portion of the Collateral;

 

(ii)                                  maintain

or preserve the lien and security interest (and the priority thereof) created

by this Indenture or carry out more effectively the purposes hereof;

 

(iii)                               perfect,

publish notice of or protect the validity of any Grant made or to be made by

this Indenture;

 

(iv)                              enforce

any of the Collateral;

 

(v)                                 preserve

and defend title to the Collateral and the rights of the Indenture Trustee and

the Noteholders in such Collateral against the claims of all persons and

parties; and

 

(vi)                              pay

all taxes or assessments levied or assessed upon the Collateral when due.

 

The Issuer shall file the initial financing statements

on Form UCC1.  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, except as

expressly provided in the Transaction Documents or such other instrument or

agreement.

 

21

 

(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 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

 

22

 

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 120 days after the end of each fiscal year of the Issuer

(commencing with the fiscal year ended December 31, 2003), 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 such 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;

 

(iii)                               the

Rating Agency Condition shall have been satisfied with respect to such

transaction;

 

23

 

(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;

 

(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;

 

24

 

(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.

 

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

 

25

 

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 personally).

 

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.

 

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.

 

26

 

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 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;

 

27

 

(B)                                the

Issuer has paid or performed or caused to be paid or performed all amounts and

obligations which the Issuer may owe to or on behalf of the Indenture Trustee

for the benefit of the Noteholders under this Indenture or the Notes; and

 

(C)                                the

Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an

Opinion of Counsel and (if required by the TIA or the Indenture Trustee) an

Independent Certificate from a firm of certified public accountants, each

meeting the applicable requirements of Section 11.01(a) and, subject to Section

11.02, stating that all conditions precedent herein provided for relating to

the satisfaction and discharge of this Indenture have been complied with and

the Rating Agency Condition has been satisfied.

 

Section

4.02.                         Application

of Trust Money.  All moneys deposited with the Indenture Trustee pursuant to

Section 4.01 shall be held in trust and applied by it, in accordance with the

provisions of the Notes and this Indenture, to the payment, either directly or

through any Paying Agent, as the Indenture Trustee may determine, to the

Holders of the particular Notes for the payment or redemption of which such

moneys have been deposited with the Indenture Trustee, of all sums due and to

become due thereon for principal and interest; but such moneys need not be

segregated from other funds except to the extent required herein or in the Sale

and Servicing Agreement or required by law.

 

Section

4.03.                         Repayment

of Moneys Held by Paying Agent.  In connection with the satisfaction and

discharge of this Indenture with respect to the Notes, all moneys then held by

any Paying Agent other than the Indenture Trustee under the provisions of this

Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to

the Indenture Trustee to be held and applied according to Section 3.03 and

thereupon such Paying Agent shall be released from all further liability with

respect to such moneys.

 

Section

4.04.                         Release

of Collateral. 

Subject to Section 11.01 and the terms of the Transaction Documents, the

Indenture Trustee shall release property from the lien of this Indenture only

upon receipt of an Issuer Request accompanied by an Officer’s Certificate and

an Opinion of Counsel and Independent Certificates in accordance with TIA

§§314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent

Certificates to the effect that the TIA does not require any such Independent

Certificates.

 

ARTICLE FIVE

 

REMEDIES

 

Section

5.01.                         Events of

Default. 

“Event of Default,” wherever used herein, means any one of the following

events (whatever the reason for such Event of Default and whether it shall be

voluntary or involuntary or be effected by operation of law or pursuant to any

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;

 

28

 

(ii)                                  default

in the payment of the principal of or any installment of the principal of any

Note when the same becomes due and payable;

 

(iii)                               default in the

observance or performance of any covenant or agreement of the Issuer made in

this Indenture (other than a covenant or agreement, a default in the observance

or performance of which is elsewhere in this Section specifically dealt with)

which default has a material adverse effect on the Noteholders, or any

representation or warranty of the Issuer made in this Indenture or in any

certificate or other writing delivered pursuant hereto or in connection

herewith proving to have been incorrect in any material respect as of the time

when the same shall have been made, and such default shall continue or not be

cured, or the circumstance or condition in respect of which such

misrepresentation or warranty was incorrect shall not have been eliminated or

otherwise cured, for a period of 30 days after there shall have been given, by

registered or certified mail, to the Indenture Trustee by the Holders of at

least 25% of the Outstanding Amount of the Class A-1 Notes and the Class A-2

Notes, taken together as a single class, or, if there are no Class A-1 Notes or

Class A-2 Notes Outstanding, by the Holders of at least 25% of the Outstanding

Amount of the Class B Notes a written notice specifying such default or

incorrect representation or warranty and requiring it to be remedied and

stating that such notice is a “Notice of Default” hereunder;

 

(iv)                              the

filing of a decree or order for relief by a court having jurisdiction in the

premises in respect of the Issuer or any substantial part of the Collateral in

an involuntary case under any applicable federal or state bankruptcy,

insolvency or other similar law now or hereafter in effect, or appointing a

receiver, liquidator, assignee, custodian, trustee, sequestrator or similar

official of the Issuer or for any substantial part of the Collateral, or

ordering the winding-up or liquidation of the Issuer’s affairs, and such decree

or order shall remain unstayed and in effect for a period of 60 consecutive

days; or

 

(v)                                 the

commencement by the Issuer of a voluntary case under any applicable federal or

state bankruptcy, insolvency or other similar law now or hereafter in effect,

or the consent by the Issuer to the entry of an order for relief in an

involuntary case under any such law, or the consent by the Issuer to the

appointment or taking possession by a receiver, liquidator, assignee,

custodian, trustee, sequestrator or similar official of the Issuer or for any

substantial part of the Collateral, or the making by the Issuer of any general

assignment for the benefit of creditors, or the failure by the Issuer generally

to pay its debts as such debts become due, or the taking of action by the

Issuer in furtherance of any of the foregoing.

 

The Issuer shall deliver to the Indenture Trustee

within five days after obtaining knowledge of the occurrence thereof, written

notice in the form of an Officer’s Certificate of any event which with the

giving of notice and the lapse of time would become 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

 

29

 

amount

of the Notes immediately due and payable at par.  At any time after such declaration of acceleration of maturity

has been made and before a judgment or decree for payment of the money due has

been obtained by the Indenture Trustee as hereinafter in this Article Five, provided, the Required Holders may rescind such declaration

if (i) the Issuer has made all payments of principal of and interest on all

Notes when the same becomes due and payable and (ii) the Issuer has paid all

amounts due and payable to the Indenture Trustee.  If an Event of Default described in Section 5.01(iv) or (v) shall

have occurred and be continuing, the principal amount of the Notes shall become

immediately due and payable.

 

Section

5.03.                         Collection

of Indebtedness and Suits for Enforcement by Indenture Trustee; Authority of

Indenture Trustee.

 

(a)                                  The

Issuer covenants that if the Notes are accelerated following the occurrence of

an Event of Default, the Issuer will, upon demand of the Indenture Trustee, pay

to it, for the benefit of the Holders of the Notes, the whole amount then due

and payable on such Notes for principal and interest, with interest upon the

overdue principal, and, to the extent payment at such rate of interest shall be

legally enforceable, upon overdue installments of interest, at the applicable

Interest Rate and in addition thereto such further amount as shall be

sufficient to cover costs and expenses of collection, including the reasonable

compensation, expenses, disbursements and advances of the Indenture Trustee and

its agents and counsel.

 

(b)                                 The

Indenture Trustee following the occurrence of an Event of Default, shall have

full right, power and authority to take, or defer from taking, any and all acts

with respect to the administration, maintenance or disposition of the

Collateral.

 

(c)                                  If

an Event of Default occurs and is continuing, the Indenture Trustee may in its

discretion (except as provided in Section 5.03(d)), proceed to protect and

enforce its rights and the rights of the Noteholders, by such appropriate

Proceedings as the Indenture Trustee shall deem most effective to protect and

enforce any such rights, whether for the specific enforcement of any covenant

or agreement in this Indenture or in aid of the exercise of any power granted

herein, or to enforce any other proper remedy or legal or equitable right

vested in the Indenture Trustee by this Indenture or by law.

 

(d)                                 Notwithstanding

anything to the contrary contained in this Indenture, if an Event of Default

shall have occurred and be continuing and if the Issuer fails to perform its

obligations under Section 10.01(b) when and as due, the Indenture Trustee may

in its discretion proceed to protect and enforce its rights and the rights of

the Noteholders by such appropriate Proceedings as the Indenture Trustee shall

deem most effective to protect and enforce any such rights, whether for

specific performance of any covenant or agreement in this Indenture or in aid

of the exercise of any power granted herein, or to enforce any other 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.

 

30

 

(e)                                  In

case there shall be pending, relative to the Issuer or any other obligor upon

the Notes or any Person having or claiming an ownership interest in the

Collateral, Proceedings under Title 11 of the United States Code or any other

applicable federal or state bankruptcy, insolvency or other similar law, or in

case a receiver, assignee or trustee in bankruptcy or reorganization,

liquidator, sequestrator or similar official shall have been appointed for or

taken possession of the Issuer or its property or such other obligor or Person,

or in case of any other comparable judicial Proceedings relative to the Issuer

or other obligor upon the Notes, or to the creditors or property of the Issuer

or such other obligor, the Indenture Trustee, irrespective of whether the

principal of any Notes shall then be due and payable as therein expressed or by

declaration or otherwise and irrespective of whether the Indenture Trustee

shall have made any demand pursuant to the provisions of this Section, shall be

entitled and empowered, by intervention in such Proceedings or otherwise:

 

(i)                                     to

file and prove a claim or claims for the whole amount of principal and interest

owing and unpaid in respect of the Notes and to file such other papers or

documents as may be necessary or advisable in order to have the claims of the

Indenture Trustee (including any claim for reasonable compensation to the

Indenture Trustee and each predecessor Indenture Trustee, and their respective

agents, attorneys and counsel, and for reimbursement of all expenses and

liabilities incurred, and all advances made, by the Indenture Trustee and each

predecessor Indenture Trustee, except as a result of negligence or bad faith)

and of the Noteholders allowed in such Proceedings;

 

(ii)           unless prohibited by applicable law

and regulations, to vote on behalf of the Holders of Notes in any election of a

trustee, a standby trustee or Person performing similar functions in any such

Proceedings;

 

(iii)          to collect and receive any moneys or

other property payable or deliverable on any such claims and to distribute all

amounts received with respect to the claims of the Noteholders and of the

Indenture Trustee on their behalf; and

 

(iv)          to file such proofs of claim and other

papers or documents as may be necessary or advisable in order to have the

claims of the Indenture Trustee or the Holders of Notes allowed in any judicial

proceedings relative to the Issuer, its creditors and its property;

 

and any trustee, receiver, liquidator, custodian or other similar

official in any such Proceeding is hereby authorized by each of such Noteholders

to make payments to the Indenture Trustee, and, in the event that the Indenture

Trustee shall consent to the making of payments directly to such Noteholders,

to pay to the Indenture Trustee such amounts as shall 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.

 

31

 

(f)                                    Nothing

herein contained shall be deemed to authorize the Indenture Trustee to

authorize or consent to or vote for or accept or adopt on behalf of any

Noteholder any plan of reorganization, arrangement, adjustment or composition

affecting the Notes or the rights of any Holder thereof or to authorize the

Indenture Trustee to vote in respect of the claim of any Noteholder in any such

proceeding except, as aforesaid, to vote for the election of a trustee in

bankruptcy or similar Person.

 

(g)                                 All

rights of action and of asserting claims under this Indenture or under any of

the Notes, may be enforced by the Indenture Trustee without the possession of any

of the Notes or the production thereof in any trial or other Proceedings

relative thereto, and any such action or Proceedings instituted by the

Indenture Trustee shall be brought in its own name as trustee of an express

trust, and any recovery of judgment, subject to the payment of the expenses,

disbursements and compensation of the Indenture Trustee, each predecessor

Indenture Trustee and their respective agents and attorneys, shall be for the

ratable benefit of the Holders of the Notes.

 

(h)                                 In

any Proceedings brought by the Indenture Trustee (including any Proceedings

involving the interpretation of any provision of this Indenture), the Indenture

Trustee shall be held to represent all of the Holders of the Notes, and it

shall not be necessary to make any Noteholder a party to any such proceedings.

 

Section

5.04.                         Remedies.  If an Event

of Default shall have occurred and be continuing, the Indenture Trustee

(subject to Section 5.05) may, and shall if so directed by the Required Holders

in writing:

 

(i)                                     institute

Proceedings in its own name and as or on behalf of a trustee of an express

trust for the collection of all amounts then payable on the Notes or under this

Indenture with respect thereto, whether by declaration or otherwise, enforce

any judgment obtained, and collect from the Issuer and any other obligor upon

such Notes moneys adjudged due;

 

(ii)                                  institute

Proceedings from time to time for the complete or partial foreclosure of this

Indenture with respect to the Collateral;

 

(iii)          exercise

any remedies of a secured party under the UCC and any other remedy available to

the Indenture Trustee and take any other appropriate action to protect and

enforce the rights and remedies of the Indenture Trustee on behalf of the

Noteholders under this Indenture or the Notes; and

 

(iv)          sell

the Collateral or any portion thereof or rights or interest therein, at one or

more public or private sales called and conducted in any manner permitted by

law; provided, however, that the Indenture Trustee may not sell or otherwise

liquidate the Collateral following an Event of Default, unless (A) the Holders

of 100% of the Outstanding 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

 

32

 

Collateral will not continue to provide sufficient funds for the

payment of principal of and interest on the Notes as they would have become due

if the Notes had not been declared due and payable, and the Indenture Trustee

provides prior written notice to each Rating Agency and obtains the consent of

the Required Holders.  In determining

such sufficiency or insufficiency with respect to clauses (B) and (C), the

Indenture Trustee may, but need not, obtain and rely upon an opinion of an

Independent investment banking or accounting firm of national reputation as to

the feasibility of such proposed action and as to the sufficiency of the

Collateral for such purpose; provided, however, upon the occurrence of an Event

of Default described in Section 5.01(iv) or (v), caused solely from an event

described in such subparagraphs occurring with respect to the Trust Depositor,

the Collateral will be liquidated by the Indenture Trustee and the Trust will

be terminated 90 days after the date of such Insolvency Event, unless, before

the end of such 90-day period, the related Trustee shall have received written

instructions from the Required Holders, to the effect that such Required

Holders disapprove of the liquidation of such Collateral and termination of

such Trust.

 

Section

5.05.                         Optional

Preservation of the Contracts.  Following an Event of Default and if such

Event of Default has not been rescinded and annulled, the Indenture Trustee

may, but need not, elect to maintain possession of the Collateral.  It is the desire of the parties hereto and

the Noteholders that there be at all times sufficient funds for the payment of

principal and interest on the Notes, and the Indenture Trustee shall take such

desire into account when determining whether or not to maintain possession of

the Collateral.  In determining whether

to maintain possession of the Collateral, the Indenture Trustee may, but need

not, obtain and rely upon an opinion of an Independent investment banking or

accounting firm of national reputation as to the feasibility of such proposed

action and as to the sufficiency of the Collateral for such purpose.

 

Section

5.06.                         Priorities.

 

(a)                                  If

the Indenture Trustee collects any money or property pursuant to this Article

Five, it shall pay out the money or property in the order and priority set

forth in Section 7.05(b) or (c) of the Sale and Servicing Agreement.

 

(b)                                 The

Indenture Trustee may fix a record date and payment date for any payment to

Noteholders pursuant to this Section. 

At least 15 days before such record date, the Issuer shall mail to each

Noteholder and the Indenture Trustee a notice that states the record date, the

payment date and the amount to be paid.

 

Section

5.07.                         Limitation

of Suits. 

No Holder of any Note shall have any right to institute any Proceeding,

judicial or otherwise, with respect to this Indenture, or for the appointment

of a receiver or trustee, or for any other remedy hereunder, unless (and in all

events subject to Section 11.16 hereof):

 

(i)                                     such

Holder has previously given written notice to the Indenture Trustee of a

continuing Event of Default;

 

33

 

(ii)                                  the

Holders of not less than 25% of the Outstanding Amount of the Class A-1 Notes

and the Class A-2 Notes, or, if there are no Class A-1 Notes or Class A-2 Notes

Outstanding, Holders of not less than 25% of the Outstanding Amount of the

Class B Notes have made written request to the Indenture Trustee to institute

such Proceeding in respect of such Event of Default in its own name as Indenture

Trustee hereunder;

 

(iii)          such

Holder or Holders have offered to the Indenture Trustee reasonable indemnity

against the costs, expenses and liabilities to be incurred in complying with

such request;

 

(iv)          the

Indenture Trustee for 60 days after its receipt of such notice, request and

offer of indemnity has failed to institute such Proceedings; and

 

(v)                                 no

direction inconsistent with such written request has been given to the

Indenture Trustee during such 60-day period by the Required Holders.

 

It is understood and intended that no one or more Holders of Notes

shall have any right in any manner whatever by virtue of, or by availing of,

any provision of this Indenture to affect, disturb or prejudice the rights of

any other Holders of Notes or to obtain or to seek to obtain priority or

preference over any other Holders or to enforce any right under this Indenture,

except in the manner herein provided.

 

In the event the Indenture Trustee shall receive

conflicting or inconsistent requests and indemnity from two or more groups of

Holders of Notes, each representing less than a majority of the Outstanding

Amount of the Class A-1 Notes and the Class A-2 Notes or the Class B Notes, as

the case may be, the Indenture Trustee shall act at the direction of the group of

Holders of Notes with the greater Outstanding Amount of Class A-1 Notes, Class

A-2 Notes, or Class B Notes, as the case may be; provided, however, if the

Indenture Trustee receives conflicting or inconsistent requests and indemnity

from two or more groups of Holders of Notes representing an equal Outstanding

Amount of the Class A-1 Notes, Class A-2 Notes or Class B Notes, the Indenture

Trustee in its sole discretion may determine what action, if any, shall be

taken, notwithstanding any other provisions of this Indenture.

 

Section

5.08.                         Unconditional

Rights of Noteholders to Receive Principal and Interest.  Notwithstanding any other

provisions in the Indenture, the Holder of any Note shall have the right, which

is absolute and unconditional, to receive payment of the principal of and

interest on such Note on or after the respective due dates thereof expressed in

such Note or in this Indenture (or, in the case of redemption, on or after the

Redemption Date) and to institute suit for the enforcement of any such payment,

and such right shall not be impaired without the consent of such Holder.

 

Section

5.09.                         Restoration

of Rights and Remedies.  If the Indenture Trustee or any Noteholder

has instituted any Proceeding to enforce any right or remedy under this Indenture

and such proceeding has been discontinued or abandoned for any reason or has

been determined adversely to the Indenture Trustee or to such Noteholder, then

and in every 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,

 

34

 

and

thereafter all rights and remedies of the Indenture Trustee and the Noteholders

shall continue as though no such Proceeding had been instituted.

 

Section

5.10.                         Rights

and Remedies Cumulative.  No right or remedy herein conferred upon or

reserved to the Indenture Trustee or to the Noteholders is intended to be

exclusive of any other right or remedy, and every right and remedy shall, to

the extent permitted by law, be cumulative and in addition to every other right

and remedy given hereunder or now or hereafter existing at law or in equity or

otherwise.  The assertion or employment

of any right or remedy hereunder, or otherwise, shall not prevent the

concurrent assertion or employment of any other appropriate right or remedy.

 

Section

5.11.                         Delay or

Omission Not a Waiver.  No delay or omission of the Indenture

Trustee or any Holder of any Note to exercise any right or remedy accruing upon

any Default of Event of Default shall impair any such right or remedy or

constitute a waiver of any such Default or Event of Default or an acquiescence

therein.  Every right and remedy given

by this Article Five or by law to the Indenture Trustee or to the Noteholders

may be exercised from time to time, and as often as may be deemed expedient, by

the Indenture Trustee or by the Noteholders, as the case may be.

 

Section

5.12.                         Control

by Noteholders.  The Required Holders shall have the right to direct the time,

method and place of conducting any Proceeding for any remedy available to the

Indenture Trustee with respect to the Notes or exercising any trust or power

conferred on the Indenture Trustee; provided that:

 

(i)                                     such

direction shall not be in conflict with any rule of law or with this Indenture;

 

(ii)                                  subject

to the terms of Section 5.04, any direction to the Indenture Trustee to sell or

liquidate the Collateral shall be by the Holders of Notes representing not less

than 100% of the Outstanding Amount of the Notes;

 

(iii)          if

the conditions set forth in Section 5.05 have been satisfied and the Indenture

Trustee elects to retain the Collateral pursuant to such Section, then any

direction to the Indenture Trustee by Holders of Notes representing less than

100% of the Outstanding Amount of the Notes to sell or liquidate the Collateral

shall be of no force and effect; and

 

(iv)          the

Indenture Trustee may take any other action deemed proper by the Indenture

Trustee that is not inconsistent with such direction.

 

Notwithstanding the rights of Noteholders set forth in

this Section, subject to Section 6.01, the Indenture Trustee need not take any

action that it determines might involve it in liability or might materially and

adversely affect the rights of any Noteholders not consenting to such action.

 

Section

5.13.                         Waiver of

Past Defaults. 

In the case of any waiver of an Event of Default, the Issuer, the

Indenture Trustee and the Holders of the Notes shall be restored to 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

 

35

 

such

waiver, such Event of Default shall cease to exist and be deemed to have been

cured and not to have occurred, for every purpose of this Indenture; but no

such waiver shall extend to any subsequent or other Default or Event of Default

or impair any right consequent thereto.

 

Section

5.14.                         Undertaking

for Costs. 

All parties to this Indenture agree, and each Holder of any Note by such

Holder’s acceptance thereof shall be deemed to have agreed, that any court may

in its discretion require, in any suit for the enforcement of any right or

remedy under this Indenture, or in any suit against the Indenture Trustee for

any action taken, suffered or omitted by it as Indenture Trustee, the filing by

any party litigant in such suit of an undertaking to pay the costs of such suit

and that such court may in its discretion assess reasonable costs, including

reasonable attorneys’ fees, against any party litigant in such suit, having due

regard to the merits and good faith of the claims or defenses made by such

party litigant; but the provisions of this Section shall not apply to (i) any

suit instituted by the Indenture Trustee, (ii) any suit instituted by any

Noteholder, or group of Noteholders, in each case holding in the aggregate more

than 10% of the Outstanding Amount of the Class A-1 Notes and the Class A-2

Notes, or, if there are no Class A-1 Notes, Class A-2 Notes Outstanding, any

Noteholder or group of Noteholders holding in the aggregate 10% of the

Outstanding Amount of the Class B Notes or (iii) any suit instituted by any

Noteholder for the enforcement of the payment of principal of or interest on

any Note on or after the respective due dates expressed in such Note and in

this Indenture (or, in the case of redemption, on or after the Redemption

Date).

 

Section

5.15.                         Waiver of

Stay or Extension Laws.  The Issuer covenants (to the extent that it

may lawfully do so) that it will not at any time insist upon, or plead or in

any manner whatsoever, claim or take the benefit or advantage of, any stay or

extension law wherever enacted, now or at any time hereafter in force, that may

affect the covenants or the performance of this Indenture; and the Issuer (to

the extent that it may lawfully do so) hereby expressly waives all benefit or

advantages of any such law, and covenants that it will not hinder, delay or

impede the execution of any power herein granted to the Indenture Trustee, but

will suffer and permit the execution of every such power as though no such law

had been enacted.

 

Section

5.16.                         Action on

Notes. 

The Indenture Trustee’s right to seek and recover judgment on the Notes

or under this Indenture shall not be affected by the seeking, obtaining or

application of any other relief under or with respect to this Indenture.  Neither the lien of this Indenture nor any

rights or remedies of the Indenture Trustee or the Noteholders shall be

impaired by the recovery of any judgment by the Indenture Trustee against the

Issuer or by the levy of any execution under such judgment upon any portion of

the Collateral or upon any of the assets of the Issuer.  Any money or property collected by the

Indenture Trustee shall be applied in accordance with Section 5.06.

 

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

 

36

 

the

Servicer, as applicable, of each of their obligations to the Issuer under or in

connection with the Sale and Servicing Agreement in accordance with the terms

thereof, and to exercise any and all rights, remedies, powers and privileges

lawfully available to the Issuer under or in connection with the Sale and

Servicing Agreement to the extent and in the manner directed by the Indenture

Trustee, including the transmission of notices of default on the part of the

Trust Depositor or the Servicer thereunder and the institution of legal of

administrative actions or proceedings to compel or secure performance by the

Trust Depositor or the Servicer of each of their obligations under the Sale and

Servicing Agreement.

 

(b)                                 If

an Event of Default has occurred and is continuing, the Indenture Trustee may,

and at the direction (which direction shall be in writing, including facsimile)

of the Modified Required Holders shall exercise all rights, remedies, powers,

privileges and claims of the Issuer against the Trust Depositor or the Servicer

under or in connection with the Sale and Servicing Agreement, including the

right or power to take any action to compel or secure performance or observance

by the Trust Depositor or the Servicer of each of their obligations to the

Issuer thereunder and to give any consent, request, notice, direction,

approval, extension or waiver under the Sale and Servicing Agreement, and any

right of the Issuer to take such action shall be suspended.

 

ARTICLE SIX

 

THE INDENTURE TRUSTEE

 

Section

6.01.                         Duties of

Indenture Trustee.

 

(a)                                  If

an Event of Default has occurred and is continuing, the Indenture Trustee shall

exercise the rights and powers vested in it by this Indenture and in the same

degree of care and skill in their exercise as a prudent person would exercise

or use under the circumstances in the conduct of such person’s own affairs.

 

(b)                                 Except

during the continuance of an Event of Default:

 

(i)                                     the

Indenture Trustee undertakes to perform such duties and only such duties as are

specifically set forth in this Indenture and no implied covenants or

obligations shall be read into this Indenture against the Indenture Trustee;

and

 

(ii)                                  in

the absence of bad faith on its part, the Indenture Trustee may conclusively

rely, as to the truth of the statements and the correctness of the opinions

expressed therein, upon certificates or opinions furnished to the Indenture

Trustee and conforming to the requirements of this Indenture; however, the

Indenture Trustee shall examine the certificates and opinions to determine whether

or not they conform to the requirements of this Indenture and the other

Transaction Documents to which the Indenture Trustee is a party.

 

37

 

(c)                                  The

Indenture Trustee may not be relieved from liability for its own negligent

action, its own negligent failure to act or its own willful misconduct, except

that:

 

(i)                                     this

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

 

(ii)                                  the

Indenture Trustee shall not be liable for any error of judgment made in good

faith by a Responsible Officer unless it is proved that the Indenture Trustee

was negligent in ascertaining the pertinent facts; and

 

(iii)          the Indenture Trustee shall not be

liable with respect to any action it takes or omits to take in good faith in accordance

with a direction received by it pursuant to Section 5.12.

 

(d)                                 Every

provision of this Indenture that in any way relates to the Indenture Trustee is

subject to paragraphs (a), (b) and (c) of this Section.

 

(e)                                  The

Indenture Trustee shall not be liable for interest on any money received by it

except as the Indenture Trustee may agree in writing with the Issuer.

 

(f)                                    Money

held in trust by the Indenture Trustee need not be segregated from other funds

except to the extent required by law or the terms of this Indenture or the Sale

and Servicing Agreement.

 

(g)                                 No

provision of this Indenture shall require the Indenture Trustee to expend or

risk its own funds or otherwise incur financial liability in the performance of

any of its duties hereunder or in the exercise of any of its rights or powers,

if it shall have reasonable grounds to believe that repayments of such funds or

adequate indemnity against such risk or liability is not reasonably assured to

it.

 

(h)                                 The

Indenture Trustee shall have no discretionary duties other than performing

those ministerial acts set forth above necessary to accomplish the purpose of

this Trust as set forth in this Indenture.

 

(i)                                     Every

provision of this Indenture relating to the conduct or affecting the liability

of or affording protection to the Indenture Trustee shall be subject to the

provisions of this section and to the provisions of the TIA.

 

Section

6.02.                         Rights of

Indenture Trustee.

 

(a)                                  The

Indenture Trustee may rely on any document believed by it to be genuine and to

have been signed or presented by the proper person. The Indenture Trustee need

not investigate any fact or matter stated in the document.

 

(b)                                 Before

the Indenture Trustee acts or refrains from acting, it may require an Officer’s

Certificate (with respect to factual matters) or an Opinion of Counsel, as

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.

 

38

 

(c)                                  The

Indenture Trustee may execute any of the trusts or powers hereunder or perform

any duties hereunder either directly or by or through Affiliates, agents or

attorneys or a custodian or nominee, and the Indenture Trustee shall not be

responsible for any misconduct or negligence on the part of, or for the

supervision of, any such agent, attorney, custodian or nominee appointed with

due care by it hereunder.

 

(d)                                 The

Indenture Trustee shall not be liable for any action it takes or omits to take

in good faith which it believes to be authorized or within its rights or

powers; provided, however, that the Indenture Trustee’s conduct does not

constitute willful misconduct, negligence or bad faith.

 

(e)                                  The

Indenture Trustee may consult with counsel, and the advice of such counsel or

any Opinion of Counsel with respect to legal matters relating to this Indenture

and the Notes shall be full and complete authorization and protection from

liability in respect to any action taken, omitted or suffered by it hereunder

in good faith and in accordance with such advice or Opinion of Counsel.

 

(f)                                    The

Indenture Trustee shall be under no obligation to institute, conduct or defend

any litigation under this Indenture or in relation to this Indenture, at the

request, order or direction of any of the Holders of Notes, pursuant to the

provisions of this Indenture, unless such Holders of Notes shall have offered

to the Indenture Trustee reasonable security or indemnity against the costs,

expenses and liabilities that may be incurred therein or thereby; provided,

however, that the Indenture Trustee shall, upon the occurrence of an Event of

Default (that has not been cured), exercise the rights and powers vested in it

by this Indenture in a manner consistent with Section 6.01.

 

(g)                                 The

Indenture Trustee shall not be bound to make any investigation into the facts

or matters stated in any resolution, certificate, statement, instrument,

opinion, report, notice, request, consent, order, approval, bond or other paper

or document, unless so requested by the Holders of Notes evidencing not less

than 25% of the Outstanding Amount of the Notes; provided, however, that if the

payment within a reasonable time to the Indenture Trustee of the costs,

expenses  or liabilities likely to be

incurred by it in the making of such investigation is, in the opinion of the

Indenture Trustee, not reasonably assured to the Indenture Trustee by the

security afforded to it by the terms of this Indenture or the Sale and

Servicing Agreement, the Indenture Trustee may require reasonable indemnity

against such cost, expense or liability as a condition to so proceeding; the

reasonable expense of every such examination shall be paid by the Person making

such request, or, if paid by the Indenture Trustee, shall be reimbursed by the

Person making such request upon demand.

 

Section

6.03.                         Individual

Rights of Indenture Trustee.  The Indenture Trustee in its individual or

any other capacity may become the owner or pledgee of Notes and may otherwise

deal with the Issuer or its Affiliates with the same rights it would have if it

were not Indenture Trustee.  Any Paying

Agent, Note Registrar, co-registrar or co-paying agent may do the same with

like rights.  However, the Indenture

Trustee is required to comply with Section 6.11.

 

39

 

Section

6.04.                         Indenture

Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for and makes no

representation as to the validity or adequacy of this Indenture, the Collateral

or the Notes, it shall not be accountable for the Issuer’s use of the proceeds

from the Notes, and it shall not be responsible for any statement of the Issuer

in this Indenture or in any document issued in connection with the sale of the

Notes or in the Notes other than the Indenture Trustee’s certificate of

authentication.

 

Section

6.05.                         Notice of

Defaults. 

If a Default occurs and is continuing and if it is known to a

Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail

to each Noteholder notice of the Default within 90 days after it occurs.  Except in the case of a Default in payment

of principal of or interest on any Note (including payments pursuant to the

redemption of such Notes), the Indenture Trustee may withhold the notice if and

so long as a committee of its Responsible Officers in good faith determines

that withholding the notice is in the interests of Noteholders.

 

Section

6.06.                         Reports

by Indenture Trustee to Holders.  Within the prescribed period of time for tax

reporting purposes after the end of each calendar year during the term of this

Indenture, the Indenture Trustee shall deliver to each Noteholder such

information, including without limitation, IRS Form 1099, as may be required by

applicable law to enable such holder to prepare its federal and state income

tax returns.

 

Section

6.07.                         Compensation

and Indemnity. 

The Issuer shall pay or shall cause the Administrator to pay to the

Indenture Trustee from time to time reasonable compensation for its services.  The Indenture Trustee’s compensation shall

not be limited by any law on compensation of a trustee of an express

trust.  The Issuer shall or shall cause

the Administrator to reimburse the Indenture Trustee for all reasonable

out-of-pocket expenses incurred or made by it, including costs of collection,

in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and

expenses, disbursements and advances of the Indenture Trustee’s agents,

counsel, accountants and experts.  The

Issuer shall indemnify or shall cause the Administrator to indemnify the

Indenture Trustee against any and all loss, liability or expense (including

attorneys’ fees) incurred by it in connection with the administration of this

trust and the performance of its duties hereunder.  The Indenture Trustee shall notify the Issuer and the

Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so

notify the Issuer and the Administrator shall not relieve the Issuer or the

Administrator of its obligations hereunder. 

The Issuer shall defend or shall cause the Administrator to defend any

such claim, and the Indenture Trustee may have separate counsel and the Issuer

shall pay or shall cause the Administrator to pay the fees and expenses of such

counsel.  Neither the Issuer nor the

Administrator need reimburse any expense or indemnify against any loss,

liability or expense incurred by the Indenture Trustee through the Indenture

Trustee’s own willful misconduct, negligence or bad faith.

 

The Issuer’s payment obligations and indemnification

to the Indenture Trustee pursuant to this Section shall survive the resignation

or removal of the Indenture Trustee and 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

 

40

 

expenses after the occurrence of an Event of Default specified in

Section 5.01(iv) or (v) with respect to the Issuer, the expenses are intended

to constitute expenses of administration under Title 11 of the United States

Code or any other applicable federal or state bankruptcy, insolvency or similar

law.

 

Section

6.08.                         Replacement

of Indenture Trustee.  The Indenture Trustee may resign at any time by so notifying the

Issuer and the Servicer.  The Issuer

shall remove the Indenture Trustee if:

 

(i)                                     the

Indenture Trustee fails to comply with Section 6.11;

 

(ii)                                  a

court having jurisdiction in the premises in respect of the Indenture Trustee

in an involuntary case or proceeding under federal or state banking or

bankruptcy laws, as now or hereafter constituted, or any other applicable

federal or state bankruptcy, insolvency or other similar law, shall have

entered a decree or order granting relief or appointing a receiver, liquidator,

assignee, custodian, trustee, conservator, sequestrator (or similar official)

for the Indenture Trustee or for any substantial part of the Indenture

Trustee’s property, or ordering the winding-up or liquidation of the Indenture

Trustee’s affairs, provided any such decree or order shall have continued

unstayed and in effect for a period of 30 consecutive days;

 

(iii)                               the Indenture Trustee

commences a voluntary case under any federal or state banking or bankruptcy

laws, as now or hereafter constituted, or any other applicable federal or state

bankruptcy, insolvency or other similar law, or consents to the appointment of

or taking possession by a receiver, liquidator, assignee, custodian, trustee,

conservator, sequestrator or other similar official for the Indenture Trustee

or for any substantial part of the Indenture Trustee’s property, or makes any

assignment for the benefit of creditors or fails generally to pay its debts as

such debts become due or takes any corporate action in furtherance of any of

the foregoing; or

 

(iv)                              the

Indenture Trustee otherwise becomes incapable of acting.

 

If the Indenture Trustee resigns or is removed, the

Issuer shall promptly appoint a successor Indenture Trustee.  A successor Indenture Trustee shall deliver

a written acceptance of its appointment to the retiring Indenture Trustee and

to the Issuer.  Thereupon the

resignation or removal of the retiring Indenture Trustee shall become

effective, and the successor Indenture Trustee shall have all the rights,

powers and duties of the Indenture Trustee under this Indenture.  The Issuer or the successor Indenture

Trustee shall mail a notice of its succession to Noteholders.  The retiring Indenture Trustee shall

promptly transfer all property held by it as Indenture Trustee to the successor

Indenture Trustee.

 

If a successor Indenture Trustee does not take office

within 60 days after the retiring Indenture Trustee resigns or is removed, the

retiring Indenture Trustee, the Issuer or the 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.

 

41

 

If the Indenture Trustee fails to comply with Section

6.11, any Noteholder may petition any court of competent jurisdiction for the

removal of the Indenture Trustee and the appointment of a successor Indenture

Trustee.

 

Any resignation or removal of the Indenture Trustee

and appointment of a successor Indenture Trustee pursuant to any of the

provisions of this Section shall not become effective until acceptance of

appointment by the successor Indenture Trustee pursuant to this Section and

payment of all fees and expenses owed to the outgoing Indenture Trustee.  Notwithstanding the replacement of the

Indenture Trustee pursuant to this Section, the retiring Indenture Trustee

shall be entitled to payment or reimbursement of such amounts as such Person is

entitled pursuant to Section 6.07.

 

Section

6.09.                         Successor

Indenture Trustee by Merger.  If the Indenture Trustee consolidates with,

merges or converts into, or transfers all or substantially all its corporate

trust business or assets to, another corporation or banking association, the

resulting, surviving or transferee corporation without any further act shall be

the successor Indenture Trustee; provided, that such corporation or banking

association shall be otherwise qualified and eligible under Section 6.11.  The Indenture Trustee shall provide each

Rating Agency prompt notice of any such transaction.

 

In case at the time such successor or successors by

merger, conversion or consolidation to the Indenture Trustee shall succeed to

the trusts created by this Indenture, any of the Notes shall have been

authenticated but not delivered, any such successor to the Indenture Trustee

may adopt the certificate of authentication of any predecessor Indenture

Trustee, and deliver such Notes so authenticated; and in case at that time any

of the Notes shall not have been authenticated, any successor to the Indenture

Trustee may authenticate such Notes either in the name of any predecessor

hereunder or in the name of the successor to the Indenture Trustee; and in all

such cases such certificates shall have the full force which it is anywhere in

the Notes or in this Indenture provided that the certificate of the Indenture

Trustee shall have.

 

Section

6.10.                         Appointment

of Co-Indenture Trustee or Separate Indenture Trustee.

 

(a)                                  Notwithstanding

any other provision of this Indenture, at any time, for the purpose of meeting

any legal requirement of any jurisdiction in which any part of the Collateral

may at the time be located, the Indenture Trustee and the Administrator acting

jointly shall have the power and may execute and deliver all instruments to

appoint one or more Persons to act as a co-Indenture Trustee or co-Indenture

Trustees, jointly with the Indenture Trustee, or separate Indenture Trustee or

separate Indenture Trustees, of all or any part of the Trust, and to vest in

such Person or Persons, in such capacity and for the benefit of the

Noteholders, such title to the Collateral, or any part hereof, and, subject to

the other provisions of this Section, such powers, duties, obligations, rights

and trusts as the Indenture Trustee and the Administrator may consider

necessary or desirable.  If the

Administrator shall not have joined in such appointment within 15 days after

the receipt by it of a request 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

 

42

 

Noteholders

of the appointment of any co-Indenture Trustee or separate Indenture Trustee

shall be required under Section 6.08.

 

(b)                                 Every

separate Indenture Trustee and co-Indenture Trustee shall, to the extent

permitted by law, be appointed and act subject to the following provisions and

conditions:

 

(i)                                     all

rights, powers, duties and obligations conferred or imposed upon the Indenture

Trustee shall be conferred or imposed upon and exercised or performed by the

Indenture Trustee and such separate Indenture Trustee or co-Indenture Trustee

jointly (it being understood that such separate Indenture Trustee or co-Indenture

Trustee is not authorized to act separately without the Indenture Trustee

joining in such act), except to the extent that under any law of any

jurisdiction in which any particular act or acts are to be performed the

Indenture Trustee shall be incompetent or unqualified to perform such act or

acts, in which event such rights, powers, duties and obligations (including the

holding of title to the Trust or any portion thereof in any such jurisdiction)

shall be exercised and performed singly by such separate Indenture Trustee or

co-Indenture Trustee, but solely at the direction of the Indenture Trustee;

 

(ii)                                  no

Indenture Trustee hereunder shall be personally liable by reason of any act or

omission of any other Indenture Trustee hereunder; and

 

(iii)          the Indenture Trustee and the

Administrator may at any time accept the resignation of or remove any separate

Indenture Trustee or co-Indenture Trustee.

 

(c)                                  Any

notice, request or other writing given to the Indenture Trustee shall be deemed

to have been given to each of the then separate Indenture Trustees and

co-Indenture Trustees, as effectively as if given to each of them.  Every instrument appointing any separate

Indenture Trustee or co-Indenture Trustee shall refer to this Agreement and the

conditions of this Article.  Each

separate Indenture Trustee and co-Indenture Trustee, upon its acceptance of the

trusts conferred, shall be vested with the estates or property specified in its

instrument of co-appointment, either jointly with the Indenture Trustee or

separately, as may be provided therein, subject to all the provisions of this

Indenture, specifically including every provision of this Indenture relating to

the conduct of, affecting the liability of or affording protection to, the

Indenture Trustee.  Every such instrument

shall be filed with the Indenture Trustee and a copy thereof given to the

Administrator.

 

(d)                                 Any

separate Indenture Trustee or co-Indenture Trustee may at any time constitute

the Indenture Trustee, its agent or attorney-in-fact with full power and

authority, to the extent not prohibited by law, to do any lawful act under or

in respect of this Agreement on its behalf and in its name.  If any separate Indenture Trustee or

co-Indenture Trustee shall die, become incapable of acting, resign or be removed,

all of its estates, properties, rights, remedies and trusts shall vest in and

be exercised by the Indenture 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

 

43

 

appointment

of any separate Indenture Trustee or co-Indenture Trustee shall not relieve the

Indenture Trustee of its obligations and duties under this Indenture.

 

Section

6.11.                         Eligibility.

 

(a)                                  The

Indenture Trustee shall at all times satisfy the requirements of TIA

§310(a).  The Indenture Trustee

hereunder shall at all times be a financial institution organized and doing

business under the laws of the United States of America or any state,

authorized under such laws to exercise corporate trust powers, whose long term

unsecured debt is rated at least Baa3 by Moody’s and shall have a combined

capital and surplus of at least $50,000,000 or shall be a member of a bank

holding system the aggregate combined capital and surplus of which is

$50,000,000 and subject to supervision or examination by federal or state

authority, provided that the Indenture Trustee’s separate capital and surplus

shall at all times be at least the amount required by Section 310(a)(2) of the

TIA.  If such Person publishes reports

of condition at least annually, pursuant to law or to the requirements of a

supervising or examining authority, then for the purposes of this Section 6.ll,

the combined capital and surplus of such Person shall be deemed to be its

combined capital and surplus as set forth in its most recent report of

condition so published.

 

(b)                                 If

a Default occurs and is continuing and the Indenture Trustee is deemed to have

a “conflicting interest” (as defined in the TIA) as a result of acting as

trustee for both the Class A-1 Notes and the Class A-2 Notes and the Class B

Notes, the Issuer shall appoint a successor Indenture Trustee for the Class A-1

Notes and the Class A-2 Notes and a successor Indenture Trustee for the Class B

Notes so that there will be separate Indenture Trustees for the Class A-1 Notes

and the Class A-2 Notes on the one hand, and for the Class B Notes on the other

hand.  No such event shall alter the

voting rights of the Noteholders under this Indenture or under any of the other

Transaction Documents.

 

(c)                                  In

the case of an appointment hereunder of a successor Indenture Trustee with

respect to any Class of Notes, the Issuer, the retiring Indenture Trustee and

the successor Indenture Trustee with respect to such Class of Notes shall

execute and deliver an indenture supplement hereto wherein the successor

Indenture Trustee shall accept such appointment and which (i) shall contain

such provisions as shall be necessary or desirable to transfer and confirm to,

and to vest in, the successor Indenture Trustee all rights, powers, trusts and

duties of the retiring Indenture Trustee with respect to the Notes of such

Class as to which the appointment of such Indenture Trustee relates, (ii) if the

retiring Indenture Trustee is not retiring with respect to all Classes of

Notes, shall contain such provisions as shall be deemed necessary or desirable

to confirm that all the rights, powers, trusts and duties of the retiring

Indenture Trustee with respect to the Notes of each Class as to which the

retiring Indenture Trustee is not retiring shall continue to be vested in the

retiring Indenture Trustee and (iii) shall add to or change any of the

provisions of this Indenture as shall be necessary to provide for or facilitate

the administration of the trusts hereunder by more than one Indenture Trustee,

it being understood that nothing herein or in such supplemental indenture shall

constitute such Indenture Trustees co-trustees of the same trust and that each

such Indenture Trustee; and upon execution and delivery of such supplemental

indenture the resignation or removal of the retiring Indenture Trustee shall

become effective to the extent provided therein.

 

44

 

(d)                                 In

case at any time the Indenture Trustee shall cease to be eligible in accordance

with the provisions of this Section 6.11, the Indenture Trustee shall resign

immediately in the manner and with the effect specified in Section 6.08.  The Indenture Trustee shall comply with TIA

§310(b); provided, however, that there shall be excluded from the operation of

TIA §310(b)(1) any indenture or indentures under which other securities of the

Issuer are outstanding if the requirements for such exclusion set forth in TIA

§310(b)(1) are met.

 

Section

6.12.                         Pennsylvania

Motor Vehicle Sales Finance Act Licenses.  The Indenture Trustee shall use its best

efforts to maintain the effectiveness of all licenses required under the

Pennsylvania Motor Vehicle Sales Finance Act in connection with this Indenture

and the transactions contemplated hereby until the lien and security interest

of this Indenture shall no longer be in effect in accordance with the terms

hereof.

 

Section

6.13.                         Preferential

Collection of Claims Against Issuer.  The Indenture Trustee shall comply with TIA

§311(a), excluding any creditor relationship listed in TIA §311(b).  An Indenture Trustee who has resigned or

been removed shall be subject to TIA §311(a) to the extent indicated.

 

ARTICLE SEVEN

 

NOTEHOLDERS’ LISTS AND

REPORTS

 

Section

7.01.                         Issuer to

Furnish Indenture Trustee Names and Addresses of Noteholders.  The Issuer

will furnish or cause to be furnished to the Indenture Trustee (i) not more

than five days after the earlier of (a) each Record Date and (b) three months

after the last Record Date, a list, in such form as the Indenture Trustee may

reasonably require, of the names and addresses of the Noteholders as of such

Record Date and (ii) at such other times as the Indenture Trustee may request in

writing, within 30 days after receipt by the Issuer of any such request, a list

of similar form and content as of a date not more than ten days prior to the

time such list is furnished; provided, however, that so long as the Indenture

Trustee is the Note Registrar, no such list shall be required to be furnished.

 

Section

7.02.                         Preservation

of Information: Communication to Noteholders.

 

(a)                                  The

Indenture Trustee shall preserve, in as current a form as is reasonably

practicable, the names and addresses of the Noteholders contained in the most

recent list furnished to the Indenture Trustee as provided in Section 7.01 and

the names and addresses of Noteholders received by the Indenture Trustee in its

capacity as Note Registrar and shall otherwise comply with TIA §312(a).  The Indenture Trustee may destroy any list

furnished to it as provided in such Section 7.01 upon receipt of a new list so

furnished.

 

(b)                                 Noteholders

may communicate pursuant to TIA § 312(b) with other Noteholders with respect to

their rights under this Indenture or under the Notes.

 

(c)                                  The

Issuer, the Indenture Trustee and the Note Registrar shall have the protection

of TIA § 312(c).

 

45

 

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, 2004, the Indenture Trustee shall mail to each

Noteholder as required by TIA §313(c) a brief report dated as of such date that

complies with TIA §313(a).  The

Indenture Trustee also shall comply with TIA §313(b).

 

A copy of each report at the time of its mailing to

Noteholders shall be filed by the Indenture Trustee with the Commission and

each stock exchange, if any, on which the Notes are listed.  The Issuer shall notify the Indenture

Trustee if and when the Notes are listed on any stock exchange.

 

ARTICLE EIGHT

 

ACCOUNTS, DISBURSEMENTS

AND RELEASES

 

Section

8.01.                         Collection

of Money. 

Except as otherwise expressly provided herein, the Indenture Trustee may

demand payment or delivery of, and shall receive and collect, directly and

without intervention or assistance of any fiscal agent or other intermediary,

all money and other property payable to or receivable by the Indenture Trustee

pursuant to this 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

 

46

 

of

any payment or performance under any agreement or instrument that is part of

the Collateral, the Indenture Trustee may take such action as may be

appropriate to enforce such payment or performance, including the institution

and prosecution of appropriate Proceedings. 

Any such action shall be without prejudice to any right to claim a

Default or Event of Default under this Indenture and any right to proceed

thereafter as provided in Article Five.

 

Section

8.02.                         Trust

Accounts.

 

(a)                                  On

or prior to the Closing Date, the Issuer shall cause the Servicer to establish

and maintain, in the name of the Indenture Trustee, for the benefit of the

Noteholders and the Certificateholders, the Trust Accounts as provided in

Section 5.05 of the Sale and Servicing Agreement.

 

(b)                                 All

Available Monies with respect to each Due Period will be deposited in the

Collection Account as provided in Section 5.05 of the Sale and Servicing

Agreement.  On or before each

Distribution Date, all amounts required to be deposited in the Note

Distribution Account with respect to the preceding Due Period pursuant to

Section 7.05 of the Sale and Servicing Agreement will be transferred from the

Collection Account and/or the Reserve Account to the Note Distribution Account.

 

(c)                                  On

each Distribution Date, the Indenture Trustee shall distribute all amounts on

deposit in the Note Distribution Account to Noteholders in respect of the Notes

to the extent of amounts due and unpaid on the Notes for principal and interest

in the order and priority set forth in Section 7.05 of the Sale and Servicing

Agreement.

 

Section

8.03.                         General

Provisions Regarding Accounts.

 

(a)                                  So

long as no Default or Event of Default shall have occurred and be continuing,

all or a portion of the funds in the Trust Accounts shall be invested in

accordance with the provisions of Section 5.05 of the Sale and Servicing

Agreement.  Except as otherwise provided

in Section 5.05 of the Sale and Servicing Agreement, all income or other gain

from investments of moneys deposited in such Trust Accounts (other than the

Reserve Fund and the Pre-Funding Account) shall be deposited by the Indenture

Trustee in the Collection Account, and any loss resulting from such investments

shall be charged to the related Trust Account. 

The Issuer will not direct the Indenture Trustee to make any investment

of any funds or to sell any investment held in any of the Trust Accounts unless

the security interest granted and perfected in such account will continue to be

perfected in such investment or the proceeds of such sale, in either case

without any further action by any Person, and, in connection with any direction

to the Indenture Trustee to make any such investment or sale, if requested by

the Indenture Trustee, the Issuer shall deliver to the Indenture Trustee an

Opinion of Counsel, acceptable to the Indenture Trustee, to such effect.

 

(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

 

47

 

Trustee’s

failure to make payments on such Eligible Investments issued by the Indenture

Trustee, in its commercial capacity as principal obligor and not as Indenture

Trustee, in accordance with their terms.

 

(c)                                  If

(i) the Issuer shall have failed to give investment directions for any funds on

deposit in the Trust Accounts to the Indenture Trustee by 11:00 a.m., New York

City time (or such other time as may be agreed by the Issuer and Indenture

Trustee), on any Business Day or (ii) a Default or Event of Default shall have

occurred and be continuing with respect to the Notes but the Notes shall not

have been declared due and payable pursuant to Section 5.02 or (iii) if such

Notes shall have been declared due and payable following an Event of Default,

but amounts collected or receivable from the Collateral are being applied in

accordance with Section 5.05 as if there had not been such a declaration, then

the Indenture Trustee shall, to the fullest extent practicable, invest and

reinvest funds in the Trust Accounts in one or more Eligible Investments

satisfying the requirements of clause (d) of the definition thereof.

 

Section

8.04.                         Release

of Collateral.

 

(a)                                  Subject

to the payment of its fees and expenses pursuant to Section 6.07, the Indenture

Trustee may, and when required by the provisions of this Indenture or the Sale

and Servicing Agreement shall, execute instruments to release property from the

lien of this Indenture, or convey the Indenture Trustee’s interest in the same,

in a manner and under circumstances that are not inconsistent with the

provisions of this Indenture.  No party

relying upon an instrument executed by the Indenture Trustee as provided in

this Article shall be bound to ascertain the Indenture Trustee’s authority,

inquire into the satisfaction of any conditions precedent or see to the

application of any moneys.

 

(b)                                 The

Indenture Trustee shall, at such time as there are no Notes Outstanding and all

sums due the Indenture Trustee pursuant to Section 6.07 have been paid, release

any remaining portion of the Collateral that secured the Notes from the lien of

this Indenture and release to the Issuer or any other Person entitled thereto

any funds then on deposit in the Trust Accounts.  The Indenture Trustee shall release property from the lien of this

Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer

Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (if

required by the TIA as so stated in the Opinion of Counsel) Independent

Certificates in accordance with TIA §§314(c) and 314(d)(1) meeting the

applicable requirements of Section 11.01.

 

Section

8.05.                         Opinion

of Counsel. 

The Indenture Trustee shall receive at least seven days notice when

requested by the Issuer to take any action pursuant to Section 8.04(a),

accompanied by copies of any instruments involved, and the Indenture Trustee

shall also require, as a condition to such action, an Opinion of Counsel, in

form and substance satisfactory to the Indenture Trustee, stating the legal

effect of any such action, outlining the steps required to complete the same,

and concluding that all conditions precedent to the taking of such action have

been complied with and such action will not materially and 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

 

48

 

rendering

any such opinion may rely, without independent investigation, on the accuracy

and validity of any certificate or other instrument delivered to the Indenture

Trustee in connection with any such action.

 

ARTICLE NINE

 

SUPPLEMENTAL INDENTURES

 

Section

9.01.                         Supplemental

Indentures Without Consent of Noteholders.

 

(a)                                  Without

the consent of the Holders of any Notes and with prior notice to each Rating

Agency, the Issuer and the Indenture Trustee, when authorized by an Issuer

Order, and the other parties hereto at any time from time to time, may enter

into one or more indentures supplemental hereto (which shall conform to the

provisions of the TIA as in force at the date of the execution thereof), in

form satisfactory to the Indenture Trustee, for any of the following purposes:

 

(i)                                     to

correct or amplify the description of any property at any time subject to the

lien of this Indenture, or better to assure, convey and confirm unto the

Indenture Trustee any property subject or required to be subjected to the lien

created by this Indenture, or to subject additional property to the lien

created by this Indenture;

 

(ii)                                  to

evidence the succession, in compliance with the applicable provisions hereof,

of another Person to the Issuer, and the assumption by any such successor of

the covenants of the Issuer herein and in the Notes contained;

 

(iii)          to add to the covenants of the Issuer,

for the benefit of the Holders of the Notes, or to surrender any right or power

herein conferred upon the Issuer;

 

(iv)          to convey, transfer, assign, mortgage

or pledge any property to or with the Indenture Trustee;

 

(v)                                 to

cure any ambiguity, to correct or supplement any provision herein or in any

supplemental indenture which may be inconsistent with any other provision herein,

in any supplemental indenture, in the Transaction Documents or in the

Prospectus or to add any other provisions with respect to matters or questions

arising under this Indenture, in any supplemental indenture, in the Transaction

Documents or in the Prospectus; provided that such action shall not adversely

affect the interests of the Holders of the Notes;

 

(vi)          to evidence and provide for the

acceptance of the appointment hereunder by a successor Indenture Trustee with

respect to the Notes and to add to or 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;

 

49

 

(vii)         to modify, eliminate or add to the

provisions of this Indenture to such extent as shall be necessary to effect the

qualification of this Indenture under the TIA or under any similar federal

statute hereafter enacted and to add to this Indenture such other provisions as

may be expressly required by the TIA; and

 

(viii)        to elect into the FASIT provisions of

the Code, provided an Opinion of Counsel to the effect that such election will

not adversely affect the Noteholders, is delivered to the Issuer and Indenture

Trustee.

 

The Indenture Trustee is hereby authorized to join in

the execution of any such supplemental indenture and to make any further

appropriate agreements and stipulations that may be therein contained.

 

(b)                                 The

Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also

without the consent of any of the Holders of the Notes and with prior notice to

each Rating Agency, enter into an indenture or indentures supplemental hereto

for the purpose of adding any provisions to, or changing in any manner or

eliminating any of the provisions of, this Indenture or of modifying in any

manner the rights of the Holders of the Notes under this Indenture; provided,

however, that such action shall not, as evidenced by an Opinion of Counsel,

adversely affect in any material respect the interests of any Noteholder.

 

Section

9.02.                         Supplemental

Indentures With Consent of Noteholders.  The Issuer and the Indenture Trustee, when

authorized by an Issuer Order, may, with the consent of the Required Holders,

by Act of such Holders delivered to the Issuer and the Indenture Trustee, enter

into an indenture or indentures supplemental hereto for the purpose of adding

any provisions to, or changing in any manner or eliminating any of the provisions

of, this Indenture or of modifying in any manner the rights of the Holders of

the Notes under this Indenture; provided, however, that no such supplemental

indenture shall, without the consent of the Holder of each Outstanding Note

affected thereby:

 

(i)                                     change

the date of payment of any installment of principal of or interest on any Note,

or reduce the principal amount thereof, the interest rate thereon or the

Redemption Date Amount with respect thereto, change the provisions of this

Indenture relating to the application of collections on, or the proceeds of the

sale of, the Collateral to payment of principal of or interest on the Notes, or

change any place of payment where, or the coin or currency in which, any Note

or the interest thereon is payable, or impair the right to institute suit for

the enforcement of the provisions of this Indenture requiring the application

of funds available therefor, as provided in Article Five, to the payment of any

such amount due on the Notes on or after the respective due dates thereof (or,

in the case of redemption, on or after the 

Redemption Date);

 

(ii)                                  reduce

the percentage of the Outstanding Amount of the Notes, the consent of the

Holders of which is required for any such supplemental indenture, or the

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;

 

50

 

(iii)          modify

or alter the provisions of the second proviso to the definition of the term

“Outstanding”;

 

(iv)          reduce

the percentage of the Outstanding Amount of the Notes required to direct the

Indenture Trustee to sell or liquidate the Collateral pursuant to Section 5.04 or

amend the provisions of this Article which specify the percentage of the

Outstanding Amount of the Notes required to amend this Indenture or the other

Transaction Documents;

 

(v)           modify

any provision of this Section except to increase any percentage specified

herein or to provide that certain additional provisions of this Indenture or

the other Transaction Documents cannot be modified or waived without the

consent of the Holder of each Outstanding Note affected thereby; or

 

(vi)          permit

the creation of any lien ranking prior to or on a parity with the lien created

by this Indenture with respect to any part of the Collateral or, except as

otherwise permitted or contemplated herein, terminate the lien created by this

Indenture on any property at any time subject hereto or deprive the Holder of

any Note of the security provided by the lien created by this Indenture.

 

The Indenture Trustee may in its discretion determine

whether or not any Notes would be affected by any supplemental indenture and

any such determination shall be conclusive upon the Holders of the Notes,

whether theretofore or thereafter authenticated and delivered hereunder.  The Indenture Trustee shall not be liable

for any such determination made in good faith.

 

It shall not be necessary for any Act of Noteholders

under this Section to approve the particular form of any proposed supplemental

indenture, but it shall be sufficient if such Act shall approve the substance

thereof.

 

Promptly after the execution by the parties hereto of

any supplemental indenture pursuant to this Section, the Indenture Trustee

shall mail to the Holders of the Notes to which such amendment or supplemental

indenture relates a notice setting forth in general terms the substance of such

supplemental indenture.  Any failure of

the Indenture Trustee to mail such notice, or any defect therein, shall not,

however, in any way impair or affect the validity of any such supplemental

indenture.

 

Section

9.03.                         Execution

of Supplemental Indentures.  In executing, or permitting the additional

trusts created by, any supplemental indenture permitted by this Article or the

modifications thereby of the trusts created by this Indenture, the Indenture

Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02

shall be fully protected in relying upon, an Opinion of Counsel stating that

the execution of such supplemental indenture is authorized or permitted by this

Indenture.  The Indenture Trustee may,

but shall not be obligated to, enter into any such supplemental indenture that

affects the Indenture Trustee’s own rights, duties, liabilities or immunities

under this Indenture or otherwise.

 

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

 

51

 

affected

thereby, and the respective rights, limitations of rights, obligations, duties,

liabilities and immunities under this Indenture of the parties hereto and the

Holders of the Notes shall thereafter be determined, exercised and enforced

hereunder subject in all respects to such modifications and amendments, and all

the terms and conditions of any such supplemental indenture shall be and be

deemed to be part of the terms and conditions of this Indenture for any and all

purposes.

 

Section

9.05.                         Conformity

With Trust Indenture Act.  Every amendment of this Indenture and every

supplemental indenture executed pursuant to this Article shall conform to the

requirements of the Trust Indenture Act as then in effect so long as this

Indenture shall then be qualified under the Trust Indenture Act.

 

Section

9.06.                         Reference

in Notes to Supplemental Indentures.  Notes authenticated and delivered after the

execution of any supplemental indenture pursuant to this Article may, and if

required by the Indenture Trustee shall, bear a notation in form approved by

the Indenture Trustee as to any matter provided for in such supplemental

indenture.  If the Issuer or the

Indenture Trustee shall so determine, new notes so modified as to conform, in

the opinion of the Indenture Trustee and the Issuer, to any such supplemental

indenture may be prepared and executed by the Issuer and authenticated and

delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

ARTICLE TEN

 

REDEMPTION OF NOTES

 

Section

10.01.                  Redemption.

 

(a)                                  In

the event that the Seller pursuant to Section 7.10 of the Sale and Servicing

Agreement purchases the corpus of the Trust, the Notes are subject to

redemption in whole, but not in part, on the Distribution Date on which such

repurchase occurs, for a purchase price equal to the outstanding principal, and

accrued interest on the Notes; provided, however, that the Issuer has available

funds sufficient to pay such amounts. 

Seller, the Servicer or the Issuer shall furnish each Rating Agency

notice of such redemption.  If the Notes

are to be redeemed pursuant to this Section 10.01(a), the Servicer or the

Issuer shall furnish notice of such election to the Indenture Trustee not later

than 20 days prior to the Redemption Date and the Issuer shall deposit with the

Indenture Trustee in the Note Distribution Account the Redemption Price of the

Notes to be redeemed whereupon all such Notes shall be due and payable on the

Redemption Date upon the furnishing of a notice complying with Section 10.02 to

each Holder of the Notes.

 

(b)                                 In

the event that the assets of the Trust are sold pursuant to Section 5.03(b) of

this Indenture, the proceeds of such sale shall be distributed as provided in

Section 5.06.  If amounts are to be paid

to Noteholders pursuant to this Section 10.01(b), the Servicer or the 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.

 

52

 

(c)                                  If

(x) the Pre-Funded Amount has not been reduced to zero on the Distribution Date

on which the Funding Period ends (or, if the funding Period does not end on a

Distribution Date, on the first Distribution Date following the end of the

Funding Period) or (y) the Pre-Funded Amount has been reduced to $150,000

or less on any Distribution Date, in either case after giving effect to any

reductions in the Pre-Funded Amount on such Distribution Date pursuant to

Section 7.07 of the Sale and Servicing Agreement, one or more classes of

Notes then outstanding will be redeemed, in whole or in part, as described in

Section 7.07(c) of the Sale and Servicing Agreement, in a principal amount

described therein.

 

Section

10.02.                  Form of

Redemption Notice.

 

(a)                                  Notice

of redemption under Section 10.01(a) shall be given by the Indenture Trustee by

first-class mail, postage prepaid, mailed not less than five days prior to the

applicable Redemption Date to each Holder of Notes, as of the close of business

on the Record Date preceding the applicable Redemption Date, at such Holder’s

address appearing in the Note Register.

 

All notices of redemption shall state:

 

(i)                                     the

Redemption Date;

 

(ii)                                  the

Redemption Date Amount; and

 

(iii)          the

place where such Notes are to be surrendered for payment of the Redemption Date

Amount (which shall be the office or agency of the Issuer to be maintained as

provided in Section 3.02).

 

Notice of redemption of the Notes shall be given by

the Indenture Trustee in the name and at the expense of the Issuer.  Failure to give notice of redemption, or any

defect therein, to any Holder of any Note shall not impair or affect the

validity of the redemption of any other Note.

 

(b)                                 Prior

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

given to Noteholders.

 

Section

10.03.                  Notes Payable on

Redemption Date.  The Notes or portions thereof to be redeemed shall, following

notice of redemption (if any) as required by Section 10.02, on the Redemption

Date become due and payable at the Redemption Date Amount and (unless the

Issuer shall default in the payment of the Redemption Date Amount) no interest

shall accrue on the Redemption Date Amount for any period after the date to

which accrued interest is calculated for purposes of calculating the Redemption

Date Amount.

 

53

 

ARTICLE ELEVEN

 

MISCELLANEOUS

 

Section

11.01.                  Compliance

Certificates and Opinions, etc.

 

(a)                                  Upon

any application or request by the Issuer to the Indenture Trustee to take any

action under any provision of this Indenture, the Issuer shall furnish to the

Indenture Trustee (i) an Officer’s Certificate stating that all conditions

precedent, if any, provided for in this Indenture relating to the proposed

action have been complied with, (ii) an Opinion of Counsel stating that in the

opinion of such counsel all such conditions precedent, if any, have been

complied with, and (iii) (if required by the TIA as so stated in the Opinion of

Counsel) an Independent Certificate from a firm of certified public accountants

meeting the applicable requirements of this Section and TIA §314(c), except

that, in the case of any such application or request as to which the furnishing

of such documents is specifically required by any provision of this Indenture,

no additional certificate or opinion need be furnished.  No additional certificate or opinion need be

furnished.

 

Every certificate or opinion with respect to

compliance with a condition or covenant provided for in this Indenture shall

include:

 

(i)                                     a

statement that each signatory of such certificate or opinion has read or has

caused to be read such covenant or condition and the definitions herein

relating thereto;

 

(ii)                                  a

brief statement as to the nature and scope of the examination or investigation

upon which the statements or opinions contained in such certificate or opinion

are based;

 

(iii)                               a

statement that, in the opinion of each such signatory, such signatory has made

such examination or investigation as is necessary to enable such signatory to

express an informed opinion as to whether or not such covenant or condition has

been complied with; and

 

(iv)                              a

statement as to whether, in the opinion of each such signatory, such condition

or covenant has been complied with.

 

(b)                                 (i)                                     Prior

to the deposit of any Collateral or other property or securities with the

Indenture Trustee that is to be made the basis for authentication and delivery

of the Notes or the release of any property subject to the lien created by this

Indenture, the Issuer shall, in addition to any obligation imposed in Section

11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an

Officer’s Certificate certifying or stating the opinion of the signer thereof

such certificate as to the fair value (within 90 days of such deposit) to the

Issuer of the Collateral or other property or securities to be so deposited.

 

(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

 

54

 

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 October 15, 2003, an Officer’s Certificate stating that all the

dispositions of Collateral described in clauses (A) or (B) that occurred during

the preceding six calendar months were in the ordinary course of the Issuer’s

business and that the proceeds thereof were applied in accordance with the

Transaction Documents.

 

Section

11.02.                  Form of

Documents Delivered to Indenture Trustee.  In any case where several matters are

required to be certified by, or covered by an opinion of, any specified Person,

it is not necessary that all such matters be certified by, or covered by the

opinion of, only one such Person, or that they be so certified or covered by

only one 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

 

55

 

the certificate or opinion or representations with respect to the

matters upon which his certificate or opinion is based are erroneous.  Any such certificate of an Authorized

Officer or Opinion of Counsel may be based, insofar as it relates to factual

matters, upon a certificate or opinion of, or representations by, an officer or

officers of the Servicer, the Seller or the Issuer, stating that the

information with respect to such factual matters is in the possession of the

Servicer, the Seller or the Issuer, unless such counsel knows, or in the

exercise of reasonable care should know, that the certificate or opinion or

representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute

two or more applications, requests, consents, certificates, opinions or other

instruments under this Indenture, they may, but need not, be consolidated and

form one instrument.

 

Whenever in this Indenture, in connection with any

application or certificate or report to the Indenture Trustee, it is provided

that the Issuer shall deliver any document as a condition of the granting of

such application, or as evidence of the Issuer’s compliance with any term

hereof, it is intended that the truth and accuracy, at the time of the granting

of such application or at the effective date of such certificate or report (as

the case may be), of the facts and opinions stated in such document shall in

such case be conditions precedent to the right of the Issuer to have such

application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be

construed to affect the Indenture Trustee’s right to rely upon the truth and

accuracy of any statement or opinion contained in any such document as provided

in Article Six.

 

Section

11.03.                  Acts of

Noteholders.

 

(a)                                  Any

request, demand, authorization, direction, notice, consent, waiver or other

action provided by this Indenture to be given or taken by Noteholders may be

embodied in and evidenced by one or more instruments of substantially similar

tenor signed by such Noteholders in person or by agents duly appointed in

writing; and except as herein otherwise expressly provided such action shall

become effective when such instrument or instruments are delivered to the

Indenture Trustee, and, where it is hereby expressly required, to the

Issuer.  Such instrument or instruments

(and the action embodied therein and evidenced thereby) are herein sometimes referred

to as the “Act” of the Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or

of a writing appointing any such agent shall be sufficient for any purpose of

this Indenture and (subject to Section 6.01) conclusive in favor of the

Indenture Trustee and the Issuer, if made in the manner provided in this

Section.

 

(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,

 

56

 

omitted

or suffered to be done by the Indenture Trustee or the Issuer in reliance

thereon, whether or not notation of such action is made upon such Note.

 

Section

11.04.                  Notices.  All

notices, demands, certificates, requests and communications hereunder

(“notices”) shall be in writing and shall be effective (a) upon receipt when

sent through the U.S. mails, registered or certified mail, return receipt

requested, postage prepaid, with such receipt to be effective the date of

delivery indicated on the return receipt, or (b) one Business Day after

delivery to an overnight courier, or (c) on the date personally delivered to an

Authorized Officer of the party to which sent, or (d) on the date transmitted

by legible telecopier transmission with a confirmation of receipt, in all cases

addressed to the recipient at the address specified in the Sale and Servicing

Agreement for such recipient.  Each

party hereto may, by notice given in accordance herewith to each of the other

parties hereto, designate any further or different address to which subsequent

notices shall be sent.

 

Section

11.05.                  Notices to

Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any

event, such notice shall be sufficiently given (unless otherwise herein

expressly provided) if in writing and mailed, first-class, postage prepaid to

each Noteholder affected by such event, at his address as it appears on the

Note Register, not later than the latest date, and not earlier than the

earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is

given by mail, neither the failure to mail such notice nor any defect in any

notice so mailed to any particular Noteholder shall affect the sufficiency of

such notice with respect to other Noteholders, and any notice that is mailed in

the manner herein provided shall conclusively be presumed to have been duly

given.

 

Where this Indenture provides for notice in any

manner, such notice may be waived in writing by any Person entitled to receive

such notice, either before or after the event, and such waiver shall be the

equivalent of such notice.  Waivers of

notice by Noteholders shall be filed with the Indenture Trustee but such filing

shall not be a condition precedent to the validity of any action taken in

reliance upon such a waiver.

 

In case, by reason of the suspension of regular mail

service as a result of a strike, work stoppage or similar activity, it shall be

impractical to mail notice of any event of Noteholders when such notice is

required to be given pursuant to any provision of this Indenture, then any

manner of giving such notice as shall be satisfactory to the Indenture Trustee

shall be deemed to be a sufficient giving of such notice.

 

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

 

57

 

Indenture

Trustee a copy of each such agreement and the Indenture Trustee will cause

payments to be made and notices to be given in accordance with such agreements.

 

Section

11.07.                  Effect of

Headings and Table of Contents.  The Article and Section headings herein and

the Table of Contents are for convenience only and shall not affect the

construction hereof.

 

Section

11.08.                  Successors and

Assigns. 

All covenants and agreements in this Indenture and the Notes by the

Issuer shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in

this Indenture shall bind its successors, co-Indenture Trustees and agents.

 

Section

11.09.                  Separability.  In case any

provision in this Indenture or in the Notes shall be invalid, illegal or

unenforceable, the validity, legality and enforceability of the remaining

provisions shall not in any way be affected or impaired thereby.

 

Section

11.10.                  Benefits of

Indenture. 

Nothing in this Indenture or in the Notes, express or implied, shall

give to any Person, other than the parties hereto and their successors

hereunder, and the Noteholders, and any other party secured hereunder, and any

other Person with an ownership interest in any part of the Collateral, any

benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section

11.11.                  Legal Holidays.  In any case

where the date on which any payment is due shall not be a Business Day, then

(notwithstanding any other provision of the Notes or this Indenture) payment

need not be made on such date, but may be made on the next succeeding Business

Day with the same force and effect as if made on the date on which nominally

due, and no interest shall accrue for the period from and after any such

nominal date.

 

Section

11.12.                  Governing Law.  THIS

INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF

ILLINOIS AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THE

AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section

11.13.                  Counterparts.  This

Indenture may be executed in several counterparts, each of which shall be an

original and all of which shall constitute but one and the same instrument.

 

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

 

58

 

the

Notes or under Indenture or any certificate or other writing delivered in

connection herewith or therewith, against (i) the Indenture Trustee or the

Owner Trustee in its individual capacity, (ii) any owner of a beneficiary

interest in the Issuer or (iii) any partner, owner, beneficiary, agent,

officer, director, employee or agent of the Indenture Trustee or the Owner

Trustee in its individual capacity, any holder of a beneficial interest in the

Issuer, the Owner Trustee or the Indenture Trustee or of any successor or

assign of the Indenture Trustee or the Owner Trustee in its individual

capacity, except as any such Person may have expressly agreed (it being

understood that the Indenture Trustee and the Owner Trustee have no such

obligations in their individual capacity) and except that any such partner,

owner or beneficiary shall be fully liable, to the extent provided by

applicable law, for any unpaid consideration for stock, unpaid capital

contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the

performance of any duties or obligations of the Issuer hereunder, the Owner

Trustee shall be subject to, and entitled to the benefits of, the terms and

provisions of Article Six, Seven and Eight of the Trust Agreement.

 

Section

11.16.                  No Petition.  The parties

hereto, by entering into this Indenture, and each Noteholder, by accepting a

Note or a beneficial interest in a Note, hereby covenant and agree that they

will not at any time institute against the Trust Depositor or the Issuer, or

join in any institution against the Trust Depositor or the Issuer of, any

bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,

or other proceedings under any United States federal or state bankruptcy or

similar law in connection with any obligations relating to the Notes, this

Indenture or any of the other Transaction Documents.

 

Section

11.17.                  Inspection.  The Issuer

agrees that, on reasonable prior notice, it will permit any representative of

the Indenture Trustee, during the Issuer’s normal business hours, to examine

all the books of account, records, reports and other papers of the Issuer, to

make copies and extracts therefrom, to cause such books to be audited by

independent certified public accountants, and to discuss the Issuer’s affairs,

finances and accounts with the Issuer’s officers, employees and independent

certified public accountants, all at such reasonable times and as often as may

be reasonably requested, the Indenture Trustee shall and shall cause its

representatives to hold in confidence all such information except to the extent

disclosure may be required by law (and all reasonable applications for

confidential treatment are unavailing) and except to the extent that the

Indenture Trustee may reasonably determine that such disclosure is consistent

with its obligations hereunder.

 

Section

11.18.                  Conflict with

Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with

another provision hereof that is required to be included in this 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

 

59

 

only

and does not represent an interest in any assets (other than the Trust Assets)

of the Trust Depositor (including by virtue of any deficiency claim in respect

of obligations not paid or otherwise satisfied from the Trust Assets and

proceeds thereof).  In furtherance of

and not in derogation of the foregoing, each Noteholder by accepting a Note

acknowledges and agrees that it shall have no right, title or interest in or to

any assets (or interests therein) (other than Trust Assets) conveyed or

purported to be conveyed by the Trust Depositor to another securitization trust

(i.e., other than the Issuer) or other Person or Persons in connection

therewith (whether by way of a sale, capital contribution or by virtue of the

granting of a Lien) (“Other Assets”). 

To the extent that, notwithstanding the agreements and provisions

contained in the preceding sentences of this Section 11.19, any Noteholder either

(i) asserts an interest in or claim to, or benefit from, Other Assets, whether

asserted against or through the Trust Depositor or any other Person owned by

the Trust Depositor, or (ii) is deemed to have any such interest, claim or

benefit in or from Other Assets, whether by operation of law, legal process,

pursuant to applicable provisions of any applicable insolvency laws or

otherwise (including without limitation by virtue of Section 1111(b) of the

federal Bankruptcy Code or any successor provision having similar effect under

the Bankruptcy Code or any successor provision having similar effect under the

Bankruptcy Code), and whether deemed asserted against or through the Trust

Depositor or any other Person owned by the Trust Depositor, then each

Noteholder by accepting a Note further acknowledges and agrees that any such

interest, claim or benefit in or from Other Assets is and shall be expressly

subordinated to the indefeasible payment in full of all obligations and

liabilities of the Trust Depositor which, under the terms of the relevant documents

relating to the securitization of such Other Assets, are entitled to be paid

from, entitled to the benefits of, or otherwise secured by such Other Assets

(whether or not any such entitlement or security interest is legally perfected

or otherwise entitled to a priority of distribution or application under

applicable law, including any applicable insolvency laws, and whether asserted

against the Trust Depositor or any other Person owned by the Depositor),

including, without limitation, the payment of post-petition interest on such

other obligations and liabilities.  This

subordination agreement shall be deemed a subordination agreement within the

meaning of Section 510(a) of the Bankruptcy Code.  Each Noteholder further acknowledges and agrees that no adequate

remedy at law exists for a breach of this Section 11.19 and that the terms and

provisions of this Section 11.19 may be enforced by an action for specific

performance.

 

[signature page follows]

 

60

 

IN WITNESS WHEREOF, the parties hereto have caused

this Indenture to be duly executed and delivered as of the day and year first

above written.

 

	

   

  	

  HARLEY-DAVIDSON MOTORCYCLE

  TRUST 2003-2

  
	

   

  	

   

  
	

   

  	

  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:

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  BNY MIDWEST TRUST COMPANY, not in its

  individual capacity but solely as Indenture Trustee

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  
	

   

  	

  Printed Name:

  
	

   

  	

  Title:

  
							

 

 

 

	

  STATE OF ILLINOIS

  	

  )

  	

   

  
	

   

  	

  )

  	

  SS

  
	

  COUNTY OF COOK

  	

  )

  	

   

  

 

	

   

  	

  On

  	

   

  
	

  [insert date]

  	

   

  
	

   

  	

   

  
	

  before me,

  	

   

  
	

  [Insert name and title of notary]

  	

   

  
	

   

  	

   

  
	

  personally appeared

                                                                   ,

  	

   

  
	

   

  
	

  o

  	

  personally known to me,

  or

  
	

   

  	

   

  
	

  o

  	

  proved to me on the basis of satisfactory evidence

  to be the person(s) whose name(s) is/are subscribed to the within instrument,

  

 

and acknowledged to me that he/she/they executed the same in

his/her/their authorized capacity(ties), and that by his/her/their signature(s)

on the instrument the person(s), or the entity upon behalf of which such

person(s) acted, executed the instrument.

 

WITNESS my hand and official seal.

 

 

	

  Signature

  	

   

  	

  [Seal]

  

 

 

 

	

  STATE OF DELAWARE

  	

  )

  	

   

  
	

   

  	

  )

  	

  SS

  
	

  COUNTY OF NEW CASTLE

  	

  )

  	

   

  

 

	

   

  	

  On

  	

   

  
	

  [insert date]

  	

   

  
	

   

  	

   

  
	

  before me,

  	

   

  
	

  [Insert name and title of notary]

  	

   

  
	

   

  	

   

  
	

  personally appeared

                                                                   ,

  	

   

  
	

   

  
	

  o

  	

  personally known to me,

  or

  
	

   

  	

   

  
	

  o

  	

  proved to me on the basis of satisfactory evidence

  to be the person(s) whose name(s) is/are subscribed to the within instrument,

  

 

and acknowledged to me that he/she/they executed the same in

his/her/their authorized capacity(ties), and that by his/her/their signature(s)

on the instrument the person(s), or the entity upon behalf of which such

person(s) acted, executed the instrument.

 

WITNESS my hand and official seal.

 

 

	

  Signature

  	

   

  	

  [Seal]

  

 

 

 

EXHIBIT A

 

[RESERVED]

 

A-1

 

EXHIBIT B

 

FORM OF CLASS A-1 NOTE

 

UNLESS THIS NOTE IS

PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A

NEW YORK CORPORATION (“DTC”), TO THE TRUST OR ITS AGENT FOR REGISTRATION OF

TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE 

ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.

OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC

(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS

REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR

OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL

INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST

HEREIN.

 

THIS SECURITY IS

NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE UNITED STATES OR

ANY AGENCY OR FUND OF THE UNITED STATES.

 

THE PRINCIPAL OF

THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL

AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE

HEREOF.

 

HARLEY-DAVIDSON

MOTORCYCLE TRUST 2003-2

 

   %

HARLEY-DAVIDSON MOTORCYCLE CONTRACT BACKED NOTES,

CLASS A-1

 

	

  REGISTERED

  	

   

  	

  $  

  
	

   

  	

   

  	

   

  
	

  No. R-

  	

   

  	

  CUSIP

  No.          

  

 

Harley-Davidson

Motorcycle Trust 2003-2, 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 January 2008 (the “Class A-1 Final Distribution Date”) and

the Redemption Date, if any, pursuant to Section 10.01 of the Indenture

referred to on the reverse hereof.

 

The Issuer will

pay interest on this Note at the rate per annum shown above on each

Distribution Date until the principal of this Note is paid or made available

for payment, on the principal amount of this Note outstanding on the preceding

Distribution Date (after giving effect to all payments of

principal made on the preceding Distribution Date), subject to certain

limitations contained in Section 3.01 of the Indenture.  Interest on this Note will accrue for each

Distribution Date from the most recent Distribution Date on which interest

 

B-1

 

has been paid to but

excluding such Distribution  Date or, if

no interest has yet been paid, from the Closing Date.  Interest will be computed on the basis of a 360-day year of

twelve 30-day months.  Such principal of

and interest on this Note shall be paid in the manner specified on the reverse

hereof.

 

The principal of

and interest on this Note are payable in such coin or currency of the United

States of America as at the time of payment is legal tender for payment of

public and private debts.  All payments

made by the Issuer with respect to this Note shall be

applied first to interest due and payable on this Note as provided above and

then to the unpaid principal of this Note.

 

Reference is made

to the further provisions of this Note set forth on the reverse hereof, which

shall have the same effect as though fully set forth on the face of this Note.

 

Unless the

certificate of authentication hereon has been executed by the Indenture Trustee

whose name appears below by manual signature, this Note shall not be entitled

to any benefit under the indenture referred to on the reverse hereof, or be

valid or obligatory for any purpose.

 

B-2

 

IN WITNESS

WHEREOF, the Issuer has caused this instrument to be signed, manually or in

facsimile, by an Authorized Officer, as of the date set forth below.

 

	

  Date:

  	

   

  	

   

  	

  HARLEY-DAVIDSON MOTORCYCLE

  
	

   

  	

  TRUST 2003-2

  
	

   

  	

   

  
	

   

  	

  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.

 

	

   

  	

  BNY MIDWEST TRUST COMPANY,

  not in its individual capacity but solely as

  Indenture Trustee

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Authorized Signatory

  

 

B-4

 

[REVERSE OF CLASS

A-1 NOTE]

 

This Note is one of a

duly authorized issue of Notes of the Issuer, designated as its

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

(the “Class A-1 Notes”), all issued under an Indenture, dated as of May 1, 2003

(the “Indenture”), between the Issuer and BNY Midwest

Trust Company, as Indenture Trustee (the “Indenture Trustee”), to which

Indenture and all indentures supplemental thereto reference is hereby made for

a statement of the respective rights and obligations thereunder of the Issuer,

the Indenture Trustee and the Holders of the Notes.  The Class A-1 Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined

in the Indenture, as supplemented or amended, shall have the meanings assigned

to them in or pursuant to the Indenture, as so supplemented or amended.

 

The Class A-1 Notes and

the other Classes of Notes described in the Indenture (collectively, the

“Notes”) are and will be equally and ratably secured by the collateral pledged

as security therefor as provided in the Indenture subject to the priorities of

allocations as to interest and principal payments as described in the Sale and

Servicing Agreement.

 

Principal of the Class

A-1 Notes will be payable on the earlier of the Class A-1 Final Distribution

Date and the Redemption Date, if any, selected pursuant to the Indenture.  Notwithstanding the foregoing, the entire

unpaid principal amount of the Class A-1 Notes shall be

due and payable on the date following the occurrence of an Event of Default on

which the maturity of the Notes shall have been accelerated in the manner

provided in the Indenture.  All

principal payments on the Class A-1 Notes shall be made pro rata to the Class

A-1 Noteholders entitled thereto.

 

Payments of interest on

this Note due and payable on each Distribution Date shall be made by wire

transfer to the account of the Person whose name appears as the Registered

Holder of this Note (or one or more Predecessor Notes) on the Note Register as

of the close of business on each Record Date except that

with respect to Notes registered on the Record Date in the name of the nominee

of the Clearing Agency (initially, such nominee to be Cede & Co.), payments

will be made by wire transfer in immediately available funds to the account

designated by such nominee.  Such checks

shall be mailed to the Person entitled thereto at the address of such Person as

it appears on the Note Register as of the applicable Record Date without

requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of

this Note (or any one or more Predecessor Notes) affected by any payments made

on any Distribution Date shall be binding upon all future Holders of this Note

and of any Note issued upon the registration of transfer hereof or in exchange

hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided

in the Indenture, for payment in full of the then remaining unpaid principal

amount of this Note on a Distribution Date, then the Indenture Trustee, in the

name of and on behalf of the Issuer, will notify the Person who was the

Registered Holder hereof as of the Record Date preceding such Distribution Date

by notice mailed within five days of such Distribution Date and the amount then

due and payable shall be payable only upon presentation and surrender of this

Note at the Corporate Trust Office of the Indenture

 

B-5

 

Trustee or at the office of the Indenture Trustee’s agent appointed for

such purposes located in the City of Chicago, Illinois.

 

The Issuer shall pay

interest on overdue installments of interest at the Class A-1 Rate to the

extent lawful.

 

As provided in the Indenture, the Notes may be

redeemed pursuant to Section 10.01(a) of the Indenture, in whole, but not in

part, at the option of the Seller, on any Distribution Date on or after

the date on which the Pool Balance is less than 10% of the Aggregate

Principal Balance as of the 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 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.

 

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.

 

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-7

 

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 2003-2

 

   %

HARLEY-DAVIDSON MOTORCYCLE CONTRACT BACKED NOTES, CLASS

A-2

 

	

  REGISTERED

  	

   

  	

  $  

  
	

   

  	

   

  	

   

  
	

  No. R-

  	

   

  	

  CUSIP

  No.                 

  

 

Harley-Davidson

Motorcycle Trust 2003-2, 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 February 2011 (the “Class A-2

Final Distribution Date”) and the Redemption Date, if any, pursuant to Section

10.01 of the Indenture referred to on the reverse hereof.  No payments of principal of the Class A-2

Notes shall be made until the principal on the Class A-1 Notes have been paid

in full.

 

The Issuer will pay

interest on this Note at the rate per annum shown above on each Distribution

Date until the principal of this Note is paid or made available for payment, on

the principal amount of this Note outstanding on the preceding Distribution Date

(after giving effect to all payments of principal made on the preceding

Distribution Date), subject to certain limitations contained in Section 3.01 of

the Indenture.  Interest on this Note

will

 

C-1

 

accrue for each Distribution Date from the most recent Distribution

Date on which interest has been paid to but excluding such Distribution Date

or, if no interest has yet been paid, from the Closing Date.  Interest will be computed on the basis of a

360-day year of twelve 30-day months. 

Such principal of and interest on this Note shall be paid in the manner

specified on the reverse hereof.

 

The principal of and

interest on this Note are payable in such coin or currency of the United States

of America as at the time of payment is legal tender for payment of public and

private debts.  All payments made by the

Issuer with respect to this Note shall be applied first to

interest due and payable on this Note as provided above and then to the unpaid

principal of this Note.

 

Reference is made to the

further provisions of this Note set forth on the reverse hereof, which shall

have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of

authentication hereon has been executed by the Indenture Trustee whose name

appears below by manual signature, this Note shall not be entitled to any

benefit under the indenture referred to on the reverse hereof, or be valid or

obligatory for any purpose.

 

C-2

 

IN WITNESS

WHEREOF, the Issuer has caused this instrument to be signed, manually or in

facsimile, by an Authorized Officer, as of the date set forth below.

 

	

  Date:

  	

   

  	

   

  	

  HARLEY-DAVIDSON MOTORCYCLE

  
	

   

  	

  TRUST 2003-2

  
	

   

  	

   

  
	

   

  	

  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.

 

	

   

  	

  BNY MIDWEST TRUST COMPANY,

  not in its individual capacity but solely as

  Indenture Trustee

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Authorized Signatory

  

 

C-4

 

[REVERSE OF CLASS A-2

NOTE]

 

This Note is one of a

duly authorized issue of Notes of the Issuer, designated as its

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

(the “Class A-2 Notes”), all issued under an Indenture, dated as of May 1, 2003

(the “Indenture”), between the Issuer and BNY Midwest Trust Company, as

Indenture Trustee (the “Indenture Trustee”), to which Indenture and all

indentures supplemental thereto reference is hereby made for a statement of the

respective rights and obligations thereunder of the Issuer, the Indenture

Trustee and the Holders of the Notes. 

The Notes are subject to all terms of the Indenture.  All terms used in this Note that are defined

in the Indenture, as supplemented or amended, shall have the meanings assigned

to them in or pursuant to the Indenture, as so supplemented or amended.

 

The Class A-2 Notes and

the other Classes of Notes described in the Indenture (collectively, the

“Notes”) are and will be equally and ratably secured by the collateral pledged

as security therefor as provided in the Indenture subject to the priorities of

allocations as to interest and principal payments as described in the Sale and

Servicing Agreement.

 

Principal of the Class

A-2 Notes will be payable on the earlier of the Class A-2 Final Distribution

Date and the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(b)

of the Indenture.  Notwithstanding the

foregoing, the entire unpaid principal amount of the Class A-2 Notes shall be

due and payable on the date on which following the occurrence of an Event of

Default on which the maturity of the Notes shall have been accelerated in the

manner provided in the Indenture.  All

principal payments on the Class A-2 Notes shall be made pro rata to the Class

A-2 Noteholders entitled thereto.

 

Payments of interest on

this Note due and payable on each Distribution Date shall be made by wire

transfer to the account of the Person whose name appears as the Registered

Holder of this Note (or one or more Predecessor Notes) on the Note Register as

of the close of business on each Record Date, except that with respect to Notes

registered on the Record Date in the name of nominee of the Clearing Agency

(initially, such nominee to be Cede & Co.), payments will be made by wire

transfer in immediately available funds to the account designated by such

nominee.  Such checks shall be mailed to

the Person entitled thereto at the address of such Person as it appears on the

Note Register as of the applicable Record Date without requiring that this Note

be submitted for notation of payment. 

Any reduction in the principal amount of this Note (or any one or more

Predecessor Notes) affected by any payments made on any Distribution Date shall

be binding upon all future Holders of this Note and of any Note issued upon the

registration of transfer hereof or in exchange hereof or in lieu hereof,

whether or not noted hereon.  If funds

are expected to be available, as provided in the Indenture, for payment in full

of the then remaining unpaid principal amount of this Note on a Distribution

Date, then the Indenture Trustee, in the name of and on behalf of the Issuer,

will notify the Person who was the Registered Holder hereof as of the Record

Date preceding such Distribution Date by notice mailed within five days of such

Distribution Date and the amount then due and payable shall be payable only

upon presentation and surrender of this Note at the Indenture Trustee’s

principal Corporate Trust

 

C-5

 

Office or at the office of the Indenture Trustee’s

agent appointed for such purposes located in the City of Chicago, Illinois.

 

The Issuer shall pay

interest on overdue installments of interest at the Class A-2 Rate to the

extent lawful.

 

As provided in the Indenture, the Notes may be

redeemed pursuant to Section 10.01(a) of the Indenture, in whole, but not in

part, at the option of the Seller, on any Distribution Date on or after

the date on which the Pool Balance is less than 10% of the Aggregate

Principal Balance as of the 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, arrangement, insolvency or liquidation

proceedings under any United States federal or state

 

C-6

 

bankruptcy or similar law in connection with any

obligations relating to the Notes, the Indenture or the Transaction Documents.

 

The Issuer has entered

into the Indenture, and this Note is issued with the intention that, for

federal, state and local income, single business and franchise tax purposes,

the Notes will qualify as indebtedness secured by the Collateral and that the

Issuer will be disregarded as a separate entity for federal income tax purposes

pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii).  Each Noteholder, by

acceptance of a Note or a beneficial interest in a Note, agrees to treat the

Notes for federal, state and local income, single business and franchise tax

purposes as indebtedness of the Issuer.

 

Prior to the due

presentment for registration of transfer of this Note, the Issuer and the Indenture

Trustee and any agent of the Issuer, the Indenture Trustee may treat the Person

in whose name this Note (as of the day of determination or as of such other

date as may be specified in the Indenture) is registered as the owner hereof

for all purposes, whether or not this Note be overdue, and neither the Issuer,

the Indenture Trustee nor any such agent shall be affected by notice to the

contrary.

 

The Indenture permits,

with certain exceptions as therein provided, the amendment thereof and the

modification of the rights and obligations of the Issuer and the rights of the

Holders of the Notes under the Indenture at any time by the Issuer and the

consent of the Modified Required Holders. 

The Indenture also contains provisions permitting the Holders of Notes

representing specified percentages of the Outstanding Amount of the Notes, on

behalf of the Holders of all the Notes, to waive compliance by the Issuer with

certain provisions of the Indenture and certain past defaults under the

Indenture and their consequences.  Any

such consent or waiver by the Holder of this Note (or any one of more

Predecessor Notes) shall be conclusive and binding upon such Holders and upon

all future Holders of this Note and of any Note issued upon the registration of

transfer hereof or in exchange hereof or in lieu hereof whether or not notation

of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or

waive certain terms and conditions set forth in the Indenture without the

consent of Holders of the Notes issued thereunder.

 

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.

 

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-7

 

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 2003-2

 

   %

HARLEY-DAVIDSON MOTORCYCLE CONTRACT BACKED NOTES, CLASS

B

 

	

  REGISTERED

  	

   

  	

  $  

  
	

   

  	

   

  	

   

  
	

  No. R-

  	

   

  	

  CUSIP

  No.                 

  

 

Harley-Davidson

Motorcycle Trust 2003-2, 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 February 2011 (the “Class B Final

Distribution Date”) and the Redemption Date, if any, pursuant to Section 10.01

of the Indenture referred to on the reverse hereof.

 

The Issuer will pay

interest on this Note at the rate per annum shown above on each Distribution

Date until the principal of this Note is paid or made available for payment, on

the principal amount of this Note outstanding on the preceding Distribution Date

(after giving effect to all payments of principal made on the preceding Distribution

Date), subject to certain limitations contained in Section 3.01 of the

Indenture.  Interest on this Note will

accrue for each Distribution Date from the most recent Distribution Date on

which interest has been paid to but excluding such Distribution Date or, if no

interest has yet been paid,

 

D-1

 

from the Closing Date.  Interest

will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note

shall be paid in the manner specified on the reverse hereof.

 

The principal of and

interest on this Note are payable in such coin or currency of the United States

of America as at the time of payment is legal tender for payment of public and

private debts.  All payments made by the

Issuer with respect to this Note shall be applied first to

interest due and payable on this Note as provided above and then to the unpaid

principal of this Note.

 

Reference is made to the

further provisions of this Note set forth on the reverse hereof, which shall

have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of

authentication hereon has been executed by the Indenture Trustee whose name

appears below by manual signature, this Note shall not be entitled to any

benefit under the indenture referred to on the reverse hereof, or be valid or

obligatory for any purpose.

 

D-2

 

IN WITNESS

WHEREOF, the Issuer has caused this instrument to be signed, manually or in

facsimile, by an Authorized Officer, as of the date set forth below.

 

	

  Date:

  	

   

  	

   

  	

  HARLEY-DAVIDSON MOTORCYCLE

  
	

   

  	

  TRUST 2003-2

  
	

   

  	

   

  
	

   

  	

  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.

 

	

   

  	

  BNY MIDWEST TRUST COMPANY,

  not in its individual capacity but solely as

  Indenture Trustee

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Authorized Signatory

  

 

D-4

 

[REVERSE OF CLASS B NOTE]

 

This Note is one of a

duly authorized issue of Notes of the Issuer, designated as its

   % Harley-Davidson Motorcycle Contract, Class B (the “Class B

Notes”), all issued under an Indenture, dated as of May 1, 2003 (the

“Indenture”), between the Issuer and BNY Midwest Trust Company, as Indenture

Trustee (the “Indenture Trustee”), to which Indenture and all indentures

supplemental thereto reference is hereby made for a statement of the respective

rights and obligations thereunder of the Issuer, the Indenture Trustee and the

Holders of the Notes.  The Notes are

subject to all terms of the Indenture. 

All terms used in this Note that are defined in the Indenture, as

supplemented or amended, shall have the meanings assigned to them in or

pursuant to the Indenture, as so supplemented or amended.

 

The Class B Notes and the

other Classes of Notes described in the Indenture (collectively, the “Notes”)

are and will be equally and ratably secured by the collateral pledged as

security therefor as provided in the Indenture subject to the priorities of allocations

as to interest and principal payments as described in the Sale and Servicing

Agreement.

 

Principal of the Class B

Notes will be payable on the earlier of the Class B Final Distribution Date and

the Redemption Date, if any, pursuant to Section 10.01(a) or 10.01(b) of the

Indenture.  Notwithstanding the

foregoing, the entire unpaid principal amount of the Class B Notes shall be due

and payable on the date on which following the occurrence of an Event of Default

on which the maturity of the Notes shall have been accelerated in the manner

provided in the Indenture.  All

principal payments on the Class B Notes shall be made pro rata to the Class B

Noteholders entitled thereto.

 

Payments of interest on

this Note due and payable on each Distribution Date shall be made by wire

transfer to the account of the Person whose name appears as the Registered

Holder of this Note (or one or more Predecessor Notes) on the Note Register as

of the close of business on each Record Date, except that with respect to Notes

registered on the Record Date in the name of nominee of the Clearing Agency

(initially, such nominee to be Cede & Co.), payments will be made by wire

transfer in immediately available funds to the account designated by such

nominee.  Such checks shall be mailed to

the Person entitled thereto at the address of such Person as it appears on the

Note Register as of the applicable Record Date without requiring that this Note

be submitted for notation of payment. 

Any reduction in the principal amount of this Note (or any one or more

Predecessor Notes) affected by any payments made on any Distribution Date shall

be binding upon all future Holders of this Note and of any Note issued upon the

registration of transfer hereof or in exchange hereof or in lieu hereof, whether

or not noted hereon.  If funds are

expected to be available, as provided in the Indenture, for payment in full of

the then remaining unpaid principal amount of this Note on a Distribution Date,

then the Indenture Trustee, in the name of and on behalf of the Issuer, will

notify the Person who was the Registered Holder hereof as of the Record Date

preceding such Distribution Date by notice mailed within five days of such

Distribution Date and the amount then due and payable shall be payable only

upon presentation and surrender of this Note at the Indenture Trustee’s

principal Corporate Trust Office or at the office of the Indenture Trustee’s

agent appointed for such purposes located in the City of Chicago, Illinois.

 

D-5

 

The Issuer shall pay

interest on overdue installments of interest at the Class B Rate to the extent

lawful.

 

As provided in the Indenture, the Notes may be

redeemed pursuant to Section 10.01(a) of the Indenture, in whole, but not in

part, at the option of the Seller, on any Distribution Date on or after

the date on which the Pool Balance is less than 10% of the Aggregate

Principal Balance as of the 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 bankruptcy or similar law

in connection with any obligations relating to the Notes, the Indenture or the

Transaction Documents.

 

D-6

 

The Issuer has entered

into the Indenture, and this Note is issued with the intention that, for

federal, state and local income, single business and franchise tax purposes,

the Notes will qualify as indebtedness secured by the Collateral and that the

Issuer will be disregarded as a separate entity for federal income tax purposes

pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii).  Each Noteholder, by

acceptance of a Note or a beneficial interest in a Note, agrees to treat the

Notes for federal, state and local income, single business and franchise tax

purposes as indebtedness of the Issuer.

 

Prior to the due

presentment for registration of transfer of this Note, the Issuer and the

Indenture Trustee and any agent of the Issuer, the Indenture Trustee may treat

the Person in whose name this Note (as of the day of determination or as of

such other date as may be specified in the Indenture) is registered as the

owner hereof for all purposes, whether or not this Note be overdue, and neither

the Issuer, the Indenture Trustee nor any such agent shall be affected by

notice to the contrary.

 

The Indenture permits,

with certain exceptions as therein provided, the amendment thereof and the

modification of the rights and obligations of the Issuer and the rights of the

Holders of the Notes under the Indenture at any time by the Issuer and the

consent of the Modified Required Holders. 

The Indenture also contains provisions permitting the Holders of Notes

representing specified percentages of the Outstanding Amount of the Notes, on

behalf of the Holders of all the Notes, to waive compliance by the Issuer with

certain provisions of the Indenture and certain past defaults under the

Indenture and their consequences.  Any

such consent or waiver by the Holder of this Note (or any one of more Predecessor

Notes) shall be conclusive and binding upon such Holders and upon all future

Holders of this Note and of any Note issued upon the registration of transfer

hereof or in exchange hereof or in lieu hereof whether or not notation of such

consent or waiver is made upon this Note. 

The Indenture also permits the Indenture Trustee to amend or waive

certain terms and conditions set forth in the Indenture without the consent of

Holders of the Notes issued thereunder.

 

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.

 

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-7

 

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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