Exhibit
10.31


 




 


 





TRANSFER AND SALE AGREEMENT


 


 


by and between


 


 


HARLEY-DAVIDSON CREDIT CORP.,


as  Seller


 


 


and


 


 


HARLEY-DAVIDSON
CUSTOMER FUNDING CORP.,


 


 


as Purchaser


 


 


Dated as of
February 1, 2004


 




 





 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I  DEFINITION

  	
   

  
	
   

  	
   

  
	
  SECTION
  1.01.

  	
  GENERAL.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II TRANSFER OF
  CONTRACTS; ASSIGNMENT OF AGREEMENT

  	
   

  
	
   

  	
   

  
	
  SECTION
  2.01.

  	
  CLOSING.

  	
   

  
	
  SECTION
  2.02.

  	
  CONDITIONS TO THE CLOSING.

  	
   

  
	
  SECTION
  2.03.

  	
  ASSIGNMENT OF AGREEMENT.

  	
   

  
	
  SECTION
  2.04.

  	
  SUBSEQUENT CONTRACTS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  
	
  SECTION
  3.01.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING
  SELLER.

  	
   

  
	
  SECTION
  3.02.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING
  EACH CONTRACT.

  	
   

  
	
  SECTION
  3.03.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING THE
  CONTRACTS IN THE AGGREGATE.

  	
   

  
	
  SECTION
  3.04.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING THE
  CONTRACT FILES.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV PERFECTION OF
  TRANSFER AND PROTECTION OF SECURITY INTERESTS

  	
   

  
	
   

  	
   

  
	
  SECTION
  4.01.

  	
  CUSTODY OF CONTRACTS.

  	
   

  
	
  SECTION
  4.02.

  	
  FILING.

  	
   

  
	
  SECTION
  4.03.

  	
  NAME CHANGE OR RELOCATION.

  	
   

  
	
  SECTION
  4.04.

  	
  COSTS AND EXPENSES

  	
   

  
	
  SECTION
  4.05

  	
  SALE TREATMENT

  	
   

  
	
  SECTION
  4.06

  	
  SEPARATENESS FROM TRUST DEPOSITOR

  	
   

  
	
  SECTION
  4.07

  	
  PROTECTION OF SECURITY INTERESTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REMEDIES UPON
  MISREPRESENTATION

  	
   

  
	
   

  	
   

  
	
  SECTION
  5.01.

  	
  REPURCHASES OF CONTRACTS FOR BREACH OF
  REPRESENTATIONS AND WARRANTIES.

  	
   

  
	
  SECTION
  5.02.

  	
  SELLER’S REPURCHASE OPTION.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI INDEMNITIES

  	
   

  
	
   

  	
   

  
	
  SECTION
  6.01.

  	
  SELLER INDEMNIFICATION.

  	
   

  
	
  SECTION
  6.02.

  	
  LIABILITIES TO OBLIGORS.

  	
   

  
	
  SECTION
  6.03.

  	
  TAX INDEMNIFICATION

  	
   

  
	
  SECTION
  6.04.

  	
  OPERATION OF INDEMNITIES.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION
  7.01.

  	
  PROHIBITED TRANSACTIONS WITH RESPECT TO THE
  TRUST

  	
   

  
	
  SECTION
  7.02.

  	
  MERGER OR CONSOLIDATION.

  	
   

  
	
  SECTION
  7.03.

  	
  TERMINATION.

  	
   

  
	
  SECTION
  7.04.

  	
  ASSIGNMENT OR DELEGATION BY SELLER.

  	
   

  
	
  SECTION
  7.05.

  	
  AMENDMENT.

  	
   

  
	
  SECTION
  7.06.

  	
  NOTICES.

  	
   

  
	
  SECTION
  7.07.

  	
  MERGER AND INTEGRATION.

  	
   

  
	
  SECTION
  7.08.

  	
  HEADINGS.

  	
   

  
	
  SECTION
  7.09.

  	
  GOVERNING LAW.

  	
   

  



 


i

















 


EXHIBITS


 


	
  Exhibit A

  	
   

  	
  Form of Assignment

  
	
  Exhibit B

  	
   

  	
  Form of Officer’s Certificate

  
	
  Exhibit C

  	
   

  	
  Form of Subsequent Purchase Agreement

  



 


ii

















 


THIS
AGREEMENT, dated
as of February 1, 2004, is made by and between Harley-Davidson Credit Corp., a
Nevada corporation, as seller hereunder (together with its successors and
assigns
“Harley-Davidson Credit” or “Seller”), and Harley-Davidson Customer
Funding Corp., a Nevada corporation and wholly-owned subsidiary of Seller
(together with its successors and assigns “Trust Depositor”), as purchaser hereunder.


 


WHEREAS, in the regular course of its business,
Seller purchases and services (i) motorcycle conditional sales contracts from
Harley-Davidson motorcycle retailers and (ii) motorcycle promissory note and
security agreements from Eaglemark Savings Bank, each of which contracts
provides for installment payment obligations by or on behalf of the retailer’s
customer/purchaser and grants a security interest in the related motorcycle in
order to secure such obligations;


 


WHEREAS,
Seller and Trust
Depositor wish to set forth the terms and conditions pursuant to which Trust
Depositor will acquire from time to time the “Contract Assets,” as
hereinafter defined; and


 


WHEREAS, Trust Depositor intends concurrently
with its purchases from time to time of Contract Assets hereunder to convey all
right, title and interest in such Contract Assets to Harley-Davidson Motorcycle
Trust 2004-1 (the “Trust”) pursuant to the Sale and Servicing
Agreement dated as of February 1, 2004 by and among Trust Depositor,
Harley-Davidson Credit, as Servicer, the Trust, as issuer (the “Issuer”)
and BNY Midwest Trust Company, as Indenture Trustee (as amended, supplemented
or otherwise modified from time to time, the “Sale and Servicing Agreement”),
executed concurrently herewith;


 


NOW,
THEREFORE, in
consideration of the premises and the mutual agreements hereinafter set forth,
Seller and Trust Depositor agree as follows:


 


ARTICLE
I


 


DEFINITIONS


 


Section 1.01.        General.  Unless
otherwise defined in this Agreement, capitalized terms used herein (including
in the preamble above) shall have the meanings assigned to them in the Sale and
Servicing Agreement.


 


ARTICLE
II


 


TRANSFER OF
CONTRACTS; ASSIGNMENT OF AGREEMENT


 


Section 2.01.        Closing.  Subject to
and upon the terms and conditions set forth in this Agreement, Seller hereby
sells, transfers, assigns, sets over and otherwise conveys to Trust Depositor,
in consideration of Trust Depositor’s payment of $433,673,174.15 in cash as the
purchase price therefor, (i) all the right, title and interest of Seller in and
to the Initial Contracts


 

















 


listed on the initial
List of Contracts in effect on the Closing Date (including, without limitation,
all security interests and all rights to receive payments which are collected
pursuant thereto after the Initial Cutoff Date, including any liquidation
proceeds therefrom, but excluding any rights to receive payments which were
collected pursuant thereto on or prior to the Initial Cutoff Date), (ii) all
rights of Seller under any physical damage or other individual insurance policy
(including a “forced placed” policy, if any) or any debt cancellation
agreement relating to any such Contract, an Obligor or a Motorcycle securing
such Contract, (iii) all security interests in each such Motorcycle, (iv) all
documents contained in the related Contract Files, (v) all rights of Seller in
the Lockbox, Lockbox Account and related Lockbox Agreement to the extent they
relate to the Contracts, (vi) all rights (but not the obligations) of the
Seller under any motorcycle dealer agreements between the dealers (i.e.
originators of certain Contracts) and the Seller, (vii) all rights of Seller to
certain rebates of premiums and other amounts relating to insurance policies,
debt cancellation agreements, extended service contracts or other repair
agreements and other items financed under such Contracts and (viii) all
proceeds and products of the foregoing (items (i) - (viii), together with the
additional assets referred to in Section 2.04 below which may be transferred
from time to time in respect of Subsequent Contracts, being collectively
referred to herein as the “Contract Assets”).  Although Seller and Trust Depositor agree
that any such transfer is intended to be a sale of ownership in the Contract
Assets, rather than the mere granting of a security interest to secure a
borrowing, in the event such transfer is deemed to be of a mere security
interest to secure indebtedness, Seller shall be deemed to have granted Trust
Depositor a perfected first priority security interest in such Contract Assets
and this Agreement shall constitute a security agreement under applicable
law.  If such transfer is deemed to be
the mere granting of a security interest to secure a borrowing, Trust Depositor
may, to secure Trust Depositor’s own borrowing under the Sale and Servicing
Agreement (to the extent that the transfer of the Contract Assets thereunder is
deemed to be a mere granting of a security interest to secure a borrowing)
repledge and reassign (i) all or a portion of the Contract Assets pledged to
Trust Depositor and not released from the security interest of this Agreement
at the time of such pledge and assignment, and (ii) all proceeds thereof.  Such repledge and reassignment may be made
by Trust Depositor with or without a repledge and reassignment by Trust
Depositor of its rights under this Agreement, and without further notice to or
acknowledgment from Seller.  Seller
waives, to the extent permitted by applicable law, all claims, causes of action
and remedies, whether legal or equitable (including any right of setoff),
against Trust Depositor or any assignee of Trust Depositor relating to such
action by Trust Depositor in connection with the transactions contemplated by
the Sale and Servicing Agreement.


 


Section 2.02.        Conditions to the Closing.  On or before
the Closing Date, Seller shall deliver or cause to be delivered to Trust
Depositor each of the documents, certificates and other items as follows:


 


(a)           The initial List of Contracts,
certified by the Chairman of the Board, President or any Vice President of
Seller together with an Assignment substantially in the form attached as Exhibit A
hereto.


 


2

















 


(b)           A certificate of an officer of Seller
substantially in the form of Exhibit B hereto.


 


(c)           An opinion of counsel for Seller
substantially in the form of Exhibit D to the Sale and Servicing
Agreement.


 


(d)           A letter or letters from Ernst &
Young LLP, or another nationally recognized accounting firm, addressed to Trust
Depositor and the Issuer and the Trustees and stating that such firm has
reviewed a sample of the Initial Contracts and performed specific procedures
for such sample with respect to certain contract terms and identifying those
Initial Contracts which do not so conform.


 


(e)           Copies of resolutions of the Board of
Directors of Seller or of the Executive Committee of the Board of Directors of
Seller approving the execution, delivery and performance of this Agreement and
the transactions contemplated hereunder, certified in each case by the
Secretary or an Assistant Secretary of Seller.


 


(f)            Officially certified recent evidence
of due incorporation and good standing of Seller under the laws of Nevada.


 


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


 


(h)           An Officer’s Certificate from Seller
certifying that the Seller, on or prior to the Closing Date, has indicated in
its computer files, in accordance with its customary standards, policies and procedures,
that the Contracts have been conveyed to the Trust Depositor pursuant to this
Agreement.


 


(i)            The documents, certificates and
other items described in Section 2.02 of the Sale and Servicing Agreement, to
the extent not already described above.


 


Section 2.03.        Assignment of Agreement.  Trust
Depositor has the right to assign its interest under this Agreement to the
Issuer as may be required to effect the purposes of the Sale and Servicing
Agreement, without further notice to, or consent of, Seller, and the Issuer
shall succeed to such of the rights of Trust Depositor hereunder as shall be so
assigned.  Seller acknowledges that,
pursuant to the Sale and Servicing Agreement, Trust Depositor will assign all
of its right, title and interest in and to the Contract Assets and its right to
exercise the remedies created by Section 5.01 hereof for breaches of
representations and warranties of Seller contained in Sections 3.01, 3.02, 3.03
and 3.04 hereof to the Issuer and the Indenture Trustee for the benefit of the
Noteholders.  Seller agrees that, upon
such assignment to the Issuer and the Indenture


 


3

















 


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


 


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


 


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


 


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


 


(ii)           the Funding Period shall not have
terminated;


 


(iii)          the Seller shall have delivered to the
Trust Depositor a duly executed Purchase Agreement in substantially the form of
Exhibit C
hereto (the “Subsequent


 


4

















 


Purchase Agreement”),
which shall
include a Subsequent List of Contracts listing the Subsequent Contracts being
purchased;


 


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


 


(v)           each Rating Agency shall have
notified the Trust Depositor and the Trustees that following such transfer, and
the transfer immediately thereafter of the Subsequent Contracts to the Trust,
the Class A-1 Notes and the Class A-2 Notes will be rated in the highest rating
category by such Rating Agency and the Class B Notes will be rated at least “A”
by Standard & Poor’s and “A2” by Moody’s;


 


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


 


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


 


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


 


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


 


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


 


ARTICLE III


 


REPRESENTATIONS
AND WARRANTIES


 


Seller makes the following representations and
warranties, on which Trust Depositor will rely in purchasing the initial
Contract Assets on the Closing Date (and any Subsequent Contracts on the
related Subsequent Transfer Date) and concurrently reconveying the same to the
Trust, and on which the Trust, the Indenture Trustee and the Noteholders will
rely under the Sale and Servicing Agreement. 
Such representations speak as of the execution and delivery of this
Agreement and as of the Closing Date in the case of the Initial Contracts, and
as of the applicable


 


5

















 


Subsequent Transfer Date
in the case of Subsequent Contracts, but shall survive the sale, transfer and
assignment of the Contracts to the Trust and the pledge of the Contracts to the
Indenture Trustee.  The repurchase
obligation of Seller set forth in Section 5.01 below and in Section 7.08 of the
Sale and Servicing Agreement constitutes the sole remedy available for a breach
of a representation or warranty of Seller set forth in Section 3.02, 3.03 or
3.04 of this Agreement.


 


Section 3.01.        Representations and Warranties Regarding Seller. 
Seller represents and warrants, as of the execution and delivery of this
Agreement and as of the Closing Date, in the case of the Initial Contracts, and
as of the applicable Subsequent Transfer Date, in the case of Subsequent
Contracts, that:


 


(a)           Organization and Good Standing.  Seller is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and has the corporate power to own its assets and to transact the
business in which it is currently engaged. 
Seller is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial or
otherwise) of Seller or Trust Depositor. 
Seller is properly licensed in each jurisdiction to the extent required
by the laws of such jurisdiction to service the Contracts in accordance with
the terms of the Sale and Servicing Agreement.


 


(b)           Authorization; Binding Obligation.  Seller has the power and authority to make,
execute, deliver and perform this Agreement and the other Transaction Documents
to which the Seller is a party and all of the transactions contemplated under
this Agreement and the other Transaction Documents to which the Seller is a
party, and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which the Seller is a party.  This Agreement
and the other Transaction Documents to which the Seller is a party constitute
the legal, valid and binding obligation of Seller enforceable in accordance
with their terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally and by the availability of equitable remedies.


 


(c)           No Consent Required.  Seller is not required to obtain the consent
of any other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and the other Transaction Documents to which
the Seller is a party.


 


(d)           No Violations.  Seller’s execution, delivery and performance
of this Agreement and the other Transaction Documents to which the Seller is a
party will not violate any provision of any existing law or regulation or any
order or decree of any court or the Articles of Incorporation or Bylaws of
Seller, or constitute a material breach of any


 


6

















 


mortgage,
indenture, contract or other agreement to which Seller is a party or by which
Seller or any of Seller’s properties may be bound.


 


(e)           Litigation.  No litigation or administrative proceeding
of or before any court, tribunal or governmental body is currently pending, or
to the knowledge of Seller threatened, against Seller or any of its properties
or with respect to this Agreement or any other Transaction Document to which
the Seller is a party which, if adversely determined, would in the opinion of
Seller have a material adverse effect on the business, properties, assets or
condition (financial or other) of Seller or the transactions contemplated by
this Agreement or any other Transaction Document to which the Seller is a
party.


 


(f)            State of Incorporation; Name; No
Changes.  Seller’s state of
incorporation is the State of Nevada. 
Seller’s exact legal name is as set forth in the first paragraph of this
Agreement.  Seller has not changed its
name whether by amendment of its Articles of Incorporation, by reorganization
or otherwise, and has not changed its state of incorporation, within the four
months preceding the Closing Date.


 


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


 


(h)           Solvency. 
The Seller, after giving effect to the conveyances made by it hereunder,
is Solvent.


 


Section 3.02.        Representations and Warranties Regarding Each Contract. 
Seller represents and warrants as to each Contract as of the execution
and delivery of this Agreement and as of the Closing Date, in the case of the
Initial Contracts, and as of the applicable Subsequent Transfer Date, in the
case of Subsequent Contracts, that:


 


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


 


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


 


(c)           No Waivers.  As of the Closing Date (or the applicable
Subsequent Transfer Date, in the case of Subsequent Contracts), the terms of
the Contracts have not


 


7

















 


been waived,
altered or modified in any respect, except by instruments or documents included
in the related Contract File.


 


(d)           Binding Obligation.  Each Contract is a legal, valid and binding
payment obligation of the Obligor thereunder and is enforceable in accordance
with its terms, except as such enforceability may be limited by insolvency, bankruptcy,
moratorium, reorganization, or other similar laws affecting the enforcement of
creditors’ rights generally.


 


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


 


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


 


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


 


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


 


(i)            Compliance with Law.  None of the Contracts, the origination of
the Contracts by the dealers or Eaglemark Savings Bank, the purchase of the
Contracts by the


 


8

















 


Seller, the sale
of the Contracts by the Seller to the Trust Depositor or by the Trust Depositor
to the Trust, or any combination of the foregoing, violated at the time of
origination or as of the Closing Date or as of any Subsequent Transfer Date, as
applicable, any requirement of any federal, state or local law and regulations
thereunder, including, without limitation, usury, truth in lending, motor
vehicle installment loan and equal credit opportunity laws, applicable to the
Contracts and the sale of Motorcycles. 
Seller shall, for at least the period of this Agreement, maintain in its
possession, available for the Trust Depositor’s and the Trustees’  inspection, and shall deliver to Trust
Depositor or the Trustee upon demand, evidence of compliance with all such
requirements.


 


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


 


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


 


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


 


9

















 


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


 


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


 


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


 


(p)           Installments.  Each Contract has a fixed Contract Rate and
provides for monthly payments of principal and interest which, if timely made,
would fully amortize the loan on a simple-interest basis over its term.


 


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


 


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


 


10

















 


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


 


(t)            Lockbox Bank.  The Lockbox Bank is the only institution
holding any Lockbox Account for receipt of payments from Obligors, and all
Obligors have been instructed to make payments to the Lockbox Account (either
directly by remitting payments to the Lockbox, or indirectly by making payments
through direct debit, the telephone or the internet to an account of the
Servicer which payments will be subsequently transferred from such account to
one or more Lockbox Banks), and no person claiming through or under Seller has
any claim or interest in the Lockbox Account other than the Lockbox Bank; provided,
however, that other “Trusts” (as defined in the Lockbox Agreement)
shall have an interest in certain other collections therein not related to the
Contracts.


 


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


 


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


 


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


 


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


 


Section 3.03.        Representations and Warranties Regarding the Contracts in the
Aggregate.  Seller represents and warrants, as of the
execution and delivery of this Agreement and as of the Closing Date, in the
case of the Initial Contracts, and, if applicable, as of the applicable
Subsequent Transfer Date, in the case of Subsequent Contracts, that:


 


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


 


11

















 


(b)           Characteristics.  The Initial Contracts have the following
characteristics: (i) all the Contracts are secured by Motorcycles; (ii) no
Initial Contract has a remaining maturity of more than 84 months; and (iii) the
final scheduled payment on the Initial Contract with the latest maturity is due
no later than February 2011.   
Approximately 77.29% of the Principal Balance of the Initial Contracts
as of the Initial Cutoff Date is attributable to loans for purchases of new
Motorcycles and approximately 22.71% is attributable to loans for purchases of
used Motorcycles.  No Initial Contract
was originated after the Initial Cutoff Date. 
No Initial Contract has a Contract Rate less than 3.98%.  The first scheduled payment date of the
Contracts (including any Subsequent Contracts) is due no later than August
2004.  Approximately 99.97% of the
Principal Balance of the Initial Contracts as of the Initial Cutoff Date is
attributable to loans for purchases of Motorcycles manufactured by Harley-Davidson
or Buell and approximately 0.03% of the Principal Balance of the Initial
Contracts as of the Initial Cutoff Date is attributable to loans for purchases
of Motorcycles not manufactured by Harley-Davidson or Buell.


 


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


 


(d)           No Adverse Selection.  No selection procedures adverse to
Noteholders have been employed in selecting the Contracts.


 


(e)           True Sale.  The transactions contemplated by this
Agreement and the Sale and Servicing Agreement constitute valid sales,
transfers and assignments from Seller to Trust Depositor and from Trust
Depositor to the Trust of all of Seller’s right, title and interest in the
Contract Assets as of the Closing Date and any Subsequent Transfer Date, as
applicable.


 


(f)            All Filings Made.  All filings (including, without limitation,
UCC filings) required to be made by any Person and actions required to be taken
or performed by any Person in any jurisdiction to give the Indenture Trustee a
first priority perfected lien on, or ownership interest in, the Contracts and
the proceeds thereof and the rest of the Trust Corpus have been made, taken or
performed.


 


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


 


Section 3.04.        Representations and Warranties Regarding the Contract Files. 
Seller represents and warrants as of the execution and delivery of this
Agreement and as of the Closing


 


12

















 


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


 


(a)           Possession.  Immediately prior to the Closing Date or any
Subsequent Transfer Date, the Servicer, or its custodian, will have possession
of each original Contract and the related complete Contract File.  Each of such documents which is required to
be signed by the Obligor has been signed by the Obligor in the appropriate
spaces.  All blanks on any form have
been properly filled in and each form has otherwise been correctly prepared.  The complete Contract File for each Contract
currently is in the possession of the Servicer, or its custodian.


 


(b)           Bulk Transfer Laws.  The transfer, assignment and conveyance of
the Contracts and the Contract Files by Seller pursuant to this Agreement or
any Subsequent Purchase Agreement and by Trust Depositor pursuant to the Sale
and Servicing Agreement is not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.


 


ARTICLE
IV


 


PERFECTION OF
TRANSFER AND PROTECTION OF SECURITY INTERESTS


 


Section 4.01.        Custody of Contracts.  The contents
of each Contract File shall be held by the Servicer, or its custodian, for the
benefit of the Trust as the owner thereof in accordance with the Sale and
Servicing Agreement.


 


Section 4.02.        Filing.  On or prior to the Closing
Date and each Subsequent Transfer Date, Seller shall cause the UCC financing
statement(s) referred to in Section 2.02(g) hereof and in Section 2.02(g) of
the Sale and Servicing Agreement to be filed and from time to time Seller shall
take and cause to be taken such actions and execute such documents as are
necessary or desirable or as Trust Depositor or the Trust may reasonably
request to perfect and protect the Trust Depositor’s and the Trust’s ownership
interest in the Contract Assets against all other persons, including, without
limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making
of notations on or taking possession of all records or documents of title.  The Seller authorizes the Trust Depositor to
file financing statements describing the Contract Assets as collateral.  All financing statements filed or to be
filed against the Seller in favor of the Trust Depositor or the Trust in
connection herewith describing the Contract Assets as collateral shall contain
a statement to the following effect: “A purchase of or security interest in any
collateral described in this financing statement, except as permitted in the
Transfer and Sale Agreement or Sale and Servicing Agreement, will violate the
rights of the Secured Party.”


 


Section 4.03.        Name Change or Relocation.  (a) During
the term of this Agreement, Seller shall not change its name, identity or
structure or state of incorporation without first giving at least 30 days’
prior written notice to Trust Depositor and to the Trustees.


 


13

















 


(b)           If
any change in Seller’s name, identity or structure or other action would make
any financing or continuation statement or notice of ownership interest or lien
filed under this Agreement seriously misleading within the meaning of
applicable provisions of the UCC or any title statute, Seller, no later than
five days after the effective date of such change, shall file such amendments
as may be required to preserve and protect the Trust Depositor’s and the
Trust’s interests in the Contract Assets and proceeds thereof.  In addition, Seller shall not change its
state of incorporation unless it has first taken such action as is advisable or
necessary to preserve and protect the Trust Depositor’s and the Trusts’
interest in the Contract Assets. 
Promptly after taking any of the foregoing actions, Seller shall deliver
to Trust Depositor and the Trustees an opinion of counsel stating that, in the
opinion of such counsel, all financing statements or amendments necessary to
preserve and protect the interests of the Trust Depositor and the Trust in the
Contract Assets have been filed, and reciting the details of such filing.


 


Section 4.04.        Costs and Expenses.  Seller
agrees to pay all reasonable costs and disbursements in connection with the
perfection and the maintenance of perfection, as against all third parties, of
(i) Trust Depositor’s, the Issuer’s and the Indenture Trustee’s right, title and
interest in and to the Contract Assets (including, without limitation, the
security interest in the Motorcycles related thereto) and (ii) the security
interests provided for in the Indenture.


 


Section 4.05         Sale Treatment.  Each of
Seller and Trust Depositor shall treat the transfer of Contract Assets made
hereunder (including in respect of Subsequent Contracts) for all purposes
(including tax and financial accounting purposes) as a sale and purchase on all
of its relevant books, records, financial statements and other applicable
documents.


 


Section 4.06         Separateness from Trust Depositor. 
The Seller agrees to take or refrain from taking or engaging in with
respect to the Trust Depositor each of the actions or activities specified in
the “substantive consolidation” opinion of Winston & Strawn LLP (or in any
related certificate of Seller) delivered on the Closing Date, upon which the
conclusions expressed therein are based.


 


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


 


ARTICLE
V


 


REMEDIES UPON
MISREPRESENTATION


 


Section 5.01.        Repurchases of Contracts for Breach of Representations and
Warranties.  Seller hereby agrees, for the benefit of the
Issuer, the Indenture Trustee and the Trust Depositor,


 


14

















 


that it shall repurchase
a Contract including any Subsequent Contracts (together with all related
Contract Assets), at its Repurchase Price, not later than two Business Days
prior to the first Determination Date after Seller becomes aware, or should
have become aware, or receives written notice from Trust Depositor, either of
the Trustees or the Servicer of any breach of a representation or warranty of
Seller set forth in Article III of this Agreement that materially adversely
affects Trust Depositor’s or the Trust’s interest in such Contract (without
regard to the benefits of the Reserve Fund) and which breach has not been
cured; provided,
however, that with respect to any Contract described on the List of
Contracts with respect to an incorrect unpaid Principal Balance which Seller
would otherwise be required to repurchase pursuant to this Section 5.01 and
Section 7.08 of the Sale and Servicing Agreement, Seller may, in lieu of
repurchasing such Contract, deposit in the Collection Account not later than
two Business Days prior to such Determination Date cash in an amount sufficient
to cure any deficiency or discrepancy; and provided further that with respect to a
breach of a representation or warranty relating to the Contracts in the
aggregate and not to any particular Contract, Seller may select Contracts
(without adverse selection) to repurchase such that had such Contracts not been
reconveyed by Trust Depositor and included as part of the Trust there would
have been no breach of such representation or warranty; provided further that the
failure to maintain perfection of the security interest in the Motorcycle
securing a Contract in accordance with the Sale and Servicing Agreement, shall
be deemed to be a breach materially and adversely affecting the Trust’s
interest in the Contracts or in the related Contract Assets.  Notwithstanding any other provision of this
Agreement, the obligation of Seller under this Section 5.01 and under Section
7.08 of the Sale and Servicing Agreement shall not terminate upon a Service
Transfer pursuant to Article VIII of the Sale and Servicing Agreement.


 


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


 


ARTICLE
VI


 


INDEMNITIES


 


Section 6.01.        Seller Indemnification.  Seller will
defend and indemnify Trust Depositor, the Trust, the Trustees, any agents of
the Trustees and the Noteholders against any and all costs, expenses, losses,
damages, claims and liabilities, joint or several, including reasonable fees
and expenses of counsel and expenses of litigation arising out of or resulting
from (i) this Agreement


 


15

















 


or the use, ownership or
operation of any Motorcycle by Seller or the Servicer or any Affiliate of
either, (ii) any representation or warranty or covenant made by Seller in this
Agreement being untrue or incorrect (subject to the second sentence of the
preamble to Article III of this Agreement above), and (iii) any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus or in any amendment thereto or the omission or alleged omission to
state therein a material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement was made in conformity with information furnished to
Trust Depositor by Seller specifically for use therein.  Notwithstanding any other provision of this
Agreement, the obligation of Seller under this Section 6.01 shall not terminate
upon a Service Transfer pursuant to Article VIII of the Sale and Servicing
Agreement and shall survive any termination of that agreement or this
Agreement.


 


Section 6.02.        Liabilities
to Obligors.  No obligation or liability to any Obligor
under any of the Contracts is intended to be assumed by the Trustees, the Trust
or the Noteholders under or as a result of this Agreement and the transactions
contemplated hereby.


 


Section 6.03.        Tax Indemnification.  Seller agrees
to pay, and to indemnify, defend and hold harmless the Trust Depositor, the
Trust, the Trustees or the Noteholders from, any taxes which may at any time be
asserted with respect to, and as of the date of, the transfer of the Contracts
to Trust Depositor hereunder and the concurrent reconveyance to the Trust and
the further pledge by the Trust to the Indenture Trustee, including, without
limitation, any sales, gross receipts, general corporation, personal property,
privilege or license taxes (but not including any federal, state or other taxes
arising out of the creation of the Trust and the issuance of the Notes) and
costs, expenses and reasonable counsel fees in defending against the same,
whether arising by reason of the acts to be performed by Seller under this
Agreement or the Servicer under the Sale and Servicing Agreement or imposed
against the Trust, a Noteholder or otherwise. 
Notwithstanding any other provision of this Agreement, the obligation of
Seller under this Section 6.03 shall not terminate upon a Service Transfer
pursuant to Article VIII of the Sale and Servicing Agreement and shall survive
any termination of this Agreement.


 


Section 6.04.        Operation of Indemnities. 
Indemnification under this Article VI shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation.  If Seller has made any indemnity payments to
Trust Depositor or the Trustees pursuant to this Article VI and Trust Depositor
or the Trustees thereafter collects any of such amounts from others, Trust
Depositor or the Trustees will repay such amounts collected to Seller, except
that any payments received by Trust Depositor or the Trustees from an insurance
provider as a result of the events under which the Seller’s indemnity payments
arose shall be repaid prior to any repayment of the Seller’s indemnity payment.


 


16

















 


ARTICLE VII


 


MISCELLANEOUS


 


Section 7.01.        Prohibited Transactions with Respect to the Trust. 
Seller shall not:


 


(a)           Provide credit to any Noteholder for
the purpose of enabling such Noteholder to purchase Notes;


 


(b)           Purchase any Notes in an agency or
trustee capacity; or


 


(c)           Except in its capacity as Servicer as
provided in the Sale and Servicing Agreement, lend any money to the Trust.


 


Section 7.02.        Merger or Consolidation.  (a) Except as
otherwise provided in this Section 7.02, Seller will keep in full force and
effect its existence, rights and franchises as a Nevada corporation, and will
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement and of any of the
Contracts and to perform its duties under this Agreement.


 


(b)           Any
person into which Seller may be merged or consolidated, or any corporation or
other entity resulting from such merger or consolidation to which Seller is a
party, or any person succeeding to the business of Seller, shall be the
successor to Seller hereunder, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.


 


(c)           Upon
the merger or consolidation of the Seller as described in this Section 7.02,
the Seller shall provide Standard & Poor’s and Moody’s notice of such
merger or consolidation within thirty (30) days after completion of the same.


 


Section 7.03.        Termination This Agreement shall terminate (after distribution of
any Note Distributable Amount due pursuant to Section 7.05  of the Sale and Servicing Agreement) on the
Distribution Date on which the principal balance of the Class A-1 Notes,  Class A-2 Notes and the Class B Notes is
reduced to zero; provided, that Seller’s representations and warranties and
indemnities by Seller shall survive termination.


 


Section 7.04.        Assignment or Delegation by Seller. 
Except as specifically authorized hereunder, Seller may not convey and
assign or delegate any of its rights or obligations hereunder absent the prior
written consent of Trust Depositor and the Trustees, and any attempt to do so
without such consent shall be void.


 


Section 7.05.        Amendment.  (a) This
Agreement may be amended from time to time by Seller and Trust Depositor, with
notice to the Rating Agencies, but without the consent of the Trustees or any
of the Noteholders to correct manifest error, to cure any ambiguity, to correct
or


 


17

















 


supplement any provisions
herein or therein which may be inconsistent with any other provisions herein,
therein or in the Prospectus, as the case may be, or to add any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement or the
Prospectus; provided,
however, that such action shall not, as evidenced by an Opinion of
Counsel for Seller acceptable to the Trustees, adversely affect the interests
of any Noteholder.


 


(b)           This
Agreement may also be amended from time to time by Seller and Trust Depositor,
with the consent of the Modified Required Holders, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Indenture Trustee for the benefit of Noteholders; provided, however, that no
such amendment or waiver shall (a) reduce in any manner the amount of, or delay
the timing of, collections of payments on the Contracts or distributions which
are required to be made on any Note or (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the holders
of all Notes then outstanding.


 


(c)           Promptly
after the execution of any amendment or consent pursuant to this Section 7.05,
Trust Depositor shall furnish written notification of the substance of such
amendment and a copy of such amendment to each Trustee and each Rating Agency.


 


(d)           It
shall not be necessary for the consent of Noteholders under this Section 7.05
to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Noteholders shall be
subject to such reasonable requirements as the Trustees may prescribe.


 


(e)           Upon
the execution of any amendment or consent pursuant to this Section 7.05, this
Agreement shall be modified in accordance therewith, and such amendment or
consent shall form a part of this Agreement for all purposes, and every holder
of Notes theretofore or thereafter issued hereunder shall be bound thereby.


 


Section 7.06.        Notices.  All notices, demands, certificates,
requests and communications hereunder (“notices”) shall be in writing and shall
be effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an Authorized Officer of the party to which sent, or
(d) on the date transmitted by legible telecopier transmission with a
confirmation of receipt, in all cases addressed to the recipient at the address
for such recipient set forth in the Sale and Servicing Agreement.


 


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


 


18

















 


All communications and notices pursuant hereto to
Noteholders shall be in writing and delivered or mailed at the address shown in
the Note Register.


 


Section 7.07.        Merger and Integration.  Except as
specifically stated otherwise herein, this Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Agreement.  This Agreement may not be modified, amended,
waived, or supplemented except as provided herein.


 


Section 7.08.        Headings.  The headings
herein are for purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.


 


Section 7.09.        Governing Law.  This Agreement
shall be governed by, and construed and enforced in accordance with, the
internal laws of the State of Illinois.


 


Section 7.10.        No Bankruptcy Petition.  The Seller
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all amounts owing in respect of all outstanding
Securities, as well as any other amounts distributable or payable from the
Trust Estate, together with any other amounts owing in respect of obligations
of the Trust Depositor, it will not institute against, or solicit or join in or
cooperate with or encourage any Person to institute against, the Trust
Depositor or the Trust, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings or other similar proceedings under the laws of the
United State or any State of the United States.  This Section 7.10 shall survive termination of this Agreement.


 


[signature page follows]


 


19

















 


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


 


 


	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Treasurer

  
						



 


Signature Page to
Transfer and

Sale Agreement


 

















 


Exhibit A


Transfer and Sale


Agreement


 


FORM OF ASSIGNMENT


 


In accordance with the Transfer and Sale Agreement
(the “Agreement”)
dated as of February 1, 2004 made by and between the undersigned, as seller
thereunder (“Seller”), and Harley-Davidson Customer Funding Corp., a
Nevada corporation and wholly-owned subsidiary of Seller (“Trust Depositor”), as
purchaser thereunder, the undersigned does hereby sell, transfer, convey and
assign, set over and otherwise convey to Trust Depositor (i) all the right,
title and interest of Seller in and to the Initial Contracts listed on the initial
List of Contracts in effect on the Closing Date (including, without limitation,
all security interests and all rights to receive payments which are collected
pursuant thereto after the Initial Cutoff Date, including any liquidation
proceeds therefrom, but excluding any rights to receive payments which were
collected pursuant thereto on or prior to the Initial Cutoff Date), (ii) all
rights of Seller under any physical damage or other individual insurance policy
(including a “forced placed” policy, if any) or any debt cancellation
agreement relating to any such Contract, an Obligor or a Motorcycle securing
such Contract, (iii) all security interests in each such Motorcycle, (iv) all
documents contained in the related Contract Files, (v) all rights of Seller in
the Lockbox, Lockbox Account and related Lockbox Agreement to the extent they
relate to the Contracts, (vi) all rights (but not the obligations) of the
Seller under any motorcycle dealer agreements between the dealers (i.e.
originators of certain Contracts) and the Seller, (vii) all rights of Seller to
certain rebates of premiums and other amounts relating to insurance policies,
debt cancellation agreements, extended service contracts or other repair
agreements and other items financed under such Contracts and (viii) all
proceeds and products of the foregoing


 


This Assignment is made pursuant to and in reliance
upon the representation and warranties on the part of the undersigned contained
in Article III of the Agreement and no others.


 


Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to such terms in the Sale and
Servicing Agreement dated as of February 1, 2004 made by and among the
undersigned, as servicer, the Trust Depositor, Harley-Davidson Motorcycle Trust
2004-1, as issuer, and BNY Midwest Trust Company, as indenture trustee.


 


A-1

















 


IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed this        
day of February, 2004.


 


	
   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Treasurer

  
					



 


A-2

















 


Exhibit B


Transfer and Sale


Agreement


 


FORM OF OFFICER’S CERTIFICATE




(See Exhibit C to
the Sale and Servicing Agreement)


 


B-1

















 


Exhibit C


Transfer and Sale


Agreement


 


FORM OF SUBSEQUENT PURCHASE AGREEMENT


 


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


 


WITNESSETH:


 


WHEREAS, the Trust Depositor and the Seller are
parties to the Transfer and Sale Agreement, dated as of February 1, 2004 (the “Transfer and
Sale Agreement”);


 


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


 


WHEREAS, the Seller has timely delivered an Addition
Notice related to such conveyance as required in the Sale and Servicing Agreement
dated as of February 1, 2004 among the Seller (in the capacity of Servicer
thereunder), the Issuer as defined therein, the Trust Depositor and the
Indenture Trustee as defined therein (the “Sale and Servicing Agreement”).


 


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


 


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


 


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


 


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


 


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


 


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


 


C-1

















 


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


 


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


 


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


 


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


 


C-2

















 


(c)           Seller
hereby represents and warrants that (a) the aggregate Principal Balance of the
Subsequent Contracts listed on the Subsequent List of Contracts and conveyed to
the Trust Depositor pursuant to this Agreement is
$[                        ]
as of the Subsequent Cutoff Date, and (b) the conditions set forth in Section
2.04(b) of the Transfer and Sale Agreement have been satisfied as of the
Subsequent Transfer Date.


 


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


 


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


 


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


 


C-3

















 


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


 


	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Treasurer