Exhibit 10.1


 


Execution Copy


 




 





 


TRANSFER AND SALE AGREEMENT


 


 


by and between


 


 


HARLEY-DAVIDSON CREDIT CORP.,


as Seller


 


 


and


 


 


HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,


as Purchaser


 


 


Dated as of May 1, 2009


 




 





 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I DEFINITION

  	
  1

  
	
   

  	
   

  
	
  SECTION 1.01.

  	
  GENERAL

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II TRANSFER OF CONTRACTS;
  ASSIGNMENT OF AGREEMENT

  	
  1

  
	
   

  	
   

  
	
  SECTION 2.01.

  	
  CLOSING

  	
  1

  
	
  SECTION 2.02.

  	
  CONDITIONS TO THE CLOSING

  	
  2

  
	
  SECTION 2.03.

  	
  ASSIGNMENT OF AGREEMENT

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND
  WARRANTIES

  	
  3

  
	
   

  	
   

  
	
  SECTION 3.01.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING SELLER

  	
  4

  
	
  SECTION 3.02.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING EACH CONTRACT

  	
  5

  
	
  SECTION 3.03.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACTS IN
  THE AGGREGATE

  	
  8

  
	
  SECTION 3.04.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING THE CONTRACT FILES

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV PERFECTION OF TRANSFER AND
  PROTECTION OF SECURITY INTERESTS

  	
  9

  
	
   

  	
   

  
	
  SECTION 4.01.

  	
  CUSTODY OF CONTRACTS

  	
  9

  
	
  SECTION 4.02.

  	
  FILING

  	
  9

  
	
  SECTION 4.03.

  	
  NAME CHANGE OR RELOCATION

  	
  9

  
	
  SECTION 4.04.

  	
  COSTS AND EXPENSES

  	
  10

  
	
  SECTION 4.05

  	
  SALE TREATMENT

  	
  10

  
	
  SECTION 4.06

  	
  SEPARATENESS FROM TRUST DEPOSITOR

  	
  10

  
	
  SECTION 4.07

  	
  PROTECTION OF SECURITY INTERESTS

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REMEDIES UPON
  MISREPRESENTATION

  	
  10

  
	
   

  	
   

  
	
  SECTION 5.01.

  	
  REPURCHASES OF CONTRACTS FOR BREACH OF REPRESENTATIONS AND
  WARRANTIES

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI INDEMNITIES

  	
  11

  
	
   

  	
   

  
	
  SECTION 6.01.

  	
  SELLER INDEMNIFICATION

  	
  11

  
	
  SECTION 6.02.

  	
  LIABILITIES TO OBLIGORS

  	
  11

  
	
  SECTION 6.03.

  	
  TAX INDEMNIFICATION

  	
  11

  
	
  SECTION 6.04.

  	
  OPERATION OF INDEMNITIES

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
  12

  
	
   

  	
   

  
	
  SECTION 7.01.

  	
  PROHIBITED TRANSACTIONS WITH RESPECT TO THE TRUST

  	
  12

  
	
  SECTION 7.02.

  	
  MERGER OR CONSOLIDATION

  	
  12

  
	
  SECTION 7.03.

  	
  TERMINATION

  	
  12

  
	
  SECTION 7.04.

  	
  ASSIGNMENT OR DELEGATION BY SELLER

  	
  13

  
	
  SECTION 7.05.

  	
  AMENDMENT

  	
  13

  
	
  SECTION 7.06.

  	
  NOTICES

  	
  13

  
	
  SECTION 7.07.

  	
  MERGER AND INTEGRATION

  	
  14

  
	
  SECTION 7.08.

  	
  HEADINGS

  	
  14

  
	
  SECTION 7.09.

  	
  GOVERNING LAW

  	
  14

  



 


i

















 


	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Assignment

  	
   

  
	
  Exhibit B

  	
  Form of Officer’s Certificate

  	
   

  



 


ii

















 


THIS AGREEMENT, dated as of May 1,
2009, 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 purchase of Contract Assets hereunder to convey all
right, title and interest in such Contract Assets to Harley-Davidson Motorcycle
Trust 2009-1 (the “Trust”)
pursuant to the Sale and Servicing Agreement dated as of May 1, 2009 by
and among Trust Depositor, Harley-Davidson Credit, as Servicer, the Trust, as
issuer (the “Issuer”) and The
Bank of New York Mellon Trust Company, N.A., 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 $500,000,000 (less fees and expenses in connection with the offering
and sale of the Class A Notes and certain deposits to the Reserve Fund on
the Closing Date) in cash as the purchase price therefor, (i) all the
right, title and interest of Seller in and to the Contracts listed on the 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 Cutoff Date, including any liquidation proceeds
therefrom, but excluding any rights to receive payments which were collected
pursuant thereto on or prior to the Cutoff Date), (ii) all rights of
Seller under any physical damage or other individual insurance policy
(including a “forced placed”
policy, if any), any debt


 

















 


insurance policy or any
debt cancellation agreement relating to any such Contract, an Obligor or a
Motorcycle securing such Contract, (iii) all security interests in each
such Motorcycle, (iv) all documents contained in the related Contract
Files, (v) all rights 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), 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.  To the
extent the cash purchase price for the Contract Assets sold by the Seller to
the Trust Depositor is less than the principal balance of the Contracts as of
the Cutoff Date, the difference shall be deemed to be a capital contribution by
the Seller to the Trust Depositor.


 


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
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.


 


(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 Contracts and
performed specific procedures for such sample with respect to certain contract
terms and identifying those Contracts which do not so conform.


 


2

















 


(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 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.


 


ARTICLE III


 


REPRESENTATIONS AND
WARRANTIES


 


Seller
makes the following representations and warranties, on which Trust Depositor
will rely in purchasing the Contract Assets on the Closing 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, 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.


 


3

















 


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, 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 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.


 


4

















 


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 5.00% 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 that:


 


(a)           List of Contracts.  The information set forth in the List of
Contracts is true, complete and correct in all material respects as of the
Cutoff Date.


 


(b)           Payments.  As of the Cutoff Date, 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 or under a debt insurance policy or debt cancellation
agreement.


 


(c)           No Waivers.  As of the Closing Date, the terms of the
Contracts have not 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.  The Seller, in accordance with its policies
and procedures, has determined that, as of the date of origination of each
Contract, the related Obligor had obtained or agreed to obtain physical damage
insurance covering the Motorcycle.  The
terms of each Contract require that for the term of such Contract the
Motorcycle securing such Contract will be covered by physical damage insurance.


 


(g)           Origination.  Each Contract (i) was originated by a
Harley-Davidson motorcycle dealer or by Eaglemark Savings Bank, in each case,
in the regular course of its business, (ii) was fully and properly
executed by the parties thereto, and (iii) has been purchased by Seller in
the


 


5

















 


regular course of its business. 
Each Contract was sold by Eaglemark Savings Bank or such motorcycle
dealer, as the case may be, to the Seller without any fraud or
misrepresentation on the part of Eaglemark Savings Bank or, to the knowledge of
the Seller, such motorcycle dealer.


 


(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 Harley-Davidson motorcycle dealers or Eaglemark Savings Bank, the
purchase of the Contracts by the 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, in any material respect 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.


 


(j)            Contract in Force.  As of the Closing Date, 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 validly assigned by Eaglemark Savings Bank
to Seller (where applicable) and by Seller to the Trust Depositor.  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 prior to the
transfer, assignment and conveyance thereof, each Contract is secured by a
first priority, validly perfected security interest in the Motorcycle covered
thereby in favor of the Seller or Eaglemark Savings Bank as secured party or
all necessary and appropriate actions have been commenced that would result in
a first priority, validly perfected security interest in the Motorcycle covered
thereby in favor of the Seller or Eaglemark Savings Bank as secured party,
except, in each case, as to priority for any lien for taxes, labor, materials
or of any state law enforcement agency affecting a Motorcycle.


 


(l)            Good Title.  Each Contract was purchased by Seller for
value and taken into possession prior to the Cutoff Date 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, immediately upon the transfer of each
Contract by the Seller, the Trust Depositor shall have good and marketable
title to each Contract free and clear of any encumbrance, equity, loan, pledge,
charge, claim or security interest, and, immediately upon the transfer of each
Contract by the Trust Depositor, the Issuer shall have good and marketable
title to each Contract free and clear of any encumbrance, equity, loan, pledge,
charge, claim or security interest.


 


6
















 


(m)                               No Defaults.  As
of the Cutoff Date, 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 Cutoff Date, no Motorcycle had been
repossessed.


 


(n)                                 No Liens.  As
of the Closing Date 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 liens prior to, or equal with, the
lien of such Contract.


 


(o)                                 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.


 


(p)                                 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.


 


(q)                                 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.


 


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


 


(s)                                  Lockbox Bank.  All
Obligors have been instructed to make payments to a Lockbox Account (either
directly by remitting payments to a 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 a Lockbox Account other than the related Lockbox Bank;
provided, however,
that other Persons may have an interest in certain other collections therein
not related to the Contracts.


 


(t)                                    Obligor Bankruptcy.  At
the Cutoff Date, no Obligor was subject to a bankruptcy proceeding (according
to the records of the Seller) within the one year preceding the Cutoff Date.


 


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


 


(v)                                 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.


 


(w)                               Selection Criteria.  Each Contract is secured by a new or used Motorcycle.  No Contract has a Contract Rate less than
3.990%.  Each Contract amortizes the
amount financed


 


7

















 


over an original term no greater than 84
months.  Each Contract has a Principal
Balance of at least $500.00 as of the Cutoff Date.


 


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, that:


 


(a)                                  Amounts.  The
sum of the aggregate Principal Balances payable by Obligors under the Contracts
as of the Cutoff Date equals or exceeds the sum of the principal balance
of  the Notes on the Closing Date.


 


(b)                                 Characteristics.  The
Contracts have the following characteristics: (i) all the Contracts are
secured by Motorcycles; (ii) no Contract has a remaining maturity of more
than 84 months; and (iii) the final scheduled payment on the Contract with
the latest maturity is due no later than June 2016.  Approximately 75.82% of the Principal Balance
of the Contracts as of the Cutoff Date is attributable to loans for purchases
of new Motorcycles and approximately 24.18% is attributable to loans for
purchases of used Motorcycles.  No
Contract was originated after the Cutoff Date. 
Approximately 98.01% of the Principal Balance of the Contracts as of the
Cutoff Date is attributable to loans for purchases of Motorcycles manufactured
by Harley-Davidson or Buell and approximately 1.99% of the Principal Balance of
the Contracts as of the Cutoff Date is attributable to loans to purchase
Motorcycles not manufactured by Harley-Davidson or Buell.


 


(c)                                  Marking Records.  As
of the Closing Date, 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.


 


(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 Cutoff
Date 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 Date that:


 


8

















 


(a)                                  Possession. 
Immediately prior to the Closing 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 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, 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.


 


(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


 


9

















 


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 to the
Trust Depositor as a sale or capital contribution for all purposes, although
the Seller and the Trust Depositor acknowledge that the consolidated financial
statements of the Seller and the Trust Depositor shall be prepared in
accordance with generally accepted accounting principles and, as a result of
the consolidation required by generally accepted accounting principles, the
transfers will be reflected as a financing by the Seller in its consolidated
financial statements; provided, however, that (i) appropriate notations
shall be made in any such consolidated financial statements (or in the
accompanying notes) to indicate that the Trust Depositor is a separate legal
entity from the Seller and to indicate that the Trust Depositor’s assets and
credit are not available to satisfy the debts and other obligations of the
Seller, (ii) such assets shall also be listed separately on any balance
sheet of the Trust Depositor prepared on a stand alone basis, and (iii) following
the occurrence of any bankruptcy, insolvency or similar event in respect of the
Seller, the Contracts and Contract Assets purportedly conveyed to the Trust
Depositor hereunder would not constitute part of the Seller’s estate in
bankruptcy.


 


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, and in
any event within 60 days thereof, certifying that the Seller’s compliance
officer has reviewed the original of each Contract and each related Contract
File, that each Contract and related Contract File conforms in all material
respects with the 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, that it shall repurchase
a Contract (together with all related Contract Assets), at its Repurchase
Price, not later than two Business Days prior to the first Distribution Date
after the last day of the calendar month in which the Seller becomes 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


 


10

















 


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 one Business Day
prior to such Distribution 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.


 


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 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
covenants and agrees to pay, and to indemnify, defend and hold harmless the
Trust Depositor, the Trust, the Trustees or the Noteholders from, any taxes
that may at any time be asserted against any such Person as a result of or
relating to the transactions contemplated herein and in the other Transaction
Documents, including any sales, gross receipts, gross margin, general
corporation, tangible personal property, Illinois personal property replacement
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 Depositor, the Trust, a Noteholder or otherwise.  Notwithstanding any other provision of this
Agreement, the obligation of Seller


 


11

















 


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.


 


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 Notes is reduced to zero; provided,
that Seller’s representations and warranties and indemnities by Seller shall
survive termination.


 


12

















 


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 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 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.


 


13

















 


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.


 


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 States or any State of the United States.  This Section 7.10 shall survive
termination of this Agreement.


 


[signature page follows]


 


14

















 


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: Acting President,
  Vice President,

  
	
   

  	
   

  	
  Treasurer and Assistant
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed Name: Perry A.
  Glassgow

  
	
   

  	
   

  	
  Title: Acting President,
  Vice President,

  
	
   

  	
   

  	
  Treasurer and Assistant
  Secretary

  



 


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 May 1, 2009 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 Contracts listed on the 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 Cutoff Date, including any liquidation proceeds
therefrom, but excluding any rights to receive payments which were collected
pursuant thereto on or prior to the Cutoff Date), (ii) all rights of
Seller under any physical damage or other individual insurance policy
(including a “forced placed” policy, if any),
any debt insurance policy or any debt cancellation agreement relating to any
such Contract, an Obligor or a Motorcycle securing such Contract, (iii) all
security interests in each such Motorcycle, (iv) all documents contained
in the related Contract Files, (v) all rights 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
May 1, 2009 made by and among the undersigned, as servicer, the Trust
Depositor, Harley-Davidson Motorcycle Trust 2009-1, as issuer, and The Bank of
New York Mellon Trust Company, N.A., as indenture trustee.


 


A-1

















 


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


 


	
   

  	
  HARLEY-DAVIDSON
  CREDIT CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Printed Name:

  
	
   

  	
   

  	
  Title:

  



 


A-2

















 


Exhibit B


Transfer and Sale


Agreement


 


FORM OF OFFICER’S CERTIFICATE


 


(See Exhibit C to the Sale and Servicing
Agreement)