Exhibit 10.2


 


Execution
Copy


 




 





SALE AND SERVICING AGREEMENT


 


among


 


HARLEY-DAVIDSON MOTORCYCLE TRUST 2009-1,


as Issuer,


 


HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,


as Trust Depositor,


 


HARLEY-DAVIDSON CREDIT CORP.,


as Servicer


 


and


 


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


as Indenture Trustee


 


 


Dated as of May 1, 2009




 





 

















 


Table of Contents


 


	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE
  One DEFINITIONS

  	
   

  	
  1

  
	
  Section 1.01.

  	
  Definitions

  	
   

  	
  1

  
	
  Section 1.02.

  	
  Usage of Terms

  	
   

  	
  17

  
	
  Section 1.03.

  	
  Section References

  	
   

  	
  17

  
	
  Section 1.04.

  	
  Calculations

  	
   

  	
  17

  
	
  Section 1.05.

  	
  Accounting Terms

  	
   

  	
  17

  
	
  ARTICLE
  Two TRANSFER OF CONTRACTS

  	
   

  	
  17

  
	
  Section 2.01.

  	
  Closing

  	
   

  	
  17

  
	
  Section 2.02.

  	
  Conditions to the Closing

  	
   

  	
  18

  
	
  ARTICLE
  Three REPRESENTATIONS AND WARRANTIES

  	
   

  	
  19

  
	
  Section 3.01.

  	
  Representations and
  Warranties Regarding the Trust Depositor

  	
   

  	
  19

  
	
  Section 3.02.

  	
  Representations and
  Warranties Regarding the Servicer

  	
   

  	
  21

  
	
  ARTICLE
  Four PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

  	
   

  	
  22

  
	
  Section 4.01.

  	
  Custody of Contracts

  	
   

  	
  22

  
	
  Section 4.02.

  	
  Filing

  	
   

  	
  23

  
	
  Section 4.03.

  	
  Name Change or Relocation

  	
   

  	
  23

  
	
  Section 4.04.

  	
  Costs and Expenses

  	
   

  	
  24

  
	
  ARTICLE
  Five SERVICING OF CONTRACTS

  	
   

  	
  24

  
	
  Section 5.01.

  	
  Responsibility for
  Contract Administration

  	
   

  	
  24

  
	
  Section 5.02.

  	
  Standard of Care

  	
   

  	
  24

  
	
  Section 5.03.

  	
  Records

  	
   

  	
  24

  
	
  Section 5.04.

  	
  Inspection

  	
   

  	
  24

  
	
  Section 5.05.

  	
  Trust Accounts

  	
   

  	
  25

  
	
  Section 5.06.

  	
  Enforcement

  	
   

  	
  26

  
	
  Section 5.07.

  	
  Trustees to Cooperate

  	
   

  	
  27

  
	
  Section 5.08.

  	
  Costs and Expenses

  	
   

  	
  28

  
	
  Section 5.09.

  	
  Maintenance of Security
  Interests in Motorcycles

  	
   

  	
  28

  
	
  Section 5.10.

  	
  Successor Servicer/Lockbox
  Agreements

  	
   

  	
  28

  
	
  Section 5.11.

  	
  Separate Entity Existence

  	
   

  	
  28

  
	
  ARTICLE
  Six THE TRUST DEPOSITOR

  	
   

  	
  29

  
	
  Section 6.01.

  	
  Covenants of the Trust
  Depositor

  	
   

  	
  29

  
	
  Section 6.02.

  	
  Liability of Trust
  Depositor; Indemnities

  	
   

  	
  30

  
	
  Section 6.03.

  	
  Merger or Consolidation
  of, or Assumption of the Obligations of, Trust Depositor; Certain Limitations

  	
   

  	
  32

  
	
  Section 6.04.

  	
  Limitation on Liability of
  Trust Depositor and Others

  	
   

  	
  32

  
	
  Section 6.05.

  	
  Trust Depositor Not to
  Resign

  	
   

  	
  33

  
	
  ARTICLE
  Seven DISTRIBUTIONS; RESERVE FUND

  	
   

  	
  33

  
	
  Section 7.01.

  	
  Monthly Distributions

  	
   

  	
  33

  
	
  Section 7.02.

  	
  Fees

  	
   

  	
  33

  
	
  Section 7.03.

  	
  Advances

  	
   

  	
  33

  
	
  Section 7.04.

  	
  Reserved

  	
   

  	
  33

  
	
  Section 7.05.

  	
  Distributions; Priorities

  	
   

  	
  34

  
	
  Section 7.06.

  	
  Reserve Fund

  	
   

  	
  35

  
	
  Section 7.07.

  	
  Reserved

  	
   

  	
  36

  
	
  Section 7.08.

  	
  Purchase of Contracts for
  Breach of Representations and Warranties

  	
   

  	
  36

  
	
  Section 7.09.

  	
  Reassignment of Reacquired
  Contracts

  	
   

  	
  36

  
	
  Section 7.10.

  	
  Servicer’s Purchase Option

  	
   

  	
  37

  
	
  Section 7.11.

  	
  Purchase of Contracts for
  Breach of Servicing Obligations

  	
   

  	
  37

  



 


i

















 


	
  ARTICLE
  Eight EVENTS OF TERMINATION; SERVICE TRANSFER

  	
   

  	
  37

  
	
  Section 8.01.

  	
  Events of Termination

  	
   

  	
  37

  
	
  Section 8.02.

  	
  Waiver of Event of
  Termination

  	
   

  	
  38

  
	
  Section 8.03.

  	
  Service Transfer

  	
   

  	
  38

  
	
  Section 8.04.

  	
  Successor Servicer to Act;
  Appointment of Successor Servicer

  	
   

  	
  39

  
	
  Section 8.05.

  	
  Notification to
  Securityholders

  	
   

  	
  39

  
	
  Section 8.06.

  	
  Effect of Transfer

  	
   

  	
  39

  
	
  Section 8.07.

  	
  Database File

  	
   

  	
  40

  
	
  Section 8.08.

  	
  Successor Servicer
  Indemnification

  	
   

  	
  40

  
	
  Section 8.09.

  	
  Responsibilities of the Successor
  Servicer

  	
   

  	
  40

  
	
  Section 8.10.

  	
  Limitation of Liability of
  Servicer

  	
   

  	
  40

  
	
  Section 8.11.

  	
  Merger or Consolidation of
  Servicer

  	
   

  	
  41

  
	
  Section 8.12.

  	
  Servicer Not to Resign

  	
   

  	
  41

  
	
  Section 8.13.

  	
  Appointment of Subservicer

  	
   

  	
  41

  
	
  ARTICLE
  Nine REPORTS

  	
   

  	
  41

  
	
  Section 9.01.

  	
  Monthly Reports

  	
   

  	
  41

  
	
  Section 9.02.

  	
  Officer’s Certificate

  	
   

  	
  41

  
	
  Section 9.03.

  	
  Other Data

  	
   

  	
  42

  
	
  Section 9.04.

  	
  Report on Assessment of
  Compliance with Servicing Criteria and Attestation; Annual Officer’s
  Certificate

  	
   

  	
  42

  
	
  Section 9.05.

  	
  Monthly Reports to Noteholders

  	
   

  	
  42

  
	
  Section 9.06.

  	
  Regulation AB

  	
   

  	
  44

  
	
  Section 9.07.

  	
  Information to Be Provided
  by the Indenture Trustee

  	
   

  	
  44

  
	
  Section 9.08.

  	
  Exchange Act Reporting

  	
   

  	
  45

  
	
  ARTICLE
  Ten TERMINATION

  	
   

  	
  46

  
	
  Section 10.01.

  	
  Sale of Trust Assets

  	
   

  	
  46

  
	
  ARTICLE
  Eleven MISCELLANEOUS

  	
   

  	
  46

  
	
  Section 11.01.

  	
  Amendment

  	
   

  	
  46

  
	
  Section 11.02.

  	
  Protection of Title to
  Trust

  	
   

  	
  47

  
	
  Section 11.03.

  	
  Governing Law

  	
   

  	
  48

  
	
  Section 11.04.

  	
  Notices

  	
   

  	
  48

  
	
  Section 11.05.

  	
  Severability of Provisions

  	
   

  	
  50

  
	
  Section 11.06.

  	
  Assignment

  	
   

  	
  50

  
	
  Section 11.07.

  	
  Third Party Beneficiaries

  	
   

  	
  50

  
	
  Section 11.08.

  	
  Counterparts

  	
   

  	
  50

  
	
  Section 11.09.

  	
  Headings

  	
   

  	
  50

  
	
  Section 11.10.

  	
  No Bankruptcy Petition;
  Disclaimer and Subordination

  	
   

  	
  50

  
	
  Section 11.11.

  	
  Limitation of Liability of
  Owner Trustee and Indenture Trustee

  	
   

  	
  51

  



 


ii

















 


EXHIBITS


 


	
  Exhibit A

  	
  Form of Assignment

  	
   

  	
  A-1

  
	
  Exhibit B

  	
  Form of
  Closing Certificate of Trust Depositor

  	
   

  	
  B-1

  
	
  Exhibit C

  	
  Form of
  Closing Certificate of Seller/Servicer

  	
   

  	
  C-1

  
	
  Exhibit D

  	
  Reserved

  	
   

  	
  D-1

  
	
  Exhibit E

  	
  Servicing
  Criteria to be Addressed in Indenture Trustee’s Assessment of Compliance

  	
   

  	
  E-1

  
	
  Exhibit F

  	
  Form of
  Indenture Trustee’s Annual Certificate

  	
   

  	
  F-1

  
	
  Exhibit G

  	
  Form of
  Certificate Regarding Reacquired Contracts

  	
   

  	
  G-1

  
	
  Exhibit H

  	
  List
  of Contracts

  	
   

  	
  H-1

  
	
  Exhibit I

  	
  Form of Monthly
  Report to Noteholders and the Certificateholder

  	
   

  	
  I-1

  
	
  Exhibit J

  	
  Seller’s
  Representations and Warranties

  	
   

  	
  J-1

  
	
  Exhibit K

  	
  Lockbox
  Bank and Lockbox Account

  	
   

  	
  K-1

  
	
  Exhibit L

  	
  Reserved

  	
   

  	
  L-1

  



 


iii

















 


SALE
AND SERVICING AGREEMENT, dated as of May 1, 2009, among Harley-Davidson
Motorcycle Trust 2009-1 (together with its successors and assigns, the  “Issuer” or the “Trust”), Harley-Davidson Customer Funding Corp. (together
with its successor and assigns, the  “Trust Depositor”), The Bank of New York Mellon Trust
Company, N.A. (solely in its capacity as Indenture Trustee together with its
successors and assigns, the “Indenture Trustee”)
and Harley-Davidson Credit Corp. (solely in its capacity as Servicer together
with its successor and assigns, “Harley-Davidson Credit”
or the “Servicer”).


 


WHEREAS
the Issuer desires to acquire from the Trust Depositor a pool of fixed-rate,
simple interest motorcycle conditional sales contracts and promissory note and
security agreements relating to Harley-Davidson and Buell motorcycles and
motorcycles not manufactured by Harley-Davidson or Buell (collectively, the “Contracts”) purchased by Harley-Davidson Credit and
subsequently sold by Harley-Davidson Credit to the Trust Depositor;


 


WHEREAS
the Trust Depositor is willing to transfer and assign the Contracts to the
Issuer pursuant to the terms hereof; and


 


WHEREAS
the Servicer is willing to service the Contracts pursuant to the terms hereof;


 


NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:


 


ARTICLE
ONE


 


DEFINITIONS


 


Section 1.01.        Definitions.  Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:


 


“Administration
Agreement” means the Administration Agreement, dated as of the
date hereof, among the Issuer, Harley-Davidson Credit Corp. (in its capacity as
administrator), the Trust Depositor and the Indenture Trustee.


 


“Advance” means, with respect to any Distribution Date, the
amounts, if any, deposited by the Servicer in the Collection Account for such
Distribution Date pursuant to Section 7.03.


 


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


 


“Aggregate Principal Balance”  will
equal the sum of the Principal Balances of each outstanding Contract.  At the time of initial issuance of the
Securities, the initial aggregate principal amount of the Securities will be
less than or equal to the Pool Balance.


 


“Aggregate Principal Balance Decline”
means, with respect to any Distribution Date, the amount by which the Aggregate
Principal Balance as of the close of business on the last day of the Due Period
relating to the Distribution Date immediately preceding such Distribution Date
(or as of the Cutoff Date 


 


1

















 


in the case of the first Distribution Date)
exceeds the Aggregate Principal Balance as of the close of business on the last
day of the Due Period relating to such Distribution Date.


 


“Agreement” means this Sale and Servicing Agreement, as
amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.


 


“Available Monies” means, with respect to any Distribution
Date, the sum of the Available Interest and the Available Principal for such
Distribution Date.


 


“Available Interest” means, with respect to any Distribution
Date, the total (without duplication) of the following amounts received by the
Servicer on or in respect of the Contracts during the related Due Period: (i) all
amounts received in respect of interest on the Contracts, (ii) the
interest component of all Net Liquidation Proceeds, (iii) the interest
component of the aggregate of the Purchase Prices for Contracts reacquired by
the Trust Depositor pursuant to Section 7.08, (iv) all Advances made
by the Servicer pursuant to Section 7.03, (v) the interest component
of all amounts paid by the Servicer in connection with an optional purchase of
the Contracts pursuant to Section 7.10, (vi) the interest component
of the aggregate of the Purchase Prices for Contracts purchased by the Servicer
pursuant to Section 7.11, and (vii) all amounts received in respect
of interest, dividends, gains, income and earnings on investment of funds in
the Trust Accounts as contemplated in Section 5.05(d).


 


“Available Principal” means, with respect to any Distribution
Date, the total (without duplication) of the following amounts received by the
Servicer on or in respect of the Contracts during the related Due Period: (i) all
amounts received in respect of principal on the Contracts, (ii) the
principal component of all Net Liquidation Proceeds, (iii) the principal
component of the aggregate of the Purchase Prices for Contracts reacquired by
the Trust Depositor pursuant to Section 7.08, (iv) the principal
component of all amounts paid by the Servicer in connection with an optional
purchase of the Contracts pursuant to Section 7.10, and (v) the
principal component of the aggregate of the Purchase Prices for Contracts
purchased by the Servicer pursuant to Section 7.11.


 


“Average Delinquency Ratio” means, for any Distribution Date,
the arithmetic average of the Delinquency Ratios for such Distribution Date and
the two immediately preceding Distribution Dates.


 


 “Average Loss
Ratio” means, for any Distribution Date, the arithmetic average of
the Loss Ratios for such Distribution Date and the two immediately preceding
Distribution Dates.


 


“Base Prospectus”  means the
Prospectus dated April 29, 2009 relating to the Harley-Davidson Motorcycle
Trusts.


 


“Buell” means Buell Motorcycle Company, LLC.


 


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


 


“Certificate”  means a Trust
Certificate (as such term is defined in the Trust Agreement), representing a
beneficial equity interest in the Trust and issued pursuant to the Trust
Agreement.


 


“Certificate Balance” means, on any Distribution Date, the
Initial Certificate Balance reduced by all distributions of principal
previously made in respect of the Certificates.


 


“Certificate Distribution Account” has the meaning specified
in the Trust Agreement.


 


2

















 


“Certificate Monthly Principal Distributable Amount” means,
with respect to any Distribution Date, the Certificate Percentage of the
Principal Distributable Amount for such Distribution Date.


 


“Certificate Percentage” means (i) for each Distribution
Date until the Notes have been paid in full, 0%; and (ii) thereafter,
100%.


 


“Certificate Pool Factor” means, with respect to the
Certificates on any Distribution Date, a seven-digit decimal figure equal to
the outstanding principal balance of the Certificates on such Distribution Date
(after giving effect to any reductions thereof to be made on such Distribution
Date) divided by the Initial Certificate Balance.


 


“Certificate Principal Carryover Shortfall” means, as of the
close of any Distribution Date, the excess, if any, of the Certificate
Principal Distributable Amount with respect to such Distribution Date over the
amount in respect of principal that is actually deposited in the Certificate
Distribution Account on such Distribution Date.


 


“Certificate Principal Distributable Amount” means, with
respect to any Distribution Date, the sum of (x) the Certificate Monthly
Principal Distributable Amount for each Distribution Date and (y) any
outstanding Certificate Principal Carryover Shortfall as of the close of the
immediately preceding Distribution Date; provided, however,
that the Certificate Principal Distributable Amount shall not exceed the
Certificate Balance. In addition, on the Distribution Date as of which all of
the Contracts are to be purchased pursuant to Section 7.11, the principal
required to be deposited into the Certificate Distribution Account will include
the amount necessary to reduce the Certificate Balance to zero.


 


“Certificate Register” shall have the meaning specified in
the Trust Agreement.


 


“Certificateholder”  shall have the
meaning specified in the Trust Agreement.


 


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


 


“Class A Noteholder” means the Person in whose name a Class A
Note is registered in the Note Register, as such term is defined in the
Indenture.


 


“Class A Notes” means, collectively, the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
Notes.


 


“Class A-1 Final Distribution Date” means the May 2010
Distribution Date.


 


“Class A-1 Noteholder” means the Person in whose name a Class A-1
Note is registered in the Note Register, as such term is defined in the
Indenture.


 


“Class A-1 Notes” has the meaning set forth in the
Indenture.


 


“Class A-1 Rate”  means 1.48890%
per annum (computed on the basis of the actual number of days elapsed and a
360-day year).


 


“Class A-2 Final Distribution Date” means the May 2012
Distribution Date.


 


“Class A-2 Noteholder” means the Person in whose name a Class A-2
Note is registered in the Note Register, as such term is defined in the
Indenture.


 


3

















 


“Class A-2 Notes” has the meaning set forth in the
Indenture.


 


“Class A-2 Rate” means 2.52% per annum (computed on the
basis of a 360-day year of twelve 30-day months).


 


 “Class A-3 Final
Distribution Date” means the November 2013 Distribution Date.


 


“Class A-3 Noteholder” means the Person in whose name a Class A-3
Note is registered in the Note Register, as such term is defined in the
Indenture.


 


“Class A-3 Notes” has the meaning set forth in the
Indenture.


 


“Class A-3 Rate” means 3.19% per annum (computed on the
basis of a 360-day year of twelve 30-day months).


 


“Class A-4 Final Distribution Date” means the January 2017
Distribution Date.


 


“Class A-4 Noteholder” means the Person in whose name a Class A-4
Note is registered in the Note Register, as such term is defined in the
Indenture.


 


“Class A-4 Notes” has the meaning set forth in the
Indenture.


 


“Class A-4 Rate” means 4.55% per annum (computed on the
basis of a 360-day year of twelve 30-day months).


 


“Clearing Agency” shall have the meaning specified in the
Indenture.


 


“Closing Date” means May 12, 2009.


 


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


 


“Collateral” shall have the meaning specified in the “granting
clause” of the Indenture.


 


“Collection Account” means a trust account as described in Section 5.05
maintained in the name of the Indenture Trustee and which shall be an Eligible
Account.


 


“Computer File” means the computer file generated by the
Servicer which provides information relating to the Contracts and which was
used by the Seller in selecting the Contracts sold to the Trust Depositor
pursuant to the Transfer and Sale Agreement and transferred to the Trust by the
Trust Depositor pursuant to this Agreement, and includes the master file and
the history file as well as servicing information with respect to the
Contracts.


 


“Contract Assets”  has the
meaning assigned in Section 2.01 of the Transfer and Sale Agreement.


 


“Contract File” means, as to each Contract, (a) the
original copy of the Contract, including the executed conditional sales
contract or promissory note and security agreement or other evidence of the
obligation of the Obligor, (b) the original title certificate to the
Motorcycle and, where applicable, the certificate of lien recordation, or, if
such title certificate has not yet been issued, an application for such title
certificate, or other appropriate evidence of a security interest in the
covered Motorcycle; (c) the assignments of the Contract; (d) the
original copy of any agreement(s) modifying the Contract including,
without limitation, any extension agreement(s) and (e) documents
evidencing the existence of physical damage insurance covering such Motorcycle.


 


4

















 


“Contract Rate” means, as to any Contract, the annual rate of
interest with respect to such Contract.


 


“Contracts” means the motorcycle conditional sales contracts
or promissory note and security agreements described in the List of Contracts
and constituting part of the Trust Corpus, and includes, without limitation,
all related security interests and any and all rights to receive payments which
are collected pursuant thereto after the Cutoff Date, but excluding any rights
to receive payments which are collected pursuant thereto on or prior to the
Cutoff Date.


 


“Corporate Trust Office” means the office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
principally administered, which office at the date of the execution of this
Agreement is located at the address set forth in Section 11.04.


 


“Cram Down Loss” means, with respect to a Contract, if a
court of appropriate jurisdiction in an insolvency proceeding shall have issued
an order reducing the Principal Balance of such Contract, the amount of such
reduction (with a “Cram Down Loss”
being deemed to have occurred on the date of issuance of such order).


 


“Cumulative Loss Ratio” means, as of any Distribution Date,
the fraction (expressed as a percentage) computed by the Servicer by dividing (i) the
aggregate Net Liquidation Losses for all Contracts since the Cutoff Date
through the end of the related Due Period by (ii) the Principal Balance of
the Contracts as of the Cutoff Date.


 


“Cutoff Date” means the close of business on April 30,
2009.


 


“Defaulted Contract” means a Contract with respect to which
there has occurred one or more of the following: (i) all or some portion
of any payment under the Contract is 120 days or more delinquent, (ii) repossession
(and expiration of any redemption period) of a Motorcycle securing a Contract
or (iii) the Servicer has determined in good faith that an Obligor is not
likely to resume payment under a Contract.


 


“Delinquency Amount” means, as of any Distribution Date, the
Principal Balance of all Contracts that were delinquent 60 days or more as of
the end of the related Due Period (including Contracts in respect of which the
related Motorcycles have been repossessed and are still in inventory).


 


“Delinquent Interest” means, for each Contract and each
Determination Date as to which the full payment due in the related Due Period
has not been paid before the 30th day after the scheduled payment date therefor
(any such payment being “delinquent” for
purposes of this definition), all interest accrued on such Contract from the
Due Date in the Due Period one month prior to the Due Period in which the
payment is delinquent.


 


“Delinquency Ratio” means, for any Distribution Date, the
fraction (expressed as a percentage) computed by dividing (a) the
Delinquency Amount during the immediately preceding Due Period by (b) the
Principal Balance of the Contracts as of the beginning of the related Due
Period.


 


“Delta Loan” means a loan made by the Seller pursuant to the
program designated as the Delta Program.


 


“Determination Date” means the fourth Business Day following
the conclusion of a Due Period during the term of this Agreement.


 


5
















 


“Distribution Date” means the fifteenth day of each calendar
month during the term of this Agreement, or if such day is not a Business Day,
the next Business Day, with the first such Distribution Date hereunder being June 15,
2009.


 


“Due Date” means, with respect to any Contract, the day of
the month on which each scheduled payment of principal and interest is due on
such Contract, exclusive of days of grace.


 


“Due Period” means a calendar month during the term of this
Agreement, and the Due Period related to a Determination Date or Distribution
Date shall be the calendar month immediately preceding such date; provided, however, that with respect to the first
Determination Date or first Distribution Date, the Due Period shall be the
period from the Cutoff Date to and including May 31, 2009.


 


“Eligible Account” means a segregated deposit account
maintained with the Indenture Trustee, acting in its fiduciary capacity, or a
depository institution or trust company organized under the laws of the United
States of America, or any of the States thereof, or the District of Columbia,
having a certificate of deposit, short-term deposit or commercial paper rating
of at least A-1+ by Standard & Poor’s and P-1 by Moody’s.


 


“Eligible Investments” mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:


 


(a)           direct
obligations of, and obligations fully guaranteed as to timely payment by, the
United States of America;


 


(b)           demand
deposits, time deposits or certificates of deposit of any depository
institution or trust company incorporated under the laws of the United States
of America or any State (or any domestic branch of a foreign bank) and subject
to supervision and examination by Federal or State banking or depository
institution authorities; provided, however,
that at the time of the investment or contractual commitment to invest therein,
the commercial paper or other short-term senior unsecured debt obligations
(other than such obligations the rating of which is based on the credit of a
Person other than such depository institution or trust company) thereof shall
have a credit rating from the Rating Agency in the highest investment category
granted thereby;


 


(c)           commercial
paper, master notes, promissory notes, demand notes or other short term debt
obligations having, at the time of the investment or contractual commitment to
invest therein, a rating from the Rating Agency in the highest investment
category granted thereby;


 


(d)           investments
in money market funds having a rating from the Rating Agency in the highest
investment category granted thereby (including funds for which the Indenture
Trustee or the Owner Trustee or any of their respective Affiliates is
investment manager or advisor);


 


(e)           notes
or bankers’ acceptances issued by any depository institution or trust company
referred to in clause (b);


 


(f)            Repurchase
and reverse repurchase agreements collateralized by securities issued or
guaranteed by the United States government or any agency, instrumentality or
establishment of the United States government (“Government Securities”), in either case entered into with a
depository institution or trust company (acting as principal) described in clause
(b), or entered into with an entity (acting as principal) which has, or
whose parent has, a credit rating from the Rating Agency in the highest credit
category granted thereby; and


 


6

















 


(g)           any
other investment with respect to which the Issuer or the Servicer has received
written notification from the Rating Agencies that the acquisition of such
investment as an Eligible Investment will not result in a withdrawal or
downgrading of the ratings on the Notes.


 


“Event of Termination” means an event specified in Section 8.01.


 


“Excess Amounts” shall mean Available Monies after
distributions made in accordance with Section 7.05.


 


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


 


“Final Distribution Date” means the Class A-1 Final
Distribution Date, the Class A-2 Final Distribution Date, the Class A-3
Final Distribution Date or the Class A-4 Final Distribution Date, as the
case may be.


 


“Form 10-D Disclosure Item” means with respect to any Person, any litigation or governmental
proceedings pending against such Person, or any of the Issuer, the Seller, the
Indenture Trustee, the Owner Trustee or the Servicer of such Person, or in the
case of the Owner Trustee or Indenture Trustee, a Responsible Officer of such
Person, has actual knowledge thereof, in each case that would be material to
the Noteholders.


 


“Form 10-K Disclosure Item” means with respect to any Person, (a) any Form 10-D
Disclosure Item, (b) any affiliations between such Person and the Seller,
the Servicer, the Trust Depositor, the Owner Trustee and the Indenture Trustee
(each, an “Item 1119 Party”), to the extent
such Person, or in the case of the Owner Trustee or Indenture Trustee, a
Responsible Officer of such Person, has actual knowledge thereof and (c) any
relationships or transactions between such Person and any Item 1119 Party that
are outside the ordinary course of business or on terms other than would be
obtained in an arm’s-length transaction with an unrelated third party, apart
from the transactions contemplated under the Transaction Documents, and that
are material to the investors’ understanding of the Notes, but only to the
extent such Person, or in the case of the Owner Trustee or Indenture Trustee, a
Responsible Officer of such Person, has actual knowledge of such relationships
or transactions.


 


“Harley-Davidson Financial”  means Harley-Davidson Financial Services, Inc.,
a Delaware corporation.


 


“Holder” means, with respect to a (i) Certificate, the
Person in whose name such Certificate is registered in the Certificate Register
and (ii) Note, the Person in whose name such Note is registered in the
Note Register.


 


“Indenture” means the Indenture, dated as of the date hereof,
between the Issuer and the Indenture Trustee.


 


“Indenture Trustee” means the Person acting as Indenture
Trustee under the Indenture, its successors in interest and any successor
trustee under the Indenture.


 


“Indenture Trustee Fee” means, with respect to any
Distribution Date, one-twelfth of the product of 0.00225% and the Principal
Balance of the Contracts as of the beginning of the related Due Period; provided, however, in no event shall such fee be less than
$200.00 per month.


 


“Independent” when used with respect to any specified Person,
means such a Person who (i) is in fact independent of the Issuer, the
Trust Depositor or the Servicer, (ii) is not a director, officer or 


 


7

















 


employee of any Affiliate of the Issuer, the Trust Depositor or the
Servicer, (iii) is not a person related to any officer or director of the
Issuer, the Trust Depositor or the Servicer or any of their respective
Affiliates, (iv) is not a holder (directly or indirectly) of more than 10%
of any voting securities of Issuer, the Trust Depositor or the Servicer or any
of their respective Affiliates, and (v) is not connected with the Issuer,
the Trust Depositor or the Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.


 


“Initial Certificate Balance” means $141,025,707.56.


 


“Initial Class A-1 Note Balance”  means
$111,000,000.


 


“Initial Class A-2 Note Balance” means $153,000,000


 


“Initial Class A-3  Note
Balance”  means
$176,000,000.


 


“Initial Class A-4 Note Balance”  means
$60,000,000.


 


“Insolvency Event” means, with respect to a specified Person,
(i) the entry of a decree or order for relief by a court or regulatory
authority having jurisdiction in respect of such Person in an involuntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any other
present or future, federal or state, bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
or other similar official for such Person or for any substantial part of its
property, or ordering the winding-up or liquidation of such Person’s affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; (ii) the commencement of an involuntary
case under the federal bankruptcy laws, as now or hereinafter in effect, or
another present or future federal or state bankruptcy, insolvency or similar
law and such case is not dismissed within 60 days; or (iii) the
commencement by such Person of a voluntary case under the federal bankruptcy
laws, as now or hereinafter in effect, or any other present or future federal
or state, bankruptcy, insolvency or similar law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other similar official for such Person or
for any substantial part of its property, or the making by such Person of an
assignment for the benefit of creditors or the failure by such Person generally
to pay its debts as such debts become due or the taking of corporate action by
such Person in furtherance of any the foregoing.


 


“Interest Period” means (i) with respect to any
Distribution Date and the Class A-1 Notes, the period from and including
the Distribution Date immediately preceding such Distribution Date (or, in the
case of the first Distribution Date, from and including the Closing Date) to
but excluding such Distribution Date and (ii) with respect to any
Distribution Date and the Class A-2 Notes, Class A-3 Notes and Class A-4
Notes, the period from and including the fifteenth day of the month of the
Distribution Date immediately preceding such Distribution Date (or, in the case
of the first Distribution Date, from and including the Closing Date) to but
excluding the fifteenth day of the month of such Distribution Date.


 


“Interest Rate”  means the Class A-1
Rate, the Class A-2 Rate, the Class A-3 Rate or the Class A-4
Rate, as applicable.


 


“Investment Earnings” means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on
amounts on deposit in the Trust Accounts to be deposited into the Collection
Account on such Distribution Date pursuant to Section 5.05(b).


 


“Issuer”  means the
Harley-Davidson Motorcycle Trust 2009-1.


 


8

















 


“Late Payment Penalty Fees” means any late payment fees paid
by Obligors on Contracts after all sums received have been allocated first to
regular installments due or overdue and all such installments are then paid in
full.


 


“Lien” means a security interest, lien, charge, pledge,
equity or encumbrance of any kind, other than tax liens, mechanics’ liens and
any liens that attach to the respective Contract by operation of law.


 


“Liquidated Contract” means a Contract with respect to which
there has occurred one or more of the following: (i) 90 days have elapsed
following the date of repossession (and expiration of any redemption period)
with respect to the Motorcycle securing such Contract, (ii) the receipt of
proceeds by the Servicer from the sale of a repossessed Motorcycle securing a
Contract, (iii) the Servicer has determined in good faith that all amounts
expected to be recovered have been received with respect to such Contract, or (iv) all
or any portion of any payment is delinquent 150 days or more.


 


“List of Contracts” means the list identifying each Contract
constituting part of the Trust Corpus, which list (a) identifies each
Contract and (b) sets forth as to each Contract (i) the Principal
Balance as of the applicable Cutoff Date, (ii) the amount of monthly
payments due from the Obligor, (iii) the Contract Rate and (iv) the
maturity date, and which list (as in effect on the Closing Date) is attached to
this Agreement as Exhibit H.


 


“Lockbox” means the Lockbox maintained by a Lockbox Bank
identified on Exhibit K hereto and any
other Lockbox hereafter established to accept collections on the Contracts.


 


“Lockbox Account”  means the
account maintained with the Lockbox Bank and identified on Exhibit K
hereto and any other account hereafter established to accept collections on the
Contracts.


 


“Lockbox Agreement”  means the
Fifth Amended and Restated Lockbox Administration Agreement dated as of November 1,
2000 by and among the Lockbox Bank, the Servicer, the Trust Depositor,
Eaglemark Customer Funding Corporation-IV, The Bank of New York
(successor-in-interest to the corporate trust business of Harris Trust and
Savings Bank), BNY Midwest Trust Company, Bank One, National Association and
The Bank of New York Mellon Trust Company, National Association, with respect
to the Lockbox Account, unless such agreement shall be terminated in accordance
with its terms, in which event “Lockbox Agreement”
shall mean such other agreement, in form and substance acceptable to the
above-described parties; such term shall also include any other agreement
having substantially the same terms as the existing agreement described above,
between or among a Lockbox Bank, the Indenture Trustee and the Servicer, the
Trust Depositor and any other parties in respect of any Lockbox Account.


 


“Lockbox Bank”  means the
financial institution maintaining the Lockbox Account and identified on Exhibit K hereto or any successor thereto and any other
financial institution at which a Lockbox Account is maintained.


 


“Loss Ratio” means, for any Distribution Date, the fraction
(expressed as a percentage) derived by dividing (x) Net Liquidation Losses
for all Contracts that became Liquidated Contracts during the immediately
preceding Due Period multiplied by twelve by (y) the outstanding Principal
Balances of all Contracts as of the beginning of the related Due Period.


 


“Monthly Report” shall have the meaning specified in Section 9.05.


 


9

















 


“Monthly Servicing Fee” means, as to any Distribution Date,
one-twelfth of the product of 1.00% and the Principal Balance of the Contracts
as of the beginning of the related Due Period or, with respect to the first
Distribution Date after the Closing Date, as of the Cutoff Date.


 


“Moody’s” means Moody’s Investors Service, Inc. or any
successor thereto.


 


“Motorcycle” means a motorcycle manufactured by a subsidiary
of Harley-Davidson, Inc. (or in certain limited instances Buell or certain
other manufacturers) securing a Contract.


 


“Net Liquidation Losses” means, as of any Distribution Date,
with respect to all Liquidated Contracts on an aggregate basis, the amount, if
any, by which (a) the outstanding Principal Balance of all Liquidated
Contracts exceeds (b) the Net Liquidation Proceeds for such Liquidated
Contracts.


 


“Net Liquidation Proceeds” means, as to
any Liquidated Contract, the proceeds realized on the sale or other disposition
of the related Motorcycle, including proceeds realized on the repurchase of
such Motorcycle by the originating dealer for breach of warranties, and the
proceeds of any insurance relating to such Motorcycle, after payment of all
reasonable expenses incurred thereby, together, in all instances, with the
expected or actual proceeds of any recourse rights relating to such Contract as
well as any post-disposition proceeds or other amounts in respect of a
Liquidated Contract received by the Servicer.


 


“Noteholder” shall have the meaning
specified in the Indenture.


 


“Note Depository Agreement” shall have the meaning specified
in the Indenture.


 


“Note Distributable Amount” means, with respect to any
Distribution Date, the sum of the Note Principal Distributable Amount and the
Note Interest Distributable Amount for such Distribution Date.


 


“Note Distribution Account” means the account established and
maintained as such pursuant to Section 5.05.


 


“Note Interest Carryover Shortfall” means, with respect to
any Distribution Date and a Class of Notes, the excess, if any, of the sum
of the Note Interest Distributable Amount for such Class for the immediately
preceding Distribution Date plus any outstanding Note Interest Carryover
Shortfall for such Class on such preceding Distribution Date, over the
amount in respect of interest that is actually deposited in the Note
Distribution Account with respect to such Class on such preceding
Distribution Date, plus, interest on such excess to the extent permitted by
applicable law, at the related Interest Rate for the related Interest Period.


 


“Note Interest Distributable Amount” means, with respect to
any Distribution Date and a Class of Notes, the sum of the Note Monthly
Interest Distributable Amount and the Note Interest Carryover Shortfall for
such Class of Notes with respect to such Distribution Date.


 


“Note Monthly Interest Distributable Amount” means, with respect
to any Distribution Date for any Class of Notes, interest accrued for the
related Interest Period at the applicable Interest Rate for such Class of
Notes on the outstanding principal amount of the Notes of such Class on
the immediately preceding Distribution Date, after giving effect to all
payments of principal to Noteholders of such Class on or prior to such
preceding Distribution Date (or, in the case of the first Distribution Date, on
the original principal amount of such Class of Notes).


 


“Note Pool Factor” means with respect to any Class of
Notes as of the close of business on any Distribution Date, a seven-digit
decimal figure equal to the outstanding principal amount of such Class of 


 


10

















 


Notes (after giving effect to any reductions thereof to be made on such
Distribution Date) divided by the original outstanding principal amount of such
Class of Notes.


 


“Note Principal Carryover Shortfall”  means,
as of the close of any Distribution Date, the excess of the Note Principal
Distributable Amount with respect to such Distribution Date over the amount in
respect of principal that is actually deposited in the Note Distribution
Account on such Distribution Date.


 


“Note Principal Distributable Amount”  means,
with respect to any Distribution Date, the sum of (x) the Principal
Distributable Amount with respect to such Distribution Date and  (y) the Note Principal Carryover
Shortfall as of the close of the immediately preceding Distribution Date; provided, however, that the Note Principal Distributable
Amount shall not exceed the Outstanding Amount of the Notes; and provided, further, that the Note Principal Distributable
Amount (i) on the Class A-1 Final Distribution Date shall not be less
than the amount that is necessary (after giving effect to other amounts to be
deposited in the Note Distribution Account for payment on the Class A-1
Notes on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-1 Notes to zero, (ii) on the Class A-2
Final Distribution Date shall not be less than the amount that is necessary
(after giving effect to other amounts to be deposited in the Note Distribution
Account for payment on the Class A-2 Notes on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of the Class A-2
Notes to zero, (iii) on the Class A-3 Final Distribution Date shall
not be less than the amount that is necessary (after giving effect to other
amounts to be deposited in the Note Distribution Account for payment on the Class A-3
Notes on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-3 Notes to zero, and (iv) on the Class A-4
Final Distribution Date shall not be less than the amount that is necessary
(after giving effect to other amounts to be deposited in the Note Distribution
Account for payment on the Class A-4 Notes on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of the Class A-4
Notes to zero.


 


“Notes” means the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, and the Class A-4 Notes, in each case as
executed and authenticated in accordance with the Indenture.


 


“Obligee” means the Person to whom an Obligor is indebted
under a Contract.


 


“Obligor” means a Motorcycle buyer or other person who owes
payments under a Contract.


 


“Officer’s Certificate” means a certificate signed by the
Chairman, the President, a Vice President, the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of any Person delivering such certificate and delivered to
the Person to whom such certificate is required to be delivered, including any
certificate delivered under any of the Transaction Documents required to be
executed by a Servicing Officer.  In the
case of an Officer’s Certificate of the Servicer, at least one of the signing
officers must be a Servicing Officer. 
Unless otherwise specified, any reference herein to an Officer’s
Certificate shall be to an Officers’ Certificate of the Servicer.


 


“Opinion of Counsel” means a written opinion of counsel (who
may be counsel to the Trust Depositor or the Servicer) acceptable to the
Indenture Trustee or the Owner Trustee, as the case may be.


 


“Outstanding Amount” shall have the meaning specified in the
Indenture.


 


“Owner Trustee” means the Person acting, not in its
individual capacity, but solely  as Owner
Trustee under the Trust Agreement, its successors in interest and any successor
owner trustee under the Trust Agreement.


 


11

















 


“Paying Agent” means as described in Section 1.01
of  the Indenture and Section 3.10
of the Trust Agreement.


 


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


 


“Pool Balance” means as of any date, the Principal Balance of
Contracts as of the close of business on such date.


 


“Principal Balance” means (a) with respect to any
Contract as of any date, an amount equal to the unpaid principal balance of
such Contract as of the close of business on the Cutoff Date, reduced by the
sum of (x) all payments received by the Servicer as of such date allocable
to principal and (y) any Cram Down Loss in respect of such Contract; provided, however, that (i) if (x) a Contract is
reacquired by the Seller pursuant to Section 5.01 of the Transfer and Sale
Agreement and Section 7.08 hereof because of a breach of representation or
warranty or is purchased by the Servicer pursuant to Section 7.11 hereof,
or if (y) the Servicer gives notice of its intent to purchase the
Contracts in connection with an optional termination of the Trust pursuant to Section 7.10
hereof, in each case the Principal Balance of such Contract or Contracts shall
be deemed as of the related Determination Date to be zero for the Due Period in
which such event occurs and for each Due Period thereafter and (ii) from
and after the Due Period in which a Contract becomes a Liquidated Contract, the
Principal Balance of such Contract shall be deemed to be zero; and (b) where
the context requires, the aggregate of the Principal Balances described in
clause (a) for all such Contracts.


 


“Principal Distributable Amount” means (i) in respect of
the first Distribution Date after the Closing Date, the excess of (x) the
Aggregate Principal Balance as of the Cutoff Date over (y) the Aggregate Principal
Balance as of the last day of the Due Period relating to the first Distribution
Date, and (ii) on any Distribution Date thereafter, the Aggregate
Principal Balance Decline for that Distribution Date.


 


“Prospectus” means the Base Prospectus together with the
Supplement.


 


“Purchase Price” means, with respect to a Contract to be
reacquired or purchased hereunder as of the last day of any Due Period an
amount equal to (a) the Principal Balance of such Contract as of such day,
plus (b) accrued and unpaid interest at the Contract Rate on such Contract
through the end of such Due Period.


 


“Qualified Eligible Investments” means Eligible Investments
acquired by the Indenture Trustee in its name and in its capacity as Indenture
Trustee, which are held by the Indenture Trustee in any Trust Account and with
respect to which (a) the Indenture Trustee has noted its interest therein
on its books and records, and (b) the Indenture Trustee has purchased such
investments for value without notice of any adverse claim thereto (and, if such
investments are securities or other financial assets or interests therein,
within the meaning of Section 8-102 of the UCC as enacted in Illinois,
without acting in collusion with a securities intermediary in violating such
securities intermediary’s obligations to entitlement holders in such assets,
under Section 8-504 of such UCC, to maintain a sufficient quantity of such
assets in favor of such entitlement holders), and (c) either (i) such
investments are in the possession, or are under the control, of the Indenture
Trustee, or (ii) such investments, (A) if certificated securities and
in bearer form, have been delivered to the Indenture Trustee, or in registered
form, have been delivered to the Indenture Trustee and either registered by the
issuer thereof in the name of the Indenture Trustee or endorsed by effective
endorsement to the Indenture Trustee or in blank; (B) if uncertificated
securities, the ownership of which has been registered to the Indenture Trustee
on the books of the issuer thereof (or another 


 


12

















 


person, other than a securities intermediary, either becomes the
registered owner of the uncertified security on behalf of the Indenture Trustee
or, having previously become the registered owner, acknowledges that it holds
for the Indenture Trustee); or (C) if securities entitlements (within the
meaning of Section 8-102 of the UCC as enacted in Illinois) representing
interests in securities or other financial assets (or interests therein) held
by a securities intermediary (within the meaning of said Section 8-102), a
securities intermediary indicates by book entry that a security or other
financial asset has been credited to the Indenture Trustee’s securities account
with such securities intermediary.  Any
such Qualified Eligible Investment may be purchased by or through the Indenture
Trustee or any of its affiliates.


 


“Rating Agency” means each of Moody’s and Standard &
Poor’s, so long as such Persons maintain a rating on the Notes; and if either
Moody’s or Standard & Poor’s no longer maintains a rating on the
Notes, such other nationally recognized statistical rating organization
selected by the Trust Depositor.


 


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


 


“Record Date” means, with respect to any Distribution Date,
the close of business on the day immediately preceding such Distribution Date.


 


“Regulation AB”  means Subpart 229.1100 - Asset Backed
Securities (Regulation AB), 17 C.F.R. Sections 229.1100-229.1123, as amended
from time to time and as clarified and interpreted by the Securities and
Exchange Commission or its staff from time to time.


 


“Reimbursement Amount” has the meaning assigned in Section 7.03
hereof.


 


“Required Holders” means (i) prior to payment in full of
the Notes, Noteholders evidencing more than 50% of the aggregate Outstanding
Amount of the Notes and (ii) after payment in full of the Notes,
Certificateholders evidencing more than 50% of the aggregate Certificate
Balance.


 


“Reportable Event” means any event required
to be reported on Form 8-K.


 


“Reserve Fund” means the Reserve Fund established and
maintained pursuant to Section 7.06 hereof.


 


“Reserve Fund Deposits” means all moneys deposited in the
Reserve Fund from time to time including, but not limited to, the Reserve Fund
Initial Deposit as well as any monies deposited therein pursuant to Section 7.05(a),
all investments and reinvestments thereof, earnings thereon, and proceeds of
the foregoing, whether now or hereafter existing.


 


“Reserve Fund Initial Deposit” means $6,410,257.08.


 


“Reserve Fund Trigger Event” means the occurrence with
respect to any Distribution Date (i) the Average Delinquency Ratio for
such Distribution Date is equal to or greater than (a) 3.75% with respect
to any Distribution Date which occurs within the period from the Closing Date
to, and inclusive of, the 12th Distribution Date occurring
after the Closing Date, (b) 4.25% with respect to any Distribution Date
which occurs within the period from the day after the 12th Distribution Date occurring after the Closing
Date to, and inclusive of, the 24th Distribution
Date occurring after the Closing Date, (c) 4.75% with 


 


13

















 


respect to any Distribution Date which occurs within the period from
the day after the 24th Distribution Date occurring after the Closing
Date to, and inclusive of, the 36th Distribution
Date occurring after the Closing Date or (d) 5.25% with respect to any
Distribution Date occurring thereafter; (ii) the Average Loss Ratio for
such Distribution Date is equal to or greater than 6.00% with respect to such
Distribution Date; or (iii) the Cumulative Loss Ratio for such
Distribution Date is equal to or greater than (a) 2.50% with respect to
any Distribution Date which occurs within the period from the Closing Date to,
and inclusive of, the 12th Distribution Date occurring after the Closing
Date, (b) 3.75% with respect to any Distribution Date which occurs within
the period from the day after the 12th Distribution
Date occurring after the Closing Date to, and inclusive of, the 24th Distribution Date occurring after the Closing
Date, (c) 5.00% with respect to any Distribution Date which occurs within
the period from the day after the 24th Distribution
Date occurring after the Closing Date to, and inclusive of, the 36th Distribution Date occurring after the Closing
Date, (d) 6.50% with respect to any Distribution Date which occurs within
the period from the day after the 36th Distribution
Date to, and inclusive of, the 48th Distribution
Date occurring after the Closing Date; or (e) 7.00% for any Distribution
Date occurring thereafter.


 


A
Reserve Fund Trigger Event shall be deemed to have terminated with respect to a
Distribution Date if no Reserve Fund Trigger Event shall exist with respect to
three consecutive Distribution Dates (inclusive of the respective Distribution
Date).


 


“Responsible Officer” means, with respect to the Owner
Trustee, any officer in its Corporate Trust Administration Department (or any
similar group of a successor Owner Trustee) and with respect to the Indenture
Trustee, the chairman and any vice chairman of the board of directors, the
president, the chairman and vice chairman of any executive committee of the
board of directors, every vice president, assistant vice president, the
secretary, every assistant secretary, cashier or any assistant cashier,
controller or assistant controller, the treasurer, every assistant treasurer,
every trust officer, assistant trust officer and every other authorized officer
or assistant officer of the Indenture Trustee customarily performing functions
similar to those performed by persons who at the time shall be such officers,
respectively, or to whom a corporate trust matter is referred because of
knowledge of, familiarity with, and authority to act with respect to a
particular matter.


 


 “Securities”
means the Notes and Certificates, or any of them.


 


“Securities Act”  means the Securities Act of 1933, as
amended.


 


“Securityholders” means the Holders of the Notes and
Certificates.


 


“Seller” means Harley-Davidson Credit Corp., a Nevada
corporation, or its successor, in its capacity as Seller of Contract Assets
under the Transfer and Sale Agreement.


 


“Servicer” means Harley-Davidson Credit Corp., a Nevada
corporation, or its successor, until any Service Transfer hereunder and
thereafter means the Successor Servicer appointed pursuant to Article VIII
below with respect to the duties and obligations required of the Servicer under
this Agreement.


 


“Service Transfer” has the meaning assigned in Section 8.03(a).


 


“Servicing Criteria” means the “servicing
criteria” set forth in Item 1122(d) of Regulation AB.


 


“Servicing Fee” means, on any Determination Date, the sum of (a) the
Monthly Servicing Fee payable on the related Distribution Date, (b) Late
Payment Penalty Fees received by the Servicer during the related Due Period,
and (c) extension fees received by the Servicer during the related Due
Period.


 


14

















 


“Servicing Officer” means any officer of the Servicer
involved in, or responsible for, the administration and servicing of Contracts
whose name appears on a list of servicing officers appearing in an Officer’s
Certificate furnished to the Indenture Trustee by the Servicer, as the same may
be amended from time to time.


 


“Shortfall” means, with respect to a Distribution Date, an
amount equal to the excess (if any) of (a) the sum of the amounts payable
pursuant to (1) clauses (iv) through (vi) of Section 7.05(a) or
(2) clauses (i) through (iii) of Section 7.05(b), as
applicable, over (b) Available Monies for such Distribution Date minus the
amounts payable pursuant to clauses (i) through (iii) of Section 7.05(a) on
such Distribution Date.


 


“Solvent” means, as to any Person at any time, that (a) the
fair value of the property of such Person is greater than the amount of such
Person’s liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for
purposes of Section 101(31) of the Bankruptcy Code; (b) the present
fair saleable value of the property of such Person in an orderly liquidation of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its property and pay its
debts and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction,
and is not about to engage in a business or a transaction, for which such
Person’s property would constitute unreasonably small capital.


 


“Specified Reserve Fund Balance” means, with respect to any
Distribution Date, an amount equal to the greater of:


 


(a)           2.70%
of the Principal Balance of the Contracts in the Trust as of the last day of
the related Due Period; provided, however,
in the event a Reserve Fund Trigger Event occurs and is continuing for three
consecutive Distribution Dates (inclusive of the respective Distribution Date),
the Specified Reserve Fund Balance shall be equal to 6.00% of the Principal
Balance of the Contracts in the Trust as of the last day of the immediately
preceding Due Period; and


 


(b)           1.00%
of the aggregate of the Initial Class A-1 Note Balance, Initial Class A-2
Note Balance, Initial Class A-3 Note Balance, Initial Class A-4 Note
Balance and the Initial Certificate Balance;


 


provided, however, in no event shall the Specified Reserve
Fund Balance be greater than the aggregate outstanding principal balance of the
Securities.  As of any Distribution Date,
the amount of funds actually on deposit in the Reserve Fund may, in certain
circumstances, be less than the Specified Reserve Fund Balance.


 


“Standard & Poor’s” means Standard & Poor’s
Ratings Services, a division of The McGraw Hill Companies, Inc., or any
successor thereto.


 


“Successor Servicer” means a servicer described in Section 8.03(b).


 


“Supplement” means the Prospectus Supplement dated May 5,
2009.


 


15
















 


“Transaction Documents” means this Agreement, the Transfer
and Sale Agreement, the Lockbox Agreement, the Indenture, the Trust Agreement,
the Administration Agreement and the Note Depository Agreement.


 


“Transfer and Sale Agreement” means the Transfer and Sale
Agreement dated as of the date hereof by and between the Seller and the Trust
Depositor, as amended, supplemented or otherwise modified from time to time.


 


“Trust” means the trust created by the Trust Agreement,
comprised of the Trust Corpus.


 


“Trust Accounts” means, collectively, the Collection Account,
the Note Distribution Account and the Reserve Fund, or any of them.


 


“Trust Account Property” means the Trust Accounts, all
amounts and investments held from time to time in any Trust Account (whether in
the form of deposit accounts, physical property, book-entry securities,
uncertificated securities or otherwise), including the Reserve Fund Initial
Deposit, and all proceeds of the foregoing.


 


“Trust Agreement” means the Trust Agreement, dated as of April 15,
2009, between the Trust Depositor and the Owner Trustee.


 


“Trust Corpus” has the meaning given to such term in Section 2.01(a) hereof.


 


“Trust Depositor”  has the
meaning assigned such term in the preamble hereunder or any successor thereto.


 


“Trust Estate”  shall have the
meaning specified in the Trust Agreement.


 


“Trustees” means the Owner Trustee and the Indenture Trustee.


 


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


 


“Uncollectible Advance” means with respect to any
Determination Date and any Contract, the amount, if any, advanced by the
Servicer pursuant to Section 7.03 
which the Servicer has as of such Determination Date determined in good
faith will not be ultimately recoverable by the Servicer from insurance
policies on the related Motorcycle, the related Obligor or out of Net
Liquidation Proceeds with respect to such Contract.  The determination by the Servicer that it has
made an Uncollectible Advance, or, that any Advance proposed to be made would
be an Uncollectible Advance, shall be evidenced by an Officer’s Certificate
delivered to the Trustees.


 


“Underwriters” has the meaning set forth in the Underwriting
Agreement.


 


“Underwriting Agreement” means the Underwriting Agreement,
dated May 5, 2009, by and among the Trust Depositor, the Seller and the
Underwriters.


 


16

















 


“United States” means the United States of America.


 


“Vice President” of any Person means any vice president of
such Person, whether or not designated by a number or words before or after the
title “Vice President”  who
is a duly elected officer of such Person.


 


“WTC” means
Wilmington Trust Company, in its individual capacity.


 


Section 1.02.        Usage of Terms.  With respect to all terms in this Agreement,
the singular includes the plural and the plural the singular; words importing
any gender include the other genders; references to “writing” include printing,
typing, lithography and other means of reproducing words in a visible form;
references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein
entered into in accordance with their respective terms and not prohibited by
this Agreement; references to Persons include their permitted successors and
assigns; and the term “including” means “including without limitation.”


 


Section 1.03.        Section References.  All section references, unless otherwise
indicated, shall be to Sections in this Agreement.


 


Section 1.04.        Calculations.  Except as otherwise provided herein, all
interest rate and basis point calculations hereunder will be made on the basis
of a 360-day year and twelve 30-day months and will be carried out to at least
three decimal places.


 


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


 


ARTICLE
TWO


 


TRANSFER OF CONTRACTS


 


Section 2.01.        Closing.  (a)  On the Closing Date, the Trust
Depositor shall transfer, assign, set over and otherwise convey to the Trust by
execution of an assignment substantially in the form of Exhibit A
hereto, without recourse other than as expressly provided herein, for a
purchase price in cash of $500,000,000 (less fees and expenses in connection
with the offering and sale of the Notes and certain deposits to the Reserve
Fund on the Closing Date) and the Trust’s issuance of the Certificates to the
Trust Depositor, (i) all the right, title and interest of the Trust
Depositor in and to the Contracts listed on the List of Contracts delivered on
the Closing Date (including, without limitation, all security interests and all
rights to receive payments which are collected pursuant thereto after the
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 the Trust Depositor under any
physical damage or other individual insurance policy (and rights under a “forced placed” policy, if any), any debt insurance policy or
any debt cancellation agreement relating to any such Contract, an Obligor or a
Motorcycle securing such Contract, (iii) all security interests in each
such Motorcycle, (iv) all documents contained in the related Contract
Files, (v) all rights (but not the obligations) of the Trust Depositor
under any related motorcycle dealer agreements between dealers (i.e., the
originators of certain Contracts) and the Seller, (vi) all rights of the
Trust Depositor in the Lockbox, the Lockbox Account and the related Lockbox
Agreement to the extent they relate to the Contracts, (vii) all rights (but
not the obligations) of the Trust Depositor under the Transfer and Sale
Agreement, including but not limited to the Trust Depositor’s rights under Article V
thereof, (viii) the remittances, deposits and payments made into the Trust
Accounts from time to time and amounts in the Trust Accounts from time to time
(and any 


 


17

















 


investments of such amounts), (ix) all
rights of the Trust Depositor to certain rebates of premiums and other amounts
relating to insurance policies, debt cancellation agreements, extended service
contracts or other repair agreements and other items financed under such
Contracts and (x) all proceeds and products of the foregoing (the property
in clauses (i)-(x) above, being the “Trust Corpus”).  Although the Trust Depositor and the Owner
Trustee agree that such transfer is intended to be a transfer of ownership of
the Trust Corpus, rather than the granting of a security interest to secure a
borrowing, and that the Trust Corpus shall not be property of the Trust
Depositor, in the event such transfer is deemed to be of a mere security
interest to secure a borrowing, the Trust Depositor shall be deemed to have
granted the Trust a perfected first priority security interest in such Trust
Corpus and this Agreement shall constitute a security agreement under
applicable law.


 


Section 2.02.        Conditions to the Closing.  On or before the Closing Date, the Trust
Depositor shall deliver or cause to be delivered the following documents to the
Owner Trustee and the Indenture Trustee:


 


(a)           The
List of Contracts, certified by the Chairman of the Board, President or any
Vice President of the Trust Depositor, together with an assignment
substantially in the form of Exhibit A
hereto.


 


(b)           A
certificate of an officer of the Seller substantially in the form of Exhibit B to the Transfer and Sale Agreement and of an
officer of the Trust Depositor substantially in the form of Exhibit B hereto.


 


(c)           Opinions
of counsel for the Seller and the Trust Depositor in form and substance
reasonably satisfactory to the Underwriters (and including as an addressee
thereof each Rating Agency).


 


(d)           A
letter or letters from Ernst & Young LLP, or another nationally
recognized accounting firm, addressed to the Seller and the Underwriters 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
which identifies those Contracts which do not conform.


 


(e)           Copies
of resolutions of the Board of Directors of each of the Seller/Servicer and the
Trust Depositor or of the Executive Committee of the Board of Directors of each
of the Seller/Servicer and the Trust Depositor approving the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which any of them is a party, as applicable, and the transactions
contemplated hereunder and thereunder, certified in each case by the Secretary
or an Assistant Secretary of the Seller/Servicer and the Trust Depositor.


 


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


 


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


 


18

















 


(h)           An
Officer’s Certificate listing the Servicer’s Servicing Officers.


 


(i)            Evidence
of deposit in the Collection Account of all funds received with respect to the
Contracts after the Cutoff Date to the Closing Date, together with an Officer’s
Certificate from the Trust Depositor to the effect that such amount is correct.


 


(j)            The
Officer’s Certificate of the Seller specified in Section 2.02(h) of
the Transfer and Sale Agreement.


 


(k)           Evidence
of deposit in the Reserve Fund of the Reserve Fund Initial Deposit by the
Indenture Trustee.


 


(l)            A
fully executed Transfer and Sale Agreement.


 


(m)          A
fully executed Trust Agreement.


 


(n)           A
fully executed Administration Agreement.


 


(o)           A
fully executed Indenture.


 


ARTICLE
THREE


 


REPRESENTATIONS AND
WARRANTIES


 


The
Seller under the Transfer and Sale Agreement has made each of the
representations and warranties set forth in Exhibit J
hereto and has consented to the assignment by the Trust Depositor to the Issuer
of the Trust Depositor’s rights with respect thereto.  Such representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, but shall
survive the transfer and assignment of the Contracts to the Trust.  Pursuant to Section 2.01 of this
Agreement, the Trust Depositor has assigned, transferred and conveyed to the
Issuer as part of the Trust Corpus its rights under the Transfer and Sale
Agreement, including without limitation, the representations and warranties of
the Seller therein as set forth in Exhibit J
attached hereto, together with all rights of the Trust Depositor with respect
to any breach thereof including any right to require the Seller to reacquire
any Contract in accordance with the Transfer and Sale Agreement.  It is understood and agreed that the
representations and warranties set forth or referred to in this Section shall
survive delivery of the Contract Files to the Owner Trustee or any custodian.


 


The
Trust Depositor hereby represents and warrants to the Trust and the Indenture
Trustee that it has entered into the Transfer and Sale Agreement with the
Seller, that the Seller has made the representations and warranties in the
Transfer and Sale Agreement as set forth in Exhibit J hereto,
that such representations and warranties run to and are for the benefit of the
Trust Depositor, and that pursuant to Section 2.01 of this Agreement the
Trust Depositor has transferred and assigned to the Trust all rights of the
Trust Depositor to cause the Seller under the Transfer and Sale Agreement to
reacquire Contracts in the event of a breach of such representations and
warranties.


 


Section 3.01.        Representations and Warranties Regarding
the Trust Depositor.  By its
execution of this Agreement, the Trust Depositor represents and warrants to the
Trust, the Indenture Trustee and the Noteholders that:


 


19

















 


(a)           Assumption of Seller’s Representations and Warranties.  The representations and warranties set forth
in Exhibit J are true and correct.


 


(b)           Organization and Good Standing.  The Trust Depositor 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.  The Trust Depositor 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 other) of the Trust Depositor or the Trust.


 


(c)           Authorization; Valid Sale; Binding Obligations.  The Trust Depositor has the power and
authority to make, execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party and all of
the transactions contemplated under this Agreement and the other Transaction
Documents to which it is a party, and to create the Trust and cause it to make,
execute, deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it 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 it is a party and to
cause the Trust to be created.  This
Agreement shall effect a valid transfer and assignment of the Trust Corpus,
enforceable against the Trust Depositor and creditors of and purchasers from
the Trust Depositor.  This Agreement and
the other Transaction Documents to which the Trust Depositor is a party
constitute the legal, valid and binding obligation of the Trust Depositor
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.


 


(d)           No Consent Required.  The Trust Depositor 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 or the other Transaction
Documents to which it is a party.


 


(e)           No Violations. 
The execution, delivery and performance of this Agreement and the other
Transaction Documents to which it is a party by the Trust Depositor, and the
consummation of the transactions contemplated hereby and thereby, will not
violate any provision of any existing law or regulation or any order or decree
of any court or of any Federal or state regulatory body or administrative
agency having jurisdiction over the Trust Depositor or any of its properties or
the Articles of Incorporation or Bylaws of the Trust Depositor, or constitute a
material breach of any mortgage, indenture, contract or other agreement to
which the Trust Depositor is a party or by which the Trust Depositor or any of
the Trust Depositor’s properties may be bound, or result in the creation or
imposition of any security interest, lien, charge, pledge, preference, equity
or encumbrance of any kind upon any of its properties pursuant to the terms of
any such mortgage, indenture, contract or other agreement, other than as
contemplated by the Transaction Documents.


 


(f)            Litigation. 
No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge of the
Trust Depositor threatened, against the Trust Depositor or any of its
properties or with respect to this Agreement, the other Transaction Documents
to which it is a party or the Notes (1) which, if adversely 


 


20

















 


determined, would in the opinion of the Trust Depositor have a material
adverse effect on the business, properties, assets or condition (financial or
otherwise) of the Trust Depositor or the Trust or the transactions contemplated
by this Agreement or the other Transaction Documents to which the Trust
Depositor is a party or (2) seeking to adversely affect the federal income
tax or other federal, state or local tax attributes of the Certificate or
Notes.


 


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


 


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


 


Such representations speak
as of the execution and delivery of this Agreement and as of the Closing Date,
but shall survive the transfer and assignment of the Contracts to the Trust.


 


Section 3.02.        Representations and Warranties Regarding
the Servicer.  The Servicer
represents and warrants to the Trust, the Indenture Trustee and the Noteholders
that:


 


(a)           Organization and Good Standing.  The Servicer 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. 
The Servicer 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 the Servicer or the Trust. 
The Servicer 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 hereof other than such licenses the failure to obtain
would not have a material adverse effect on the business, properties, assets,
or condition (financial or otherwise) of the Servicer or on the ability of the
Servicer to perform its obligations hereunder.


 


(b)           Authorization; Binding Obligations.  The Servicer has the power and authority to
make, execute, deliver and perform this Agreement and the other Transaction
Documents to which the Servicer is a party and all of the transactions
contemplated under this Agreement and the other Transaction Documents to which
the Servicer 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 Servicer is a party.  This Agreement and the other Transaction
Documents to which the Servicer is a party constitute the legal, valid and
binding obligation of the Servicer 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.  The Servicer 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 Servicer is a party.


 


21

















 


(d)           No Violations. 
The execution, delivery and performance of this Agreement and the other
Transaction Documents to which the Servicer is a party by the Servicer will not
violate any provisions of any existing law or regulation or any order or decree
of any court or of any Federal or state regulatory body or administrative
agency having jurisdiction over the Servicer or any of its properties or the
Articles of Incorporation or Bylaws of the Servicer, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which the
Servicer is a party or by which the Servicer or any of the Servicer’s
properties may be bound, or result in the creation of or imposition of any
security interest, lien, pledge, preference, equity or encumbrance of any kind
upon any of its properties pursuant to the terms of any such mortgage,
indenture, contract or other agreement, other than this Agreement.


 


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


 


ARTICLE
FOUR


 


PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS


 


Section 4.01.        Custody of Contracts.  (a) Subject to the terms and conditions
of this Section 4.01, the contents of each Contract File shall be held by
the Servicer, or its custodian, for the benefit of, and as agent for, the Trust
as the owner thereof and the Indenture Trustee.


 


(b)           The Servicer agrees to maintain the
related Contract Files at its offices where they are currently maintained, or
at such other offices of the Servicer in the State of Nevada as shall from time
to time be identified to the Trustees by written notice.  The Servicer may temporarily move individual
Contract Files or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures; provided, however,
that the Servicer will take all action necessary to maintain the perfection of
the Trust’s interest in the Contracts and the proceeds thereof.  It is intended that, by the Servicer’s
agreement pursuant to Section 4.01(a) above and this Section 4.01(b),
the Trustees  shall be deemed to have
possession of the Contract Files for purposes of Section 9-313 of the
Uniform Commercial Code of the State in which the Contract Files are located.


 


(c)           As custodian, the Servicer shall have
the following powers and perform the following duties:


 


(i)            hold,
or cause the Servicer’s custodian to hold, the Contract Files on behalf of the
Trust, maintain accurate records pertaining to each Contract to enable it to
comply with the terms and conditions of this Agreement, maintain a current
inventory thereof and certify to the Owner Trustee and the Indenture Trustee
annually that it, or its custodian, continues to maintain possession of such
Contract Files;


 


(ii)           implement
policies and procedures in writing and signed by a Servicing Officer with
respect to persons authorized to have access to the Contract Files on the
Servicer’s premises 


 


22

















 


and the receipting for Contract Files taken from their storage area by
an employee of the Servicer for purposes of servicing or any other purposes;


 


(iii)          attend
to all details in connection with maintaining custody of the Contract Files on
behalf of the Trust;


 


(iv)          at
all times maintain, or cause the Servicer’s custodian to maintain, the original
of the fully executed Contract in accordance with its customary practices and
procedures, except as may be necessary to conduct collection and servicing
activities in accordance with its customary practices and procedures; and


 


(v)           as
promptly as practicable after the Closing Date, and in any event within 60 days
thereof, deliver an Officer’s Certificate to the Owner Trustee and the
Indenture Trustee certifying that as of a date no earlier than the Closing Date
it has conducted an inventory of the Contract Files and that there exists a
Contract File for each Contract and stating all exceptions to such statement,
if any.


 


(d)           In performing its duties under this Section 4.01,
the Servicer agrees to act with reasonable care, using that degree of skill and
care that it exercises with respect to similar contracts for the installment
purchase of consumer goods owned and/or serviced by it, and in any event with
no less degree of skill and care than would be exercised by a prudent servicer
of motorcycle conditional sales contracts and promissory notes and security
agreements.  The Servicer shall promptly
report to the Owner Trustee and the Indenture Trustee any failure by it, or its
custodian, to hold the Contract Files as herein provided and shall promptly
take appropriate action to remedy any such failure.  In acting as custodian of the Contract Files,
the Servicer further agrees not to assert any legal or beneficial ownership
interest in the Contracts or the Contract Files, except as provided in Section 5.06.  The Servicer agrees to indemnify the
Noteholders, the Certificateholder, the Owner Trustee and the Indenture Trustee
for any and all liabilities, obligations, losses, damages, payments, costs, or
expenses of any kind whatsoever which may be imposed on, incurred by or
asserted against the Noteholders, the Certificateholder, the Owner Trustee and
the Indenture Trustee as the result of any act or omission by the Servicer
relating to the maintenance and custody of the Contract Files; provided, however, that the Servicer will not be liable for
any portion of any such amount resulting from the gross negligence or willful
misconduct of any Noteholder, Certificateholder, the Owner Trustee or the
Indenture Trustee.  The Trustees shall
have no duty to monitor or otherwise oversee the Servicer’s performance as
custodian hereunder.


 


Section 4.02.        Filing.  On or prior to the Closing Date, the Servicer
shall cause the UCC financing statement(s) referred to in Section 2.02(g) hereof
to be filed and from time to time the Servicer shall take and cause to be taken
such actions and execute such documents as are necessary or desirable or as the
Owner Trustee or Indenture Trustee may reasonably request to perfect and
protect the Trust’s first priority perfected interest in the Trust Corpus
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.  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,
neither the Seller nor the Trust Depositor shall change its name, identity or
structure or change its state of 


 


23

















 


incorporation without first giving at least
30 days’ prior written notice to the Owner Trustee and the Indenture Trustee.


 


(b)           If any change in either the Seller’s
or the Trust Depositor’s name, identity or structure or other action would make
any financing or continuation statement or notice of lien filed under this
Agreement seriously misleading within the meaning of applicable provisions of
the UCC or any title statute, the Servicer, 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’s interests in the Trust Corpus and the proceeds
thereof.  In addition, neither the Seller
nor the Trust Depositor shall change its state of incorporation unless it has
first taken such action as is advisable or necessary to preserve and protect
the Trust’s interest in the Trust Corpus. 
Promptly after taking any of the foregoing actions, the Servicer shall
deliver to the Owner Trustee and the Indenture Trustee an opinion of counsel
reasonably acceptable to the Owner Trustee and the Indenture Trustee stating
that, in the opinion of such counsel, all financing statements or amendments
necessary to preserve and protect the interests of the Trust in the Trust
Corpus and the Indenture Trustee in the Collateral have been filed, and
reciting the details of such filing.


 


Section 4.04.        Costs and Expenses.  The Servicer agrees to pay all reasonable
costs and disbursements in connection with the perfection and the maintenance
of perfection, as against all third parties, of the Trust’s right, title and
interest in and to the Contracts (including, without limitation, the security
interest in the Motorcycles granted thereby).


 


ARTICLE
FIVE


 


SERVICING OF CONTRACTS


 


Section 5.01.        Responsibility for Contract
Administration.  The
Servicer will have the sole obligation to manage, administer, service and make
collections on the Contracts and perform or cause to be performed all
contractual and customary undertakings of the holder of the Contracts to the
Obligor.  The Owner Trustee, at the
written request of a Servicing Officer, shall furnish the Servicer with any
powers of attorney or other documents necessary or appropriate in the opinion
of the Owner Trustee to enable the Servicer to carry out its servicing and
administrative duties hereunder.  The
Servicer is hereby appointed the servicer hereunder until such time as any
Service Transfer may be effected under Article VIII.


 


Section 5.02.        Standard of Care.  In managing, administering, servicing and
making collections on the Contracts pursuant to this Agreement, the Servicer
will exercise that degree of skill and care consistent with the skill and care
that the Servicer exercises with respect to similar contracts serviced by the
Servicer, and, in any event no less degree of skill and care than would be
exercised by a prudent servicer of motorcycle conditional sales contracts and
promissory note and security agreements; provided, however,
that notwithstanding the foregoing, the Servicer shall not release or waive the
right to collect the unpaid balance of any Contract except that with respect to
a Contract that has become a Defaulted Contract, the Servicer, consistent with
its collection policies, may release or waive the right to collect the unpaid
balance of such Defaulted Contract in an effort to maximize collections
thereon.


 


Section 5.03.        Records.  The Servicer shall, during the period it is servicer
hereunder, maintain such books of account and other records as will enable the
Owner Trustee and the Indenture Trustee to determine the status of each
Contract.


 


Section 5.04.        Inspection.  (a) At all times during the term hereof,
the Servicer shall afford the Owner Trustee and 
the Indenture Trustee and their respective authorized agents reasonable
access during 


 


24

















 


normal business hours to the Servicer’s
records relating to the Contracts and will cause its personnel to assist in any
examination of such records by the Owner Trustee or the Indenture Trustee, or
such authorized agents and allow copies of the same to be made.  The examination referred to in this Section will
be conducted in a manner which does not unreasonably interfere with the
Servicer’s normal operations or customer or employee relations.  Without otherwise limiting the scope of the
examination the Owner Trustee or the Indenture Trustee may, using generally
accepted audit procedures, verify the status of each Contract and review the
Computer File and records relating thereto for conformity to Monthly Reports
prepared pursuant to Article IX and compliance with the standards
represented to exist as to each Contract in this Agreement.


 


(b)           At all times during the term hereof,
the Servicer shall keep available a copy of the List of Contracts at its
principal executive office for inspection by the Trustees.


 


Section 5.05.        Trust Accounts.  (a) On or before the Closing Date, the
Trust Depositor shall establish the Trust Accounts, each with and in the name
of the Indenture Trustee for the benefit of the Noteholders (and, in the case
of the Reserve Fund, the Certificateholders). 
The Indenture Trustee is hereby required to ensure that each of the Trust
Accounts is established and maintained as an Eligible Account.


 


(b)           The Indenture Trustee shall deposit
(or the Servicer shall deposit, with respect to payments by or on behalf of the
Obligors received directly by the Servicer), without deposit into any
intervening account, into the Collection Account as promptly as practical (but
in any case not later than the second Business Day following the receipt
thereof):


 


(i)            With
respect to principal and interest on the Contracts received after the Cutoff
Date (which for the purpose of this paragraph (b)(i) shall include those
monies in the Lockbox Account allocable to principal and interest on the
Contracts), all such amounts received by the Owner Trustee or Servicer;


 


(ii)           All
Net Liquidation Proceeds related to the Contracts;


 


(iii)          The
aggregate of the Purchase Prices for Contracts reacquired by the Trust
Depositor as described in Section 7.08;


 


(iv)          All
Advances made by the Servicer pursuant to Section 7.03(a);


 


(v)           All
amounts paid by the Servicer in connection with an optional purchase of the
Contracts described in Section 7.10;


 


(vi)          The
aggregate of the Purchase Prices for Contracts purchased by the Servicer as
described in Section 7.11; and


 


(vii)         All
amounts received in respect of interest, dividends, gains, income and earnings
on investments of funds in the Trust Accounts (except the Reserve Fund) as
contemplated herein.


 


(c)           Reserved.


 


(d)           The Servicer shall direct the
Indenture Trustee to, and the Indenture Trustee shall, invest the amounts in
the Trust Accounts in Qualified Eligible Investments that are payable on demand
or that mature not later than one Business Day prior to the next succeeding
Distribution Date.  Once such funds are
invested, the Indenture Trustee shall not change the investment of such
funds.  Any loss on such 


 


25

















 


investments shall be deposited in the applicable Trust Account by the
Servicer out of its own funds immediately as realized.  Funds in the Trust Accounts not so invested must
be insured to the extent permitted by law by the Bank Insurance Fund or the
Savings Association Insurance Fund of the Federal Deposit Insurance
Corporation.  Subject to the restrictions
herein, the Indenture Trustee may purchase a Qualified Eligible Investment from
itself or an Affiliate.   Subject to the
other provisions hereof, the Indenture Trustee shall have sole control over
each such investment and the income thereon, and any certificate or other
instrument evidencing any such investment, if any, shall be delivered directly
to the Indenture Trustee or its agent, together with each document of transfer,
if any, necessary to transfer title to such investment to the Indenture Trustee
in a manner which complies with this Section 5.05(d).  All interest, dividends, gains upon sale and
other income from, or earnings on, investments of funds in the Trust Accounts
(other than the Reserve Fund) shall be deposited in the Collection Account
pursuant to Section 5.05(b) and distributed on the next Distribution
Date pursuant to Section 7.05.  The
Trust Depositor and the Trust agree and acknowledge that the Indenture Trustee
is to have  “control”
(within the meaning of Section 9-106 of the UCC) of collateral comprised
of “Investment Property” (within the meaning
of Section 9-102 of the UCC) for all purposes of this Agreement.


 


(e)           Notwithstanding anything to the
contrary herein, the Servicer may remit payments on the Contracts and Net
Liquidation Proceeds to the Collection Account in next-day funds or immediately
available funds no later than 10:00 a.m., Central time, on the Business
Day prior to the next succeeding Distribution Date, but only for so long as the
short-term debt security rating of the Servicer is at least “Prime-1” by Moody’s
and “A-1” by Standard & Poor’s.


 


(f)            The Servicer shall apply collections
received in respect of a Contract as follows:


 


(i)            First, to accrued interest with
respect to such Contract;


 


(ii)           Second, to pay any expenses and
unpaid late charges or extension fees (if any) due and owing under such
Contract; and


 


(iii)          Third, to principal to the extent due
and owing under such Contract.


 


(g)           Any collections on a Contract
remaining after application by the Servicer in accordance with the provisions
of Section 5.05(f) shall constitute an excess payment (an “Excess Payment”). 
Excess Payments constituting prepayments of principal shall be applied
as a prepayment of the Principal Balance of such Contract.  All other Excess Payments shall be permitted
to be retained by the Servicer.


 


(h)           The Servicer will, from time to time
as provided herein, be permitted to withdraw or request the withdrawal from the
Collection Account any amount deposited therein that, based on the Servicer’s
good-faith determination, was deposited in error.


 


Section 5.06.        Enforcement.  (a) The Servicer will, consistent with Section 5.02,
act with respect to the Contracts in such manner as will maximize the receipt
of all payments called for under the terms of the Contracts.  The Servicer acting as agent for the Trust
pursuant to the Lockbox Agreement shall use its best efforts to cause Obligors
to make all payments on the Contracts to the Lockbox Account (either directly
by remitting payments to the Lockbox, or indirectly by making payments through
a credit card, direct debit, the telephone or the internet to an account of the
Servicer which payments will be subsequently transferred from such account to
the Lockbox Account).  The Servicer will
act in a commercially reasonable manner with respect to the repossession and
disposition of a Motorcycle following a default under the related Contract with
a view to realizing proceeds at least equal to the Motorcycle’s fair market
value.  If the Servicer determines that
eventual payment in full of a Contract is unlikely, the Servicer will follow
its normal practices and procedures to recover all amounts due upon that 


 


26

















 


Contract, including repossessing and
disposing of the related Motorcycle at a public or private sale or taking other
action permitted by applicable law.  The
Servicer will be entitled to recover all reasonable out-of-pocket expenses
incurred by it in liquidating a Contract and disposing of the related
Motorcycle.


 


(b)           The Servicer may sue to enforce or
collect upon Contracts, in its own name, if possible, or as agent for the
Trustees.  If the Servicer elects to
commence a legal proceeding to enforce a Contract, the act of commencement
shall be deemed to be an automatic assignment of the Contract to the Servicer
for purposes of collection only.  If,
however, in any enforcement suit or legal proceeding it is held that the
Servicer may not enforce a Contract on the ground that it is not a real party
in interest or a holder entitled to enforce the Contract, the Owner Trustee (or
the Indenture Trustee) on behalf of the Trust shall, at the Servicer’s expense,
take such steps as the Servicer deems reasonably necessary to enforce the
Contract, including bringing suit in its name or the names of the Noteholders
under the Indenture and the Certificateholders as owners of the Trust.


 


(c)           The Servicer shall exercise any
rights of recourse against third persons that exist with respect to any
Contract in accordance with the Servicer’s usual practice.  In exercising recourse rights, the Servicer
is authorized on the Trust’s behalf to reassign the Defaulted Contract or the
related Motorcycle to the Person against whom recourse exists at the price set
forth in the document creating the recourse; provided,
however, the Servicer in exercising recourse against any third
persons as described in the immediately preceding sentence shall do so in such
manner as to maximize the aggregate recovery with respect to the Contract; and provided further, however, that notwithstanding the
foregoing the Servicer in its capacity as such may exercise such recourse only
if such Contract (i) was not required to be reacquired by the Seller
pursuant to the Transfer and Sale Agreement or (ii) was required to be
reacquired by the Seller and the Seller has defaulted on such reacquisition
obligation.


 


(d)           The Servicer will not permit any
rescission or cancellation of any Contract due to the acts or omissions of the
Trust Depositor.


 


(e)           Subject to Section 5.02, the
Servicer may grant extensions, rebates or adjustments on a Contract; provided, however, that
if the Servicer extends the date for final payment by the Obligor of any
Contract beyond the Class A-4 Final Distribution Date, it shall promptly
purchase such Contract pursuant to Section 7.11.


 


(f)            The Servicer will not add to the
outstanding Principal Balance of any Contract the premium of any physical
damage or other individual insurance on a Motorcycle securing such Contract it
obtains on behalf of the Obligor under the terms of such Contract, but may
create a separate Obligor obligation with respect to such premium if and as
provided by the Contract.


 


(g)           If the Servicer shall have
repossessed a Motorcycle on behalf of the Trust, the Servicer shall either (i) maintain
at its expense physical damage insurance with respect to such Motorcycle, or (ii) indemnify
the Trust against any damage to such Motorcycle prior to resale or other
disposition.  The Servicer shall not
allow such repossessed Motorcycles to be used in an active trade or business,
but rather shall dispose of the Motorcycle in a reasonable time in accordance
with the Servicer’s normal business practices.


 


Section 5.07.        Trustees to Cooperate.  Upon payment in full on any Contract, the
Servicer shall (if the Servicer is not then in possession of the Contracts and Contract
Files) notify the Trustees and request delivery of the Contract and Contract
File to the Servicer.  Upon receipt of
such notice and request, the Trustees shall promptly release or cause to be
released such Contract and Contract File to the Servicer.  Upon receipt of such Contract and Contract
File, each of the Trust Depositor and the Servicer is authorized to execute an
instrument in satisfaction of such Contract and to do such other acts and
execute 


 


27

















 


such other documents as the Servicer deems
necessary to discharge the Obligor thereunder and eliminate the security
interest in the Motorcycle related thereto. 
The Servicer shall determine when a Contract has been paid in full; to
the extent that insufficient payments are received on a Contract credited by
the Servicer as prepaid or paid in full and satisfied, the shortfall shall be
paid by the Servicer out of its own funds. 
From time to time as appropriate for servicing and repossession in
connection with any Contract, if the Servicer is not then in possession of the
Contracts and Contract Files, the Indenture Trustee shall, upon written request
of a Servicing Officer and delivery to the Indenture Trustee of a receipt
signed by such Servicing Officer, cause the original Contract and the related
Contract File to be released to the Servicer and shall execute such documents
as the Servicer shall deem reasonably necessary to the prosecution of any such
proceedings.  Such receipt shall obligate
the Servicer to return the original Contract and the related Contract File to
the Indenture Trustee when the need by the Servicer has ceased unless the
Contract shall be reacquired as described in Section 7.10.  Upon request of a Servicing Officer, the
Indenture Trustee shall perform such other acts as reasonably requested by the
Servicer and otherwise cooperate with the Servicer in the enforcement of the
Certificateholder’s rights and remedies with respect to Contracts.


 


Section 5.08.        Costs and Expenses.  All costs and expenses incurred by the
Servicer in carrying out its duties hereunder, fees and expenses of accountants
and payments of all fees and expenses incurred in connection with the
enforcement of Contracts (including enforcement of Defaulted Contracts and repossessions
of Motorcycles securing such Contracts when such Contracts are not reacquired
pursuant to Section 7.08) and all other fees and expenses not expressly
stated hereunder to be for the account of the Trust shall be paid by the
Servicer and the Servicer shall not be entitled to reimbursement hereunder.


 


Section 5.09.        Maintenance of Security Interests in
Motorcycles.  The
Servicer shall take such steps as are necessary to maintain continuous
perfection and the first priority of the security interest created by each
Contract in the related Motorcycle.  The
Owner Trustee and the Indenture Trustee hereby authorize the Servicer to take
such steps as are necessary to perfect such security interest and to maintain
the first priority thereof in the event of a relocation of a Motorcycle or for
any other reason.


 


Section 5.10.        Successor Servicer/Lockbox Agreements.  In the event the Servicer shall for any
reason no longer be acting as such, the Successor Servicer shall thereupon
assume all of the rights and obligations of the outgoing servicer under each
Lockbox Agreement; provided, however,
that the Successor Servicer shall not be liable for any acts or obligations of
the Servicer prior to such succession. 
In such event, the Successor Servicer shall be deemed to have assumed
all of the outgoing Servicer’s interest therein and to have replaced the
outgoing Servicer as a party to each such Lockbox Agreement to the same extent
as if such Lockbox Agreement had been assigned to the Successor Servicer,
except that the outgoing Servicer shall not thereby be relieved of any
liability or obligations on the part of the outgoing Servicer to a Lockbox Bank
under such Lockbox Agreement.  The
outgoing Servicer shall, upon the request of the Owner Trustee, but at the
expense of the outgoing Servicer, deliver to the Successor Servicer all
documents and records relating to each such Lockbox Agreement and an accounting
of amounts collected and held by a Lockbox Bank and otherwise use its best
efforts to effect the orderly and efficient transfer of any Lockbox Agreement
to the Successor Servicer.


 


Section 5.11.        Separate Entity Existence.  The Servicer agrees to take
or refrain from taking or engaging in with respect to the Trust Depositor, as
applicable, each of the actions or activities specified in the “substantive
consolidation” opinion of Winston & Strawn LLP (or in any related
Certificate of the Servicer) delivered on the Closing Date, upon which the
conclusions expressed therein are based.


 


28
















 


ARTICLE SIX



THE TRUST DEPOSITOR


 


Section 6.01.        Covenants
of the Trust Depositor.


 


(a)           Existence.  During the term of this Agreement, the Trust
Depositor will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the other Transaction
Documents and each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the transactions contemplated
hereby.


 


(b)           Arm’s
Length Transactions.  During the
term of this Agreement, all transactions and dealings between the Trust
Depositor and its Affiliates will be conducted on an arm’s-length basis.


 


(c)           No
Other Business.  The Trust
Depositor shall not engage in any business other than financing, purchasing,
owning, selling and managing the Contracts in the manner contemplated by this
Agreement and the other Transaction Documents and activities incidental
thereto; provided, however, that the Trust
Depositor may purchase and transfer (or grant Liens in respect of) contracts
and/or other related assets similar to the Contracts to other Persons in
securitization or other non-recourse financing transactions involving the
Seller or any of its Affiliates (or with respect to the Contract Assets
themselves, following a release and reconveyance thereof from the Trust), on
terms and conditions (with respect to the liabilities imposed upon the Trust
Depositor by virtue of such transactions, as well as in respect of agreements
or restrictions concerning activities of the Trust Depositor and its relations
or interactions with the Seller or the Servicer or other applicable Affiliate
relevant to “bankruptcy remoteness” or “substantive consolidation” analysis),
in each case substantially similar to such terms and conditions applicable to
the Trust Depositor hereunder and under the other Transaction Documents.


 


(d)           No
Borrowing.  The Trust
Depositor shall not issue, incur, assume, guarantee or otherwise become liable,
directly or indirectly, for (i) any Indebtedness except for any
Indebtedness permitted by or arising under the Transaction Documents or (ii) obligations
in connection with transactions described in the proviso of Section 6.01(c),
as limited thereby.  The proceeds of the
Notes shall be used exclusively to fund the Trust Depositor’s purchase of the
Contracts and the other assets specified in this Agreement and to pay the
transactional expenses of the Trust Depositor.


 


(e)           Guarantees,
Loans, Advances and Other Liabilities.  Except as otherwise contemplated by the
Transaction Documents or in connection with transactions described in Section 6.01(c),
as limited thereby, the Trust Depositor shall not make any loan or advance or
credit to, or guarantee (directly or indirectly or by an instrument having the
effect of assuming another’s payment or performance on any obligation or
capability of so doing or otherwise), endorse or otherwise become contingently
liable, directly or indirectly, in connection with the obligations, stocks or
dividends of, or own, purchase, repurchase or acquire (or agree contingently to
do so) any stock, obligations, assets or securities of, any other interest in,
or make any capital contribution to, any other Person.


 


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


 


(g)           Restricted
Payments.  Except as
permitted or contemplated by the Transaction Documents, the Trust Depositor
shall not, directly or indirectly, (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination 


 


29

















 


thereof,
to any owner of an equity interest in the Trust Depositor, (ii) redeem,
purchase, retire or otherwise acquire for value any such equity interest or (iii) set
aside or otherwise segregate any amounts for any such purpose; it being
understood that the Trust Depositor shall at all times have the right to
distribute funds received pursuant to the Transaction Documents to its equity
owner.


 


(h)           Separate
Entity Existence.   The Trust
Depositor shall:


 


(i)            Maintain its
own deposit account or accounts, separate from those of any Affiliate, with
commercial banking institutions.  The
funds of the Trust Depositor will not be diverted to any other Person or for
other than authorized uses of the Trust Depositor.


 


(ii)           Ensure that, to the extent
that it shares the same officers or other employees as any of its members or
Affiliates, the salaries of and the expenses related to providing benefits to
such officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary and
benefit costs associated with all such common officers and employees.


 


(iii)         Ensure that, to the extent
that it jointly contracts with any of its members or Affiliates to do business
with vendors or service providers or to share overhead expenses, the costs
incurred in so doing shall be allocated fairly among such entities, and each
such entity shall bear its fair share of such costs.  To the extent that the Trust Depositor
contracts or does business with vendors or service providers when the goods and
services provided are partially for the benefit of any other Person, the costs
incurred in so doing shall be fairly allocated to or among such entities for
whose benefit the goods and services are provided, and each such entity shall
bear its fair share of such costs.  All
material transactions between Trust Depositor and any of its Affiliates shall
be only on an arm’s length basis.


 


(iv)          To the extent
that the Trust Depositor and any of its members or Affiliates have offices in
the same location, there shall be a fair and appropriate allocation of overhead
costs among them, and each such entity shall bear its fair share of such
expenses.


 


(v)           Conduct its affairs strictly
in accordance with its By-laws and Articles of Incorporation, and observe all
necessary, appropriate and customary limited liability company formalities,
including, but not limited to, holding all regular and special members’ and
directors’ meetings appropriate to authorize all entity action, keeping
separate and accurate records of such meetings and its actions, passing all
resolutions or consents necessary to authorize actions taken or to be taken,
and maintaining accurate and separate books, records and accounts, including,
but not limited to, payroll and intercompany transaction accounts.


 


(vi)          Take or refrain from taking
or engaging in, as applicable, each of the actions or activities specified in
the “true sale” and “substantive consolidation” opinions of Winston &
Strawn LLP delivered on the Closing Date (or in any related certificate
delivered in connection therewith), upon which the conclusions expressed
therein are based.


 


Section 6.02.        Liability
of Trust Depositor; Indemnities.  The Trust Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by the Trust Depositor under this Agreement.


 


The Trust Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, WTC, the Indenture Trustee and the Servicer from and
against 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 


 


30

















 


Transaction
Documents, including any sales, gross receipts, gross margin, general
corporation, tangible personal property, Illinois personal property replacement
privilege or license taxes (but, in the case of the Issuer, not including any
taxes asserted with respect to, and as of the date of, the transfer of the
Contracts to the Issuer or the issuance and original sale of the Securities, or
federal or other income taxes arising out of distributions on the Certificate
or the Notes) and costs and expenses in defending against the same.


 


The Trust Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, WTC, the Indenture Trustee and the Securityholders
from and against any loss, liability or expense incurred by reason of the Trust
Depositor’s willful misfeasance, bad faith or negligence (other than errors in
judgment) in the performance of its duties under this Agreement, or by reason
of reckless disregard of its obligations and duties under this Agreement.


 


The Trust Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, WTC and the Indenture Trustee from and against all
costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties herein and, in the case of the Owner Trustee, in the Trust Agreement
and, in the case of the Indenture Trustee, in the Indenture, except to the
extent that such cost, expense, loss, claim, damage or liability  in the case of (i) the Owner Trustee or
WTC, as the case may be, shall be due to the willful misfeasance, bad faith or
negligence of the Owner Trustee or WTC, as the case may be, or shall arise from
the breach by the Owner Trustee or WTC, as the case may be, of any of its
representations or warranties set forth in Section 7.03 of the Trust
Agreement, or (ii) the Indenture Trustee, shall be due to the willful
misfeasance, bad faith or negligence of the Indenture Trustee.


 


The Trust Depositor shall be liable directly to and will indemnify any
injured party or any other creditor of the Trust for all losses, claims,
damages, liabilities and expenses of the Trust to the extent that Trust
Depositor would be liable if the Trust were a partnership under the Delaware
Revised Uniform Limited Partnership Act in which Trust Depositor were a general
partner; provided, however, that Trust Depositor
shall not be liable for any losses incurred by a Certificateholder in the
capacity of an investor in the Trust Certificate or a Noteholder in the
capacity of an investor in the Notes.  In
addition, any third party creditors of the Trust (other than in connection with
the obligations described in the immediately preceding sentence for which Trust
Depositor shall not be liable) shall be deemed third party beneficiaries of
this paragraph.  The obligations of Trust
Depositor under this paragraph shall be evidenced by the Trust Certificate
described in the Trust Agreement.


 


Indemnification under this Section shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation
and shall survive the termination of the Trust and the resignation or removal
of the Trustees.  If the Trust Depositor
shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter shall collect
any of such amounts from others, such Person shall promptly repay such amounts
to the Trust Depositor, without interest.


 


Notwithstanding anything to the contrary herein, the obligations of the
Trust Depositor under this Section are solely the corporate obligations of
the Trust Depositor and shall be payable by it solely as provided in this
Section.  The Trust Depositor shall only
be required to make such contributions required under this Section, (y) from
funds available to it pursuant to, and in accordance with the payment
priorities set forth in Section 7.05 and (z) only to the extent that
it receives additional funds designated for such purposes or to the extent that
it has additional funds available (other than funds described in the preceding
clause (y)) that would be in excess of amounts that would be necessary to pay
the debt and other obligations of such entity incurred in accordance with its
certificate of incorporation and all financing documents to which it is a party
as they come due.  In addition, no amount
owing by the Trust Depositor hereunder in excess of the liabilities that it is
required to pay in accordance with the preceding 


 


31

















 


sentence
shall constitute a “claim” (as defined in Section 101(5) of the
Bankruptcy Code) against it.  No recourse
shall be had for the payment of any amount owing hereunder or any other
obligation of, or claim against the Trust Depositor arising out of or based up
on this Section against any stockholder, employee, officer, agent,
director or authorized person of the Trust Depositor or Affiliate thereof; provided, however, that
the foregoing shall not relieve any such person or entity of any liability they
might otherwise have as a result of fraudulent actions or omissions taken by
them.


 


Section 6.03.        Merger
or Consolidation of, or Assumption of the Obligations of, Trust Depositor; Certain
Limitations.  Notwithstanding
any other provision in this Section and any provision of law, the Trust
Depositor shall not do any of the following:


 


(a)           engage in any business or activity other than as set
forth in its Articles of Incorporation;


 


(b)           without the affirmative vote of a majority of
the members of the Board of Directors of the Trust Depositor (which must
include the affirmative vote of at least two duly appointed Independent
directors) (i) dissolve or liquidate, in whole or in part, or institute
proceedings to be adjudicated bankrupt or insolvent, (ii) consent to the
institution of bankruptcy or insolvency proceedings against it, (iii) file
a petition seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy, (iv) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the corporation or a substantial part of its
property, (v) make a general assignment for the benefit of creditors, (vi) admit
in writing its inability to pay its debts generally as they become due, or (vii) take
any corporate action in furtherance of the actions set forth in clauses (i) through
(vi) above; provided, however, that no
director may be required by any shareholder of the Trust Depositor to consent
to the institution of bankruptcy or insolvency proceedings against the Trust
Depositor so long as it is solvent; or


 


(c)           merge or consolidate with any other
corporation, company or entity or sell all or substantially all of its assets
or acquire all or substantially all of the assets or capital stock or other
ownership interest of any other corporation, company or entity unless the
Person formed by such consolidation or into which the Trust Depositor has
merged or the Person which acquires by conveyance, transfer or lease
substantially all the assets of the Trust Depositor as an entirety, can
lawfully perform the obligations of the Trust Depositor hereunder and executes
and delivers to the Owner Trustee and the Indenture Trustee an agreement in
form and substance reasonably satisfactory to the Owner Trustee and the
Indenture Trustee which contains an assumption by such successor entity of the
due and punctual performance and observance of each covenant and condition to
be performed or observed by the Trust Depositor under this Agreement; provided that the Trust Depositor shall provide notice of
any merger, consolidation or succession pursuant to this Section to each
Rating Agency and shall receive from each Rating Agency a letter to the effect
that such merger, consolidation or succession will not result in a
qualification, downgrading or withdrawal of the then-current ratings of each Class of
Notes.


 


Section 6.04.        Limitation
on Liability of Trust Depositor and Others.  The Trust Depositor and any director or
officer or employee or agent of the Trust Depositor may rely in good faith on
any document of any kind, prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.  The Trust Depositor and any director or
officer or employee or agent of the Trust Depositor shall be reimbursed by the
Owner Trustee or the Indenture Trustee, as the case may be, for any contractual
damages, liability or expense incurred by reason of the Owner Trustee’s or the
Indenture Trustee’s willful misfeasance, bad faith or negligence (except errors
in judgment) in the performance of their respective duties hereunder, or by
reason of reckless disregard of their respective obligations and 


 


32

















 


duties hereunder.  The Trust
Depositor shall not be under any obligation to appear in, prosecute or defend
any legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.


 


Section 6.05.        Trust
Depositor Not to Resign. 
Subject to the provisions of Section 6.03, the Trust Depositor
shall not resign from the obligations and duties hereby imposed on it as Trust
Depositor hereunder.


 


ARTICLE SEVEN



DISTRIBUTIONS; RESERVE FUND


 


Section 7.01.        Monthly
Distributions.  (a) 
Each Noteholder and Certificateholder as of the related Record Date shall be
paid on the next succeeding Distribution Date by check mailed to such
Noteholder or Certificateholder at the address for such Noteholder or
Certificateholder appearing on the Note Register or Certificate Register or by
wire transfer if such Noteholder or Certificateholder provides written
instructions to the Indenture Trustee or the Owner Trustee, respectively, at
least ten days prior to such Distribution Date.


 


(b)           The Indenture
Trustee shall serve as the paying agent hereunder (the “Paying Agent”)
and shall make the payments to or on behalf of the Noteholders and the
Certificateholders required hereunder. 
The Indenture Trustee hereby agrees that all amounts held by it for
payment hereunder will be held in trust for the benefit of the Noteholders and
the Certificateholders.


 


Section 7.02.        Fees.  The Indenture Trustee shall be paid the
Indenture Trustee Fee and the Servicer shall be paid the Monthly Servicing Fee,
each of which shall be paid solely from the monies and in accordance with the
priorities described in Section 7.05(a). 
No recourse may be had to the Seller, Trust Depositor, Trustees, Servicer,
or any of their respective Affiliates in the event that amounts available under
Section 7.05(a) are insufficient for payment of the Indenture Trustee’s
Fee and the Monthly Servicing Fee.


 


Section 7.03.        Advances.  (a) On each Determination Date, the Servicer
shall compute the amount of Delinquent Interest, if any, on the Contracts for
the immediately preceding Due Period. 
Not later than each Distribution Date, the Servicer shall advance (each,
an “Advance”) an amount equal to the
Delinquent Interest for such Determination Date by depositing such amount in
the Collection Account; provided, however,
that the Servicer shall be obligated to advance Delinquent Interest only to the
extent that the Servicer, in its sole discretion, expects that such advance
will not become an Uncollectible Advance. 
The Servicer shall indicate on each Monthly Report (i) the amount
of Delinquent Interest, if any, on the Contracts for the related Due Period and
(ii) the amount of the Advance, if any, made by the Servicer in respect of
the Delinquent Interest pursuant to this Section 7.03.  If the amount of such Advance is less than
the amount of the Delinquent Interest, the relevant Monthly Report shall be
accompanied by a certificate of a Servicing Officer setting forth in reasonable
detail the basis for the determination by the Servicer that the portion of the
Delinquent Interest not advanced would become an Uncollectible Advance.  By each Determination Date, the Servicer
shall determine the amount of prior unreimbursed Advances for which it shall be
entitled to be reimbursed pursuant to the provisions of this Section (such
amount, the “Reimbursement Amount”).  The Servicer shall be entitled to be
reimbursed for any outstanding Advance with respect to a Contract by means of a
first priority withdrawal from the Collection Account of such Reimbursement
Amount as provided in Section 7.05(a)(i).


 


Section 7.04.        Reserved.


 


33

















 


Section 7.05.        Distributions;
Priorities.


 


(a)           Except as provided in Section 7.05(b),on each
Distribution Date, the Indenture Trustee, at the Servicer’s direction, will
make the following allocations and distributions of Available Monies in the
following order of priority:


 


(i)            to the Servicer, the Reimbursement Amount to the
Servicer for Advances previously made;


 


(ii)           to the Servicer, the Servicing Fee, including any
unpaid Servicing Fee with respect to one or more prior Due Periods;


 


(iii)          to the Indenture Trustee,
any accrued and unpaid Indenture Trustee Fee with respect to one or more prior
Due Periods;


 


(iv)          to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, the applicable Note
Interest Distributable Amount with respect to such Distribution Date to the Class A
Noteholders; provided, however, that if there
are insufficient funds on deposit in the Note Distribution Account to pay the
entire amount of the Note Interest Distributable Amount for the Class A
Notes, then the amount in the Note Distribution Account shall be applied to the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and
the Class A-4 Notes, pro rata, on the basis of the Note Interest
Distributable Amount for each such Class of Notes;


 


(v)           to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, the Principal
Distributable Amount with respect to such Distribution Date first, to the Class A-1
Noteholders until the Class A-1 Notes have been paid in full, second, to
the Class A-2 Noteholders until the Class A-2 Notes have been paid in
full, third, to the Class A-3 Noteholders until the Class A-3 Notes
have been paid in full and, fourth, to the Class A-4 Noteholders until the
Class A-4 Notes have been paid in full;


 


(vi)          to the Certificate Distribution Account, together
with any amounts deposited therein pursuant to Section 7.06, the
Certificate Principal Distributable Amount with respect to such Distribution
Date to the Certificateholders;


 


(vii)        any Excess Amounts to the
Reserve Fund up to the Specified Reserve Fund Balance; and


 


(viii)       any remaining amounts to the
Trust Depositor as residual interestholder under the Trust Agreement.


 


(b)           If the Notes
have been declared immediately due and payable as provided in Section 5.02
of the Indenture following the occurrence of an Event of Default under the
Indenture, then, until such time as the Notes have been paid in full, Available
Monies shall be allocated and distributed in the following order of priority
after payment of the amounts set forth in Section 7.05(a)(i), (ii), and
(iii):


 


(i)            to the Note
Distribution Account, together with any amounts deposited therein pursuant to Section 7.06,
the applicable Note Interest Distributable Amount with respect to such
Distribution Date to the Class A Noteholders; provided,
however, that if there are insufficient funds on deposit in the Note
Distribution Account to pay the entire amount of the Note Interest
Distributable Amount for the Class A Notes, then the amount in the Note
Distribution Account 


 


34

















 


shall be applied to the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes, pro rata,
on the basis of the Note Interest Distributable Amount for each such Class of
Notes;


 


(ii)           to the Note
Distribution Account, together with any amounts deposited therein pursuant to Section 7.06,
the Principal Distributable Amount with respect to such Distribution Date
first, to the Class A-1 Noteholders until the Class A-1 Notes have
been paid in full and, second, pro rata, to
the Class A-2 Noteholders, Class A-3 Noteholders and Class A-4
Noteholders,  based on the
outstanding principal amount of the related Classes of Notes, until such
Classes of Notes have been paid in full;


 


(iii)          to the
Certificate Distribution Account, together with any amounts deposited therein
pursuant to Section 7.06, the Certificate Principal Distributable Amount
with respect to such Distribution Date to the Certificateholders; and


 


(iv)          any remaining
amounts to the Trust Depositor as residual interestholder under the Trust
Agreement.


 


Notwithstanding that the Notes have been paid in full, the Indenture
Trustee shall continue to maintain the Collection Account hereunder until the
Pool Balance has been reduced to zero.


 


Section 7.06.        Reserve
Fund.


 


(a)           On or prior to
the Closing Date, the Indenture Trustee, on behalf of the Trust Depositor shall
deposit the Reserve Fund Initial Deposit into the Reserve Fund from the net
proceeds of the Notes.


 


(b)           The Indenture
Trustee shall determine no later than 10:00 a.m., Chicago, Illinois time,
on the Distribution Date (but after making, and taking into account, the
determination, demand and transfer of funds contemplated in Section 7.05
above) whether there exists a Shortfall with respect to the upcoming
Distribution Date.  In the event that the
Indenture Trustee determines that there exists a Shortfall, the Indenture
Trustee shall no later than 12:00 noon, Chicago, Illinois time, on such
Distribution Date remit monies from the Reserve Fund in the following order of
priority:  first, to the Note
Distribution Account the amount of such Shortfall relating to the Note Interest
Distributable Amount, second, to the Note Distribution Account, the amount of
such Shortfall relating to the Note Principal Distributable Amount and third,
to the Certificate Distribution Account, the amount of such Shortfall relating
to the Certificate Principal Distributable Amount.


 


(c)           The Indenture
Trustee shall at the written direction of the Servicer invest the funds in the
Reserve Fund in Qualified Eligible Investments. 
Funds in the Reserve Fund shall be invested in investments that are
payable on demand or mature on or before the Business Day prior to each
Distribution Date.  Once such funds are
invested, the Indenture Trustee shall not change the investment of such funds
prior to maturity.  Upon any such
investment, the Indenture Trustee shall, consistent with the definition of
Qualified Eligible Investment herein, make an appropriate notation of the
security interest in such Qualified Eligible Investment on the Indenture
Trustee’s records, by book entry or otherwise. 
All income and gain realized from any such investments as well as any
interest earned on Reserve Fund Deposits shall be deposited and retained in the
Reserve Fund (subject to Section 7.06(e)). 
Losses, if any, realized on amounts in the Reserve Fund invested
pursuant to this paragraph shall first be credited against undistributed
investment earnings on amounts in the Reserve Fund invested pursuant to this
paragraph, and shall thereafter be deemed to reduce the amount on deposit in
the Reserve Fund.  Neither the Trust
Depositor nor the Indenture Trustee shall be liable for the amount of any loss
incurred in respect of any 


 


35

















 


investment,
or lack of investment, of funds held in the Reserve Fund.  All income or loss on funds held in the
Reserve Fund shall be taxable to the Trust Depositor.


 


(d)           Any Excess
Amounts will be applied to the Specified Reserve Fund Balance.


 


(e)           On each
Distribution Date on which the amount on deposit in the Reserve Fund (after
giving effect to all deposits thereto and withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Fund Balance, the
Indenture Trustee shall release its lien on any remaining amounts to the Trust
Depositor.


 


Section 7.07.        Reserved.


 


Section 7.08.        Purchase
of Contracts for Breach of Representations and Warranties.


 


Upon a discovery by the Servicer, the Trust Depositor or the Trustees
of a breach of a representation or warranty of the Seller as set forth in Exhibit J hereto that materially adversely affects the
Trust’s interest in such Contract (without regard to the benefits of the
Reserve Fund), the party discovering the breach shall give prompt written
notice to the other parties; provided, that
the Trustees shall have no duty or obligation to inquire or to investigate the
breach by the Seller of any of such representations or warranties.  The Seller, as provided in the Transfer and
Sale Agreement and in accordance with this Section 7.08, shall reacquire a
Contract at its Purchase 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 the Trustees, the Servicer
or the Trust Depositor of any breach of a representation or warranty of the
Seller set forth in Article III of the Transfer and Sale Agreement that
materially and adversely affects such Contract or the Trust’s interest in such
Contract 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 the
Seller would otherwise be required to reacquire under the Transfer and Sale
Agreement, the Seller may, in lieu of reacquiring such Contract, deposit in the
Collection Account, not later than one Business Day prior to the first
Distribution Date after the last day of the calendar month in which the Seller
becomes aware of such inaccuracy, cash in an amount sufficient to cure any
deficiency or discrepancy; and provided further
that with respect to a breach of representation or warranty relating to the
Contracts in the aggregate and not to any particular Contract the Seller may
select Contracts (without adverse selection) to reacquire such that had such
Contracts not been included as part of the Trust Corpus 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 Section 5.09,
shall be deemed to be a breach materially and adversely affecting the Trust’s
interest in the Contract or in the related Contracts.  Notwithstanding any other provision of this
Agreement, the obligation of the Seller under the Transfer and Sale Agreement
and described in this Section 7.08 shall not terminate or be deemed
released by any party hereto upon a Service Transfer pursuant to Article VIII.  The reacquisition obligation described in
this Section 7.08 is in no way to be satisfied with monies in the Reserve
Fund.  The sole remedy of the Issuer, the
Trustees and the Noteholders against the Seller with respect to a breach of a
representation or warranty of the Seller shall be to require the Seller to
reacquire the related Contract pursuant to this Section 7.08.


 


Section 7.09.        Reassignment
of Reacquired Contracts.  Upon
receipt by the Indenture Trustee for deposit in the Collection Account of the
Purchase Price as described in Section 7.08, Section 7.10 or Section 7.11,
and upon receipt of a certificate of a Servicing Officer in the form attached
hereto as Exhibit G, the Indenture Trustee
shall release its lien on and the Trust shall assign to the Seller or the
Servicer, as applicable, all of the Trust’s right, title and interest in the
reacquired or purchased Contract without 


 


36

















 


recourse, representation or warranty, except as to the absence of
liens, charges or encumbrances created by or arising as a result of actions of
the Trustees.


 


Section 7.10.        Servicer’s
Purchase Option.  On written
notice to the Owner Trustee and Indenture Trustee at least 20 days prior to a
Distribution Date, and provided that the Pool Balance is then less than 10% of
the Pool Balance as of the Cutoff Date, the Servicer may (but is not required
to) purchase 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
outstanding Certificate Balance of all Certificates, the Reimbursement Amount
(if any) as well as accrued and unpaid Monthly Servicing Fees and the Indenture
Trustee Fee to the date of such purchase. 
Such price shall be deposited in the Collection Account not later than
one (1) Business Day before such Distribution Date, against the Owner
Trustee’s and Indenture Trustee’s release of the Contracts and the Contract
Files to the Servicer.


 


Section 7.11.        Purchase
of Contracts for Breach of Servicing Obligations.  Upon a discovery by the Servicer or the
Trustees of a breach of any of the covenants of the Servicer set forth in Section 5.02,
5.06 or 5.09 that materially adversely affects the Trust’s interest in a
Contract (without regard to the benefits of the Reserve Fund), the party
discovering the breach shall give prompt written notice to the other parties; provided, that the Trustees shall have no duty or obligation
to inquire or to investigate the breach by the Servicer of any of such
covenants.  The Servicer, in accordance
with this Section 7.11, shall purchase such Contract at its Purchase
Price, two Business Days prior to the first Distribution Date after the last
day of the calendar month in which the Servicer becomes aware, or receives
written notice from the Trustees of any breach described in the preceding
sentence which breach has not been cured; provided, however,
that with respect to a breach of any of the covenants of the Servicer set forth
in Section 5.02, 5.06 or 5.09 relating to the Contracts in the aggregate
and not to any particular Contract the Servicer may select Contracts (without
adverse selection) to purchase such that had such Contracts not been included
as part of the Trust Corpus there would have been no breach of such
covenant.  Notwithstanding any other
provision of this Agreement, the obligation of the Servicer described in this Section 7.11
shall not terminate or be deemed released by any party hereto upon a Service
Transfer pursuant to Article VIII. 
The purchase obligation described in this Section 7.11 is in no way
to be satisfied with monies in the Reserve Fund.  Upon Servicer’s payment of the Purchase Price
of the Contract, any Event of Termination pursuant to Section 8.01(b) arising
as a result of the Servicer’s breach of any of the covenants set forth in Section 5.02,
5.06 or 5.09 with respect to such Contract shall be deemed not to have
occurred.


 


ARTICLE EIGHT


 


EVENTS OF TERMINATION; SERVICE TRANSFER


 


Section 8.01.        Events
of Termination.  “Event of
Termination” means the occurrence of any of the following:


 


(a)           Any failure by
the Servicer to make any payment or deposit required to be made under the Notes
hereunder or in the Transfer and Sale Agreement and the continuance of such
failure for a period of four Business Days after the date on which a Servicing
Officer discovers such failure or the Indenture Trustee provides written notice
of such failure to the Servicer;


 


(b)           Failure on the
Servicer’s part to observe or perform in any material respect any covenant or
agreement in this Agreement or in the Transfer and Sale Agreement (other than a
covenant or 


 


37

















 


agreement,
the breach of which is specifically addressed elsewhere in this Section) which
failure shall (i) materially and adversely affect the rights of
Noteholders and (ii) continue unremedied for a period of 60 days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Servicer by the Owner Trustee
or the Indenture Trustee or (B) to the Servicer, and to the Indenture
Trustee by the Holders of Notes, evidencing not less than 25% of the
Outstanding Amount of the Notes;


 


(c)           An involuntary
case under any applicable bankruptcy, insolvency or other similar law shall
have been commenced in respect of the Servicer or Trust Depositor and shall not
have been dismissed within 90 days, or a court having jurisdiction in the
premises shall have entered a decree or order for relief in respect of either
the Servicer or Trust Depositor in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of either the Servicer or Trust Depositor, or for any
substantial liquidation or winding up of their respective affairs;


 


(d)           The Servicer or
Trust Depositor shall have commenced a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
shall have consented to the entry of an order for relief in an involuntary case
under any such law, or shall have consented to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian or
sequestrator (or other similar official) of the Servicer or Trust Depositor, as
the case may be, or for any substantial part of their respective property, or
shall have made any general assignment for the benefit of their respective
creditors, or shall have failed to, or admitted in writing its inability to,
pay its debts as they become due, or shall have taken any corporate action in
furtherance of the foregoing;


 


(e)           Any
representation, warranty or statement of the Servicer made in this Agreement or
any certificate, report or other writing delivered pursuant hereto shall prove
to be incorrect in any material respect as of the time when the same shall have
been made and the incorrectness of such representation, warranty or statement
has a material adverse effect on the Trust and, within 30 days after written
notice thereof shall have been given to the Servicer by the Indenture Trustee,
the circumstances or condition in respect of which such representation,
warranty or statement was incorrect shall not have been eliminated or otherwise
cured.


 


Section 8.02.        Waiver
of Event of Termination.  The
Required Holders may, by written notice delivered to the parties hereto, waive
any Event of Termination other than an Event of Termination described in Section 8.01(a).


 


Section 8.03.        Service
Transfer.  (a) 
If an Event of Termination has occurred and is continuing and has not been
waived pursuant to Section 8.02, (x) the Required Holders or (y) the
Indenture Trustee may, by written notice delivered to the parties hereto,
terminate all (but not less than all) of the Servicer’s management,
administrative, servicing, custodial and collection functions hereunder (such
termination being herein called a “Service Transfer”).


 


(b)           Upon receipt of
the notice required by Section 8.03(a) (or, if later, on a date
designated therein), all rights, benefits, fees, indemnities, authority and
power of the Servicer under this Agreement, whether with respect to the
Contracts, the Contract Files or otherwise, shall pass to and be vested in the
Indenture Trustee (the “Successor Servicer”)
pursuant to and under this Section 8.03; and, without limitation, the
Successor Servicer is authorized and empowered to execute and deliver on behalf
of the Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do any and all acts or things necessary or appropriate
to effect the purposes of such notice of termination.  The Servicer agrees to cooperate with the
Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, the transfer
to the 


 


38

















 


Successor
Servicer for administration by it of all cash amounts which shall at the time
be held by the Servicer for deposit, or have been deposited by the Servicer, in
the Collection Account, or for its own account in connection with its services
hereafter or thereafter received with respect to the Contracts.  The Servicer shall transfer to the Successor
Servicer all records held by the Servicer relating to the Contracts in such
electronic form as the Successor Servicer may reasonably request and (ii) any
Contract Files in the Servicer’s possession. 
In addition, the Servicer shall permit access to its premises (including
all computer records and programs) to the Successor Servicer or its designee, and
shall pay the reasonable transition expenses of the Successor Servicer.  Upon a Service Transfer, the Successor
Servicer shall also be entitled to receive the Monthly Servicing Fee for
performing the obligations of the Servicer.


 


Section 8.04.        Successor
Servicer to Act; Appointment of Successor Servicer.  On or after a Service Transfer pursuant to Section 8.03,
the Successor Servicer shall be the successor in all respects to the Servicer
in its capacity as servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and the terminated Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such Service Transfer; provided, however, that (i) the Successor Servicer will
not assume any obligations of the Servicer described in Section 8.08 and (ii) the
Successor Servicer shall not be liable for any acts or omissions of the
Servicer occurring prior to such Service Transfer or for any breach by the
Servicer of any of its representations and warranties contained herein or in
any related document or agreement. Notwithstanding the above, if the Successor
Servicer is legally unable or unwilling to act as Servicer, the Required
Holders may appoint a successor servicer (other than the original Servicer or
an Affiliate of the original Servicer) to act as Servicer.  As compensation therefor, the successor
servicer shall be entitled to receive reasonable compensation equal to the
Monthly Servicing Fee.  The Owner
Trustee, Noteholders and the Indenture Trustee and such successor shall take
such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession; provided,
however, that the Indenture Trustee shall not be required to make
payment for compensation or any other payment in order to effectuate such
succession.  To the extent the terminated
Servicer has made Advances, it shall be entitled to reimbursement of the same
notwithstanding its termination hereunder, to the same extent as if it had
continued to service the Contracts hereunder.


 


Section 8.05.        Notification
to Securityholders.  (a) 
Promptly following the occurrence of any Event of Termination, the Servicer
shall give written notice thereof to the Trustees, the Trust Depositor and each
Rating Agency at the addresses described in Section 11.04 hereof and to
the Noteholders and Certificateholders at their respective addresses appearing
on the Note Register and the Certificate Register.


 


(b)           Within 10 days
following any termination or appointment of a Successor Servicer pursuant to
this Article VIII, the Indenture Trustee shall give written notice thereof
to each Rating Agency and the Trust Depositor at the addresses described in Section 11.04
hereof, and to the Noteholders and Certificateholders at their addresses
appearing on the Note Register and Certificate Register.


 


Section 8.06.        Effect
of Transfer.  (a) 
After a Service Transfer, the terminated Servicer shall have no further
obligations with respect to the management, administration, servicing, custody
or collection of the Contracts and the Successor Servicer appointed pursuant to
Section 8.04 shall have all of such obligations, except that the
terminated Servicer will transmit or cause to be transmitted directly to the
Successor Servicer for its own account, promptly on receipt and in the same
form in which received, any amounts (properly endorsed where required for the
Successor Servicer to collect them) received as payments upon or otherwise in
connection with the Contracts.


 


39
















 


(b)           A Service Transfer shall not affect
the rights and duties of the parties hereunder (including but not limited to
the indemnities of the Servicer)  other
than those relating to the management, administration, servicing, custody or
collection of the Contracts.


 


Section 8.07.        Database File.  The Servicer will provide the Successor
Servicer with a magnetic tape (in a format reasonably acceptable to the
Indenture Trustee and the Servicer) containing the database file for each
Contract (i) as of the Cutoff Date, (ii) thereafter, as of the last
day of the preceding Due Period on each Determination Date prior to a Service
Transfer and (iii) on and as of the Business Day before the actual
commencement of servicing functions by the Successor Servicer following the
occurrence of a Service Transfer.


 


Section 8.08.        Successor Servicer Indemnification.  The Servicer shall defend, indemnify and hold
the Successor Servicer and any officers, directors, employees or agents of the
Successor Servicer harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments and any other
costs, fees, and expenses that the Successor Servicer may sustain in connection
with the claims asserted at any time by third parties against the Successor
Servicer which result from (i) any willful or grossly negligent act taken
or omission by the Servicer or (ii) a breach of any representations of the
Servicer in Section 3.02 hereof. 
The indemnification provided by this Section 8.08 shall survive the
termination of this Agreement.


 


Section 8.09.        Responsibilities of the Successor
Servicer.  The
Successor Servicer will not be responsible for delays attributable to the
Servicer’s failure to deliver information, defects in the information supplied
by the Servicer or other circumstances beyond the control of the Successor
Servicer.


 


The
Successor Servicer will make arrangements with the Servicer for the prompt and
safe transfer of, and the Servicer shall provide to the Successor Servicer, all
necessary servicing files and records, including (as deemed necessary by the
Successor Servicer at such time): (i) microfiche loan documentation, (ii) servicing
system tapes, (iii) Contract payment history, (iv) collections
history and (v) the trial balances, as of the close of business on the day
immediately preceding conversion to the Successor Servicer, reflecting all
applicable loan information.


 


The
Successor Servicer shall have no responsibility and shall not be in default
hereunder nor incur any liability for any failure, error, malfunction or any
delay in carrying out any of its duties under this Agreement if any such
failure or delay results from the Successor Servicer acting in accordance with
information prepared or supplied by a Person other than the Successor Servicer
or the failure of any such Person to prepare or provide such information.  The Successor Servicer shall have no
responsibility, shall not be in default and shall incur no liability (i) for
any act or failure to act by any third party, including the Servicer, the Trust
Depositor or the Trustees or for any inaccuracy or omission in a notice or
communication received by the Successor Servicer from any third party or (ii) which
is due to or results from the invalidity, unenforceability of any Contract with
applicable law or the breach or the inaccuracy of any representation or
warranty made with respect to any Contract.


 


Section 8.10.        Limitation of Liability of Servicer.  (a)  Neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer shall be under any
liability to the Trust, the Owner Trustee, the Indenture Trustee or the
Noteholders, except as provided under this Agreement, for any action taken or
for refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that
this provision shall not protect the Servicer or any such person against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement.  The Servicer and any director, officer,
employee or agent of the Servicer may rely in good 


 


40

















 


faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.


 


(b)           Except as provided in this Agreement,
the Servicer shall not be under any obligation to appear in, prosecute or
defend any legal action that shall not be incidental to its duties to service
the Contracts in accordance with this Agreement, and that in its opinion may
cause it to incur any expense or liability; provided, however,
that the Servicer may undertake any reasonable action that it may deem
necessary or desirable in respect of the Transaction  Documents and the rights and duties of the
parties to the Transaction Documents and the interests of the Noteholders under
the Indenture.  In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall
be expenses, costs and liabilities of the Servicer and the Servicer will not be
entitled to be reimbursed therefor.


 


Section 8.11.        Merger or Consolidation of Servicer.  Any Person into which the Servicer may be
merged or consolidated, or any corporation, or other entity resulting from any
merger conversion or consolidation to which the Servicer shall be a party, or
any Person succeeding to all or substantially all of the business of the
Servicer (which Person assumes the obligations of the Servicer), shall be the
successor of the Servicer 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. 
The Servicer shall give prior written notice of any such merger or
consolidation to which it is a party to the Issuer, the Owner Trustee, the
Indenture Trustee and the Rating Agencies.


 


Section 8.12.        Servicer Not to Resign.  Subject to the provisions of Section 8.03,
Servicer shall not resign from the obligations and duties hereby imposed on it
as Servicer under this Agreement except upon determination that the performance
of its duties under this Agreement shall no longer be permissible under
applicable law.  Notice of any such
determination permitting the resignation of Servicer shall be communicated to
the Owner Trustee and the Indenture Trustee at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing at
the earliest practicable time) and any such determination shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee shall have
assumed the responsibilities and rights of the predecessor Servicer in
accordance with Section 8.04.


 


Section 8.13.        Appointment of Subservicer.  So long as Harley-Davidson Credit Corp. acts
as the Servicer, the Servicer may at any time without notice or consent perform
specific duties as servicer under this Agreement through other subcontractors; provided, however, that, in each case, no such delegation or
subcontracting shall relieve the Servicer of its responsibilities with respect
to such duties as to which the Servicer shall remain primarily responsible with
respect thereto.


 


ARTICLE
NINE


 


REPORTS


 


Section 9.01.        Monthly Reports.  No later than 10:00 a.m., Chicago,
Illinois time, two Business Days prior to each Distribution Date, the Servicer
shall deliver to the Trustees and each Rating Agency a  Monthly
Report.


 


Section 9.02.        Officer’s Certificate.  Each Monthly Report delivered pursuant to Section 9.01
shall be accompanied by a certificate of a Servicing Officer substantially in
the form of Exhibit C, certifying the accuracy
of the Monthly Report and that no Event of Termination or event that with
notice 


 


41

















 


or lapse of time or both would become an Event of Termination has
occurred, or if such event has occurred and is continuing, specifying the event
and its status.


 


Section 9.03.        Other Data.  In addition, the Trust Depositor and the
Servicer shall, upon the request of the Trustees, Moody’s or Standard &
Poor’s, furnish the Trustees, Moody’s or Standard & Poor’s, as the
case may be, such underlying data as may be reasonably requested.


 


Section 9.04.        Report on Assessment of
Compliance with Servicing Criteria and Attestation; Annual Officer’s
Certificate.


 


(a)  The Servicer will:


 


(i)            deliver
to the Indenture Trustee and each Rating Agency within 90 days after the end of
each calendar year a report on its assessment of compliance with the servicing
criteria applicable to it during the preceding calendar year, including
disclosure of any material instance of non-compliance identified by the
Servicer, as required by Rule 13a-18 and 15d-18 of the Exchange Act and
Item 1122 of Regulation AB under the Securities Act;


 


(ii)           cause
a firm of registered public accountants that is qualified and independent
within the meaning of Rule 2-01 of Regulation S-X under the Securities Act
to deliver to the Indenture Trustee and each Rating Agency within 90 days after
the end of each calendar year an attestation report that satisfies the
requirements of Rule 13a-18 or Rule 15d-18 under the Exchange Act and
Item 1122 of Regulation AB, as applicable, on the Servicer’s assessment of
compliance with servicing criteria with respect to the prior calendar year; and


 


(iii)          deliver
to the Indenture Trustee and each Rating Agency within 90 days after the end of
each calendar year, an Officer’s Certificate to the effect that (i) a
review of the Servicer’s activities during the immediately preceding calendar
year (or, in the case of the first certificate, since the Closing Date) and of
its performance under this Agreement has been made under the supervision of the
officer signing such certificate and (ii) to the best of such officer’s
knowledge, based on such review, the Servicer has fulfilled in all material
respects all of its obligations under this Agreement throughout such calendar
year (or applicable portion of such calendar year), or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status of such failure.


 


(b)           If the Trust is not required to file
periodic reports under the Exchange Act, or otherwise required by law to file
the reports described in clause (a) above, such reports may be delivered
on or before April 30 of each calendar year.  A copy of such reports may be obtained by any
Noteholder by a request in writing to the Indenture Trustee.


 


Section 9.05.        Monthly Reports to Noteholders.  (a)  On or before two Business Days
prior to each Distribution Date, the Servicer shall prepare and, concurrently
with each distribution pursuant to Article VII, deliver to the Indenture
Trustee, in its capacity as Note Registrar and Paying Agent, to forward or
otherwise make available via internet to each Noteholder and deliver to each
Certificateholder that is not the Trust Depositor or an Affiliate thereof a
statement as of the related Distribution Date substantially in the form of Exhibit I hereto (the “Monthly
Report”) setting forth at least the following information:


 


(i)           the amount of Noteholder’s principal
distribution;


 


(ii)          the amount of Noteholder’s interest
distribution;


 


42

















 


(iii)         the Certificate Principal Distributable
Amount,


 


(iv)         the amount of fees payable out of the
Trust, separately identifying the Monthly Servicing Fee and the Indenture
Trustee Fee;


 


(v)          the amount of any Note Interest
Carryover Shortfall, Note Principal Carryover Shortfall and Certificate Principal
Carryover Shortfall on such Distribution Date and the change in such amounts
from those with respect to the immediately preceding Distribution Date;


 


(vi)         the Note Pool Factor for each Class of
Notes and the Certificate Pool Factor, in each case of such Distribution Date;


 


(vii)        the amount of the distributions
described in (i) or (ii) above payable pursuant to a claim on the
Reserve Fund or from any other source not constituting Available Monies and the
amount remaining in the Reserve Fund after giving effect to all deposits and
withdrawals from the Reserve Fund on such date;


 


(viii)       the remaining Principal Balance after
giving effect to the distribution of principal to each Class of Notes to
be made on such Distribution Date and the remaining Certificate Balance after
giving effect to the distribution of principal to each Certificate to be made
on such Distribution Date;


 


(ix)         the number and aggregate principal
balance of Contracts delinquent 30-59 days, 60-89 days and 90 or more days,
computed as of the end of the related Due Period;


 


(x)          the number and aggregate principal
balance of Contracts that became Liquidated Contracts during the immediately
preceding Due Period, the Net Liquidation Proceeds and the Net Liquidation
Losses for such Due Period;


 


(xi)         the Loss Ratio, Average Loss Ratio,
Cumulative Loss Ratio, the Delinquency Ratio and the Average Delinquency Ratio
as of such Distribution Date;


 


(xii)        the number of Contracts and the
aggregate Principal Balance of such Contracts, as of the first day of the Due
Period relating to such Distribution Date (after giving effect to payments
received during such Due Period);


 


(xiii)       the aggregate Principal Balance and
number of Contracts that were reacquired by the Seller pursuant to the
Agreement with respect to the related Due Period, identifying the Purchase
Price for such Contracts;


 


(xiv)       the aggregate Principal Balance and
number of Contracts that were purchased by the Servicer pursuant to the
Agreement with respect to the related Due Period, identifying the Purchase
Price for such Contracts;


 


43

















 


(xv)        the amount of Advances made by the
Servicer in respect of the related Contracts and the related Due Period and the
amount of unreimbursed Advances in respect of the related Contracts determined
by the Servicer to be Defaulted Contracts; and


 


(xvi)       such other customary factual information
as is available to the Servicer as the Servicer deems necessary and can
reasonably obtain from its existing data base to enable the Noteholders and the
Certificateholder to prepare their tax returns.


 


(b)           Within the prescribed period of time
for tax reporting purposes after the end of each calendar year, the Servicer
shall prepare and the Note Registrar shall mail to each Noteholder of record at
any time during such year a report as to the aggregate amounts reported
pursuant to subsections (i), (ii), (iv) and (v) of this Section,
attributable to such Noteholder.


 


(c)           The
Indenture Trustee shall send the
Monthly Report to (i) the initial Clearing Agency under the Note
Depository Agreement or any qualified successor appointed pursuant to Section 2.11
of the Indenture and (ii) each Securityholder or party to this Agreement.


 


Section 9.06.        Regulation
AB.


 


The
parties hereto acknowledge that interpretations of the requirements of
Regulation AB may change over time, whether due to interpretive guidance
provided by the Securities and Exchange Commission or its staff, consensus
among participants in the asset backed securities markets, advice of counsel,
or otherwise, and agree to comply with reasonable requests (which are practical
from a timing perspective) made by the Trust Depositor or the Servicer in good
faith for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB.  In
connection therewith, the Owner Trustee and the Indenture Trustee shall
reasonably cooperate with the Servicer in connection with the satisfaction of
the Trust Depositor’s and the Trust’s reporting requirements under the Exchange
Act, subject to reimbursement of expenses in accordance with the Transaction
Documents.


 


Section 9.07.        Information
to Be Provided by the Indenture Trustee.


 


(a)           As soon as available but no later
than March 15 of each calendar year for so long as the Issuer is required
to report under the Exchange Act, commencing in 2010, the Indenture Trustee
shall:


 


(i)            deliver
to the Servicer a report regarding the Indenture Trustee’s assessment of
compliance with the Servicing Criteria during the immediately preceding
calendar year, as required under paragraph (b) of Rule 13a-18, Rule 15d-18
of the Exchange Act and Item 1122 of Regulation AB. Such report shall be
signed by an authorized officer of the Indenture Trustee, and shall address
each of the Servicing Criteria specified in Exhibit E
or such criteria as mutually agreed upon by the Servicer and the Indenture
Trustee;


 


(ii)           deliver
to the Servicer a report of a registered public accounting firm that attests
to, and reports on, the assessment of compliance made by the Indenture Trustee
and delivered pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under the Securities Act and the Exchange Act; and


 


(iii)          deliver
to the Servicer and any other Person that will be responsible for signing the
certification required by Rules 13a-14(d) and 15d-14(d) under
the Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of
2002) (a “Sarbanes Certification”)
on behalf of the Issuer or the Servicer a certification substantially in the
form attached hereto as Exhibit F
in such form as mutually agreed upon by the Servicer and the Indenture Trustee.


 


44

















 


The Indenture Trustee acknowledges that the parties
identified in clause (iii) above may rely on the certification provided by
the Indenture Trustee pursuant to such clause in signing a Sarbanes
Certification and filing such with the Securities and Exchange Commission.


 


Section 9.08.        Exchange
Act Reporting.


 


(a)           Form 10-D Filings.  So long as the Issuer is required to report
under the Exchange Act, no later than each Distribution Date, each of the
Indenture Trustee and the Owner Trustee shall notify the Servicer of any Form 10-D
Disclosure Item with respect to such Person (to the extent there is any Form 10-D
Disclosure Item), together with a description of any such Form 10-D
Disclosure Item in form and substance reasonably acceptable to the Servicer.


 


(b)           Form 8-K Filings. 
So long as the Issuer is required to report under the Exchange Act, each
of the Indenture Trustee and the Owner Trustee shall promptly notify the
Servicer, but in no event later than one (1) Business Day after its
occurrence, of any Reportable Event of which such Person (or in the case of the
Owner Trustee and the Indenture Trustee, a Responsible Officer of such Person)
has actual knowledge.  Each Person shall
have actual knowledge of any such event only to the extent that it relates to
such Person or any action or failure to act by such Person.


 


(c)           Form 10-K Filings.  So long as the Issuer is required to report
under the Exchange Act, no later than March 15 of each year, commencing in
2009, the Indenture Trustee and the Owner Trustee shall notify the Servicer of
any Form 10-K Disclosure Item known to any Responsible Officer thereof or
relating to the Indenture Trustee or Owner Trustee, as applicable, together
with a description of any such Form 10-K Disclosure Item in form and
substance reasonably acceptable to the Servicer.


 


45

















 


ARTICLE TEN


TERMINATION


 


Section 10.01.      Sale of Trust Assets.


 


(a)           [Intentionally
Omitted].


 


(b)           As
described in Article Nine of the Trust Agreement, notice of any
termination of the Trust shall be given by the Servicer to the Owner Trustee
and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.


 


(c)           Following
the satisfaction and discharge of the Indenture and the payment in full of the
principal of and interest on the Notes, the Certificateholders will succeed to
the rights of the Noteholders hereunder and the Owner Trustee will succeed to
the rights of, and assume the obligations of, the Indenture Trustee pursuant to
this Agreement.


 


ARTICLE ELEVEN


 


MISCELLANEOUS


 


Section 11.01.      Amendment.


 


(a)           This Agreement may be amended by the Trust Depositor, the
Servicer, the Indenture Trustee and the Owner Trustee on behalf of the Issuer,
collectively, without the consent of any Securityholders, (i) to cure any
ambiguity, to correct or supplement any provisions in this Agreement which are
inconsistent with the provisions herein or in the Prospectus, or to add any
other provisions with respect to matters or questions arising under this
Agreement that shall not be inconsistent with the provisions of this Agreement
or the Prospectus, (ii) to add or provide any credit enhancement for any Class of
Notes and (iii) to change any provision applicable for determining the
Specified Reserve Fund Balance or the manner in which the Reserve Fund is
funded; provided, however that any such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Securityholder and provided, further, that in connection with any amendment pursuant to
clause (iii) above, the Servicer shall deliver to the Owner Trustee and
the Indenture Trustee a letter from Standard & Poor’s (so long as
Standard & Poor’s is a Rating Agency) and Moody’s (so long as Moody’s
is a Rating Agency) to the effect that such amendment will not cause its
then-current rating on any Class of Notes to be qualified, reduced or
withdrawn.


 


(b)           This
Agreement may also be amended from time to time by the Trust Depositor, the
Servicer, the Indenture Trustee and the Owner Trustee on behalf of the Issuer,
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 Noteholders or
the Certificateholders; provided, however,
that no such amendment shall increase or reduce in any manner the amount of, or
accelerate or delay the timing of (i)(a) collections of payments on the
Contracts or distributions that shall be required to be made on any Note or any
Interest Rate, (b) except as otherwise provided in Section 11.01(a),
the Specified Reserve Fund Balance or the manner in which the Reserve Fund is
funded or (ii) reduce the aforesaid percentage of the Outstanding Amount
of the Notes, the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all Notes of the relevant Class then
outstanding and, to the extent affected thereby, the Holders of the
Certificates.


 


46

















 


(c)           Prior
to the execution of any amendment or consent pursuant to this Section 11.01,
the Indenture Trustee shall furnish written notification of the substance of
such amendment or consent, together with a copy thereof, to each Rating Agency.


 


(d)           Promptly
after the execution of any such amendment or consent, the Owner Trustee and the
Indenture Trustee, as the case may be, shall furnish written notification of
the substance of such amendment or consent to each Noteholder and
Certificateholder.  It shall not be
necessary for the consent of Noteholders pursuant to Section 11.01(b) to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents and of
evidencing the authorization by Noteholders and/or Certificateholders of the
execution thereof shall be subject to such reasonable requirements as the Owner
Trustee or the Indenture Trustee may prescribe.


 


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


 


(f)            Notwithstanding anything to the
contrary in this Section 11.01, the Trust Depositor or the Servicer,
acting on behalf of the Trust Depositor, may request each Rating Agency to
approve a formula for determining the Specified Reserve Fund Balance that is
different from the formula or result determined from the current definition
thereof contained herein so as to result in a decrease in the amount of the
Specified Reserve Fund Balance or the manner by which such Reserve Fund is
funded.  If each Rating Agency delivers
to the Indenture Trustee and Owner Trustee a written notice or letter stating
that such action will not result in a reduction or withdrawal of the rating of
any outstanding Class with respect to which a Rating Agency has previously
issued a rating as a result or such action, then the Specified Reserve Fund
Balance will be theretofore determined in accordance with such changed formula
or manner of funding, and an amendment to this Agreement effecting such change
may be executed without the consent of any Securityholder.


 


Section 11.02.      Protection of Title to Trust.


 


(a)           The Servicer shall file such
financing statements and cause to be filed such continuation statements, all in
such manner and in such places as may be required by law fully to preserve,
maintain and protect the interest of the Issuer, the Securityholders and the
Indenture Trustee in the Contracts and in the proceeds thereof.  The Servicer shall deliver (or cause to be
delivered) to the Owner Trustee and the Indenture Trustee file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.  The
Trust Depositor authorizes the Trust to file financing statements describing
the Trust Corpus as collateral.


 


(b)           Neither the Seller, the Trust
Depositor nor the Servicer shall change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with Section 4.02 seriously
misleading within the meaning of § 9-507 of the UCC, unless it shall have given
the Issuer, the Owner Trustee and the Indenture Trustee at least 30 days’ prior
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.


 


(c)           The Seller and the Trust Depositor
shall give the Issuer, the Owner Trustee and the Indenture Trustee at least 30
days’ prior written notice of any change in its state of incorporation.  The 


 


47

















 


Servicer
shall at all times maintain each office from which it shall service Contracts,
and its principal executive office, within the United States.


 


(d)           The Servicer shall maintain or cause
to be maintained accounts and records as to each Contract accurately and in
sufficient detail to permit (i) the reader thereof to know at any time the
status of such Contract, including payments and recoveries made and payments
owing (and the nature of each) and (ii) reconciliation between payments or
recoveries on (or with respect to) each Contract and the amounts from time to
time deposited in or credited to the Collection Account in respect of each
Contract.


 


(e)           The Servicer shall maintain or cause
to be maintained its computer systems so that, from and after the time of
transfer under this Agreement of the Contracts, the Servicer’s master computer
records (including any backup archives) that shall refer to a Contract indicate
clearly the interest of the Issuer and the Indenture Trustee in such Contract
and that such Contract is owned by the Issuer and has been pledged to the
Indenture Trustee.  Indication of the
Issuer’s ownership of and the Indenture Trustee’s interest in a Contract shall
be deleted from or modified on the Servicer’s computer systems when, and only
when, the related Contract shall have been paid in full or reacquired or shall
have become a Liquidated Contract.


 


(f)            If
at any time the Trust Depositor or the Servicer shall propose to sell, grant a
security interest in, or otherwise transfer any interest in motorcycle
conditional sales contracts or promissory note and security agreements to any
prospective purchaser, lender or other transferee, the Servicer shall give or
cause to be given to such prospective purchaser, lender or other transferee
computer tapes, records or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Contract,
shall indicate clearly that such Contract has been transferred and is owned by
the Issuer and has been pledged to the Indenture Trustee.


 


(g)           The
Servicer shall permit the Owner Trustee and its agents, at any time during
normal business hours, to inspect, audit and make copies of and abstracts from
the Servicer’s records regarding any Contract.


 


(h)           Upon
request, the Servicer shall furnish to the Owner Trustee and the Indenture
Trustee, within five Business Days, a list of all Contracts then held as part
of the Trust Estate, together with a reconciliation of such list to the List of
Contracts and to each of the Monthly Reports furnished before such request
indicating removal of Contracts from the Trust.


 


(i)            The
Servicer shall deliver to the Owner Trustee, the Indenture Trustee and each
Rating Agency promptly after the execution and delivery of this Agreement and
of each amendment hereto, an Opinion of Counsel either (A) stating that,
in the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to preserve
and protect the interest of the Owner Trustee and the Indenture Trustee and
reciting the details of each filings or referring to prior Opinions of Counsel
in which such details are given, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interest.


 


Section 11.03.      Governing Law.  This Agreement shall be construed in
accordance with the laws of the State of Illinois and the obligations, rights,
and remedies of the parties under the Agreement shall be determined in
accordance with such laws.


 


Section 11.04.      Notices.  All notices, demands, certificates, requests
and communications hereunder (“notices”) shall be in writing and shall be
effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
Business Day after delivery to an 


 


48

















 


overnight courier, or (c) on the date personally delivered to an
Authorized Officer of the party to which sent, or (d) on the date
transmitted by legible telecopier or electronic mail transmission with a
confirmation of receipt, in all cases addressed to the recipient as follows:


 


	
   

  	
  (i)

  	
  If
  to the Servicer or Seller:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Harley-Davidson
  Credit Corp.

  
	
   

  	
   

  	
  222
  West Adams Street, Suite 2000

  
	
   

  	
   

  	
  Chicago,
  Illinois 60606

  
	
   

  	
   

  	
  Attention:
  Perry A. Glassgow

  
	
   

  	
   

  	
  Telecopier
  No.: (312) 368-4372

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  If
  to the Trust Depositor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Harley-Davidson
  Customer Funding Corp.

  
	
   

  	
   

  	
  3850
  Arrowhead Drive

  
	
   

  	
   

  	
  Carson
  City, Nevada 89706

  
	
   

  	
   

  	
  Attention:
  Perry A. Glassgow

  
	
   

  	
   

  	
  Telecopier
  No.: (775) 886-3490

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Harley-Davidson
  Credit Corp.

  
	
   

  	
   

  	
  222
  West Adams Street, Suite 2000

  
	
   

  	
   

  	
  Chicago,
  Illinois 60606

  
	
   

  	
   

  	
  Attention:
  Perry A. Glassgow

  
	
   

  	
   

  	
  Telecopier
  No.:   (312) 368-4372

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  If
  to the Indenture Trustee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Bank of New York Mellon Trust Company, N.A.

  
	
   

  	
   

  	
  2 North LaSalle Street

  
	
   

  	
   

  	
  Suite 1020

  
	
   

  	
   

  	
  Chicago, Illinois 60602

  
	
   

  	
   

  	
  Attention:
  Corporate Trust Administration

  
	
   

  	
   

  	
  Telecopier
  No.:   (312) 827-8562

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  If
  to the Owner Trustee:

  
	
   

  	
   

  	
  Wilmington
  Trust Company

  
	
   

  	
   

  	
  Rodney
  Square North

  
	
   

  	
   

  	
  1100
  North Market Street

  
	
   

  	
   

  	
  Wilmington,
  Delaware 19890-0001

  
	
   

  	
   

  	
  Attention:
  Corporate Trust Administration

  
	
   

  	
   

  	
  Telecopier
  No.: (302) 636-4140

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  If
  to Moody’s:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Moody’s
  Investors Service, Inc.

  
	
   

  	
   

  	
  7
  World Trade Center at 250 Greenwich Street

  
	
   

  	
   

  	
  New
  York, New York 10007

  
	
   

  	
   

  	
  Attention:
  ABS Monitoring Department

  
	
   

  	
   

  	
  Telecopier
  No.: (212) 298-7139

  
	
   

  	
   

  	
  Email:
  servicerreports@moodys.com

  



 


49

















 


	
   

  	
  (vi)

  	
  If
  to Standard & Poor’s:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Standard &
  Poor’s Ratings Services,

  
	
   

  	
   

  	
  a
  Standard & Poor’s Financial Services LLC business

  
	
   

  	
   

  	
  55
  Water Street / 41st Floor

  
	
   

  	
   

  	
  New
  York, NY 10041-0003

  
	
   

  	
   

  	
  Attention:
  ABS Surveillance Group

  
	
   

  	
   

  	
  Telecopier
  No. (212)-438-2657

  
	
   

  	
   

  	
  Email:
  servicer_reports@sandp.com

  
	
   

  	
   

  	
   

  
	
   

  	
  (vii)

  	
  If
  to the Underwriters:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  At
  the address set forth in the Underwriting Agreement

  



 


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


 


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


 


Section 11.06.      Assignment.  Notwithstanding anything to the contrary
contained herein, as provided in Sections 6.03 and 8.03, this Agreement may not
be assigned by the Trust Depositor or the Servicer without the prior written
consent of Securityholders aggregating not less than 66-2/3% of each Class.


 


Section 11.07.      Third Party Beneficiaries.  Except as otherwise specifically provided
herein, no other third party shall be deemed a third party beneficiary of this
Agreement, and specifically that the Obligors are not third party beneficiaries
of this Agreement.


 


Section 11.08.      Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
together constitute but one and the same instrument.


 


Section 11.09.      Headings.  The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.


 


Section 11.10.      No Bankruptcy Petition; Disclaimer and
Subordination.  (a) Each
of the Seller, the Indenture Trustee, the Servicer, the Owner Trustee and each
Holder (by acceptance of the applicable Securities) 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, it will not institute
against the Trust Depositor, or the Trust, or join any other Person in
instituting against the Trust Depositor or the Trust, any 


 


50

















 


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 11.10
will survive the termination of this Agreement.


 


(b)           The Trust acknowledges and agrees
that each Certificate represents a beneficial interest in the Trust and Trust Corpus
only and the Securities do not represent an interest in any assets (other than
the Trust Corpus) of the Trust Depositor (including by virtue of any deficiency
claim in respect of obligations not paid or otherwise satisfied from the Trust
Assets and proceeds thereof).  In
furtherance of and not in derogation of the foregoing, to the extent that the
Trust Depositor enters into other securitization transactions, the Trust
acknowledges and agrees that it shall have no right, title or interest in or to
any assets (or interests therein) other than the Trust Assets conveyed or
purported to be conveyed (whether by way of a sale, capital contribution or by
the granting of a Lien) by the Trust Depositor to any Person other than the
Trust (the “Other Assets”).


 


To
the extent that notwithstanding the agreements contained in this Section, the
Trust or any Securityholder, either (i) asserts an interest in or claim
to, or benefit from any Other Assets, whether asserted against or through the
Trust Depositor or any other Person owned by the Trust Depositor, or (ii) is
deemed to have any interest, claim or benefit in or from any Other Assets,
whether by operation of law, legal process, pursuant to applicable provisions
of Insolvency Laws or otherwise (including without limitation pursuant to Section 1111(b) of
the federal Bankruptcy Code, as amended) and whether deemed asserted against or
through the Trust Depositor or any other Person owned by the Trust Depositor,
then the Trust and each Securityholder by accepting a Note or Certificate
further acknowledges and agrees that any such interest, claim or benefit in or
from the Other Assets is and shall be expressly subordinated to the
indefeasible payment in full of all obligations and liabilities of the Trust
Depositor which, under the terms of the documents relating to the
securitization of the Other Assets, are entitled to be paid from, entitled to
the benefits of, or otherwise secured by such Other Assets (whether or not any
such entitlement or security interest is legally perfected or otherwise
entitled to a priority of distribution under applicable law, including
Insolvency Laws, and whether asserted against the Trust Depositor or any other
Person owned by the Trust Depositor) including, without limitation, the payment
of post-petition interest on such other obligations and liabilities.  This subordination agreement shall be deemed
a subordination agreement within the meaning of Section 510(a) of the
Bankruptcy Code.  Each Securityholder is
deemed to have acknowledged and agreed that no adequate remedy at law exists
for a breach of this Section 11.10 and that the terms and provisions of
this Section 11.10 may be enforced by an action for specific performance.


 


(c)           The provisions of this Section 11.10
shall be for the third party benefit of those entitled to rely thereon and
shall survive the termination of this Agreement.


 


Section 11.11.      Limitation of Liability of Owner Trustee
and Indenture Trustee.


 


(a)           Notwithstanding anything contained
herein to the contrary, this Agreement has been executed by Wilmington Trust
Company, not in its individual capacity but solely in its capacity as Owner
Trustee of the Issuer, and in no event shall Wilmington Trust Company in its
individual capacity or any beneficial owner of the Issuer have any liability
for  the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder, as to all
of which recourse shall be had solely to the assets of the Issuer.  For all purposes of this Agreement, in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles Six, Seven and Eight of the Trust Agreement.


 


(b)           Notwithstanding anything contained
herein to the contrary, this Agreement has been executed by The Bank of New
York Mellon Trust Company, N.A., not in its individual capacity but 


 


51

















 


solely
as Indenture Trustee, and in no event shall The Bank of New York Mellon Trust
Company, N.A. have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.


 


[signature page follows]


 


52

















 


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


 


	
   

  	
  HARLEY-DAVIDSON
  MOTORCYCLE TRUST 2009-1

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Wilmington
  Trust Company, not in its individual capacity but solely as Owner Trustee on
  behalf of the Trust

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  J. Christopher Murphy

  
	
   

  	
   

  	
   

  	
  Printed
  Name: J. Christopher Murphy

  
	
   

  	
   

  	
   

  	
  Title:
  Financial Services Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING CORP., as Trust Depositor

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Printed
  Name:  Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Title: Acting President, Vice President,

  Treasurer and Assistant Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON
  CREDIT CORP., as Servicer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Printed
  Name: Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Title:
  Acting President, Vice President,

  
	
   

  	
   

  	
   

  	
  Treasurer
  and Assistant Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK MELLON TRUST COMPANY, N.A., not in its individual capacity
  but solely as Indenture Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David H. Hill

  
	
   

  	
   

  	
   

  	
  Printed
  Name: David H. Hill

  
	
   

  	
   

  	
   

  	
  Title:
  Assistant Vice President

  



 


53
















 


Exhibit A


 


[Form of Assignment]


 


In
accordance with the Sale and Servicing Agreement (the “Sale and
Servicing Agreement”) dated as of May 1, 2009 made by and
between the undersigned, as Trust Depositor 
(“Trust Depositor”), Harley-Davidson
Credit Corp., as Servicer (“HDCC”), The Bank of New York Mellon Trust Company,
N.A., as Indenture Trustee and Harley-Davidson Motorcycle Trust 2009-1 (the “Trust”), as assignee thereunder, the undersigned does hereby
sell, transfer, convey and assign, set over and otherwise convey to the Trust (i) all
the right, title and interest of the Trust Depositor in and to the Contracts
listed on the List of Contracts delivered on the Closing Date (including,
without limitation, all security interests and all rights to receive payments
which are collected pursuant thereto after the 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 the Trust Depositor under any physical damage or other individual
insurance policy (and rights under a “forced placed”
policy, if any), any debt insurance policy or any debt cancellation agreement
relating to any such Contract, an Obligor or a Motorcycle securing such
Contract, (iii) all security interests in each such Motorcycle, (iv) all
documents contained in the related Contract Files, (v) all rights (but not
the obligations) of the Trust Depositor under any related motorcycle dealer
agreements between dealers (i.e., the originators of certain Contracts) and
HDCC, (vi) all rights of the Trust Depositor in the Lockbox, the Lockbox
Account and related Lockbox Agreement to the extent they relate to such
Contracts, (vii) all rights (but not the obligations) of the Trust
Depositor under the Transfer and Sale Agreement, including but not limited to
the Trust Depositor’s rights under Article V thereof, (viii) the
remittances, deposits and payments made into the Trust Accounts from time to
time and amounts in the Trust Accounts from time to time (and any investments
of such amounts), (ix) all rights of the Trust Depositor to certain
rebates of premiums and other amounts relating to insurance policies, debt
cancellation agreements, extended service contracts or other repair agreements
and other items financed under such Contracts, and (x) all proceeds and
products of the foregoing.


 


This
Assignment is made pursuant to and in reliance upon the representation and
warranties on the part of the undersigned contained in Article Three of
the Sale and Servicing 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.


 


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


 


	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  
	
   

  	
  Title:

  



 


A-1

















 


Exhibit B


 


[Form of Closing Certificate of Trust Depositor]


 


Harley-Davidson
Customer Funding Corp.


 


Officer’s Certificate


 


The
undersigned certifies that he is
[                      ]
of Harley-Davidson Customer Funding Corp., a Nevada corporation (the “Trust Depositor”), and that as such is duly authorized to
execute and deliver this certificate on behalf of the Trust Depositor in
connection with the Sale and Servicing Agreement (the “Agreement”)
dated as of May 1, 2009 (the “Effective Date”)
by and among the Trust Depositor, The Bank of New York Mellon Trust Company,
N.A. (the “Indenture Trustee”), as Indenture
Trustee,  Harley-Davidson Credit Corp. (“Harley-Davidson Credit”), as Servicer, and Harley-Davidson
Motorcycle Trust 2009-1 (“Issuer”) (all
capitalized terms used herein without definition have the respective meanings
set forth in the Agreement), and further certifies as follows:


 


(1)           Attached
hereto as Exhibit I is a true and correct
copy of the Articles of Incorporation of the Trust Depositor, together with all
amendments thereto as in effect on the date hereof.


 


(2)           There
has been no other amendment or other document filed affecting the Articles of
Incorporation of the Trust Depositor since May 12, 2000, and no such
amendment has been authorized by the Board of Directors or shareholders of the
Trust Depositor.


 


(3)           Attached
hereto as Exhibit II is a Certificate of the
Secretary of State of the State of Nevada dated as of a recent date stating
that the Trust Depositor is duly incorporated under the laws of the State of
Nevada and is in good standing.


 


(4)           Attached
hereto as Exhibit III is a true and correct
copy of the By-laws of the Trust Depositor, which are in full force and effect
on the date hereof.


 


(5)           Attached
hereto as Exhibit IV is a true and correct
copy of resolutions adopted pursuant to the unanimous written consent of the
Board of Directors of the Trust Depositor relating to the execution, delivery
and performance of the Agreement, the Transfer and Sale Agreement, the Trust
Agreement; the Administration Agreement and the Underwriting Agreement
(collectively, the “Program Agreements”).  Said resolutions have not been amended,
modified, annulled or revoked, and are on the date hereof in full force and
effect and are the only resolutions relating to these matters which have been
adopted by the Board of Directors.


 


(6)           No
event with respect to the Trust Depositor has occurred and is continuing which
would constitute an Event of Termination or an event that, with notice or the
passage of time or both, would become an Event of Termination under the
Agreement.  To the best of my knowledge
after reasonable investigation, there has been no material adverse change in
the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Trust Depositor, whether or not arising in the
ordinary course of business since the respective dates as of which information
is given in the Preliminary Prospectus (as defined in the Underwriting
Agreement) or the Prospectus and except as set forth therein.


 


B-1

















 


(7)           All
federal, state and local taxes of the Trust Depositor due and owing as of the
date hereof have been paid.


 


(8)           All
representations and warranties of the Trust Depositor contained in the Program
Agreements or any other related documents, or in any document, certificate or
financial or other statement delivered in connection therewith are true and
correct as of the date hereof.


 


(9)           There
is no action, investigation or proceeding pending or, to our knowledge,
threatened against the Trust Depositor before any court, administrative agency
or other tribunal (a) asserting the invalidity of the Program Agreements; (b) seeking
to prevent the consummation of any of the transactions contemplated by the
Program Agreements; or (c) which is likely materially and adversely to
affect the Trust Depositor’s performance of its obligations under, or the
validity or enforceability of, the Program Agreements.


 


(10)         No
consent, approval, authorization or order of, and no notice to or filing with,
any governmental agency or body or state or federal court is required to be
obtained by the Trust Depositor for the Trust Depositor’s consummation of the
transactions contemplated by the Program Agreements, except such as have been
obtained or made and such as may be required under the blue sky laws of any
jurisdiction in connection with the issuance and sale of the Certificate.


 


(11)         The
Trust Depositor is not a party to any agreements or instruments evidencing or
governing indebtedness for money borrowed or by which the Trust Depositor or
its property is bound (other than the Program Agreements).  Neither Harley-Davidson Credit’s transfer and
assignment of the Contract Assets to the Trust Depositor, the Trust Depositor’s
concurrent transfer and assignment of the Trust Corpus to the Trust, nor the
concurrent pledge of the Collateral by the Trust to the Indenture Trustee nor
the issuance and sale of the Certificate and the Notes, nor the execution and
delivery of the Program Agreements, nor the consummation of any other of the
transactions contemplated therein, will violate or conflict with any agreement
or instrument to which the Trust Depositor is a party or by which it is
otherwise bound.


 


(12)         In
connection with the transfer of Contracts and related collateral contemplated
in the Agreement, (a) the Trust Depositor has not made such transfer with
actual intent to hinder, delay or defraud any creditor of the Trust Depositor,
and (b) the Trust Depositor has not received less than a reasonably
equivalent value in exchange for such transfer, is not on the date thereof
insolvent (nor will become insolvent as a result thereof), is not engaged (or
about to engage) in a business or transaction for which it has unreasonably
small capital, and does not intend to incur or believe it will incur debts
beyond its ability to pay when matured.


 


(13)         Each
of the agreements and conditions of the Trust Depositor to be performed on or
before the Closing Date pursuant to the Program Agreements have been performed
in all material respects.


 


*    *    *   
*


 


B-2

















 


In Witness Whereof, I have affixed my
signature hereto this        day of
                          .


 


 


	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  
	
   

  	
  Title:

  



 

















 


Exhibit C


 


[Form of Closing Certificate of Servicer/Seller]


 


HARLEY-DAVIDSON
CREDIT CORP.


 


Officer’s Certificate


 


The
undersigned certifies that he is
[                          ]
of Harley-Davidson Credit Corp. (“Harley-Davidson Credit”),
and that as such is duly authorized to execute and deliver this certificate on
behalf of Harley-Davidson Credit, as Servicer, in connection with the Sale and
Servicing Agreement (the  “Sale and Servicing Agreement”) dated as of May 1, 2009
(the “Effective Date”) by and among
Harley-Davidson Credit, as Servicer, Harley-Davidson Customer Funding Corp. (“CFC”), The Bank of New York Mellon Trust Company, N.A., as
Indenture Trustee and Harley-Davidson Motorcycle Trust 2009-1 (“Issuer”), in connection with the Transfer and Sale Agreement
dated as of the Effective Date (the “Transfer and Sale
Agreement”) by and between Harley-Davidson Credit and CFC (all
capitalized terms used herein without definition having the respective meanings
set forth in the Sale and Servicing Agreement), and further certifies as follows:


 


(1)           Attached
hereto as Exhibit I is a true and correct
copy of the Articles of Incorporation of Harley-Davidson Credit, together with
all amendments thereto as in effect on the date hereof.


 


(2)           There
has been no other amendment or other document filed affecting the Articles of
Incorporation of Harley-Davidson Credit since August 9, 1999, and no such
amendment has been authorized by the Board of Directors or shareholders of
Harley-Davidson Credit.


 


(3)           Attached
hereto as Exhibit II is a Certificate of the
Secretary of State of the State of Nevada dated as of a recent date, stating
that Harley-Davidson Credit is duly incorporated under the laws of the State of
Nevada and is in good standing.


 


(4)           Attached
hereto as Exhibit III is a true and correct
copy of the By-laws of Harley-Davidson Credit which were in full force and
effect as of August 1999 and at all times subsequent thereto.


 


(5)           Attached
hereto as Exhibit IV is a true and correct
copy of resolutions adopted pursuant to a unanimous written consent of the
Board of Directors of Harley-Davidson Credit and relating to the authorization,
execution, delivery and performance of the Transfer and Sale Agreement, the
Sale and Servicing Agreement, the Underwriting Agreement and the Administration
Agreement.  Said resolutions have not
been amended, modified, annulled or revoked, and are on the date hereof in full
force and effect and are the only resolutions relating to these matters which
have been adopted by the Board of Directors.


 


(6)           No
event with respect to Harley-Davidson Credit has occurred and is continuing
which would constitute an Event of Termination or an event that, with notice or
the passage of time, would constitute an Event of Termination under the Sale
and Servicing Agreement.  To the best of
my knowledge after reasonable investigation, there has been no material adverse
change in the condition, financial or otherwise, or the earnings, business
affairs or business prospects of Harley-Davidson Credit, whether or not arising
in the ordinary course of business, since the 


 


C-1

















 


respective dates as of which information is given in the Preliminary
Prospectus (as defined in the Underwriting Agreement) or the Prospectus and
except as set forth therein.


 


(7)           All
federal, state and local taxes of Harley-Davidson Credit due and owing as of
the date hereof have been paid.


 


(8)           All
representations and warranties of Harley-Davidson Credit contained in the
Transfer and Sale Agreement, the Sale and Servicing Agreement, the Underwriting
Agreement and the Administration Agreement (collectively, the “Program Agreements”) or in any
document, certificate or financial or other statement delivered in connection
therewith are true and correct as of the date hereof.


 


(9)           There
is no action, investigation or proceeding pending or, to my knowledge,
threatened against Harley-Davidson Credit before any court, administrative
agency or other tribunal (a) asserting the invalidity of any Program
Agreement to which Harley-Davidson Credit is a party; or (b) which is
likely materially and adversely to affect Harley-Davidson Credit’s performance
of its obligations under, or the validity or enforceability of, the Program
Agreements.


 


(10)         No
consent, approval, authorization or order of, and no notice to or filing with,
any governmental agency or body or state or federal court is required to be
obtained by Harley-Davidson Credit for Harley-Davidson Credit’s consummation of
the transactions contemplated by the Program Agreements, except such as have
been obtained or made and such as may be required under the blue sky laws of
any jurisdiction in connection with the issuance and sale of the Notes or the
Certificate.


 


(11)         Schedule A hereto contains a complete list of all
material agreements (other than the Transfer and Sale Agreement) or instruments
evidencing or governing indebtedness for money borrowed to which
Harley-Davidson Credit is a party or by which Harley-Davidson Credit or its
property is bound.  Neither
Harley-Davidson Credit’s transfer and assignment of the Contract Assets to CFC,
CFC’s concurrent transfer and assignment of the Trust Corpus to the Trust, nor
the concurrent pledge by the Trust of the Collateral to the Indenture Trustee,
nor the issuance and sale of the Notes or the Certificate or the entering into
of the Program Agreements, nor the consummation of any other of the
transactions contemplated therein, will violate or conflict with any agreement
or instrument to which Harley-Davidson Credit is a party or by which it is otherwise
bound.


 


(12)         In
connection with the transfers of Contracts and related assets contemplated in
the Transfer and Sale Agreement, (a) Harley-Davidson Credit has not made
such transfer with actual intent to hinder, delay or defraud any creditor of
Harley-Davidson Credit, and (b) Harley-Davidson Credit has not received
less than a reasonably equivalent value in exchange for such transfer, is not
on the date hereof insolvent (nor will Harley-Davidson Credit become insolvent
as a result thereof), is not engaged (or about to engage) in a business or
transaction for which it has unreasonably small capital, and does not intend to
incur or believe it will incur debts beyond its ability to pay when matured.


 


(13)         The
sole shareholder of Harley-Davidson Credit is Harley-Davidson Financial
Services, Inc., a Delaware corporation, which has its chief executive
office and only office in Chicago, Illinois, and has no other offices in any
other state.


 


C-2

















 


(14)         Each
of the agreements and conditions of Harley-Davidson Credit to be performed or
satisfied on or before the Closing Date under the Program Agreements has been
performed or satisfied in all material respects.


 


(15)         Each
Contract being transferred pursuant to the Transfer and Sale Agreement is
evidenced by a written agreement providing for a repayment obligation as well
as a security interest in the related Motorcycle securing such obligation, and
conforms as to these matters in all material respects with the form of written
Contract provided as Exhibit A
hereto (with such minor variations as to specific terms as may be required or
deemed desirable in respect of the laws or requirements of particular states).


 


(16)         Harley-Davidson
Credit has not authorized the filing of any UCC financing statements listing
the Contract Assets as collateral other than financing statements relating to
the transactions contemplated in the Transfer and Sale Agreement and in the
agreements listed on Schedule A
hereto.


 


*   *   *  
*   *   *


 


C-3

















 


In Witness Whereof, I have affixed my
signature hereto this        day of
                      .


 


 


	
   

  	
  By:

  	
   

  
	
   

  	
  Printed
  Name:

  
	
   

  	
  Title:

  



 

















 


Exhibit D


 


[RESERVED]


 


D-1

















 


Exhibit E


 


SERVICING CRITERIA TO BE ADDRESSED IN


INDENTURE TRUSTEE’S ASSESSMENT OF COMPLIANCE


 


The
assessment of compliance to be delivered by the Indenture Trustee shall
address, at a minimum, the criteria identified as below as “Applicable
Servicing Criteria” (1):


 


Servicing Criteria


 


	
  Reference

  	
   

  	
  Criteria

  	
   

  	
  Applicable

  Servicing

  Criteria

  
	
   

  	
   

  	
  General Servicing Considerations

  	
   

  	
   

  
	
  1122(d)(1)(i)

  	
   

  	
  Policies
  and procedures are instituted to monitor any performance or other triggers
  and events of default in accordance with the transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(1)(ii)

  	
   

  	
  If
  any material servicing activities are outsourced to third parties, policies
  and procedures are instituted to monitor the third party’s performance and
  compliance with such servicing activities.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(1)(iii)

  	
   

  	
  Any
  requirements in the transaction agreements to maintain a back-up servicer for
  the pool assets are maintained.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(1)(iv)

  	
   

  	
  A
  fidelity bond and errors and omissions policy is in effect on the party participating
  in the servicing function throughout the reporting period in the amount of
  coverage required by and otherwise in accordance with the terms of the
  transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cash Collection and Administration

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(i)

  	
   

  	
  Payments
  on pool assets are deposited into the appropriate custodial bank accounts and
  related bank clearing accounts no more than two business days following
  receipt, or such other number of days specified in the transaction
  agreements.

  	
   

  	
  x

  	
  (2)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(ii)

  	
   

  	
  Disbursements
  made via wire transfer on behalf of an obligor or to an investor are made
  only by authorized personnel.

  	
   

  	
  x

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(iii)

  	
   

  	
  Advances
  of funds or guarantees regarding collections, cash flows or distributions,
  and any interest or other fees charged for such advances, are made, reviewed
  and approved as specified in the transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(iv)

  	
   

  	
  The
  related accounts for the transaction, such as cash reserve accounts or
  accounts established as a form of overcollateralization, are separately
  maintained (e.g., with respect to commingling of cash) as set forth in the
  transaction agreements.

  	
   

  	
  x

  	
   

  



 






	
  (1)

  	
  Each
  Assessment of compliance delivered by the Indenture Trustee shall be made 

  



 


E-1

















 


	
   

  	
  only
  toward such portion(s) of servicing criteria applicable to the Indenture
  Trustee and not such other portion(s) applicable to other persons.

  
	
  (2)

  	
  Solely
  with regard to deposits made by the Indenture Trustee.

  



 


E-2

















 


Servicing Criteria


 


	
   

  	
   

  	
   

  	
   

  	
  Applicable

  Servicing

  Criteria

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(v)

  	
   

  	
  Each custodial account is maintained at a federally
  insured depository institution as set forth in the transaction agreements.
  For purposes of this criterion, “federally insured depository institution”
  with respect to a foreign financial institution means a foreign financial
  institution that meets the requirements of Rule 13k-1(b)(1) of the
  Securities Exchange Act.

  	
   

  	
  x

  	
  (3)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(vi)

  	
   

  	
  Unissued checks are safeguarded so as to prevent
  unauthorized access.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(vii)

  	
   

  	
  Reconciliations
  are prepared on a monthly basis for all asset-backed securities related bank
  accounts, including custodial accounts and related bank clearing accounts.
  These reconciliations are (A) mathematically accurate; (B) prepared
  within 30 calendar days after the bank statement cutoff date, or such other
  number of days specified in the transaction agreements; (C) reviewed and
  approved by someone other than the person who prepared the reconciliation;
  and (D) contain explanations for reconciling items. These reconciling
  items are resolved within 90 calendar days of their original identification,
  or such other number of days specified in the transaction agreements.

  	
   

  	
   

  



 


	
  Reference

  	
   

  	
  Criteria

  	
   

  	
   

  
	
   

  	
   

  	
  Investor
  Remittances and Reporting

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(3)(i)

  	
   

  	
  Reports
  to investors, including those to be filed with the Commission, are maintained
  in accordance with the transaction agreements and applicable Commission
  requirements. Specifically, such reports (A) are prepared in accordance
  with timeframes and other terms set forth in the transaction agreements;
  (B) provide information calculated in accordance with the terms
  specified in the transaction agreements; (C) are filed with the
  Commission as required by its rules and regulations; and (D) agree
  with investors’ or the trustee’s records as to the total unpaid principal
  balance and number of pool assets serviced by the Servicer.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(3)(ii)

  	
   

  	
  Amounts
  due to investors are allocated and remitted in accordance with timeframes,
  distribution priority and other terms set forth in the transaction
  agreements.

  	
   

  	
  x

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(3)(iii)

  	
   

  	
  Disbursements
  made to an investor are posted within two business days to the Servicer’s
  investor records, or such other number of days specified in the transaction
  agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(3)(iv)

  	
   

  	
  Amounts
  remitted to investors per the investor reports agree with cancelled checks,
  or other form of payment, or custodial bank statements.

  	
   

  	
  x

  	
   

  



 






	
  (3)

  	
  Assessment
  to be given by Indenture Trustee shall be only with respect to trust accounts
  maintained by the Indenture Trustee under the Sale and Servicing Agreement

  



 


E-3

















 


	
   

  	
   

  	
  Pool Asset Administration

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(i)

  	
   

  	
  Collateral
  or security on pool assets is maintained as required by the transaction
  agreements or related asset pool documents.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(ii)

  	
   

  	
  Pool
  assets and related documents are safeguarded as required by the transaction
  agreements

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(iii)

  	
   

  	
  Any
  additions, removals or substitutions to the asset pool are made, reviewed and
  approved in accordance with any conditions or requirements in the transaction
  agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(iv)

  	
   

  	
  Payments
  on pool assets, including any payoffs, made in accordance with the related
  pool asset documents are posted to the Servicer’s obligor records maintained
  no more than two business days after receipt, or such other number of days
  specified in the transaction agreements, and allocated to principal, interest
  or other items (e.g., escrow) in accordance with the related asset pool
  documents.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(v)

  	
   

  	
  The
  Servicer’s records regarding the accounts and the accounts agree with the
  Servicer’s records with respect to an obligor’s unpaid principal balance.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(vi)

  	
   

  	
  Changes
  with respect to the terms or status of an obligor’s account (e.g., loan
  modifications or re-agings) are made, reviewed and approved by authorized
  personnel in accordance with the transaction agreements and related pool
  asset documents.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(vii)

  	
   

  	
  Loss
  mitigation or recovery actions (e.g., forbearance plans, modifications and
  deeds in lieu of foreclosure, foreclosures and repossessions, as applicable)
  are initiated, conducted and concluded in accordance with the timeframes or
  other requirements established by the transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(viii)

  	
   

  	
  Records
  documenting collection efforts are maintained during the period a pool asset
  is delinquent in accordance with the transaction agreements. Such records are
  maintained on at least a monthly basis, or such other period specified in the
  transaction agreements, and describe the entity’s activities in monitoring
  delinquent pool assets including, for example, phone calls, letters and
  payment rescheduling plans in cases where delinquency is deemed temporary
  (e.g., illness or unemployment).

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(ix)

  	
   

  	
  Adjustments
  to interest rates or rates of return for pool assets with variable rates are
  computed based on the related pool asset documents.

  	
   

  	
   

  



 


	
  Reference

  	
   

  	
  Criteria

  	
   

  	
   

  
	
  1122(d)(4)(x)

  	
   

  	
  Regarding
  any funds held in trust for an obligor (such as escrow accounts):
  (A) such funds are analyzed, in accordance with the obligor’s Account
  documents, on at least an annual basis, or such other period specified in the
  transaction agreements; (B) interest on such funds is paid, or credited,
  to obligors in accordance with applicable Account documents and state laws;

  	
   

  	
   

  



 


E-4

















 


	
   

  	
   

  	
  and
  (C) such funds are returned to the obligor within 30 calendar days of
  full repayment of the related Accounts, or such other number of days
  specified in the transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xi)

  	
   

  	
  Payments
  made on behalf of an obligor (such as tax or insurance payments) are made on
  or before the related penalty or expiration dates, as indicated on the
  appropriate bills or notices for such payments, provided that such support
  has been received by the servicer at least 30 calendar days prior to these
  dates, or such other number of days specified in the transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xii)

  	
   

  	
  Any
  late payment penalties in connection with any payment to be made on behalf of
  an obligor are paid from the servicer’s funds and not charged to the obligor,
  unless the late payment was due to the obligor’s error or omission.

  	
   

  	
   

  



 


Servicing Criteria


 


	
   

  	
   

  	
   

  	
   

  	
  Applicable

  Servicing

  Criteria

  
	
  1122(d)(4)(xiii)

  	
   

  	
  Disbursements
  made on behalf of an obligor are posted within two business days to the
  obligor’s records maintained by the servicer, or such other number of days
  specified in the transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xiv)

  	
   

  	
  Delinquencies,
  charge-offs and uncollectible accounts are recognized and recorded in
  accordance with the transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xv)

  	
   

  	
  Any
  external enhancement or other support, identified in Item
  1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained
  as set forth in the transaction agreements.

  	
   

  	
   

  



 


E-5
















 


Exhibit F


 


FORM OF
ANNUAL CERTIFICATION OF THE INDENTURE TRUSTEE


 


	
  Dated:

  	
   

  



 


The Bank of New York Mellon
Trust Company, N.A., not in its individual capacity but solely as indenture
trustee (the “Indenture Trustee”), certifies to Harley-Davidson Credit Corp.
(the “Servicer”), its officers and Harley-Davidson Motorcycle Trust 2009-1 (the
“Issuer”), with the knowledge and intent that they will rely upon this
certification, that:


 


(1)   It has reviewed the report on assessment of
the Indenture Trustee’s compliance provided in accordance with Rules 13a-18
and 15d-18 under the Securities Exchange Act of 1934, as amended (the “Securities
Exchange Act”) and Item 1122 of Regulation AB under the Securities Act of 1933,
as amended, and the Securities Exchange Act (the “Servicing Assessment”), that
were delivered by the Indenture Trustee to the Seller pursuant to the Sale and
Servicing Agreement dated as of May 1, 2009, among Harley-Davidson
Customer Funding Corp., the Servicer, the Indenture Trustee and the Issuer
(collectively, the “Indenture Trustee Information”);


 


(2)   To the best of its knowledge, the Indenture
Trustee Information, taken as a whole, does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under which such statements were made,
not misleading with respect to the period of time covered by the Indenture
Trustee Information (in making such statement, the Indenture Trustee makes no
representation or warranty as to any information prepared or provided to it by
a third person and upon which it relied in preparing our information); and


 


(3)   To the best of its knowledge, all of the
Indenture Trustee Information required to be provided by the Indenture Trustee
under the Indenture has been provided to the Servicer.


 


	
   

  	
  THE
  BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


F-1

















 


Exhibit G


 


[Form of Certificate Regarding Reacquired Contracts]


 


Harley-Davidson Credit Corp.


 


Certificate Regarding Reacquired Contracts


 


The
undersigned certifies that he is the
[                ]
of Harley-Davidson Credit Corp., a Nevada corporation (the  “Servicer”), and that as such is duly authorized to execute
and deliver this certificate on behalf of the Servicer pursuant to Section 7.08
of the Sale and Servicing Agreement (the “Agreement”)
dated as of May 1, 2009 by and among Harley-Davidson Customer Funding
Corp., as Trust Depositor, the Servicer, The Bank of New York Mellon Trust
Company, N.A., as Indenture Trustee, and Harley-Davidson Motorcycle Trust
2009-1 (all capitalized terms used herein without definition having the
respective meanings specified in the Agreement), and further certifies that:


 


1.                                       The Contracts on the
attached schedule are to be reacquired by the [Seller/Servicer] on the date
hereof pursuant to [Section 7.08 of the Agreement and Section 5.01 of
the Transfer and Sale Agreement/Section 7.10 of the Agreement/Section 7.11
of the Agreement.]


 


2.                                       Upon deposit of the Purchase
Price for such Contracts, such Contracts may, pursuant to Section 7.09 of
the Agreement, be assigned by the Trustee to the Seller[/Servicer].


 


IN
WITNESS WHEREOF, I have affixed hereunto my signature this
             day of
                          .


 


	
   

  	
  Harley-Davidson
  Credit Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Printed
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


G-1

















 


Exhibit H


 


[List of Contracts]


 


H-1

















 


Exhibit I


 


[Form of Monthly Report to Noteholders and Certificateholders]


 


[see attached]


 


J-1

















 


Exhibit J


 


[Seller’s Representations and Warranties]


 


(1)           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.


 


J-1

















 


(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)           Buell. 
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.


 


(2)           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 regular course of its
business.  Each Contract was sold by
Eaglemark Savings Bank or such 


 


J-2

















 


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.


 


(1)           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.


 


(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, 


 


J-3

















 


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


 


(3)           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:


 


J-4

















 


(a)           Amounts.  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 Corpus, 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 the Transfer and Sale Agreement and this 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 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.


 


(4)           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:


 


(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 the Transfer and Sale Agreement and by Trust 


 


J-5

















 


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.


 


J-6

















 


Exhibit K


 


[Lockbox Bank and Lockbox Account]


 


Lockbox


 


Harley-Davidson
Credit Corp.


8529
Innovation Way


Chicago,
Illinois 60682-0085


 


Lockbox Bank


 


Bank
of America, N.A.


135
South LaSalle Street


Chicago,
Illinois 60674


 


K-1

















 


Exhibit L


 


RESERVED


 


L-1