EXHIBIT
10.13


 












 


TRANSFER AND SALE AGREEMENT


 


by and between


 


HARLEY-DAVIDSON CREDIT CORP.,


as  Seller


 


and


 


HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,


 


as Purchaser


 


Dated as of April
1, 2002


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE
  I  DEFINITION

  
	
   

  
	
   

  	
  SECTION
  1.01.

  	
  GENERAL.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II  TRANSFER OF CONTRACTS; ASSIGNMENT OF
  AGREEMENT

  
	
   

  
	
   

  	
  SECTION
  2.01.

  	
  CLOSING.

  
	
   

  	
  SECTION
  2.02.

  	
  CONDITIONS TO THE CLOSING.

  
	
   

  	
  SECTION
  2.03.

  	
  ASSIGNMENT OF AGREEMENT.

  
	
   

  	
  SECTION
  2.04.

  	
  SUBSEQUENT CONTRACTS.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III  REPRESENTATIONS
  AND WARRANTIES

  
	
   

  
	
   

  	
  SECTION
  3.01.

  	
  REPRESENTATIONS
  AND WARRANTIES REGARDING SELLER.

  
	
   

  	
  SECTION
  3.02.

  	
  REPRESENTATIONS
  AND WARRANTIES REGARDING EACH CONTRACT.

  
	
   

  	
  SECTION
  3.03.

  	
  REPRESENTATIONS
  AND WARRANTIES REGARDING THE CONTRACTS IN THE AGGREGATE.

  
	
   

  	
  SECTION
  3.04.

  	
  REPRESENTATIONS
  AND WARRANTIES REGARDING THE CONTRACT FILES.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV  PERFECTION
  OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

  
	
   

  
	
   

  	
  SECTION
  4.01.

  	
  CUSTODY OF CONTRACTS.

  
	
   

  	
  SECTION
  4.02.

  	
  FILING.

  
	
   

  	
  SECTION
  4.03.

  	
  NAME CHANGE OR RELOCATION.

  
	
   

  	
  SECTION
  4.04.

  	
  COSTS AND EXPENSES

  
	
   

  	
  SECTION
  4.05

  	
  SALE TREATMENT

  
	
   

  	
  SECTION
  4.06

  	
  SEPARATENESS FROM
  TRUST DEPOSITOR

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V  REMEDIES UPON MISREPRESENTATION

  
	
   

  
	
   

  	
  SECTION
  5.01.

  	
  REPURCHASES
  OF CONTRACTS FOR BREACH OF REPRESENTATIONS AND WARRANTIES.

  
	
   

  	
  SECTION
  5.02.

  	
  SELLER’S REPURCHASE OPTION.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI  INDEMNITIES

  
	
   

  
	
   

  	
  SECTION
  6.01.

  	
  SELLER INDEMNIFICATION.

  
	
   

  	
  SECTION
  6.02.

  	
  LIABILITIES TO OBLIGORS.

  
	
   

  	
  SECTION
  6.03.

  	
  TAX INDEMNIFICATION

  
	
   

  	
  SECTION
  6.04.

  	
  OPERATION OF INDEMNITIES.

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII  MISCELLANEOUS

  
	
   

  
	
   

  	
  SECTION
  7.01.

  	
  PROHIBITED
  TRANSACTIONS WITH RESPECT TO THE TRUST

  
	
   

  	
  SECTION
  7.02.

  	
  MERGER OR CONSOLIDATION.

  
	
   

  	
  SECTION
  7.03.

  	
  TERMINATION.

  
	
   

  	
  SECTION
  7.04.

  	
  ASSIGNMENT OR
  DELEGATION BY SELLER.

  
	
   

  	
  SECTION
  7.05.

  	
  AMENDMENT.

  
	
   

  	
  SECTION
  7.06.

  	
  NOTICES.

  
	
   

  	
  SECTION 7.07.

  	
  MERGER AND INTEGRATION.

  
	
   

  	
  SECTION
  7.08.

  	
  HEADINGS.

  
	
   

  	
  SECTION
  7.09.

  	
  GOVERNING LAW.

  



 


i

















 


EXHIBITS


 


	
  Exhibit A

  	
   

  	
  Form of
  Assignment

  
	
  Exhibit B

  	
   

  	
  Form of Officer’s
  Certificate

  
	
  Exhibit C

  	
   

  	
  Form of
  Subsequent Purchase Agreement

  



 


 


ii

















 


THIS AGREEMENT, dated as of April 1, 2002,
is made by and between Harley-Davidson Credit Corp., a Nevada corporation, as
seller hereunder (together with its successors and assigns “Harley-Davidson Credit” or “Seller”),
and Harley-Davidson Customer Funding Corp., a Nevada corporation and
wholly-owned subsidiary of Seller (together with its successors and assigns “Trust
Depositor”), as purchaser hereunder.


 


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


 


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


 


WHEREAS, Trust Depositor intends
concurrently with its purchases from time to time of Contract Assets hereunder
to convey all right, title and interest in such Contract Assets to
Harley-Davidson Motorcycle Trust 2002-1 (the “Trust”) pursuant to the Sale
and Servicing Agreement dated as of April 1, 2002 by and among Trust Depositor,
Harley-Davidson Credit, as Servicer, Harley-Davidson Motorcycle Trust 2002-1,
as issuer (the “Issuer”) and BNY Midwest Trust Company, as Indenture
Trustee (as amended, supplemented or otherwise modified from time to time, the
“Sale and
Servicing Agreement”), executed concurrently herewith;


 


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


 


ARTICLE I


 


DEFINITIONS


 


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


 


ARTICLE II


 


TRANSFER OF CONTRACTS;
ASSIGNMENT OF AGREEMENT


 


Section
2.01.   Closing.    
 Subject to and
upon the terms and conditions set forth in this Agreement, Seller hereby sells,
transfers, assigns, sets over and otherwise conveys to Trust Depositor, in consideration
of Trust Depositor’s payment of $380,941,785.63 in cash as the purchase price
therefor, (i) all the right, title and interest of Seller in and to the Initial
Contracts listed on the initial List of Contracts in effect on the Closing Date
(including, without limitation,


 


1

















 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


(h)           An Officer’s Certificate from Seller
confirming that Seller’s compliance officer has reviewed the original of each
Initial Contract and each related Contract File, that each Initial Contract and
related Contract File conforms in all material respects with the initial List
of Contracts and each such Contract File is complete, that each document
required be an original, and that the face of each original Initial Contract
has been stamped with the following notation:


 


“This Contract/Note is
subject to a security interest granted to Harley-Davidson Motorcycle Trust
2002-1.  A UCC1 financing statement
covering this Contract/Note has been filed with the Secretary of State of the
State of Nevada.  Such lien will be
released only in connection with appropriate filings in such offices.  Consequently, potential purchasers of this
Contract/Note must refer to such filings to determine whether such lien has
been released.”


 


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


 


Section
2.03.   Assignment of Agreement.     Trust Depositor has the right to assign its interest under this
Agreement to the Issuer as may be required to effect the purposes of the Sale


 


3

















 


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


 


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


 


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


 


4

















 


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


 


(ii)            the Funding Period shall not have
terminated;


 


(iii)           the Seller shall have delivered to
the Trust Depositor a duly executed Purchase Agreement and Assignment in
substantially the form of Exhibit C
hereto (the “Subsequent Purchase Agreement”),
which shall include a Subsequent List of Contracts listing the Subsequent
Contracts being purchased;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


5

















 


ARTICLE III


 


REPRESENTATIONS AND WARRANTIES


 


Seller makes the following representations and
warranties, on which Trust Depositor will rely in purchasing the initial
Contract Assets on the Closing Date (and any Subsequent Contracts on the
related Subsequent Transfer Date) and concurrently reconveying the same to the
Trust, and on which the Trust and the Noteholders will rely under the Sale and
Servicing Agreement.  Such
representations speak as of the execution and delivery of this Agreement and as
of the Closing Date in the case of the Initial Contracts, and as of the
applicable Subsequent Transfer Date in the case of Subsequent Contracts, but
shall survive the sale, transfer and assignment of the Contracts to the Trust
and the pledge of the Contracts to the Indenture Trustee.  The repurchase obligation of Seller set
forth in Section 5.01 below and in Section 7.08 of the Sale and Servicing
Agreement constitutes the sole remedy available for a breach of a
representation or warranty of Seller set forth in Section 3.02, 3.03 or 3.04 of
this Agreement.


 


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


 


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


 


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


 


6

















 


(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,
dlivery, performance, validity or enforceability of this Agreement and the other
Transaction Documents to which the Seller is a party. 


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


7

















 


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


 


(c)           No
Waivers.  As of the Closing
Date (or the applicable Subsequent Transfer Date, in the case of Subsequent
Contracts), the terms of the Contracts have not been waived, altered or
modified in any respect, except by instruments or documents included in the
related Contract File.


 


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


 


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


 


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


 


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


 


8

















 


Contract under this
Agreement or under the Sale and Servicing Agreement or the pledge of the
Contract under the Indenture unlawful, void or voidable.


 


(i)            Compliance
with Law.  None of the Contracts, the origination of
the Contracts by the dealers, 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 or as of any Subsequent Transfer
Date, as applicable, any requirement of any federal, state or local law and
regulations thereunder, including, without limitation, usury, truth in lending,
motor vehicle installment loan and equal credit opportunity laws, applicable to
the Contracts and the sale of Motorcycles. 
Seller shall, for at least the period of this Agreement, maintain in its
possession, available for the Trust Depositor’s and the Trustees’  inspection, and shall deliver to Trust
Depositor or  the Trustee  upon demand, evidence of compliance with all
such requirements.


 


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


 


(k)           Valid
Security Interest.  Each
Contract creates a valid, subsisting and enforceable first priority perfected
security interest in favor of Seller in the Motorcycle covered thereby, and
such security interest has been assigned by Seller to the Trust Depositor.  The original certificate of title,
certificate of lien or other notification (the “Lien Certificate”) issued by
the body responsible for the registration of, and the issuance of certificates
of title relating to, motor vehicles and liens thereon (the “Registrar of
Titles”) of the applicable state to a secured party which indicates
the lien of the secured party on the Motorcycle is recorded on the original
certificate of title, and the original certificate of title for each
Motorcycle, show, or if a new or replacement Lien Certificate is being applied
for with respect to such Motorcycle the Lien Certificate will be received
within 180 days of the Closing Date (or the applicable Subsequent Transfer Date
in the case of Subsequent Contracts) and will show, the Seller as original
secured party under each Contract as the holder of a first priority security
interest in such Motorcycle.  With
respect to each Contract for which the Lien Certificate has not yet been
returned from the Registrar of Titles, the Seller has received written evidence
from the related dealer that such Lien Certificate showing the Seller as
lienholder has been applied for.  The
Seller’s security interest has been validly assigned by the Seller to the Trust
Depositor and by the Trust Depositor to the Issuer and Owner Trustee pursuant
to this Agreement.  Immediately after
the sale, each Contract will be secured by an enforceable and perfected first
priority security interest in the Motorcycle in favor of the Trust as secured
party, which security interest is prior to all other liens upon and security
interests in such Motorcycle which now exist or may hereafter arise or be
created (except, as to priority, for any lien for taxes, labor, materials or of
any state law enforcement agency affecting a Motorcycle).


 


9

















 


 


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


 


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


 


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


 


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


 


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


 


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


 


(r)            One
Original.  Each Contract is
evidenced by only one original executed Contract, which original has been delivered
to the Issuer and the Owner Trustee or its


 


10

















 


designee on or before the
Closing Date (or the applicable Subsequent Transfer Date in the case of
Subsequent Contracts).


 


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


 


(t)            Lockbox
Bank.  The Lockbox Bank is
the only institution holding any Lockbox Account for receipt of payments from
Obligors, and all Obligors, and only such Obligors, have been instructed to
make payments to the Lockbox Account, and no person claiming through or under
Seller has any claim or interest in the Lockbox Account other than the Lockbox
Bank; provided,
however, that other “Trusts” (as defined in the Lockbox Agreement)
shall have an interest in certain other collections therein not related to the
Contracts.


 


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


 


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


 


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


 


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


 


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


 


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


 


11

















 


(b)           Characteristics.  The Initial Contracts have the following
characteristics: (i) all the Contracts are secured by Motorcycles; (ii) no
Initial Contract has a remaining maturity of more than 84 months; and (iii) the
final scheduled payment on the Initial Contract with the latest maturity is due
no later than April 2009.  Approximately
76.26% of the Principal Balance of the Initial Contracts as of the Initial
Cutoff Date is attributable to loans for purchases of new Motorcycles and
approximately 23.74% is attributable to loans for purchases of used
Motorcycles.  No Initial Contract was
originated after the Initial Cutoff Date. 
No Initial Contract has a Contract Rate less than 4.99%.  The first scheduled payment date of the Contracts
(including any Subsequent Contracts) is due no later than August 2002.  Approximately 3.0% of the Principal Balance
of the Initial Contracts as of the Initial Cutoff Date is attributable to loans
for purchases of Motorcycles not manufactured by Harley-Davidson or Buell.


 


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


 


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


 


(e)           True
Sale.  The transaction
contemplated by this Agreement constitutes a valid sale, transfer and
assignment from Seller to Trust Depositor and from Trust Depositor to the Trust
of all of Seller’s right, title and interest in the Contract Assets as of the
Closing Date and any Subsequent Transfer Date, as applicable.


 


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


 


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


 


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


 


(a)      Possession. 
Immediately prior to the Closing Date or any Subsequent Transfer Date,
the Servicer will have possession of each original Contract and the related 


 


12

















 


complete Contract File, and there are and there will
be no custodial agreements relating to the same in effect.  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.


 


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


 


ARTICLE IV


 


PERFECTION OF TRANSFER
AND PROTECTION OF SECURITY INTERESTS


 


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


 


Section
4.02.   Filing.     On or prior to the Closing Date and each
Subsequent Transfer Date, Seller shall cause the UCC financing statement(s)
referred to in Section 2.02(g) hereof and in Section 2.02(g) of the Sale and
Servicing Agreement to be filed and from time to time Seller shall take and
cause to be taken such actions and execute such documents as are necessary or
desirable or as Trust Depositor or the Trust may reasonably request to perfect
and protect the Trust Depositor’s and the Trust’s ownership interest in the
Contract Assets against all other persons, including, without limitation, the
filing of financing statements, amendments thereto and continuation statements,
the execution of transfer instruments and the making of notations on or taking
possession of all records or documents of title.  The Seller authorizes the Trust Depositor to file financing
statements describing the Contract Assets as collateral.


 


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


 


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


 


13

















 


opinion of counsel stating that, in the opinion of such counsel, all
financing statements or amendments necessary to preserve and protect the
interests of the Trustees in the Contract Assets have been filed, and reciting
the details of such filing.


 


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


 


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


 


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


 


ARTICLE V


 


REMEDIES UPON MISREPRESENTATION


 


Section
5.01.     Repurchases of Contracts for Breach of
Representations and Warranties.     Seller hereby agrees, for the benefit of the
Trustees and the Trust Depositor, that it shall repurchase a Contract including
any Subsequent Contracts (together with all related Contract Assets), at its
Repurchase Price, not later than two Business Days prior to the first
Determination Date after Seller becomes aware, or should have become aware, or
receives written notice from Trust Depositor, either of the Trustees or the
Servicer of any breach of a representation or warranty of Seller set forth in
Article III of this Agreement that materially adversely affects Trust Depositor’s
or the Trust’s interest in such Contract (without regard to the benefits of the
Reserve Fund) and which breach has not been cured; provided, however, that with
respect to any Contract incorrectly described on the List of Contracts with
respect to unpaid Principal Balance which Seller would otherwise be required to
repurchase pursuant to this Section 5.01 and Section 7.08 of the Sale and
Servicing Agreement, Seller may, in lieu of repurchasing such Contract, deposit
in the Collection Account not later than two Business Days prior to such
Determination Date cash in an amount sufficient to cure such deficiency or
discrepancy; and provided further that with respect to a breach of a
representation or warranty relating to the Contracts in the aggregate and not
to any particular Contract, Seller may select Contracts (without adverse
selection) to repurchase such that had such Contracts not been reconveyed by
Trust Depositor and included as part of the Trust there would have been no
breach of such representation or warranty; provided further that (a) the failure of a
Contract File to be complete or of the original certificate of title


 


14

















 


and evidence of recordation of such certificate to be included in the
Contract File as of 180 days after the Closing Date (or Subsequent Transfer
Date, in the case of Subsequent Contracts), or (b) the failure to maintain
perfection of the security interest in the Motorcycle securing a Contract in
accordance with the Sale and Servicing Agreement, shall be deemed to be a
breach materially and adversely affecting the Trust’s interest in the Contracts
or in the related Contract Assets. 
Notwithstanding any other provision of this Agreement, the obligation of
Seller under this Section 5.01 and under Section 7.08 of the Sale and Servicing
Agreement shall not terminate upon a Service Transfer pursuant to Article VIII
of the Sale and Servicing Agreement.


 


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


 


ARTICLE VI


 


INDEMNITIES


 


Section
6.01.     Seller
Indemnification.      Seller will defend and indemnify Trust
Depositor, the Trust, the Trustees, any agents of the Trustees and the
Noteholders against any and all costs, expenses, losses, damages, claims and
liabilities, joint or several, including reasonable fees and expenses of
counsel and expenses of litigation arising out of or resulting from (i) this
Agreement or the use, ownership or operation of any Motorcycle by Seller or the
Servicer or any Affiliate of either, (ii) any representation or warranty or
covenant made by Seller in this Agreement being untrue or incorrect (subject to
the second sentence of the preamble to Article III of this Agreement above),
and (iii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or in any amendment thereto or the omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement was made in conformity with
information furnished to Trust Depositor by Seller specifically for use
therein.  Notwithstanding any other
provision of this Agreement, the obligation of Seller under this Section 6.01
shall not terminate upon a Service Transfer pursuant to Article VIII of the
Sale and Servicing Agreement and shall survive any termination of that
agreement or this Agreement.


 


15

















 


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


 


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


 


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


 


ARTICLE VII


 


MISCELLANEOUS


 


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


 


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


 


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


 


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


 


Section
7.02.     Merger or Consolidation.     (a) Except as otherwise provided in this
Section 7.02, Seller will keep in full force and effect its existence, rights
and franchises as a Nevada corporation, and will obtain and preserve its
qualification to do business as a foreign corporation


 


16

















 


in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement and of
any of the Contracts and to perform its duties under this Agreement.


 


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


 


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


 


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


 


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


 


Section
7.05.   Amendment.     (a) This Agreement may be amended from time
to time by Seller and Trust Depositor, with notice to the Rating Agencies, but
without the consent of the Trustees or any of the Noteholders, to correct
manifest error, to cure any ambiguity, to correct or supplement any provisions
herein or therein which may be inconsistent with any other provisions herein or
therein, as the case may be, or to add any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however, that such
action shall not, as evidenced by an opinion of Counsel for Seller acceptable
to the Trustees, adversely affect the interests of any Noteholder.


 


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


 


17

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section
7.10.    No Bankruptcy
Petition.     The Seller
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all amounts owing in respect of all


 


18

















 


outstanding Securities, as well as any other amounts distributable or
payable from the Trust Estate, together with any other amounts owing in respect
of obligations of the Trust Depositor, it will not institute against, or
solicit or join in or cooperate with or encourage any Person to institute
against, the Trust Depositor or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United State or any State of the United States.  This Section 7.10 shall survive termination
of this Agreement.


 


19

















 


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


 


	
   

  	
   

  	
  HARLEY-DAVIDSON CUSTOMER FUNDING CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name: 
  Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name: 
  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Treasurer

  	
   

  
						



 


Signature Page to
Transfer and
 Sale Agreement


 


20

















 


Exhibit
A


Transfer and Sale


Agreement


 


FORM OF
ASSIGNMENT


 


In accordance with the Transfer and Sale Agreement
(the “Agreement”)
dated as of April 1, 2002 made by and between the undersigned, as seller
thereunder (“Seller”), and Harley-Davidson Customer Funding Corp., a
Nevada corporation and wholly-owned subsidiary of Seller (“Trust Depositor”), as
purchaser thereunder, the undersigned does hereby sell, transfer, convey and
assign, set over and otherwise convey to Trust Depositor (i) all the right,
title and interest of Seller in and to the Initial Contracts listed on the
initial List of Contracts in effect on the Closing Date (including, without
limitation, all security interests and all rights to receive payments which are
collected pursuant thereto on or after the Initial Cutoff Date, including any
liquidation proceeds therefrom, but excluding any rights to receive payments
which were collected pursuant thereto prior to the Initial Cutoff Date), (ii)
all rights of Seller under any physical damage or other individual insurance
policy (including a “forced placed” policy, if any) or any debt
cancellation agreement relating to any such Contract, an Obligor or a
Motorcycle securing such Contract, (iii) all security interests in each such
Motorcycle, (iv) all documents contained in the related Contract Files, (v) all
rights of Seller in the Lockbox, Lockbox Account and related Lockbox Agreement
to the extent they relate to the Contracts, (vi) all rights (but not the
obligations) of the Seller under any motorcycle dealer agreements between the
dealers (i.e. the originators of the Contracts) and the Seller, (vii) all
rights of Seller to certain rebates of premiums and other amounts relating to
insurance policies, debt cancellation agreements, extended service contracts or
other repair agreements and other items financed under such Contracts and
(viii) all proceeds and products of the foregoing


 


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


 


Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to such terms in the Sale and
Servicing Agreement dated as of April 1, 2002 made by and among the
undersigned, as servicer, the Trust Depositor, Harley-Davidson Motorcycle Trust
2002-1, as issuer, and BNY Midwest Trust Company, as indenture trustee.


 


A-1

















 


IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed this     
day of April, 2002.


 


	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
  Printed Name: 
  Perry A. Glassgow

  	 

	
   

  	
   

  	
   

  	
  Title: Treasurer

  	 

						



 


A-2

















 


Exhibit
B


Transfer and Sale


Agreement


 


FORM OF
OFFICER’S CERTIFICATE


 


(See Exhibit C to the
Sale and Servicing Agreement)


 


B-1

















 


Exhibit
C


Transfer and Sale


Agreement


 


FORM OF SUBSEQUENT PURCHASE AGREEMENT


 


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


 


WITNESSETH:


 


WHEREAS, the Trust Depositor and the Seller are
parties to the Transfer and Sale Agreement, dated as of April 1, 2002 (the “Transfer and
Sale Agreement”);


 


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


 


WHEREAS, the Seller has timely delivered an Addition
Notice related to such conveyance as required in the Sale and Servicing
Agreement dated as of April 1, 2002 among the Seller (in the capacity of
Servicer thereunder), the Trust Depositor and the Trustee as defined therein
(the “Sale
and Servicing Agreement”).


 


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


 


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


 


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


 


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


 


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


 


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


 


C-1

















 


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


 


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


 


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


 


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


 


(c)           Seller
hereby represents and warrants that (a) the aggregate Principal Balance of the
Subsequent Contracts listed on the Subsequent List of Contracts and conveyed to
the Trust 


 


C-2

















 


Depositor pursuant to this Agreement is $[                    ] as of the Subsequent Cutoff Date, and (b) the
conditions set forth in Section 2.04(b) of the Transfer and Sale Agreement have
been satisfied as of the Subsequent Transfer Date.


 


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


 


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


 


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


 


C-3

















 


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


 


	
   

  	
   

  	
  HARLEY-DAVIDSON CUSTOMER FUNDING CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name: 
  Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name: 
  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Treasurer