Exhibit
10.2


 


EXECUTION
COPY




 





 


 


SALE AND SERVICING AGREEMENT


 


 


among


 


 


HARLEY-DAVIDSON MOTORCYCLE TRUST 2009-4,


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 December 1, 2009


 




 





 

















 


Table of Contents


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE
  One DEFINITIONS

  	
  1

  
	
  Section 1.01.

  	
  Definitions

  	
  1

  
	
  Section 1.02.

  	
  Usage
  of Terms

  	
  18

  
	
  Section 1.03.

  	
  Section References

  	
  18

  
	
  Section 1.04.

  	
  Calculations

  	
  18

  
	
  Section 1.05.

  	
  Accounting
  Terms

  	
  18

  
	
  ARTICLE
  Two TRANSFER OF CONTRACTS

  	
  18

  
	
  Section 2.01.

  	
  Closing

  	
  18

  
	
  Section 2.02.

  	
  Conditions
  to the Closing

  	
  19

  
	
  ARTICLE
  Three REPRESENTATIONS AND WARRANTIES

  	
  20

  
	
  Section 3.01.

  	
  Representations
  and Warranties Regarding the Trust Depositor

  	
  21

  
	
  Section 3.02.

  	
  Representations
  and Warranties Regarding the Servicer

  	
  22

  
	
  ARTICLE
  Four PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

  	
  23

  
	
  Section 4.01.

  	
  Custody
  of Contracts

  	
  23

  
	
  Section 4.02.

  	
  Filing

  	
  24

  
	
  Section 4.03.

  	
  Name
  Change or Relocation

  	
  25

  
	
  Section 4.04.

  	
  Costs
  and Expenses

  	
  25

  
	
  ARTICLE
  Five SERVICING OF CONTRACTS

  	
  25

  
	
  Section 5.01.

  	
  Responsibility
  for Contract Administration

  	
  25

  
	
  Section 5.02.

  	
  Standard
  of Care

  	
  25

  
	
  Section 5.03.

  	
  Records

  	
  26

  
	
  Section 5.04.

  	
  Inspection

  	
  26

  
	
  Section 5.05.

  	
  Trust
  Accounts

  	
  26

  
	
  Section 5.06.

  	
  Enforcement

  	
  28

  
	
  Section 5.07.

  	
  Trustees to Cooperate

  	
  29

  
	
  Section 5.08.

  	
  Costs
  and Expenses

  	
  29

  
	
  Section 5.09.

  	
  Maintenance
  of Security Interests in Motorcycles

  	
  29

  
	
  Section 5.10.

  	
  Successor
  Servicer/Lockbox Agreements

  	
  29

  
	
  Section 5.11.

  	
  Separate
  Entity Existence

  	
  30

  
	
  ARTICLE
  Six THE TRUST DEPOSITOR

  	
  30

  
	
  Section 6.01.

  	
  Covenants
  of the Trust Depositor

  	
  30

  
	
  Section 6.02.

  	
  Liability
  of Trust Depositor; Indemnities

  	
  32

  
	
  Section 6.03.

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

  	
  33

  
	
  Section 6.04.

  	
  Limitation
  on Liability of Trust Depositor and Others

  	
  34

  
	
  Section 6.05.

  	
  Trust
  Depositor Not to Resign

  	
  34

  
	
  ARTICLE
  Seven DISTRIBUTIONS; RESERVE FUND

  	
  34

  
	
  Section 7.01.

  	
  Monthly
  Distributions

  	
  34

  
	
  Section 7.02.

  	
  Fees

  	
  34

  
	
  Section 7.03.

  	
  Advances

  	
  34

  
	
  Section 7.04.

  	
  Reserved

  	
  35

  
	
  Section 7.05.

  	
  Distributions;
  Priorities

  	
  35

  
	
  Section 7.06.

  	
  Reserve
  Fund

  	
  38

  
	
  Section 7.07.

  	
  Reserved

  	
  39

  
	
  Section 7.08.

  	
  Purchase
  of Contracts for Breach of Representations and Warranties

  	
  39

  
	
  Section 7.09.

  	
  Reassignment
  of Reacquired Contracts

  	
  40

  
	
  Section 7.10.

  	
  Servicer’s
  Purchase Option

  	
  40

  
	
  Section 7.11.

  	
  Purchase
  of Contracts for Breach of Servicing Obligations

  	
  40

  



 


i

















 


	
  ARTICLE
  Eight EVENTS OF TERMINATION; SERVICE TRANSFER

  	
  41

  
	
  Section 8.01.

  	
  Events
  of Termination

  	
  41

  
	
  Section 8.02.

  	
  Waiver
  of Event of Termination

  	
  42

  
	
  Section 8.03.

  	
  Service
  Transfer

  	
  42

  
	
  Section 8.04.

  	
  Successor
  Servicer to Act; Appointment of Successor Servicer

  	
  42

  
	
  Section 8.05.

  	
  Notification
  to Securityholders

  	
  42

  
	
  Section 8.06.

  	
  Effect
  of Transfer

  	
  43

  
	
  Section 8.07.

  	
  Database
  File

  	
  43

  
	
  Section 8.08.

  	
  Successor
  Servicer Indemnification

  	
  43

  
	
  Section 8.09.

  	
  Responsibilities
  of the Successor Servicer

  	
  43

  
	
  Section 8.10.

  	
  Limitation
  of Liability of Servicer

  	
  44

  
	
  Section 8.11.

  	
  Merger
  or Consolidation of Servicer

  	
  44

  
	
  Section 8.12.

  	
  Servicer
  Not to Resign

  	
  44

  
	
  Section 8.13.

  	
  Appointment
  of Subservicer

  	
  44

  
	
  ARTICLE
  Nine REPORTS

  	
  45

  
	
  Section 9.01.

  	
  Monthly
  Reports

  	
  45

  
	
  Section 9.02.

  	
  Officer’s
  Certificate

  	
  45

  
	
  Section 9.03.

  	
  Other
  Data

  	
  45

  
	
  Section 9.04.

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

  	
  45

  
	
  Section 9.05.

  	
  Monthly
  Reports to Noteholders

  	
  46

  
	
  Section 9.06.

  	
  Regulation
  AB

  	
  47

  
	
  Section 9.07.

  	
  Information
  to Be Provided by the Indenture Trustee

  	
  47

  
	
  Section 9.08.

  	
  Exchange
  Act Reporting

  	
  48

  
	
  ARTICLE
  Ten TERMINATION

  	
  49

  
	
  Section 10.01.

  	
  Sale
  of Trust Assets

  	
  49

  
	
  ARTICLE
  Eleven MISCELLANEOUS

  	
  49

  
	
  Section 11.01.

  	
  Amendment

  	
  49

  
	
  Section 11.02.

  	
  Protection
  of Title to Trust

  	
  50

  
	
  Section 11.03.

  	
  Governing
  Law

  	
  51

  
	
  Section 11.04.

  	
  Notices

  	
  51

  
	
  Section 11.05.

  	
  Severability
  of Provisions

  	
  53

  
	
  Section 11.06.

  	
  Assignment

  	
  53

  
	
  Section 11.07.

  	
  Third
  Party Beneficiaries

  	
  53

  
	
  Section 11.08.

  	
  Counterparts

  	
  53

  
	
  Section 11.09.

  	
  Headings

  	
  53

  
	
  Section 11.10.

  	
  No
  Bankruptcy Petition; Disclaimer and Subordination

  	
  53

  
	
  Section 11.11.

  	
  Limitation of Liability of
  Owner Trustee and Indenture Trustee

  	
  54

  



 


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 December 1, 2009, among
Harley-Davidson Motorcycle Trust 2009-4 (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 November 23, 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 December 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 0.28603%
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 October 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 1.16% per annum (computed on the
basis of a 360-day year of twelve 30-day months).


 


“Class A-3 Final Distribution Date”
means the February 2014 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 1.87% per annum (computed on the
basis of a 360-day year of twelve 30-day months).


 


“Class A-4 Final Distribution Date” means the July 2014
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 2.40% per annum (computed on the
basis of a 360-day year of twelve 30-day months).


 


“Class B Final Distribution Date” means the September 2014
Distribution Date.


 


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


 


“Class B  Notes”
has the meaning set forth in the Indenture.


 


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


 


“Class C  Final Distribution
Date” means the June 2017 Distribution Date.


 


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


 


“Class C Notes” has the meaning set forth in the
Indenture.


 


“Class C Rate” means 4.57% 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 December 10, 2009.


 


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


 


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


 


4
















 


“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 (or with respect to “electronic chattel paper,” the “authoritative
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 (or with
respect to “electronic chattel paper,” the “authoritative 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 (quoted terms have the
meaning assigned to them in the UCC).


 


“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.


 


“Controlling Class” means the Class A Notes (voting
together as a single class, if applicable) for so long as any Class A
Notes are outstanding, then the Class B Notes for so long as any Class B
Notes are outstanding, and then the Class C Notes for so long as any Class C
Notes are outstanding.


 


“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 November 30,
2009.


 


5

















 


“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.


 


“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 January 15,
2010.


 


“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 December 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 


 


6

















 


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


 


(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, the Class A-4 Final Distribution Date, the Class B
Final Distribution Date or the Class C Final Distribution Date, as the
case may be.


 


“First Priority Principal Distributable Amount”  means, with respect to any Distribution Date, an amount,
not less than zero, equal to the result of (a) the aggregate Outstanding
Amount of the Class A Notes as of the preceding Distribution Date (after
giving effect to any principal payments made on the Class A Notes on that
preceding Distribution Date), minus (b) the Aggregate Principal Balance at the end of Due Period related to
that Distribution Date; provided, however, that the First Priority Principal Distributable
Amount shall not exceed the Outstanding Amount of the Class A Notes (after
giving effect to any principal payments made on the Class A Notes on that
preceding Distribution Date); provided, further, that the First Priority Principal Distributable
Amount on the Final Distribution Date for a class of Class A Notes shall
not be less than the amount that is necessary to pay such class of Class A
Notes in full.


 


7

















 


“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
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 $85,163,448.06.


 


“Initial Class A-1 Note Balance”  means
$142,000,000.


 


“Initial Class A-2 Note Balance” means $162,000,000.


 


“Initial Class A-3  Note Balance”  means $154,000,000.


 


8

















 


“Initial Class A-4 Note Balance”  means
$42,000,000.


 


“Initial Class B Note Balance”  means
$22,668,000.


 


“Initial Class C Note Balance”  means
$39,831,000.


 


“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, Class A-4
Notes, Class B Notes and Class C 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, the Class A-4
Rate, the Class B Rate or the Class C 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 2009-4.


 


“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 


 


9

















 


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
Amended and Restated Lockbox Administration Agreement dated as of July 14,
2009 by and among the Lockbox Bank, the Servicer, the Trust Depositor,
Harley-Davidson Warehouse Funding Corp., a Nevada corporation, The Bank of New
York Mellon Trust Company, National Association, JPMorgan Chase Bank, National
Association, Eaglemark Customer Funding Corporation IV, and Bank of America,
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.


 


“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.


 


10

















 


“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
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, minus
the aggregate amount of the First Priority Distributable Amount and the Second
Priority Distributable Amount distributed on such Distribution Date; provided, however, that the Note Principal Distributable
Amount shall not exceed the Outstanding Amount of the Notes (after giving
effect to other amounts distributable 


 


11

















 


in respect of principal on the Class A Notes and Class B
Notes to be deposited in the Note Distribution Account in respect of the First
Priority Principal Distributable Amount and the Second Priority Principal
Distributable Amount on such Distribution Date); 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, (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, (v) on the Class B 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 B
Notes on such Distribution Date and allocable to principal) to reduce the
Outstanding Amount of the Class B Notes to zero, and (vi) on the Class C
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 C Notes on such Distribution Date and
allocable to principal) to reduce the Outstanding Amount of the Class C
Notes to zero.


 


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


 


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


 


12

















 


“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 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 


 


13

















 


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 Controlling Class 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 $6,476,624.48.


 


“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 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 


 


14

















 


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 occurring after the Closing
Date to, and inclusive of, the 48th Distribution
Date occurring after the Closing Date; or (e) 7.25% 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.


 


“Second Priority Principal Distributable Amount”  means, with respect to any Distribution Date, an amount,
not less than zero, equal to the result of (a) the aggregate Outstanding
Amount of the Class A Notes and Class B Notes as of the preceding
Distribution Date (after giving effect to any principal payments made on the Class A
Notes and Class B Notes on that preceding Distribution Date), minus (b) the
sum of (i) the amount of principal distributed in respect of the First
Priority Principal Distributable Amount on such Distribution Date and (ii) the
Aggregate Principal Balance at
the end of Due Period related to that Distribution Date; provided,
however, that the Second Priority
Principal Distributable Amount shall not exceed the Outstanding Amount of the Class A
Notes and Class B Notes (after giving effect to the other amounts
distributable in respect of principal on the Class A Notes and Class B
Notes to be deposited in the Note Distribution Account in respect of the First
Priority Principal Distributable Amount on such Distribution Date); provided, further, that
the Second Priority Principal Distributable Amount on the Final Distribution
Date for the Class B Notes shall not be less than the amount that is
necessary to pay the Class B Notes in full.


 


“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.


 


15
















 


“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.


 


“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 (x) of Section 7.05(a),
(2) clauses (i) through (vii) of Section 7.05(b) or (3) clauses
(i) through (vii) of Section 7.05(c), 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, Initial Class B Note
Balance, Initial Class C 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
Notes.  As of any Distribution Date, the
amount of funds actually on 


 


16

















 


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 November 25,
2009.


 


“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 November 1,
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 


 


17

















 


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 November 25, 2009, by and among the Trust Depositor, the Seller and
the Underwriters.


 


“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 $562,499,000 (less fees and expenses in connection with
the offering and sale of the Class A Notes and Class B Notes and
certain deposits to the Reserve Fund on the Closing Date) and the Trust’s
issuance of the Class C Notes and 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 


 


18

















 


the Trust Depositor under any theft, physical
damage, credit life, disability 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 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.


 


19

















 


(g)           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, in proper
form for filing with the appropriate office in Nevada; and 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, in proper form for filing with the appropriate
office in Nevada; and a UCC financing statement naming the Trust as debtor, and
naming the Indenture Trustee as secured party and identifying the Collateral as
collateral, in proper form for filing with the appropriate office in Delaware.


 


(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 


 


20

















 


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:


 


(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, 


 


21

















 


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
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 


 


22

















 


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.


 


(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, or the offices of one of
its custodians, where they are currently maintained, or at such other offices
of the Servicer, or its custodian, as shall from time to time be identified to
the Trustees by written notice except that in the case of any Contracts
constituting “electronic chattel paper,” the “authoritative copy” thereof shall
be maintained by the Servicer in a computer system such that the Servicer
maintains “control” over such “authoritative copy” (quoted terms have the
meaning assigned to them in the UCC). 
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.


 


23

















 


(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 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 (or, in the
case of “electronic chattel paper,” the “authoritative copy” of such 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 (quoted terms have the meaning assigned to
them in the UCC); 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 


 


24

















 


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 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, 


 


25

















 


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 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) 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;


 


26
















 


(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 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.


 


27

















 


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
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 C 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) 


 


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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 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 


 


29

















 


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.


 


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 


 


30

















 


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 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 


 


31

















 


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 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.


 


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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 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 


 


33

















 


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 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



 


34

















 


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.


 


Section 7.05.        Distributions; Priorities.


 


(a)           Except as
provided in Section 7.05(b) or (c), 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 First Priority 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 Note Distribution
Account, together with any amounts deposited therein pursuant to Section 7.06,
the Note Interest Distributable Amount with respect to such Distribution Date
to the Class B Noteholders;


 


(vii)      to the Note Distribution
Account, together with any amounts deposited therein pursuant to Section 7.06,
the Second Priority 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, 


 


35

















 


to the Class A-3 Noteholders until the Class A-3
Notes have been paid in full, fourth, to the Class A-4 Noteholders until
the Class A-4 Notes have been paid in full and, fifth, to the Class B
Noteholders until the Class B Notes have been paid in full;


 


(viii)     to the Note Distribution
Account, together with any amounts deposited therein pursuant to Section 7.06,
the Note Interest Distributable Amount with respect to such Distribution Date
to the Class C Noteholders;


 


(ix)        to the Note Distribution
Account, together with any amounts deposited therein pursuant to Section 7.06,
the Note 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, fourth, to the Class A-4
Noteholders, until the Class A-4 Notes have been paid in full, fifth, to
the Class B Noteholders until the Class B Notes have been paid in
full and, sixth, to the Class C Noteholders until the Class C Notes
have been paid in full;


 


(x)         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;


 


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


 


(xii)         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 Section 5.01(iii) of
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 shall be applied to the
Class A-1 Notes, the Class A-2 Notes, 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 First Priority
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;


 


36
















 


(iii)          to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, the Note Interest
Distributable Amount with respect to such Distribution Date to the Class B
Noteholders;


 


(iv)          to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, the Second Priority
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, 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 and, third, to the Class B Noteholders until the Class B Notes
have been paid in full;


 


(v)           to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, the Note Interest
Distributable Amount with respect to such Distribution Date to the Class C
Noteholders;


 


(vi)          to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, all amounts remaining
after distribution of amounts in clauses (i), (ii), (iii), (iv) and (v) above
shall be allocated in the following order of priority:


 


(1)           to the Class A Noteholders, first, to the Class A-1
Noteholders, until the outstanding principal balance of the Class A-1
Notes has 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 the outstanding principal balance of each such Class of
the Notes has been paid in full;


 


(2)           to the Class B Noteholders, until the
outstanding principal balance of the Class B Notes has been paid in full;
and


 


(3)           to the Class C Noteholders, until the
outstanding principal balance of the Class C Notes has been paid in full;


 


(vii)         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


 


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


 


(c)           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 Section 5.01(i),
(ii), (iv) or (v) of 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 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 


 


37

















 


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, any amounts remaining
after the distribution of amounts in clause (i) above to the Class A
Noteholders 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 Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, the Note Interest
Distributable Amount with respect to such Distribution Date to the Class B
Noteholders;


 


(iv)          to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, all amounts remaining
after distribution of amounts in clauses (i), (ii) and (iii) above,
to the Class B Noteholders in reduction of the outstanding principal
balance of the Class B Notes until the outstanding principal balance of
the Class B Notes has been paid in full;


 


(v)           to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, the Note Interest
Distributable Amount with respect to such Distribution Date to the Class C
Noteholders;


 


(vi)          to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, all amounts remaining
after distribution of amounts in clauses (i) through (v) above, to
the Class C Noteholders in reduction of the outstanding principal balance
of the Class C Notes until the outstanding principal balance of the Class C
Notes has been paid in full;


 


(vii)         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


 


(viii)        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
Class A Notes and Class B 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 


 


38

















 


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 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 


 


39

















 


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 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 


 


40

















 


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
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.


 


41

















 


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 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 


 


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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.


 


(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 


 


43

















 


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 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 


 


44

















 


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 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.


 


45

















 


(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;


 


(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;


 


46

















 


(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;


 


(xv)        the amount otherwise
distributable on the Class B Notes that has instead been distributed to
one or more senior Classes of Notes on such Distribution Date;


 


(xvi)       the amount otherwise
distributable on the Class C Notes that has instead been distributed to
one or more senior Classes of Notes on such Distribution Date;


 


(xvii)      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


 


(xviii)     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:


 


47

















 


(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.


 


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
2010, 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.


 


48
















 


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.


 


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(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 


 


50

















 


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 


 


51

















 


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

  
	
   

  	
  1100
  North Market Street

  
	
   

  	
  Wilmington,
  Delaware 19890-1605

  
	
   

  	
  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

  



 


52

















 


	
   

  	
  Attention:
  ABS Monitoring Department

  
	
   

  	
  Telecopier
  No.: (212) 298-7139

  
	
   

  	
  Email:
  servicerreports@moodys.com

  
	
   

  	
   

  
	
  (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 bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar 


 


53

















 


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 solely as
Indenture Trustee, and in no event shall The Bank of New York Mellon Trust
Company, N.A. 


 


54

















 


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]


 


55

















 


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 2009-4

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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: 

  	
  Vice President, Treasurer and Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT CORP., as Servicer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Perry A. Glassgow

  
	
   

  	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
   

  	
  Title: 

  	
  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/ Robert Castle

  
	
   

  	
   

  	
  Printed Name: Robert Castle

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  



 


Signature Page to Sale
& Servicing Agreement


 
















 


Exhibit A


 


[Form of Assignment]


 


In
accordance with the Sale and Servicing Agreement (the “Sale and
Servicing Agreement”) dated as of December 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 2009-4 (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 theft, physical damage, credit life,
disability 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 December 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 2009-4 (“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 December 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 2009-4 (“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


 


	
   

  	
   

  	
   

  	
   

  	
  Applicable

  Servicing

  	
   

  
	
  Reference

  	
   

  	
  Criteria

  	
   

  	
  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.

  	
   

  	
  ü

  	
  (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.

  	
   

  	
  ü

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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.

  	
   

  	
  ü

  	
   

  	
   

  



 






(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.

  	
   

  	
  ü

  	
  (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.

  	
   

  	
  ü

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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.

  	
   

  	
  ü

  	
   

  	
   

  



 






(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 2009-4 (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 December 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 December 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 2009-4
(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]


 


I-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 


 


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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, 


 


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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 tangible record constituting
or forming a part of each Contract that is “tangible chattel paper,” or a
single “authoritative copy,” of each electronic record constituting or forming
a part of each Contract that is “electronic chattel paper,” which tangible
record or “authoritative copy” is held (or, in the case of “electronic chattel
paper,” maintained) by the Servicer or its designee, as custodian on behalf of
the Issuer (quoted terms have the meaning assigned to them in the UCC).


 


(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.  Each Contract constitutes “tangible
chattel paper” or “electronic 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 1.000%.  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.


 


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(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:


 


(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 November 15, 2016. 
Approximately 77.69% of the Principal Balance of the Contracts as of the
Cutoff Date is attributable to loans for purchases of new Motorcycles and
approximately 22.31% is attributable to loans for purchases of used
Motorcycles.  No Contract was originated
after the Cutoff Date.  Approximately
98.80% of the Principal Balance of the Contracts as of the Cutoff Date is
attributable to loans for purchases of Motorcycles manufactured by
Harley-Davidson, approximately 0.72% of the Principal Balance of the Contracts
as of the Cutoff Date is attributable to loans to purchase Motorcycles
manufactured by Buell and approximately 0.48% 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 


 


J-5

















 


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 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.

  	
   

  
	
   

  	
  PO
  Box 15129

  	
   

  
	
   

  	
  Palatine,
  IL 60055-5129

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Lockbox Bank

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Bank of New York Mellon

  	
   

  



 


K-1

















 


Exhibit L


 


RESERVED


 


L-1