Exhibit
10.1




 





 


 


TRANSFER AND SALE
AGREEMENT


 


 


by and between


 


 


HARLEY-DAVIDSON
CREDIT CORP.,


as Seller


 


 


and


 


 


HARLEY-DAVIDSON
CUSTOMER FUNDING CORP.,


 


 


as Purchaser


 


 


Dated as of May 1,
2004




 


 





 

















 


TABLE OF CONTENTS


 


	
  ARTICLE
  I  DEFINITION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  1.01.

  	
  GENERAL.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II TRANSFER OF CONTRACTS; ASSIGNMENT OF AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.01.

  	
  CLOSING.

  	
   

  
	
  SECTION
  2.02.

  	
  CONDITIONS TO THE CLOSING.

  	
   

  
	
  SECTION
  2.03.

  	
  ASSIGNMENT OF AGREEMENT.

  	
   

  
	
  SECTION
  2.04.

  	
  SUBSEQUENT CONTRACTS.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.01.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING
  SELLER.

  	
   

  
	
  SECTION
  3.02.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING
  EACH CONTRACT.

  	
   

  
	
  SECTION
  3.03.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING
  THE CONTRACTS IN THE AGGREGATE.

  	
   

  
	
  SECTION
  3.04.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING
  THE CONTRACT FILES.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.01.

  	
  CUSTODY OF CONTRACTS.

  	
   

  
	
  SECTION
  4.02.

  	
  FILING.

  	
   

  
	
  SECTION
  4.03.

  	
  NAME CHANGE OR RELOCATION.

  	
   

  
	
  SECTION
  4.04.

  	
  COSTS AND EXPENSES

  	
   

  
	
  SECTION
  4.05

  	
  SALE TREATMENT

  	
   

  
	
  SECTION
  4.06

  	
  SEPARATENESS FROM TRUST DEPOSITOR

  	
   

  
	
  SECTION
  4.07

  	
  PROTECTION OF SECURITY INTERESTS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V REMEDIES UPON MISREPRESENTATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  5.01.

  	
  REPURCHASES OF CONTRACTS FOR BREACH OF
  REPRESENTATIONS AND WARRANTIES.

  	
   

  
	
  SECTION
  5.02.

  	
  SELLER’S REPURCHASE OPTION.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI INDEMNITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  6.01.

  	
  SELLER INDEMNIFICATION.

  	
   

  
	
  SECTION
  6.02.

  	
  LIABILITIES TO OBLIGORS.

  	
   

  
	
  SECTION
  6.03.

  	
  TAX INDEMNIFICATION

  	
   

  
	
  SECTION
  6.04.

  	
  OPERATION OF INDEMNITIES.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  7.01.

  	
  PROHIBITED TRANSACTIONS WITH RESPECT TO
  THE TRUST

  	
   

  
	
  SECTION
  7.02.

  	
  MERGER OR CONSOLIDATION.

  	
   

  
	
  SECTION
  7.03.

  	
  TERMINATION.

  	
   

  
	
  SECTION
  7.04.

  	
  ASSIGNMENT OR DELEGATION BY SELLER.

  	
   

  
	
  SECTION
  7.05.

  	
  AMENDMENT.

  	
   

  
	
  SECTION
  7.06.

  	
  NOTICES.

  	
   

  
	
  SECTION
  7.07.

  	
  MERGER AND INTEGRATION.

  	
   

  
	
  SECTION
  7.08.

  	
  HEADINGS.

  	
   

  
	
  SECTION
  7.09.

  	
  GOVERNING LAW.

  	
   

  



 


i

















 


	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Assignment

  
	
  Exhibit B

  	
  Form of Officer’s Certificate

  
	
  Exhibit C

  	
  Form of Subsequent Purchase Agreement

  



 


ii

















 


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


 


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


 


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


 


WHEREAS, Trust Depositor intends concurrently with its purchases from time to
time of Contract Assets hereunder to convey all right, title and interest in
such Contract Assets to Harley-Davidson Motorcycle Trust 2004-2 (the “Trust”)
pursuant to the Sale and Servicing Agreement dated as of May 1, 2004 by and
among Trust Depositor, Harley-Davidson Credit, as Servicer, the Trust, as issuer
(the “Issuer”)
and BNY Midwest Trust Company, as Indenture Trustee (as amended, supplemented
or otherwise modified from time to time, the “Sale and Servicing Agreement”),
executed concurrently herewith;


 


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


 


ARTICLE I


 


DEFINITIONS


 


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


 


ARTICLE II


 


TRANSFER
OF CONTRACTS; ASSIGNMENT OF AGREEMENT


 


Section
2.01.        Closing. 
Subject to and upon the terms and conditions set forth in this
Agreement, Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to Trust Depositor, in consideration of Trust Depositor’s payment of
$388,240,349.60 in cash as the purchase price therefor, (i) all the right,
title and interest of Seller in and to the Initial Contracts


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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Trustee and the Issuer and the Indenture Trustee may
enforce directly without joinder of Trust Depositor, the obligations of Seller
set forth herein.


 


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


 


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


 


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


 


(ii)           the Funding Period shall not have
terminated;


 


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


 


4

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


ARTICLE III


 


REPRESENTATIONS
AND WARRANTIES


 


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


 


5

















 


of the Sale and Servicing Agreement constitutes the
sole remedy available for a breach of a representation or warranty of Seller
set forth in Section 3.02, 3.03 or 3.04 of this Agreement.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(d)           Binding Obligation.  Each Contract is a legal, valid and binding
payment obligation of the Obligor thereunder and is enforceable in accordance
with its terms,


 


7

















 


except as such
enforceability may be limited by insolvency, bankruptcy, moratorium,
reorganization, or other similar laws affecting the enforcement of creditors’
rights generally.


 


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


 


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


 


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


 


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


 


(i)            Compliance with Law.  None of the Contracts, the origination of
the Contracts by the dealers or Eaglemark Savings Bank, the purchase of the
Contracts by the Seller, the sale of the Contracts by the Seller to the Trust
Depositor or by the Trust Depositor to the Trust, or any combination of the
foregoing, violated at the time of origination or as of the Closing Date or as
of any Subsequent Transfer Date, as applicable, any requirement of any federal,
state or local law and regulations thereunder, including, without limitation,
usury, truth in lending, motor vehicle installment loan and equal credit
opportunity laws, applicable to the Contracts and the sale of Motorcycles.


 


8

















 


Seller shall, for at
least the period of this Agreement, maintain in its possession, available for
the Trust Depositor’s and the Trustees’ 
inspection, and shall deliver to Trust Depositor or the Trustee upon
demand, evidence of compliance with all such requirements.


 


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


 


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


 


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


 


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


 


9

















 


had full right to
transfer the Contract to Trust Depositor and to permit Trust Depositor to
transfer the same to the Issuer, and, as of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts), the Issuer will
have a first priority perfected security interest therein.


 


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


 


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


 


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


 


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


 


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


 


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


 


(t)            Lockbox Bank.  The Lockbox Bank is the only institution
holding any Lockbox Account for receipt of payments from Obligors, and all
Obligors have been instructed to make payments to the Lockbox Account (either
directly by remitting payments to the Lockbox, or indirectly by making payments
through direct debit, the telephone or the internet to an account of the
Servicer which payments will be subsequently transferred from such account to
one or more Lockbox Banks), and no person claiming through or under Seller has
any claim or interest in the Lockbox Account


 


10

















 


other than the Lockbox
Bank; provided,
however, that other “Trusts” (as defined in the Lockbox Agreement)
shall have an interest in certain other collections therein not related to the
Contracts.


 


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


 


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


 


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


 


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


 


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


 


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


 


(b)           Characteristics.  The Initial Contracts have the following
characteristics: (i) all the Contracts are secured by Motorcycles; (ii) no
Initial Contract has a remaining maturity of more than 84 months; and (iii) the
final scheduled payment on the Initial Contract with the latest maturity is due
no later than May 2011.    Approximately
79.79% of the Principal Balance of the Initial Contracts as of the Initial
Cutoff Date is attributable to loans for purchases of new Motorcycles and
approximately 20.21% is attributable to loans for purchases of used
Motorcycles.  No Initial Contract was
originated after the Initial Cutoff Date. 
No Initial Contract has a Contract Rate less than 4.489%.  The last scheduled payment date of the
Contracts (including any Subsequent Contracts) is due no later than August
2011.  Approximately 97.94% of the
Principal Balance of the Initial Contracts as of the Initial Cutoff Date is attributable
to loans for purchases of Motorcycles manufactured by Harley-Davidson or Buell
and approximately 2.06% of the


 


11

















 


Principal Balance of the
Initial Contracts as of the Initial Cutoff Date is attributable to loans for
purchases of Motorcycles not manufactured by Harley-Davidson or Buell.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(b)           Bulk Transfer Laws.  The transfer, assignment and conveyance of
the Contracts and the Contract Files by Seller pursuant to this Agreement or
any Subsequent Purchase Agreement and by Trust Depositor pursuant to the Sale
and Servicing


 


12

















 


Agreement is not subject
to the bulk transfer or any similar statutory provisions in effect in any
applicable jurisdiction.


 


ARTICLE IV


 


PERFECTION
OF TRANSFER AND PROTECTION OF SECURITY INTERESTS


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


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


 


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


 


ARTICLE V


 


REMEDIES
UPON MISREPRESENTATION


 


Section
5.01.        Repurchases
of Contracts for Breach of Representations and Warranties. 
Seller hereby agrees, for the benefit of the Issuer, the Indenture
Trustee and the Trust Depositor, that it shall repurchase a Contract including
any Subsequent Contracts (together with all related Contract Assets), at its
Repurchase Price, not later than two Business Days prior to the first
Determination Date after Seller becomes aware, or should have become aware, or
receives written notice from Trust Depositor, either of the Trustees or the
Servicer of any breach of a representation or warranty of Seller set forth in
Article III of this Agreement that materially adversely affects Trust
Depositor’s or the Trust’s interest in such Contract (without regard to the
benefits of the Reserve Fund) and which breach has not been cured; provided,
however, that with respect to any Contract described on the List of
Contracts with respect to an incorrect unpaid Principal Balance which Seller
would otherwise be required to repurchase pursuant to this Section 5.01 and
Section 7.08 of the Sale and Servicing Agreement, Seller may, in lieu of
repurchasing such Contract, deposit in the Collection Account not later than
two Business Days prior to such Determination Date cash in an amount sufficient
to cure any deficiency or discrepancy; and provided further that with respect to a
breach of a representation or warranty relating to the Contracts in the
aggregate and not to any particular Contract, Seller may select


 


14

















 


Contracts (without adverse selection) to repurchase
such that had such Contracts not been reconveyed by Trust Depositor and
included as part of the Trust there would have been no breach of such
representation or warranty; provided further that the failure to
maintain perfection of the security interest in the Motorcycle securing a
Contract in accordance with the Sale and Servicing Agreement, shall be deemed
to be a breach materially and adversely affecting the Trust’s interest in the
Contracts or in the related Contract Assets. 
Notwithstanding any other provision of this Agreement, the obligation of
Seller under this Section 5.01 and under Section 7.08 of the Sale and Servicing
Agreement shall not terminate upon a Service Transfer pursuant to Article VIII
of the Sale and Servicing Agreement.


 


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


 


ARTICLE VI


 


INDEMNITIES


 


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


 


15

















 


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


 


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


 


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


 


ARTICLE VII


 


MISCELLANEOUS


 


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


 


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


 


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


 


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


 


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


 


16

















 


enforceability of this Agreement and of any of the
Contracts and to perform its duties under this Agreement.


 


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


 


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


 


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


 


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


 


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


 


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


 


17

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Section 7.10.        No
Bankruptcy Petition.  The Seller covenants and agrees that, prior
to the date that is one year and one day after the payment in full of all
amounts owing in respect of all outstanding Securities, as well as any other
amounts distributable or payable from the Trust


 


18

















 


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


 


[signature page
follows]


 


19

















 


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


 


 


	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed
  Name:  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Title:
  Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed
  Name:  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Title:
  Treasurer

  	
   

  
					



 


 


Signature Page to
Transfer and


Sale Agreement


 

















 


Exhibit A


Transfer and Sale


Agreement


 


FORM
OF ASSIGNMENT


 


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


 


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


 


Capitalized terms used
herein but not otherwise defined shall have the meanings assigned to such terms
in the Sale and Servicing Agreement dated as of May 1, 2004 made by and among
the undersigned, as servicer, the Trust Depositor, Harley-Davidson Motorcycle
Trust 2004-2, as issuer, and BNY Midwest Trust Company, as indenture trustee.


 


A-1

















 


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


 


	
   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Printed
  Name:  Perry A. Glassgow

  
	
   

  	
   

  	
  Title:
  Treasurer

  



 


A-2

















 


Exhibit B


Transfer and Sale


Agreement


 


FORM
OF OFFICER’S CERTIFICATE


 


(See Exhibit C to
the Sale and Servicing Agreement)


 


B-1

















 


Exhibit C


Transfer and Sale


Agreement


 


FORM
OF SUBSEQUENT PURCHASE AGREEMENT


 


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


 


WITNESSETH:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


C-1

















 


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


 


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


 


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


 


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


 


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


 


C-2

















 


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


 


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


 


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


 


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


 


C-3

















 


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


 


 


	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Printed
  Name:  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Title:
  Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Printed
  Name:  Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Title:
  Treasurer