Exhibit
10.2


 




 





 


SALE AND SERVICING
AGREEMENT


 


among


 


HARLEY-DAVIDSON
MOTORCYCLE TRUST 2005-4,


as Issuer,


 


HARLEY-DAVIDSON
CUSTOMER FUNDING CORP.,


as Trust
Depositor,


 


HARLEY-DAVIDSON
CREDIT CORP.,


as Servicer


 


and


 


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


as Indenture
Trustee


 


 


Dated as of
November 1, 2005


 




 





 





















 


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

  
	
   

  	
  Section 2.03.

  	
   

  	
  [Intentionally Omitted]

  	
  20

  
	
  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

  	
  23

  
	
  ARTICLE
  FOUR PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

  	
  24

  
	
   

  	
  Section 4.01.

  	
   

  	
  Custody of Contracts

  	
  24

  
	
   

  	
  Section 4.02.

  	
   

  	
  Filing

  	
  26

  
	
   

  	
  Section 4.03.

  	
   

  	
  Name Change or Relocation

  	
  26

  
	
   

  	
  Section 4.04.

  	
   

  	
  Costs and Expenses

  	
  26

  
	
  ARTICLE
  FIVE SERVICING OF CONTRACTS

  	
  27

  
	
   

  	
  Section 5.01.

  	
   

  	
  Responsibility for Contract
  Administration

  	
  27

  
	
   

  	
  Section 5.02.

  	
   

  	
  Standard of Care

  	
  27

  
	
   

  	
  Section 5.03.

  	
   

  	
  Records

  	
  27

  
	
   

  	
  Section 5.04.

  	
   

  	
  Inspection

  	
  27

  
	
   

  	
  Section 5.05.

  	
   

  	
  Trust Accounts

  	
  28

  
	
   

  	
  Section 5.06.

  	
   

  	
  Enforcement

  	
  29

  
	
   

  	
  Section 5.07.

  	
   

  	
  Trustees to Cooperate

  	
  31

  
	
   

  	
  Section 5.08.

  	
   

  	
  Costs and Expenses

  	
  31

  
	
   

  	
  Section 5.09.

  	
   

  	
  Maintenance of Security
  Interests in Motorcycles

  	
  31

  
	
   

  	
  Section 5.10.

  	
   

  	
  Successor Servicer/Lockbox
  Agreements

  	
  32

  
	
   

  	
  Section 5.11.

  	
   

  	
  Separate Entity Existence

  	
  32

  
	
  ARTICLE SIX
  THE TRUST DEPOSITOR

  	
  32

  
	
   

  	
  Section 6.01.

  	
   

  	
  Covenants of the Trust Depositor

  	
  32

  
	
   

  	
  Section
  6.02.

  	
   

  	
  Liability
  of Trust Depositor; Indemnities

  	
  35

  
	
   

  	
  Section 6.03.

  	
   

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

  	
  36

  
	
   

  	
  Section 6.04.

  	
   

  	
  Limitation on Liability of Trust
  Depositor and Others

  	
  37

  
	
   

  	
  Section 6.05.

  	
   

  	
  Trust Depositor Not to Resign

  	
  37

  
	
  ARTICLE SEVEN DISTRIBUTIONS;
  RESERVE FUND

  	
  38

  
	
   

  	
  Section 7.01.

  	
   

  	
  Monthly Distributions

  	
  38

  
	
   

  	
  Section 7.02.

  	
   

  	
  Fees

  	
  38

  
	
   

  	
  Section 7.03.

  	
   

  	
  Advances

  	
  38

  
	
   

  	
  Section 7.04.

  	
   

  	
  [Intentionally Omitted]

  	
  39

  
	
   

  	
  Section 7.05.

  	
   

  	
  Distributions; Priorities

  	
  39

  
	
   

  	
  Section 7.06.

  	
   

  	
  Reserve Fund

  	
  41

  
	
   

  	
  Section 7.07.

  	
   

  	
  [Intentionally Omitted]

  	
  42

  
	
   

  	
  Section 7.08.

  	
   

  	
  Purchase of Contracts for Breach
  of Representations and Warranties

  	
  42

  
	
   

  	
  Section 7.09.

  	
   

  	
  Reassignment of Reacquired
  Contracts

  	
  43

  
	
   

  	
  Section 7.10.

  	
   

  	
  Servicer’s Purchase Option

  	
  43

  
	
   

  	
  Section 7.11.

  	
   

  	
  Purchase of Contracts for Breach
  of Servicing Obligations

  	
  43

  



 


i





















 


	
  ARTICLE EIGHT EVENTS OF
  TERMINATION; SERVICE TRANSFER

  	
  44

  
	
   

  	
  Section 8.01.

  	
   

  	
  Events of Termination

  	
  44

  
	
   

  	
  Section 8.02.

  	
   

  	
  Waiver of Event of Termination

  	
  45

  
	
   

  	
  Section 8.03.

  	
   

  	
  Service Transfer

  	
  45

  
	
   

  	
  Section 8.04.

  	
   

  	
  Successor Servicer to Act;
  Appointment of Successor Servicer

  	
  46

  
	
   

  	
  Section 8.05.

  	
   

  	
  Notification to Securityholders

  	
  46

  
	
   

  	
  Section 8.06.

  	
   

  	
  Effect of Transfer

  	
  46

  
	
   

  	
  Section 8.07.

  	
   

  	
  Database File

  	
  47

  
	
   

  	
  Section 8.08.

  	
   

  	
  Successor Servicer Indemnification

  	
  47

  
	
   

  	
  Section 8.09.

  	
   

  	
  Responsibilities of the
  Successor Servicer

  	
  47

  
	
   

  	
  Section 8.10.

  	
   

  	
  Limitation of Liability of Servicer

  	
  48

  
	
   

  	
  Section 8.11.

  	
   

  	
  Merger or Consolidation of
  Servicer

  	
  48

  
	
   

  	
  Section 8.12.

  	
   

  	
  Servicer Not to Resign

  	
  48

  
	
   

  	
  Section 8.13.

  	
   

  	
  Appointment of Subservicer

  	
  49

  
	
  ARTICLE NINE REPORTS

  	
  50

  
	
   

  	
  Section 9.01.

  	
   

  	
  Monthly Reports

  	
  50

  
	
   

  	
  Section 9.02.

  	
   

  	
  Officer’s Certificate

  	
  50

  
	
   

  	
  Section 9.03.

  	
   

  	
  Other Data

  	
  50

  
	
   

  	
  Section 9.04.

  	
   

  	
  Annual Report of Accountants

  	
  50

  
	
   

  	
  Section 9.05.

  	
   

  	
  Annual Statement of Compliance
  from Servicer

  	
  50

  
	
   

  	
  Section 9.06.

  	
   

  	
  Monthly Reports to Noteholders

  	
  51

  
	
  ARTICLE TEN TERMINATION

  	
  52

  
	
   

  	
  Section 10.01.

  	
   

  	
  Sale of Trust Assets

  	
  52

  
	
  ARTICLE ELEVEN MISCELLANEOUS

  	
  53

  
	
   

  	
  Section 11.01.

  	
   

  	
  Amendment

  	
  53

  
	
   

  	
  Section 11.02.

  	
   

  	
  Protection of Title to Trust

  	
  54

  
	
   

  	
  Section 11.03.

  	
   

  	
  Governing Law

  	
  56

  
	
   

  	
  Section 11.04.

  	
   

  	
  Notices

  	
  56

  
	
   

  	
  Section 11.05.

  	
   

  	
  Severability of Provisions

  	
  58

  
	
   

  	
  Section 11.06.

  	
   

  	
  Assignment

  	
  58

  
	
   

  	
  Section 11.07.

  	
   

  	
  Third Party Beneficiaries

  	
  58

  
	
   

  	
  Section 11.08.

  	
   

  	
  Counterparts

  	
  58

  
	
   

  	
  Section 11.09.

  	
   

  	
  Headings

  	
  58

  
	
   

  	
  Section 11.10.

  	
   

  	
  No Bankruptcy Petition;
  Disclaimer and Subordination

  	
  58

  
	
   

  	
  Section 11.11.

  	
   

  	
  Limitation of Liability of
  Owner Trustee and Indenture Trustee

  	
  59

  



 


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

  	
   

  	
  Form of Opinion of Counsel for Trust
  Depositor regarding general corporate matters (including perfection opinion)

  	
  D-1

  
	
  Exhibit E

  	
   

  	
  Form of Opinion of Counsel for Trust
  Depositor regarding the “true sale”
  nature of the transaction

  	
  E-1

  
	
  Exhibit F

  	
   

  	
  Form of Opinion of Counsel for Trust
  Depositor regarding non-consolidation

  	
  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

  



 


iii





















 


SALE AND SERVICING
AGREEMENT, dated as of November 1, 2005, among Harley-Davidson Motorcycle Trust
2005-4 (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 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:


 


“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 equal the initial Pool Balance.


 


1





















 


“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 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 8, 2005
relating to the Harley-Davidson Motorcycle Trusts.


 


2





















 


“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.


 


“Calculation
Day” means the last day of each calendar month.


 


“Certificate”
means the Trust Certificate (as such term is defined in the
Trust Agreement), representing 100% of the beneficial equity interest in the
Trust and issued pursuant to the Trust Agreement.


 


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


 


“Class
A-1 Final Distribution Date” means the November 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 Rate” means 4.78% per annum (computed on the basis of a
360-day year of twelve 30-day months).


 


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


 


“Class
A-2 Noteholder” means the Person in whose name a Class A-2
Note is registered in the Note Register.


 


“Class
A-2 Rate” means 4.85% per annum (computed on the basis of a
360-day year of twelve 30-day months).


 


“Class
B Final Distribution Date” means the June 2013 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 Rate” means 5.06%
per annum (computed on the basis of a 360-day year of twelve 30-day months).


 


3





















 


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


 


“Closing
Date” means November 16, 2005.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Cram
Down Loss” means, with respect to a Contract, if a court of
appropriate jurisdiction in an insolvency proceeding shall have issued an order
reducing the Principal


 


4





















 


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 as of the close of business on November 2, 2005.


 


“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 dated 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 December
15, 2005.


 


“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.


 


5





















 


“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 Initial Determination Date or Initial Distribution Date, the Due Period
shall be the period from the Cutoff Date to and including November 30, 2005.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(f)            repurchase obligations
with respect to any security that is a direct obligation of, or fully
guaranteed as to timely payment by, the United States of America or any agency
or instrumentality thereof the obligations of which are backed by the full


 


6





















 


faith and credit
of the United States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (b);
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.


 


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


 


“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 .0035% 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
Class A-1 Note Balance” means $234,000,000.


 


7





















 


“Initial
Class A-2 Note Balance” means $73,937,000.


 


“Initial
Class B Note Balance” means $17,063,000.


 


“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, with respect to any Distribution Date, 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 or the
Class B 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 2005-4.


 


“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.


 


8





















 


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


 


“List
of Contracts” means the list identifying each Contract
constituting part of the Trust Corpus, which list shall consist of the List of
Contracts reflecting the Contracts transferred to the Trust on the Closing Date
and which list (a) identifies each Contract and (b) sets forth as to each
Contract (i) the Principal Balance as of the 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.


 


“Lockbox
Account” means the account maintained with the Lockbox Bank
and identified on Exhibit K
hereto.


 


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


 


“Lockbox
Bank” means the financial institution maintaining the Lockbox
Account and identified on Exhibit K
hereto or any successor thereto.


 


“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 Due Period.


 


“Modified
Required Holders” means (i) prior to the payment in full of
the Class A Notes outstanding, Class A-1 Noteholders and/or Class A-2
Noteholders evidencing at least 66 2/3% of the aggregate outstanding principal
balance of the Class A Notes and (ii) from and after the payment in full of the
Class A Notes outstanding, Class B Noteholders evidencing at least 66 2/3% of
the aggregate outstanding principal balance of the Class B Notes.


 


“Monthly
Report” shall have the meaning specified in Section 9.06.


 


9





















 


“Monthly
Servicing Fee” means, as to any Distribution Date, one-twelfth
of the product of 1.00% and the Principal Balance of the Contracts as of the
beginning of the related Due Period or, with respect to the first Distribution
Date of December 15, 2005, as of the Cutoff Date.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


10





















 


“Note
Monthly Interest Distributable Amount” means, with respect to
any Distribution Date for any Class of Notes, interest accrued from and
including the fifteenth day of the month of the preceding calendar month to,
but excluding, the fifteenth day of the calendar month in which such
Distribution Date occurs (or in the case of the first Distribution Date, interest
accrued from and including the Closing Date to but excluding such Distribution
Date) at the related 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 the Principal Distributable Amount with respect
to such Distribution Date and the Note Principal Carryover Shortfall as of the
close of the immediately preceding Distribution Date; provided, however, that the Note Principal
Distributable Amount shall not exceed the outstanding principal amount of the
Notes; and provided, further,
that the Note Principal Distributable Amount (i) on the Class A-1 Final
Distribution Date shall not be less than the amount that is necessary (after
giving effect to other amounts to be deposited in the Note Distribution Account
for payment on the Class A-1 Notes on such Distribution Date and allocable to
principal) to reduce the outstanding principal 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
principal amount of the Class A-2 Notes to zero, and (iii) on the Class B Final
Distribution Date shall not be less than the amount that is necessary (after
giving effect to the 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 principal amount on the Class
B notes to zero.


 


“Note
Register” shall have the meaning specified in the Indenture.


 


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


 


11





















 


“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.


 


“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


 


12





















 


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, with respect to any Distribution
Date, the Aggregate Principal Balance Decline for such 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 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.


 


13





















 


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


 


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


 


“Required
Holders” means (i) prior to the payment in full of the Class
A Notes outstanding, Class A-1 Noteholders and Class A-2 Noteholders evidencing
more than 50% of the aggregate outstanding principal balance of the Class A
Notes and (ii) from and after the payment in full of the Class A Notes
outstanding, Class B Noteholders evidencing more than 50% of the aggregate
outstanding principal balance of the Class B Notes.


 


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


 


“Reserve
Fund Initial Deposit” means $2,437,500.00.


 


“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 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) 2.50% with respect to any Distribution Date
which occurs within the period from the Closing Date to, and inclusive of, the
first anniversary of the Closing Date, (b) 3.00% with respect to any
Distribution Date which occurs within the period from the day after the first
anniversary of the Closing Date to, and inclusive of, the second anniversary of
the Closing Date, or (c) 3.50% with respect to any Distribution Date which
occurs within the period from the day after the second anniversary of the
Closing Date to, and inclusive of, the third anniversary of the Closing Date or
(d) 4.00% with respect to any Distribution Date occurring after the third
anniversary of the Closing Date; (ii) the Average Loss Ratio for such
Distribution Date is equal to or greater than (a) 3.00% with respect to any
Distribution Date which occurs within the period from the Closing Date to, and
inclusive of, the second anniversary of the Closing Date or (b) 2.75% with
respect to any Distribution Date which occurs following the second anniversary
of the Closing Date;  or (iii) the
Cumulative Loss Ratio for such Distribution Date is equal to or greater than
(a) 1.25% with respect to any Distribution Date which occurs within the period
from the Closing Date to, and inclusive of, the first anniversary of the
Closing Date, (b) 2.00% with respect to any Distribution Date which occurs
within the period from the day after the first anniversary of the Closing Date
to, and inclusive of, the second anniversary of the Closing Date, (c) 2.50%
with respect to any Distribution Date which occurs within the period from the
day after the second anniversary of the Closing Date to, and inclusive of, the
third anniversary of the Closing Date, or (d) 2.75% with respect to any
Distribution Date occurring after the third anniversary of the Closing Date.


 


14





















 


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 Trustee customarily performing functions similar to those performed by persons
who at the time shall be such officers, respectively, or to whom a corporate
trust matter is referred because of knowledge of, familiarity with, and
authority to act with respect to a particular matter.


 


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


 


“Securityholders”
means the Holders of the Notes.


 


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


 


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


 


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


 


“Servicing
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 (v) and (vi)
of Section 7.05(a), (2) clauses (i) and (ii) of Section 7.05(b) or (3) clauses
(i) through (iv) of Section 7.05(c), as applicable, over (b) Available Monies for
such Distribution Date minus the amounts payable pursuant to clauses (i)
through (iv) of Section 7.05(a) on such Distribution Date.


 


15





















 


“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)           2.00%
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 and Initial Class B Note Balance;


 


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


 


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


 


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


 


“Supplement”
means the Prospectus Supplement dated November 8, 2005.


 


“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.


 


16





















 


“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,
2005, between the Trust Depositor and the Owner Trustee.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Underwriters”
means Wachovia Capital Markets, LLC, BNP Paribas Securities Corp.,  and J.P. Morgan Securities Inc.


 


“United
States” means the United States of America.


 


17





















 


“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, (i) all the right, title and interest of the
Trust Depositor in and to the Contracts listed on the List of Contracts
delivered on the Closing Date (including, without limitation, all security
interests and all rights to receive payments which are collected pursuant
thereto after the Cutoff Date, including any liquidation proceeds therefrom,
but excluding any rights to receive payments which were collected pursuant
thereto on or prior to the Cutoff Date), (ii) all rights of the Trust Depositor
under any physical damage or other individual insurance policy (and rights
under a “forced placed” policy,
if any), any debt insurance policy or any debt cancellation agreement relating
to any such Contract, an Obligor or a Motorcycle securing such Contract, (iii)
all security interests in each such Motorcycle, (iv) all documents contained in
the related Contract Files, (v) all rights (but not the obligations) of the
Trust Depositor under any related motorcycle dealer agreements between dealers
(i.e., the originators of certain Contracts) and the Seller, (vi)


 


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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 substantially in the form of Exhibits  D,
E and F hereto (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


 


19





















 


and thereunder, certified
in each case by the Secretary or an Assistant Secretary of the Seller/Servicer
and the Trust Depositor.


 


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


 


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


 


(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 Owner
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.


 


Section
2.03.               [Intentionally Omitted].


 


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


 


20





















 


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


 


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


 


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


 


(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


 


21





















 


which it is a party and
has taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party and to cause the Trust to be created.  This Agreement shall effect a valid transfer
and assignment of the Trust Corpus, enforceable against the Trust Depositor and
creditors of and purchasers from the Trust Depositor.  This Agreement and the other Transaction
Documents to which the Trust Depositor is a party constitute the legal, valid
and binding obligation of the Trust Depositor enforceable in accordance with
their terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally and by the availability of equitable remedies.


 


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


 


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


 


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


 


22





















 


forth in the first
paragraph of this Agreement.  The Trust
Depositor has not changed its name, whether by amendment of its Articles of
Incorporation, by reorganization or otherwise, and has not changed the location
of its place of business, within the four months preceding the Closing Date.


 


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


 


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


 


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


 


(a)           Organization and Good Standing.  The Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and has the corporate power to own its assets and to transact the
business in which it is currently engaged. 
The Servicer is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial or
otherwise) of the Servicer or the Trust. 
The Servicer is properly licensed in each jurisdiction to the extent
required by the laws of such jurisdiction to service the Contracts in accordance
with the terms hereof other than such licenses the failure to obtain would not
have a material adverse effect on the business, properties, assets, or
condition (financial or otherwise) of the Servicer or on the ability of the
Servicer to perform its obligations hereunder.


 


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


 


(c)           No Consent Required.  The Servicer is not required to obtain the
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau
or agency in connection with the


 


23





















 


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


 


24





















 


(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 in accordance with its customary practices and
procedures, except as may be necessary to conduct collection and servicing
activities in accordance with its customary practices and procedures; and


 


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


 


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


 


25





















 


negligence or willful misconduct of any Noteholder, Certificateholder,
the Owner Trustee or the Indenture Trustee. 
The Trustees shall have no duty to monitor or otherwise oversee the
Servicer’s performance as custodian hereunder.


 


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


 


Section
4.03.               Name Change or
Relocation.  (a) During the term of this Agreement,
neither the Seller nor the Trust Depositor shall change its name, identity or
structure or change its state of 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).


 


26





















 


ARTICLE
FIVE



SERVICING OF CONTRACTS


 


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


 


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


 


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


 


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


 


27





















 


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.  The
Indenture Trustee is hereby required to ensure that each of the Trust Accounts
is established and maintained as an Eligible Account.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(c)           [Intentionally
Omitted].


 


(d)           The
Servicer shall direct in writing, 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


 


28





















 


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
“P-1” by Moody’s and “A-1” by Standard & Poor’s.


 


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


 


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


 


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


 


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


 


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


 


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


 


Section
5.06.               Enforcement. 
(a) The Servicer will, consistent with Section 5.02, act with respect to
the Contracts in such manner as will maximize the receipt of all payments
called for under the terms of the Contracts. 
The Servicer 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 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,


 


29





















 


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 Certificateholder
as owner 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 B 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


 


30





















 


Motorcycle, or (ii) indemnify the Trust against any damage to such
Motorcycle prior to resale or other disposition.  The Servicer shall not allow such repossessed
Motorcycles to be used in an active trade or business, but rather shall dispose
of the Motorcycle in a reasonable time in accordance with the Servicer’s normal
business practices.


 


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


 


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Section
5.10.               Successor
Servicer/Lockbox Agreements.  The Servicer
shall use its best efforts to cause Obligors to make all payments on the
Contracts to one or more Lockbox Banks, acting as agent for the Trust pursuant
to a Lockbox Agreement.  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 the 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 the Lockbox Bank under such Lockbox Agreement.  The outgoing Servicer shall, upon the request
of the Owner Trustee, but at the expense of the outgoing Servicer, deliver to
the Successor Servicer all documents and records relating to each such Lockbox
Agreement and an accounting of amounts collected and held by the 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


 


32





















 


thereto; provided, however,
that the Trust Depositor may purchase and transfer (or grant Liens in respect
of) contracts and/or other related assets similar to the Contracts to other
Persons in securitization or other non-recourse financing transactions
involving the Seller or any of its Affiliates (or with respect to the Contract
Assets themselves, following a release and reconveyance thereof from the
Trust), on terms and conditions (with respect to the liabilities imposed upon
the Trust Depositor by virtue of such transactions, as well as in respect of
agreements or restrictions concerning activities of the Trust Depositor and its
relations or interactions with the Seller or the Servicer or other applicable
Affiliate relevant to “bankruptcy remoteness” or “substantive consolidation”
analysis), in each case substantially similar to such terms and conditions
applicable to the Trust Depositor hereunder and under the other Transaction
Documents.


 


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


 


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


 


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


 


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


 


33





















 


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


 


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


 


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


 


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


 


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


 


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


 


34





















 


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 with respect to the transactions contemplated herein and in the
other Transaction Documents, including any sales, gross receipts, 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 asserted
with respect to ownership of the Contracts, 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.


 


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


 


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


 


36





















 


however,
that no director may be required by any shareholder of the Trust Depositor to
consent to the institution of bankruptcy or insolvency proceedings against the
Trust Depositor so long as it is solvent; or


 


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


 


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


 


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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 Certificateholder 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 Certificateholder.


 


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


 


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Section
7.04.               [Intentionally
Omitted].


 


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)            [Intentionally
Omitted];


 


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


 


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


 


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


 


(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 for each Class of Notes allocated in the following
order of priority:


 


(1)           to
the Class A-1 Noteholders and to the Class A-2 Noteholders, the Note Interest
Distributable Amount for each such Class of Notes; 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 each such Class of Notes, then the amount in
the Note Distribution Account shall be applied to the Class A-1 Notes and the
Class A-2 Notes pro rata on the
basis of the Note Interest Distributable Amount for each such Class of Notes;
and


 


(2)           to
the Class B Noteholders, the Note Interest Distributable Amount for such Class
of Notes;


 


(vi)          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 Notes until the Class A-1
Notes have been paid in full, second, to the Class A-2 Notes until the Class
A-2 Notes have been paid in full, and third, to the Class B Notes until the
Class B Notes have been paid in full;


 


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


 


(viii)        to
the Holder of the Certificate.


 


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(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), (iii) and (iv):


 


(i)            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 for each Class of Notes allocated in the following
order of priority:


 


(1)           to
the Class A-1 Noteholders and to the Class A-2 Noteholders, the Note Interest
Distributable Amount for each such Class of Notes; 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 each such Class of Notes, then the amount in
the Note Distribution Account shall be applied to the Class A-1 Notes and the
Class A-2 Notes pro rata on the
basis of the Note Interest Distributable Amount for each such Class; and


 


(2)           to
the Class B Noteholders, the Note Interest Distributable Amount for such Class
of Notes;


 


(ii)           to
the Note Distribution Account, together with any amounts deposited therein
pursuant to Section 7.06, all amounts remaining after distribution of interest
to each Class of Notes shall be allocated in the following order of priority:


 


(1)           to
the Class A Notes, pro rata (based
on outstanding principal amount), until the outstanding principal balance of
each Class of the Class A Notes has been reduced to zero; and


 


(2)           to
the Class B Notes, until the outstanding principal balance of the Class B Notes
has been reduced to zero; and


 


(iii)          to
the Holder of the Certificate.


 


(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), (iii) and (iv):


 


(i)            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 for distribution to the Class A-1 Noteholders and to
the Class A-2 Noteholders, as applicable; provided,
however, that if there are insufficient funds on


 


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deposit in the Note Distribution Account to pay the
entire amount of the Note Interest Distributable Amount for each such Class of
Notes, then the amount in the Note Distribution Account shall be applied to the
Class A-1 Notes and the Class A-2 Notes pro
rata (on the basis of the Note Interest Distributable Amount for
each such Class);


 


(ii)           to
the Note Distribution Account, together with any amounts deposited therein
pursuant to Section 7.06, the Note Principal Distributable Amount for
distribution to the Class A-1 Noteholders and the Class A-2 Noteholders in
reduction of the outstanding principal amount of the Class A-1 Notes and Class
A-2 Notes, as applicable, until the outstanding principal balance of the Class
A-1 Notes and the Class A-2 Notes has been reduced to zero; provided, however,
that if there are insufficient funds on deposit in the Note Distribution
Account to reduce the outstanding principal balance of the Class A-1 Notes and
the Class A-2 Notes to zero, the amount in the Note Distribution Account shall
be applied to the payment of principal on the Class A-1 Notes and the Class A-2
Notes pro rata (based on
outstanding principal amount);


 


(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 for distribution to the Class B Noteholders;


 


(iv)          to
the Note Distribution Account, together with any amounts deposited therein
pursuant to Section 7.06, the remaining Note Principal Distributable Amount
with respect to such Distribution Date after the outstanding principal balance
of the Class A-2 Notes has been reduced to zero, for distribution to the Class
B Noteholders in reduction of the outstanding principal amount of the Class B
Notes until the outstanding principal balance of the Class B Notes has been
reduced to zero; and


 


(v)           to
the Holder of the Certificate.


 


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 Securities.


 


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


 


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(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.               [Intentionally Omitted].


 


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, two Business Days prior to the first Determination Date after the Seller
becomes aware, or should have become 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 after such Determination Date


 


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cash in an amount
sufficient to cure any deficiency or discrepancy; and provided further that with respect to a
breach of representation or warranty relating to the Contracts in the aggregate
and not to any particular Contract the Seller may select Contracts (without
adverse selection) to reacquire such that had such Contracts not been included
as part of the Trust Corpus there would have been no breach of such
representation or warranty; provided further
that the failure to maintain perfection of the security interest in
the Motorcycle securing a Contract in accordance with Section 5.09, shall be
deemed to be a breach materially and adversely affecting the Trust’s interest
in the Contract or in the related Contracts. 
Notwithstanding any other provision of this Agreement, the obligation of
the Seller under the Transfer and Sale Agreement and described in this Section
7.08 shall not terminate or be deemed released by any party hereto upon a
Service Transfer pursuant to Article VIII. 
The reacquisition obligation described in this Section 7.08 is in no way
to be satisfied with monies in the Reserve Fund.  The sole remedy of the Issuer, the Trustees
or 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 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


 


43





















 


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


 


ARTICLE EIGHT



EVENTS OF TERMINATION; SERVICE TRANSFER


 


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


 


(a)           Any
failure by the Servicer or the Seller to make any payment or deposit required
to be made 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 such
payment or deposit was due;


 


(b)           Failure
on the Servicer’s or the Seller’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 continues unremedied
for 30 days after the date on which such failure commences;


 


(c)           Any
assignment by the Servicer or the Seller of its duties or rights hereunder or
under the Transfer and Sale Agreement, except as specifically permitted
hereunder or thereunder, or any attempt to make such an assignment;


 


(d)           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;


 


44





















 


(e)           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;


 


(f)            Any
failure by the Servicer to deliver to the Trustees the Monthly Report pursuant
to the terms of this Agreement which remains uncured for five Business Days
after the date which such failure commences;


 


(g)           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 or the Trust Depositor by
the Indenture Trustee, the circumstances or condition in respect of which such
representation, warranty or statement was incorrect shall not have been
eliminated or otherwise cured.


 


Section 8.02.               Waiver of Event of Termination. 
The Required Noteholders 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


 


45





















 


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


 


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


 


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


 


46





















 


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 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


 


47





















 


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


 


48





















 


and the Indenture Trustee at the earliest practicable time (and, if
such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee shall have
assumed the responsibilities and rights of the predecessor Servicer in
accordance with Section 8.04.


 


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


 


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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.               Annual Report of Accountants.


 


(a)           The
Servicer shall cause a firm of nationally recognized independent certified
public accountants (the “Independent
Accountants”), who may also
render other services to the Servicer, Harley-Davidson Financial or to the
Trust Depositor, to deliver to the Trustees, the Underwriters and each Rating
Agency, on or before March 31 (or 90 days after the end of the Servicer’s
fiscal year, if other than December 31) of each year, beginning on March 31,
2006, a statement (the “Accountant’s
Report”) addressed to the Board
of Directors of the Servicer and to the Trustees to the effect that such firm
has examined the assertion of the management of the Servicer that Servicer
maintained effective internal control over the servicing requirements
identified in Article V of this Agreement, and reporting requirements
identified in Article IX of this Agreement and issued its report thereon.


 


(b)           In
the event the Independent Accountants require the Indenture Trustee to agree to
the procedures performed by such firm, the Servicer shall direct the Indenture
Trustee in writing to so agree; it being understood and agreed that the
Indenture Trustee will deliver such letter of agreement in conclusive reliance
upon the direction of the Servicer, and the Indenture Trustee shall not make
any independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.


 


Section 9.05.               Annual Statement of Compliance from
Servicer.  The Servicer will deliver to the Trustees,
the Underwriters and each of the Rating Agencies, on or before January 31 of
each year commencing January 31, 2006, an Officer’s Certificate stating that
(a) a review of the activities of the Servicer during the prior calendar year
and of its performance under this


 


50





















 


Agreement was made under the supervision of the officer signing such
certificate and (b) to such officer’s knowledge, based on such review, the
Servicer has fully performed all its obligations under this Agreement, or, if
there has been a default in the performance of any such obligation, specifying
each such default known to such officer and the nature and status thereof.  A copy of such certificate may be obtained
(i) by any Noteholder by a request in writing to the Indenture Trustee and (ii)
by any Certificateholder by a request in writing to the Owner Trustee.


 


Section 9.06.               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 to Noteholders pursuant to Article VII,
deliver to the Indenture Trustee, in its capacity as Note Registrar and Paying
Agent, shall cause to be delivered and mailed to each Noteholder at the
addresses appearing on the Note Register a statement as of the related
Distribution Date substantially in the form of Exhibit
I hereto (the “Monthly Report”)
setting forth:


 


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


 


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


 


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


 


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


 


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


 


(vi)          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;


 


(vii)         the remaining Principal
Balance after giving effect to the distribution of principal to each class of
Notes to be made on such Distribution Date;


 


(viii)        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;


 


(ix)           the number and
aggregate principal balance of Contracts that became Liquidated Contracts
during the immediately preceding Due Period, the amount of liquidation proceeds
for such Due Period, the amount of liquidation expenses being deducted from
liquidation proceeds for such Due Period, the Net Liquidation Proceeds and the
Net Liquidation Losses for such Due Period;


 


51





















 


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


 


(xi)           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);


 


(xii)          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;


 


(xiii)         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;


 


(xiv)        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;


 


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


 


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


 


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


 


ARTICLE TEN



TERMINATION


 


Section 10.01.            Sale of Trust Assets.


 


(a)           [Intentionally
Omitted].


 


52





















 


(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 Certificateholder 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 Certificateholder; 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 the Certificate.


 


53





















 


(c)           Prior
to the execution of any such amendment or consent, 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.  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 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.


 


54





















 


(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 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,


 


55





















 


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, except that the
duties of the Owner Trustee shall be governed by the laws of the State of
Delaware.


 


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 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 as follows:


 


(i)            If
to the Servicer or Seller:


 


Harley-Davidson Credit
Corp.


150 South Wacker Drive,
Suite 3100


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:


 


56





















 


Harley-Davidson Credit
Corp.


150 South Wacker Drive,
Suite 3100


Chicago, Illinois 60606


Attention:  Perry A. Glassgow


Telecopier No.:  (312) 368-4372


 


(iii)          If
to the Indenture Trustee:


 


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


2 North LaSalle Street


Suite 1020


Chicago, Illinois 60602


Attention:  Corporate Trust Administration


 


Telecopier No.:  (312) 827-8562


 


(iv)          If
to the Owner Trustee:


 


Wilmington Trust Company


Rodney Square North


1100 North Market Street


Wilmington, Delaware
19890-0001


Attention: Corporate
Trust Administration


 


Telecopier No.: (302)
651-8882


 


(v)           If
to Moody’s:


 


Moody’s Investors Service,
Inc.


99 Church Street


New York, New York 10007


Attention: ABS Monitoring
Department


 


Telecopier No.: (212)
553-1350


 


(vi)          If
to Standard & Poor’s:


 


Standard & Poor’s
Ratings Services, a


division of The McGraw
Hill Companies, Inc.


55 Water Street


New York, New York 10004


 


Telecopier No.: (212)
438-2657


 


57





















 


(vii)         If
to the Underwriters:


 


c/o Wachovia Capital
Markets, LLC


One Wachovia Center


301 South College Street


Charlotte, North Carolina
28288


Attention: Curt Sidden


 


Telecopier No.:  (704) 383-9106


 


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, the parties hereto
hereby manifest their intent that no 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


 


58





















 


in instituting against the Trust Depositor or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings under the laws of the United States or any state
of the United States.  This Section 11.10
will survive the termination of this Agreement.


 


(b)           The
Trust acknowledges and agrees that the 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.


 


59





















 


(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 Trust Company, N.A., not in its individual capacity but
solely as Indenture Trustee, and in no event shall The Bank of New York Trust
Company, N.A. have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.


 


[signature page
follows]


 


60





















 


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 2005-4

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Wilmington Trust Company, not in its

  
	
   

  	
   

  	
   

  	
  individual capacity but solely as Owner

  
	
   

  	
   

  	
   

  	
  Trustee on behalf of the Trust

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ RACHEL L. SIMPSON

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name: Rachel L. Simpson

  
	
   

  	
   

  	
   

  	
  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 and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT CORP., as Servicer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ PERRY A. GLASSGOW

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Title: Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

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

  
	
   

  	
  not in its individual capacity but solely as
  Indenture Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ CYNTHIA L. DAVIS

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name: Cynthia L. Davis

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
							



 


Signature Page to Sale and Servicing
Agreement


 


61





















 


Exhibit
A


 


[Form of
Assignment]


 


In accordance with the
Sale and Servicing Agreement (the “Sale and
Servicing Agreement”) dated as of November 1, 2005 made by and
between the undersigned, as Trust Depositor (“Trust
Depositor”), Harley-Davidson Credit Corp., as Servicer (“HDCC”), The Bank of New York Trust Company,
N.A., as Indenture Trustee and Harley-Davidson Motorcycle Trust 2005-4 (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 physical damage or other individual insurance policy (and rights
under a “forced placed” policy,
if any), any debt insurance policy or any debt cancellation agreement relating
to any such Contract, an Obligor or a Motorcycle securing such Contract, (iii)
all security interests in each such Motorcycle, (iv) all documents contained in
the related Contract Files, (v) all rights (but not the obligations) of the
Trust Depositor under any related motorcycle dealer agreements between dealers
(i.e., the originators of certain Contracts) and HDCC, (vi) all rights of the
Trust Depositor in the Lockbox, the Lockbox Account and related Lockbox
Agreement to the extent they relate to such Contracts, (vii) all rights (but
not the obligations) of the Trust Depositor under the Transfer and Sale
Agreement, including but not limited to the Trust Depositor’s rights under
Article V thereof, (viii) the remittances, deposits and payments made into the
Trust Accounts from time to time and amounts in the Trust Accounts from time to
time (and any investments of such amounts), (ix) all rights of the Trust
Depositor to certain rebates of premiums and other amounts relating to
insurance policies, debt cancellation agreements, extended service contracts or
other repair agreements and other items financed under such Contracts, and (x)
all proceeds and products of the foregoing.


 


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


 


IN WITNESS WHEREOF, the
undersigned has caused this Assignment to be duly executed this           
day of November, 2005.


 


	
   

  	
  HARLEY-DAVIDSON CUSTOMER FUNDING

  
	
   

  	
  CORP.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:

  	
  Perry A. Glassgow

  
	
   

  	
  Title:

  	
  Vice President and Treasurer

  
							



 


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 Vice President, Treasurer and Assistant Secretary 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 November 1, 2005
(the “Effective Date”) by and
among the Trust Depositor, The Bank of New York Trust Company, N.A. (the “Indenture Trustee”), as Indenture
Trustee,  Harley-Davidson Credit Corp. (“Harley-Davidson Credit”), as Servicer, and
Harley-Davidson Motorcycle Trust 2005-4 (“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 [                ],
2005 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 dated as of the
Effective Date between the Trust Depositor and Harley-Davidson Credit; the
Trust Agreement dated as of November 1, 2005 between the Trust Depositor and
Wilmington Trust Company (the “Owner Trustee”), as Owner Trustee; the
Administration Agreement dated as of the Effective Date between the Trust
Depositor, the Issuer, the Indenture Trustee, Harley-Davidson Credit, as
Administrator; the Underwriting Agreement dated November 8, 2005 among the
Trust


 


B-1





















 


Depositor,
Harley-Davidson Credit and the Underwriters (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 Prospectus
and except as set forth therein.


 


(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


 


B-2





















 


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-3





















 


In
Witness Whereof, I have affixed my signature hereto this        
day of November, 2005.


 


	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
  Title: Vice President, Treasurer and

  
	
   

  	
   

  	
  Assistant Secretary

  
					



 





















 


Exhibit
C


 


[Form of Closing
Certificate of Servicer/Seller]


 


HARLEY-DAVIDSON
CREDIT CORP.


 


Officer’s
Certificate


 


The undersigned certifies
that he is Vice President, Treasurer and Assistant Secretary 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 November 1, 2005 (the “Effective Date”) by and among
Harley-Davidson Credit, as Servicer, Harley-Davidson Customer Funding Corp. (“CFC”), The Bank of New York Trust Company,
N.A., as Indenture Trustee and Harley-Davidson Motorcycle Trust 2005-4 (“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 [                 ],
2005 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 dated November 8, 2005
among Harley-Davidson Credit, CFC and the Underwriters (the “Underwriting Agreement”); and the
Administration Agreement dated


 


C-1





















 


as of the
Effective Date among Harley-Davidson Credit, CFC, the Issuer and The Bank of
New York Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”) (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 respective dates as of which information
is given in 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


 


C-2





















 


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.


 


(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 November, 2005.


 


	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
  Title: Vice President, Treasurer and

  
	
   

  	
   

  	
  Assistant Secretary

  
					



 





















 


Exhibit
D


 


[Form of Opinion
of Counsel for Trust Depositor


Regarding General
Corporate Matters


(Including
Perfection Opinion)]


 


See Tab
23


 


D-1





















 


Exhibit
E


 


[Form of Opinion
of Counsel for Trust


Depositor
Regarding the “True Sale” Nature


of the
Transaction]


 


See Tab 24


 


E-1





















 


Exhibit
F


 


[Form of Opinion
of Counsel for Trust


Depositor Regarding
Non-consolidation]


 


See Tab 25


 


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 Treasurer 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 November 1, 2005
by and among Harley-Davidson Customer Funding Corp., as Trust Depositor, the
Servicer, The Bank of New York Trust Company, N.A., as Indenture Trustee, and
Harley-Davidson Motorcycle Trust 2005-4 (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: Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Vice President and Treasurer

  
						



 


G-1





















 


Exhibit
H


 


[List of
Contracts]


 


See Tab 6


 


H-1





















 


Exhibit
I


 


[Form of Monthly
Report to Noteholders and the Certificateholder]


 


Harley-Davidson
Motorcycle Trust 2005-4


$[               ]            [        ]%
Harley-Davidson Motorcycle Contract Backed Notes, Class A-1


$[              ]             [        ]%
Harley-Davidson Motorcycle Contract Backed Notes, Class A-2


$[             ]              [      ]%
Harley-Davidson Motorcycle Contract Backed Notes, Class B


 


Monthly Report


For the [         ]
Distribution Date


 


	
  A.

  	
   

  	
  Calculation of
  Available Monies 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Available Principal (as
  defined in Article I of the Sale and Servicing Agreement) 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Available Interest (as
  defined in Article I of the Sale and Servicing Agreement) 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Available Monies (l.
  plus 2.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Calculation of
  Principal Distributable Amount (as defined in Article I of the Sale and
  Servicing Agreement)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Calculation of
  Available Interest (as defined in Article I of the Sale and Servicing
  Agreement).

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Note Principal
  Distributable Amount

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Priority of allocation
  of the Note Principal Distributable Amount 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (a)   First, to the Class A-1 Notes until the
  Class A-1 Notes have been paid in full

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b)   Second, to the Class A-2 Notes until the
  Class A-2 Notes have been paid in full

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (c)   Third, to the Class B Notes until the
  Class B Notes have been paid in full

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Principal Distributable
  Amount (from B)

  	
   

  	
  $

  
														



 


I-1





















 


	
   

  	
   

  	
  3.

  	
   

  	
  Note principal
  distribution 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (a)

  	
  Class A-1 Notes 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b)

  	
  Class A-2 Notes

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (c)

  	
  Class B Notes 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (d)

  	
  Note Principal
  Carryover Shortfall due from prior period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (e)

  	
  Aggregate note
  principal distributed (sum of (a) through (d))

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Note Principal
  Carryover Shortfall

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Calculation of Note
  Monthly Interest Distributable Amount.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Class A-l Interest Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Class A-2 Interest Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Class B Interest Rate 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  One-twelfth of the
  Class A-1 Interest Rate times the Class A-1 Note Balance from and including
  the fifteenth day of the month based on a 360-day year of 12 months of 30
  days each (or from and including the Closing Date with respect to the first
  Distribution Date) to but excluding the fifteenth day of the month of the
  current Distribution Date 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  One-twelfth of the
  Class A-2 Note Interest Rate times the Class A-2 Note Balance from and
  including the fifteenth day of the month based on a 360-day year of 12 months
  of 30 days each (or from and including the Closing Date with respect to the
  first Distribution Date) to but excluding the fifteenth day of the month of
  the current Distribution Date 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  One-twelfth of the
  Class B Note Interest Rate times the Class B Note Balance from and including
  the fifteenth day of the month based on a 360-day year of 12 months of 30
  days each (or from and including

  	
   

  	
   

  
													



 


I-2





















 


	
   

  	
   

  	
   

  	
   

  	
  the Closing Date with
  respect to the first Distribution Date) to but excluding the fifteenth day of
  the month of the current Distribution Date 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  Interest Carryover
  Shortfall for such Distribution Date 

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.

  	
   

  	
  Note Monthly Interest
  Distributable Amount (the sum of items 3, 4 and 5)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Calculation of Note
  Distributable Amount (sum of D.3(e) plus E.6.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Fees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  The Monthly Servicing
  Fee for such Distribution Date (1/12 of the product of 1.00% and the
  Principal Balance of the Contracts as of the beginning of the related Due
  Period)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Indenture Trustee Fee
  for such Distribution Date excluding expense component (1/12 of the product
  of .00185% 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)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  CALCULATION OF THE
  AVAILABLE MONIES FOR SUCH DISTRIBUTION DATE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  The amount of funds
  deposited into the Collection Account pursuant to Section 5.05(b) of the Sale
  and Servicing Agreement with respect to the related Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  a.             All
  amounts received by the Indenture Trustee or the Servicer with respect to
  principal and interest on the Contracts, as well as Late Payment Penalty Fees
  and Extensions Fees for the related Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  b.             All
  Net Liquidation Proceeds

  	
   

  	
  $

  
													



 


I-3





















 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  c.             The
  aggregate of the Purchase Prices for Contracts required to be reacquired by
  the Seller as described in Section 7.08 of the Sale and Servicing Agreement
  or purchased by the Servicer as described in Section 7.11 of the Sale and
  Servicing Agreement

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  d.             All
  Advances made by Servicer pursuant to Section 7.03(a) of the Sale and
  Servicing Agreement

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  e.             All
  amounts paid by the Servicer in connection with an optional purchase of the
  Contracts described in Section 7.10 of the Sale and Servicing Agreement

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  f.              All
  amounts received in respect of interest, dividends, gains, income and
  earnings on investments of funds in the Trust Accounts as contemplated in
  Section 5.05(b)(vii) of the Sale and Servicing Agreement

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  g.             Total
  amount of funds deposited into the Collection Account pursuant to Section
  5.05(b) (the sum of a. through f.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  The amount of funds
  permitted to be withdrawn from the Collection Account pursuant to clauses
  (ii) through (iv) of Section 7.05(a) of the Sale and Servicing Agreement with
  respect to the related Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  a.             Amounts
  to be paid to the Servicer as the Reimbursement Amount in accordance with
  Section 7.03(a) of the Sale and Servicing Agreement

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  b.             Amounts
  to be paid to the Servicer in respect to the Servicing Fee for the related
  Due Period

  	
   

  	
  $

  
											



 


I-4





















 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  c.             Amounts
  to be paid to the Indenture Trustee in respect of the Indenture Trustee’s Fee
  for the related Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  d.             Other
  amounts required or authorized to be withdrawn from the Collection Account
  pursuant to the Sale and Servicing Agreement. Specify

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  e.             Total
  amount of funds permitted to be withdrawn from the Collection Account
  pursuant to clauses (ii) through (iv) Section 7.05(a) of the Sale and
  Servicing Agreement with respect to the related Due Period (sum of a. through
  d.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  The Available Monies
  (not including amounts from Reserve Fund Account) for such Distribution Date
  available to pay Note Distributable Amounts and Certificate Distributable
  Amounts (1(h) minus 2(e))

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  The Available Monies
  otherwise distributable to the Certificateholders that will be distributed to
  the Noteholders on such Distribution Date

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  The shortfall of Available
  Monies for such Distribution Date to pay either the Note Distributable Amount
  (the Available Monies for such Distribution Date minus the sum of the Note
  Distributable Amount as set forth in F.)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J.

  	
   

  	
  The amount to be
  withdrawn from the Reserve Fund on such Distribution Date to cover the Note
  Interest Distributable Amount

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  K.

  	
   

  	
  The amount to be
  withdrawn from the Reserve Fund on such Distribution Date to cover the Note
  Principal Distributable Amount

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  L.

  	
   

  	
  Interest Earnings on the
  Reserve Fund.

  	
   

  	
  $

  



 


I-5





















 


	
  M.

  	
   

  	
  The amount on deposit
  in the Reserve Fund after giving effect to deposits and withdrawals therefrom
  on such Distribution Date

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  N.

  	
   

  	
  The Specified Reserve
  Fund Amount for such Distribution Date will be an amount equal to the greater
  of (a) 2.00% of the Principal Balance of the Contracts in the Trust as of the
  last day of the immediately preceding Due Period; provided, however, in the
  event a Reserve Fund Trigger Event occurs with respect to a Distribution Date
  and has not terminated for three (3) consecutive Distribution Dates
  (inclusive) such amount 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 and Initial Class B Note Balance;
  provided, however, in no event shall the Specified Reserve Fund Balance be
  greater than the aggregate outstanding principal balance of the Securities.

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  O.

  	
   

  	
  The Pool Factor

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  The Class A-1 Note Pool
  Factor immediately before such Distribution Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  The Class A-2 Note Pool
  Factor immediately after such Distribution Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  The Class B Note Pool
  Factor immediately after such Distribution Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  The Class A-1 Note Pool
  Factor immediately before such Distribution Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  The Class A-2 Note Pool
  Factor immediately after such Distribution Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  The Class B Note Pool
  Factor immediately after such Distribution Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.

  	
   

  	
  Delinquent Contracts

  	
   

  	
   

  
									



 


I-6





















 


	
   

  	
   

  	
  1.

  	
   

  	
  31-59 Days

  	
   

  	
  #

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  60-89 Days

  	
   

  	
  #

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  90 or More Days

  	
   

  	
  #

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Q.

  	
   

  	
  Liquidated Contracts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Total Liquidated
  Contracts       #

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Liquidation proceeds
  for the Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Liquidation expenses
  for the Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Net Liquidation
  Proceeds for the Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Net Liquidation Losses
  for the Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  R.

  	
   

  	
  Advances

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Unreimbursed Advances
  prior to such Distribution Date

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Amount paid to Servicer
  on such Distribution Date to reimburse Servicer for such unreimbursed
  Advances

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Amount of Delinquent
  Interest for such Distribution Date

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Amount of new Advances
  on such Distribution Date (if such amount is less than the amount of
  Delinquent Interest, attach the certificate required by Section 7.03 of the
  Sale and Servicing Agreement)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Total of unreimbursed
  Advances after new Advances on such Distribution Date

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  S.

  	
   

  	
  Reacquired Contracts

  	
   

  	
   

  
													



 


I-7





















 


	
   

  	
   

  	
  1.

  	
   

  	
  Number of Contracts to
  be reacquired by the Seller pursuant to Section 7.08 of the Sale and
  Servicing Agreement or purchased by the Servicer pursuant to Section 7.11 of
  the Sale and Servicing Agreement

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Principal Amount of
  such Contracts

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Related Purchase Price
  of such Contracts

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  T.

  	
   

  	
  Purchased Contracts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Number of Contracts to
  be purchased by the Servicer pursuant to Section 7.11 of the Sale and
  Servicing Agreement

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Principal Amount such
  Contracts

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  Related Purchase Price
  of such Contracts

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.

  	
   

  	
  Contracts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
   

  	
  Number of Contracts as
  of beginning of Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  Principal Balance of
  Contracts as of beginning of Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
   

  	
  The weighted average
  Contract Rate of the Contracts as of the beginning of the Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Number of Contracts as
  of end of Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Principal Balance of
  Contracts as of end of Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.

  	
   

  	
  The weighted average
  Contract Rate of the Contracts as of the end of the Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.

  	
   

  	
  The weighted average
  remaining term to maturity of the Contracts as of the end of the Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  Ratios

  	
   

  	
   

  
								



 


I-8





















 


	
   

  	
   

  	
  1.

  	
   

  	
  Cumulative Loss Ratio

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  a.             The
  aggregate Net Liquidation Losses for all Contracts since the Cutoff Date
  through the end of the related Due Period

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  b.             The
  Principal Balance of the Contracts as of the Cutoff Date

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  c.             The
  Cumulative Loss Ratio for such Distribution Date (the quotient of a. divided
  by b., expressed as a percentage)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Average Delinquency
  Ratio for such Distribution Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)           The
  Delinquency Amount (the Principal Balance of all Contracts that were
  delinquent 60 days or more as of the end of the Due Period)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)           The
  Delinquency Ratio (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) for such Distribution Date

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)           The
  Delinquency Ratio for the prior Distribution Date

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (d)           The
  Delinquency Ratio for the second prior Distribution Date

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (e)           The
  Average Delinquency Ratio (the arithmetic average of a. through c.)

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Average Loss Ratio for
  such Distribution Date

  	
   

  	
   

  
									



 


I-9





















 


	
   

  	
   

  	
   

  	
  (a)           Net
  Liquidation Losses

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)           The
  Loss Ratio for (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
  Due Period) such Distribution Date

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)           The
  Loss Ratio for the prior Distribution Date

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (d)           The
  Loss Ratio for the second prior Distribution Date

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (e)           The
  Average Loss Ratio (the arithmetic average of a. through c.)

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  Computation of
  Specified Reserve Fund Balance

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Reserve Fund Trigger
  Events

  	
   

  	
   

  



 


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  (1)           Average
  Delinquency Ratio (if (a) (i) Average Delinquency Ratio 2.50% with respect to
  any Distribution Date which occurs within the period from the Closing Date
  to, and inclusive of, the first anniversary of the Closing Date, (ii) 3.00%
  with respect to any Distribution Date which occurs within the period from the
  day after the first anniversary of the Closing Date to, and inclusive of, the
  second anniversary of the Closing Date or (iii) 3.50% for any Distribution
  Date which occurs within the period from the day after the second anniversary
  of the Closing Date to, and inclusive of, the third anniversary of the
  Closing Date or (iv) 4.00% for any Distribution Date following the third
  anniversary of the Closing Date, then a Reserve Fund Trigger Event has
  occurred)

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (2)           Average
  Loss Ratio (if Average Loss Ratio is equal to or greater than (i) 3.00% with
  respect to any Distribution Date which occurs within the period from the
  Closing Date to, and inclusive of, the second anniversary of the Closing Date
  or (ii) 2.75% with respect to any Distribution Date which occurs following
  the second anniversary of the Closing Date, then a Reserve Fund Trigger Event
  has occurred)

  	
   

  	
  %

  



 


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  (3)           Cumulative
  Loss Ratio (if Cumulative Loss Ratio is equal to or greater than (i) 1.25%
  with respect to any Distribution Date which occurs within the period from the
  Closing Date to, and inclusive of, the first anniversary of the Closing Date,
  (ii) 2.00% with respect to any Distribution Date which occurs within the
  period from the day after the first anniversary of the Closing Date to, and
  inclusive of, the second anniversary of the Closing Date, (iii) 2.50% for any
  Distribution Date while occurs within the period from the day after the
  second anniversary of the Closing Date to, and inclusive of the third
  anniversary of the Closing Date, or (iv) 2.75% following the third
  anniversary of the Closing Date, then a Reserve Fund Trigger Event has
  occurred)

  	
   

  	
  %

  



 


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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


 


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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)           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


 


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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 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 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


 


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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, 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.


 


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(q)           One Original.  Each Contract is evidenced by only one
original executed Contract, which original has been delivered to the Issuer or
its designee on or before the Closing Date.


 


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


 


(s)           Lockbox Bank.  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 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.


 


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


 


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


 


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


 


(w)          Selection Criteria. 
Each Contract is secured by a new or used Motorcycle.  No Contract has a Contract Rate less than
1.99%.  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 Cutoff Date.


 


(3)           Representations and Warranties Regarding the
Contracts in the Aggregate.  Seller
represents and warrants, as of the execution and delivery of this Agreement and
as of the Closing Date, that:


 


(a)           Amounts. 
The sum of the aggregate Principal Balances payable by Obligors under
the Contracts as of the Cutoff Date equals or exceeds the sum of the principal
balance of the Class A-1 Notes, the Class A-2 Notes and the Class B Notes on
the Closing Date.


 


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(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 not later
than November 2012.  Approximately 80.85%
of the Principal Balance of the Contracts as of the Cutoff Date is attributable
to loans for purchases of new Motorcycles and approximately 19.15% is
attributable to loans for purchases of used Motorcycles.  No Contract was originated after the Cutoff
Date.  No Contract has a Contract Rate
less than 2.990%.  Approximately 98.19%
of the Principal Balance of the Contracts as of the Cutoff Date is attributable
to loans for purchases of Motorcycles manufactured by Harley-Davidson or Buell
and approximately 1.81% of the Principal Balance of the Contracts as of the
Cutoff Date is attributable to loans to purchase Motorcycles not manufactured
by Harley-Davidson or Buell.


 


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


 


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


 


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


 


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


 


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


 


(4)           Representations and Warranties Regarding the
Contract Files.  Seller represents
and warrants as of the execution and delivery of this Agreement and as of the
Closing Date that:


 


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


 


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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.


 


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Exhibit
K


 


[Lockbox Bank and
Lockbox Account]


 


Lockbox


 


Harley-Davidson Credit
Corp.


8529 Innovation Way


Chicago, Illinois
60682-0085


 


Lockbox Bank


 


LaSalle Bank National
Association


135 South LaSalle Street


Chicago, Illinois 60674


 


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