Document:

Exhibit 10.1

 

TRANSFER AND SALE AGREEMENT

by and between

HARLEY-DAVIDSON CREDIT CORP.,

as Seller

and

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

as Purchaser

Dated as of January 15, 2007

 

TABLE OF CONTENTS

	
  ARTICLE I DEFINITION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  GENERAL

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II TRANSFER OF CONTRACTS; ASSIGNMENT OF
  AGREEMENT

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  CLOSING

  	
   

  	
  1

  
	
  SECTION 2.02.

  	
  CONDITIONS TO THE CLOSING

  	
   

  	
  2

  
	
  SECTION 2.03.

  	
  ASSIGNMENT OF AGREEMENT

  	
   

  	
  3

  
	
  SECTION 2.04.

  	
  SUBSEQUENT CONTRACTS

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING SELLER

  	
   

  	
  5

  
	
  SECTION 3.02.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING EACH CONTRACT

  	
   

  	
  6

  
	
  SECTION 3.03.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING THE
  CONTRACTS IN THE AGGREGATE

  	
   

  	
  9

  
	
  SECTION 3.04.

  	
  REPRESENTATIONS AND WARRANTIES REGARDING THE
  CONTRACT FILES

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION
  OF SECURITY INTERESTS

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  CUSTODY OF CONTRACTS

  	
   

  	
  11

  
	
  SECTION 4.02.

  	
  FILING

  	
   

  	
  11

  
	
  SECTION 4.03.

  	
  NAME CHANGE OR RELOCATION

  	
   

  	
  11

  
	
  SECTION 4.04.

  	
  COSTS AND EXPENSES

  	
   

  	
  11

  
	
  SECTION 4.05

  	
  SALE TREATMENT

  	
   

  	
  12

  
	
  SECTION 4.06

  	
  SEPARATENESS FROM TRUST DEPOSITOR

  	
   

  	
  12

  
	
  SECTION 4.07

  	
  PROTECTION OF SECURITY INTERESTS

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V REMEDIES UPON MISREPRESENTATION

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  REPURCHASES OF CONTRACTS FOR BREACH OF
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI INDEMNITIES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  SELLER INDEMNIFICATION

  	
   

  	
  13

  
	
  SECTION 6.02.

  	
  LIABILITIES TO OBLIGORS

  	
   

  	
  13

  
	
  SECTION 6.03.

  	
  TAX INDEMNIFICATION

  	
   

  	
  13

  
	
  SECTION 6.04.

  	
  OPERATION OF INDEMNITIES

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII MISCELLANEOUS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  PROHIBITED TRANSACTIONS WITH RESPECT TO THE TRUST

  	
   

  	
  14

  
	
  SECTION 7.02.

  	
  MERGER OR CONSOLIDATION

  	
   

  	
  14

  
	
  SECTION 7.03.

  	
  TERMINATION

  	
   

  	
  14

  
	
  SECTION 7.04.

  	
  ASSIGNMENT OR DELEGATION BY SELLER

  	
   

  	
  14

  
	
  SECTION 7.05.

  	
  AMENDMENT

  	
   

  	
  14

  
	
  SECTION 7.06.

  	
  NOTICES

  	
   

  	
  15

  
	
  SECTION 7.07.

  	
  MERGER AND INTEGRATION

  	
   

  	
  15

  
	
  SECTION 7.08.

  	
  HEADINGS

  	
   

  	
  15

  
	
  SECTION 7.09.

  	
  GOVERNING LAW

  	
   

  	
  15

  

 

 i
 

 

	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Assignment

  
	
  Exhibit B

  	
   

  	
  Form of Officer’s Certificate

  
	
  Exhibit C

  	
   

  	
  Form of Subsequent Purchase Agreement

  

 

 ii

THIS AGREEMENT, dated as of January 15, 2007, is made by and between
Harley-Davidson Credit Corp., a Nevada corporation, as seller hereunder
(together with its successors and assigns “Harley-Davidson Credit” or “Seller”), and Harley-Davidson Customer Funding Corp., a
Nevada corporation and wholly-owned subsidiary of Seller (together with
its successors and assigns “Trust Depositor”),
as purchaser hereunder.

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

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

WHEREAS, Trust Depositor intends concurrently with its
purchases from time to time of Contract Assets hereunder to convey all right,
title and interest in such Contract Assets to Harley-Davidson Motorcycle Trust
2007-1 (the “Trust”) pursuant to the Sale and
Servicing Agreement dated as of January 15, 2007 by and among Trust Depositor,
Harley-Davidson Credit, as Servicer, the Trust, as issuer (the “Issuer”) and The Bank of New York Trust Company, N.A., as
Indenture Trustee (as amended, supplemented or otherwise modified from time to
time, the “Sale and Servicing Agreement”), executed
concurrently herewith;

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

ARTICLE I

DEFINITIONS

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

ARTICLE II

TRANSFER OF CONTRACTS;
ASSIGNMENT OF AGREEMENT

Section 2.01.                         Closing. 
Subject to and upon the terms and conditions set forth in this
Agreement, Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to Trust Depositor, in consideration of Trust Depositor’s payment of
$547,481,210.37 in cash as the purchase price therefor, (i) all the right,
title and interest of Seller in and to the Initial Contracts listed on the
initial List of Contracts in effect on the Closing Date (including, without
limitation, all security interests and all rights to receive payments which are
collected pursuant thereto after the Initial Cutoff Date, including any
liquidation proceeds therefrom, but excluding any rights to receive payments which
were collected pursuant thereto on or prior to the Initial Cutoff Date), (ii)
all rights of Seller under any physical damage or other individual insurance
policy (including a “forced placed”
policy, if any), any debt insurance policy or any

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

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

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

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

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

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

(e)                                  Copies
of resolutions of the Board of Directors of Seller or of the Executive
Committee of the Board of Directors of Seller approving the execution, delivery
and performance

 2
 

of this Agreement and the
transactions contemplated hereunder, certified in each case by the Secretary or
an Assistant Secretary of Seller.

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

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

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

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

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

 Section
2.04.                      Subsequent Contracts. 
(a) Subject to and upon the terms and conditions set forth in paragraph
(b) below and in the related Subsequent Purchase Agreement, Seller hereby
agrees to sell, transfer, assign, set over and otherwise convey to Trust
Depositor, in consideration of Trust Depositor’s payment on the related
Subsequent Transfer Date of the purchase price therefor (as set forth in the
related Subsequent Purchase Agreement), and Trust Depositor hereby agrees to
purchase, (i) all the right, title and interest of Seller in and to the
Subsequent Contracts listed on the related Subsequent List of Contracts
(including, without limitation, all security interests and all rights to
receive payments which are collected pursuant thereto after the applicable
Subsequent Cutoff Date, including any liquidation proceeds therefrom, but
excluding any rights to receive payments which were collected pursuant thereto
on or prior to such Subsequent Cutoff Date), (ii) all rights of Seller under any
physical damage or other individual insurance policy (including a “forced placed” policy, if any), any debt insurance policy
or any debt cancellation agreement relating to any such Subsequent Contract ,
an Obligor or a Motorcycle securing such Subsequent Contract, (iii) all
security interests in each such Motorcycle, (iv) all documents contained in the
related Contract Files, (v) all rights of Seller in the Lockbox, Lockbox
Account and related Lockbox Agreement to the extent they relate to the
Subsequent Contracts, (vi) all rights (but not

 3
 

the obligations) of the
Seller under any motorcycle dealer agreements between the dealers (i.e. originators of certain Subsequent Contracts) and the
Seller, (vii) all rights of Seller to certain rebates of premiums and other
amounts relating to insurance policies, debt cancellation agreements, extended
service contracts or other repair agreements and other items financed under
such Subsequent Contracts and (viii) all proceeds and products of the foregoing
(items (i) - (viii), upon consummation of any above-described
purchase, becoming part of the “Contract Assets”).  Seller agrees, subject to the terms and
conditions herein applicable to transfers of Subsequent Contracts, to sell an
aggregate Principal Balance of Subsequent Contracts at or prior to the end of
the Funding Period equal to the Pre-Funded Amount on the Closing Date.

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

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

(ii)                                  the
Funding Period shall not have terminated;

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

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

(v)                                 each
Rating Agency shall have notified the Trust Depositor and the Trustees that following
such transfer, and the transfer immediately thereafter of the Subsequent
Contracts to the Trust, the Notes will be rated at least their respective
ratings as of the Closing Date by such Rating Agency;

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

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

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

 4
 

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

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

ARTICLE III

REPRESENTATIONS AND
WARRANTIES

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

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

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

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

 5
 

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

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

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

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

(g)                                 Operations. 
Approximately 5.00% of the aggregate principal balance of contracts
financed from time to time by the Seller are secured by motorcycles
manufactured by Buell.

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

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

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

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

 6
 

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

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

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

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

 7
 

(k)                                  Valid
Security Interest.  Each Contract
creates a valid, subsisting and enforceable first priority perfected security
interest in favor of Seller or Eaglemark Savings Bank (as the case may be) in
the Motorcycle covered thereby, and such security interest has been validly
assigned by Eaglemark Savings Bank to Seller (where applicable) and by Seller
to the Trust Depositor.  Seller’s
security interest has been validly assigned by the Seller to the Trust
Depositor pursuant to this Agreement and by the Trust Depositor to the Issuer
pursuant to the Sale and Servicing Agreement. 
Immediately prior to the transfer, assignment and conveyance thereof,
each Contract is secured by a first priority, validly perfected security
interest in the Motorcycle covered thereby in favor of the Seller or Eaglemark
Savings Bank as secured party or all necessary and appropriate actions have
been commenced that would result in a first priority, validly perfected
security interest in the Motorcycle covered thereby in favor of the Seller or
Eaglemark Savings Bank as secured party, except, in each case, as to priority
for any lien for taxes, labor, materials or of any state law enforcement agency
affecting a Motorcycle.

(l)                                     Good
Title.  Each Contract was purchased
by Seller for value and taken into possession prior to the Initial Cutoff Date
(or the applicable Subsequent Cutoff Date in the case of Subsequent Contracts)
in the ordinary course of its business, without knowledge that the Contract was
subject to a security interest.  No Contract
has been sold, assigned or pledged to any person other than Trust Depositor and
the Issuer as the transferee of Trust Depositor, and prior to the transfer of
the Contract to Trust Depositor, Seller had good and marketable title to each
Contract free and clear of any encumbrance, equity, loan, pledge, charge, claim
or security interest and was the sole owner thereof and 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 Initial Cutoff
Date (or the applicable Subsequent Cutoff Date in the case of Subsequent
Contracts), no default, breach, violation or event permitting acceleration
existed with respect to any Contract and no event had occurred which, with
notice and the expiration of any grace or cure period, would constitute such a
default, breach, violation or event permitting acceleration under such
Contract.  Seller has not waived any such
default, breach, violation or event permitting acceleration, and Seller has not
granted any extension of payment terms on any Contract.  As of the Initial Cutoff Date (or the
applicable Subsequent Cutoff Date in the case of Subsequent Contracts), no
Motorcycle had been repossessed.

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

 8
 

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

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

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

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

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

(w)                               Selection Criteria.  Each Contract is secured by a new
or used Motorcycle.  No Contract has a
Contract Rate less than 3.989%.  Each Contract amortizes the amount financed
over an original term no greater than 84 months.  Each Contract has a Principal Balance of at
least $533.20 as
of the related Cutoff Date.

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

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

 9
 

(b)                                 Characteristics.  The Initial Contracts have the following
characteristics: (i) all the Contracts are secured by Motorcycles; (ii) no
Initial Contract has a remaining maturity of more than 84 months; and (iii) the
final scheduled payment on the Initial Contract with the latest maturity is due
not later than June 2014.  Approximately
77.89% of the Principal Balance of the Initial Contracts as of the Initial
Cutoff Date is attributable to loans for purchases of new Motorcycles and
approximately 22.11%
is attributable to loans for purchases of used Motorcycles.  No Initial Contract was originated after the
Initial Cutoff Date.  No Initial Contract
has a Contract Rate less than 3.989%.  The last scheduled payment date of the
Contracts (including any Subsequent Contracts) is due not later than September 2014.  Approximately 98.98% of the Principal Balance of the Initial
Contracts as of the Initial Cutoff Date is attributable to loans to purchase
Motorcycles manufactured by Harley-Davidson or Buell and approximately 1.02% of
the Principal Balance of the Initial Contracts as of the Initial Cutoff Date is
attributable to loans to purchase Motorcycles not manufactured by
Harley-Davidson or Buell.

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

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

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

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

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

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

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

 10
 

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

ARTICLE IV

PERFECTION OF TRANSFER AND
PROTECTION OF SECURITY INTERESTS

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

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

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

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

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

 11
 

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

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

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

ARTICLE V

REMEDIES UPON
MISREPRESENTATION

Section
5.01.                         Repurchases
of Contracts for Breach of Representations and Warranties.  Seller hereby agrees, for the benefit of the
Issuer, the Indenture Trustee and the Trust Depositor, that it shall repurchase
a Contract including any Subsequent Contracts (together with all related
Contract Assets), at its Repurchase Price, not later than two Business Days
prior to the first Distribution Date after the last day of the calendar month
in which the Seller becomes aware or receives written notice from Trust
Depositor, either of the Trustees or the Servicer of any breach of a
representation or warranty of Seller set forth in Article III of this Agreement
that materially adversely affects Trust Depositor’s or the Trust’s interest in
such Contract (without regard to the benefits of the Reserve Fund) and which
breach has not been cured; provided, however,
that with respect to any Contract described on the List of Contracts with
respect to an incorrect unpaid Principal Balance which Seller would otherwise
be required to repurchase pursuant to this Section 5.01 and Section 7.08 of the
Sale and Servicing Agreement, Seller may, in lieu of repurchasing such
Contract, deposit in the Collection Account not later than one Business Day
prior to such Distribution Date cash in an amount sufficient to cure any
deficiency or discrepancy; and provided further
that with respect to a breach of a representation or warranty relating to the
Contracts in the aggregate and not to any particular Contract, Seller may
select Contracts (without adverse selection) to repurchase such that had such
Contracts not been reconveyed by Trust Depositor and included as part of the
Trust there would have been no breach of such representation or warranty; provided further that the failure to maintain perfection of
the security interest in the Motorcycle securing a Contract in accordance with
the Sale and Servicing Agreement, shall be deemed to be a breach materially and
adversely affecting the Trust’s interest in the Contracts or in the related
Contract Assets.  Notwithstanding any
other provision of this Agreement, the obligation of Seller under this Section
5.01 and under Section 7.08 of the Sale and Servicing Agreement shall not
terminate upon a Service Transfer pursuant to Article VIII of the Sale and
Servicing Agreement.

 12
 

ARTICLE VI

INDEMNITIES

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

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

Section 6.03.                         Tax Indemnification. 
Seller covenants and agrees to pay, and to indemnify, defend and hold
harmless the Trust Depositor, the Trust, the Trustees or the Noteholders from,
any taxes that may at any time be asserted against any such Person as a result
of or relating to the transactions contemplated herein and in the other
Transaction Documents, including any sales, gross receipts, gross margin,
general corporation, tangible personal property, Illinois personal property
replacement privilege or license taxes (but not including any federal, state or
other taxes arising out of the creation of the Trust and the issuance of the
Notes) and costs, expenses and reasonable counsel fees in defending against the
same, whether arising by reason of the acts to be performed by Seller under
this Agreement or the Servicer under the Sale and Servicing Agreement or
imposed against the Trust Depositor, the Trust, a Noteholder or otherwise.  Notwithstanding any other provision of this
Agreement, the obligation of Seller under this Section 6.03 shall not terminate
upon a Service Transfer pursuant to Article VIII of the Sale and Servicing
Agreement and shall survive any termination of this Agreement.

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

 13
 

ARTICLE VII

MISCELLANEOUS

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

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

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

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

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

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

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

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

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

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

 14
 

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

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

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

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

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

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

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

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

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

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

 15
 

Section 7.10.                         No Bankruptcy Petition. 
The Seller covenants and agrees that, prior to the date that is one year
and one day after the payment in full of all amounts owing in respect of all
outstanding Securities, as well as any other amounts distributable or payable
from the Trust Estate, together with any other amounts owing in respect of
obligations of the Trust Depositor, it will not institute against, or solicit
or join in or cooperate with or encourage any Person to institute against, the
Trust Depositor or the Trust, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceedings under the
laws of the United States or any State of the United States.  This Section 7.10 shall survive termination
of this Agreement.

[signature page follows]

 16

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

 

	
  

  	
  HARLEY-DAVIDSON CUSTOMER FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Vice President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Perry A. Glassgow

  	
   

  
	
   

  	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Vice President and Treasurer

  
					

 

 

Signature Page to
Transfer and Sale

Agreement

 

Exhibit A

Transfer and Sale

Agreement

FORM OF ASSIGNMENT

In accordance with the Transfer and Sale Agreement
(the “Agreement”) dated as of January 15, 2007
made by and between the undersigned, as seller thereunder (“Seller”), and Harley-Davidson Customer Funding Corp., a
Nevada corporation and wholly-owned subsidiary of Seller (“Trust Depositor”), as purchaser thereunder, the undersigned
does hereby sell, transfer, convey and assign, set over and otherwise convey to
Trust Depositor (i) all the right, title and interest of Seller in and to the
Initial Contracts listed on the initial List of Contracts in effect on the
Closing Date (including, without limitation, all security interests and all
rights to receive payments which are collected pursuant thereto after the
Initial Cutoff Date, including any liquidation proceeds therefrom, but
excluding any rights to receive payments which were collected pursuant thereto
on or prior to the Initial Cutoff Date), (ii) all rights of Seller under any
physical damage or other individual insurance policy (including a “forced placed” policy, if any), any debt insurance policy or
any debt cancellation agreement relating to any such Contract, an Obligor or a
Motorcycle securing such Contract, (iii) all security interests in each such
Motorcycle, (iv) all documents contained in the related Contract Files, (v) all
rights of Seller in the Lockbox, Lockbox Account and related Lockbox Agreement
to the extent they relate to the Contracts, (vi) all rights (but not the
obligations) of the Seller under any motorcycle dealer agreements between the
dealers (i.e. originators of certain Contracts) and the Seller, (vii) all
rights of Seller to certain rebates of premiums and other amounts relating to
insurance policies, debt cancellation agreements, extended service contracts or
other repair agreements and other items financed under such Contracts and
(viii) all proceeds and products of the foregoing

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

Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to such terms in the Sale and
Servicing Agreement dated as of January 15, 2007 made by and among the
undersigned, as servicer, the Trust Depositor, Harley-Davidson Motorcycle Trust
2007-1, as issuer, and The Bank of New York Trust Company, N.A., as indenture
trustee.

 A-1
 

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

	
  

  	
  HARLEY-DAVIDSON
  CREDIT CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Vice President and Treasurer

  
					

 

 A-2

Exhibit B

Transfer and Sale

Agreement

FORM OF OFFICER’S CERTIFICATE

(See Exhibit C to the Sale and Servicing Agreement)

 B-1

Exhibit C

Transfer and Sale

Agreement

FORM OF SUBSEQUENT PURCHASE AGREEMENT

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

WITNESSETH:

WHEREAS, the Trust Depositor and the Seller are
parties to the Transfer and Sale Agreement, dated as of January 15, 2007 (the “Transfer and Sale Agreement”);

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

WHEREAS, the Seller has timely delivered an Addition
Notice related to such conveyance as required in the Sale and Servicing
Agreement dated as of January 15, 2007 among the Seller (in the capacity of
Servicer thereunder), the Issuer as defined therein, the Trust Depositor and
the Indenture Trustee as defined therein (the “Sale and
Servicing Agreement”).

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

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

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

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

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

Section 2.                                        Subsequent List of
Contracts.  The Subsequent List of Contracts attached
hereto as Exhibit A is a supplement to the initial List of Contracts attached
as Exhibit H to the Sale and Servicing
Agreement.  The Contracts listed in the
Subsequent List of Contracts constitute the Subsequent Contracts to be
transferred pursuant to this Agreement on the subsequent Transfer Date.

Section 3.                                          Transfer of Subsequent Contracts. 
Subject to and upon the terms and conditions set forth in Section 2.04(b)
of the Transfer and Sale Agreement and this Agreement, Seller hereby sells,

 C-1
 

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

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

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

(c)                                  Seller hereby represents and warrants
that (a) the aggregate Principal Balance of the Subsequent Contracts listed on
the Subsequent List of Contracts and conveyed to the Trust Depositor pursuant
to this Agreement is $[           ] as of the Subsequent Cutoff Date, and
(b) the conditions set forth in Section 2.04(b) of the Transfer and Sale
Agreement have been satisfied as of the Subsequent Transfer Date.

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

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

 C-2
 

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

 C-3

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

 

	
  

  	
   

  	
  HARLEY-DAVIDSON CUSTOMER FUNDING CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Title: Vice President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name:  Perry A. Glassgow

  
	
   

  	
   

  	
   

  	
  Title: Vice President and TreasurerExhibit
10.2

 

SALE AND SERVICING AGREEMENT

among

HARLEY-DAVIDSON
MOTORCYCLE TRUST 2007-1,

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 January 15, 2007

 

	
  

  	
  Page

  
	
  Table of
  Contents

  	
   

  
	
  ARTICLE One  DEFINITIONS

  	
  1

  
	
  Section
  1.01.

  	
   

  	
  Definitions

  	
  1

  
	
  Section
  1.02.

  	
   

  	
  Usage of Terms

  	
  20

  
	
  Section
  1.03.

  	
   

  	
  Section References

  	
  20

  
	
  Section
  1.04.

  	
   

  	
  Calculations

  	
  20

  
	
  Section
  1.05.

  	
   

  	
  Accounting Terms

  	
  20

  
	
  ARTICLE Two  TRANSFER
  OF CONTRACTS

  	
  20

  
	
  Section 2.01.

  	
   

  	
  Closing

  	
  20

  
	
  Section
  2.02.

  	
   

  	
  Conditions to the Closing

  	
  21

  
	
  Section
  2.03.

  	
   

  	
  Conveyance of Subsequent Contracts

  	
  22

  
	
  ARTICLE Three  REPRESENTATIONS AND WARRANTIES

  	
  24

  
	
  Section
  3.01.

  	
   

  	
  Representations and Warranties Regarding the
  Trust Depositor

  	
  25

  
	
  Section
  3.02.

  	
   

  	
  Representations and Warranties Regarding the
  Servicer

  	
  26

  
	
  ARTICLE Four  PERFECTION
  OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

  	
  28

  
	
  Section
  4.01.

  	
   

  	
  Custody of Contracts

  	
  28

  
	
  Section
  4.02.

  	
   

  	
  Filing

  	
  29

  
	
  Section
  4.03.

  	
   

  	
  Name Change or Relocation

  	
  29

  
	
  Section
  4.04.

  	
   

  	
  Costs and Expenses

  	
  30

  
	
  ARTICLE Five  SERVICING
  OF CONTRACTS

  	
  30

  
	
  Section
  5.01.

  	
   

  	
  Responsibility for Contract Administration

  	
  30

  
	
  Section
  5.02.

  	
   

  	
  Standard of Care

  	
  30

  
	
  Section
  5.03.

  	
   

  	
  Records

  	
  30

  
	
  Section
  5.04.

  	
   

  	
  Inspection

  	
  30

  
	
  Section
  5.05.

  	
   

  	
  Trust Accounts

  	
  31

  
	
  Section
  5.06.

  	
   

  	
  Enforcement

  	
  32

  
	
  Section
  5.07.

  	
   

  	
  Trustees to Cooperate

  	
  33

  
	
  Section
  5.08.

  	
   

  	
  Costs and Expenses

  	
  34

  
	
  Section
  5.09.

  	
   

  	
  Maintenance of Security Interests in Motorcycles

  	
  34

  
	
  Section
  5.10.

  	
   

  	
  Successor Servicer/Lockbox Agreements

  	
  34

  
	
  Section
  5.11.

  	
   

  	
  Separate Entity Existence

  	
  35

  
	
  ARTICLE Six  THE TRUST DEPOSITOR

  	
  35

  
	
  Section
  6.01.

  	
   

  	
  Covenants of the Trust Depositor

  	
  35

  
	
  Section
  6.02.

  	
   

  	
  Liability of Trust Depositor; Indemnities

  	
  37

  
	
  Section
  6.03. 

  	
   

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

  	
  38

  
	
  Section
  6.04.

  	
   

  	
  Limitation on Liability of Trust Depositor and
  Others

  	
  39

  
	
  Section
  6.05.

  	
   

  	
  Trust Depositor Not to Resign

  	
  39

  
	
  ARTICLE Seven  DISTRIBUTIONS; RESERVE FUND

  	
  39

  
	
  Section
  7.01.

  	
   

  	
  Monthly Distributions

  	
  39

  
	
  Section
  7.02.

  	
   

  	
  Fees

  	
  39

  
	
  Section
  7.03.

  	
   

  	
  Advances; Realization of Carrying Charge

  	
  40

  
	
  Section
  7.04.

  	
   

  	
  Interest Reserve Account

  	
  40

  
	
  Section
  7.05.

  	
   

  	
  Distributions; Priorities

  	
  41

  
	
  Section
  7.06.

  	
   

  	
  Reserve Fund

  	
  44

  
	
  Section
  7.07.

  	
   

  	
  Establishment of Pre-Funding Account

  	
  45

  
							

 

 i
 

 

	
  Section 7.08.

  	
   

  	
  Purchase of Contracts for Breach of
  Representations and Warranties

  	
  46

  
	
  Section
  7.09.

  	
   

  	
  Reassignment of Reacquired Contracts

  	
  47

  
	
  Section
  7.10.

  	
   

  	
  Servicer’s Purchase Option

  	
  47

  
	
  Section
  7.11.

  	
   

  	
  Purchase of Contracts for Breach of Servicing
  Obligations

  	
  47

  
	
  ARTICLE Eight  EVENTS OF TERMINATION; SERVICE TRANSFER

  	
  48

  
	
  Section
  8.01.

  	
   

  	
  Events of Termination

  	
  48

  
	
  Section
  8.02.

  	
   

  	
  Waiver of Event of Termination

  	
  49

  
	
  Section
  8.03.

  	
   

  	
  Service Transfer

  	
  49

  
	
  Section
  8.04.

  	
   

  	
  Successor Servicer to Act; Appointment of
  Successor Servicer

  	
  49

  
	
  Section
  8.05.

  	
   

  	
  Notification to Securityholders

  	
  50

  
	
  Section
  8.06.

  	
   

  	
  Effect of Transfer

  	
  50

  
	
  Section
  8.07.

  	
   

  	
  Database File

  	
  50

  
	
  Section
  8.08.

  	
   

  	
  Successor Servicer Indemnification

  	
  50

  
	
  Section
  8.09.

  	
   

  	
  Responsibilities of the Successor Servicer

  	
  50

  
	
  Section
  8.10.

  	
   

  	
  Limitation of Liability of Servicer

  	
  51

  
	
  Section
  8.11.

  	
   

  	
  Merger or Consolidation of Servicer

  	
  51

  
	
  Section
  8.12.

  	
   

  	
  Servicer Not to Resign

  	
  52

  
	
  Section
  8.13.

  	
   

  	
  Appointment of Subservicer

  	
  52

  
	
  ARTICLE Nine  REPORTS

  	
  52

  
	
  Section
  9.01.

  	
   

  	
  Monthly Reports

  	
  52

  
	
  Section
  9.02.

  	
   

  	
  Officer’s Certificate

  	
  52

  
	
  Section
  9.03.

  	
   

  	
  Other Data

  	
  52

  
	
  Section
  9.04.

  	
   

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

  	
  52

  
	
  Section
  9.05.

  	
   

  	
  Monthly Reports to Noteholders

  	
  53

  
	
  ARTICLE Ten  TERMINATION

  	
  56

  
	
  Section
  10.01.

  	
   

  	
  Sale of Trust Assets

  	
  56

  
	
  ARTICLE Eleven  MISCELLANEOUS

  	
  57

  
	
  Section
  11.01.

  	
   

  	
  Amendment

  	
  57

  
	
  Section
  11.02.

  	
   

  	
  Protection of Title to Trust

  	
  58

  
	
  Section
  11.03.

  	
   

  	
  Governing Law

  	
  59

  
	
  Section
  11.04.

  	
   

  	
  Notices

  	
  59

  
	
  Section
  11.05.

  	
   

  	
  Severability of Provisions

  	
  61

  
	
  Section
  11.06.

  	
   

  	
  Assignment

  	
  61

  
	
  Section
  11.07.

  	
   

  	
  Third Party Beneficiaries

  	
  62

  
	
  Section
  11.08.

  	
   

  	
  Counterparts

  	
  62

  
	
  Section
  11.09.

  	
   

  	
  Headings

  	
  62

  
	
  Section
  11.10.

  	
   

  	
  No Bankruptcy Petition; Disclaimer and
  Subordination

  	
  62

  
	
  Section
  11.11.

  	
   

  	
  Limitation of Liability of Owner Trustee and
  Indenture Trustee

  	
  63

  

 

 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 Attestation Report

  	
   

  	
  D-1

  
	
  Exhibit E 

  	
   

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

  	
   

  	
  E-1

  
	
  Exhibit F

  	
   

  	
  Form of Indenture Trustee’s Annual Certification

  	
   

  	
  F-1

  
	
  Exhibit G

  	
   

  	
  Form of Certificate Regarding Reacquired Contracts

  	
   

  	
  G-1

  
	
  Exhibit H

  	
   

  	
  List of Contracts

  	
   

  	
  H-1

  
	
  Exhibit I

  	
   

  	
  Form of Monthly Report to Noteholders and the
  Certificateholder

  	
   

  	
  I-1

  
	
  Exhibit J

  	
   

  	
  Seller’s Representations and Warranties

  	
   

  	
  J-1

  
	
  Exhibit K

  	
   

  	
  Lockbox Bank and Lockbox Account

  	
   

  	
  K-1

  
	
  Exhibit L

  	
   

  	
  Form of Subsequent Transfer Agreement

  	
   

  	
  L-1

  

 

 iii

SALE AND SERVICING AGREEMENT, dated as of January 15,
2007, among Harley-Davidson Motorcycle Trust 2007-1 (together with its
successors and assigns, the “Issuer” or
the “Trust”), Harley-Davidson Customer
Funding Corp. (together with its successor and assigns, the “Trust
Depositor”), The Bank of New York 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 an initial and one or more subsequent pools 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:

“Addition Notice” means, with respect to any transfer of Subsequent
Contracts to the Issuer pursuant to Section 2.03 and the Trust Depositor’s
corresponding prior purchase of such Contracts from the Seller, a notice, which
shall be given at least 10 days prior to the related Subsequent Transfer Date,
identifying the aggregate Principal Balance of the Subsequent Contracts to be
transferred.

“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 and the Pre-Funded Amount, if any.  At the time of initial issuance of the
Securities, the initial aggregate principal amount of the Securities will equal
the initial Pool Balance plus the initial Pre-Funded Amount.

 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 Initial 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, and shall include, solely in
respect of a Distribution Date in connection with a Mandatory Redemption, any
amount remaining on deposit in the Pre-Funding Account on the Distribution Date
on or immediately following the last day of the Funding Period after giving
effect to the Issuer’s acquisition of Subsequent Contracts.

“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, (vii)
all amounts received in respect of Carrying Charges transferred from the
Interest Reserve Account pursuant to Section 7.03, and (viii) 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 January 22, 2007 relating
to the Harley-Davidson Motorcycle Trusts.

“Buell” means Buell Motorcycle
Company, LLC.

 2
 

“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.

“Carrying Charges” means, with respect to any Distribution Date, the sum
of (i) the product of (x) the weighted average of the Class A-1 Rate, the Class
A-2 Rate, the Class A-3 Rate, the Class A-4 Rate, the Class B Rate and the
Class C Rate for the related Interest Period (with each such rate being
multiplied by the number of days in the Interest Period related to the
applicable Class of Notes divided by 360) and (y) the undisbursed funds
(excluding investment earnings) in the Pre-Funding Account (as of the last day
of the related Due Period) and (ii) the Indenture Trustee Fee for the related
Distribution Date, minus (iii) the amount of any investment earnings on funds
in the Pre-Funding Account which was transferred to the Interest Reserve
Account, as well as interest earnings on amounts in the Interest Reserve
Account with respect to such Distribution Date.

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

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

“Class A-1 Final Distribution Date” means the February 2008 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 5.30025%
per annum (computed on the basis of the actual number of days elapsed and a
360-day year).

“Class A-2 Final Distribution Date” means the January 2011 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 5.29% per
annum (computed on the basis of a 360-day year of twelve 30-day months).

 3
 

“Class A-3 Final Distribution Date” means the March 2012 Distribution Date.

“Class A-3 Noteholder” means the Person in whose name a Class
A-3 Note is registered in the Note Register.

“Class A-3 Rate” means 5.22% per
annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class A-4 Final Distribution Date” means the June 2013 Distribution Date.

“Class A-4 Noteholder” means the Person in whose name a Class
A-4 Note is registered in the Note Register.

“Class A-4 Rate” means 5.21% per
annum (computed on the basis of a 360-day year of twelve 30-day months).

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

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

“Class B Rate” means 5.37% per
annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class C Final Distribution Date” means the April 2015 Distribution Date.

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

“Class C Rate” means 5.54% per
annum (computed on the basis of a 360-day year of twelve 30-day months).

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

“Closing Date” means January 31,
2007.

“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 any Subsequent Purchase Agreement) and
transferred to the Trust by the Trust Depositor pursuant to this Agreement (and
any Subsequent Transfer Agreement), and includes the master file and the
history file as well as servicing information with respect to the Contracts.

 4
 

“Contract Assets” has the meaning assigned in Section 2.01 (and 2.03, as
applicable in the case of Subsequent Contracts) 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 (as such list may be supplemented from time to time to reflect
transfers of Subsequent Contracts), and includes, without limitation, all
related security interests and any and all rights to receive payments which are
collected pursuant thereto after the Initial Cutoff Date or, with respect to
any Subsequent Contracts, any related Subsequent Cutoff Date, but excluding any
rights to receive payments which are collected pursuant thereto on or prior to
the Initial Cutoff Date, or with respect to any Subsequent Contracts, any
related Subsequent Cutoff Date.

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

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

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

“Cumulative Loss Ratio” means, as of any Distribution Date, the
fraction (expressed as a percentage) computed by the Servicer by dividing (i)
the aggregate Net Liquidation Losses for all Contracts since the related Cutoff
Date through the end of the related Due Period by (ii) the sum of (A) the
Principal Balance of the Contracts as of the Initial Cutoff Date plus (B) the
Principal Balance of any Subsequent Contracts as of the related Subsequent
Cutoff Date plus (C) the Pre-Funded Amount.

“Cutoff Date” means either or both (as the context may require) the
Initial Cutoff Date and any Subsequent Cutoff Date.

“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,

 5
 

(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 February
15, 2007.

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

“Due Period” means a calendar month during the term of this
Agreement, and the Due Period related to a Determination Date or Distribution
Date shall be the calendar month immediately preceding such date; provided, however, that with respect to the Initial
Determination Date or Initial Distribution Date, the Due Period shall be the
period from the Initial Cutoff Date to and including January 31, 2007.

“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;

 6
 

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

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

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

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

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

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

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

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

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

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

“First Priority Principal Distributable Amount” means, with respect to any Distribution
Date, an amount, not less than zero, equal to the result of (a) the
aggregate Outstanding Amount of the Class A Notes as of the preceding Distribution
Date (after giving effect to any principal payments made on the Class A
Notes on that preceding Distribution Date), minus (b) the Aggregate Principal Balance at the
end of Due Period related to that Distribution Date; provided, however,
that the First Priority Principal

 7
 

Distributable Amount
shall not exceed the Outstanding Amount of the Class A Notes (after giving
effect to any principal payments made on the Class A Notes on that
preceding Distribution Date).

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

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

“Funding Period” means the period beginning on the Closing Date and
ending on the first to occur of (a) the date on which the amount on deposit in
the Pre-Funding Account (after giving effect to any transfers therefrom
in connection with the transfer of Subsequent Contracts to the Trust on such
date) is less than $150,000, (b) the date on which an Event of Termination
occurs, (c) the date on which an Insolvency Event occurs with respect to the
Trust Depositor and (d) the close of business on the date which is 90 days from
and including the Closing Date.

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

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

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

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

“Indenture Trustee Fee” means, with respect to any Distribution
Date, one-twelfth of the product of 0.00215% and the sum of (i) the
Principal Balance of the Contracts as of the beginning of the related Due
Period and (ii) the Pre-Funded Amount as of the beginning of such 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

 8
 

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
$141,000,000.

“Initial Class A-2 Note Balance” means
$290,000,000.

“Initial Class A-3 Note Balance” means
$158,000,000.

“Initial Class A-4 Note Balance” means
$143,000,000.

“Initial Class B Note Balance” means
$48,000,000.

“Initial Class C Note Balance” means
$20,000,000.

“Initial Contracts” means those Contracts conveyed to the Trust on the
Closing Date.

“Initial Cutoff Date” means as of
the close of business on January 15, 2007.

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

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

 9
 

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

“Interest Reserve Account” means the account designated as the
Interest Reserve Account in, and which is established and maintained pursuant
to, Section 7.04 hereof.

“Interest Reserve Amount” means, as of any date of determination,
the amount on deposit in the InterestReserve
Account on such date, and as of the Closing Date shall be $1,854,434.86.

“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, other than the Pre-Funding Account,
to be deposited into the Collection Account on such Distribution Date pursuant
to Section 5.05(b).

“Issuer” means the
Harley-Davidson Motorcycle Trust 2007-1.

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

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

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

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

“Lockbox” means the Lockbox maintained by a Lockbox Bank
identified on Exhibit K hereto.

“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

 10
 

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 related Due Period.

“Mandatory Redemption” means the prepayment, in part, made to
the Noteholders without premium made on the Distribution Date on or immediately
following the last day of the Funding Period in the event that any amount
remains on deposit in the Pre-Funding Account after giving effect to the
acquisition of all Subsequent Contracts, including any such acquisition on such
date.

“Mandatory Redemption Subaccount” means the subaccount of the Note
Distribution Account into which deposits from the Pre-Funding Account for any
Mandatory Redemption are made.

“Modified Required Holders” means Noteholders evidencing at least 66
2/3% of the aggregate Outstanding Amount of the Controlling Class.

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

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

 11
 

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

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

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

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

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

“Note Pool Factor” means with respect to any Class of Notes as of the
close of business on any Distribution Date, a seven-digit decimal figure equal
to the outstanding principal amount of such Class of Notes (after giving effect
to any reductions thereof to be made on such Distribution Date) divided by the
original outstanding principal amount of such Class of Notes.

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

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

 12
 

Date and allocable to
principal) to reduce the Outstanding Amount of the Class A-2 Notes to zero,
(iii) on the Class A-3 Final Distribution Date shall not be less than the
amount that is necessary (after giving effect to other amounts to be deposited
in the Note Distribution Account for payment on the Class A-3 Notes on such
Distribution Date and allocable to principal) to reduce the Outstanding Amount
of the Class A-3 Notes to zero, (iv) on the Class A-4 Final Distribution Date
shall not be less than the amount that is necessary (after giving effect to
other amounts to be deposited in the Note Distribution Account for payment on
the Class A-4 Notes on such Distribution Date and allocable to principal) to
reduce the Outstanding Amount of the Class A-4 Notes to zero, (v) on the Class
B Final Distribution Date shall not be less than the amount that is necessary
(after giving effect to 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 Amount on the Class B
Notes to zero, and (vi) on the Class C Final Distribution Date shall not be
less than the amount that is necessary (after giving effect to the other
amounts to be deposited in the Note Distribution Account for payment on the
Class C Notes on such Distribution Date and allocable to principal) to reduce
the Outstanding Amount on the Class C notes to zero.

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

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

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

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

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

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

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

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

“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.

 13
 

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

“Pre-Funded Amount” means as of any date, the amount on
deposit in the Pre-Funding Account at the close of business on such date.

“Pre-Funding Account” means the account designated as the Pre-Funding
Account in, and which is established and maintained pursuant to
Section 7.07.

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

“Principal Distributable Amount” means, 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

 14
 

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.

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

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

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

“Required Holders” means Noteholders evidencing more than 50% of the
aggregate Outstanding Amount of the Controlling Class.

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

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

“Reserve Fund Initial Deposit” means $1,368,703.03.

“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) 3.50% 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) 3.25% with
respect to

 15
 

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) 1.75% 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) 2.50% 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) 3.25% 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) 3.50% with respect to any Distribution Date occurring after the
third anniversary of the Closing Date.

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

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

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

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

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

“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 and any Subsequent Purchase Agreement.

 16
 

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

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

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

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

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

“Shortfall” means, with respect to a Distribution Date, an amount
equal to the excess (if any) of (a) the sum of the amounts payable pursuant to
(1) clauses (v) through (x) of Section 7.05(a), (2) clauses (i) through (vi) of
Section 7.05(b) or (3) clauses (i) through (vi) 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.

“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)           1.50% of the Principal Balance of the
Contracts in the Trust as of the last day of the related Due Period; provided, however, in the event a Reserve Fund Trigger Event
occurs and is continuing for three consecutive Distribution Dates (inclusive of
the respective Distribution Date), the Specified Reserve Fund Balance shall be
equal to 6.00% of the Principal Balance of the Contracts in the Trust as of the
last day of the immediately preceding Due Period; and

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

 17

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.

“Subsequent Contracts” means all Contracts transferred to the
Trust pursuant to Section 2.03.

“Subsequent Cutoff Date” means the date specified as such for
Subsequent Contracts in the related Subsequent Transfer Agreement.

“Subsequent List of Contracts” means a list, in the form of the initial
List of Contracts delivered on the Closing Date, but listing each Subsequent
Contract transferred to the Trust pursuant to the related Subsequent Transfer
Agreement.

“Subsequent Purchase Agreement” means, with respect to any Subsequent
Contracts, the agreement between the Seller and the Trust Depositor pursuant to
which the Seller will transfer the Subsequent Contracts to the Trust Depositor,
the form of which is attached to the Transfer and Sale Agreement as Exhibit C.

“Subsequent Reserve Fund Amount” means the amount on each Subsequent
Transfer Date equal to 0.25% of the aggregate balance of the Subsequent
Contracts (as of the related Subsequent Cutoff Dates) conveyed to the Trust.

“Subsequent Transfer Agreement” means the agreement described in Section
2.03(b) hereof.

“Subsequent Transfer Date” means any date during the Funding Period
on which Subsequent Contracts are transferred to the Trust.

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

“Supplement” means the Prospectus
Supplement dated January 23, 2007.

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

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

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

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

 18
 

“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 January 1,
2007, between the Trust Depositor and the Owner Trustee.

“Trust Corpus” has the meaning given to such term in Section 2.01(a)
hereof (and in Section 2.03(a) hereof in respect of Subsequent Contracts and
related assets transferred to the Trust pursuant to Subsequent Transfer
Agreements).

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

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

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

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

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

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

“Underwriting Agreement” means the Underwriting Agreement, dated
January 23, 2007, by and among the Trust Depositor, the Seller and the
Underwriters.

“United States” means the United
States of America.

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

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

 19
 

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 Initial Contracts
listed on the initial 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 Initial Cutoff
Date, including any liquidation proceeds therefrom, but excluding any rights to
receive payments which were collected pursuant thereto on or prior to the
Initial Cutoff Date), (ii) all rights of the Trust Depositor under any physical
damage or other individual insurance policy (and rights under a “forced placed” policy, if any), any debt
insurance policy or any debt cancellation agreement relating to any such
Contract, an Obligor or a Motorcycle securing such Contract, (iii) all security
interests in each such Motorcycle, (iv) all documents contained in the related
Contract Files, (v) all rights (but not the obligations) of the Trust Depositor
under any related motorcycle dealer agreements between dealers (i.e., the
originators of certain Contracts) and the Seller, (vi) all rights of the Trust
Depositor in the Lockbox, the Lockbox Account and the related Lockbox Agreement
to the extent they relate to the Contracts, (vii) all rights (but not the
obligations) of the Trust Depositor under the Transfer and Sale Agreement,
including but not limited to the Trust Depositor’s rights under Article V
thereof, (viii) the remittances, deposits and payments made into the Trust
Accounts from time to time and amounts in the Trust Accounts from time to time
(and any 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

 20
 

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

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

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

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

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

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

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

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

 21
 

(i)            Evidence of deposit in
the Collection Account of all funds received with respect to the Initial
Contracts after the Initial 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.        Conveyance of Subsequent
Contracts.  (a) Subject to the
conditions set forth in paragraph (b) below, the Trust Depositor shall
transfer, assign, set over and otherwise convey to the Trust, without recourse
other than as expressly provided herein and therein, (i) all the right, title
and interest of the Trust Depositor in and to the Subsequent Contracts listed
on the Subsequent List of Contracts (including, without limitation, all
security interests and all rights to receive payments which are collected
pursuant thereto after the related Subsequent Cutoff Date, including any
liquidation proceeds therefrom, but excluding any rights to receive payments
which were collected pursuant thereto on or prior to such Subsequent Cutoff
Date), (ii) all rights of the Trust Depositor under any physical damage or
other individual insurance policy (including a “forced placed” policy, if any), any debt insurance policy or
any debt cancellation agreement relating to any such Subsequent Contract, an
Obligor or a Motorcycle securing such Subsequent Contract, (iii) all security
interests in each such Motorcycle, (iv) all documents contained in the related
Contract Files, (v) all rights (but not the obligations) of the Trust Depositor
under any related motorcycle dealer agreements between dealers (i.e., the
originators of certain Subsequent Contracts) and the Seller, (vi) all rights of
the Trust Depositor in the Lockbox, the Lockbox Account and the related Lockbox
Agreement to the extent they relate to such Subsequent Contracts, (vii) all
rights (but not the obligations) of the Trust Depositor under the Transfer and
Sale Agreement related to such Subsequent Contracts (to the extent not already
conveyed under Section 2.01(a)), including but not limited to the Trust
Depositor’s related rights under Article V thereof, as well as all rights, but
not the obligations, of the Trust Depositor under the Subsequent Purchase
Agreement related to such Subsequent Contracts, (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 related to such Subsequent
Contracts (to the extent not already conveyed under Section 2.01(a)) (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 Subsequent Contracts and (x) all proceeds
and products of the foregoing (the property in clauses (i)-(x) above,
upon such transfer, becoming part of the “Trust
Corpus”).  Although the Trust
Depositor and the Owner Trustee agree that such transfer is intended to be a
transfer of ownership, rather than the granting of a security interest to
secure a borrowing, and that the Trust Corpus following such transfer 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 Owner

 22
 

Trustee for the benefit of the Trust a perfected first priority
security interest in such Trust Corpus and this Agreement shall constitute a
security agreement under applicable law.

(b)           The Trust Depositor shall transfer to the
Trust the Subsequent Contracts and the other property and rights related
thereto described in paragraph (a) above only upon the satisfaction of each of
the following conditions on or prior to the related Subsequent Transfer Date:

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

(ii)           the Funding Period
shall not have terminated;

(iii)          the Trust Depositor
shall have delivered to the Owner Trustee a duly executed written assignment
(including an acceptance by the Owner Trustee) in substantially the form of Exhibit L hereto (the “Subsequent Transfer
Agreement”), which shall include a Subsequent List of Contracts
listing the Subsequent Contracts;

(iv)          the Trust Depositor
shall have deposited or caused to be deposited in the Collection Account all
collections received with respect to the Subsequent Contracts after the related
Subsequent Cutoff Date;

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

(vi)          the applicable
Subsequent Reserve Fund Amount for such Subsequent Transfer Date shall have
been deposited by the Indenture Trustee from the Pre-Funding Account to the
Reserve Fund;

(vii)         each Rating Agency shall
have notified the Trust Depositor, the Owner Trustee and the Indenture Trustee
that following such transfer the Notes will be rated at least their respective
ratings as of the Closing Date by such Rating Agency;

(viii)        such addition will not
result in a material adverse tax consequence to the Trust or the
Certificateholder as evidenced by an Opinion of Counsel to be delivered by the
Trust Depositor to the Owner Trustee, Indenture Trustee, the Rating Agencies
and the Underwriters;

(ix)           the Trust Depositor
shall have confirmed the satisfaction of each condition precedent specified in
this paragraph (b);

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

 23
 

(xi)           no selection procedures
believed by the Trust Depositor to be adverse to the interests of the
Noteholders shall have been utilized in selecting the Subsequent Contracts;

(xii)          the
Trust Depositor shall have delivered to the Rating Agencies evidence that (A) the
weighted average contract rate of the Contracts collectively, following the
transfer of the Subsequent Contracts, is not less than 11.91% and (B) that the
weighted average calculated remaining term to maturity of the Contracts
collectively, following the transfer of the Subsequent Contracts, does not
exceed 73 months;

(xiii)         each of the
representations and warranties made by the Seller pursuant to Section 3.01
of the Transfer and Sale Agreement with respect to the Subsequent Contracts
shall be true and correct as of the related Subsequent Transfer Date, and the
Seller shall have performed all obligations to be performed by it hereunder on
or prior to such Subsequent Transfer Date;

(xiv)        the Seller or the Servicer
shall, at its own expense, on or prior to the Subsequent Transfer Date indicate
in its Computer File that the Subsequent Contracts identified on the Subsequent
List of Contracts in the Subsequent Transfer Agreement have been transferred to
the Issuer pursuant to this Agreement and the Transfer and Sale Agreement; and

(xv)         the Seller shall have
taken any action required to maintain the first perfected ownership interest of
the Issuer in the Trust Estate and the first perfected security interest of the
Indenture Trustee in the Collateral.

(c)           The Trust Depositor covenants to transfer
(at or prior to the end of the Funding Period) to the Trust pursuant thereto
Subsequent Contracts with an aggregate Principal Balance equal to
$252,518,789.63; provided, however, that in
complying with such covenant, the Trust Depositor agrees to make no more than
one separate transfer of Subsequent Contracts per monthly period (as measured
by the corresponding Distribution Dates). 
In the event that the Trust Depositor shall fail to deliver and transfer
to the Trust any or all of such Subsequent Receivables by the date on which the
Funding Period ends and the Pre-Funded Amount is greater than $150,000 on such
date, the Trust Depositor shall cause to be deposited into the Collection
Account the amount then on deposit in the Pre-Funding Account; provided, however, that the foregoing shall be the sole
remedy of the Trust, the Owner Trustee, the Indenture Trustee and the
Securityholders with respect to a failure of the Trust Depositor to comply with
such covenant.

ARTICLE THREE

REPRESENTATIONS
AND WARRANTIES

The Seller under the Transfer and Sale Agreement has
made, and upon execution of each Subsequent Purchase Agreement is deemed to
remake, each of the representations and warranties set forth in Exhibit J hereto and has consented to the assignment by the
Trust Depositor to the Issuer of the Trust Depositor’s rights with respect
thereto.  Such representations speak as
of the execution and delivery of this Agreement and as of the Closing Date in
the case of the Initial Contracts, and as of the applicable Subsequent Transfer
Date in the case of the Subsequent Contracts, but shall survive the transfer
and assignment of the Contracts to the Trust. 
Pursuant to Section 2.01 of this Agreement, the Trust Depositor

 24
 

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 and each Subsequent Transfer
Agreement, the Trust Depositor represents and warrants to the Trust, the Indenture
Trustee and the Noteholders that:

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

(b)           Organization and Good
Standing.  The Trust Depositor is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has the corporate power to own
its assets and to transact the business in which it is currently engaged.  The Trust Depositor is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the character of the business transacted by it or properties owned or
leased by it requires such qualification and in which the failure so to qualify
would have a material adverse effect on the business, properties, assets, or
condition (financial or other) of the Trust Depositor or the Trust.

(c)           Authorization; Valid
Sale; Binding Obligations.  The Trust
Depositor has the power and authority to make, execute, deliver and perform its
obligations under this Agreement and the other Transaction Documents to which
it is a party and all of the transactions contemplated under this Agreement and
the other Transaction Documents to which it is a party, and to create the Trust
and cause it to make, execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement and the other Transaction Documents to which it
is a party and to cause the Trust to be created.  This Agreement and the related Subsequent
Transfer Agreement, if any, 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.

 25
 

(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 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 in the case of the
Initial Contracts, and as of the applicable Subsequent Transfer Date in the
case of the Subsequent Contracts, 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.

 26
 

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

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

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

(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.

 27
 

ARTICLE FOUR

PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

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

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

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

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

(ii)           implement policies and
procedures in writing and signed by a Servicing Officer with respect to persons
authorized to have access to the Contract Files on the Servicer’s premises 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 (or Subsequent Transfer Date, as the case
may be), 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 (or Subsequent Transfer Date, as the
case may be) it has conducted an inventory of the Contract Files (which in the
case of Subsequent Contracts, need be only of the Contract Files related to
such Subsequent Contracts) and that there exists a Contract File for each
Contract and stating all exceptions to such statement, if any.

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

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

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

 29
 

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

ARTICLE FIVE

SERVICING OF CONTRACTS

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

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

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

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

 30
 

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 Initial Cutoff Date or
Subsequent Cutoff Date, as applicable (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;

(vii)         All amounts realized in
respect of Carrying Charges transferred from the Interest Reserve Account as
contemplated in Section 7.03(b); and

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

(c)           The Indenture Trustee shall, if amounts
remain on deposit in the Pre-Funding Account at the expiration of the
Funding Period, cause to be deposited into the Note Distribution Account the
amount then on deposit in the Pre-Funding Account.

(d)           The Servicer shall direct the Indenture
Trustee, 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

 31
 

Indenture Trustee shall
have sole control over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment, if any, shall
be delivered directly to the Indenture Trustee or its agent, together with each
document of transfer, if any, necessary to transfer title to such investment to
the Indenture Trustee in a manner which complies with this Section
5.05(d).  All interest, dividends, gains
upon sale and other income from, or earnings on, investments of funds in the
Trust Accounts (other than the Reserve Fund and the Pre-Funding Account) shall
be deposited in the Collection Account pursuant to Section 5.05(b) and
distributed on the next Distribution Date pursuant to Section 7.05.  The Trust Depositor and the Trust agree and
acknowledge that the Indenture Trustee is to have “control”
(within the meaning of Section 9-106 of the UCC) of collateral comprised of “Investment Property” (within the meaning of Section 9-102
of the UCC) for all purposes of this Agreement.

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

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

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

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

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

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

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

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

 32
 

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 C Final Distribution Date, it shall promptly purchase
such Contract pursuant to Section 7.11.

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

(g)           If the Servicer shall have repossessed a
Motorcycle on behalf of the Trust, the Servicer shall either (i) maintain at
its expense physical damage insurance with respect to such Motorcycle, or (ii)
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

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

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

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

Section 5.10.        Successor Servicer/Lockbox
Agreements.  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.

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

ARTICLE SIX

THE TRUST DEPOSITOR

Section 6.01.        Covenants of the Trust
Depositor.

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

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

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

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

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

 35
 

own, purchase, repurchase
or acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, any other interest in, or make any capital contribution to, any
other Person.

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

(g)           Restricted Payments. 
Except as permitted or contemplated by the Transaction Documents, the
Trust Depositor shall not, directly or indirectly, (i) pay any dividend or make
any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to any owner of an equity
interest in the Trust Depositor, (ii) redeem, purchase, retire or otherwise
acquire for value any such equity interest or (iii) set aside or otherwise
segregate any amounts for any such purpose; it being understood that the Trust
Depositor shall at all times have the right to distribute funds received
pursuant to the Transaction Documents to its equity owner.

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

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

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

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

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

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

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

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

The Trust Depositor shall indemnify, defend and hold
harmless the Issuer, the Owner Trustee, WTC, the Indenture Trustee and the
Servicer from and against any taxes that may at any time be asserted against
any such Person as a result of or relating to the transactions contemplated
herein and in the other Transaction Documents, including any sales, gross
receipts, gross margin, general corporation, tangible personal property,
Illinois personal property replacement privilege or license taxes (but, in the
case of the Issuer, not including any taxes asserted with respect to, and as of
the date of, the transfer of the Contracts to the Issuer or the issuance and
original sale of the Securities, or federal or other income taxes arising out
of distributions on the Certificate or the Notes) and costs and expenses in
defending against the same.

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

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

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

Indemnification under this Section shall include,
without limitation, reasonable fees and expenses of counsel and expenses of
litigation and shall survive the termination of the Trust and the resignation
or

 37
 

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, 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

 38
 

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.

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

 39
 

under Section 7.05(a) are insufficient for
payment of the Indenture Trustee’s Fee and the Monthly Servicing Fee.

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

(b)           The Servicer shall determine no later
than 11:00 a.m., Chicago, Illinois time, on the second Business Day prior to a
Distribution Date (or, in the case of the termination of the Funding Period
pursuant to clause (a) of the definition thereof, on the Business Day prior to
the date of such termination) the Carrying Charges in respect of the upcoming
Distribution Date.  To the extent of such
amount, the Indenture Trustee shall transfer an amount equal to the Carrying
Charges from the Interest Reserve Account (solely to the extent of the amount
then on deposit in such account) into the Collection Account as contemplated in
Section 5.05(b)(vii) hereof.

Section 7.04.        Interest Reserve Account.

(a)           On or prior to the Closing Date, the Trust Depositor
shall establish with and in the name of the Indenture Trustee on behalf of the
Securityholders, an Eligible Account designated “Harley-Davidson
Customer Funding Corp. Interest Reserve Account - Harley Davidson Motorcycle
Trust 2007-1 – The Bank of New York Trust Company, N.A., as Indenture Trustee”
(such account being the “Interest Reserve
Account”).

(b)           No withdrawals may be made of funds in the Interest
Reserve Account except as provided in (c) below.  Except as specifically provided, funds in the
Interest Reserve Account shall not be commingled with funds in any other
account established with respect to the Notes, the Certificate or with any
other monies.

(c)           All investment earnings realized in respect of amounts
in the Pre-Funding Account shall be deposited when and as received in the
Interest Reserve Account, such that the Pre-Funded Amount shall never exceed
the amount initially deposited into the Pre-Funding Account on the Closing
Date.  With respect to amounts on deposit
in the Interest Reserve Account, the Indenture Trustee shall disburse from such
funds the amount specified in respect of Carrying Charges in accordance with
Section 7.03(b)

 40
 

herein.  In the event that (i) the Funding Period has
terminated, (ii) all amounts on deposit in the Pre-Funding Account have
been disbursed, (iii) a Distribution Date has elapsed following the
occurrence of both (i) and (ii), and (iv) all amounts referred to in
clause (ii) have been applied, then any amounts remaining in the Interest Reserve
Account shall be allocated and distributed to the Trust Depositor; provided
that, notwithstanding the foregoing, on the date on which the Funding Period
terminates pursuant to clause (a) of the definition thereof, any amounts
remaining in the Interest Reserve Account (other than the amount specified in
respect of Carrying Charges in accordance with Section 7.03(b)) shall be
released to the Trust Depositor on such date.

Section 7.05.        Distributions; Priorities.

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

(i)            to the Mandatory Redemption Subaccount in the Note Distribution
Account to the Noteholders, the amount of any Mandatory Redemption (which
amounts are available for payment of such Mandatory Redemptions and not for any
other purpose) which amount shall be paid in the following order of priority:
first, to the Class A-1 Noteholders until the Class A-1 Notes are paid in full,
second, any remaining amount shall be paid to the Class A-2 Noteholders until
the Class A-2 Notes are paid in full, third, any remaining amount shall be paid
to the Class A-3 Noteholders until the Class A-3 Notes are paid in full,
fourth, any remaining amount shall be paid to the Class A-4 Noteholders until
the Class A-4 Notes are paid in full, fifth, any remaining amount shall be paid
to the Class B Noteholders until the Class B Notes are paid in full, and sixth,
any remaining amount shall be paid to the Class C Noteholders until the Class C
Notes are paid in full;

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

(vi)          to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, the First Priority
Principal Distributable Amount with respect to such Distribution Date first, to
the Class A-1 Noteholders until the Class A-1 Notes have been paid in

 41
 

full, second, to
the Class A-2 Noteholders until the Class A-2 Notes have been paid in full,
third, to the Class A-3 Noteholders until the Class A-3 Notes have been paid in
full and, fourth, to the Class A-4 Noteholders until the Class A-4 Notes have
been paid in full;

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

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

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

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

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

(xii)          to the Holder of the Certificate.

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

 42
 

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

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

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

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

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

(1)           to the Class A Notes, first, to the Class A-1
Noteholders, until the outstanding principal balance of the Class A-1 Notes has
been paid in full and, second, to the Class A-2 Noteholders, Class A-3
Noteholders and Class A-4 Noteholders, pro
rata,based on the
outstanding principal amount of the related Classes of Notes, until the
outstanding principal balance of each such Class of the Notes has been paid in
full;

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

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

(vii)         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):

 43
 

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

(ii)           to the Note Distribution Account, together with any
amounts deposited therein pursuant to Section 7.06, all amounts remaining after
distribution of amounts in clause (i) above for distribution to the Class A
Noteholders first, to the Class A-1 Noteholders until the Class A-1 Notes have
been paid in full and, second, to the Class A-2 Noteholders, Class A-3
Noteholders and Class A-4 Noteholders, pro
rata, based on the outstanding principal amount of the related
Classes of Notes, until such Classes of Notes have been paid in full;

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

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

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

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

(vii)         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

 44
 

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.

(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.        Establishment of
Pre-Funding Account.

(a)           On or prior to the Closing Date, the Trust Depositor
shall establish with and in the name of the Indenture Trustee on behalf of the
Securityholders, an Eligible Account designated “Harley-Davidson
Customer Funding Corp. Pre-Funding Account - Harley Davidson Motorcycle Trust
2007-1 – The Bank of New York Trust Company, N.A., as Indenture Trustee”
(such account being the “Pre-Funding Account”).

(b)           During the Funding Period, following receipt from the
Trust Depositor of an Addition Notice, and upon further receipt of a written
demand from the Trust Depositor for a disbursement of funds from the
Pre-Funding Account to be made on or before the date on which the Funding
Period terminates (which written demand must be delivered not later than one
Business Day prior to the requested date of funding and must be accompanied by
the written consent of the Indenture Trustee), the Indenture Trustee will
disburse the amount demanded from the Pre-Funding Account to the Seller upon
the order of the Trust Depositor for the purpose of purchasing Subsequent
Contracts from the Seller pursuant to a Subsequent Purchase Agreement.  With respect to amounts still remaining on
deposit in the Pre-Funding Account on the date upon which the Funding Period
ends (and provided a timely written demand for funding as described above has
not been received requesting funding on such date) the Indenture Trustee

 45
 

shall immediately
transfer all funds remaining in the Pre-Funding Account to the Note
Distribution Account.

(c)           If (x) the Pre-Funded Amount has not been reduced
to zero on the Distribution Date on which the Funding Period ends (or, if the
Funding Period does not end on a Distribution Date, on the first Distribution
Date following the end of the Funding Period) or (y) the Pre-Funded Amount
has been reduced to $150,000 or less on any Determination Date, in either case
after giving effect to any reductions in the Pre-Funded Amount on such Distribution
Date or Determination Date pursuant to paragraph (b) above, the Trust
Depositor shall instruct the Indenture Trustee to withdraw from the Pre-Funding
Account the Pre-Funded Amount and, in the case of (x), on such Distribution
Date or, on the Determination Date, deposit the Pre-Funded Amount in the Note
Distribution Account for payment as principal of the Class A-1 Notes up to
the Outstanding Amount thereof, then for payment of principal of the
Class A-2 Notes up to the Outstanding Amount thereof, then for payment of
principal of the Class A-3 Notes up to the Outstanding Amount thereof,
then for payment of principal of the Class A-4 Notes up to the Outstanding
Amount thereof, then for payment of principal of the Class B Notes up to the Outstanding
Amount thereof and then for payment of principal of the Class C Notes up to the
Outstanding Amount thereof.

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

 46
 

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

 47
 

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 (or in any Subsequent Purchase Agreement or Subsequent
Transfer 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 (or in any Subsequent
Purchase Agreement or Subsequent Transfer 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 (or under any Subsequent Purchase Agreement or Subsequent Transfer
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;

(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, in any Subsequent Transfer 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,

 48
 

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
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

 49
 

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 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 Initial Cutoff Date, (ii) the Subsequent Cutoff Date,
(iii) thereafter, as of the last day of the preceding Due Period on each
Determination Date prior to a Service Transfer and (iv) 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.

 50
 

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

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

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

 51
 

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

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

ARTICLE NINE

REPORTS

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

Section 9.02.        Officer’s Certificate.  Each Monthly Report delivered pursuant to
Section 9.01 shall be accompanied by a certificate of a Servicing Officer
substantially in the form of Exhibit C,
certifying the accuracy of the Monthly Report and that no Event of Termination
or event that with notice or lapse of time or both would become an Event of
Termination has occurred, or if such event has occurred and is continuing,
specifying the event and its status.

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

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

(a)  The Servicer will:

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

 52
 

(ii)           cause a firm of registered public accountants that is
qualified and independent within the meaning of Rule 2-01 of Regulation S-X
under the Securities Act to deliver to the Indenture Trustee and each Rating
Agency within 90 days after the end of each calendar year an attestation report
that satisfies the requirements of Rule 13a-18 or Rule 15d-18 under the
Exchange Act and Item 1122 of Regulation AB, as applicable, on the Servicer’s
assessment of compliance with servicing criteria with respect to the prior
calendar year.  Such attestation report
will be addressed to the board of directors of the Servicer and to the Trust,
the Trust Depositor and the Indenture Trustee. 
Such attestation report will be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.  Such registered public accounting firm may
render other services to the Servicer, the Depositor or the Seller, but such
firm must indicate in each attestation report that it is qualified and
independent within the meaning of Rule 2-01 of Regulation S-X under the
Securities Act; and

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

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

Section 9.05.        Monthly Reports to
Noteholders.  (a)  On or before two Business Days prior to each
Distribution Date, the Servicer shall prepare and, concurrently with each
distribution 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 at least
the following information:

(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;

 53

(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 amount of any
Mandatory Redemption to be made on such Distribution Date;

(viii)        for each Distribution Date
during the Funding Period, the remaining Pre-Funded Amount;

(ix)           for each Distribution Date
during the Funding Period to and including the Distribution Date immediately
following the end of the Funding Period, the Principal Balance and number of
Subsequent Contracts conveyed to the Trust during the related Due Period;

(x)            the remaining Principal
Balance after giving effect to the distribution of principal (and Mandatory
Redemption, if any) to each class of Notes to be made on such Distribution
Date;

(xi)           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;

(xii)          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;

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

(xiv)        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 and to any transfers of Subsequent
Contracts to the Trust occurring on or prior to such Distribution Date);

(xv)         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;

(xvi)        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;

(xvii)       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;

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

 54
 

(xix)         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

(xx)          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.

Section 9.06.        Regulation
AB.

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

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

(a)           As soon as available but no later than
March 15 of each calendar year for so long as the Issuer is required to
report under the Exchange Act, commencing in 2008, the Indenture Trustee shall:

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

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

 55
 

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

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

Section 9.08.        Exchange Act Reporting.

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

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

(c)           Form 10-K Filings.  So
long as the Issuer is required to report under the Exchange Act, no later than
March 15 of each year, commencing in 2008, the Indenture Trustee and the Owner
Trustee shall notify the Servicer of any Form 10-K Disclosure Item, together
with a description of any such Form 10-K Disclosure Item in form and substance
reasonably acceptable to the Servicer.

ARTICLE TEN

TERMINATION

Section 10.01.      Sale of Trust Assets.

(a)           [Intentionally Omitted].

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

(c)           Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the
Notes, the Certificateholder will succeed to the rights of the Noteholders

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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.

(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.

 57
 

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

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

Section
11.02.      Protection
of Title to Trust.

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

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

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

 58
 

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

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

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

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

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

Section
11.03.      Governing
Law.  This Agreement shall be construed
in accordance with the laws of the State of Illinois and the obligations,
rights, and remedies of the parties under the Agreement shall be determined in
accordance with such laws, 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 or electronic mail
transmission with a confirmation of receipt, in all cases addressed to the
recipient as follows:

 59
 

(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

or, on
and after February 12, 2007:

Harley-Davidson Credit
Corp.

222 West Adams Street,
Suite 2000

Chicago, Illinois  60606

Attention:  Perry A. Glassgow

Telecopier
No.:  (312) 368-4372

(ii)           If
to the Trust Depositor:

Harley-Davidson
Customer Funding Corp.

3850
Arrowhead Drive

Carson City, Nevada 89706

Attention:  Perry A. Glassgow

Telecopier No.:  (775) 886-3490

with a copy to:

Harley-Davidson Credit
Corp.

150 South Wacker Drive,
Suite 3100

Chicago, Illinois  60606

Attention:  Perry A. Glassgow

Telecopier
No.:  (312) 368-4372

or, on
and after February 12, 2007:

Harley-Davidson Credit
Corp.

222 West Adams Street,
Suite 2000

Chicago, Illinois  60606

Attention:  Perry A. Glassgow

Telecopier
No.:   (312) 368-4372

(iii)          If to the Indenture Trustee:

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

2 North LaSalle
Street

Suite 1020

Chicago, Illinois
60602

Attention:  Corporate Trust Administration

Telecopier No.:  (312) 827-8562

 60
 

(iv)          If
to the Owner Trustee:

Wilmington
Trust Company

Rodney
Square North

1100
North Market Street

Wilmington,
Delaware 19890-0001

Attention:
Corporate Trust Administration

Telecopier No.: (302) 636-4140

(v)           If
to Moody’s:

Moody’s
Investors Service, Inc.

99
Church Street

New
York, New York 10007

Attention:
ABS Monitoring Department

Telecopier No.: (212) 298-7139

Email:
servicerreports@moodys.com

(vi)          If
to Standard & Poor’s:

Standard
& Poor’s Ratings Services, a

division
of The McGraw Hill Companies, Inc.

55
Water Street

New
York, New York 10004

Telecopier No.: (212) 438-2657

(vii)         If to the Underwriters:

At the address set forth in the Underwriting Agreement

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

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

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

 61
 

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 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

 62
 

and that the terms and
provisions of this Section 11.10 may be enforced by an action for specific
performance.

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

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

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

(b)           Notwithstanding anything contained herein
to the contrary, this Agreement has been executed by The Bank of New York 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]

 63

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 2007-1

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wilmington Trust Company, not in its

  individual capacity but solely as Owner Trustee

  on behalf of the Trust

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michele C. Harra

  
	
   

  	
   

  	
      Printed Name:

  	
  Michele C. Harra

  	
   

  
	
   

  	
   

  	
     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

Exhibit
A

[Form of Assignment]

In accordance with the Sale and Servicing Agreement
(the “Sale and Servicing Agreement”) dated as
of January 15, 2007 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 2007-1 (the “Trust”), as assignee thereunder, the undersigned does
hereby sell, transfer, convey and assign, set over and otherwise convey to the
Trust (i) all the right, title and interest of the Trust Depositor in and to
the Initial Contracts listed on the initial 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
Initial Cutoff Date, including any liquidation proceeds therefrom, but
excluding any rights to receive payments which were collected pursuant thereto
on or prior to the Initial Cutoff Date), (ii) all rights of 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                           .

	
   

  	
  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 January 15, 2007 (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 2007-1 (“Issuer”) (all
capitalized terms used herein without definition have the respective meanings
set forth in the Agreement), and further certifies as follows:

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

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

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

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

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

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

 B-1
 

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

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

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

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

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

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

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

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

*    *    *   
*

 B-2

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

	
  

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name: 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 January 15, 2007 (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 2007-1 (“Issuer”), in
connection with the Transfer and Sale Agreement dated as of the Effective Date
(the “Transfer and Sale Agreement”) by and
between Harley-Davidson Credit and CFC (all capitalized terms used herein
without definition having the respective meanings set forth in the Sale and
Servicing Agreement), and further certifies as follows:

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

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

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

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

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

(6)           No event with respect to
Harley-Davidson Credit has occurred and is continuing which would constitute an
Event of Termination or an event that, with notice or the passage of

 C-1
 

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
Preliminary Prospectus (as defined in the Underwriting Agreement) or the
Prospectus and except as set forth therein.

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

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

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

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

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

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

 C-2
 

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                      .

	
  

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
  Title: Vice President, Treasurer and Assistant

  Secretary

  

 

Exhibit D

FORM OF REPORT ON ASSESSMENT OF COMPLIANCE WITH
APPLICABLE SERVICING

CRITERIA PURSUANT TO ITEM 1122 OF REGULATION AB UNDER THE

SECURITIES EXCHANGE ACT OF 1934

Date:                     

Re:          Harley-Davidson
Motorcycle Trust 2007-1

[Servicer][Indenture
Trustee] (the “Company”) hereby certifies that it is responsible for the
assessment of its compliance with the servicing criteria set forth in Item 1122
of Regulation AB applicable to it, as described on Schedule I attached hereto
(the “Applicable Servicing Criteria”), and further certifies as follows:

1.             The
Company used the criteria set forth in paragraph (d) of Item 1122 of Regulation
AB to assess compliance with the Applicable Servicing Criteria; and

2.             The
Company is in compliance with the Applicable Servicing Criteria as of and for
the period ending December 31,         
[except as described below:].

[Accountant],
an independent registered public accounting firm has issued an attestation
report on our assessment of compliance with the Applicable Servicing Criteria
as of and for the period ending December 31,
        , a copy of which is attached
hereto.

	
  

  	
  [                                                    ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: 

  	
   

  	
   

  
						

 

 D-1

Exhibit E

SERVICING CRITERIA TO BE ADDRESSED IN

INDENTURE TRUSTEE’S ASSESSMENT OF COMPLIANCE

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

Servicing Criteria

	
   

  	
   

  	
   

  	
   

  	
  Applicable

  Servicing

  
	
  Reference

  	
   

  	
  Criteria

  	
   

  	
  Criteria

  
	
   

  	
   

  	
  General
  Servicing Considerations

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(1)(i)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(1)(ii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(1)(iii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(1)(iv)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cash
  Collection and Administration

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(i)

  	
   

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

  	
   

  	
  x(2)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(ii)

  	
   

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

  	
   

  	
  x

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(iii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(iv)

  	
   

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

  	
   

  	
  x

  

 

 E-1
 

(1)           Each Assessment of
compliance delivered by the Indenture Trustee shall be made only toward such
portion(s) of servicing criteria applicable to the Indenture Trustee and not
such other portion(s) applicable to other persons.

(2)           Solely with regard to
deposits made by the Indenture Trustee.

 E-2
 

 

	
   

  	
   

  	
  Servicing Criteria

  	
   

  	
  Applicable

  Servicing

  Criteria

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(v)

  	
   

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

  	
   

  	
  x(3)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(vi)

  	
   

  	
  Unissued checks are safeguarded so as to prevent
  unauthorized access.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(2)(vii)

  	
   

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

  	
   

  	
   

  

 

	
  Reference

  	
   

  	
  Criteria

  	
   

  	
   

  
	
   

  	
   

  	
  Investor
  Remittances and Reporting

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(3)(i)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(3)(ii)

  	
   

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

  	
   

  	
  x

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(3)(iii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(3)(iv)

  	
   

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

  	
   

  	
  x

  

 

 E-3
 

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

 E-4
 

 

Pool
Asset Administration

 

	
  1122(d)(4)(i)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(ii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(iii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(iv)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(v)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(vi)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(vii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(viii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(ix)

  	
   

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

  	
   

  	
   

  

 

 E-5
 

 

	
  Reference

  	
   

  	
  Criteria

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(x)

  	
   

  	
  Regarding any funds held in trust for an obligor
  (such as escrow accounts): (A) such funds are analyzed, in accordance with
  the obligor’s Account documents, on at least an annual basis, or such other
  period specified in the transaction agreements; (B) interest on such funds is
  paid, or credited, to obligors in accordance with applicable Account documents
  and state laws; and (C) such funds are returned to the obligor within 30
  calendar days of full repayment of the related Accounts, or such other number
  of days specified in the transaction agreements.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xi)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xii)

  	
   

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

  	
   

  	
   

  

 

	
   

  	
   

  	
  Servicing Criteria

  	
   

  	
  Applicable

  Servicing

  Criteria

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xiii)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xiv)

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1122(d)(4)(xv)

  	
   

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

  	
   

  	
   

  

 

 E-6

Exhibit F

FORM OF INDENTURE TRUSTEE’S ANNUAL
CERTIFICATION

Re:          Harley-Davidson
Motorcycle Trust 2007-1

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

(1)           It
has reviewed the report on assessment of the Indenture Trustee’s compliance
provided in accordance with Rules 13a-18 and 15d-18 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and Item 1122
of Regulation AB (the “Servicing Assessment”), and the registered public
accounting firm’s attestation report provided in accordance with Rules 13a-18
and 15d-18 under the Exchange Act and Section 1122(b) of Regulation AB
(the “Attestation Report”) that were delivered by the Indenture Trustee
to the Seller pursuant to the Sale and Servicing Agreement (the “Agreement”),
dated as of January 15, 2007, by and between Harley-Davidson Customer Funding
Corp., the Servicer, the Indenture Trustee and Harley-Davidson Motorcycle Trust
2007-1 (collectively, the “Indenture Trustee Information”);

(2)               To the best of its knowledge, the
Indenture Trustee Information, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in the light of the circumstances under which such
statements were made, not misleading with respect to the period of time covered
by the Indenture Trustee Information; and

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

	
   

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

  
	
   

  	
  not in its individual capacity but solely as
  Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:

  
	
   

  	
   

  	
  Title: 

  

 

 F-1

Exhibit G

[Form of Certificate Regarding Reacquired Contracts]

Harley-Davidson Credit Corp.

Certificate Regarding Reacquired Contracts

The undersigned certifies
that he is the 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 January 15, 2007 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 2007-1 (all capitalized terms used herein without definition
having the respective meanings specified in the Agreement), and further
certifies that:

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

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

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

	
   

  	
  Harley-Davidson Credit Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:
  Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Vice
  President and Treasurer

  

 

 G-1

Exhibit H

[List of Contracts]

 H-1

Exhibit I

[Form of Monthly Report to Noteholders and the
Certificateholder]

Harley-Davidson
Motorcycle Trust 2007-1

$                               %
Motorcycle Contract Backed Notes, Class A-1

$                               %
Motorcycle Contract Backed Notes, Class A-2

$                               %
Motorcycle Contract Backed Notes, Class A-3

$                               %
Motorcycle Contract Backed Notes, Class A-4

$                               %
Motorcycle Contract Backed Notes, Class B

$                               %
Motorcycle Contract Backed Notes, Class C

Monthly
Report

For
the                                   
Distribution Date

 

Capitalized terms
are defined in the Sale and Servicing Agreement dated as of January 15, 2007.

 I-1
 

Beginning of Due Period

End of Due Period

Determination Date

Record Date

Distribution Date

Number of days in
Interest Period (On 30/360 basis)

Number of days in
Interest Period (On Actual/360 basis)

	
   

  	
   

  	
  Number

  	
   

  	
  Cut-Off

  	
   

  	
   

  	
   

  	
  Initial

  
	
  Purchases

  	
   

  	
  of Contracts

  	
   

  	
  Date

  	
   

  	
  Closing Date

  	
   

  	
  Pool Balance

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial Contracts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subsequent Contracts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 I-2
 

I. POOL BALANCE
CALCULATION

Principal Balance of
Contracts at beginning of Due Period

Pre-Funded Amount
at beginning of Due Period

Purchase of Subsequent
Contracts

Reduction of Pre-Funded
Amount at end of Due Period

Mandatory
Redemption amount

Monthly principal
amounts

Principal collections on
Contracts outstanding at end of Due Period

Principal collections on
Contracts paid off in full during Due Period

Balance of Contracts
liquidated during Due Period

Balance of Contracts
purchased by Seller or Servicer during Due Period

Other adjustments

Mandatory Redemption amount

Aggregate Principal Balance Decline

Aggregate
Principal Balance at end of Due Period

Pool factor

 I-3
 

II. NOTE PRINCIPAL
BALANCE CALCULATION:

	
  Original Note
  Balance

  	
   

  	
  Class A-1

  $

  	
   

  	
  Class A-2

  $

  	
   

  	
  Class A-3

  $

  	
   

  	
  Class A-4

  $

  	
   

  	
  Class B

  $

  	
   

  	
  Class C

  $

  	
   

  	
  Total

  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note balance at beginning of Due Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal Distributable Amount

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amounts otherwise distributable to Class B that have
  been distributed to Class A

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amounts otherwise distributable to Class C that have
  been distributed to Class A and/or Class B

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mandatory Redemption Amount

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note Principal Carryover Shortfall

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total principal paid

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note balance at end of Due Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note factor at beginning of Due Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Note factor at end of Due Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 I-4
 

 

III. NOTE INTEREST
DISTRIBUTABLE CALCULATION

	
   

  	
   

  	
   

  	
   

  	
  Interest Carryover

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Note Monthly

  	
   

  	
  Interest Carryover

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Note Balance

  	
   

  	
  Shortfall

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Interest

  	
   

  	
  Interest

  	
   

  	
  Shortfall

  	
   

  	
  Note Interest

  	
   

  
	
   

  	
   

  	
  at Beginning of

  	
   

  	
  at Beginning of

  	
   

  	
  Interest

  	
   

  	
   

  	
   

  	
  Accrual

  	
   

  	
  Distributable

  	
   

  	
  at End of

  	
   

  	
  Distributable

  	
   

  
	
  Class

  	
   

  	
  Due Period

  	
   

  	
  Due Period

  	
   

  	
  Rate

  	
   

  	
  Days

  	
   

  	
  Basis

  	
   

  	
  Amount

  	
   

  	
  Due Period

  	
   

  	
  Amount

  	
   

  
	
  A-1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A-4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 I-5
 

 

IV.CALCULATION OF
AVAILABLE MONIES AND DISTRIBUTIONS

Available Monies:

Principal collections on
Contracts during Due Period

Interest collections on
Contracts during Due Period

Net Liquidation Proceeds

Aggregate of Purchase
Price for Contracts required to be purchased by Seller or Servicer

Advances made by Servicer

Amounts paid by Seller in
connection with the optional repurchase of the Contracts

Carrying Charges from the
Interest Reserve Account

Mandatory Redemption
amount

Investment Earnings -
Collection Account

Investment Earnings - Interest Reserve Account

Total Available Monies

Distribution of
Available Monies in order of priority:

Mandatory Redemption
amount to the Noteholders

Return of previous
month’s Advances made by Servicer

Monthly Servicing Fee to
the Servicer, including any unpaid Servicing Fees

Monthly Indenture Trustee
Fee, including any unpaid Indenture Trustee fees

Class A Note Interest
Distributable Amount

First Priority Principal Distributable Amount

 I-6
 

Class B Note Interest
Distributable Amount

Second Priority Principal
Distributable Amount

Class C Note Interest
Distributable Amount

Class A Note Principal
Distributable Amount

Class B Note Principal
Distributable Amount

Class C Note Principal Distributable Amount

Total distribution of fees, interest and principal

Excess Amounts (Shortfall)

Amount withdrawn from Reserve Fund to cover Shortfall

Excess Amounts to Reserve
Fund

Excess Amounts to Certificateholder

Total distribution of Available Monies

 I-7
 

 

V. ACCOUNT BALANCE
INFORMATION

Calculation of
Specified Reserve Fund Balance:

The greater of:

a) [             ]%
of the Principal Balance of the Contracts at the end of the Due Period

b) [             ]%
of the aggregate initial note balance

c) If Reserve Fund
Trigger Event has occurred, [             ]%
of the Principal Balance of the Contracts

at the end of the
Due Period

Specified Reserve Fund Balance

Reserve Fund
balance at beginning of Due Period

Additions to Reserve
Fund:

Additional deposit -
Subsequent Reserve Fund Amount deposit

Additional deposit -
Excess Amounts to Reserve Fund

Investment Earnings - Reserve Fund

Total additions

Withdrawals from
Reserve Fund:

Amount withdrawn to cover Shortfall

 I-8
 

Excess Reserve Fund balance to Servicer

Total withdrawals

Reserve Fund
balance at end of Due Period

Pre-Funding
Account balance at beginning of Due Period

Withdrawals from
Pre-Funding Account:

Subsequent Contracts
purchased

Mandatory Redemption amount

Pre-Funding
Account balance at end of Due Period

Interest Reserve
Account balance at beginning of Due Period

Additions to the
Interest Reserve Account:

Investment Earnings - Interest Reserve Account

Withdrawals from
the Interest Reserve Account:

Carrying Charges

Transfer of Investment
Earnings to Collection Account

Excess Interest Reserve
Amount to Depositor

Interest Reserve Account balance at end of Due Period

 I-9
 

 

VI. CONTRACT
PERFORMANCE INFORMATION

	
  

  	
   

  	
  Number of months since Closing Date

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Trigger Status? 
  Yes or No

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  	
  Number of

  	
   

  	
   

  	
   

  	
  % of Principal Balance at

  	
   

  
	
   

  	
   

  	
  Monthly Losses

  	
   

  	
  Contracts

  	
   

  	
  Amount

  	
   

  	
  beginning of Due Period

  	
   

  
	
  Monthly Losses

  	
   

  	
  Principal Balance of Liquidated Contracts for the Due
  Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Less:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Net Liquidation
  Proceeds for the Due Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Net Liquidation Losses
  for the Due Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Annualized Net Liquidation Losses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Average
  Loss Ratio

  	
   

  	
  Annualized Net
  Liquidation Losses - current Distribution Date

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Annualized Net Liquidation Losses - prior
  Distribution Date

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Annualized Net Liquidation Losses - second prior
  Distribution Date

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Three-month Average Loss Ratio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Exceeds Reserve Fund Trigger Event threshold? Yes or
  No

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 I-10
 

 

	
  Months

  	
   

  	
  Trigger Threshold

  	
   

  
	
  1-24

  	
   

  	
  %

  	
   

  
	
  25 or greater

  	
   

  	
  %

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  	
  Number of

  	
   

  	
   

  	
   

  	
  %of Initial

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Contracts

  	
   

  	
  Amount

  	
   

  	
  Principal Balance

  	
   

  
	
  Cumulative Losses

  	
   

  	
  Cumulative Liquidated Contracts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cumulative Net Liquidation Proceeds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Cumulative Net Liquidation Losses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Average net loss (amount
of cumulative Net Liquidation Losses / number of cumulative Liquidated
Contracts)

 

	
  Cumulative
  Loss Ratio

  	
   

  	
  Cumulative Loss Ratio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Exceeds
  Reserve Fund Trigger Event threshold? 
  Yes or No

  	
   

  	
   

  	
   

  

 

	
  Months

  	
   

  	
  Trigger Threshold

  	
   

  
	
  1-12

  	
   

  	
  %

  	
   

  
	
  13-24

  	
   

  	
  %

  	
   

  
	
  25-36

  	
   

  	
  %

  	
   

  
	
  37 or greater

  	
   

  	
  %

  	
   

  

 

 I-11
 

 

	
  Delinquencies 

  	
   

  	
  Days

  	
   

  	
  Number of

  	
   

  	
  Principal

  	
   

  	
  Delinquent

  	
   

  	
  % of Principal Balance at

  	
   

  
	
   

  	
  Delinquent

  	
   

  	
  Contracts

  	
   

  	
  Balance

  	
   

  	
  Interest Amount

  	
   

  	
  Beginning of Due Period

  	
   

  
	
   

  	
   

  	
  30-59

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  60-89

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  90-119

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  120+

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Totals

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  60+ Delinquency Amount

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Average
  Delinquency Ratio

  	
   

  	
  Delinquency Ratio - current Distribution Date

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Delinquency
  Ratio - prior Distribution Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Delinquency
  Ratio - second prior Distribution Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Three-month Average
  Delinquency Ratio

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Exceeds Reserve Fund
  Trigger Event threshold?  Yes or No

  	
   

  	
   

  	
   

  

 

	
  Months

  	
   

  	
  Trigger Threshold%

  	
   

  
	
  1-12

  	
   

  	
  %

  	
   

  
	
  13-24

  	
   

  	
  %

  	
   

  
	
  25-36

  	
   

  	
  %

  	
   

  
	
  37 or greater

  	
   

  	
  %

  	
   

  

 

 I-12
 

VII. ADDITIONAL CONTRACT INFORMATION

	
  Contract Data

  	
   

  	
  Beginning of Due Period

  	
   

  	
  End of Due Period

  
	
  Number of
  Contracts

  	
   

  	
   

  	
   

  	
   

  
	
  Principal
  Balance of Contracts

  	
   

  	
   

  	
   

  	
   

  
	
  Weighted average
  original term

  	
   

  	
   

  	
   

  	
   

  
	
  Weighted average
  remaining term

  	
   

  	
   

  	
   

  	
   

  
	
  Weighted average
  life

  	
   

  	
   

  	
   

  	
   

  
	
  One month
  prepayments (ABS)

  	
   

  	
   

  	
   

  	
   

  
	
  Weighted average
  Contract Rate

  	
   

  	
   

  	
   

  	
   

  

 

	
  

  	
   

  	
  Principal Balance

  	
   

  	
  % of Principal Balance

  
	
  Contract Rate

  	
   

  	
  of Contracts

  	
   

  	
  at End of Due Period

  
	
  0.000% - 5.000%

  	
   

  	
   

  	
   

  	
   

  
	
  5.001% - 10.000%

  	
   

  	
   

  	
   

  	
   

  
	
  10.001% - 15.000%

  	
   

  	
   

  	
   

  	
   

  
	
  15.001% - 20.000%

  	
   

  	
   

  	
   

  	
   

  
	
  20.001% or greater

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Advances made by Servicer in current Due Period

  	
   

  	
   

  	
   

  	
   

  
	
  Unreimbursed Advances due to Servicer

  	
   

  	
   

  	
   

  	
   

  
	
  Number of Contracts purchased by Seller or Servicer

  	
   

  	
   

  	
   

  	
   

  
	
  Principal Balance of Contracts purchased by Seller
  or Servicer

  	
   

  	
   

  	
   

  	
   

  
	
  Purchase Price of Contracts purchased by Seller or
  Servicer

  	
   

  	
   

  	
   

  	
   

  

 

 I-13
 

VIII. OTHER
INFORMATION FOR NOTEHOLDERS

1.    Information
regarding material changes to the definition or determination of delinquencies,
charge-offs and uncollectible accounts:

2.    Information
regarding any material modifications, extensions or waivers to contract terms,
fees, penalties or payments during the distribution period or that have
cumulatively become material over time:

3.    Information
regarding material breaches of contract representations or warranties or
transaction covenants:

4.    Information
regarding any new issuance of asset-backed securities backed by the same
contracts:

5.    Information
regarding any contract changes (other than in connection with a contract
converting into cash in accordance with its terms), such as additions or
removals in connection with a prefunding period, including any material changes
in the solicitation, credit-granting, underwriting, origination, acquisition or
pool selection criteria or procedures, as applicable, used to originate,
acquire or select the new pool of contracts:

6.    During
the pre-funding period, if applicable, information regarding originators, pool
contracts or significant obligors pursuant to Item 1121(b) of Regulation AB:

]

7.    Information
regarding derivatives:

 

 I-14

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, in the
case of the Initial Contracts, and as of the applicable Subsequent Transfer
Date, in the case of Subsequent Contracts, that:

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

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

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

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

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

 J-1
 

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, in the case of the Initial Contracts, and as of the applicable
Subsequent Transfer Date, in the case of Subsequent Contracts, that:

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

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

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

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

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

 J-2
 

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

(k)           Valid Security Interest.  Each Contract creates a valid, subsisting and
enforceable first priority perfected security interest in favor of Seller or
Eaglemark Savings Bank (as the case may be) in the Motorcycle covered thereby,
and such security interest has been validly assigned by Eaglemark Savings Bank
to Seller (where applicable) and by Seller to the Trust Depositor.  Seller’s security interest has been validly
assigned by the Seller to the Trust Depositor pursuant to this Agreement and by
the Trust Depositor to the Issuer pursuant to the Sale and Servicing
Agreement.  Immediately prior to the
transfer, assignment and conveyance thereof, each Contract is secured by a first
priority, validly perfected security interest in the Motorcycle covered thereby
in favor of the Seller or Eaglemark Savings Bank as secured party or all
necessary and appropriate actions have been commenced that would result in a
first priority, validly perfected security interest in the Motorcycle covered
thereby in favor of the Seller or Eaglemark Savings Bank as secured party,
except, in each case, as to priority for any lien for taxes, labor, materials
or of any state law enforcement agency affecting a Motorcycle.

(1)           Good Title.  Each Contract was purchased by Seller for
value and taken into possession prior to the Initial Cutoff Date (or the
applicable Subsequent Cutoff Date in the case

 J-3
 

of Subsequent Contracts)
in the ordinary course of its business, without knowledge that the Contract was
subject to a security interest.  No
Contract has been sold, assigned or pledged to any person other than Trust
Depositor and the Issuer as the transferee of Trust Depositor, and prior to the
transfer of the Contract to Trust Depositor, Seller had good and marketable
title to each Contract free and clear of any encumbrance, equity, loan, pledge,
charge, claim or security interest and was the sole owner thereof and 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 Initial Cutoff Date (or the
applicable Subsequent Cutoff Date in the case of Subsequent Contracts), no
default, breach, violation or event permitting acceleration existed with
respect to any Contract and no event had occurred which, with notice and the
expiration of any grace or cure period, would constitute such a default,
breach, violation or event permitting acceleration under such Contract.  Seller has not waived any such default,
breach, violation or event permitting acceleration, and Seller has not granted
any extension of payment terms on any Contract. 
As of the Initial Cutoff Date (or the applicable Subsequent Cutoff Date
in the case of Subsequent Contracts), no Motorcycle had been repossessed.

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

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

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

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

(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

 J-4
 

defined in the Lockbox
Agreement) shall have an interest in certain other collections therein not
related to the Contracts.

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

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

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

(w)          Selection
Criteria.  Each Contract is
secured by a new or used Motorcycle.  No
Contract has a Contract Rate less than 3.989%.  Each
Contract amortizes the amount financed over an original term no greater than 84
months.  Each Contract has a Principal
Balance of at least $533.20 as of the related Cutoff Date.

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

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

(b)           Characteristics.  The Initial Contracts have the following
characteristics: (i) all the Contracts are secured by Motorcycles; (ii) no
Initial Contract has a remaining maturity of more than 84 months; and (iii) the
final scheduled payment on the Initial Contract with the latest maturity is due
not later than June 2014.  Approximately
77.89% of the Principal Balance of the Initial Contracts as of the Initial
Cutoff Date is attributable to loans for purchases of new Motorcycles and
approximately 22.11%
is attributable to loans for purchases of used Motorcycles.  No Initial Contract was originated after the
Initial Cutoff Date.  No Initial Contract
has a Contract Rate less than 3.989%.  The last scheduled payment date of the
Contracts (including any Subsequent Contracts) is due not later than September 2014.  Approximately 98.98% of the Principal Balance of the Initial
Contracts as of the Initial Cutoff Date is attributable to loans to purchase
Motorcycles manufactured by Harley-Davidson or Buell and approximately 1.02% of
the Principal Balance of the Initial Contracts as of the Initial Cutoff Date is
attributable to loans to purchase Motorcycles not manufactured by
Harley-Davidson or Buell.

(c)           Marking Records.  As of the Closing Date (or the applicable
Subsequent Transfer Date in the case of Subsequent Contracts), Seller has
caused the Computer File relating to the Contracts sold hereunder and
concurrently reconveyed by Trust Depositor to the Trust and

 J-5
 

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 and any Subsequent Transfer Date, as applicable.

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

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

(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, in the case of the Initial Contracts, and as of the applicable
Subsequent Transfer Date, in the case of Subsequent Contracts, that:

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

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

 J-6

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

 K-1

Exhibit L

FORM OF SUBSEQUENT TRANSFER AGREEMENT

SUBSEQUENT TRANSFER AGREEMENT (the “Agreement”), dated as of                                 ,
by and among Harley-Davidson Motorcycle Trust [           ]
(the “Trust”), Harley-Davidson Customer
Funding Corp., a Nevada corporation (the “Trust Depositor”),
The Bank of New York Trust Company, N.A., as Indenture Trustee (the “Indenture Trustee”) and Harley-Davidson Credit Corp., a
Nevada corporation (the “Servicer”),
pursuant to the Sale and Servicing Agreement referred to below.

WITNESSETH:

WHEREAS, the Trust, the Trust Depositor, the Servicer
and the Indenture Trustee, are parties to the Sale and Servicing Agreement,
dated as of                                 
(the “Sale and Servicing Agreement”);

WHEREAS, pursuant to the Sale and Servicing Agreement,
the Trust Depositor wishes to sell the Subsequent Contracts to the Trust, and
the Trust wishes to purchase the same, for the consideration described in the
Sale and Servicing Agreement; and

WHEREAS, the Seller, on behalf of the Trust Depositor,
has delivered an Addition Notice related to such conveyance as required by
Section 2.03(b) of the Sale and Servicing Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

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

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

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

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

Section 2.              Subsequent List of Contracts. 
The Subsequent List of Contracts attached hereto as Exhibit A
is a supplement to the initial List of Contracts attached as Exhibit H to the
Sale and Servicing Agreement.  The
Contracts listed in the Subsequent List of Contracts constitute the Subsequent
Contracts to be transferred pursuant to this Agreement on the Subsequent
Transfer Date.

Section 3.              Transfer of Subsequent Contracts. Subject to and upon the terms and
conditions set forth in Section 2.03(b) of the Sale and Servicing Agreement and
this Agreement, the Trust Depositor hereby sells, transfers, assigns, sets over
and otherwise conveys to the Trust (i) all the right, title and interest of the
Trust Depositor in and to the Subsequent Contracts listed on the Subsequent
List of Contracts (including, without limitation, all security interests and
all rights to receive payments which are collected pursuant thereto after the
Subsequent Cutoff Date, including any liquidation proceeds therefrom, but excluding
any rights to receive payments which were collected pursuant thereto on or
prior to the

 L-1
 

Subsequent Cutoff Date),
(ii) all rights of the Trust Depositor under any physical damage or other
individual insurance policy (including a “forced placed” policy, if any), any
debt insurance policy or any debt cancellation agreement relating to any such
Subsequent Contract, an Obligor or a Motorcycle securing such Subsequent
Contract, (iii) all security interests in each such Motorcycle, (iv) all
documents contained in the related Contract Files, (v) all rights (but not the
obligations) of the Trust Depositor under any motorcycle dealer agreements
between the dealers (i.e., the originators of certain Subsequent Contracts) and
the Seller, (vi) all rights of the Trust Depositor in the Lockbox, the Lockbox
Account and related Lockbox Agreement to the extent they relate to such
Subsequent Contracts, (vii) all rights (but not the obligations) of the Trust
Depositor under the Transfer and Sale Agreement related to such Subsequent
Contracts (to the extent not already conveyed under Section 2.01(a) of the Sale
and Servicing Agreement), including but not limited to the Trust Depositor’s
related rights under Article V thereof, as well as all rights, but not the
obligations, of the Trust Depositor under the Subsequent Purchase Agreement
related to such Subsequent Contracts, (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 related to such Subsequent Contracts (to the
extent not already conveyed under Section 2.01(a) of the Sale and Servicing
Agreement) (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 Subsequent
Contracts and (x) all proceeds and products of the foregoing.  It is the intention of the Trust Depositor
and Owner Trustee that the transfer contemplated by this Agreement shall
constitute a sale of the Subsequent Contracts from the Trust Depositor to the
Trust, conveying good title thereto free and clear of any Liens.

Section 4.              Representations and Warranties of
the Trust Depositor.  (a) The Trust Depositor hereby represents and
warrants to the Trust, the Indenture Trustee and the Noteholders that the
representations and warranties of the Trust Depositor set forth in Section 3.01
of the Sale and Servicing Agreement are true and correct as of the Subsequent
Transfer Date.

(b)           The Trust Depositor hereby repeats and
remakes with respect to the Subsequent Contracts as of the Subsequent Transfer
Date the representations and warranties of the Servicer, as Seller of the
Subsequent Contracts, set forth in Exhibit J to the Sale and Servicing
Agreement, except that no representation or warranty is made herein with
respect to paragraph 3(b) thereof (other than with respect to clause (i) of
paragraph 3(b)).

(c)           The Trust Depositor hereby represents and
warrants that (a) the aggregate Principal Balance of the Subsequent Contracts
listed on the Subsequent List of Contracts and conveyed to the Trust pursuant
to this Agreement is $               
as of the Subsequent Cutoff Date, and (b) the conditions set forth in Section
2.03(b) of the Sale and Servicing Agreement have been satisfied as of the
Subsequent Transfer Date.

Section 5.              Representations and Warranties of
the Servicer.  (a) The Servicer hereby represents and
warrants to the Trust that the representations and warranties of the Servicer
set forth in Section 3.02 of the Sale and Servicing Agreement are true and
correct as of the Subsequent Transfer Date.

Section 6.              Ratification of Agreement. 
As supplemented by this Agreement, the Sale and Servicing Agreement is
in all respects ratified and confirmed and, as so supplemented by this
Agreement, shall be read, taken and construed as one and the same instrument.

Section 7.              Counterparts. 
This Agreement may be executed in two or more counterparts (and by
different parties in separate counterparts), each of which shall be an original
but all of which together shall constitute one and the same instrument.

 L-2
 

Section 8.              Governing Law. 
This Agreement shall be construed in accordance with the laws of the
State of Illinois, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.

Section 9.              Authorization of Trustee. 
By its execution hereof, the Trust Depositor hereby authorizes and
directs the Owner Trustee to execute and deliver this Agreement on behalf of
the Trust.

[signature page follows]

 L-3

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

	
   

  	
  HARLEY-DAVIDSON CUSTOMER

  
	
   

  	
  FUNDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
  Title: Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name: Perry A. Glassgow

  
	
   

  	
  Title: Vice President and Treasure

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON

  
	
   

  	
  MOTORCYCLE TRUST 2007-1

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:          Wilmington
  Trust Company, not in its

  individual capacity but solely as Owner Trustee on

  behalf of the Trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST COMPANY,

  N.A.

  
	
   

  	
  not in its individual capacity but solely

  
	
   

  	
  as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:

  
	
   

  	
  Title:

  
						

 

 L-1

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