Document:

Exhibit 10.2

 

 

SALE AND SERVICING AGREEMENT

 

among

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2005-2,

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 May 1, 2005

 

 

 

Table of Contents

 

	
  ARTICLE ONE
  DEFINITIONS

  	
   

  
	
  Section 1.01.

  	
   

  	
  Definitions

  	
   

  
	
  Section 1.02.

  	
   

  	
  Usage of Terms

  	
   

  
	
  Section 1.03.

  	
   

  	
  Section References

  	
   

  
	
  Section 1.04.

  	
   

  	
  Calculations

  	
   

  
	
  Section 1.05.

  	
   

  	
  Accounting Terms

  	
   

  
	
  ARTICLE TWO
  TRANSFER OF CONTRACTS

  	
   

  
	
  Section 2.01.

  	
   

  	
  Closing

  	
   

  
	
  Section 2.02.

  	
   

  	
  Conditions to the
  Closing

  	
   

  
	
  Section 2.03.

  	
   

  	
  Conveyance of Subsequent
  Contracts

  	
   

  
	
  ARTICLE THREE
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  Section 3.01.

  	
   

  	
  Representations
  and Warranties Regarding the Trust Depositor

  	
   

  
	
  Section 3.02.

  	
   

  	
  Representations
  and Warranties Regarding the Servicer

  	
   

  
	
  ARTICLE FOUR
  PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

  	
   

  
	
  Section 4.01.

  	
   

  	
  Custody of
  Contracts

  	
   

  
	
  Section 4.02.

  	
   

  	
  Filing

  	
   

  
	
  Section 4.03.

  	
   

  	
  Name Change
  or Relocation

  	
   

  
	
  Section 4.04.

  	
   

  	
  Costs and
  Expenses

  	
   

  
	
  ARTICLE FIVE
  SERVICING OF CONTRACTS

  	
   

  
	
  Section 5.01.

  	
   

  	
  Responsibility
  for Contract Administration

  	
   

  
	
  Section 5.02.

  	
   

  	
  Standard of
  Care

  	
   

  
	
  Section 5.03.

  	
   

  	
  Records

  	
   

  
	
  Section 5.04.

  	
   

  	
  Inspection

  	
   

  
	
  Section 5.05.

  	
   

  	
  Trust
  Accounts

  	
   

  
	
  Section 5.06.

  	
   

  	
  Enforcement

  	
   

  
	
  Section 5.07.

  	
   

  	
  Trustees
  to Cooperate

  	
   

  
	
  Section 5.08.

  	
   

  	
  Costs
  and Expenses

  	
   

  
	
  Section 5.09.

  	
   

  	
  Maintenance
  of Security Interests in Motorcycles

  	
   

  
	
  Section 5.10.

  	
   

  	
  Successor
  Servicer/Lockbox Agreements

  	
   

  
	
  Section 5.11.

  	
   

  	
  Separate
  Entity Existence

  	
   

  
	
  ARTICLE SIX
  THE TRUST DEPOSITOR

  	
   

  
	
  Section 6.01.

  	
   

  	
  Covenants
  of the Trust Depositor

  	
   

  
	
  Section 6.02.

  	
   

  	
  Liability
  of Trust Depositor; Indemnities

  	
   

  
	
  Section 6.03.

  	
   

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

  	
   

  
	
  Section 6.04.

  	
   

  	
  Limitation
  on Liability of Trust Depositor and Others

  	
   

  
	
  Section 6.05.

  	
   

  	
  Trust
  Depositor Not to Resign

  	
   

  
	
  ARTICLE SEVEN DISTRIBUTIONS;
  RESERVE FUND

  	
   

  
	
  Section 7.01.

  	
   

  	
  Monthly
  Distributions

  	
   

  
	
  Section 7.02.

  	
   

  	
  Fees

  	
   

  
	
  Section 7.03.

  	
   

  	
  Advances;
  Realization of Carrying Charge

  	
   

  
	
  Section 7.04.

  	
   

  	
  Interest
  Reserve Account

  	
   

  
	
  Section 7.05.

  	
   

  	
  Distributions;
  Priorities

  	
   

  
	
  Section 7.06.

  	
   

  	
  Reserve Fund

  	
   

  
	
  Section 7.07.

  	
   

  	
  Establishment of Pre-Funding Account

  	
   

  
	
  Section 7.08.

  	
   

  	
  Reacquisition of Contracts for
  Breach of Representations and Warranties

  	
   

  
	
  Section 7.09.

  	
   

  	
  Reassignment of Reacquired Contracts

  	
   

  
	
  Section 7.10.

  	
   

  	
  Seller’s Reacquisition Option

  	
   

  
	
  ARTICLE EIGHT EVENTS OF
  TERMINATION; SERVICE TRANSFER

  	
   

  

 

i

 

	
  Section 8.01.

  	
   

  	
  Events
  of Termination

  	
   

  
	
  Section 8.02.

  	
   

  	
  Waiver of Event of Termination

  	
   

  
	
  Section 8.03.

  	
   

  	
  Service Transfer

  	
   

  
	
  Section 8.04.

  	
   

  	
  Successor
  Servicer to Act; Appointment of Successor Servicer

  	
   

  
	
  Section 8.05.

  	
   

  	
  Notification to Securityholders

  	
   

  
	
  Section 8.06.

  	
   

  	
  Effect of Transfer

  	
   

  
	
  Section 8.07.

  	
   

  	
  Database File

  	
   

  
	
  Section 8.08.

  	
   

  	
  Successor Servicer Indemnification

  	
   

  
	
  Section 8.09.

  	
   

  	
  Responsibilities of the Successor
  Servicer

  	
   

  
	
  Section 8.10.

  	
   

  	
  Limitation of Liability of Servicer

  	
   

  
	
  Section 8.11.

  	
   

  	
  Merger or Consolidation of Servicer

  	
   

  
	
  Section 8.12.

  	
   

  	
  Servicer Not to Resign

  	
   

  
	
  Section 8.13.

  	
   

  	
  Appointment of Subservicer

  	
   

  
	
  ARTICLE NINE
  REPORTS

  	
   

  
	
  Section 9.01.

  	
   

  	
  Monthly
  Reports

  	
   

  
	
  Section 9.02.

  	
   

  	
  Officer’s Certificate

  	
   

  
	
  Section 9.03.

  	
   

  	
  Other Data

  	
   

  
	
  Section 9.04.

  	
   

  	
  Annual Report of Accountants

  	
   

  
	
  Section 9.05.

  	
   

  	
  Annual Statement of Compliance from
  Servicer

  	
   

  
	
  Section 9.06.

  	
   

  	
  Monthly Reports to Noteholders

  	
   

  
	
  ARTICLE TEN
  TERMINATION

  	
   

  
	
  Section 10.01.

  	
   

  	
  Sale of Trust Assets

  	
   

  
	
  ARTICLE ELEVEN MISCELLANEOUS

  	
   

  
	
  Section 11.01.

  	
   

  	
  Amendment

  	
   

  
	
  Section 11.02.

  	
   

  	
  Protection of Title to Trust

  	
   

  
	
  Section 11.03.

  	
   

  	
  Governing Law

  	
   

  
	
  Section 11.04.

  	
   

  	
  Notices

  	
   

  
	
  Section 11.05.

  	
   

  	
  Severability of Provisions

  	
   

  
	
  Section 11.06.

  	
   

  	
  Assignment

  	
   

  
	
  Section 11.07.

  	
   

  	
  Third Party Beneficiaries

  	
   

  
	
  Section 11.08.

  	
   

  	
  Counterparts

  	
   

  
	
  Section 11.09.

  	
   

  	
  Headings

  	
   

  
	
  Section 11.10.

  	
   

  	
  No Bankruptcy Petition;
  Disclaimer and Subordination

  	
   

  
	
  Section 11.11.

  	
   

  	
  Limitation
  of Liability of Owner Trustee and Indenture Trustee

  	
   

  

 

ii

 

EXHIBITS

 

	
  Exhibit A

  	
   

  	
  Form of
  Assignment

  	
   

  
	
  Exhibit B

  	
   

  	
  Form of
  Closing Certificate of Trust Depositor

  	
   

  
	
  Exhibit C

  	
   

  	
  Form of
  Closing Certificate of Seller/Servicer

  	
   

  
	
  Exhibit D

  	
   

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

  	
   

  
	
  Exhibit E

  	
   

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

  	
   

  
	
  Exhibit F

  	
   

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

  	
   

  
	
  Exhibit G

  	
   

  	
  Form of
  Certificate Regarding Reacquired Contracts

  	
   

  
	
  Exhibit H

  	
   

  	
  List
  of Contracts

  	
   

  
	
  Exhibit I

  	
   

  	
  Form of
  Monthly Report to Noteholders and the Certificateholder

  	
   

  
	
  Exhibit J

  	
   

  	
  Seller’s
  Representations and Warranties

  	
   

  
	
  Exhibit K

  	
   

  	
  Lockbox
  Bank and Lockbox Account

  	
   

  
	
  Exhibit L

  	
   

  	
  Form of
  Subsequent Transfer Agreement

  	
   

  

 

iii

 

 

SALE AND SERVICING
AGREEMENT, dated as of May 1, 2005, among Harley-Davidson Motorcycle Trust
2005-2 (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

 

1

 

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.

 

“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.

 

“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 Reacquisition 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 Trust Depositor in connection with an
optional reacquisition of the Contracts pursuant to Section 7.10, (vi) all
amounts received in respect of Carrying Charges transferred from the Interest
Reserve Account pursuant to Section 7.03, and (vii) all amounts
received in respect of interest, dividends, gains, income and earnings on
investment of funds in the Trust Accounts as contemplated in Section 5.05(d).

 

“Available Principal” means, with respect to any Distribution
Date, the total (without duplication) of the following amounts received by the
Servicer on or in respect of the Contracts during the related Due Period: (i) all
amounts received in respect of principal on the Contracts, (ii) the
principal component of all Net Liquidation Proceeds, (iii) the principal
component of the aggregate of the Reacquisition Prices for Contracts reacquired
by the Trust Depositor pursuant to Section 7.08, and (iv) the
principal component of all amounts paid by the Trust Depositor in connection
with an optional reacquisition of the Contracts pursuant to Section 7.10.

 

“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.

 

2

 

“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 May 23,
2005 relating to the Harley-Davidson Motorcycle Trusts.

 

“Buell”
means Buell Motorcycle Company, LLC.

 

“Business Day” means any day other than a Saturday or a
Sunday, or another day on which banking institutions in the city of Chicago,
Illinois, Wilmington, Delaware or New York, New York are authorized or
obligated by law, executive order, or governmental decree to be closed.

 

“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 and the Class B Rate for the related
Interest Period 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 Notes” means, collectively, the Class A-1
Notes and the Class A-2 Notes.

 

“Class A-1 Final
Distribution Date”
means the January 2010 Distribution Date.

 

“Class A-1 Noteholder” means the Person in whose name a Class A-1
Note is registered in the Note Register, as such term is defined in the
Indenture.

 

“Class A-1
Rate” means 3.79% per annum (computed on the basis of a 360-day
year of twelve 30-day months).

 

3

 

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

 

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

 

“Class A-2
Rate” means 4.07% per annum (computed on the basis of a 360-day
year of twelve 30-day months).

 

“Class B Final Distribution
Date” means the February 2013
Distribution Date.

 

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

 

 “Class B Rate” means
4.27% 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 May 31, 2005.

 

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

 

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

 

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

 

“Computer File” means the computer file generated by the
Servicer which provides information relating to the Contracts and which was
used by the Seller in selecting the Contracts sold to the Trust Depositor
pursuant to the Transfer and Sale Agreement (and 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.

 

“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 

 

4

 

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.

 

“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, (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).

 

5

 

“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 succeeding Business Day, with the first such Distribution Date
hereunder being June 15, 2005.

 

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

 

“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 May 31, 2005.

 

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

 

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

 

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

 

(b)                                 demand
deposits, time deposits or certificates of deposit of any depository
institution or trust company incorporated under the laws of the United States
of America or any State (or any domestic branch of a foreign bank) and subject
to supervision and

 

6

 

examination
by Federal or State banking or depository institution authorities; provided, however, that at the time of the investment or
contractual commitment to invest therein, the commercial paper or other
short-term senior unsecured debt obligations (other than such obligations the
rating of which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from the
Rating Agency in the highest investment category granted thereby;

 

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

 

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

 

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

 

(f)                                    repurchase
obligations with respect to any security that is a direct obligation of, or
fully guaranteed as to timely payment by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with a depository institution or trust company (acting as principal)
described in clause (b); and

 

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

 

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

 

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

 

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

 

“Funding Period” means the period beginning on the
Closing Date and ending on the first to occur of (a) the Distribution 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 Distribution 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

 

7

 

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 .00185% 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 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 $487,000,000.

 

“Initial Class A-2
Note Balance” means $251,180,000.

 

“Initial Class B
Note Balance” means $36,820,000.

 

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

 

“Initial
Cutoff Date” means as of the close of business on May 18,
2005.

 

“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, 

 

8

 

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

 

“Interest Period” means, with respect to any Distribution
Date, the period from and including the fifteenth day of the month of the
Distribution Date immediately preceding such Distribution Date (or, in the case
of the first Distribution Date, from and including the Closing Date) to but
excluding the fifteenth day of the month of such Distribution Date.

 

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

 

“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 Interest Reserve
Account on such date, and as of the Closing Date shall be $1,546,161.85.

 

“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 2005-2.

 

“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.

 

9

 

“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 respect to the Lockbox Account, unless such agreement shall
be terminated in accordance with its terms, in which event “Lockbox Agreement” shall mean such other agreement, in form
and substance acceptable to the above-described parties.

 

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

 

“Loss Ratio” means, for any Distribution Date, the
fraction (expressed as a percentage) derived by dividing (x) Net Liquidation
Losses for all Contracts that became Liquidated Contracts during the
immediately preceding Due Period multiplied by twelve by (y) the outstanding
Principal Balances of all Contracts as of the beginning of the Due Period.

 

“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.

 

10

 

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

 

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

 

“Monthly Servicing Fee” means, as to any Distribution Date, one-twelfth
of the product of 1.00% and the Principal Balance of the Contracts as of the
beginning of the related Due Period or, with respect to the first Distribution
Date of June 15, 2005, 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
plus accrued and unpaid interest thereon at the Contract Rate to the date on
which such Liquidated Contracts became Liquidated Contracts exceeds (b) the
Net Liquidation Proceeds for such Liquidated Contracts.

 

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

 

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

 

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

 

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

 

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

 

11

 

“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 from and including the fifteenth day of the month of
the preceding calendar month to, but excluding, the fifteenth day of the
calendar month in which such Distribution Date occurs (or in the case of the
first Distribution Date, interest accrued from and including the Closing Date
to but excluding such Distribution Date) at the related Interest Rate for such Class of
Notes on the outstanding principal amount of the Notes of such Class on
the immediately preceding Distribution Date, after giving effect to all
payments of principal to Noteholders of such Class on or prior to such
preceding Distribution Date (or, in the case of the first Distribution Date, on
the original principal amount of such Class of Notes).

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Person” means any individual, corporation,
estate, limited liability company, partnership, joint venture, association,
joint stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.

 

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

 

13

 

“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 if (y) the Seller gives notice of its
intent to reacquire the Contracts in connection with an optional termination of
the Trust pursuant to Section 5.02 of the Transfer and Sale Agreement and 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.

 

“Qualified Eligible Investments” means Eligible Investments acquired by
the Indenture Trustee in its name and in its capacity as Indenture Trustee,
which are held by the Indenture Trustee in any Trust Account and with respect
to which (a) the Indenture Trustee has noted its interest therein on its
books and records, and (b) the Indenture Trustee has purchased such
investments for value without notice of any adverse claim thereto (and, if such
investments are securities or other financial assets or interests therein,
within the meaning of Section 8-102 of the UCC as enacted in
Illinois, without acting in collusion with a securities intermediary in
violating such securities intermediary’s obligations to entitlement holders in
such assets, under Section 8-504 of such UCC, to maintain a
sufficient quantity of such assets in favor of such entitlement holders), and (c) either
(i) such investments are in the possession, or are under the control, of
the Indenture Trustee, or (ii) such investments, (A) if certificated
securities and in bearer form, have been delivered to the Indenture Trustee, or
in registered form, have been delivered to the Indenture Trustee and either
registered by the issuer thereof in the name of the Indenture Trustee or
endorsed by effective endorsement to the Indenture Trustee or in blank; (B) if
uncertificated securities, the ownership of which has been registered to the
Indenture Trustee on the books of the issuer thereof (or another person, other
than a securities intermediary, either becomes the registered owner of the
uncertified security on behalf of the Indenture Trustee or, having previously
become the registered owner, acknowledges that it holds for the Indenture
Trustee);

 

14

 

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.

 

“Reacquisition
Price” means, with respect to a Contract to be reacquired 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.

 

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

 

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

 

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

 

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

 

“Reserve
Fund Initial Deposit” means $5,396,598.75.

 

“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

 

15

 

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

 

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

 

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

 

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

 

“Securityholders”
means the Holders of the Notes.

 

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

 

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

 

16

 

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

 

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

 

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

 

“Shortfall” means, with respect to a Distribution
Date, the excess (if any), of the sum of the amounts payable pursuant to
clauses (v) through (viii) of Section 7.05(a) over
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)                                  2.00% of the Principal Balance of the
Contracts in the Trust as of the last day of the related Due Period; provided, however, in the event a Reserve Fund Trigger Event
occurs and is continuing for three consecutive Distribution Dates (inclusive of
the respective Distribution Date), the Specified Reserve Fund Balance shall be
equal to 6.00% of the Principal Balance of the Contracts in the Trust as of the
last day of the immediately preceding Due Period; and

 

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

 

provided,
however, in no
event shall the Specified Reserve Fund Balance be greater than the aggregate
outstanding principal balance of the Securities.  As of any Distribution Date, the

 

17

 

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, 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 1.00% of the aggregate balance of the Subsequent
Contracts 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 May 23, 2005.

 

“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.

 

18

 

“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.

 

“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 April 29,
2005, 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” means J.P. Morgan Securities Inc., ABN
AMRO Incorporated, BNP Paribas Securities Corp., Citigroup Global Markets Inc.
and Wachovia Capital Markets, LLC.

 

“United
States” means the United States of America.

 

19

 

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

 

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

 

Section 1.02.                         Usage of Terms. 
With respect to all terms in this Agreement, the singular includes the
plural and the plural the singular; words importing any gender include the
other genders; references to “writing” include printing, typing, lithography
and other means of reproducing words in a visible form; references to
agreements and other contractual instruments include all amendments,
modifications and supplements thereto or any changes therein entered into in
accordance with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns; and the
term “including” means “including without limitation.”

 

Section 1.03.                         Section References. 
All section references, unless otherwise indicated, shall be to
Sections in this Agreement.

 

Section 1.04.                         Calculations. 
Except as otherwise provided herein, all interest rate and basis point
calculations hereunder will be made on the basis of a 360-day year and
twelve 30-day months and will be carried out to at least three decimal
places.

 

Section 1.05.                         Accounting Terms. 
All accounting terms used but not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States.

 

ARTICLE TWO

TRANSFER OF CONTRACTS

 

Section 2.01.                         Closing.  (a)  On
the Closing Date, the Trust Depositor shall transfer, assign, set over and
otherwise convey to the Trust by execution of an assignment substantially in
the form of Exhibit A hereto, without recourse
other than as expressly provided herein, (i) all the right, title and
interest of the Trust Depositor in and to the 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)

 

20

 

and the Seller, (vi) all
rights of the Trust Depositor in the Lockbox, the Lockbox Account and the
related Lockbox Agreement to the extent they relate to the Contracts, (vii) all
rights (but not the obligations) of the Trust Depositor under the Transfer and
Sale Agreement, including but not limited to the Trust Depositor’s rights under
Article V thereof, (viii) the remittances, deposits and payments made
into the Trust Accounts from time to time and amounts in the Trust Accounts
from time to time (and any investments of such amounts), (ix) all rights
of the Trust Depositor to certain rebates of premiums and other amounts
relating to insurance policies, debt cancellation agreements, extended service
contracts or other repair agreements and other items financed under such
Contracts and (x) all proceeds and products of the foregoing (the property in
clauses (i)-(x) above, being the “Trust Corpus”).  Although the Trust Depositor and the Owner
Trustee agree that such transfer is intended to be a transfer of ownership of
the Trust Corpus, rather than the granting of a security interest to secure a
borrowing, and that the Trust Corpus shall not be property of the Trust
Depositor, in the event such transfer is deemed to be of a mere security
interest to secure a borrowing, the Trust Depositor shall be deemed to have
granted the Trust a perfected first priority security interest in such Trust
Corpus and this Agreement shall constitute a security agreement under
applicable law.

 

Section 2.02.                         Conditions to the Closing. 
On or before the Closing Date, the Trust Depositor shall deliver or
cause to be delivered the following documents to the Owner Trustee and the
Indenture Trustee:

 

(a)                                  The
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 substantially in the form of Exhibits  D, E and F hereto (and including as an addressee thereof each Rating
Agency).

 

(d)                                 A
letter or letters from Ernst & Young LLP, or another nationally
recognized accounting firm, addressed to the Seller and the Underwriters and
stating that such firm has reviewed a sample of the 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

 

21

 

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

 

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

 

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

 

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

 

(i)                                     Evidence
of deposit in the Collection Account of all funds received with respect to the
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

 

22

 

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 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;

 

23

 

(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 Class A-1 Notes and Class A-2
Notes will be rated in the highest rating category by such Rating Agency and
the Class B Notes will be rated at least its rating as of the Closing Date
by Standard & Poor’s and Moody’s;

 

(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;

 

(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 10.83% 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 76 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

 

24

 

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
$235,340,125.11; 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 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

 

25

 

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

 

26

 

such
terms may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by the availability of equitable
remedies.

 

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

 

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

 

(f)                                    Litigation.  No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently pending, or to
the knowledge of the Trust Depositor threatened, against the Trust Depositor or
any of its properties or with respect to this Agreement, the other Transaction
Documents to which it is a party or the Notes (1) which, if adversely
determined, would in the opinion of the Trust Depositor have a material adverse
effect on the business, properties, assets or condition (financial or otherwise)
of the Trust Depositor or the Trust or the transactions contemplated by this
Agreement or the other Transaction Documents to which the Trust Depositor is a
party or (2) seeking to adversely affect the federal income tax or other
federal, state or local tax attributes of the Certificate or Notes.

 

(g)                                 State
of Incorporation; Name; No Changes. 
The Trust Depositor’s state of incorporation is the State of
Nevada.  The Trust Depositor’s exact
legal name is as set 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.

 

27

 

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.  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

 

28

 

having
jurisdiction over the Servicer or any of its properties or the Articles of
Incorporation or Bylaws of the Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the Servicer is a
party or by which the Servicer or any of the Servicer’s properties may be
bound, or result in the creation of or imposition of any security interest,
lien, pledge, preference, equity or encumbrance of any kind upon any of its
properties pursuant to the terms of any such mortgage, indenture, contract or
other agreement, other than this Agreement.

 

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

 

ARTICLE FOUR

PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS

 

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

 

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

 

(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;

 

29

 

(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 and store such original Contract in a fireproof
vault 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.

 

(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

 

30

 

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

 

Section 4.03.                         Name Change or Relocation.  (a) During
the term of this Agreement, neither the Seller nor the Trust Depositor shall
change its name, identity or structure or change its state of incorporation
without first giving at least 30 days’ prior written notice to the Owner
Trustee and the Indenture Trustee.

 

(b)                                 If any change in either the Seller’s or
the Trust Depositor’s name, identity or structure or other action would make
any financing or continuation statement or notice of lien filed under this
Agreement seriously misleading within the meaning of applicable provisions of
the UCC or any title statute, the Servicer, no later than five days after the
effective date of such change, shall file such amendments as may be required to
preserve and protect the Trust’s interests in the Trust Corpus and the proceeds
thereof.  In addition, neither the Seller
nor the Trust Depositor shall change its state of incorporation unless it has
first taken such action as is advisable or necessary to preserve and protect
the Trust’s interest in the Trust Corpus. 
Promptly after taking any of the foregoing actions, the Servicer shall
deliver to the Owner Trustee and the Indenture Trustee an opinion of counsel
reasonably acceptable to the Owner Trustee and the Indenture Trustee stating
that, in the opinion of such counsel, all financing statements or amendments necessary
to preserve and protect the interests of the Trust in the Trust Corpus and the
Indenture Trustee in the Collateral have been filed, and reciting the details
of such filing.

 

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

 

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

 

31

 

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.

 

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

 

32

 

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
Reacquisition 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 Trust Depositor in connection with an optional
reacquisition of the Contracts described in Section 7.10;

 

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

 

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

 

(d)                                 If the Servicer so directs, in writing,
the Indenture Trustee shall invest the amounts in the Trust Accounts in
Qualified Eligible Investments that are payable on demand or that mature not
later than one Business Day prior to the next succeeding Distribution
Date.  Once such funds are invested, the
Indenture Trustee shall not change the investment of such funds.  Any loss on such investments shall be
deposited in the applicable Trust Account by the Servicer out of its own funds
immediately as realized.  Funds in the
Trust Accounts not so invested must be insured to the extent permitted by law
by the Bank Insurance Fund or the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation. 
Subject to the restrictions herein, the Indenture Trustee may purchase a
Qualified Eligible Investment from itself or an Affiliate.   Subject to the other provisions hereof, the
Indenture Trustee shall have sole control over each such investment and the
income thereon, and any certificate or other instrument evidencing any such
investment, if any, shall be delivered directly to the Indenture Trustee or its
agent, together with each document of transfer, if any, necessary to transfer
title to such investment to the Indenture Trustee in a manner which complies
with this Section 5.05(d).  All
interest, dividends, gains upon sale and other income from, or earnings on,
investments of funds in the Trust

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 5.06.                         Enforcement.  (a) The
Servicer will, consistent with Section 5.02, act with respect to the
Contracts in such manner as will maximize the receipt of all payments called
for under the terms of the Contracts. 
The Servicer shall use its best efforts to cause Obligors to make all
payments on the Contracts to the Lockbox Account (either directly by remitting
payments to the Lockbox, or indirectly by making payments through direct debit,
the telephone or the internet to an account of the Servicer which payments will
be subsequently transferred from such account to the Lockbox Account).  The Servicer will act in a commercially
reasonable manner with respect to the repossession and disposition of a
Motorcycle following a default under the related Contract with a view to
realizing proceeds at least equal to the Motorcycle’s fair market value.  If the Servicer determines that eventual
payment in full of a Contract is unlikely, 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 

 

34

 

 

all reasonable
out-of-pocket expenses incurred by it in liquidating a Contract and disposing
of the related Motorcycle.

 

(b)                                 The Servicer may sue to enforce or
collect upon Contracts, in its own name, if possible, or as agent for the
Trustees.  If the Servicer elects to
commence a legal proceeding to enforce a Contract, the act of commencement
shall be deemed to be an automatic assignment of the Contract to the Servicer
for purposes of collection only.  If,
however, in any enforcement suit or legal proceeding it is held that the
Servicer may not enforce a Contract on the ground that it is not a real party
in interest or a holder entitled to enforce the Contract, the Owner Trustee (or
the Indenture Trustee) on behalf of the Trust shall, at the Servicer’s expense,
take such steps as the Servicer deems reasonably necessary to enforce the
Contract, including bringing suit in its name or the names of the Noteholders
under the Indenture and the Certificateholder as owner of the Trust.

 

(c)                                  The Servicer shall exercise any rights of
recourse against third persons that exist with respect to any Contract in
accordance with the Servicer’s usual practice. 
In exercising recourse rights, the Servicer is authorized on the Trust’s
behalf to reassign the Defaulted Contract or the related Motorcycle to the
Person against whom recourse exists at the price set forth in the document
creating the recourse; provided, however,
the Servicer in exercising recourse against any third persons as described in
the immediately preceding sentence shall do so in such manner as to maximize
the aggregate recovery with respect to the Contract; and provided
further, however, that notwithstanding the foregoing the Servicer in
its capacity as such may exercise such recourse only if such Contract (i) was
not required to be reacquired by the Seller pursuant to the Transfer and Sale
Agreement or (ii) was required to be reacquired by the Seller and the
Seller has defaulted on such reacquisition obligation.

 

(d)                                 The Servicer will not permit any
rescission or cancellation of any Contract due to the acts or omissions of the
Trust Depositor.

 

(e)                                  The Servicer may grant to the Obligor on
any Contract an extension of payments due under such Contract; provided that (i) the extension period is limited to 45
days, provided that such period may be extended to 62 days on a case-by-case
basis (ii) the Obligor has not received an extension during the previous
twelve-month period, (iii) the evidence supports the Obligor’s willingness
and capability to resume monthly payments, (iv) such extension is
consistent with the Servicer’s customary servicing procedures and is consistent
with Section 5.02, (v) such extension does not extend the maturity
date of the Contract beyond the latest maturity date of any of the Contracts as
of the Initial Cutoff Date (or, if a transfer of Subsequent Contracts to the
Trust occurs, beyond the latest maturity date of such Subsequent Contracts) and
(vi) the aggregate Principal Balances of Contracts which have had
extensions granted does not exceed more than 3.00% of the aggregate of the
Initial Class A-1 Note 
Balance, the Initial Class A-2 Note Balance and the Initial Class B
Note Balance.  Exceptions to any of
clauses (i) through (iv) above may be authorized by the Servicer’s
management on a case-by-case basis consistent with the Servicer’s prudent
business practices.

 

35

 

(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 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.

 

36

 

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.

 

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)                                  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.

 

37

 

(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 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,

 

38

 

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.

 

39

 

(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 with respect to the transactions
contemplated herein and in the other Transaction Documents, including any
sales, gross receipts, general corporation, tangible personal property, Illinois
personal property replacement privilege or license taxes (but, in the case of
the Issuer, not including any taxes asserted with respect to, and as of the
date of, the transfer of the Contracts to the Issuer or the issuance and
original sale of the Securities, or asserted with respect to ownership of the
Contracts, or federal or other income taxes arising out of distributions on the
Certificate or the Notes) and costs and expenses in defending against the same.

 

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

 

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

 

The Trust Depositor shall
be liable directly to and will indemnify any injured party or any other
creditor of the Trust for all losses, claims, damages, liabilities and expenses
of the Trust to the extent that Trust Depositor would be liable if the Trust
were a partnership under the Delaware Revised Uniform Limited Partnership Act
in which Trust Depositor were a general partner; provided,
however, that Trust Depositor shall not be liable for any losses
incurred by a

 

40

 

Certificateholder
in the capacity of an investor in the Trust Certificate or a Noteholder in the
capacity of an investor in the Notes.  In
addition, any third party creditors of the Trust (other than in connection with
the obligations described in the immediately preceding sentence for which Trust
Depositor shall not be liable) shall be deemed third party beneficiaries of
this paragraph.  The obligations of Trust
Depositor under this paragraph shall be evidenced by the Trust Certificate
described in the Trust Agreement.

 

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

 

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

 

41

 

institution
of bankruptcy or insolvency proceedings against it, (iii) file a petition
seeking or consent to reorganization or relief under any applicable federal or
state law relating to bankruptcy, (iv) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the corporation or a substantial part of its property, (v) make
a general assignment for the benefit of creditors, (vi) admit in writing
its inability to pay its debts generally as they become due, or (vii) take
any corporate action in furtherance of the actions set forth in clauses (i) through
(vi) above; provided, however, that no
director may be required by any shareholder of the Trust Depositor to consent
to the institution of bankruptcy or insolvency proceedings against the Trust
Depositor so long as it is solvent; or

 

(c)                                  merge or consolidate
with any other corporation, company or entity or sell all or substantially all
of its assets or acquire all or substantially all of the assets or capital stock
or other ownership interest of any other corporation, company or entity unless
the Person formed by such consolidation or into which the Trust Depositor has
merged or the Person which acquires by conveyance, transfer or lease
substantially all the assets of the Trust Depositor as an entirety, can
lawfully perform the obligations of the Trust Depositor hereunder and executes
and delivers to the Owner Trustee and the Indenture Trustee an agreement in
form and substance reasonably satisfactory to the Owner Trustee and the
Indenture Trustee which contains an assumption by such successor entity of the
due and punctual performance and observance of each covenant and condition to
be performed or observed by the Trust Depositor under this Agreement; provided that the Trust Depositor shall provide notice of
any merger, consolidation or succession pursuant to this Section to each
Rating Agency and shall receive from each Rating Agency a letter to the 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.

 

42

 

ARTICLE SEVEN

DISTRIBUTIONS; RESERVE FUND

 

Section 7.01.                         Monthly Distributions.  (a) 
Each Noteholder and Certificateholder as of the related Record Date shall be
paid on the next succeeding Distribution Date by check mailed to such
Noteholder or Certificateholder at the address for such Noteholder or
Certificateholder appearing on the Note Register or Certificate Register or by
wire transfer if such Noteholder or Certificateholder provides written
instructions to the Indenture Trustee or the Owner Trustee, respectively, at
least ten days prior to such Distribution Date.

 

(b)                                 The Indenture Trustee shall serve as the
paying agent hereunder (the “Paying Agent”)
and shall make the payments to or on behalf of the Noteholders and the
Certificateholder required hereunder. 
The Indenture Trustee hereby agrees that all amounts held by it for
payment hereunder will be held in trust for the benefit of the Noteholders and
the Certificateholder.

 

Section 7.02.                         Fees. 
The Indenture Trustee shall be paid the Indenture Trustee Fee and the
Servicer shall be paid the Monthly Servicing Fee, each of which shall be paid
solely from the monies and in accordance with the priorities described in Section 7.05(a).  No recourse may be had to the Seller, Trust
Depositor, Trustees, Servicer, or any of their respective Affiliates in the
event that amounts available under Section 7.05(a) are insufficient
for payment of the Indenture Trustee’s Fee and the Monthly Servicing Fee.

 

Section 7.03.                         Advances; 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).

 

43

 

(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 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)(vi) 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 2005-2 – 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 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.

 

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, and third, any remaining amount shall be paid to the Class B
Noteholders until the Class B Notes are paid in full;

 

44

 

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

 

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

 

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

 

(v)                                 to the Note Distribution Account,
together with any amounts deposited therein pursuant to Section 7.06, the
Note Interest Distributable Amount with respect to such Distribution Date for
each Class of Notes allocated in the following order of priority:

 

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

 

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

 

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

 

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

 

(viii)                        to the Holder of the Certificate.

 

(b)                                 If the Notes have been declared
immediately due and payable as provided in Section 5.02 of the Indenture
following the occurrence of an Event of Default under Section 5.01(iii) of
the Indenture, then, until such time as the Notes have been paid in full,
Available Monies shall be allocated and distributed in the following order of
priority after payment of the amounts set forth in Section 7.05(a)(i),
(ii), (iii) and (iv):

 

(i)                                     to the Note Distribution Account,
together with any amounts deposited therein pursuant to Section 7.06, the
Note Interest Distributable Amount with respect to

 

45

 

such Distribution Date
for each Class of Notes allocated in the following order of priority:

 

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

 

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

 

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

 

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

 

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

 

(iii)                               to the Holder of the Certificate.

 

(c)                                  If the Notes have been declared
immediately due and payable as provided in Section 5.02 of the Indenture
following the occurrence of an Event of Default under Section 5.01(i), (ii),
(iv) or (v) of the Indenture, then, until such time as the Notes have
been paid in full, Available Monies shall be allocated and distributed in the
following order of priority after payment of amounts set forth in Section 7.05(a)(i),
(ii), (iii) and (iv):

 

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

 

(ii)                                  to the Note Distribution Account,
together with any amounts deposited therein pursuant to Section 7.06, the
Note Principal Distributable Amount for distribution to the Class A-1
Noteholders and the Class A-2 Noteholders in reduction of the

 

46

 

outstanding
principal amount of the Class A-1 Notes and Class A-2
Notes, as applicable, until the outstanding principal balance of the Class A-1
Notes and the Class A-2 Notes has been reduced to zero; provided,
however, that if there are insufficient funds on deposit in the Note
Distribution Account to reduce the outstanding principal balance of the Class A-1
Notes and the Class A-2 Notes to zero, the amount in the Note
Distribution Account shall be applied to the payment of principal on the Class A-1
Notes and the Class A-2 Notes pro rata (based
on outstanding principal amount);

 

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

 

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

 

(v)                                 to the Holder of the Certificate.

 

Section 7.06.                         Reserve Fund.

 

(a)                                  On or prior to the Closing Date, the
Indenture Trustee, on behalf of the Trust Depositor shall deposit the Reserve
Fund Initial Deposit into the Reserve Fund from the net proceeds of the Securities.

 

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

 

(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

 

47

 

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 2005-2 – 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 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

 

48

 

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 and then, for payment of principal of the Class B Notes up
to the Outstanding Amount thereof.

 

Section 7.08.                         Reacquisition 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
Reacquisition Price, two Business Days prior to the first Determination Date
after the Seller becomes aware, or should have become aware, or receives
written notice from the Trustees, the Servicer or the Trust Depositor of any
breach of a representation or warranty of the Seller set forth in Article III
of the Transfer and Sale Agreement that materially and adversely affects such
Contract or the Trust’s interest in such Contract and which breach has not been
cured; provided, however, that with respect to
any Contract described on the List of Contracts with respect to an incorrect
unpaid Principal Balance which the Seller would otherwise be required to
reacquire under the Transfer and Sale Agreement, the Seller may, in lieu of
reacquiring such Contract, deposit in the Collection Account not later than one
Business Day after such Determination Date 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.

 

Section 7.09.                         Reassignment of Reacquired
Contracts.  Upon receipt by the Indenture Trustee for
deposit in the Collection Account of the Reacquisition Price as described in Section 7.08
or Section 7.10, 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

 

49

 

the Seller all of
the Trust’s right, title and interest in the reacquired 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.                         Seller’s Reacquisition Option. 
As provided in the Transfer and Sale Agreement, 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
the Pool Balance as of the Initial Cutoff Date plus the Pre-Funded Amount as of
the Closing Date, the Seller 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 reacquisition.  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 Seller.

 

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

 

50

 

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, 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

 

51

 

and all documents and
other instruments, and to do any and all acts or things necessary or
appropriate to effect the purposes of such notice of termination.  The Servicer agrees to cooperate with the
Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, the transfer
to the Successor Servicer for administration by it of all cash amounts which
shall at the time be held by the Servicer for deposit, or have been deposited
by the Servicer, in the Collection Account, or for its own account in
connection with its services hereafter or thereafter received with respect to
the Contracts.  The Servicer shall
transfer to the Successor Servicer all records held by the Servicer relating to
the Contracts in such electronic form as the Successor Servicer may reasonably
request and (ii) any Contract Files in the Servicer’s possession.  In addition, the Servicer shall permit access
to its premises (including all computer records and programs) to the Successor
Servicer or its designee, and shall pay the reasonable transition expenses of
the Successor Servicer.  Upon a Service
Transfer, the Successor Servicer shall also be entitled to receive the Monthly
Servicing Fee for performing the obligations of the Servicer.

 

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

 

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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.

 

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.

 

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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.

 

54

 

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 cause the Trustees and each
Rating Agency to receive a Monthly
Report.

 

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

 

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

 

Section 9.04.                         Annual Report of Accountants.

 

(a)                                  The Servicer shall cause a firm of
nationally recognized independent certified public accountants (the “Independent  Accountants”),
who may also render other services to the Servicer, Harley-Davidson Financial
or to the Trust Depositor, to deliver to the Trustees, the Underwriters and
each Rating Agency, on or before March 31 (or 90 days after the end of the

 

55

 

Servicer’s fiscal
year, if other than December 31) of each year, beginning on March 31,
2006, with respect to the twelve months ended the immediately preceding December 31
(or other applicable date), a statement (the “Accountant’s
Report”) addressed to the Board of
Directors of the Servicer and to the Trustees to the effect that such firm has
audited the financial statements of Harley-Davidson Financial and issued its
report thereon and that such audit:

 

(1)                                  was
made in accordance with generally accepted auditing standards, and accordingly
included such tests of the accounting records and such other auditing
procedures as such firm considered necessary in the circumstances;

 

(2)                                  included
an examination of documents and records relating to the servicing of motorcycle
conditional sales contracts and promissory note and security agreements under
pooling and servicing agreements substantially similar to one another (such
statement to have attached thereto a schedule setting forth the pooling
and servicing agreements covered thereby, including this Agreement);

 

(3)                                  included
an examination of the delinquency and loss statistics relating to
Harley-Davidson Financial’s portfolio of motorcycle conditional sales contracts
and promissory notes and security agreements; and

 

(4)                                  except
as described in the statement, disclosed no exceptions or errors in the records
relating to motorcycle loans serviced for others that, in the firm’s opinion,
generally accepted auditing standards requires such firm to report.

 

The Accountant’s Report
shall further state that:

 

(1)                                  a
review in accordance with agreed upon procedures was made of one randomly
selected Monthly Report; and

 

(2)                                  except
as disclosed in the Report, no exceptions or errors in the Monthly Report so
examined were found.

 

(b)                                 The Accountant’s Report shall also
indicate that the firm is independent of Harley-Davidson Financial within the
meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants.

 

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

 

Section 9.05.                         Annual Statement of Compliance
from Servicer.  The Servicer will deliver to the Trustees,
the Underwriters and each of the Rating Agencies, on or before January

 

56

 

31 of each year
commencing January 31, 2006, an Officer’s Certificate stating that (a) a
review of the activities of the Servicer during the prior calendar year and of
its performance under this Agreement was made under the supervision of the
officer signing such certificate and (b) to such officer’s knowledge,
based on such review, the Servicer has fully performed all its obligations
under this Agreement, or, if there has been a default in the performance of any
such obligation, specifying each such default known to such officer and the
nature and status thereof.  A copy of
such certificate may be obtained (i) by any Noteholder by a request in
writing to the Indenture Trustee and (ii) by any Certificateholder by a
request in writing to the Owner Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

(vi)                              the
amount of the distributions described in (i) or (ii) above payable
pursuant to a claim on the Reserve Fund or from any other source not
constituting Available Monies and the amount remaining in the Reserve Fund
after giving effect to all deposits and withdrawals from the Reserve Fund on
such date;

 

(vii)                           the 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

 

57

 

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 Reacquisition Price for such Contracts;

 

(xvi)                         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;

 

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

 

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

 

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

 

58

 

(c)                                  The Indenture Trustee shall send the Monthly Report to (i) the initial Clearing
Agency under the Note Depository Agreement or any qualified successor appointed
pursuant to Section 2.11 of the Indenture and (ii) each
Securityholder or party to this Agreement.

 

ARTICLE TEN

TERMINATION

 

Section 10.01.                  Sale of Trust Assets.

 

(a)                                  [Intentionally Omitted].

 

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

 

(c)                                  Following the satisfaction and discharge
of the Indenture and the payment in full of the principal of and interest on
the Notes, the Certificateholder will succeed to the rights of the Noteholders
hereunder and the Owner Trustee will succeed to the rights of, and assume the
obligations of, the Indenture Trustee pursuant to this Agreement.

 

ARTICLE ELEVEN

MISCELLANEOUS

 

Section 11.01.                  Amendment.

 

(a)                                  This Agreement may be amended by the
Trust Depositor, the Servicer, the Indenture Trustee and the Owner Trustee on
behalf of the Issuer, collectively, without the consent of any Securityholders,
(i) to cure any ambiguity, to correct or supplement any provisions in this
Agreement which are inconsistent with the provisions herein or in the
Prospectus, or to add any other provisions with respect to matters or questions
arising under this Agreement that shall not be inconsistent with the provisions
of this Agreement or the Prospectus, (ii) to add or provide any credit
enhancement for any Class of Notes and (iii) to change any provision
applicable for determining the Specified Reserve Fund Balance or the manner in
which the Reserve Fund is funded; provided, however
that any such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Securityholder
and provided, further, that in connection with any amendment pursuant to clause
(iii) above, the Servicer shall deliver to the Owner Trustee and the
Indenture Trustee a letter from Standard & Poor’s (so long as Standard &
Poor’s is a Rating Agency) and Moody’s (so long as Moody’s is a Rating Agency)
to the effect that such amendment will not cause its then-current rating on any
Class of Notes to be qualified, reduced or withdrawn.

 

59

 

(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.

 

(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

 

60

 

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.

 

(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

 

61

 

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 transmission with a confirmation of
receipt, in all cases addressed to the recipient as follows:

 

(i)                                     If
to the Servicer or Seller:

 

Harley-Davidson
Credit Corp.

150
South Wacker Drive, Suite 3100

Chicago,
Illinois 60606

Attention:
Perry A. Glassgow

 

62

 

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

 

(iii)                               If
to the Indenture Trustee:

 

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

2 North LaSalle Street

Suite 1020

Chicago, Illinois 60602

Attention:  Corporate Trust Administration

 

Telecopier
No.:  (312) 827-8562

 

(iv)                              If
to the Owner Trustee:

 

Wilmington
Trust Company

Rodney
Square North

1100
North Market Street

Wilmington,
Delaware 19890-0001

Attention:
Corporate Trust Administration

 

Telecopier
No.: (302) 651-8882

 

(v)                                 If
to Moody’s:

 

Moody’s
Investors Service, Inc.

99
Church Street

New
York, New York 10007

 

63

 

Attention:
ABS Monitoring Department

 

Telecopier
No.: (212) 553-1350

 

(vi)                              If
to Standard & Poor’s:

 

Standard & Poor’s Ratings Services, a

division of The McGraw Hill Companies

55
Water Street

New
York, New York 10004

 

Telecopier
No.: (212) 438-2657

 

(vii)                           If to
the Underwriters:

 

J.P.
Morgan Securities Inc.

270
Park Avenue

10
th Floor

New
York, New York 10017

Attention:
General Counsel

 

Telecopier
No.: (212) 834-6562

 

ABN
AMRO Incorporated

135
South LaSalle Street

Suite 725

Chicago,
Illinois 60603

Attention:
Erik Ford

 

Telecopier
No.: (312) 904 3028

 

BNP
Paribas Securities Corp.

787
Seventh Avenue

New
York, New York 10019

Attention:
Michael Gonik

 

Telecopier
No.: (212) 841-2689

 

Citigroup
Global Markets Inc.

390
Greenwich Street

 

64

 

6th
Floor

New
York, New York  10013

Attention:  Asset Backed Finance Division

 

Telecopier
No.:  (212) 723-8591

 

 

Wachovia
Capital Markets, LLC

301
College Street

Charlotte,
North Carolina 28288

Attention:
Curt Sidden

 

Telecopier
No.: (704) 383-9106

 

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

 

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

 

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

 

Section 11.07.                  Third Party Beneficiaries.  Except as
otherwise specifically provided herein, the parties hereto hereby manifest
their intent that no third party shall be deemed a third party beneficiary of
this Agreement, and specifically that the Obligors are not third party
beneficiaries of this Agreement.

 

Section 11.08.                  Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be an
original and all of which shall together constitute but one and the same
instrument.

 

Section 11.09.                  Headings.  The headings
of the various Articles and Sections herein are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof.

 

Section 11.10.                  No Bankruptcy Petition; Disclaimer and Subordination.  (a) Each
of the Seller, the Indenture Trustee, the Servicer, the Owner Trustee and each
Holder (by

 

65

 

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 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.

 

66

 

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]

 

67

 

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

 

	
   

  	
  HARLEY-DAVIDSON
  MOTORCYCLE TRUST 2005-2

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Wilmington Trust
  Company, not in its

  individual capacity but solely as Owner

  Trustee on behalf of the Trust

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ JANEL R.
  HAVRILLA

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name:
  Janel R. Havrilla

  
	
   

  	
   

  	
   

  	
  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
  DAVIS

  	
   

  
	
   

  	
   

  	
   

  	
  Printed Name:
  Cynthia 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 May 1, 2005 made by and between the
undersigned, as Trust Depositor  (“Trust Depositor”), Harley-Davidson Credit Corp., as Servicer
(“HDCC”), The Bank of New York Trust Company,
N.A., as Indenture Trustee and Harley-Davidson Motorcycle Trust 2005-2
(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 May, 2005.

 

	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING

  
	
   

  	
  CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name: Perry
  A. Glassgow

  
	
   

  	
  Title:   Vice
  President and Treasurer

  

 

A-1

 

Exhibit B

 

[Form of Closing Certificate of Trust Depositor]

 

Harley-Davidson Customer
Funding Corp.

 

Officer’s Certificate

 

The undersigned certifies
that he is Vice President, Treasurer and Assistant Secretary of Harley-Davidson
Customer Funding Corp., a Nevada corporation (the “Trust
Depositor”), and that as such is duly authorized to execute and
deliver this certificate on behalf of the Trust Depositor in connection with
the Sale and Servicing Agreement (the “Agreement”)
dated as of May 1, 2005 (the “Effective Date”)
by and among the Trust Depositor, The Bank of New York Trust Company, N.A. (the
“Indenture Trustee”), as Indenture
Trustee,  Harley-Davidson Credit Corp. (“Harley-Davidson Credit”), as Servicer, and Harley-Davidson
Motorcycle Trust 2005-2 (“Issuer”) (all
capitalized terms used herein without definition have the respective meanings
set forth in the Agreement), and further certifies as follows:

 

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

 

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

 

(3)                                  Attached
hereto as Exhibit II is a Certificate of the
Secretary of State of the State of Nevada dated [                ],
2005 stating that the Trust Depositor is duly incorporated under the laws of
the State of Nevada and is in good standing.

 

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

 

(5)                                  Attached
hereto as Exhibit IV is a true and correct
copy of resolutions adopted pursuant to the unanimous written consent of the
Board of Directors of the Trust Depositor relating to the execution, delivery
and performance of the Agreement; the Transfer and Sale Agreement dated as of
the Effective Date between the Trust Depositor and Harley-Davidson Credit; the
Trust Agreement dated as of April 29, 2005 between the Trust Depositor and
Wilmington Trust Company (the “Owner Trustee”), as Owner Trustee; the
Administration Agreement dated as of the Effective Date between the Trust
Depositor, the Issuer, the Indenture Trustee, Harley-

 

B-1

 

Davidson
Credit, as Administrator; the Underwriting Agreement dated May 23, 2005
among the Trust Depositor, Harley-Davidson Credit and the Underwriters
(collectively, the “Program Agreements”).  Said resolutions have not been amended,
modified, annulled or revoked, and are on the date hereof in full force and
effect and are the only resolutions relating to these matters which have been
adopted by the Board of Directors.

 

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

 

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

 

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

 

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

 

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

 

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

 

B-2

 

Program
Agreements, nor the consummation of any other of the transactions contemplated
therein, will violate or conflict with any agreement or instrument to which the
Trust Depositor is a party or by which it is otherwise bound.

 

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

 

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

 

*    *    *    *

 

B-3

 

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

 

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:
  Perry A. Glassgow

  
	
   

  	
  Title:

  	
  Vice President, Treasurer and

  Assistant Secretary

  
					

 

 

Exhibit C

 

[Form of Closing Certificate of Servicer/Seller]

 

HARLEY-DAVIDSON CREDIT CORP.

 

Officer’s Certificate

 

The undersigned certifies
that he is Vice President, Treasurer and Assistant Secretary of Harley-Davidson
Credit Corp. (“Harley-Davidson Credit”), and
that as such is duly authorized to execute and deliver this certificate on
behalf of Harley-Davidson Credit, as Servicer, in connection with the Sale and
Servicing Agreement (the “Sale and Servicing
Agreement”) dated as of May 1, 2005 (the “Effective
Date”) by and among Harley-Davidson Credit, as Servicer,
Harley-Davidson Customer Funding Corp. (“CFC”), The Bank
of New York Trust Company, N.A., as Indenture Trustee and Harley-Davidson Motorcycle
Trust 2005-2 (“Issuer”), in
connection with the Transfer and Sale Agreement dated as of the Effective Date
(the “Transfer and Sale Agreement”) by and
between Harley-Davidson Credit and CFC (all capitalized terms used herein
without definition having the respective meanings set forth in the Sale and
Servicing Agreement), and further certifies as follows:

 

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

 

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

 

(3)                                  Attached
hereto as Exhibit II is a Certificate of the
Secretary of State of the State of Nevada dated [              ],
2005 stating that Harley-Davidson Credit is duly incorporated under the laws of
the State of Nevada and is in good standing.

 

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

 

(5)                                  Attached
hereto as Exhibit IV is a true and correct
copy of resolutions adopted pursuant to a unanimous written consent of the
Board of Directors of Harley-Davidson Credit and relating to the authorization,
execution, delivery and performance of the Transfer and Sale Agreement; the
Sale and Servicing Agreement; the Underwriting Agreement dated May 23,
2005 among Harley-Davidson Credit, CFC and the Underwriters (the “Underwriting Agreement”); and the Administration Agreement
dated

 

C-1

 

as of
the Effective Date among Harley-Davidson Credit, CFC, the Issuer and The Bank
of New York Trust Company, N.A., as Indenture Trustee (the “Indenture
Trustee”) (the “Administration Agreement”).  Said resolutions have not been amended, modified,
annulled or revoked, and are on the date hereof in full force and effect and
are the only resolutions relating to these matters which have been adopted by
the Board of Directors.

 

(6)                                  No
event with respect to Harley-Davidson Credit has occurred and is continuing
which would constitute an Event of Termination or an event that, with notice or
the passage of time, would constitute an Event of Termination under the Sale
and Servicing Agreement.  To the best of
my knowledge after reasonable investigation, there has been no material adverse
change in the condition, financial or otherwise, or the earnings, business
affairs or business prospects of Harley-Davidson Credit, whether or not arising
in the ordinary course of business, since the respective dates as of which
information is given in the Prospectus and except as set forth therein.

 

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

 

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

 

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

 

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

 

(11)                            Schedule A
hereto contains a complete list of all material agreements (other than the
Transfer and Sale Agreement) or instruments evidencing or governing
indebtedness for money borrowed to which Harley-Davidson Credit is a party or
by which Harley-Davidson Credit or its property is bound.  Neither Harley-Davidson Credit’s transfer and
assignment of the Contract Assets to CFC, CFC’s concurrent transfer and
assignment of the Trust Corpus to the Trust, nor the concurrent pledge by the

 

C-2

 

Trust
of the Collateral to the Indenture Trustee, nor the issuance and sale of the
Notes or the Certificate or the entering into of the Program Agreements, nor
the consummation of any other of the transactions contemplated therein, will
violate or conflict with any agreement or instrument to which Harley-Davidson
Credit is a party or by which it is otherwise bound.

 

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

 

(13)                            The
sole shareholder of Harley-Davidson Credit is Harley-Davidson Financial
Services, Inc., a Delaware corporation, which has its chief executive
office and only office in Chicago, Illinois, and has no other offices in any
other state.

 

(14)                            Each
of the agreements and conditions of Harley-Davidson Credit to be performed or
satisfied on or before the Closing Date under the Program Agreements has been
performed or satisfied in all material respects.

 

(15)                            Each
Contract being transferred pursuant to the Transfer and Sale Agreement is
evidenced by a written agreement providing for a repayment obligation as well
as a security interest in the related Motorcycle securing such obligation, and
conforms as to these matters in all material respects with the form of written
Contract provided as Exhibit A
hereto (with such minor variations as to specific terms as may be required or
deemed desirable in respect of the laws or requirements of particular states).

 

(16)                            Harley-Davidson
Credit has not executed for filing 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 May, 2005.

 

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Printed Name:
  Perry A. Glassgow

  
	
   

  	
  Title: 

  	
  Vice President, Treasurer and

  Assistant Secretary

  
					

 

 

Exhibit D

 

[Form of Opinion of Counsel for Trust Depositor

Regarding General Corporate Matters

(Including Perfection Opinion)]

 

 

See Tab 23

 

D-1

 

Exhibit E

 

[Form of Opinion of Counsel for Trust

Depositor Regarding the “True Sale”
Nature

of the Transaction]

 

 

See Tab 24

 

E-1

 

Exhibit F

 

[Form of Opinion of Counsel for Trust

Depositor Regarding Non-consolidation]

 

 

See Tab 25

 

F-1

 

Exhibit G

 

[Form of Certificate Regarding Reacquired Contracts]

 

Harley-Davidson Credit Corp.

 

Certificate Regarding Reacquired Contracts

 

The undersigned certifies
that he is the Treasurer of Harley-Davidson Credit Corp., a Nevada corporation
(the “Servicer”), and that as such is duly
authorized to execute and deliver this certificate on behalf of the Servicer
pursuant to Section 7.08 of the Sale and Servicing Agreement (the “Agreement”) dated as of May 1, 2005 by and among
Harley-Davidson Customer Funding Corp., as Trust Depositor, the Servicer, The
Bank of New York Trust Company, N.A., as Indenture Trustee, and Harley-Davidson
Motorcycle Trust 2005-2 (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 on
the date hereof pursuant to Section 7.08 of the Agreement and Section 5.01
of the Transfer and Sale Agreement.

 

2.                                       Upon
deposit of the Reacquisition Price for such Contracts, such Contracts may,
pursuant to Section 7.08 of the Agreement, be assigned by the Trustee to
the Seller.

 

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

 

	
   

  	
  Harley-Davidson
  Credit Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name:
  Perry A. Glassgow

  
	
   

  	
   

  	
  Title:  Vice
  President and Treasurer

  
					

 

G-1

 

Exhibit H

 

[List of Contracts]

 

 

See Tab 6

 

H-1

 

Exhibit I

 

[Form of Monthly Report to Noteholders and the Certificateholder]

 

Harley-Davidson Motorcycle Trust 2005-2

$487,000,000 3.79% Harley-Davidson Motorcycle Contract Backed Notes, Class A-1

$251,180,000 4.07% Harley-Davidson Motorcycle Contract Backed Notes, Class A-2

$36,820,000 4.27% Harley-Davidson Motorcycle Contract Backed Notes, Class B

 

Monthly Report

For the [              ]
Distribution Date

 

 

	
  A.

  	
   

  	
  Calculation of
  Available Monies 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       Available
  Monies (l. plus 2.)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Note Principal
  Distributable Amount

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       Priority
  of allocation of the Note Principal Distributable Amount 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       Principal
  Distributable Amount (from B)

  	
   

  	
  $

  	
   

  

 

I-1

 

	
   

  	
   

  	
  3.                                       Note
  principal distribution 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)                                  Class A-1
  Notes

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)                                 Class A-2
  Notes

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)                                  Class B
  Notes

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)                                 Note
  Principal Carryover Shortfall due from prior period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)                                  Special
  Mandatory Redemption Amounts (from Pre-Funding Account, as defined in Article I
  of the Sale and Servicing Agreement)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (f)                                    Aggregate
  note principal distributed (sum of (a) through (e))

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.                                       Note
  Principal Carryover Shortfall

  	
   

  	
  $

  	
   

  

 

I-2

 

	
  E.

  	
   

  	
  Calculation of
  Note Monthly Interest Distributable Amount.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       Class A-l
  Interest Rate

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       Class A-2
  Interest Rate

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       Class B
  Interest Rate

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.                                       Interest
  Carryover Shortfall for such Distribution Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

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

  	
   

  	
  $

  	
   

  

 

I-3

 

	
  G.

  	
   

  	
  Fees

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  CALCULATION OF
  THE AVAILABLE MONIES FOR SUCH DISTRIBUTION DATE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  b.                                      All
  Net Liquidation Proceeds

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  

 

I-4

 

	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  f.                                         All
  amounts obtained from the Indenture Trustee in respect of Carrying Charges to
  be deposited into the Collection Account for the upcoming Distribution Date
  as contemplated in Section 7.03(b) of the Sale and Servicing
  Agreement

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  

 

I-5

 

	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J.

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  K.

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  L.

  	
   

  	
  Interest
  Earnings on the Reserve Fund.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M.

  	
   

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

  	
   

  	
  $

  	
   

  

 

I-6

 

	
  N.

  	
   

  	
  The Specified
  Reserve Fund Amount for such Distribution Date will be an amount equal to the
  greater of (a) 2.00% of the Principal Balance of the Contracts in the
  Trust as of the last day of the immediately preceding Due Period; provided,
  however, in the event a Reserve Fund Trigger Event occurs with respect to a
  Distribution Date and has not terminated for three (3) consecutive
  Distribution Dates (inclusive) such amount shall be equal to 6.00% of the
  Principal Balance of the Contracts in the Trust as of the last day of the
  immediately preceding Due Period) and (b) 1.00% of the aggregate of the
  Initial Class A-1 Note Balance, Initial Class A-2 Note
  Balance and Initial Class B Note Balance; provided, however, in no event
  shall the Specified Reserve Fund Balance be greater than the aggregate
  outstanding principal balance of the Securities.

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  O.

  	
   

  	
  The Pool Factor

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       The
  Class B Note Pool Factor immediately after such Distribution Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.                                       The
  Class B Note Pool Factor immediately after such Distribution Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P.

  	
   

  	
  Delinquent
  Contracts

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       31-59
  Days

  	
   

  	
  #

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       60-89
  Days

  	
   

  	
  #

  	
   

  	
  $

  	
   

  

 

I-7

 

	
   

  	
   

  	
  3.                                       90
  or More Days

  	
   

  	
  #

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Q.

  	
   

  	
  Liquidated Contracts

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       Total
  Liquidated Contracts          #      

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       Liquidation
  proceeds for the Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       Liquidation
  expenses for the Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.                                       Net
  Liquidation Proceeds for the Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.                                       Net
  Liquidation Losses for the Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  R.

  	
   

  	
  Advances

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       Unreimbursed
  Advances prior to such Distribution Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       Amount
  of Delinquent Interest for such Distribution Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.                                       Total
  of unreimbursed Advances after new Advances on such Distribution Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  S.

  	
   

  	
  Reacquired Contracts

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       Number
  of Contracts to be reacquired by the Seller pursuant to Section 7.08 of
  the Sale and Servicing Agreement

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       Principal
  Amount of such Contracts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       Related
  Reacquisition Price of such Contracts

  	
   

  	
  $

  	
   

  

 

I-8

 

	
  T.

  	
   

  	
  Contracts

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       Number
  of Contracts as of beginning of Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       Principal
  Balance of Contracts as of beginning of Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.                                       Number
  of Contracts as of end of Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.                                       Principal
  Balance of Contracts as of end of Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.                                       Pre-Funded
  Amount as of beginning of Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.                                       Pre-Funded
  Amount as of end of Due Period

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.

  	
   

  	
  Interest Reserve Account

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       Interest
  Reserve Amount as of previous Distribution Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       Interest
  received into Interest Reserve Account

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       Carrying
  Charges (if any) to be paid on upcoming Distribution Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.                                       Excess
  Funds remitted to Trust Depositor

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.                                       Interest
  Reserve Amount as of upcoming Distribution Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  Ratios

  	
   

  	
   

  	
   

  

 

I-9

 

	
   

  	
   

  	
  1.                                       Cumulative
  Loss Ratio

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  b.                                      The
  sum of the Principal Balance of the Contracts as of the Initial Cutoff Date
  plus the Principal Balance of any Subsequent Contracts as of the related
  Subsequent Cutoff Date

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       Average
  Delinquency Ratio for such Distribution Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)                                 The
  Delinquency Ratio (the fraction (expressed as a percentage) computed by
  dividing (a) the Delinquency Amount during the immediately preceding Due
  Period by (b) the Principal Balance of the Contracts as of the beginning
  of the related Due Period) for such Distribution Date

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)                                  The
  Delinquency Ratio for the prior Distribution Date

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       Average
  Loss Ratio for such Distribution Date

  	
   

  	
   

  	
   

  

 

I-10

 

	
   

  	
   

  	
  (a)                                  Net
  Liquidation Losses

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)                                 The
  Loss Ratio for (the fraction (expressed as a percentage) derived by dividing
  (x) Net Liquidation Losses for all Contracts that became Liquidated Contracts
  during the immediately preceding Due Period multiplied by twelve by (y) the
  outstanding Principal Balances of all Contracts as of the beginning of the
  Due Period) such Distribution Date

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)                                  The
  Loss Ratio for the prior Distribution Date

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.                                       Computation
  of Specified Reserve Fund Balance

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Reserve Fund Trigger Events

  	
   

  	
   

  	
   

  

 

I-11

 

	
   

  	
   

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

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

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

  	
   

  	
   

  	
  %

  

 

I-12

 

	
   

  	
   

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

  	
   

  	
   

  	
  %

  

 

I-13

 

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.

 

J-1

 

(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)                                 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,

 

J-2

 

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

 

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

 

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

 

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

 

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

 

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

 

J-3

 

vehicle
installment loan and equal credit opportunity laws, applicable to the Contracts
and the sale of Motorcycles.  Seller
shall, for at least the period of this Agreement, maintain in its possession,
available for the Trust Depositor’s, and the Trustee’s inspection, and shall
deliver to Trust Depositor or  the
Trustee upon demand, evidence of compliance with all such requirements.

 

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

 

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

 

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

 

(m)                               Good
Title.  Each Contract was purchased
by Seller for value and taken into possession prior to the Initial Cutoff Date
(or the applicable Subsequent Cutoff Date in the case of Subsequent Contracts)
in the ordinary course of its business, without knowledge that the Contract was
subject to a security interest.  No
Contract has been sold, assigned or pledged to any person other than Trust
Depositor and the Issuer as the

 

J-4

 

transferee
of Trust Depositor, and prior to the transfer of the Contract to Trust Depositor,
Seller had good and marketable title to each Contract free and clear of any
encumbrance, equity, loan, pledge, charge, claim or security interest and was
the sole owner thereof and had full right to transfer the Contract to Trust
Depositor and to permit Trust Depositor to transfer the same to the Issuer,
and, as of the Closing Date (or the applicable Subsequent Transfer Date in the
case of Subsequent Contracts), the Issuer will have a first priority perfected
security interest therein.

 

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

 

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

 

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

 

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

 

(r)                                    One
Original.  Each Contract is evidenced
by only one original executed Contract, which original is being held by the
Servicer (or its custodian) as custodian.

 

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

 

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

 

J-5

 

person
claiming through or under Seller has any claim or interest in the Lockbox
Account other than the Lockbox Bank; provided, however, that other “Trusts” (as
defined in the Lockbox Agreement) shall have an interest in certain other
collections therein not related to the Contracts.

 

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

 

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

 

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

 

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

 

(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 Class A-1 Notes, the Class A-2
Notes and the Class B Notes on the Closing Date or the related Subsequent
Transfer Date, as applicable.

 

(b)                                 Characteristics.  The
Initial Contracts have the following characteristics: (i) all the
Contracts are secured by Motorcycles; (ii) no Initial Contract has a
remaining maturity of more than 84 months; and (iii) the final scheduled
payment on the Initial Contract with the latest maturity is due not later than May 2012.  Approximately 79.84% of the Principal Balance
of the Initial Contracts as of the Initial Cutoff Date is attributable to loans
for purchases of new Motorcycles and approximately 20.16% 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 3.987%.  The last scheduled payment
date of the Contracts (including any Subsequent Contracts) is due no later than
August 2012.  Approximately 98.22%
of the Principal Balance of the Initial Contracts as of the Initial Cutoff Date
is attributable to loans for purchases of Motorcycles manufactured by
Harley-Davidson or Buell and approximately 1.78% of the

 

J-6

 

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 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

 

J-7

 

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

 

J-8

 

Exhibit K

 

[Lockbox Bank and Lockbox Account]

 

Lockbox

 

Harley-Davidson
Credit Corp.

135
South LaSalle Street, Dept. 8529

Chicago,
Illinois 60674-8529

 

Lockbox Bank

 

LaSalle
Bank National Association

135
South LaSalle Street

Chicago,
Illinois 60674

 

K-1

 

Exhibit L

 

[Form of Subsequent Transfer Agreement]

 

[see Exhibit C of the Transfer
and Sale Agreement]

 

L-1Exhibit 10.3

 

 

 

ADMINISTRATION AGREEMENT

 

among

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2005-2,

 

as Issuer,

 

HARLEY-DAVIDSON CREDIT CORP.,

 

as Administrator,

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.,

 

as Trust Depositor,

 

and

 

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

 

as Indenture Trustee

 

 

Dated as of May 1, 2005

 

 

 

 

TABLE OF CONTENTS

 

	
  SECTION 1.  DUTIES OF THE
  ADMINISTRATOR.

  	
   

  
	
   

  	
   

  
	
  SECTION 2.  RECORDS

  	
   

  
	
   

  	
   

  
	
  SECTION 3.  COMPENSATION

  	
   

  
	
   

  	
   

  
	
  SECTION 4. ADDITIONAL INFORMATION
  TO BE FURNISHED TO THE ISSUER

  	
   

  
	
   

  	
   

  
	
  SECTION 5. INDEPENDENCE OF THE
  ADMINISTRATOR

  	
   

  
	
   

  	
   

  
	
  SECTION 6. NO JOINT VENTURE

  	
   

  
	
   

  	
   

  
	
  SECTION 7. OTHER ACTIVITIES OF
  ADMINISTRATOR

  	
   

  
	
   

  	
   

  
	
  SECTION 8. TERM OF AGREEMENT;
  RESIGNATION AND REMOVAL OF ADMINISTRATOR

  	
   

  
	
   

  	
   

  
	
  SECTION 9. ACTION UPON
  TERMINATION, RESIGNATION OR REMOVAL

  	
   

  
	
   

  	
   

  
	
  SECTION 10. NOTICES

  	
   

  
	
   

  	
   

  
	
  SECTION 11. AMENDMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 12. SUCCESSORS AND
  ASSIGNS

  	
   

  
	
   

  	
   

  
	
  SECTION 13. GOVERNING LAW

  	
   

  
	
   

  	
   

  
	
  SECTION 14. HEADINGS

  	
   

  
	
   

  	
   

  
	
  SECTION 15. COUNTERPARTS

  	
   

  
	
   

  	
   

  
	
  SECTION 16. SEVERABILITY

  	
   

  
	
   

  	
   

  
	
  SECTION 17. NOT APPLICABLE TO
  HARLEY-DAVIDSON CREDIT IN OTHER CAPACITIES

  	
   

  
	
   

  	
   

  
	
  SECTION 18. LIMITATION OF
  LIABILITY OF OWNER TRUSTEE AND INDENTURE TRUSTEE

  	
   

  
	
   

  	
   

  
	
  SECTION 19. THIRD-PARTY
  BENEFICIARY

  	
   

  
	
   

  	
   

  
	
  SECTION 20. SURVIVABILITY

  	
   

  

 

 

This Administration Agreement,
dated as of May 1, 2005, among Harley-Davidson Motorcycle Trust 2005-2
(the “Issuer”), Harley-Davidson Credit Corp.
(together with its successors and assigns “Harley-Davidson Credit”)
in its capacity as administrator, the “Administrator”),
Harley-Davidson Customer Funding Corp. (the “Trust Depositor”)
and The Bank of New York Trust Company, N.A., not in its individual capacity
but solely as Indenture Trustee (together with its successors and assigns, the “Indenture Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer is issuing
3.79% Harley-Davidson Motorcycle Contract Backed Notes, Class A-1 Notes,
4.07% Harley-Davidson Motorcycle Contract Backed Notes, Class A-2 Notes
and 4.27% Harley-Davidson Motorcycle Contract Backed Notes, Class B Notes
(collectively, the “Notes”)
pursuant to the Indenture, dated as of the date hereof (the “Indenture”),
between the Issuer and the Indenture Trustee (capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in the
Indenture);

 

WHEREAS, the Issuer has entered
into certain agreements in connection with the issuance of the Notes including (i) a
Sale and Servicing Agreement, dated as of the date hereof (the “Sale and Servicing Agreement”), among the Issuer, the
Indenture Trustee, the Trust Depositor and Harley-Davidson Credit, as servicer
(in such capacity, the “Servicer”),
and (ii) the Indenture (collectively referred to hereinafter as the “Transaction Documents”);

 

WHEREAS, pursuant to the
Transaction Documents, the Issuer and the Owner Trustee are required to perform
certain duties in connection with (i) the Notes and the collateral
therefor pledged pursuant to the Indenture (the “Collateral”)
and (ii) the beneficial ownership interest in the Issuer (the registered
holder of such interest being referred to herein as the “Owner”);

 

WHEREAS, the Issuer and the Owner
Trustee desire to have the Administrator perform certain of the duties of the
Issuer and the Owner Trustee referred to in the preceding clause and to provide
such additional services consistent with the terms of this Agreement and the
Transaction Documents as the Issuer and the Owner Trustee may from time to time
request; and

 

WHEREAS, the Administrator has the
capacity to provide the services required hereby and is willing to perform such
services for the Issuer and the Owner Trustee on the terms set forth herein;

 

NOW, THEREAFTER, in consideration
of the mutual covenants contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

 

2

 

Section 1.                                          Duties of the Administrator.

 

(a)                                  Duties with respect to the Indenture.

 

(i)                                     The Administrator agrees to perform all its duties
as Administrator and the duties of the Issuer and the Owner Trustee under the
Transaction Documents.  In addition, the
Administrator shall consult with the Owner Trustee regarding the duties of the
Issuer or the Owner Trustee under the Indenture.  The Administrator shall monitor the
performance of the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the respective duties of the Issuer and the Owner
Trustee under the Indenture.  The
Administrator shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate persons of, all such documents, reports,
filings, instruments, certificates and opinions that it shall be the duty of
the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the
Indenture.  In furtherance of the
foregoing, the Administrator shall take all appropriate action that the Issuer
or the Owner Trustee is required to take pursuant to the Indenture including,
without limitation, such of the foregoing as are required with respect to the
following matters under the Indenture (references are to Sections of the
Indenture):

 

(A)                              the duty to cause the Note Register to be kept and to give the
Indenture Trustee notice of any appointment of a new Note Registrar and the
location, or change in location, of the Note Register (Section 2.04);

 

(B)                                the notification of Noteholders of the final principal payment on their
Notes (Section 2.07(b));

 

(C)                                the fixing or causing to be fixed of any special record date and the
notification of the Indenture Trustee and Noteholders with respect to special
payment dates, if any (Section 2.07(c));

 

(D)                               the preparation of or obtaining of the documents and instruments
required for execution and authentication of the Notes and delivery of the same
to the Indenture Trustee (Section 2.02);

 

(E)                                 the preparation, obtaining or filing of the
instruments, opinions and certificates and other documents required for the
release of Collateral (Section 2.12);

 

(F)                                 the maintenance of an office in the City of
Wilmington, Delaware, for registration of transfer or exchange of Notes (Section 3.02);

 

3

 

(G)                                the duty to cause newly appointed Paying Agents, if any, to deliver to
the Indenture Trustee the instrument specified in the Indenture regarding funds
held in trust (Section 3.03);

 

(H)                               the direction to the Indenture Trustee to deposit monies with Paying
Agents, if any, other than the Indenture Trustee (Section 3.03);

 

(I)                                    the obtaining and preservation of the Issuer’s
qualification to do business in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of the
Indenture, the Notes, the Collateral and each other instrument and agreement
included in the Collateral (Section 3.04);

 

(J)                                   the preparation of all supplements and amendments to
the Indenture and all financing statements, continuation statements,
instruments of further assurance and other instruments and the taking of such
other action as is necessary or advisable to protect the Collateral other than
as prepared by the Servicer (Section 3.05);

 

(K)                               the delivery of the Opinion of Counsel on the Closing Date and certain
other statements as to compliance with the Indenture (Sections 3.06 and 3.09);

 

(L)                                 the identification to the Indenture Trustee in an
Officer’s Certificate of a Person with whom the Issuer has contracted to
perform its duties under the Indenture (Section 3.07(b));

 

(M)                            the notification of the Indenture Trustee and each Rating Agency of an
Event of Termination under the Sale and Servicing Agreement;

 

(N)                               the duty to cause the Servicer to comply with Article Five and Article Nine
of the Sale and Servicing Agreement (Section 3.14);

 

(O)                               the preparation and obtaining of documents and instruments required for
the release of the Issuer from its obligations under the Indenture (Section 3.10(b) and
Section 3.11(b));

 

(P)                                 the delivery of written notice to the Indenture
Trustee and each Rating Agency of each Event of Default under the Indenture and
each Event of Termination by the Servicer under the Sale and Servicing
Agreement (Section 3.18);

 

(Q)                               the monitoring of the Issuer’s obligations as to the satisfaction and
discharge of the Indenture and the preparation of an Officer’s Certificate and
the

 

4

 

obtaining of the Opinion of Counsel
and the Independent Certificate relating thereto (Section 4.01);

 

(R)                                the compliance with any written directive of the Indenture Trustee with
respect to the sale of the Collateral in a commercially reasonable manner if an
Event of Default shall have occurred and be continuing (Section 5.04);

 

(S)                                 the preparation and delivery of notice to
Noteholders of the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee (Section 6.08);

 

(T)                                the preparation of any written instruments required to confirm more
fully the authority of any co-trustee or separate trustee and any written
instruments necessary in connection with the resignation or removal of the
Indenture Trustee or any co-trustee or separate trustee (Sections 6.08 and
6.10);

 

(U)                               the furnishing of the Indenture Trustee with the names and addresses of
Noteholders during any period when the Indenture Trustee is not the Note
Registrar (Section 7.01);

 

(V)                                the opening of one or more accounts in the Indenture Trustee’s name,
the preparation and delivery of Issuer Orders, Officer’s Certificates and
Opinions of Counsel and all other actions necessary with respect to investment
and reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03);

 

(W)                           the preparation of an Issuer Request and Officer’s Certificate and the
obtaining of an Opinion of Counsel and Independent Certificates, if necessary,
for the release of the Collateral (Sections 8.04 and 8.05);

 

(X)                               the preparation of Issuer Orders and the obtaining of Opinions of
Counsel with respect to the execution of supplemental indentures and the
mailing to the Noteholders of notices with respect to such supplemental
indentures (Sections 9.01, 9.02 and 9.03);

 

(Y)                                the execution and delivery of new Notes conforming to any supplemental
indenture (Section 9.06);

 

(Z)                                the duty to notify Noteholders of redemption of the Notes or to cause
the Indenture Trustee to provide such notification (Section 10.02);

 

5

 

(AA)                    the
preparation and delivery of all Officer’s Certificates, Opinions of Counsel and
Independent Certificates with respect to any requests by the Issuer to the
Indenture Trustee to take any action under the Indenture (Section 11.01(a));

 

(BB)                        the
preparation and delivery of Officer’s Certificates and the obtaining of
Independent Certificates, if necessary, for the release of property from the
lien of the Indenture (Section 11.01(b));

 

(CC)                        the
notification of the Rating Agencies, upon the failure of the Issuer, the Owner
Trustee or the Indenture Trustee to provide notification;

 

(DD)                      the
preparation and delivery to Noteholders and the Indenture Trustee of any
agreements with respect to alternate payment and notice provisions (Section 11.06);

 

(EE)                          the recording of the Indenture, if applicable (Section 11.14); and

 

(FF)                          the appointment of a successor Indenture Trustee.

 

(ii)                                  The Administrator will:

 

(A)                              except as otherwise expressly provided in the Indenture, pay the
Indenture Trustee’s fees and reimburse the Indenture Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Indenture Trustee in accordance with any provision of the Indenture (including
the reasonable compensation, expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith;

 

(B)                                indemnify the Indenture Trustee and its agents for, and hold them
harmless against, any loss, liability or expense incurred without negligence or
bad faith on their part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Indenture, including the
reasonable costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of their powers
or duties under the Indenture; and

 

(C)                                indemnify the Owner Trustee and its agents for, and hold them harmless
against, any loss, liability or expense incurred without negligence or bad
faith on their part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust Agreement,
including the reasonable costs and expenses of defending themselves against any
claim or liability in connection with the exercise or performance of any of
their powers or duties under the Trust Agreement.

 

6

 

(b)                                 Additional Duties.

 

(i)                                     In addition to the duties set forth in Section 1(a)(i),
the Administrator shall perform such calculations and shall prepare or shall
cause the preparation by other appropriate persons of, and shall execute on
behalf of the Issuer or the Owner Trustee, all such documents, reports,
filings, instruments, certificates and opinions that the Issuer or the Owner
Trustee are required to prepare, file or deliver pursuant to the Transaction
Documents or under Section 5.03 of the Trust Agreement, and at the request
of the Owner Trustee shall take all appropriate action that the Issuer or the
Owner Trustee are required to take pursuant to the Transaction Documents.  In furtherance thereof, the Owner Trustee
shall, on behalf of the Issuer, execute and deliver to the Administrator and to
each successor Administrator appointed pursuant to the terms hereof, one or
more powers of attorney substantially in the form of Exhibit A
hereto, appointing the Administrator the attorney-in-fact of the Issuer for the
purpose of executing on behalf of the Owner Trustee and the Issuer all such
documents, reports, filings, instruments, certificates and opinions.  Subject to Section 5, and in accordance
with the directions of the Issuer, the Administrator shall administer, perform
or supervise the performance of such other activities in connection with the
Collateral (including the Transaction Documents) as are not covered by any of
the foregoing provisions and as are expressly requested by the Issuer and are
reasonably within the capability of the Administrator.

 

(ii)                                  Notwithstanding anything in this Agreement or the
Transaction Documents to the contrary, the Administrator shall be responsible
for promptly notifying the Owner Trustee in the event that any withholding tax
is imposed on the Trust’s payments (or allocations of income) to the Owner as
contemplated in Section 5.01(c) of the Trust Agreement.  Any such notice shall specify the amount of
any withholding tax required to be withheld by the Owner Trustee pursuant to
such provision.

 

(iii)                               Notwithstanding anything in this Agreement or the Transaction Documents
to the contrary, the Administrator shall be responsible for performance of the
duties of the Owner Trustee set forth in Section 5.03(a), (b), (c) and
(d), the penultimate sentence of Section 5.03 and Section 5.04(a) of
the Trust Agreement with respect to, among other things, accounting and reports
to the Owner; provided, however, that the Owner
Trustee shall retain responsibility for the distribution of information forms
necessary to enable the Owner to prepare its federal and state income tax
returns.

 

(iv)                              The Administrator shall satisfy its obligations with respect to clauses
(ii) and (iii) above by retaining, at the expense of the Trust
payable by the Administrator, a firm of independent public accountants (the “Accountants”) acceptable to the Owner Trustee, which shall
perform the obligations of the Administrator thereunder.

 

7

 

(v)                                 The Administrator shall perform the duties of the
Administrator specified in Section 10.02 of the Trust Agreement required
to be performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the Administrator
under the Trust Agreement.

 

(vi)                              In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Administrator may enter into transactions or
otherwise deal with any of its Affiliates; provided, however,
that the terms of any such transactions or dealings shall be in accordance with
any directions received from the Issuer and shall be, in the Administrator’s
opinion, no less favorable to the Issuer than would be available from
unaffiliated parties.

 

(c)                                  Non-Ministerial Matters.

 

(i)                                     With respect to matters that in the reasonable
judgment of the Administrator are non-ministerial, the Administrator shall not
take any action unless within a reasonable time before the taking of such
action, the Administrator shall have notified the Owner Trustee of the proposed
action and the Owner Trustee shall not have withheld consent or provided an
alternative direction.  For the purpose
of the preceding sentence, “non-ministerial matters”
shall include, without limitation:

 

(A)                              the amendment of or any supplement to the Indenture;

 

(B)                                the initiation of any claim or lawsuit by the Issuer and the compromise
of any action, claim or lawsuit brought by or against the Issuer (other than in
connection with the collection of the Contracts);

 

(C)                                the amendment, change or modification of any other Transaction
Documents;

 

(D)                               the appointment of successor Note Registrars, successor Paying Agents
and successor Indenture Trustees pursuant to the Indenture or the appointment
of successor Administrators or a successor Servicer, or the consent to the
assignment by the Note Registrar, Paying Agent or Indenture Trustee of its
obligations under the Indenture; and

 

(E)                                 the removal of the Indenture Trustee.

 

(ii)                                  Notwithstanding anything to the contrary in this
Agreement, the Administrator shall not be obligated to, and shall not, (A) make
any payments to the Noteholders under the Transaction Documents, (B) sell
the Collateral pursuant to clause

 

8

 

(iv) of Section 5.04 of
the Indenture, (C) take any other action that the Issuer directs the
Administrator not to take on its behalf or (D) take any other action which
may be construed as having the effect of varying the investment of the Holders.

 

Section 2.                                          Records.   The Administrator shall
maintain appropriate books of account and records relating to services
performed hereunder, which books of account and records shall be accessible for
inspection by the Issuer and the Owner Trustee at any time during normal business
hours.

 

Section 3.                                          Compensation.  As
compensation for the performance of the Administrator’s obligations under this
Agreement and as reimbursement for its expenses related thereto, the
Administrator shall be entitled to a monthly fee which shall be solely an
obligation of the Trust Depositor and shall be in an amount as shall be
agreeable to the Trust Depositor and the Administrator.

 

Section 4.                                          Additional Information to be Furnished to
the Issuer.  The Administrator shall furnish to the Issuer
from time to time such additional information regarding the Collateral as the
Issuer shall reasonably request.

 

Section 5.                                          Independence of the Administrator.  For all
purposes of this Agreement, the Administrator shall be an independent
contractor and shall not be subject to the supervision of the Issuer or the
Owner Trustee with respect to the manner in which it accomplishes the
performance of its obligations hereunder. 
Unless expressly authorized by the Issuer, the Administrator shall have
no authority to act for or represent the Issuer or the Owner Trustee in any way
and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.

 

Section 6.                                          No Joint Venture.  Nothing
contained in this Agreement (i) shall constitute the Administrator and
either of the Issuer or the Owner Trustee as members of any partnership, joint
venture, association, syndicate, unincorporated business or other separate
entity, (ii) shall be construed to impose any liability as such on any of
them or (iii) shall be deemed to confer on any of them any express,
implied or apparent authority to incur any obligation or liability on behalf of
the others.

 

Section 7.                                          Other Activities of Administrator.  Nothing
herein shall prevent the Administrator or its Affiliates from engaging in other
business or, in its sole discretion, from acting in a similar capacity as an
administrator for any other Person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Owner
Trustee or the Indenture Trustee.

 

9

 

Section 8.                                          Term of Agreement; Resignation and Removal
of Administrator.  This Agreement shall continue in force until
the termination of the Issuer, upon which event this Agreement shall automatically
terminate.

 

(a)                                  Subject to Section 8(d) and Section 8(e),
the Administrator may resign its duties hereunder by providing the Issuer with
at least 60 days’ prior written notice.

 

(b)                                 Subject to Section 8(d) and Section 8(e),
the Issuer may remove the Administrator without cause by providing the
Administrator with at least 60 days’ prior written notice.

 

(c)                                  Subject to Section 8(d) and Section 8(e),
at the sole option of the Issuer, the Administrator may be removed immediately
upon written notice of termination from the Issuer to the Administrator if any
of the following events shall occur:

 

(i)                                     the Administrator shall default in the performance
of any of its duties under this Agreement and, after notice of such default,
shall not cure such default within ten days (or, if such default cannot be
cured in such time, shall not give within ten days such assurance of cure as
shall be reasonably satisfactory to the Issuer);

 

(ii)                                  a court having jurisdiction in the premises shall
enter a decree or order for relief, and such decree or order shall not have
been vacated within 60 days, in respect of the Administrator in any involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for the Administrator or any
substantial part of its property or order the winding-up or liquidation of its
affairs; or

 

(iii)                               the Administrator shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator or similar
official for the Administrator or any substantial part of its property, shall
consent to the taking of possession by any such official of any substantial
part of its property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become due.

 

The Administrator agrees that if
any of the events specified in clauses (ii) or (iii) above shall
occur, it shall give written notice thereof to the Issuer and the Indenture Trustee
within seven days after the occurrence of such event.

 

10

 

(d)                                 No resignation or removal of the Administrator
pursuant to this Section shall be effective until (i) a successor
Administrator shall have been appointed by the Issuer and (ii) such
successor Administrator shall have agreed in writing to be bound by the terms
of this Agreement in the same manner as the Administrator is bound hereunder.

 

(e)                                  The appointment of any successor Administrator shall
be effective only after the satisfaction of the Rating Agency Condition with
respect to the proposed appointment.

 

(f)                                    Subject to Section 8(d) and 8(e), the
Administrator acknowledges that upon the appointment of a Successor Servicer
pursuant to the Sale and Servicing Agreement, the Administrator shall
immediately resign and such Successor Servicer shall automatically become the
Administrator under this Agreement.

 

Section 9.                                          Action upon Termination, Resignation or
Removal.  Promptly upon the effective date of termination of
this Agreement pursuant to Section 8 or the resignation or removal of the
Administrator pursuant to Section 8(a), (b) or (c) respectively,
the Administrator shall be entitled to be paid all fees and reimbursable
expenses accruing to it to the date of such termination, resignation or
removal.  The Administrator shall
forthwith upon such termination pursuant to Section 8 deliver to the
Issuer all property and documents of or relating to the Collateral then in the
custody of the Administrator.  In the
event of the resignation or removal of the Administrator pursuant to Section (a),
(b) or (c), respectively, the Administrator shall cooperate with the
Issuer and take all reasonable steps requested to assist the Issuer in making
an orderly transfer of the duties of the Administrator.

 

Section 10.                                   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.

 

Section 11.                                   Amendments.  This
Agreement may be amended from time to time by a written amendment duly executed
and delivered by the parties hereto, with the written consent of the Owner
Trustee but without the consent of the Noteholders, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement

 

11

 

or of modifying in any manner the
rights of the Noteholders; provided that such amendment will not, in the
Opinion of Counsel satisfactory to the Indenture Trustee, materially and
adversely affect the interest of any Noteholder.  This Agreement may also be amended by the
parties hereto with the written consent of the Owner Trustee and 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 Noteholders; provided, however,
that no such amendment may (i) increase or reduce in any manner the amount
of, or accelerate or delay the timing of, collections of payments on the
Contracts or distributions that are required to be made for the benefit of the
Noteholders or (ii) reduce the aforesaid percentage of the holders of
Notes which are required to consent to any such amendment, without the consent
of the holders of all outstanding Notes. 
Notwithstanding the foregoing, the Administrator may not amend this
Agreement without the permission of the Trust Depositor, which permission shall
not be unreasonably withheld.

 

Section 12.                                    Successors and Assigns.  This
Agreement may not be assigned by the Administrator unless such assignment is
previously consented to in writing by the Issuer, the Indenture Trustee and the
Owner Trustee and subject to the satisfaction of the Rating Agency Condition in
respect thereof.  An assignment with such
consent and satisfaction, if accepted by the assignee, shall bind the assignee
hereunder in the same manner as the Administrator is bound hereunder.  Notwithstanding the foregoing, this Agreement
may be assigned by the Administrator without the consent of the Issuer or the
Owner Trustee to a corporation or other organization that is a successor (by
merger, consolidation or purchase of assets) to the Administrator; provided
that such successor organization executes and delivers to the Issuer, the Owner
Trustee and the Indenture Trustee an agreement, in form and substance
reasonably satisfactory to the Owner Trustee and the Indenture Trustee, in
which such corporation or other organization agrees to be bound hereunder by
the terms of said assignment in the same manner as the Administrator is bound
hereunder.  Subject to the foregoing,
this Agreement shall bind any successors or assigns of the parties hereto.

 

Section 13.                                   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 14.                                   Headings.  The section and subsection headings
hereof have been inserted for convenience of reference only and shall not be
construed to affect the meaning, construction or effect of this Agreement.

 

12

 

Section 15.                                   Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same agreement.

 

Section 16.                                 Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

 

Section 17.                                   Not Applicable to Harley-Davidson Credit in
Other Capacities.  Nothing in this Agreement shall affect any
obligation Harley-Davidson Credit may have in any other capacity.

 

Section 18.                                   Limitation of Liability of Owner Trustee and
Indenture Trustee.

 

(a)                                  Notwithstanding anything contained herein to the
contrary, this instrument has been countersigned 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 countersigned 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.

 

Section 19.                                   Third-party Beneficiary.  The Owner
Trustee is a third-party beneficiary to this Agreement and is entitled to the
rights and benefits hereunder and may enforce the provisions hereof as if it
were a party hereto.

 

Section 20.                                   Survivability.  The
obligations of the Administrator described in Section 1(a)(ii) hereof
shall survive termination of this Agreement.

 

13

 

[signature page follows]

 

14

 

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed and delivered as of the
day and year first above written.

 

	
   

  	
  HARLEY-DAVIDSON MOTORCYCLE TRUST

  
	
   

  	
  2005-2

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wilmington Trust Company, not in
  its

  
	
   

  	
   

  	
  individual capacity but solely as
  Owner

  
	
   

  	
   

  	
  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JANEL R. HAVRILLA

  	
   

  
	
   

  	
   

  	
  Printed Name: Janel R. Havrilla

  
	
   

  	
   

  	
  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

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST

  
	
   

  	
  COMPANY, N.A., not in its
  individual capacity

  
	
   

  	
  but solely as Indenture Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ CYNTHIA DAVIS

  	
   

  
	
   

  	
   

  	
  Printed Name:  Cynthia
  Davis

  
	
   

  	
   

  	
  Title:   Vice
  President

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT CORP.,

  
	
   

  	
  as Administrator

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PERRY A. GLASSGOW

  	
   

  
	
   

  	
   

  	
  Printed Name:  Perry A.
  Glassgow

  
	
   

  	
   

  	
  Title:   Vice
  President and Treasurer

  

 

 

Signature Page to Administration Agreement

 

 

LIMITED POWER OF ATTORNEY

 

	
  State of
  Illinois

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  SS.

  
	
   

  	
   

  	
   

  
	
  County of
  Cook

  	
  )

  	
   

  

 

KNOW ALL PERSONS BY THESE PRESENTS,
that Wilmington Trust Company, a Delaware banking corporation (the “Owner Trustee”), whose principal executive office is
located at Wilmington Trust Company, Rodney Square North, 1100 North Market
Street, Wilmington, Delaware Attention: 
Trust Administration, by and through its duly elected and authorized
officer, JANEL R. HAVRILLA,  a FINANCIAL
SERVICES OFFICER, on behalf of itself and of Harley-Davidson Motorcycle Trust
2005-2 (the “Trust”) as Issuer under the
Administration Agreement, dated as of May 1, 2005 (the “Administration
Agreement”), among the Trust, Harley-Davidson Customer Funding
Corp., The Bank of New York Trust Company, N.A., as Indenture Trustee, and
Harley-Davidson Credit Corp., as Administrator, does hereby nominate,
constitute and appoint Harley-Davidson Credit Corp., a Nevada corporation, each
of its officers from time to time and each of its employees authorized by it
from time to time to act hereunder, jointly and each of them severally,
together or acting alone, its true and lawful attorney-in-fact, for the Owner
Trustee and the Issuer in their name, place and stead, in the sole discretion
of such attorney-in-fact, to perform such calculations and prepare or cause the
preparation by other appropriate persons of, and to execute on behalf of the
Issuer or the Owner Trustee, all such documents, reports, filings, instruments,
certificates and opinions that the Issuer or the Owner Trustee is required to
prepare, file or deliver pursuant to the Administration Agreement, and to take
any and all other action, as such attorney-in-fact may deem necessary or
desirable in accordance with the directions of the Owner Trustee and in
connection with its duties as Administrator or successor Administrator under
the Administration Agreement. 
Capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Administration Agreement.

 

The Owner Trustee hereby ratifies
and confirms the execution, delivery and performance (whether before or after
the date hereof) of the above-mentioned documents, reports, filings, instruments,
certificates and opinions, by the attorney-in-fact and all that the
attorney-in-fact shall lawfully do or cause to be done by virtue hereof.

 

 

The Owner Trustee hereby agrees
that no person or other entity dealing with the attorney-in-fact shall be bound
to inquire into such attorney-in-fact’s power and authority hereunder and any
such person or entity shall be fully protected in relying on such power of
authority.

 

This Limited Power of Attorney may
not be assigned without the prior written consent of the Owner Trustee.  It is effective immediately and will continue
until it is revoked.

 

This Limited Power of Attorney
shall be governed and construed in accordance with the laws of the State of
Illinois without reference to principles of conflicts of law.

 

Executed as of this 31st day of
May, 2005.

 

 

	
   

  	
   Wilmington Trust Company, not in its individual

  
	
   

  	
   capacity but solely as Owner Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JANEL R.
  HAVRILLA

  	
   

  
	
   

  	
  Printed Name: Janel R. Havrilla

  	
   

  
	
   

  	
  Title:   Financial Services
  Officer

  	
   

  
					

 

 

CERTIFICATE OF ACKNOWLEDGMENT OF

 

NOTARY PUBLIC

 

	
  State of
  Delaware   

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  )

  	
  SS.

  
	
   

  	
   

  	
   

  
	
  County of
  New Castle

  	
  )

  	
   

  

 

	
   

  	
  On May 24, 2005 before me, Amanda
  E. Burger, Administrative Assistant

  
	
   

  	
   

  	
  [Insert name and title of notary]

  
	
   

  	
  personally appeared Janel R.
  Havrilla.

  
	
   

  	
   

  
	
  ý

  	
  personally known to me, or

  
	
   

  	
   

  
	
  o

  	
  proved to me on the basis of
  satisfactory evidence to be the person(s) whose name(s) is/are

  

 

subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ties), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which person(s) acted,
executed the instrument.

 

	
   

  	
  WITNESS my hand and official seal.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature:  

  	
  /s/ AMANDA E. BURGER

  	
   

  
	
   

  	
  Amanda E. Burger

  	
   

  
	
   

  	
  Notary Public - State of Delaware

  	
   

  	
  [SEAL]

  
	
   

  	
  My Comm. Expires Mar. 7, 2007.

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