SALE AND SERVICING AGREEMENT

Sales Agreement

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HARLEY DAVIDSON CUSTOMER FUNDING CORP | HARLEY-DAVIDSON MOTORCYCLE TRUST 2006-2 | HARLEY-DAVIDSON CREDIT CORP | THE BANK OF NEW YORK TRUST COMPANY, N.A

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Title: SALE AND SERVICING AGREEMENT
Governing Law: Illinois Date: 6/14/2006
Law Firm: Harley-Davidson Credit Corp.

Exhibit 10.2

SALE AND SERVICING AGREEMENT

among

HARLEY-DAVIDSON MOTORCYCLE TRUST 2006-2,

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, 2006

Page

Table of Contents

ARTICLE One DEFINITIONS		3
Section 1.01.	Definitions	3
Section 1.02.	Usage of Terms	85
Section 1.03.	Section References	85
Section 1.04.	Calculations	86
Section 1.05.	Accounting Terms	87
ARTICLE Two TRANSFER OF CONTRACTS		87
Section 2.01.	Closing	87
Section 2.02.	Conditions to the Closing	91
Section 2.03.	Conveyance of Subsequent Contracts	97
ARTICLE Three REPRESENTATIONS AND WARRANTIES		109
Section 3.01.	Representations and Warranties Regarding the Trust Depositor	112
Section 3.02.	Representations and Warranties Regarding the Servicer	121
ARTICLE Four PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS		127
Section 4.01.	Custody of Contracts	127
Section 4.02.	Filing	134
Section 4.03.	Name Change or Relocation	136
Section 4.04.	Costs and Expenses	138
ARTICLE Five SERVICING OF CONTRACTS		138
Section 5.01.	Responsibility for Contract Administration	138
Section 5.02.	Standard of Care	139
Section 5.03.	Records	140
Section 5.04.	Inspection	141
Section 5.05.	Trust Accounts	142
Section 5.06.	Enforcement	151
Section 5.07.	Trustees to Cooperate	157
Section 5.08.	Costs and Expenses	159
Section 5.09.	Maintenance of Security Interests in Motorcycles	160
Section 5.10.	Successor Servicer/Lockbox Agreements	161
Section 5.11.	Separate Entity Existence	163
ARTICLE Six THE TRUST DEPOSITOR		163
Section 6.01.	Covenants of the Trust Depositor	163
(a)	Existence	164
Section 6.02.	Liability of Trust Depositor; Indemnities	174
Section 6.03.	Merger or Consolidation of, or Assumption of the Obligations of, Trust Depositor; Certain Limitations	181
Section 6.04.	Limitation on Liability of Trust Depositor and Others	185
Section 6.05.	Trust Depositor Not to Resign	187
ARTICLE Seven DISTRIBUTIONS; RESERVE FUND		187
Section 7.01.	Monthly Distributions	187
Section 7.02.	Fees	189
Section 7.03.	Advances; Realization of Carrying Charge	189
Section 7.04.	Interest Reserve Account	192
Section 7.05.	Distributions; Priorities	194
Section 7.06.	Reserve Fund	208
Section 7.07.	Establishment of Pre-Funding Account	212
Section 7.08.	Purchase of Contracts for Breach of Representations and Warranties	216
Section 7.09.	Reassignment of Reacquired Contracts	219
Section 7.10.	Servicer’s Purchase Option	220

Section 7.11.	Purchase of Contracts for Breach of Servicing Obligations	222
ARTICLE Eight EVENTS OF TERMINATION; SERVICE TRANSFER		224
Section 8.01.	Events of Termination	224
Section 8.02.	Waiver of Event of Termination	229
Section 8.03.	Service Transfer	230
Section 8.04.	Successor Servicer to Act; Appointment of Successor Servicer	233
Section 8.05.	Notification to Securityholders	235
Section 8.06.	Effect of Transfer	236
Section 8.07.	Database File	237
Section 8.08.	Successor Servicer Indemnification	238
Section 8.09.	Responsibilities of the Successor Servicer	239
Section 8.10.	Limitation of Liability of Servicer	241
Section 8.11.	Merger or Consolidation of Servicer	244
Section 8.12.	Servicer Not to Resign	245
Section 8.13.	Appointment of Subservicer	246
ARTICLE Nine REPORTS		247
Section 9.01.	Monthly Reports	247
Section 9.02.	Officer’s Certificate	247
Section 9.03.	Other Data	248
Section 9.04.	Report on Assessment of Compliance with Servicing Criteria and Attestation; Annual Officer’s Certificate	248
Section 9.05.	Monthly Reports to Noteholders	253
ARTICLE Ten TERMINATION		268
Section 10.01.	Sale of Trust Assets	268
ARTICLE Eleven MISCELLANEOUS		269
Section 11.01.	Amendment	269
Section 11.02.	Protection of Title to Trust	276
Section 11.03.	Governing Law	282
Section 11.04.	Notices	283
Section 11.05.	Severability of Provisions	290
Section 11.06.	Assignment	291
Section 11.07.	Third Party Beneficiaries	291
Section 11.08.	Counterparts	292
Section 11.09.	Headings	292
Section 11.10.	No Bankruptcy Petition; Disclaimer and Subordination	292
Section 11.11.	Limitation of Liability of Owner Trustee and Indenture Trustee	297

EXHIBITS

Exhibit A	Form of Assignment	A-1
Exhibit B	Form of Closing Certificate of Trust Depositor	B-1
Exhibit C	Form of Closing Certificate of Seller/Servicer	C-1
Exhibit D	Form of Attestation Report	D-1
Exhibit E	Servicing Criteria to be Addressed in Indenture Trustee’s
	Assessment of Compliance	E-1
Exhibit F	Form of Indenture Trustee’s Annual Certification	F-1
Exhibit G	Form of Certificate Regarding Reacquired Contracts	G-1
Exhibit H	List of Contracts	H-1
Exhibit I	Form of Monthly Report to Noteholders and the Certificateholder	I-1
Exhibit J	Seller’s Representations and Warranties	J-1
Exhibit K	Lockbox Bank and Lockbox Account	K-1
Exhibit L	Form of Subsequent Transfer Agreement	L-1

iii

SALE AND SERVICING AGREEMENT, dated as of May 1, 2006, among Harley-Davidson Motorcycle Trust 2006-2 (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

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 Purchase Prices for Contracts reacquired by the Trust Depositor pursuant to Section 7.08, (iv) all Advances made by the Servicer pursuant to Section 7.03, (v) the interest component of all amounts paid by the Servicer in connection with an optional purchase of the Contracts pursuant to Section 7.10, (vi) the interest component of the aggregate of the Purchase Prices for Contracts purchased by the Servicer pursuant to Section 7.11, (vii) all amounts received in respect of Carrying Charges transferred from the Interest Reserve Account pursuant to Section 7.03, and (viii) all amounts received in respect of interest, dividends, gains, income and earnings on investment of funds in the Trust Accounts as contemplated in Section 5.05(d).

“Available Principal” means, with respect to any Distribution Date, the total (without duplication) of the following amounts received by the Servicer on or in respect of the Contracts during the related Due Period: (i) all amounts received in respect of principal on the Contracts, (ii) the principal component of all Net Liquidation Proceeds, (iii) the principal component of the aggregate of the Purchase Prices for Contracts reacquired by the Trust Depositor pursuant to Section 7.08, (iv) the principal component of all amounts paid by the Servicer in connection with an optional purchase of the Contracts pursuant to Section 7.10, and (v) the principal component of the aggregate of the Purchase Prices for Contracts purchased by the Servicer pursuant to Section 7.11.

“Average Delinquency Ratio” means, for any Distribution Date, the arithmetic average of the Delinquency Ratios for such Distribution Date and the two immediately preceding Distribution Dates.

“Average Loss Ratio” means, for any Distribution Date, the arithmetic average of the Loss Ratios for such Distribution Date and the two immediately preceding Distribution Dates.

“Base Prospectus” means the Prospectus dated May 23, 2006 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 October 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 5.36% per annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class A-2 Final Distribution Date” means the March 2013 Distribution Date.

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

“Class A-2 Rate” means 5.35% per annum (computed on the basis of a 360-day year of twelve 30-day months).

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

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

“Class B Rate” means 5.58% 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, 2006.

“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 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).

“Delinquent Interest” means, for each Contract and each Determination Date as to which the full payment due in the related Due Period has not been paid before the 30th day after the scheduled payment dated therefor (any such payment being “ delinquent” for purposes of this definition), all interest accrued on such Contract from the Due Date in the Due Period one month prior to the Due Period in which the payment is delinquent.

“Delinquency Ratio” means, for any Distribution Date, the fraction (expressed as a percentage) computed by dividing (a) the Delinquency Amount during the immediately preceding Due Period by (b) the Principal Balance of the Contracts as of the beginning of the related Due Period.

“Delta Loan” means a loan made by the Seller pursuant to the program designated as the Delta Program.

“ Determination Date” means the fourth Business Day following the conclusion of a Due Period during the term of this Agreement.

“Distribution Date” means the fifteenth day of each calendar month during the term of this Agreement, or if such day is not a Business Day, the next Business Day, with the first such Distribution Date hereunder being June 15, 2006.

“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, 2006.

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

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

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

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

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

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

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

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

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

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

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

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

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

“Funding Period” means the period beginning on the Closing Date and ending on the first to occur of (a) the 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 respect to the Trust Depositor and (d) the close of business on the date which is 90 days from and including the Closing Date.

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

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

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

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

“Indenture Trustee Fee” means, with respect to any Distribution Date, one-twelfth of the product of 0.00215% and the sum of (i) the Principal Balance of the Contracts as of the beginning of the related Due Period and (ii) the Pre-Funded Amount as of the beginning of such period; provided, however , in no event shall such fee be less than $200.00 per month.

“Independent” when used with respect to any specified Person, means such a Person who (i) is in fact independent of the Issuer, the Trust Depositor or the Servicer, (ii) is not a director, officer or employee of any Affiliate of the Issuer, the Trust Depositor or the Servicer, (iii) is not a person related to 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 $450,000,000.

“Initial Class A-2 Note Balance” means $302,000,000.

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

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

“Initial Cutoff Date” means as of the close of business on May 12, 2006.

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

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

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

“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 $2,237,443.58.

“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 2006-2.

“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.

“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.

“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 9.05.

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

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

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

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

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

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

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

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

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

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

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

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

“ 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.

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

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

“Principal Balance” means (a) with respect to any Contract as of any date, an amount equal to the unpaid principal balance of such Contract as of the close of business on the Initial Cutoff Date or related Subsequent Cutoff Date, as applicable, reduced by the sum of (x) all payments received by the Servicer as of such date allocable to principal and (y) any Cram Down Loss in respect of such Contract; provided, however , that (i) if (x) a Contract is reacquired by the Seller pursuant to Section 5.01 of the Transfer and Sale Agreement and Section 7.08 hereof

because of a breach of representation or warranty or is purchased by the Servicer pursuant to Section 7.11 hereof, or if (y) the Servicer gives notice of its intent to purchase the Contracts in connection with an optional termination of the Trust pursuant to Section 7.10 hereof, in each case the Principal Balance of such Contract or Contracts shall be deemed as of the related Determination Date to be zero for the Due Period in which such event occurs and for each Due Period thereafter and (ii) from and after the Due Period in which a Contract becomes a Liquidated Contract, the Principal Balance of such Contract shall be deemed to be zero; and (b) where the context requires, the aggregate of the Principal Balances described in clause (a) for all such Contracts.

“Principal Distributable Amount” means, with respect to any Distribution Date, the Aggregate Principal Balance Decline for such Distribution Date.

“Prospectus” means the Base Prospectus together with the Supplement.

“ Purchase Price” means, with respect to a Contract to be reacquired or purchased hereunder as of the last day of any Due Period an amount equal to (a) the Principal Balance of such Contract as of such day, plus (b) accrued and unpaid interest at the Contract Rate on such Contract through the end of such Due Period.

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

“Rating Agency” means each of Moody’s and Standard & Poor’s, so long as such Persons maintain a rating on the Notes; and if either Moody’s or Standard & Poor’s no longer maintains a rating on the Notes, such other nationally recognized statistical rating organization selected by the Trust Depositor.

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

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

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

“Required Holders” means (i) prior to 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.

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

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

“Reserve Fund Initial Deposit” means $3,774,564.50.

“Reserve Fund Deposits” means all moneys deposited in the Reserve Fund from time to time including, but not limited to, the Reserve Fund Initial Deposit as well as any monies deposited therein pursuant to Section 7.05(a), all investments and reinvestments thereof, earnings thereon, and proceeds of the foregoing, whether now or hereafter existing.

“Reserve Fund Trigger Event” means the occurrence with respect to any Distribution Date (i) the Average Delinquency Ratio for such Distribution Date is equal to or greater than (a) 2.50% with respect to any Distribution Date which occurs within the period from the Closing Date to, and inclusive of, the first anniversary of the Closing Date, (b) 3.00% with respect to any Distribution Date which occurs within the period from the day after the first anniversary of the Closing Date to, and inclusive of, the second anniversary of the Closing Date, or (c) 3.50% with respect to any Distribution Date which occurs within the period from the day after the second anniversary of the Closing Date to, and inclusive of, the third anniversary of the Closing Date or (d) 4.00% with respect to any Distribution Date occurring after the third anniversary of the Closing Date; (ii) the Average Loss Ratio for such Distribution Date is equal to or greater than (a) 3.50% with respect to any Distribution Date which occurs within the period from the Closing Date to, and inclusive of, the second anniversary of the Closing Date or (b) 3.25% with respect to any Distribution Date which occurs following the second anniversary of the Closing Date; or

(iii) the Cumulative Loss Ratio for such Distribution Date is equal to or greater than (a) 1.75% with respect to any Distribution Date which occurs within the period from the Closing Date to, and inclusive of, the first anniversary of the Closing Date, (b) 2.50% with respect to any Distribution Date which occurs within the period from the day after the first anniversary of the Closing Date to, and inclusive of, the second anniversary of the Closing Date, (c) 3.00% with respect to any Distribution Date which occurs within the period from the day after the second anniversary of the Closing Date to, and inclusive of, the third anniversary of the Closing Date, or (d) 3.25% with respect to any Distribution Date occurring after the third anniversary of the Closing Date.

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

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

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

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

“Securityholders” means the Holders of the Notes.

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

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

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

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

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

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

“Shortfall” means, with respect to a Distribution Date, an amount equal to the excess (if any) of (a) the sum of the amounts payable pursuant to (1) clauses (v) through (viii) of Section 7.05(a), (2) clauses (i) through (iv) of Section 7.05(b) or (3) clauses (i) through (iv) of Section 7.05(c), as applicable, over (b) Available Monies for such Distribution Date minus the amounts payable pursuant to clauses (i) through (iv) of Section 7.05(a) on such Distribution Date.

“Solvent” means, as to any Person at any time, that (a) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(31) of the Bankruptcy Code; (b) the present fair saleable value of the property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital .

“Specified Reserve Fund Balance” means, with respect to any Distribution Date, an amount equal to the greater of:

(a) 2.00% of the Principal Balance of the Contracts in the Trust as of the last day of the related Due Period; provided, however , in the event a Reserve Fund Trigger Event occurs and is continuing for three consecutive Distribution Dates (inclusive of the respective Distribution Date), the Specified Reserve Fund Balance shall be equal to 6.00% of the Principal Balance of the Contracts in the Trust as of the last day of the immediately preceding Due Period; and

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

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

amount of funds actually on deposit in the Reserve Fund may, in certain circumstances, be less than the Specified Reserve Fund Balance.

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

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

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

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

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

“Subsequent Reserve Fund Amount” means the amount on each Subsequent Transfer Date equal to 0.75% 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, 2006.

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

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

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

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

“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 May 2, 2006, 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.

“Underwriting Agreement” means the Underwriting Agreement, dated May 23, 2006, by and among the Trust Depositor, the Seller and the Underwriters.

“United States” means the United States of America.

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

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

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

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

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

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

ARTICLE TWO

TRANSFER OF CONTRACTS

Section 2.01. Closing. (a) On the Closing Date, the Trust Depositor shall transfer, assign, set over and otherwise convey to the Trust by execution of an assignment substantially in the form of Exhibit A hereto, without recourse other than as expressly provided herein, (i) all the right, title and interest of the Trust Depositor in and to the Initial Contracts listed on the initial List of Contracts delivered on the Closing Date (including, without limitation, all security interests and all rights to receive payments which are collected pursuant thereto after the Initial Cutoff Date, including any liquidation proceeds therefrom, but excluding any rights to receive payments which were collected pursuant thereto on or prior to the Initial Cutoff Date), (ii) all rights of the Trust Depositor under any physical damage or other individual insurance policy

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

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

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

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

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

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

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

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

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

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

(i) Evidence of deposit in the Collection Account of all funds received with respect to the Initial Contracts after the Initial Cutoff Date to the Closing Date, together with an Officer’s Certificate from the Trust Depositor to the effect that such amount is correct.

(j) The Officer’s Certificate of the Seller specified in Section 2.02(h) of the Transfer and Sale Agreement.

(k) Evidence of deposit in the Reserve Fund of the Reserve Fund Initial Deposit by the Owner Trustee.

(l) A fully executed Transfer and Sale Agreement.

(m) A fully executed Trust Agreement.

(n) A fully executed Administration Agreement.

(o) A fully executed Indenture.

Section 2.03. Conveyance of Subsequent Contracts . (a) Subject to the conditions set forth in paragraph (b) below, the Trust Depositor shall transfer, assign, set over and otherwise convey to the Trust, without recourse other than as expressly provided herein and therein, (i) all

the right, title and interest of the Trust Depositor in and to the Subsequent Contracts listed on the Subsequent List of Contracts (including, without limitation, all security interests and all rights to receive payments which are collected pursuant thereto after the related Subsequent Cutoff Date, including any liquidation proceeds therefrom, but excluding any rights to receive payments which were collected pursuant thereto on or prior to such Subsequent Cutoff Date), (ii) all rights of the Trust Depositor under any physical damage or other individual insurance policy (including a “ forced placed” policy, if any), any debt insurance policy or any debt cancellation agreement relating to any such Subsequent Contract, an Obligor or a Motorcycle securing such Subsequent Contract, (iii) all security interests in each such Motorcycle, (iv) all documents contained in the related Contract Files, (v) all rights (but not the obligations) of the Trust Depositor under any related motorcycle dealer agreements between dealers (i.e., the originators of certain Subsequent Contracts) and the Seller, (vi) all rights of the Trust Depositor in the Lockbox, the Lockbox Account and the related Lockbox Agreement to the extent they relate to such Subsequent Contracts, (vii) all rights (but not the obligations) of the Trust Depositor under the Transfer and Sale Agreement related to such Subsequent Contracts (to the extent not already conveyed under Section 2.01(a)), including but not limited to the Trust Depositor’s related rights under Article V thereof, as well as all rights, but not the obligations, of the Trust Depositor under the Subsequent Purchase Agreement related to such Subsequent Contracts, (viii) the remittances, deposits and payments made into the Trust Accounts from time to time and amounts in the Trust Accounts from time to time related to such Subsequent Contracts (to the extent not already conveyed under Section 2.01(a)) (and any investments of such amounts), (ix) all rights of the Trust Depositor to certain rebates of premiums and other amounts relating to insurance policies, debt cancellation agreements, extended service contracts or other repair agreements and other items financed under such Subsequent Contracts and (x) all proceeds and products of the foregoing (the property in clauses (i)-(x) above, upon such transfer, becoming part of the “ Trust Corpus” ). Although the Trust Depositor and the Owner Trustee agree that such transfer is intended to be a transfer of ownership, rather than the granting of a security interest to secure a borrowing, and that the Trust Corpus following such transfer shall not be property of the Trust Depositor, in the event such transfer is deemed to be of a mere security interest to secure a borrowing, the Trust Depositor shall be deemed to have granted the Owner Trustee for the benefit of the Trust a perfected first priority security interest in such Trust Corpus and this Agreement shall constitute a security agreement under applicable law.

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

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

(ii) the Funding Period shall not have terminated;

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

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

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

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

(vii) each Rating Agency shall have notified the Trust Depositor, the Owner Trustee and the Indenture Trustee that following such transfer the 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 11.71% 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 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 $296,724,733.64; 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 set forth or referred to in this Section shall survive delivery of the Contract Files to the Owner Trustee or any custodian.

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

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

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

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

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

from the Trust Depositor. This Agreement and the other Transaction Documents to which the Trust Depositor is a party constitute the legal, valid and binding obligation of the Trust Depositor enforceable in accordance with their terms, except as enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the availability of equitable remedies.

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

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

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

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

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

Such representations speak as of the execution and delivery of this Agreement and as of the Closing Date in the case of the Initial Contracts, and as of the applicable Subsequent Transfer Date in the case of the Subsequent Contracts, but shall survive the transfer and assignment of the Contracts to the Trust.

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

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

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

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

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

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

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.

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

(ii) implement policies and procedures in writing and signed by a Servicing Officer with respect to persons authorized to have access to the Contract Files on the Servicer’s premises and the receipting for Contract Files taken from their storage area by an employee of the Servicer for purposes of servicing or any other purposes;

(iii) attend to all details in connection with maintaining custody of the Contract Files on behalf of the Trust;

(iv) at all times maintain, or cause the Servicer’s custodian to maintain, the original of the fully executed Contract in accordance with its customary practices and procedures, except as may be necessary to conduct collection and servicing activities in accordance with its customary practices and procedures; and

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

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

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

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

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

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

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

ARTICLE FIVE

SERVICING OF CONTRACTS

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

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

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

Section 5.04. Inspection . (a) At all times during the term hereof, the Servicer shall afford the Owner Trustee and the Indenture Trustee and their respective authorized agents reasonable access during normal business hours to the Servicer’s records relating to the Contracts and will cause its personnel to assist in any examination of such records by the Owner Trustee or the Indenture Trustee, or such authorized agents and allow copies of the same to be made. The examination referred to in this Section will be conducted in a manner which does not unreasonably interfere with the Servicer’s normal operations or customer or employee relations. Without otherwise limiting the scope of the examination the Owner Trustee or the Indenture Trustee may, using generally accepted audit procedures, verify the status of each Contract and review the Computer File and records relating thereto for conformity to Monthly Reports prepared pursuant to Article IX and compliance with the standards represented to exist as to each Contract in this Agreement.

(b) At all times during the term hereof, the Servicer shall keep available a copy of the List of Contracts at its principal executive office for inspection by the Trustees.

Section 5.05. Trust Accounts . (a) On or before the Closing Date, the Trust Depositor shall establish the Trust Accounts, each with and in the name of the Indenture Trustee for the benefit of the Noteholders. The Indenture Trustee is hereby required to ensure that each of the Trust Accounts is established and maintained as an Eligible Account.

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

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

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

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

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

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

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

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

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

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

(d) The Servicer shall direct the Indenture Trustee, and the Indenture Trustee shall invest the amounts in the Trust Accounts in Qualified Eligible Investments that are payable on demand or that mature not later than one Business Day prior to the next succeeding Distribution Date. Once such funds are invested, the Indenture Trustee shall not change the investment of such funds. Any loss on such investments shall be deposited in the applicable Trust Account by

the Servicer out of its own funds immediately as realized. Funds in the Trust Accounts not so invested must be insured to the extent permitted by law by the Bank Insurance Fund or the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation. Subject to the restrictions herein, the Indenture Trustee may purchase a Qualified Eligible Investment from itself or an Affiliate. Subject to the other provisions hereof, the Indenture Trustee shall have sole control over each such investment and the income thereon, and any certificate or other instrument evidencing any such investment, if any, shall be delivered directly to the Indenture Trustee or its agent, together with each document of transfer, if any, necessary to transfer title to such investment to the Indenture Trustee in a manner which complies with this Section 5.05(d). All interest, dividends, gains upon sale and other income from, or earnings on, investments of funds in the Trust Accounts (other than the Reserve Fund and the Pre-Funding Account) shall be deposited in the Collection Account pursuant to Section 5.05(b) and distributed on the next Distribution Date pursuant to Section 7.05. The Trust Depositor and the Trust agree and acknowledge that the Indenture Trustee is to have “control” (within the meaning of Section 9-106 of the UCC) of collateral comprised of “Investment Property” (within the meaning of Section 9-102 of the UCC) for all purposes of this Agreement.

(e) Notwithstanding anything to the contrary herein, the Servicer may remit payments on the Contracts and Net Liquidation Proceeds to the Collection Account in next-day funds or immediately available funds no later than 10:00 a.m., Central time, on the Business Day prior to the next succeeding Distribution Date, but only for so long as the short-term debt security rating of the Servicer is at least “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 all reasonable out-of-pocket expenses incurred by it in liquidating a Contract and disposing of the related Motorcycle.

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

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

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

(e) Subject to Section 5.02, the Servicer may grant extensions, rebates or adjustments on a Contract; provided, however, that if the Servicer extends the date for final payment by the Obligor of any Contract beyond the Class B Final Distribution Date, it shall promptly purchase such Contract pursuant to Section 7.11.

(f) The Servicer will not add t

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SALE AND SERVICING AGREEMENT

Sales Agreement

HARLEY DAVIDSON CUSTOMER FUNDING CORP | HARLEY-DAVIDSON MOTORCYCLE TRUST 2006-2 | HARLEY-DAVIDSON CREDIT CORP | THE BANK OF NEW YORK TRUST COMPANY, N.A

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:

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.

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:

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

ARTICLE THREE 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:

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

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.

ARTICLE FIVE SERVICING OF CONTRACTS

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 5.06. 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

AGREEMENTS / CONTRACTS

CLAUSES

ARTICLE THREE

REPRESENTATIONS AND WARRANTIES

ARTICLE FIVE

SERVICING OF CONTRACTS