The red wire with the fuse should be connected to te permanently live solenoid terminal. The small 3rd terminal is the 'trigger' wire that (ultimately) goes to the 'START' terminal on the ignition switch. The seat switch usually has nothing to do with the START circuit, but some models have a set of contacts on the seat switch that are open until you sit on the seat. This prevents starting unless you are on board.
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Phil Saunders, November 2010