Document:

Exhibit 10.4

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2008-1

 

$93,000,000
3.1713% MOTORCYCLE CONTRACT BACKED NOTES, CLASS A-1

$197,000,000  FLOATING RATE MOTORCYCLE CONTRACT BACKED
NOTES, CLASS A-2

$55,000,000 4.25%
MOTORCYCLE CONTRACT BACKED NOTES, CLASS A-3a

$70,000,000  FLOATING RATE MOTORCYCLE CONTRACT BACKED
NOTES, CLASS A-3b

$71,000,000 4.90%
MOTORCYCLE CONTRACT BACKED NOTES, CLASS A-4

 

HARLEY-DAVIDSON CUSTOMER FUNDING CORP.

Trust Depositor

 

HARLEY-DAVIDSON
CREDIT CORP.

Seller, Servicer
and Sponsor

 

UNDERWRITING
AGREEMENT

 

February 15, 2008

 

Wachovia Capital Markets,
LLC

Citigroup Global Markets
Inc.

ABN AMRO Incorporated

BNP Paribas Securities
Corp.

J.P. Morgan Securities
Inc.

c/o Wachovia Capital
Markets, LLC 

301 South College Street

Charlotte, North Carolina, 28288

 

Ladies and Gentlemen:

 

Harley-Davidson Customer
Funding Corp., a Nevada corporation (the “Trust Depositor”) and a wholly-owned
subsidiary of Harley-Davidson Credit Corp., a Nevada corporation (“Harley-Davidson”),
proposes to cause Harley-Davidson Motorcycle Trust 2008-1 (the “Trust”) to
issue and sell to you (the “Underwriters”) $93,000,000 principal amount of its
3.1713% Motorcycle Contract Backed Notes, Class A-1 (the “Class A-1
Notes”), $197,000,000 principal amount of its Floating Rate Motorcycle Contract
Backed Notes, Class A-2 (the “Class A-2 Notes”), $55,000,000 principal amount of its 4.25% Motorcycle
Contract Backed Notes, Class A-3a (the “Class A-3a Notes”), $70,000,000 principal amount of its Floating Rate
Motorcycle Contract Backed Notes, Class A-3b (the “Class A-3b Notes”),
and $71,000,000
principal amount of its 4.90% Motorcycle Contract Backed Notes, Class A-4a
(the “Class A-4a Notes” and, together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3a Notes and the Class A-3b Notes, the “Class A
Notes”).  The Trust will also issue $37,800,000 principal amount of 6.34% Motorcycle
Contract Backed Notes, Class B (the “Class B Notes”) and $16,200,000
principal amount of 7.55% Motorcycle Contract Backed Notes, Class C (the “Class C
Notes” and, together with the Class A Notes and the Class B Notes,
the “Notes”), which will initially be retained by 

 

 

 

the Trust Depositor or one of its affiliates.  The assets of the Trust will include a pool
of motorcycle conditional sales contracts (the “Contracts”) relating to
motorcycles manufactured by one or more subsidiaries of Harley-Davidson, Inc.
(including Buell Motorcycle Company, LLC (“Buell”), a wholly-owned subsidiary
of Harley-Davidson, Inc.), and certain other motorcycle manufacturers,
certain monies received thereon after January 31, 2008 (the “Cutoff Date”),
all insurance proceeds and liquidation proceeds with respect thereto, security
interests in the motorcycles financed thereby, the related Contracts files, the
Trust Accounts, proceeds of the foregoing, certain rights with respect to funds
on deposit from time to time in the Reserve Fund and certain other
property.  The Contracts will be serviced
for the Trust by Harley-Davidson.  The
Notes will be issued pursuant to the Indenture to be dated as of February 15,
2008 (as amended and supplemented from time to time, the “Indenture”) between
the Trust and The Bank of New York Trust Company, N.A., as indenture trustee
(the “Indenture Trustee”).  The Notes
will be secured by the assets of the Trust pursuant to the Indenture.  The Class A Notes are hereinafter
referred to as the “Offered Securities”.

 

A certificate (the “Certificate”)
will be issued pursuant to a Trust Agreement dated as of January 1, 2008
(as amended and supplemented from time to time, the “Trust Agreement”), between
the Trust Depositor and Wilmington Trust Company, as owner trustee (the “Owner
Trustee”).  The Certificate will be
retained by the Trust Depositor and will not be offered pursuant to the
Preliminary Prospectus (as defined herein) or the Prospectus (as defined
herein).

 

The Trust will acquire
the Contracts from the Trust Depositor pursuant to a Sale and Servicing
Agreement to be dated as of February 15, 2008 (as amended and supplemented
from time to time, the “Sale and Servicing Agreement”), among the Trust, the
Trust Depositor, Harley-Davidson, as servicer, and The Bank of New York Trust
Company, N.A., as Indenture Trustee. 
Harley-Davidson will also agree to perform certain administrative
functions on behalf of the Trust pursuant to an Administration Agreement to be
dated as of February 15, 2008 (as amended and supplemented from time to
time, the “Administration Agreement”) among Harley-Davidson, as administrator,
the Trust and the Indenture Trustee.  The
Trust Depositor will acquire the Contracts from Harley-Davidson on the Closing
Date (as defined herein) pursuant to a Transfer and Sale Agreement to be dated
as of February 15, 2008 (as amended and supplemented from time to time,
the “Transfer and Sale Agreement”) among the Trust Depositor, as purchaser, and
Harley-Davidson, as seller.  All of the
assets conveyed to the Trust pursuant to the Sale and Servicing Agreement are
referred to herein as the “Trust Property”. 
Capitalized terms that are used and not otherwise defined herein shall
have the respective meanings assigned thereto in the Sale and Servicing
Agreement.

 

In connection with the
issuance of the Class A-2 Notes and the Class A-3b Notes, the Trust
will enter into an ISDA Master Agreement (including the Schedule thereto), to
be dated as of the Closing Date (the “ISDA Master Agreement”), between the
Trust and Citibank, N.A. (the “Swap Counterparty”), and confirmations of
interest rate swap transactions relating to the Class A-2 Notes and the Class A-3b
Notes, respectively, to be dated as of the Closing Date (the “Confirmations”
and together with the ISDA Master Agreement, the “Swap Agreement”), between the
Trust and the Swap Counterparty.

 

In connection with the
sale of the Offered Securities, the Trust Depositor and Harley-Davidson will
prepare a Prospectus Supplement to be dated February 15, 2008 which will 

 

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supplement the Base Prospectus dated as of February 13,
2008.  The Prospectus sets forth certain
information concerning the Trust Depositor, Harley-Davidson, the Trust and the
Offered Securities.  The Trust Depositor
and Harley-Davidson hereby confirm that they have authorized the use of the
Prospectus, and any amendment or supplement thereto, in connection with the
offer and sale of the Offered Securities by the Underwriters.  Unless stated to the contrary, all references
herein to the Prospectus are to the Prospectus as defined herein and are not
meant to include any amendment or supplement thereto.

 

At or prior to the time
when sales to purchasers of the Offered Securities were first made to investors
by the Underwriters, which was approximately 12:00 p.m. on February 15,
2008 (the “Time of Sale”), the Trust Depositor and Harley-Davidson had prepared
the following information (collectively, the “Time of Sale Information”): the
preliminary prospectus supplement dated February 13, 2008 (the “Preliminary
Prospectus Supplement”) to the base prospectus dated February 13, 2008
(the “Preliminary Base Prospectus”) (together, along with information referred
to under the caption “Appendix A—Static Pool Information” therein regardless of
whether it is deemed a part of the Registration Statement or Prospectus, the “Preliminary
Prospectus”).  If, subsequent to the Time
of Sale and prior to the Closing Date, such information included an untrue
statement of material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and as a result investors in the Offered
Securities may terminate their prior “Contracts of Sale” (within the meaning of
Rule 159 under the Securities Act of 1933, as amended (the “Act”)) for any
Offered Securities and the Underwriters enter into new Contracts of Sale with
investors in the Offered Securities, then “Time of Sale Information” will refer
to the information conveyed to investors at the time of entry into the first
such new Contract of Sale, in an amended Preliminary Prospectus approved by the
Trust Depositor, Harley-Davidson and the Underwriters that corrects such
material misstatements or omissions (a “Corrected Prospectus”) and “Time of
Sale” will refer to the time and date on which such new Contracts of Sale were
entered into.

 

1.            Representations
and Warranties of Harley-Davidson and the Trust Depositor.  Harley-Davidson and the Trust Depositor
jointly and severally represent and warrant to each Underwriter as set forth
below in this Section 1:

 

(a)           A registration statement on Form S-3
(No. 333-124935) relating to asset backed notes, including the Offered
Securities, has been filed by the Trust Depositor with the Securities and
Exchange Commission (the “Commission”) and has become effective within the
three years prior to the Closing Date, has been amended by various
post-effective amendments, the last of which is Post-Effective Amendment No. 2
that became effective on April 13, 2006, and is still effective as of the
date hereof under the Act.

 

The Trust Depositor proposes to file with the Commission pursuant to Rule 424(b) of
the rules and regulations of the Commission under the Act (the “Rules and
Regulations”) a prospectus supplement dated February 15, 2008 (together
with information referred to under the caption “Appendix A — Static Pool
Information” therein regardless of whether it is deemed a part of the
Registration Statement or Prospectus, the “Prospectus Supplement”) to the
prospectus dated 

 

3

 

February 13, 2008 (the “Base Prospectus”), relating to the Offered
Securities and the method of distribution thereof.  Such registration statement, including
exhibits thereto, and such prospectus, as amended or supplemented to the date
hereof, and as further supplemented by the Prospectus Supplement, are
hereinafter referred to as the “Registration Statement” and the “Prospectus,”
respectively.  Any reference herein to
the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, the Base Prospectus or the Prospectus Supplement shall include,
without limitation, any document filed under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), the Base Prospectus and the Prospectus
Supplement, as the case may be, deemed to be incorporated therein pursuant to
the Act.

 

The conditions to the use of a registration statement on Form S-3
under the Act have been satisfied.  The
Trust Depositor has filed the Preliminary Prospectus and it has done so within
the applicable period of time required under the Act and the Rules and
Regulations.

 

(b)           The Registration Statement, at the
time it became effective, any post-effective amendment thereto, at the time it
became effective, the Preliminary Prospectus, as of its date, and the
Prospectus, as of the date of the Prospectus Supplement, complied and on the
Closing Date will comply in all material respects with the applicable
requirements of the Act and the Rules and Regulations and the Trust
Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and
regulations of the Commission thereunder.

 

The Registration Statement, as of the most recent effective date as to
each part of the Registration Statement and any amendment thereto pursuant to Rule 430B(f)(2) under
the Act, did not include any untrue statement of a material fact and did not
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.

 

The Preliminary Prospectus, as of its date and as of the Time of Sale,
did not contain an untrue statement of a material fact and did not omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

 

The Prospectus, as of the date of the Prospectus Supplement and as of
the Closing Date, does not and will not contain any untrue statement of a
material fact and did not and will not omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

The representations and warranties in the three preceding paragraphs do
not apply to (i) that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification (Form T-1) of the
Indenture Trustee under the Trust Indenture Act or (ii) information
contained in or omitted from the Registration Statement, the Preliminary
Prospectus or the Prospectus (or any 

 

4

 

supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Trust Depositor by any Underwriter through Wachovia
Capital Markets, LLC specifically for use in connection with preparation of the
Registration Statement, the Preliminary Prospectus or the Prospectus (or any
supplement thereto), it being agreed that the only such information consists of
the statements in the third and fourth paragraphs (concerning initial offering
prices, concessions and reallowances) and in the fifth and sixth paragraphs
(concerning overallotment, stabilizing transactions and syndicate covering
transactions) under the heading “Underwriting” in the Preliminary Prospectus
Supplement and the Prospectus Supplement (such information, the “Underwriter
Information”).

 

The documents incorporated by reference in the Registration Statement,
the Preliminary Prospectus and the Prospectus, when they became effective under
the Act or were filed with the Commission under the Exchange Act, as the case
may be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and any further documents so filed and incorporated by
reference in the Registration Statement or the Prospectus, when such documents
are filed with the Commission, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.

 

Since the respective dates as of which information is given in the
Preliminary Prospectus there has not been any material adverse change, or any
development involving a prospective material adverse change, in or affecting
the condition, financial or otherwise, earnings, business or operations of the
Trust Depositor or Harley-Davidson, and their respective subsidiaries, taken as
a whole, except as set forth in the Preliminary Prospectus.

 

The Indenture has been qualified under the Trust Indenture Act.

 

(c)           The Time of Sale Information, at the
Time of Sale, did not, and at the Closing Date will not, contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that neither the Trust Depositor
nor Harley-Davidson makes any representation and warranty with respect to any
statements or omissions made in reliance upon and in conformity with the
Underwriter Information.  As of the Time
of Sale, the Trust Depositor was not and as of the Closing Date is not, an “ineligible
issuer,” as defined in Rule 405 under the Act.

 

(d)           [Reserved].

 

(e)           [Reserved].

 

(f)            Neither the Trust Depositor nor the
Trust is, and neither the issuance and sale of the Offered Securities nor the
activities of the Trust pursuant to the 

 

5

 

Indenture or the Trust
Agreement will cause the Trust Depositor or the Trust to be, an “investment
company” or under the “control” of an “investment company” as such terms are
defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”).

 

(g)           This Agreement has been duly
authorized, executed and delivered by Harley-Davidson and the Trust Depositor.

 

(h)           None of Harley-Davidson, the Trust
Depositor, any of their Affiliates or anyone acting on behalf of
Harley-Davidson, the Trust Depositor or any of their Affiliates has taken any
action that would require qualification of the Trust Agreement under the Trust
Indenture Act or registration of the Trust Depositor under the Investment
Company Act, nor will Harley-Davidson, the Trust Depositor or any of their
Affiliates act, nor have they authorized or will they authorize any person to
act, in such manner.

 

(i)            Neither the Trust Depositor nor
Harley-Davidson is in violation of any provision of any existing law or
regulation or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other instrument to
which it is a party or by which it is bound or to which any of its property is
subject, which violations or defaults separately or in the aggregate would have
a material adverse effect on the Trust Depositor, Harley-Davidson or the Trust.

 

(j)            Neither the issuance and sale of the
Offered Securities, nor the execution and delivery by the Trust Depositor or
Harley-Davidson of this Agreement, the Offered Securities, the Sale and
Servicing Agreement, the Transfer and Sale Agreement, the Trust Agreement, the
Administration Agreement, the Lockbox Agreement or the Indenture, nor the
incurrence by the Trust Depositor or Harley-Davidson of the obligations herein
and therein set forth, nor the consummation of the transactions contemplated
hereunder or thereunder, nor the fulfillment of the terms hereof or thereof
does or will (i) violate any existing law or regulation, applicable to it
or its properties or by which it or its properties are or may be bound or
affected, (ii) conflict with, or result in a breach of, or constitute a
default under, any material indenture, contract, agreement, deed, lease,
mortgage or instrument to which it is a party or by which it or its properties
are bound or (iii) result in the creation or imposition of any lien upon
any of its property or assets, except for those encumbrances created under the
Transfer and Sale Agreement, the Sale and Servicing Agreement, the Trust
Agreement or the Indenture.

 

(k)           All consents, approvals,
authorizations, orders, filings, registrations or qualifications of or with any
court or any other governmental agency, board, commission, authority, official
or body required in connection with the execution and delivery by the Trust
Depositor and Harley-Davidson of this Agreement, the Offered Securities, the
Sale and Servicing Agreement, the Transfer and Sale Agreement, the Trust
Agreement, the Administration Agreement, the Indenture, 

 

6

 

or the Lockbox Agreement,
or to the consummation of the transactions contemplated hereunder and
thereunder, or to the fulfillment of the terms hereof and thereof, have been or
will have been obtained on or before the Closing Date.

 

(l)            All actions required to be taken by
the Trust Depositor and Harley-Davidson as a condition to the offer and sale of
the Offered Securities as described herein or the consummation of any of the
transactions described in the Preliminary Prospectus and the Prospectus have
been or, prior to the Closing Date, will be taken.

 

(m)          The representations and warranties of
each of the Trust Depositor and Harley-Davidson in (or incorporated in) the
Sale and Servicing Agreement, the Transfer and Sale Agreement, the Trust
Agreement, the Indenture, the Administration Agreement and the Lockbox
Agreement and made in any Officer’s Certificate of the Trust Depositor or
Harley-Davidson delivered pursuant to the Sale and Servicing Agreement, the
Indenture or the Transfer and Sale Agreement will be true and correct at the
time made and on and as of the Closing Date as if set forth herein.

 

(n)           The Contracts conveyed to the Trust
had an aggregate outstanding balance as of the Cutoff Date of not less than
$540,000,000.

 

(o)           Each of the Trust Depositor and
Harley-Davidson agrees it shall not grant, assign, pledge or transfer to any
Person a security interest in, or any other right, title or interest in, the
Contracts, except as provided in the Sale and Servicing Agreement, the Trust
Agreement, the Indenture and the Transfer and Sale Agreement and each agrees to
take all action necessary in order to maintain the security interest in the
Contracts granted pursuant to the Sale and Servicing Agreement, the Trust
Agreement, the Indenture and the Transfer and Sale Agreement.

 

(p)           There are no actions, proceedings or
investigations pending, or to the best knowledge of either the Trust Depositor
or Harley-Davidson, threatened against the Trust Depositor or Harley-Davidson
before any court or before any governmental authority of arbitration board or
tribunal which, if adversely determined, could materially and adversely affect,
either individually or in the aggregate, the financial position, business,
operations or prospects of the Trust Depositor or Harley-Davidson.

 

(q)           For Illinois income, franchise and
excise tax purposes, under the provisions of Illinois law as of the Closing
Date, the Trust will not be classified as an association taxable as a
corporation.

 

(r)            Under generally accepted accounting
principles, Harley-Davidson will report its transfer of the Contracts to the
Trust Depositor pursuant to the Transfer and Sale Agreement as a sale of the
Contracts.

 

7

 

2.            Representations
and Warranties of the Underwriters. 
Each Underwriter, severally and not jointly, represents and warrants to,
and agrees with, the Trust Depositor that:

 

(a)           It has only communicated or caused to
be communicated and it will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act 2000 of the United
Kingdom (“FSMA”)) received by it in connection with the issue or sale of any
Offered Securities in circumstances in which Section 21(1) of the
FSMA does not apply to the Trust.

 

(b)           It has complied and will comply with
all applicable provisions of the FSMA with respect to anything done by it in
relation to any Offered Securities in, from or otherwise involving the United
Kingdom.

 

3.            Purchase
and Sale.  Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Trust Depositor agrees to cause the Trust to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Trust, each of the Offered Securities in the principal
amounts and at the purchase prices set forth opposite its name in Schedule I
hereto.

 

4.            Delivery
and Payment.  Delivery of and payment
for the Offered Securities shall be made at the office of Winston &
Strawn LLP, 35 Wacker Drive, Chicago, Illinois, at 10:00 A.M., Chicago
time, on February 20, 2008, or such later date (not later than March 5,
2008) as the Underwriters shall designate, which date and time may be postponed
by agreement among the Underwriters and the Trust Depositor (such date and time
of delivery and payment for the Offered Securities being herein called the “Closing
Date”).

 

Each class of the Offered
Securities will be represented initially by one or more definitive global
certificates in registered form which will be deposited by or on behalf of the
Trust with The Depository Trust Company (“DTC”) or, on DTC’s behalf, with DTC’s
designated nominee or custodian and duly endorsed to DTC or in blank by an
effective endorsement.  The Trust will
transfer the Offered Securities in book-entry form to the account of each
Underwriter, against payment by the Underwriters of the purchase price therefor
by wire transfer payable to the order of Harley-Davidson in federal (same day)
funds (to such account or accounts as Harley-Davidson shall designate), by
causing DTC to credit the Offered Securities to the account of each Underwriter
at DTC.  Harley-Davidson will cause the
global certificates referred to above to be made available to the Underwriters
for checking at least 24 hours prior to the Closing Date at the office of DTC
or its designated custodian.

 

5.            Offering
by the Underwriters.  It is
understood that the several Underwriters propose to offer the Offered
Securities for sale to the public (which may include selected dealers), as set
forth in the Prospectus.

 

6.            Agreements.  The Trust Depositor and Harley-Davidson,
jointly and severally, agree with the Underwriters that:

 

(a)           Prior to the termination of the
offering of the Offered Securities, the Trust Depositor will not file any
amendment to the Registration Statement or any 

 

8

 

amendment, supplement or
revision to either the Preliminary Prospectus or to the Prospectus, unless the
Trust Depositor has furnished you a copy for your review prior to such proposed
filing or use, as the case may be, and will not file or use any such document
to which you shall reasonably object. 
Subject to the foregoing sentence, the Trust Depositor will effect the filings
required under Rule 424(b) under the Act in the manner and within the
time period required by Rule 424(b) (without reliance on Rule 424(b)(8)),
and will provide evidence satisfactory to you of such timely filing.

 

(b)           During the period when a prospectus
is required by the Act or the Exchange Act to be delivered in connection with
sales of the Offered Securities (the “Prospectus Delivery Period”),
Harley-Davidson will notify you promptly, and confirm the notice in writing, of
(i) the effectiveness of any post-effective amendment to the Registration
Statement or the filing of any supplement or amendment to the Prospectus, (ii) the
receipt of any comments from the Commission, (iii) any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or any document incorporated by reference therein
or otherwise deemed to be a part thereof or for additional information, (iv) the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use of
any Preliminary Prospectus, or of the suspension of the qualification of the
Offered Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes and (v) the
happening of any event which makes the Registration Statement or the Prospectus
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.  Harley-Davidson
will make every reasonable effort to prevent the issuance of any stop order
and, if any stop order is issued, to obtain as soon as possible the lifting
thereof.

 

(c)           If during the Prospectus Delivery
Period any event shall occur or condition shall exist as a result of which it
is necessary to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it shall be necessary during the Prospectus
Delivery Period to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the Act or the Rules and
Regulations, Harley-Davidson will promptly notify you and will promptly prepare
and file with the Commission, subject to the review and approval provisions
afforded to you described in Section 6(a), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement, the Preliminary Prospectus or the Prospectus comply with
such requirements.  Harley-Davidson will
use its best efforts to have such amendment or new registration statement
declared effective as soon as practicable, and Harley-Davidson will furnish to
the Underwriters, without charge, such number of copies of such amendment or
supplement as the 

 

9

 

Underwriters may
reasonably request.  Any such filing
shall not operate as a waiver or limitation of any right of any Underwriter
hereunder.

 

(d)           Upon request, Harley-Davidson will
deliver to the Underwriters and counsel for the Underwriters, without charge,
photocopies of the signed Registration Statement at the time it originally
became effective (the “Original Registration Statement”) and of each amendment
thereto (including exhibits filed therewith) prior to the Closing Date.  The copies of the Original Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”),
except to the extent permitted by Regulation S-T under the Act.

 

(e)           Prior to the availability of the
Prospectus, Harley-Davidson will deliver to the Underwriters, without charge,
as many copies of the Preliminary Prospectus as the Underwriters may reasonably
request, and Harley-Davidson and the Trust Depositor hereby consent to the use
of such copies for purposes permitted by the Act.  Harley-Davidson will furnish to the
Underwriters, without charge, during the Prospectus Delivery Period, such
number of copies of the Prospectus as the Underwriters may reasonably
request.  The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be identical
to any electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T under
the Act.  Harley-Davidson will pay the
expenses of printing or other production of all documents relating to the
offering.

 

(f)            The Trust Depositor will comply with
the Act and the Rules and Regulations, the Exchange Act and the rules and
regulations thereunder and the Trust Indenture Act and the rules and
regulations thereunder so as to permit the completion of the distribution of
the Offered Securities as contemplated in this Agreement, the Basic Documents,
the Registration Statement and the Prospectus.

 

(g)           The Trust Depositor will arrange for
the qualification of the Offered Securities for sale by the Underwriters under
the laws of such jurisdictions as the Underwriters may designate and will
maintain such qualifications in effect so long as required for the sale of the
Offered Securities.  The Trust Depositor
will promptly advise the Underwriters of the receipt by the Trust Depositor of
any notification with respect to the suspension of the qualification of the
Offered Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose.

 

(h)           The Trust Depositor and
Harley-Davidson will cooperate with the Underwriters and use their best efforts
to permit the Offered Securities to be eligible for clearance and settlement
through DTC.

 

10

 

(i)            For a period from the date of this
Agreement until the retirement of the Offered Securities, the Servicer will
deliver to you the monthly servicing reports, the annual statements of
compliance, annual assessments of compliance with servicing criteria and
accountants’ attestations in respect of such assessments furnished to the
Indenture Trustee or the Owner Trustee pursuant to the Sale and Servicing
Agreement, the Indenture, the Trust Agreement or the Administration Agreement,
as soon as such statements and reports are furnished to the Indenture Trustee
or the Owner Trustee.

 

(j)            So long as any of the Offered
Securities is outstanding, Harley-Davidson will furnish to you (i) as soon
as practicable after the end of the fiscal year all documents required to be
distributed to holders of Offered Securities or filed with the Commission
pursuant to the Exchange Act or any order of the Commission thereunder and (ii) from
time to time, any other information concerning Harley-Davidson or the Trust
Depositor filed with any government or regulatory authority that is otherwise
publicly available, as you may reasonably request.

 

(k)           To the extent, if any, that the
rating provided with respect to the Offered Securities by Moody’s Investors
Service, Inc. (“Moody’s”) or Standard & Poor’s Ratings Services,
a division of the McGraw-Hill Companies, (“S&P” and together with Moody’s,
the “Rating Agencies”) is conditional upon the furnishing of documents or the
taking of any actions by the Trust Depositor, the Trust Depositor shall furnish
such documents and take such actions.

 

(l)            Until 30 days following the Closing
Date, neither the Trust Depositor nor any trust or other entity originated,
directly or indirectly, by the Trust Depositor or Harley-Davidson, or any of
their respective affiliates, will, without the prior written consent of the
Underwriters, offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce the offering of, any asset-backed
securities collateralized by motorcycle contracts originated in the United States
(other than the Offered Securities).

 

(m)          The Trust Depositor will enter into
the Trust Agreement, Harley-Davidson will enter into the Administration
Agreement, the Trust Depositor, Harley-Davidson, the Indenture Trustee and the
Trust will enter into the Sale and Servicing Agreement and Harley-Davidson and
the Trust Depositor will enter into the Transfer and Sale Agreement on or prior
to the Closing Date.

 

(n)           In accordance with Section 11,
Harley-Davidson will cause any Trust Free Writing Prospectus (as defined in Section 11
hereof) with respect to the Offered Securities to be filed with the Commission
to the extent required by Rule 433 under the Act.

 

7.            Payment
of Expenses, Etc.  If the
transactions contemplated by this Agreement are consummated or this Agreement
is terminated pursuant to Section 13, the Trust Depositor will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each 

 

11

 

amendment
thereto, (ii) the printing of the Preliminary Prospectus, the Prospectus
and each amendment thereto, (iii) the fees of the Trustee and its counsel,
(iv) the preparation, issuance and delivery of the Offered Securities to
the Underwriters, (v) the fees and disbursements of the Trust Depositor’s
accountants, (vi) the qualification of the Offered Securities under
securities laws in accordance with the provisions of Section 6(g),
including filing fees in connection therewith, (vii) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, (viii) the printing and
delivery to the Underwriters of copies of the Preliminary Prospectus, the
Prospectus and of each amendment thereto, (ix) the printing and delivery
to the Underwriters of copies of any blue sky or legal investment survey
prepared in connection with the Offered Securities, (x) any fees charged
by Rating Agencies for the rating of the Offered Securities and (xi) the costs
and expenses (including any damages or other amounts payable in connection with
legal and contractual liability) associated with reforming any Contracts for
Sale of the Offered Securities made by the Underwriters caused by a Defective
Prospectus or a breach of any representation in Section 1(b) or Section 1(c).

 

8.            Conditions
to the Obligation of the Underwriters. 
The obligation of the Underwriters to purchase the Offered Securities
shall be subject to the accuracy of the representations and warranties on the
part of the Trust Depositor and Harley-Davidson contained herein at the date
and time that this Agreement is executed and delivered by the parties hereto
(the “Execution Time”) and the Closing Date, to the accuracy of the statements
of the Trust Depositor and Harley-Davidson made in any certificates pursuant to
the provisions hereof, to the performance by the Trust Depositor and
Harley-Davidson of their respective obligations hereunder and to the following
additional conditions:

 

(a)           If the Registration Statement has not
become effective prior to the Execution Time, unless the Underwriters agree in
writing to a later time, the Registration Statement shall have become effective
not later than (i) 6:00 P.M. New York City time on the date of
determination of the public offering price, if such determination occurs at or
prior to 3:00 P.M. New York City time on such date or (ii) 12:00 noon
New York City time on the business day following the day on which the public
offering price was determined, if such determination occurs after 3:00 P.M.
New York City time on such date.

 

(b)           Each of the Preliminary Prospectus,
the Prospectus and any supplements thereto shall have been filed with the
Commission in the manner and within the applicable time period required under Rule 424(b) under
the Act (without reference to Rule 424(b)(8)) in accordance with the Rules and
Regulations and Section 6(a) hereof, and prior to the Closing Date,
no stop order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been instituted
or, to the knowledge of the Trust Depositor or you, shall be contemplated by
the Commission or by any authority administering any state securities or blue
sky law; and any requests for additional information from the Commission with
respect to the Registration Statement shall have been complied with.

 

12

 

(c)          The Trust Depositor shall have
furnished to the Underwriters the opinions of Winston & Strawn LLP,
counsel for the Trust Depositor, and with respect to Nevada opinions, Hale Lane Peek Dennison and Howard,
special Nevada counsel, each dated the Closing Date and satisfactory in form
and substance to the Underwriters, to the effect that:

 

(i)            the Trust Depositor has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Nevada, with full corporate power and authority to own
its properties and conduct its business as described in the Preliminary
Prospectus and the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of the State of
Illinois;

 

(ii)           each of the Transfer and Sale
Agreement, the Sale and Servicing Agreement and the Trust Agreement have been
duly authorized, executed and delivered by the Trust Depositor, and constitutes
a legal, valid and binding obligation of the Trust Depositor enforceable
against the Trust Depositor in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors’ rights generally from time to
time in effect);

 

(iii)          this Agreement has been duly
authorized, executed and delivered by the Trust Depositor;

 

(iv)          the direction by the Trust Depositor
to the Indenture Trustee to authenticate the Notes has been duly authorized by
the Trust Depositor and, when the Notes have been duly executed and delivered
by the Owner Trustee and when authenticated by the Indenture Trustee in
accordance with the Indenture and delivered and paid for pursuant to this
Agreement, the Notes will constitute legal, valid and binding obligations of
the Trust (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditor’s
rights generally from time to time in effect) and will be entitled to the
benefits of the Indenture;

 

(v)           no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body is
required for the consummation of the transactions contemplated herein or in the
Transfer and Sale Agreement, the Sale and Servicing Agreement, and the
Indenture (collectively, the “Basic Documents”), except such as may be required
under the blue sky or securities laws of any jurisdiction in connection with
the purchase and sale of the Offered Securities by the Underwriters, the filing
of the UCC-1 financing statements relating to the conveyance of the Contracts
by Harley-Davidson to the Trust Depositor and of the Contracts and the other
Trust Property by the Trust Depositor to the Trust and by the Trust to the
Indenture Trustee on behalf of the Noteholders, and such other approvals (which
shall be specified in such opinion) as have been obtained and filings as have
been made or are in the process of being made;

 

13

 

(vi)          none of the sale of the Contracts by
Harley-Davidson to the Trust Depositor pursuant to the Transfer and Sale
Agreement, the sale of the Trust Property to the Trust pursuant to the Sale and
Servicing Agreement, the pledge of the Trust Property to the Indenture Trustee,
the issue and sale of the Notes, the execution and delivery of this Agreement,
the Sale and Servicing Agreement, the Transfer and Sale Agreement, the Trust
Agreement or the Indenture, the consummation of any other of the transactions
herein or therein contemplated or the fulfillment of the terms hereof or
thereof will conflict with, result in a breach or violation of, or constitute a
default under, any law binding on the Trust Depositor or the charter or bylaws
of the Trust Depositor or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Trust Depositor is a party or
by which it is bound, or any judgment, order or decree known to such counsel to
be applicable to the Trust Depositor of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
the Trust Depositor;

 

(vii)         there are no actions, proceedings or
investigations pending or, to the best of such counsel’s knowledge after due
inquiry, threatened before any court, administrative agency or other tribunal (A) asserting
the invalidity of any of the Basic Documents, (B) seeking to prevent the
consummation of any of the transactions contemplated by any of the Basic
Documents or the execution and delivery thereof or (C) that might
materially and adversely affect the performance by the Trust Depositor of its
obligations under, or the validity or enforceability of, this Agreement or any
Basic Document;

 

(viii)        to the best knowledge of such counsel
and except as set forth in the Preliminary Prospectus and the Prospectus, no
default exists and no event has occurred which, with notice, lapse of time or
both, would constitute a default in the due performance and observance of any
term, covenant or condition of any agreement to which the Trust Depositor is a
party or by which it is bound, which default is or would have a material
adverse effect on the financial condition, earnings, prospects, business or
properties of the Trust Depositor, taken as a whole;

 

(ix)           the provisions of the Transfer and
Sale Agreement are effective to transfer to the Trust Depositor all right,
title and interest of Harley-Davidson in and to the Contracts, and to the
knowledge of such counsel, the other Trust Property will be owned by the Trust
Depositor free and clear of any Lien except for the Lien of the Sale and
Servicing Agreement and the Indenture;

 

(x)            the provisions of the Sale and
Servicing Agreement are effective to transfer to the Trust all right, title and
interest of the Trust Depositor in and to the Collateral and the Contracts and
to the knowledge of such counsel, the other Collateral, will be owned by the
Trust free and clear of any Lien except for the Lien of the Indenture;

 

14

 

 

(xi)                                the provisions of the Indenture are
effective to create, in favor of the Indenture Trustee for the benefit of the
Noteholders as security for the Trust’s obligations under the Notes, a valid
security interest in the Contracts and that portion of the other Collateral
which is subject to Article 9 of the Illinois Uniform Commercial Code (the
“UCC Collateral”) and the proceeds thereof;

 

(xii)                             the form UCC-1 financing statements
naming (A) Harley-Davidson as seller and the Trust Depositor as purchaser,
(B) the Trust Depositor as seller and the Trust as purchaser and (C) the
Trust, as debtor, and the Indenture Trustee, as secured party are in
appropriate form for filing with the Secretary of State of the State of Nevada;
the interest of the Indenture Trustee in the Contracts and the proceeds thereof
and, to the extent that the filing of a financing statement is effective to
perfect an interest in the other Trust Property under Article 9 of the
Nevada Uniform Commercial Code, the other Trust Property will be perfected upon
the filing of such financing statements in such filing offices; and no other
interest of any other purchaser from or creditor of Harley-Davidson, the Trust
Depositor or the Trust is equal or prior to the interest of the Trustee in the
Contracts and such other Trust Property;

 

(xiii)                          the Contracts are “tangible chattel paper”
under Article 9 of the Illinois Uniform Commercial Code and the Nevada
Uniform Commercial Code;

 

(xiv)                         the Basic Documents conform in all
material respects with the descriptions thereof contained in the Preliminary
Prospectus and the Prospectus;

 

(xv)                            the statements in the Preliminary Base
Prospectus and the Base Prospectus under the headings “Risk Factors” and “Legal
Aspects of the Contracts”, to the extent they constitute matters of law or
legal conclusions with respect thereto, have been reviewed by such counsel and
are correct in all material respects;

 

(xvi)                         the statements contained in the
Preliminary Base Prospectus and the Base Prospectus under the headings “Description
of the Notes and Indenture” and “Information Regarding the Notes” and in the
Preliminary Prospectus Supplement and the Prospectus Supplement under the
headings “Description of the Notes” and “Certain Information Regarding the
Notes”, insofar as such statements constitute a summary of the Offered
Securities and the Basic Documents, constitute a fair summary of such
documents;

 

(xvii)                      the Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended;

 

(xviii)                   the Indenture, the Sale and Servicing
Agreement and the Administration Agreement have been duly authorized and, when
duly executed and delivered by the Owner Trustee, will constitute the legal,
valid and binding obligations of the Trust, enforceable against the Trust in
accordance with their terms, except (A) the enforceability thereof may be
subject to bankruptcy, 

 

15

 

insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors’ rights and (B) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;

 

(xix)                           the Trust Depositor is not, nor will the
Trust Depositor become as a result of the offer and sale of the Offered
Securities as contemplated in the Preliminary Prospectus, the Prospectus and
the Basic Documents, an “investment company” as defined in the Investment
Company Act or a company “controlled by” an “investment company” within the
meaning of the Investment Company Act;

 

(xx)                              to the best knowledge of such counsel,
the Trust Depositor has obtained all material licenses, permits and other
governmental authorizations that are necessary to the conduct of its business;
such licenses, permits and other governmental authorizations are in full force
and effect, and the Trust Depositor is in all material respects complying
therewith; and the Trust Depositor is otherwise in compliance with all laws,
rules, regulations and statutes of any jurisdiction to which it is subject,
except where non-compliance would not have a material adverse effect on the
Trust Depositor;

 

(xxi)                           all actions required to be taken, and all
filings required to be made, by the Trust Depositor or Harley-Davidson under
the Act and the Exchange Act prior to the sale of the Offered Securities have
been duly taken or made;

 

(xxii)                        to the best of such counsel’s knowledge
and information, there are no legal or governmental proceedings pending or
threatened that are required to be disclosed in the Registration Statement,
other than those disclosed therein;

 

(xxiii)                     to the best of such counsel’s knowledge
and information, there are no contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, the descriptions thereof or references thereto are correct,
and no default exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument so
described, referred to, filed or incorporated by reference;

 

(xxiv)                    the Registration Statement has become
effective under the Act, any required filings of the Preliminary Prospectus and
the Prospectus, and any supplements thereto, pursuant to Rule 424(b) under
the Act have been made in the manner and within the time period required by Rule 424(b) (without
reference to Rule 424(b)(8)), and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the Registration Statement has
been issued, and no proceedings for that purpose have been instituted or are
pending or 

 

16

 

contemplated under the Act, and the Registration
Statement, Preliminary Prospectus and the Prospectus, and each amendment or
supplement thereto, as of their respective effective or issue dates, complied
as to form in all material respects with the requirements of the Act, the
Exchange Act, the Trust Indenture Act and the Rules and Regulations;

 

(xxv)                       such counsel has examined the
Registration Statement, the Time of Sale Information and the Prospectus and
nothing has come to such counsel’s attention that would lead such counsel to
believe that (a) the Registration Statement, at the time it initially
became effective, at the time Post-Effective Amendment No. 2 thereto
became effective and at each deemed effective date with respect to the
Underwriters pursuant to Rule 430B(f)(2) under the Act, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, (b) the
Preliminary Prospectus, at the Time of Sale, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (c) the
Prospectus, at the date thereof and at the Closing Date, included or includes
any untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each of clauses
(a), (b) and (c), except for the financial statements and related
schedules or other financial or statistical data included or incorporated by
reference therein and that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification (Form T-1) of
the Indenture Trustee under the Trust Indenture Act, as to which such counsel
will not be called upon to express a belief); and

 

(xxvi)                    the Class A-1 Notes are “eligible
securities” within the meaning of Rule 2a-7 of the Investment Company Act.

 

In rendering such
opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the State of Illinois, the State of New
York, the State of Delaware or the United States, to the extent such counsel
deems proper and specifies in such opinion, upon the opinion of other counsel
of good standing whom such counsel believes to be reliable and who are
satisfactory to the Underwriters and (B) as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers of
the Trust Depositor and public officials.

 

All references in this Section 8(c) to
the Prospectus shall be deemed to include any amendment or supplement thereto
at the Closing Date.

 

(d)           The Underwriters shall have received
the opinion of R.J. Seaward, General Counsel for Harley-Davidson, dated the
Closing Date and satisfactory in form and substance to the Underwriters, to the
effect that:

 

17

 

(i)                                     Harley-Davidson has obtained all material
licenses, permits and other governmental authorizations that are necessary to
the conduct of its business; such licenses, permits and other governmental
authorizations are in full force and effect, and Harley-Davidson is in all
material respects complying therewith and Harley-Davidson is otherwise in
compliance with all laws, rules, regulations and statutes of any jurisdiction
to which it is subject, except where non-compliance would not have a material
adverse effect on Harley-Davidson; and

 

(ii)                                  none of the execution and delivery of
this Agreement or the Transfer and Sale Agreement, the consummation of any of
the transactions therein contemplated or the fulfillment of the terms thereof
will conflict with, result in a breach or violation of, or constitute a default
under, any law or the charter or bylaws of Harley-Davidson or the terms of any
indenture or other agreement or instrument known to such counsel and to which
Harley-Davidson or the Trust Depositor is a party or by which it is bound or
any judgment, order or decree known to such counsel to be applicable to
Harley-Davidson or the Trust Depositor of any court, regulatory body,
administrative agency, governmental body, or arbitrator having jurisdiction
over Harley-Davidson or the Trust Depositor.

 

In rendering such
opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the State of Illinois or the United
States, to the extent such counsel deems proper and specifies in such opinion,
upon the opinion of other counsel of good standing whom such counsel believes
to be reliable and who are satisfactory to the Underwriters and (B) as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of Harley-Davidson and public officials.

 

(e)           The Underwriters shall have received
the opinion of Winston & Strawn LLP, counsel for Harley-Davidson,
dated the Closing Date and satisfactory in form and substance to the
Underwriters, to the effect that:

 

(i)                                     Harley-Davidson has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Nevada, with full corporate power and authority to own
its properties and conduct its business as described in the Preliminary
Prospectus and the Prospectus;

 

(ii)                                  this Agreement has been duly authorized,
executed and delivered by Harley-Davidson;

 

(iii)                               the Sale and Servicing Agreement has been
duly authorized, executed and delivered by Harley-Davidson and constitutes a
legal, valid and binding obligation of Harley-Davidson, enforceable against
Harley-Davidson in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or
other laws affecting creditors’ rights generally from time to time in effect);

 

(iv)                              the Transfer and Sale Agreement has been
duly authorized, executed and delivered by Harley-Davidson and constitutes a
legal, valid and binding 

 

18

 

obligation of Harley-Davidson, enforceable against
Harley-Davidson in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium, or
other laws affecting creditors’ rights generally from time to time in effect);

 

(v)                                 no consent, approval, authorization or
order of, or filing with, any court or governmental agency or body is required
for the consummation of the transactions contemplated herein or in any Basic
Document, except such as may be required under the blue sky or securities laws
of any jurisdiction in connection with the purchase and sale of the Offered
Securities by the Underwriters, the filing of the UCC-1 financing statements relating
to the conveyance of the Contracts by Harley-Davidson to the Trust Depositor
pursuant to the Transfer and Sale Agreement and of the Contracts and other
Trust Property to the Trust and of the Contracts and other Trust Property to
the Indenture Trustee for the benefit of the Noteholders pursuant to the Sale
and Servicing Agreement, the Trust Agreement and the Indenture, and such other
approvals (which shall be specified in such opinion) as have been obtained and
filings as have been made or are in the process of being made; and

 

(vi)                              none of the execution and delivery of
this Agreement, the Sale and Servicing Agreement, the Transfer and Sale
Agreement, the consummation of any of the transactions therein contemplated or
the fulfillment of the terms thereof will conflict with, result in a breach or
violation of, or constitute a default under, the charter or bylaws of
Harley-Davidson.

 

In rendering such
opinion, such counsel may rely (A) as to matters involving the application
of laws of any jurisdiction other than the State of New York, the State of
Delaware, the State of Illinois or the United States, to the extent such
counsel deems proper and specifies in such opinion, upon the opinion of other
counsel of good standing whom such counsel believes to be reliable and who are
satisfactory to the Underwriters and (B) as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers of
Harley-Davidson and public officials.

 

All references in this Section 8(e) to
the Prospectus shall be deemed to include any amendment or supplement thereto
at the Closing Date.

 

(f)            The Underwriters shall have received
an opinion addressed to them from Winston & Strawn LLP, in its
capacity as federal tax counsel for the Trust Depositor, to the effect that the
statements in the Preliminary Prospectus and the Prospectus under the headings “Prospectus
Supplement Summary — Tax Status” and “Material Federal Income Tax Consequences”
accurately describe the material federal income tax consequences to holders of
the Offered Securities.  Winston &
Strawn LLP, in its capacity as special ERISA counsel to the Trust Depositor,
shall have delivered an opinion to the effect that the statements in the
Preliminary Prospectus and the Prospectus under the headings “Prospectus
Supplement Summary — ERISA Considerations” and “ERISA Considerations”, to
the extent that they constitute statements of matters of law or legal
conclusions 

 

19

 

with respect thereto,
have been prepared or reviewed by such counsel and accurately describe the
material consequences to holders of the Offered Securities under ERISA.

 

(g)           The Underwriters shall have received
from Sidley Austin LLP such opinion or opinions, dated the Closing Date, with respect
to the issuance and sale of the Offered Securities, the Preliminary Prospectus,
the Prospectus (as amended or supplemented at the Closing Date) and other
related matters as the Underwriters may reasonably require, and the Trust
Depositor shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.

 

(h)           The Underwriters shall have received
an opinion addressed to the Underwriters, the Trust Depositor and the Servicer
of Morris, James, Hitchens & Williams, counsel to Wilmington Trust
Company (the “Trust Company”) and special Delaware counsel for the Trust, dated
the Closing Date and satisfactory in form and substance to the Underwriters, to
the effect that:

 

(i)                                     the Trust has been duly organized and is
validly existing in good standing as a “statutory trust” within the meaning of
the Delaware Statutory Trust Act, 12 Del. C. c.38;

 

(ii)                                  the Trust Company is a Delaware banking
corporation, duly organized and validly existing in good standing under the
laws of the State of Delaware and has all necessary power and authority to
enter into, to deliver and perform its obligations under the Trust Agreement
and to act as the Owner Trustee and to enter into, deliver and perform its
obligations as Owner Trustee under each of the other Transaction Documents to
which the Trust or the Owner Trustee, as the case may be, is a party;

 

(iii)                               the execution, delivery and performance
by the Trust of each of the Transaction Documents to which it is a party (i) has
been duly authorized by the Trust Agreement, and (ii) does not require the
consent or approval of, or the giving of notice to, the registration with, or
the taking of any other action in respect of any governmental authority or
agency of the United States federal government or the State of Delaware
regulating the banking and trust powers of the Trust Company, other than the
filing with the Secretary of State of a certificate of trust pursuant to 12
Del. C. § 3810, which filing has been made. 
Upon the due execution and delivery of the Trust Agreement by the Trust
Company, the Trust Agreement duly authorizes the Trust Company, acting alone,
to execute and deliver, on behalf of the Trust, each of the Transaction
Documents;

 

(iv)                              the Trust Agreement and each other
Transaction Document to which the Trust is a party have been duly authorized,
executed and delivered by the Trust, and the Trust Agreement and each such
other Transaction Document to the extent entered into by the Trust constitutes
a legal, valid and binding obligation of the Trust, enforceable against the
Trust in accordance with the terms thereof. 
The 

 

20

 

Trust Agreement constitutes the legal, valid and
binding obligation of the Trust Company enforceable against the Trust Company
in accordance with its terms;

 

(v)                                 to the knowledge of such counsel, no
litigation, investigation or proceeding of or before any arbitrator, court,
tribunal or governmental authority is pending or threatened by or against the
Trust or the Trust Company (a) with respect to any of the Transaction
Documents or any of the transactions contemplated thereby, or (b) which if
determined adversely against the Trust or the Trust Company, as the case may
be, individually or in the aggregate, would materially and adversely affect the
Trust Estate or the validity of, or the right, power or authority of the Trust
to enter into or perform its obligations under, the Transaction Documents;

 

(vi)                              to the knowledge of such counsel, there
exist no liens affecting the interests of the Trust in and to the Trust Estate
resulting from acts or omissions to act of or claims against the Trust, except
liens created by the Transaction Documents;

 

(vii)                           neither the execution and delivery by the
Trust Company or the Trust, as the case may be, of the Transaction Documents,
nor the fulfillment of or compliance by the Trust Company or the Trust, as the
case may be, with the respective provisions thereof, conflicts with, or results
in a breach of the terms, conditions or provisions of, or constitutes a default
under, or results in a violation of, the charter or by-laws of the Trust
Company, any law of the State of Delaware or any federal law of the United
States of America governing the banking and trust powers of the Trust Company
or, to the best knowledge of such counsel, any agreement, indenture,
instrument, order, judgment or decree to which the Trust Company, the Trust or
any of their respective properties is subject;

 

(viii)                        to the extent that Article 9 of the
Delaware Uniform Commercial Code is applicable (without regard to conflict of
laws principles), and assuming that the security interest in the Trust’s rights
in the Contracts and the proceeds thereof that may be perfected under the UCC
solely by the filing of a financing statement with the Secretary of State of
Delaware (the “Trust Collateral”), has been duly created and has attached, upon
the filing of the Trust Financing Statement with the Secretary of State of
Delaware, the Indenture Trustee will have a perfected security interest in all
right, title and interest of the Trust in the Trust Collateral;

 

(ix)                                under 12 Del. C. § 3805(b), no creditor
of the Certificateholder (including creditors of the Trust Depositor, as the
Certificateholder) shall have any right to obtain possession of, or otherwise
exercise legal or equitable remedies with respect to, the property of the
Trust; and

 

(x)                                   the Certificate has been duly authorized,
executed and authenticated by the Owner Trustee on behalf of the Trust and, when
the Certificate has been issued and delivered in accordance with the
instructions of the Trust Depositor, 

 

21

 

the Certificate will be validly issued and entitled to
the benefits of the Trust Agreement.

 

(i)            The Underwriters shall have received
an opinion addressed to the Underwriters and the Trust Depositor of Chapman and
Cutler LLP, counsel to The Bank of New York Trust Company, N.A. (the “Bank”),
dated the Closing Date and satisfactory in form and substance to the
Underwriters, to the effect that:

 

(i)                                     the Bank is duly organized and validly
existing as a national banking association under the laws of the United States
of America;

 

(ii)                                  the Bank has the full corporate power to
accept the office of Indenture Trustee under the Indenture and to enter into
and perform its obligations under the Indenture and the Sale and Servicing
Agreement;

 

(iii)                               the execution and delivery of the
Indenture, the Sale and Servicing Agreement and the performance by the Bank of its
obligations under the Indenture and the Sale and Servicing Agreement have been
duly authorized by all necessary corporate action of the Bank and each has been
duly executed and delivered by the Bank;

 

(iv)                              the Indenture and the Sale and Servicing
Agreement constitute valid and binding obligations of the Bank enforceable
against the Bank in accordance with their terms under the laws of the State of
Illinois and the federal law of the United States;

 

(v)                                 the execution and delivery by the Bank of
the Indenture and the Sale and Servicing Agreement do not require any consent,
approval or authorization of, or any registration or filing with, any Illinois
or United States federal governmental authority;

 

(vi)                              each of the Notes has been duly
authenticated by the Bank, as Indenture Trustee;

 

(vii)                           neither the consummation by the Bank of
the transactions contemplated in the Indenture or the Sale and Servicing
Agreement nor the fulfillment of the terms thereof by the Bank will conflict
with, result in a breach or violation of, or constitute a default under, any
law or the charter, bylaws or other organizational documents of the Bank, or
the terms of any indenture or other agreement or instrument and to which the
Bank or any of its subsidiaries is a party or by which it is bound, or any
judgment, order or decree to be applicable to the Bank or any of its
subsidiaries of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Bank or any of its
subsidiaries;

 

(viii)                        there is no action, suit or proceeding
pending or threatened against the Bank (as Indenture Trustee under the
Indenture or in its individual capacity) before or by any governmental
authority that, if adversely decided, would 

 

22

 

materially and adversely affect the ability of the
Bank to perform its obligations under the Indenture or the Sale and Servicing
Agreement; and

 

(ix)                                the execution and delivery by the Bank
of, and the performance by the Bank of its obligations under, the Indenture and
the Sale and Servicing Agreement will not subject any of the property or assets
of the Trust, or any portion thereof, to any lien created by or arising under
the Bank that are unrelated to the transactions contemplated in such
Agreements.

 

(j)            The Underwriters shall have received
such opinions, addressed to the Underwriters and dated the Closing Date, as are
delivered to the Rating Agencies.

 

(k)           The Underwriters shall have received
an opinion from Winston & Strawn LLP, counsel for the Trust
Depositor, dated the Closing Date and satisfactory in form and substance to the
Underwriters regarding 1) the true-sale of the Contracts by Harley-Davidson to
the Trust Depositor and 2) the first priority perfected security interest of
the Trust and the pledge by the Trust of the Contracts and other Trust Property
to the Indenture Trustee for the benefit of the Noteholders.

 

(l)            The Underwriters shall have received
an opinion from Winston & Strawn LLP, counsel for the Trust
Depositor, dated the Closing Date and satisfactory in form and substance to the
Underwriters regarding substantive consolidation.

 

(m)          The Underwriters shall have received
an opinion from Hale Lane Peek Dennison and Howard, special Nevada counsel to
Eaglemark Savings Bank, dated the Closing Date and reasonably satisfactory in
form and substance to the Underwriters regarding Eaglemark Savings Bank and
related matters.

 

(n)           The Underwriters shall have received
a certificate dated the Closing Date of any of the Chairman of the Board, the
President, the Executive Vice President, any Vice President, the Treasurer, any
Assistant Treasurer, the principal financial officer or the principal
accounting officer of the Trust Depositor in which such officer shall state
that, to the best of his or her knowledge after reasonable investigation:

 

(i)                                     the representations and warranties of the
Trust Depositor contained in this Agreement and the Basic Documents are true
and correct;

 

(ii)                                  the Trust Depositor has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied under such agreements at or prior to the Closing Date;

 

(iii)                               since the date of the Preliminary
Prospectus, no material adverse change, or any development involving a
prospective material adverse change, in or affecting particularly the business
or properties of the Trust Depositor has occurred; and

 

23

 

(iv)                              no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are contemplated by the Commission.

 

(o)           The Underwriters shall have received
a certificate dated the Closing Date of any of the Chairman of the Board, the
President, the Executive Vice President, any Vice President, the Treasurer, any
Assistant Treasurer, the principal financial officer or the principal
accounting officer of Harley-Davidson in which such officer shall state that,
to the best of his or her knowledge after reasonable investigation:

 

(i)                                     the representations and warranties of
Harley-Davidson contained in this Agreement and the Basic Documents are true
and correct;

 

(ii)                                  Harley-Davidson has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied under such agreements at or prior to the Closing Date;

 

(iii)                               since the date of the most recent
financial information included in the Preliminary Prospectus, no material
adverse change, or any development involving a prospective material adverse
change, in or affecting particularly the business or properties of
Harley-Davidson has occurred; and

 

(iv)                              no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are contemplated by the Commission.

 

(p)           The Underwriters shall have received
evidence satisfactory to them that, on or before the Closing Date, UCC-1
financing statements have been or are being filed in the offices of the
Secretary of State of the State of Nevada and the Secretary of State of the
State of Delaware reflecting the sale of the Contracts by Harley-Davidson to
the Trust Depositor and of the Contracts and other Trust Property by the Trust
Depositor to the Trust and the pledge by the Trust of the contracts and other
Trust Property to the Indenture Trustee for the benefit of the Noteholders.

 

(q)           At or prior to the Time of Sale and
at the Closing Date, Ernst & Young LLP shall have furnished to the
Underwriters a letter or letters, dated respectively as of the date of the Time
of Sale and as of the Closing Date, substantially in the forms of the drafts to
which the Underwriters have previously agreed and otherwise in form and
substance satisfactory to the Underwriters concerning the Time of Sale Information
and the Prospectus.

 

(r)            Subsequent to the Execution Time or,
if earlier, the dates as of which information is given in the Preliminary
Prospectus, there shall not have been any change or any development involving a
prospective change in or affecting the business or properties of
Harley-Davidson or the Trust Depositor the effect of which is, in the judgment
of the Underwriters, so material and adverse as to make 

 

24

 

it impractical or
inadvisable to market the Offered Securities as contemplated by the Preliminary
Prospectus.

 

(s)           The Class A-1 Notes shall have
been rated “Prime-1” by Moody’s and “A-1+” by S&P.  The Class A-2, Class A-3 and Class A-4
Notes shall have been rated “Aaa” by Moody’s and “AAA” by S&P.

 

(t)            The Class B Notes shall have
been rated at least “A-” by S&P and “A1” by Moody’s.

 

(u)           The Class C Notes shall have
been rated at least “BBB” by S&P and “Baa3” by Moody’s.

 

(v)           On or prior to the Closing Date, the
Offered Securities shall have been accepted for settlement through the
facilities of DTC.

 

(w)          On the Closing Date, the Certificate,
the Class B Notes and the Class C Notes, shall have been issued and
delivered to the Trust Depositor.

 

(x)            Prior to the Closing Date, the Trust
Depositor shall have furnished to the Underwriters such further information,
certificates and documents as the Underwriters may reasonably request,
including without limitation, certificates and opinions in respect of the Swap
Agreement and the Swap Counterparty.

 

If any of the conditions
specified in this Section 8 shall not have been fulfilled in all material
respects when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Underwriters.  Notice of such cancellation
shall be given to the Trust Depositor in writing or by telephone or telegraph
confirmed in writing.

 

9.             Reimbursement of
Expenses.  If the sale of the Offered
Securities provided for herein is not consummated because any condition to the
obligation of the Underwriters set forth in Section 8 hereof is not
satisfied, because of any refusal, inability or failure on the part of
Harley-Davidson or the Trust Depositor to perform any agreement herein or to
comply with any provision hereof other than by reason of a default by the
Underwriters in payment for the Offered Securities on the Closing Date,
Harley-Davidson and the Trust Depositor will reimburse the Underwriters upon
demand for all out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Offered Securities.

 

10.           Indemnification
and Contribution.  (a)  The
Trust Depositor and Harley-Davidson, jointly and severally, agree to indemnify
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls each Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common 

 

25

 

law
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, the Preliminary Prospectus, the Prospectus, any Trust Free Writing
Prospectus, the Time of Sale Information, the Issuer Information or any
information provided by the Trust Depositor or Harley-Davidson to any
Underwriter or any holder or prospective purchaser of Offered Securities or in
any amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however, that the Trust Depositor and
Harley-Davidson will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made (x) in
the Preliminary Prospectus, the Prospectus, any Trust Free Writing Prospectus
or the Time of Sale Information, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with the Underwriter Information or
(y) in any Derived Information (as defined in Section 11 below)
unless such untrue statement or alleged untrue statement or omission or alleged
omission made in any Derived Information results from an error or omission in
the Preliminary Prospectus, the Prospectus, the Time of Sale Information or any
Issuer Information.

 

(b)           Each Underwriter,
severally and not jointly, agrees to indemnify and hold harmless the Trust
Depositor and Harley-Davidson, their directors, their officers and each person
who controls the Trust Depositor or Harley-Davidson within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Trust Depositor and Harley-Davidson to each Underwriter, but
only with reference to untrue statements or omissions or alleged untrue
statements or omissions made in (x) the Registration Statement, the
Preliminary Prospectus, the Prospectus or the Time of Sale Information or in
any amendment thereof or supplement thereto in reliance upon and in conformity
with the Underwriter Information or (y) any Derived Information; provided, however, that the indemnity with respect to clause
(y) above shall not apply to any untrue statement or alleged untrue
statement or omission or alleged omission made in any Derived Information that
results from an error or omission in (i) the Preliminary Prospectus, (ii) the
Prospectus, (iii) the Time of Sale Information or (iv) any Issuer
Information.  This indemnity agreement
will be in addition to any liability that an Underwriter may otherwise have.

 

(c)           Upon receipt by an
indemnified party under this Section 10 of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 10, promptly notify
the indemnifying party in writing of the commencement thereof; but the failure
so to notify the indemnifying party (i) will not relieve it from liability
under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by
the indemnifying party of substantial rights and defenses and (ii) will
not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. 
The indemnifying party shall be entitled to appoint counsel of the
indemnifying party’s choice at the indemnifying party’s expense to represent
the 

 

26

 

indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however,
that such counsel shall be satisfactory to the indemnified party.  Notwithstanding the indemnifying party’s
election to appoint counsel to represent the indemnified party in an action,
the indemnified party shall have the right to employ separate counsel
(including local counsel), and the indemnifying party shall bear the reasonable
fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified parties and the indemnifying party and the indemnified parties
shall have reasonably concluded that there may be legal defenses available to
them and/or other indemnified parties that are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall authorize
the indemnified party to employ separate counsel at the expense of the
indemnifying party.  An indemnifying
party shall not, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement (x) does
not include a statement as to, or admission of, fault, culpability or a failure
to act by or on behalf of any such indemnified party, and (y) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

 

(d)           In the event that
the indemnity provided in paragraph (a) or (b) of this Section 10
is unavailable to or insufficient to hold harmless an indemnified party for any
reason, the Trust Depositor, Harley-Davidson and each Underwriter agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively “Losses”) to which the Trust Depositor,
Harley-Davidson and the several Underwriters may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Trust
Depositor and Harley-Davidson on the one hand and by the several Underwriters
on the other from the offering of the Offered Securities; provided,
however, that in no case shall any Underwriter be responsible for
any amount in excess of the purchase discount or commission applicable to the Offered
Securities purchased by such Underwriter hereunder.  If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Trust Depositor,
Harley-Davidson and each Underwriter shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Trust Depositor and Harley-Davidson on the one hand and of the several
Underwriters on the other in connection with the statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations.  Benefits received by the
Trust Depositor and Harley-Davidson shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses), and benefits
received by any Underwriter shall be deemed to be equal to the total purchase
discounts and commissions received by such Underwriter from the Trust Depositor
in connection with the purchase of the Offered Securities hereunder.  Relative fault shall be determined by reference
to whether any alleged untrue statement or omission relates to information
provided by the Trust Depositor and Harley-Davidson on the one hand or the
several Underwriters on the other.  The
Trust Depositor, 

 

27

 

Harley-Davidson
and the several Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation that does not take account of the equitable considerations referred to
above.  Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section 10, each
person who controls any Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of such Underwriter
shall have the same rights to contribution as such Underwriter, and each person
who controls the Trust Depositor or Harley-Davidson within the meaning of
either the Act or the Exchange Act and each officer and director of the Trust
Depositor or Harley-Davidson shall have the same rights to contribution as the
Trust Depositor or Harley-Davidson, subject in each case to the applicable
terms and conditions of this paragraph (d).

 

11.           Free Writing
Prospectuses.

 

(a)           The
following terms have the specified meanings for purposes of this Agreement:

 

“Free Writing Prospectus”
means and includes any information relating to the Offered
Securities disseminated by the Trust Depositor or any Underwriter that
constitutes a “free writing prospectus” within the meaning of Rule 405
under the Act.

 

“Issuer Information”
means (1) the information contained in any Underwriter Free Writing
Prospectus which information is also included in the Preliminary Prospectus or
the Prospectus (other than Underwriter Information), (2) information in
the Preliminary Prospectus or the Prospectus provided by the Trust Depositor or
Harley-Davidson that is used to calculate or create any Derived Information and
(3) any computer
tape or other information in respect of the Offered Securities, the Contracts
or other Trust Property furnished by the Trust Depositor or Harley-Davidson to
any Underwriter.

 

“Derived Information”
means such written information regarding the Offered Securities as is
disseminated by any Underwriter to a potential investor, which information is
neither (A) Issuer Information nor (B) contained in the Registration
Statement, the Preliminary Prospectus, the Prospectus Supplement, the
Prospectus or any amendment or supplement to any of them, taking into account
information incorporated therein by reference (other than information
incorporated by reference from any information regarding the Offered Securities
that is disseminated by any Underwriter to a potential investor).

 

(b)           Neither
the Trust Depositor nor any Underwriter shall disseminate or file with the
Commission any information relating to the Offered Securities in reliance on Rule 167
or 426 under the Act, nor shall the Trust Depositor or any Underwriter
disseminate any Underwriter Free Writing Prospectus (as defined below) “in a
manner reasonably designed to lead to its broad unrestricted dissemination”
within the meaning of Rule 433(d) under the Act.

 

(c)           The
Trust Depositor shall not disseminate to any potential investor any information
relating to the Offered Securities that constitutes a “written communication”
within 

 

28

 

the meaning of Rule 405 under the Act, other than
the Time of Sale Information and the Prospectus, unless the Trust Depositor has
obtained the prior consent of Wachovia Capital Markets, LLC.

 

(d)           Each Underwriter represents, warrants,
covenants and agrees with the Trust Depositor that, other than the Preliminary
Prospectus and the Prospectus, it has not made, used, prepared, authorized,
approved or referred to and will not prepare, make, use, authorize, approve or
refer to any “written communication” (as defined in Rule 405 under the
Act) that constitutes an offer to sell or solicitation of an offer to buy the
Offered Securities, including but not limited to any “ABS informational and
computational materials” as defined in Item 1101(a) of Regulation AB under
the Act; provided, however, that (i) each Underwriter may prepare and convey
one or more “written communications” (as defined in Rule 405 under the
Act) containing no more than the following: (1) information included in
the previously filed Preliminary Prospectus (including a cdi file based on such
information), (2) information relating to the class, size, rating, price,
CUSIP numbers, coupon, yield, spread, benchmark, pricing prepayment speed and clean
up call information, status and/or legal maturity date of the Offered
Securities, any credit enhancement expected to be provided with respect to the
Offered Securities or the Contracts, any derivatives expected to be entered
into in connection with the Offered Securities or the Contracts, the weighted
average life, expected final payment date, trade date, settlement date and
payment window of one or more classes of Offered Securities, the names of any
underwriters for one or more classes of Offered Securities and the names of any
credit enhancement or derivative providers, (3) the eligibility of the
Offered Securities to be purchased by ERISA plans and (4) syndicate
structure and a column or other entry showing the status of the subscriptions
for the Offered Securities (both for the issuance as a whole and for each
Underwriter’s retention) and/or expected pricing parameters of the Offered
Securities (each such written communication, an “Underwriter Free Writing
Prospectus”); (ii) each Underwriter shall provide the Trust Depositor with
a true and accurate copy of each Free Writing Prospectus conveyed by it of the
type referred to in Rule 433(d)(5)(ii) under the Act no later than
the close of business on the date of first use and in any event not less than one
business day prior to the required date of filing with the Commission; and (iii) each
Underwriter is permitted to provide information customarily included in
confirmations of sales of securities and notices of allocations and information
delivered in compliance with Rule 134 of the Act.

 

(e)           Harley-Davidson
agrees to file with the Commission when required under the Rules and
Regulations the following:

 

(i)                                     any Free Writing
Prospectus that includes Issuer Information (any such Free Writing Prospectus,
a “Trust Free Writing Prospectus”);

 

(ii)                                  subject to the
Underwriters’ compliance with Section 11(d), any Underwriter Free Writing
Prospectus at the time required to be filed; and

 

(iii)                               any Free Writing
Prospectus for which the Trust Depositor or any person acting on its behalf,
including, without limitation, Harley-Davidson, provided, authorized or
approved information that is prepared and published or disseminated by a person
unaffiliated with the Trust Depositor or any other 

 

29

 

offering participant that is in
the business of publishing, radio or television broadcasting or otherwise
disseminating communications.

 

(f)            Notwithstanding
the provisions of Section 11(e), Harley-Davidson will not be required to
file any Free Writing Prospectus that does not contain substantive changes from
or additions to a Free Writing Prospectus previously filed with the Commission.

 

(g)           The
Trust Depositor and the Underwriters each agree that any Free Writing
Prospectuses prepared by it will contain a legend substantially similar to the
following legend:

 

The issuer has filed a
registration statement (including a prospectus) with the SEC for the offering
to which this communication relates. 
Before you invest, you should read the prospectus in that registration
statement and other documents the issuer has filed with the SEC for more
complete information about the issuer and this offering.  You may get these documents for free by
visiting EDGAR on the SEC website at www.sec.gov.  Alternatively, the issuer, any underwriter or
any dealer participating in the offering will arrange to send you the
prospectus if you request it by calling toll-free 1-8[xx-xxx-xxxx].

 

(h)           In
the event the Trust Depositor or Harley-Davidson becomes aware that, as of the
Time of Sale, any Time of Sale Information contains or contained any untrue
statement of material fact or omits or omitted to state a material fact
necessary in order to make the statements contained therein (when read in
conjunction with all Time of Sale Information) in light of the circumstances
under which they were made, not misleading (a “Defective Prospectus”),
Harley-Davidson shall promptly notify the Underwriters of such untrue statement
or omission no later than one business day after discovery and Harley-Davidson
shall, if requested by the Underwriters, prepare and deliver to the
Underwriters a Corrected Prospectus.

 

(i)            In
disseminating information to prospective investors, each Underwriter has
complied and will continue to comply fully with all applicable Rules and
Regulations, including but not limited to Rules 164 and 433 under the Act
and the requirements thereunder for filing and retention of Free Writing
Prospectuses, including retaining any Free Writing Prospectuses it has used but
which are not required to be filed for the required period.

 

(j)            Prior
to entering into any Contract of Sale, each Underwriter shall convey the Time
of Sale Information to the prospective investor.  Each Underwriter shall maintain sufficient
records to document its conveyance of the Time of Sale Information to the
potential investor prior to the formation of the related Contract of Sale and
shall maintain such records as required by the Rules and Regulations.

 

(k)           If a Defective
Prospectus has been corrected with a Corrected Prospectus, each Underwriter
shall (A) deliver the Corrected Prospectus to each investor with whom it
entered into a Contract of Sale and that received the Defective Prospectus from
it prior to entering into a new Contract of Sale with such investor, (B) notify
such investor that the prior
Contract of Sale with the investor, if any, has been terminated and of the
investor’s rights as a result of such agreement and (C) provide such
investor with an opportunity to agree to purchase 

 

30

 

the Offered Securities on
the terms described in the Corrected Prospectus, in each case as consistent
with the Underwriter’s good faith interpretation of the requirements of
Commission Release No. 33-8591.

 

12.           Defaults of the
Underwriters.  If any Underwriter
defaults in its obligation to purchase the Offered Securities hereunder on the
Closing Date and arrangements satisfactory to the nondefaulting Underwriters
and the Trust Depositor for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of the nondefaulting Underwriters,
Harley-Davidson or the Trust Depositor, except as provided in Section 15. Nothing
herein will relieve a defaulting Underwriter from liability for its
default.  The term “Underwriter” includes
any person substituted for an Underwriter under this Section.

 

In the event of any such
default that does not result in a termination of this Agreement, any of the
nondefaulting Underwriters or the Trust Depositor shall have the right to
postpone the Closing Date for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectus or in any
other documents or arrangements.

 

13.           Termination.  This Agreement shall be subject to
termination in the absolute discretion of the Underwriters, by notice given to
the Trust Depositor prior to delivery of and payment for the Offered
Securities, if prior to such time (i) trading in securities generally on
the New York Stock Exchange or the Nasdaq Stock Market’s National Market shall
have been suspended or limited or minimum prices shall have been established on
either such exchange, (ii) a banking moratorium shall have been declared
either by federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other calamity or crisis the effect
of which on financial markets is such as to make it, in the judgment of the
Underwriters, impracticable or inadvisable to proceed with the offering or
delivery of the Offered Securities as contemplated by the Prospectus.

 

14.           No Bankruptcy
Petition.  Each Underwriter covenants
and agrees that, prior to the date which is one year and one day after the
payment in full of all securities issued by the Trust Depositor or by a trust
for which the Trust Depositor was the depositor, which securities were rated by
any nationally recognized statistical rating organization, it will not
institute against, or join any other Person in instituting against, the Trust
Depositor any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under any federal or state
bankruptcy or similar law.

 

15.           Representations
and Indemnities to Survive.  The
respective agreements, representations, warranties, indemnities and other
statements of the Trust Depositor and Harley-Davidson and their respective
officers and of the several Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter, the Trust Depositor or Harley-Davidson
or any of the officers, directors or controlling persons referred to in Section 13
hereof, and will survive delivery of and payment for the Offered
Securities.  The provisions of Sections
9, 10 and 16 hereof shall survive the termination or cancellation of this
Agreement.

 

31

 

16.           Relationship
Among Parties.  Harley-Davidson and
the Trust Depositor acknowledge and agree that the Underwriters are acting solely in the
capacity of an arm’s length contractual counterparty to Harley-Davidson
and the Trust Depositor with respect to the offering of the Offered
Securities contemplated hereby (including in connection with determining the
terms of the offering) and not as a financial advisor or a fiduciary to, or an
agent of, Harley-Davidson, the Trust Depositor or
any other person.  Additionally, none of
the Underwriters are advising Harley-Davidson, the Trust
Depositor or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction.  Harley-Davidson and the
Trust Depositor shall consult with their own advisors concerning such
matters and shall be responsible for making their own independent investigation
and appraisal of the transactions contemplated hereby, and the Underwriters shall
have no responsibility or liability to Harley-Davidson or
the Trust Depositor with respect to any legal, tax, investment,
accounting or regulatory matters. Any review by the Underwriters of Harley-Davidson, the Trust Depositor, the transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Underwriters and shall not be on behalf
of Harley-Davidson or the Trust Depositor.

 

17.           Notices.  All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Underwriters, will
be mailed, delivered or telegraphed and confirmed to them c/o Wachovia Capital
Markets, LLC, 301 South College Street, Charlotte, North Carolina, 28288,
Attention:  Asset-Backed Finance; or if
sent to the Trust Depositor, will be mailed, delivered or telegraphed and
confirmed to it at Harley-Davidson Customer Funding Corp., 3850 Arrowhead
Drive, Carson City, Nevada 89706, Attention: 
President; or if sent to Harley-Davidson, will be mailed, delivered,
telegraphed and confirmed to it at Harley-Davidson Credit Corp., 3850 Arrowhead
Drive, Carson City, Nevada 89706, Attention: President.

 

18.           Successors.  This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 10
hereof, and, except as expressly set forth herein, no other person will have
any right or obligation hereunder.

 

19.           Applicable Law.  This Agreement will be governed by and
construed in accordance with the laws of the State of New York.

 

20.           Business Day.  For purposes of this Agreement, “business day”
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which national banking associations in the cities of Chicago, Illinois or New
York, New York are authorized or obligated by law, executive order or
regulation to close.

 

21.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same agreement.

 

32

 

If the foregoing is in
accordance with your understanding of our agreement, please sign and return to
us the enclosed duplicate hereof, whereupon this Agreement and your acceptance
shall represent a binding agreement among the Trust Depositor, Harley-Davidson
and the several Underwriters.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON
  CUSTOMER FUNDING

  
	
   

  	
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Perry A. Glassgow

  
	
   

  	
   

  	
  Name: Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Vice President
  and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HARLEY-DAVIDSON CREDIT
  CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Perry A. Glassgow

  
	
   

  	
   

  	
  Name: Perry A. Glassgow

  
	
   

  	
   

  	
  Title: Vice President
  and Treasurer

  

 

 

The foregoing Agreement
is hereby

confirmed and accepted as of the

date first above written.

 

WACHOVIA
CAPITAL MARKETS, LLC

CITIGROUP
GLOBAL MARKETS INC.

ABN
AMRO INCORPORATED

BNP PARIBAS SECURITIES CORP.

J.P. MORGAN SECURITIES
INC.

 

By: WACHOVIA CAPITAL MARKETS, LLC

 

	
  By:

  	
  /s/ Timothy MacPhail

  	
   

  
	
   

  	
  Name: Timothy MacPhail

  	
   

  
	
   

  	
  Title: Vice President

  	
   

  

 

 

SCHEDULE I

 

HARLEY-DAVIDSON MOTORCYCLE TRUST 2008-1

 

	
  OFFERED SECURITY

  	
   

  	
  PRINCIPAL AMOUNT

  	
   

  	
  PRICE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class A-1 Notes

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Capital Markets, LLC

  	
   

  	
  $

  	
  18,600,000

  	
   

  	
  99.90000

  	
  %

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  $

  	
  18,600,000

  	
   

  	
  99.90000

  	
  %

  
	
  ABN AMRO Incorporated

  	
   

  	
  $

  	
  18,600,000

  	
   

  	
  99.90000

  	
  %

  
	
  BNP Paribas Securities Corp.

  	
   

  	
  $

  	
  18,600,000

  	
   

  	
  99.90000

  	
  %

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  $

  	
  18,600,000

  	
   

  	
  99.90000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class A-2 Notes

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Capital Markets, LLC

  	
   

  	
  $

  	
  39,400,000

  	
   

  	
  99.86000

  	
  %

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  $

  	
  39,400,000

  	
   

  	
  99.86000

  	
  %

  
	
  ABN AMRO Incorporated

  	
   

  	
  $

  	
  39,400,000

  	
   

  	
  99.86000

  	
  %

  
	
  BNP Paribas Securities Corp.

  	
   

  	
  $

  	
  39,400,000

  	
   

  	
  99.86000

  	
  %

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  $

  	
  39,400,000

  	
   

  	
  99.86000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class A-3a Notes

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Capital Markets, LLC

  	
   

  	
  $

  	
  11,000,000

  	
   

  	
  99.81779

  	
  %

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  $

  	
  11,000,000

  	
   

  	
  99.81779

  	
  %

  
	
  ABN AMRO Incorporated

  	
   

  	
  $

  	
  11,000,000

  	
   

  	
  99.81779

  	
  %

  
	
  BNP Paribas Securities Corp.

  	
   

  	
  $

  	
  11,000,000

  	
   

  	
  99.81779

  	
  %

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  $

  	
  11,000,000

  	
   

  	
  99.81779

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class A-3b Notes

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Capital Markets, LLC

  	
   

  	
  $

  	
  14,000,000

  	
   

  	
  99.83000

  	
  %

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  $

  	
  14,000,000

  	
   

  	
  99.83000

  	
  %

  
	
  ABN AMRO Incorporated

  	
   

  	
  $

  	
  14,000,000

  	
   

  	
  99.83000

  	
  %

  
	
  BNP Paribas Securities Corp.

  	
   

  	
  $

  	
  14,000,000

  	
   

  	
  99.83000

  	
  %

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  $

  	
  14,000,000

  	
   

  	
  99.83000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class A-4 Notes

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia Capital Markets, LLC

  	
   

  	
  $

  	
  14,200,000

  	
   

  	
  99.77750

  	
  %

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  $

  	
  14,200,000

  	
   

  	
  99.77750

  	
  %

  
	
  ABN AMRO Incorporated

  	
   

  	
  $

  	
  14,200,000

  	
   

  	
  99.77750

  	
  %

  
	
  BNP Paribas Securities Corp.

  	
   

  	
  $

  	
  14,200,000

  	
   

  	
  99.77750

  	
  %

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  $

  	
  14,200,000

  	
   

  	
  99.77750

  	
  %Exhibit 10.5

 

(Multicurrency—Cross
Border)

 

ISDA®

International Swap
Dealers Association. Inc.

MASTER AGREEMENT

 

	
  dated
  as of

  	
  February 15,
  2008

  	
   

  

 

	
  CITIBANK, N.A.

  	
   

  	
  and

  	
   

  	
  HARLEY-DAVIDSON

  MOTORCYCLE TRUST 2008-1

  

 

have
entered and/or anticipate entering into one or more transactions (each a “Transaction”)
that are or will be governed by this Master Agreement, which includes the
schedule (the “Schedule”), and the documents and other confirming evidence
(each a “Confirmation”) exchanged between the parties confirming those
Transactions.

 

Accordingly,
the parties agree as follows:—

 

1.                                      Interpretation

 

(a)                                  Definitions.  The terms defined in Section 14 and in
the Schedule will have the meanings therein specified for the purpose of this
Master Agreement.

 

(b)                                 Inconsistency.  In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master Agreement,
the Schedule will prevail.  In the event
of any inconsistency between the provisions of any Confirmation and this Master
Agreement (including the Schedule), such Confirmation will prevail for the
purpose of the relevant Transaction.

 

(c)                                  Single Agreement.  All Transactions are entered
into in reliance on the fact that this Master Agreement and all Confirmations
form a single agreement between the parties (collectively referred to as this “Agreement”),
and the parties would not otherwise enter into any Transactions.

 

2.                                      Obligations

 

(a)                                  General Conditions.

 

(i)                     Each party will
make each payment or delivery specified in each Confirmation to be made by it,
subject to the other provisions of this Agreement.

 

(ii)                  Payments under
this Agreement will be made on the due date for value on that date in the place
of the account specified in the relevant Confirmation or otherwise pursuant to this
Agreement, in freely transferable funds and in the manner customary for
payments in the required currency. Where settlement is by delivery (that is,
other than by payment), such delivery will be made for receipt on the due date
in the manner customary for the relevant obligation unless otherwise specified
in the relevant Confirmation or elsewhere in this Agreement.

 

(iii)               Each obligation
of each party under Section 2(a)(i) is subject to (1) the
condition precedent that no Event of Default or Potential Event of Default with
respect to the other party has occurred and is continuing, (2) the
condition precedent that no Early Termination Date in respect of the relevant
Transaction has occurred or been effectively designated and (3) each other
applicable condition precedent specified in this Agreement.

 

Copyright ©1992 by International Swap Dealers Association, Inc.

 

 

 

(b)                                 Change of Account.   Either party may change its account for
receiving a payment or delivery by giving notice to the other party at least
five Local Business Days prior to the scheduled date for the payment or
delivery to which such change applies unless such other party gives timely
notice of a reasonable objection to such change.

 

(c)                                  Netting.  If on any date amounts would otherwise be payable:—

 

(i)                     in the same
currency; and

 

(ii)                  in respect of
the same Transaction,

 

by
each party to the other, then, on such date, each party’s obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the
other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.

 

The
parties may elect in respect of two or more Transactions that a net amount will
be determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such amounts
are payable in respect of the same Transaction. 
The election may be made in the Schedule or a Confirmation by specifying
that subparagraph (ii) above will not apply to the Transactions identified
as being subject to the election, together with the starting date (in which
case subparagraph (ii) above will not, or will cease to, apply to such
Transactions from such date).  This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.

 

(d)                                 Deduction
or Withholding for Tax.

 

(i)                     Gross-Up.                          All payments under this
Agreement will be made without any deduction or withholding for or on account
of any Tax unless such deduction or withholding is required by any applicable
law, as modified by the practice of any relevant governmental revenue
authority, then in effect.  If a party is
so required to deduct or withhold, then that party (“X”) will:—

 

(1)               promptly notify
the other party (“Y”) of such requirement;

 

(2)               pay to the
relevant authorities the full amount required to be deducted or withheld
(including the full amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section 2(d)) promptly upon
the earlier of determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;

 

(3)               promptly forward
to Y an official receipt (or a certified copy), or other documentation
reasonably acceptable to Y, evidencing such payment to such authorities; and

 

(4)               if such Tax is
an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is
otherwise entitled under this Agreement, such additional amount as is necessary
to ensure that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal the full
amount Y would have received had no such deduction or withholding been
required.  However, X will not be
required to pay any additional amount to Y to the extent that it would not be
required to be paid but for:—

 

(A)                 the failure by Y
to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or

 

(B)                   the failure of a
representation made by Y pursuant to Section 3(f) to be accurate and
true unless such failure would not have occurred but for (I) any action
taken by a taxing authority, or brought in a court of competent jurisdiction,
on or after the date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.

 

2

 

(ii)                  Liability.  If:—

 

(1)               X is required by
any applicable law, as modified by the practice of any relevant governmental
revenue authority, to make any deduction or withholding in respect of which X
would not be required to pay an additional amount to Y under Section 2(d)(i)(4);

 

(2)               X does not so
deduct or withhold; and

 

(3)               a liability
resulting from such Tax is assessed directly against X,

 

then,
except to the extent Y has satisfied or then satisfies the liability resulting
from such Tax, Y will promptly pay to X the amount of such liability (including
any related liability for interest, but including any related liability for
penalties only if Y has failed to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

 

(e)                                  Default Interest; Other Amounts. Prior to the
occurrence or effective designation of an Early Termination Date in respect of
the relevant Transaction, a party that defaults in the performance of any
payment obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate.  Such interest will be calculated on the basis
of daily compounding and the actual number of days elapsed.  If, prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party defaults in the performance of any obligation required to
be settled by delivery, it will compensate the other party on demand if and to
the extent provided for in the relevant Confirmation or elsewhere in this
Agreement.

 

3.                                       Representations

 

Each
party represents to the other party (which representations will be deemed to be
repeated by each party on each date on which a Transaction is entered into and,
in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:—

 

(a)                                  Basic Representations.

 

(i)                     Status.  It is duly organised and validly existing
under the laws of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;

 

(ii)                  Powers.  It has the power to execute this Agreement
and any other documentation relating to this Agreement to which it is a party,
to deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform its
obligations under this Agreement and any obligations it has under any Credit
Support Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;

 

(iii)               No Violation or Conflict.  Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;

 

(iv)              Consents.  All governmental and other consents that are
required to have been obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and

 

(v)                 Obligations Binding.  Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid and
binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganisation, insolvency, moratorium or
similar laws affecting creditors’ rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)).

 

3

 

(b)                                 Absence of Certain Events.
 No Event of Default or Potential
Event of Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.

 

(c)                                  Absence of Litigation.  There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

 

(d)                                 Accuracy of Specified Information.  All applicable information that is furnished
in writing by or on behalf of it to the other party and is identified for the
purpose of this Section 3(d) in the Schedule is, as of the date of
the information, true, accurate and complete in every material respect.

 

(e)                                  Payer Tax Representation.  Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate
and true.

 

(f)                                    Payee Tax Representations.  Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate
and true.

 

4.                                      Agreements

 

Each party agrees with
the other that, so long as either party has or may have any obligation under
this Agreement or under any Credit Support Document to which it is a party:—

 

(a)                                  Furnish Specified Information.  It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:—

 

(i)                     any forms,
documents or certificates relating to taxation specified in the Schedule or any
Confirmation;

 

(ii)                  any other
documents specified in the Schedule or any Confirmation; and

 

(iii)               upon reasonable
demand by such other party, any form or document that may be required or
reasonably requested in writing in order to allow such other party or its
Credit Support Provider to make a payment under this Agreement or any
applicable Credit Support Document without any deduction or withholding for or
on account of any Tax or with such deduction or withholding at a reduced rate
(so long as the completion, execution or submission of such form or document
would not materially prejudice the legal or commercial position of the party in
receipt of such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required certification,

 

in
each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

 

(b)                                 Maintain Authorisations.  It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or other
authority that are required to be obtained by it with respect to this Agreement
or any Credit Support Document to which it is a party and will use all
reasonable efforts to obtain any that may become necessary in the future.

 

(c)                                  Comply with Laws.  It will comply in all material respects with
all applicable laws and orders to which it may be subject if failure so to
comply would materially impair its ability to perform its obligations under
this Agreement or any Credit Support Document to which it is a party.

 

(d)                                 Tax Agreement.  It will give notice of any failure of a
representation made by it under Section 3(f) to be accurate and true
promptly upon learning of such failure.

 

(e)                                  Payment of Stamp  Tax.  Subject to Section 11, it will pay any
Stamp Tax levied or imposed upon it or in respect of its execution or
performance of this Agreement by a jurisdiction in which it is incorporated,

 

4

 

organised,
managed and controlled, or considered to have its seat, or in which a branch or
office through which it is acting for the purpose of this Agreement is located
(“Stamp Tax Jurisdiction”) and will indemnify the other party against any Stamp
Tax levied or imposed upon the other party or in respect of the other party’s
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.

 

5.                                      Events of Default and
Termination Events

 

(a)                                  Events of Default.   The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any of the following events constitutes an
event of default (an “Event of Default”) with respect to such party:—

 

(i)                  Failure to Pay or Deliver.  Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required
to be made by it if such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to the party;

 

(ii)               Breach of Agreement.  Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or
to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the party in
accordance with this Agreement if such failure is not remedied on or before the
thirtieth day after notice of such failure is given to the party;

 

(iii)               Credit Support Default.

 

(1)       Failure by the party or any
Credit Support Provider of such party to comply with or perform any agreement
or obligation to be complied with or performed by it in accordance with any
Credit Support Document if such failure is continuing after any applicable
grace period has elapsed;

 

(2)       the expiration or termination
of such Credit Support Document or the failing or ceasing of such Credit
Support Document to be in full force and effect for the purpose of this
Agreement (in either case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of the other
party; or

 

(3)       the party or such Credit
Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in
part, or challenges the validity of, such Credit Support Document;

 

(iv)              Misrepresentation.  A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been
made or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have been
made or repeated;

 

(v)                 Default under Specified Transaction.  The party, any Credit Support Provider of
such party or any applicable Specified Entity of such party (1) defaults
under a Specified Transaction and, after giving effect to any applicable notice
requirement or grace period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified Transaction, (2) defaults,
after giving effect to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction (or
such default continues for at least three Local Business Days if there is no
applicable notice requirement or grace period) or (3) disaffirms,
disclaims, repudiates or rejects, in whole or in part, a Specified Transaction
(or such action is taken by any person or entity appointed or empowered to
operate it or act on its behalf);

 

(vii)           Cross Default.  If “Cross Default” is specified in the
Schedule as applying to the party, the occurrence or existence of (1) a
default, event of default or other similar condition or event (however

 

5

 

described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has resulted
in such Specified Indebtedness becoming, or becoming capable at such time of
being declared, due and payable under such agreements or instruments, before it
would otherwise have been due and payable or (2) a default by such party,
such Credit Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount under such
agreements or instruments (after giving effect to any applicable notice
requirement or grace period);

 

(vii)        Bankruptcy. The party, any Credit
Support Provider of such party or any applicable Specified Entity of such
party:—

 

(1)     is dissolved (other than
pursuant to a consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors’ rights,
or a petition is presented for its winding-up or liquidation, and, in the case
of any such proceeding or petition instituted or presented against it, such
proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for
its winding-up or liquidation or (B) is not dismissed, discharged, stayed
or restrained in each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a consolidation, amalgamation
or merger); (6) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other
legal process levied, enforced or sued on or against all or substantially all
its assets and such secured party maintains possession, or any such process is
not dismissed, discharged, stayed or restrained, in each case within 30 days
thereafter; (8) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or

 

(viii)        Merger Without Assumption.  The party or any Credit Support Provider of
such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or transfer:—

 

(1)     the resulting, surviving or
transferee entity fails to assume all the obligations of such party or such
Credit Support Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this Agreement; or

 

(2)     the benefits of any Credit
Support Document fail to extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity of its
obligations under this Agreement.

 

(b)                                 Termination Events.  The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any event specified below constitutes an
Illegality if the event is specified in (i) below, a Tax Event if the
event is specified in (ii) below or a Tax Event upon Merger if the event
is specified in (iii) below, and, if specified to be applicable, a Credit Event 

 

6

 

Upon
Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:—

 

(i)                                     Illegality.  Due to the adoption of, or
any change in, any applicable law after the date on which a Transaction is
entered into, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after such date, it becomes unlawful (other
than as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):—

 

(1)               to perform any
absolute or contingent obligation to make a payment or delivery or to receive a
payment or delivery in respect of such Transaction or to comply with any other
material provision of this Agreement relating to such Transaction; or

 

(2)               to perform, or
for any Credit Support Provider of such party to perform, any contingent or
other obligation which the party (or such Credit Support Provider) has under
any Credit Support Document relating to such Transaction;

 

(ii)          Tax Event.  Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law,  the party (which will
be the Affected Party) will, or there is a substantial likelihood that it will,
on the next succeeding Scheduled Payment Date (1) be required to pay to
the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive
a payment from which an amount is required to be deducted or withheld for or on
account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) and no additional amount is required to be paid in respect of such Tax
under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));

 

(iii)       Tax Event Upon Merger.  The party (the “Burdened Party”) on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive
a payment from which an amount has been deducted or withheld for or on account
of any Indemnifiable Tax in respect of which the other party is not required to
pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or
(B)), in either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its assets
to, another entity (which will be the Affected Party) where such action does
not constitute an event described in Section 5(a)(viii);

 

(iv)      Credit Event Upon Merger.  If “Credit Event Upon Merger” is specified in
the Schedule as applying to the party, such party (“X”), any Credit Support
Provider of X or any applicable Specified Entity of X consolidates or
amalgamates with, or merges with or into, or transfers all or substantially all
its assets to, another entity and such action does not constitute an event
described in Section 5(a)(viii) but the creditworthiness of the
resulting, surviving or transferee entity is materially weaker than that of X,
such Credit Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its successor or
transferee, as appropriate, will be the Affected Party); or

 

(v)         Additional Termination Event.  If any “Additional Termination Event” is
specified in the Schedule or any Confirmation as applying, the occurrence of
such event (and, in such event, the Affected Party or Affected Parties shall be
as specified for such Additional Termination Event in the Schedule or such
Confirmation).

 

(c)                                  Event of Default and Illegality.  If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.

 

7

 

6.                                      Early
Termination

 

(a)                                  Right to Terminate Following Event of Default.  If at any time an Event of
Default with respect to a party (the “Defaulting Party”) has occurred and is
then continuing, the other party (the “Non-defaulting Party”) may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions.  If, however, “Automatic Early Termination” is
specified in the Schedule as applying to a party, then an Early Termination
Date in respect of all outstanding Transactions will occur immediately upon the
occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(l),
(3), (5), (6) or, to the extent analogous thereto, (8), and as of the time
immediately preceding the institution of the relevant proceeding or the
presentation of the relevant petition upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).

 

(b)                                 Right to Terminate Following Termination Event.

 

(i)             Notice.   If a Termination Event occurs, an Affected
Party will, promptly upon becoming aware of it, notify the other party,
specifying the nature of that Termination Event and each Affected Transaction
and will also give such other information about that Termination Event as the
other party may reasonably require.

 

(ii)          Transfer to Avoid Termination Event.  If either an Illegality under Section 5(b)(i)(l) or
a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon
Merger occurs and the Burdened Party is the Affected Party, the Affected Party
will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv),
use all reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after it
gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.

 

If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period, whereupon
the other party may effect such a transfer within 30 days after notice is given
under Section 6(b)(i).

 

Any such transfer by a party under this Section 6(b)(ii) will
be subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party’s policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.

 

(iii)       Two Affected Parties.  If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will use all
reasonable efforts to reach agreement within 30 days after notice thereof is
given under Section 6(b)(i) on action to avoid that Termination
Event.

 

(iv)      Right to Terminate. If:—

 

(1) 
a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii),
as the case may be, has not been effected with respect to all Affected
Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i);
or

 

(2) 
an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an
Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the
Burdened Party is not the Affected Party,

 

either
party in the case of an Illegality, the Burdened Party in the case of a Tax
Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon Merger
or an Additional Termination Event if there is only one Affected Party may, by
not more than 20 days notice to the other party and provided that the relevant
Termination Event is then 

 

8

 

continuing,
designate a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.

 

(c)                                  Effect of Designation.

 

(i)             If notice
designating an Early Termination Date is given under Section 6(a) or
(b), the Early Termination Date will occur on the date so designated, whether
or not the relevant Event of Default or Termination Event is then continuing.

 

(ii)          Upon the
occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 2(e) in respect
of the Terminated Transactions will be required to be made, but without
prejudice to the other provisions of this Agreement. The amount if any, payable
in respect of an Early Termination Date shall be determined pursuant to Section 6(e).

 

(d)                                 Calculations.

 

(i)             Statement.   On or as soon as reasonably practicable
following the occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and
will provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid.  In the absence of written confirmation from
the source of a quotation obtained in determining a Market Quotation, the
records of the party obtaining such quotation will be conclusive evidence of
the existence and accuracy of such quotation.

 

(ii)          Payment Date.  An amount calculated as being
due in respect of any Early Termination Date under Section 6(e) will
be payable on the day that notice of the amount payable is effective (in the
case of an Early Termination Date which is designated or occurs as a result of
an Event of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event). Such
amount will be paid together with (to the extent permitted under applicable
law) interest thereon (before as well as after judgment) in the Termination
Currency, from (and including) the relevant Early Termination Date to (but
excluding) the date such amount is paid, at the Applicable Rate. Such interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed.

 

(e)                                  Payments on Early Termination.
 If an Early Termination Date
occurs. the following provisions shall apply based on the parties’ election in
the Schedule of a payment measure, either “Market Quotation” or “Loss”, and a
payment method, either the “First Method” or the “Second Method”. If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that “Market Quotation” or the “Second Method”, as the case
may be, shall apply. The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject
to any Set-off.

 

(i)             Events of Default.  If the Early Termination Date results from an
Event of Default:—

 

(1)               First
Method and Market Quotation.  If the First Method and Market Quotation
apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if
a positive number, of (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts  owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party.

 

(2)               First
Method and Loss.  If the First
Method and Loss apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party’s Loss in respect of this
Agreement.

 

(3)               Second
Method and Market Quotation.  If the Second Method and Market Quotation
apply, an amount will be payable equal to (A) the sum of the Settlement
Amount (determined by the

 

9

 

Non-defaulting
Party) in respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party will pay it to
the Non-defaulting Party; if it is a negative number, the Non-defaulting Party
will pay the absolute value of that amount to the Defaulting Party.

 

(4)               Second
Method and Loss. If the Second Method and Loss apply, an amount will
be payable equal to the Non-defaulting Party’s Loss in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay
it to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.

 

(ii)                                  Termination Events.  If the Early Termination Date results from a
Termination Event:—

 

(1)     One
Affected Party.   If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except
that, in either case, references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party and the party which
is not the Affected Party, respectively, and, if Loss applies and fewer than
all the Transactions are being terminated, Loss shall be calculated in respect
of all Terminated Transactions.

 

(2)     Two
Affected Parties. If there are two Affected Parties:—

 

(A) 
if Market Quotation applies, each party will determine a Settlement Amount in
respect of the Terminated Transactions, and an amount will be payable equal to (I) the
sum of (a) one-half of the difference between the Settlement Amount
of  the party with the higher Settlement
Amount (“X”) and the Settlement Amount of the party with the lower Settlement
Amount (“Y”) and (b) the Termination Currency Equivalent of the Unpaid
Amounts owing  to X less (II) the
Termination Currency Equivalent of the Unpaid Amounts owing to Y; and

 

(B) 
if Loss applies, each party will determine its Loss in respect of this
Agreement (or, if fewer than all the Transactions are being terminated, in
respect of all Terminated Transactions) and an amount will be payable equal to
one-half of the difference between the Loss of the party with the higher Loss (“X”)
and the Loss of the party with the lower Loss (“Y”).

 

If
the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.

 

(iii)       Adjustment for Bankruptcy.  In circumstances where an Early Termination
Date occurs because “Automatic Early Termination” applies in respect of a
party, the amount determined under this Section 6(e) will be subject
to such adjustments as are appropriate and permitted by law to reflect any
payments or deliveries made by one party to the other under this Agreement (and
retained by such other party) during the period from the relevant Early
Termination Date to the date for payment determined under Section 6(d)(ii).

 

(iv)      Pre-Estimate.   The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the loss of
bargain and the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to  recover any additional damages as a
consequence of such losses.

 

10

 

7.             Transfer

 

Subject
to Section 6(b)(ii), neither this Agreement nor any interest or obligation
in or under this Agreement may be transferred (whether by way of security or
otherwise) by either party without the prior written consent of the other
party, except that:—

 

(a)           a party may make such a transfer of
this Agreement pursuant to a consolidation or amalgamation with, or merger with
or into, or transfer of all or substantially all its assets to, another entity
(but without prejudice to any other right or remedy under this Agreement); and

 

(b)           a party may make such a transfer of
all or any part of its interest in any amount payable to it from a Defaulting
Party under Section 6(e).

 

Any
purported transfer that is not in compliance with this Section will be
void.

 

8.             Contractual Currency

 

(a)           Payment in the Contractual Currency.  Each payment under this Agreement will be
made in the relevant currency specified in this Agreement for that payment (the
“Contractual Currency”). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than
the Contractual Currency, except to the extent such tender results in the
actual receipt by the party to which payment is owed, acting in a reasonable
manner and in good faith in converting the currency so tendered into this
Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required
to make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.

 

(b)           Judgments. 
To the extent permitted by applicable law, if any judgment or order
expressed in a currency other than the Contractual Currency is rendered (i) for
the payment of any amount owing in respect of this Agreement, (ii) for the
payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for
the payment of any amount described in (i) or (ii) above, the party
seeking recovery, after recovery in full of the aggregate amount to which such
party is entitled pursuant to the judgment or order, will be entitled to
receive immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid
in such other currency if such shortfall or such excess arises or results from
any variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such
party. The term “rate of exchange” includes, without limitation, any premiums
and costs of exchange payable in connection with the purchase of or conversion
into the Contractual Currency.

 

(c
)          Separate Indemnities. To the extent
permitted by applicable law, these indemnities constitute separate and
independent obligations from the other obligations in this Agreement, will be
enforceable as separate and independent causes of action, will apply
notwithstanding any indulgence granted by the party to which any payment is
owed and will not be affected by judgment being obtained or claim or proof
being made for any other sums payable in respect of this Agreement.

 

(d)           Evidence of Loss.  For the purpose of this Section 8, it
will be sufficient for a party to demonstrate that it would have suffered a
loss had an actual exchange or purchase been made.

 

11

 

9.             Miscellaneous

 

(a)           Entire Agreement.  This Agreement constitutes the entire
agreement and understanding of the parties with respect to its subject matter
and supersedes all oral communication and prior writings with respect thereto.

 

(b)           Amendments. 
No amendment, modification or waiver in respect of this Agreement will
be effective unless in writing (including a writing evidenced by a facsimile
transmission) and executed by each of the parties or confirmed by an exchange
of telexes or electronic messages on an electronic messaging system.

 

(c)           Survival of Obligations.  Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

 

(d)           Remedies Cumulative.  Except as provided in this Agreement, the
rights, powers, remedies and privileges provided in this Agreement are
cumulative and not exclusive of any rights, powers, remedies and privileges
provided by law.

 

(e)           Counterparts and Confirmations.

 

(i) 
This Agreement (and each amendment, modification and waiver in respect of it)
may be executed and delivered in counterparts (including by facsimile
transmission), each of which will be deemed an original.

 

(ii) 
The parties intend that they are legally bound by the terms of each Transaction
from the moment they agree to those terms (whether orally or otherwise). A
Confirmation shall be entered into as soon as practicable and may be executed
and delivered in counterparts (including by facsimile transmission) or be
created by an exchange of telexes or by an exchange of electronic messages on
an electronic messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The parties will
specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.

 

(f)            No Waiver of Rights.  A failure or delay in exercising any right,
power or privilege in respect of this Agreement will not be presumed to operate
as a waiver, and a single or partial exercise of any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of that
right, power or privilege or the exercise of any other right, power or
privilege.

 

(g)           Headings. 
The headings used in this Agreement are for convenience of reference
only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

 

10.          Offices; Multibranch
Parties

 

(a)           If Section 10(a) is
specified in the Schedule as applying, each party that enters into a
Transaction through an Office other than its head or home office represents to
the other party that, notwithstanding the place of booking office or
jurisdiction of incorporation or organisation of such party, the obligations of
such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

 

(b)           Neither party may change the Office
through which it makes and receives payments or deliveries for the purpose of a
Transaction without the prior written consent of the other party.

 

(c)           If a party is specified as a
Multibranch Party in the Schedule, such Multibranch Party may make and receive
payments or deliveries under any Transaction through any Office listed in the
Schedule, and the Office through which it makes and receives payments or
deliveries with respect to a Transaction will be specified in the relevant
Confirmation.

 

11.          Expenses

 

A
Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document 

 

12

 

to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.

 

12.          Notices

 

(a)           Effectiveness.  Any notice or other communication in respect
of this Agreement may be given in any manner set forth below (except that a
notice or other communication under Section 5 or 6 may not be given by
facsimile transmission or electronic messaging system) to the address or number
or in accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:—

 

(i) 
if in writing and delivered in person or by courier, on the date it is
delivered;

 

(ii) 
if sent by telex, on the date the recipient’s answerback is received;

 

(iii) 
if sent by facsimile transmission, on the date that transmission is received by
a responsible employee of the recipient in legible form (it being agreed that
the burden of proving receipt will be on the sender and will not be met by a
transmission report generated by the sender’s facsimile machine);

 

(iv) 
if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered or
its delivery is attempted; or

 

(v) 
if sent by electronic messaging system, on the date that electronic message is
received,

 

unless
the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

 

(b)           Change of Addresses.  Either party may by notice to the other
change the address, telex or facsimile number or electronic messaging system
details at which notices or other communications are to be given to it.

 

13.          Governing Law and
Jurisdiction

 

(a)           Governing Law.  This Agreement
will be governed by and construed in accordance with the law specified in the
Schedule.

 

(b)           Jurisdiction.   With respect to any suit, action or
proceedings relating to this Agreement (“Proceedings”), each party
irrevocably:—

 

(i) 
submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive jurisdiction
of the courts of the State of New York and the United States District Court
located in the Borough of Manhattan in New York City, if this Agreement is
expressed to be governed by the laws of the State of New York; and

 

(ii) 
waives any objection which it may have at any time to the laying of venue of
any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such court does not
have any jurisdiction over such party.

 

Nothing
in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed by English
law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

 

(c)           Service of Process.  Each party irrevocably appoints the Process
Agent (if any) specified opposite its name in the Schedule to receive, for it
and on its behalf, service of process in any Proceedings.  If for any 

 

13

 

reason
any party’s Process Agent is unable to act as such,  such party will promptly notify the other
party and within 30 days appoint a substitute process agent acceptable to the
other party. The parties irrevocably consent to service of process given in the
manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.

 

(d)           Waiver of Immunities.  Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction
of any court, (iii) relief by way of injunction, order for specific
performance or for recovery of property, (iv) attachment of its assets
(whether before or after judgment) and (v) execution or enforcement of any
judgment to which it or its revenues or assets might otherwise be entitled in
any Proceedings in the courts of any jurisdiction and irrevocably agrees, to
the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.

 

14.          Definitions

 

As
used in this Agreement:—

 

“Additional Termination Event” has the meaning
specified in Section 5(b).

 

“Affected Party” has the meaning
specified in Section 5(b).

 

“Affected Transactions” means (a) with
respect to any Termination Event consisting of an Illegality, Tax Event or Tax
Event Upon Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all
Transactions.

 

“Affiliate” means, subject
to the Schedule, in relation to any person, any entity controlled, directly or
indirectly, by the person, any entity that controls, directly or indirectly,
the person or any entity directly or indirectly under common control with the
person. For this purpose, “control” of any entity or person means ownership of
a majority of the voting power of the entity or person.

 

“Applicable Rate” means:—

 

(a)           in respect of obligations payable or
deliverable (or which would have been but for Section 2(a)(iii)) by a
Defaulting Party, the Default Rate;

 

(b)           in respect of an obligation to pay an
amount under Section 6(e) of either party from and after the date
(determined in accordance with Section 6(d)(ii)) on which that amount is
payable, the Default Rate;

 

(c)           in respect of all other obligations
payable or deliverable (or which would have been but for Section 2(a)(iii))
by a Non-defaulting Party, the Non-default Rate; and

 

(d)           in all other cases, the Termination
Rate.

 

“Burdened Party” has the meaning
specified in Section 5(b).

 

“Change in Tax Law” means the
enactment, promulgation, execution or ratification of, or any change in or
amendment to, any law (or in the application or official interpretation of any
law) that occurs on or after the date on which the relevant Transaction is
entered into.

 

“consent” includes a
consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control consent.

 

“Credit Event Upon Merger” has the meaning
specified in Section 5(b).

 

“Credit Support Document” means any
agreement or instrument that is specified as such in this Agreement.

 

“Credit Support Provider” has the meaning
specified in the Schedule.

 

“Default Rate” means a rate
per annum equal to the cost (without proof or evidence of any actual cost) to
the relevant payee (as certified by it) if it were to fund or of funding the
relevant amount plus 1% per annum.

 

14

 

“Defaulting Party” has the meaning
specified in Section 6(a).

 

“Early Termination Date” means the date
determined in accordance with Section 6(a) or 6(b)(iv).

 

“Event of Default” has the meaning
specified in Section 5(a) and, if applicable, in the Schedule.

 

“Illegality” has the meaning
specified in Section 5(b).

 

“Indemnifiable Tax” means any Tax
other than a Tax that would not be imposed in respect of a payment under this
Agreement but for a present or former connection between the jurisdiction of
the government or taxation authority imposing such Tax and the recipient of
such payment or a person related to such recipient (including, without
limitation, a connection arising from such recipient or related person being or
having been a citizen or resident of such jurisdiction, or being or having been
organised, present or engaged in a trade or business in such jurisdiction, or
having or having had a permanent establishment or fixed place of business in
such jurisdiction, but excluding a connection arising solely from such recipient
or related person having executed, delivered, performed its obligations or
received a payment under, or enforced, this Agreement or a Credit Support
Document).

 

“law” includes any treaty, law, rule or
regulation (as modified, in the case of tax matters, by the practice of any
relevant governmental revenue authority) and “lawful” and “unlawful” will be
construed accordingly.

 

“Local Business Day” means, subject
to the Schedule, a day on which commercial banks are open for  business (including dealings in foreign
exchange and foreign currency deposits) (a) in relation to any obligation
under Section 2(a)(i), in the place(s) specified in the relevant
Confirmation or, if not so specified, as otherwise agreed by the parties in
writing or determined pursuant to provisions contained, or incorporated by
reference, in this Agreement, (b) in relation to any other payment, in the
place where the relevant account is located and, if different, in the principal
financial centre, if any, of the currency of such payment, (c) in relation
to any notice or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where
the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2),
in the relevant locations for performance with respect to such Specified
Transaction.

 

“Loss” means, with respect to this
Agreement or one or more Terminated Transactions, as the case may be, and a
party, the Termination Currency Equivalent of an amount that party reasonably
determines in good faith to be its total losses and costs (or gain, in which
case expressed as a negative number) in connection with this Agreement or that
Terminated Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of funding or, at the election of such
party but without duplication, loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related
trading position (or any gain resulting from any of them). Loss includes losses
and costs (or gains) in respect of any payment or delivery required to have
been made (assuming satisfaction of each applicable condition precedent) on or
before the  relevant Early Termination
Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or
(3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal
fees and out-of-pocket expenses referred to under Section 11. A party will
determine its Loss as of the relevant Early Termination Date, or, if that is
not reasonably practicable, as of the earliest date thereafter as is reasonably
practicable. A party may (but need not) determine its Loss by reference to
quotations of relevant rates or prices from one or more leading dealers in the
relevant markets.

 

“Market Quotation” means, with
respect to one or more Terminated Transactions and a party making the
determination, an amount determined on the basis of quotations from Reference
Market-makers. Each quotation will be for an amount, if any, that would be paid
to such party (expressed as a negative number) or by such party (expressed as a
positive number) in consideration of an agreement between such party (taking
into account any existing Credit Support Document with respect to the
obligations of such party) and the quoting Reference Market-maker to enter into
a transaction (the “Replacement Transaction”) that would have the effect of
preserving for such party the economic equivalent of any payment or delivery
(whether the underlying obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions that
would, but for the occurrence of the relevant Early Termination Date, have

 

15

 

been
required after that date. For this purpose, Unpaid Amounts in respect of the
Terminated Transaction or group of Terminated Transactions are to be excluded
but, without limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required (assuming satisfaction of
each applicable condition precedent) after that Early Termination Date is to be
included. The Replacement Transaction would be subject to such documentation as
such party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as
of the same day and time (without regard to different time zones) on or as soon
as reasonably practicable after the relevant Early Termination Date.  The day and time as of which those quotations
are to be obtained will be selected in good faith by the party obliged to make
a determination under Section 6(e), and, if each party is so obliged,
after consultation with the other. If more than three quotations are provided,
the Market Quotation will be the arithmetic mean of the quotations, without
regard to the quotations having the highest and lowest values.  If exactly three such quotations are provided,
the Market Quotation will be the quotation remaining after disregarding the
highest and lowest quotations.  For this
purpose, if more than one quotation has the same highest value or lowest value,
then one of such quotations shall be disregarded.  If fewer than three quotations are provided,
it will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.

 

“Non-default Rate” means a rate
per annum equal to the cost (without proof or evidence of any actual cost) to
the Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.

 

“Non-defaulting Party” has the meaning
specified in Section 6(a).

 

“Office” means a branch or office of
a party, which may be such party’s head or home office.

 

“Potential Event of Default” means any event
which, with the giving of notice or the lapse of time or both, would constitute
an Event of Default.

 

“Reference Market-makers” means four
leading dealers in the relevant market selected by the party determining a
Market Quotation in good faith (a) from among dealers of the highest
credit standing which satisfy all the criteria that such party applies
generally at the time in deciding whether to offer or to make an extension of
credit and (b) to the extent practicable, from among such dealers having
an office in the same city.

 

“Relevant Jurisdiction” means, with
respect to a party, the jurisdictions (a) in which the party is
incorporated, organised, managed and controlled or considered to have its seat,
(b) where an Office through which the party is acting for purposes of this
Agreement is located, (c) in which the party executes this Agreement and (d) in
relation to any payment, from or through which such payment is made.

 

“Scheduled Payment Date” means a date on
which a payment or delivery is to be made under Section 2(a)(i) with
respect to a Transaction.

 

“Set-off” means set-off,
offset, combination of accounts, right of retention or withholding or similar
right or requirement to which the payer of an amount under Section 6 is
entitled or subject (whether arising under this Agreement, another contract,
applicable law or otherwise) that is exercised by, or imposed on, such payer.

 

“Settlement Amount” means, with
respect to a party and any Early Termination Date, the sum of:—

 

(a)           the Termination Currency Equivalent
of the Market Quotations (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions for which a Market Quotation is
determined; and

 

(b)           such party’s Loss (whether positive or
negative and without reference to any Unpaid Amounts) for each Terminated
Transaction or group of Terminated Transactions for which a Market Quotation
cannot be determined or would not (in the reasonable belief of the party making
the determination) produce a commercially reasonable result.

 

“Specified Entity” has the meaning
specified in the Schedule.

 

16

 

“Specified Indebtedness” means, subject
to the Schedule, any obligation (whether present or future, contingent or
otherwise, as principal or surety or otherwise) in respect of borrowed money.

 

“Specified Transaction” means, subject
to the Schedule, (a) any transaction (including an agreement with respect
thereto) now existing or hereafter entered into between one party to this
Agreement (or any Credit Support Provider of such party or any applicable
Specified Entity of such party) and the other party to this Agreement (or any
Credit Support Provider of such other party or any applicable Specified Entity of
such other party) which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of these transactions), (b) any combination of these transactions and (c) any
other transaction identified as a Specified Transaction in this Agreement or
the relevant confirmation.

 

“Stamp Tax” means any
stamp, registration, documentation or similar tax.

 

“Tax” means any present or future
tax, levy, impost, duty, charge, assessment or fee of any nature (including
interest, penalties and additions thereto) that is imposed by any government or
other taxing authority in respect of any payment under this Agreement other
than a stamp, registration, documentation or similar tax.

 

“Tax Event” has the meaning
specified in Section 5(b).

 

“Tax Event Upon Merger” has the meaning
specified in Section 5(b).

 

“Terminated Transactions” means with
respect to any Early Termination Date (a) if resulting from a Termination
Event, all Affected Transactions and (b) if resulting from an Event of
Default, all Transactions (in either case) in effect immediately before the
effectiveness of the notice designating that Early Termination Date (or, if “Automatic
Early Termination” applies, immediately before that Early Termination Date).

 

“Termination Currency” has the meaning
specified in the Schedule.

 

“Termination Currency Equivalent” means, in
respect of any amount denominated in the Termination Currency, such Termination
Currency amount and, in respect of any amount denominated in a currency other
than the Termination Currency (the “Other Currency”), the amount in the
Termination Currency determined by the party making the relevant determination
as being required to purchase such amount of such Other Currency as at the
relevant Early Termination Date, or, if the relevant Market Quotation or Loss
(as the case may be), is determined as of a later date, that later date, with
the Termination Currency at the rate equal to the spot exchange rate of the
foreign exchange agent (selected as provided below) for the purchase of such
Other Currency with the Termination Currency at or about 11:00 a.m. (in
the city in which such foreign exchange agent is located) on such date as would
be customary for the determination of such a rate for the purchase of such
Other Currency for value on the relevant Early Termination Date or that later
date.  The foreign exchange agent will,
if only one party is obliged to make a determination under Section 6(e),
be selected in good faith by that party and otherwise will be agreed by the
parties.

 

“Termination Event” means an
Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be
applicable, a Credit Event Upon Merger or an Additional Termination Event.

 

“Termination Rate” means a rate
per annum equal to the arithmetic mean of the cost (without proof or evidence
of any actual cost) to each party (as certified by such party) if it were to
fund or of funding such amounts.

 

“Unpaid Amounts” owing to any
party means, with respect to an Early Termination Date, the aggregate of (a) in
respect of all Terminated Transactions, the amounts that became payable (or
that would have become payable but for Section 2(a)(iii)) to such party
under Section 2(a)(i) on or prior to such Early Termination Date and
which remain unpaid as at such Early Termination Date and (b) in respect
of each Terminated Transaction, for each obligation under Section 2(a)(i) which
was (or would have been but for Section 2(a)(iii)) required to be settled
by delivery to such party on or prior to such Early Termination Date and which
has not been so settled as at such Early Termination Date, an amount equal to
the fair market 

 

17

 

value
of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding) such
Early Termination Date, at the Applicable Rate. 
Such amounts of interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.  The fair market value of any obligation
referred to in clause (b) above shall be reasonably determined by the
party obliged to make the determination under Section 6(e) or, if
each party is so obliged, it shall be the average of the Termination Currency
Equivalents of the fair market values reasonably determined by both parties.

 

IN
WITNESS WHEREOF the parties have executed this document on the respective dates
specified below with effect from the date specified on the first page of
this document.

 

	
  CITIBANK,
  N.A.

  	
   

  	
  HARLEY-DAVIDSON

  MOTORCYCLE TRUST 2008-1

  
	
  (Name of Party)

  	
   

  	
  (Name of Party)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  Wilmington Trust Company, not in its Individual capacity but soley as Owner
  Trustee on behalf of Party B

  
	
  By:

  	
  /s/
  Linda Cook

  	
   

  	
  By:

  	
  /s/
  Erik E. Overcash

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Linda
  Cook

  	
   

  	
  Name:

  	
  Erik
  E. Overcash

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice
  President

  	
   

  	
  Title:

  	
  Financial
  Services Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
							

 

 

 

18

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