EXHIBIT 10.1
(MULTICURRENCY--CROSS BORDER)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of
[SWAP COUNTERPARTY] Ford Credit Auto Owner Trust 200_
("Party A") and ("Party B") 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.
(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
2
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 (1) 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 (11) a
Change in Tax Law.
(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
3
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 organized and validly existing under the laws of
the jurisdiction of its organization 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 authorize 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, reorganization,
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)).
(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
4
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 AUTHORIZATIONS. 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.
5
(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 I 1, 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, organized, 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
6
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);
(vi) 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 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
7
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
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
8
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 lndemnifiable 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 Merge 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.
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)(1), (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
9
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)(1) 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
the 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
10
Party may, by not more than 20 days notice to the other
party and-provided that the relevant Termination Event is then
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:
11
(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 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 (1) 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 (11) 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
12
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.
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
the 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
13
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.
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.
14
(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 Organization 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
15
reason of the enforcement and protection of its rights under this Agreement or
any Credit Support Document 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
16
(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 Xxx 0000 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 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 TRANSITIONS" 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:
17
(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, authorization, 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.
"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 organized, 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
18
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 center, 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 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,
19
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 bead 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, organized, 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.
20
"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.
"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.
21
"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 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.
22
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.
[SWAP COUNTERPARTY] Ford Credit Auto Owner Trust 200_
- --------------------- ---------------------------------
(Name of Party) (Name of Party)
By: By:
- --------------------- ---------------------------------
Name: Name:
Title: Title:
Date: Date:
23
SCHEDULE
TO THE
ISDA MASTER AGREEMENT
DATED AS OF __________, 200_
BETWEEN
----------------------
("PARTY A")
AND
FORD CREDIT AUTO OWNER TRUST 200_-_
("PARTY B")
PART 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v), Not applicable.
Section 5(a)(vi), Not applicable.
Section 5(a)(vii), Not applicable.
Section 5(b)(iv), Not applicable.
in relation to Party B for the purpose of:
Section 5(a)(v), Not applicable.
Section 5(a)(vi), Not applicable.
Section 5(a)(vii), Not applicable.
Section 5(b)(iv), Not applicable.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14
of this Agreement unless another meaning is specified here: No change
from Section 14.
(c) The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii), the
"MISREPRESENTATION" provisions of Section 5(a)(iv), the "DEFAULT UNDER
SPECIFIED TRANSACTION" provisions of Section 5(a)(v) and the "TAX
EVENT" and "TAX EVENT UPON MERGER" provisions of Sections 5(b)(ii) and
5(b)(iii) and the "CREDIT EVENT UPON MERGER" provisions of Section
5(b)(iv) will not apply to Party A or to Party B.
(d) The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will apply
to Party A and will not apply to Party B.
(e) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
(f) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not
apply to Party A or Party B.
(g) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:
S-1
(i) Market Quotation will apply unless Party B is the
Non-defaulting Party or the party which is not the Affected Party, as
the case may be, and Party B has contracted to enter into a replacement
Transaction on or prior to the Early Termination Date, in which event
Loss will apply.
(ii) The Second Method will apply.
(h) "TERMINATION CURRENCY" means United States Dollars.
(i) ADDITIONAL TERMINATION EVENT. Each of the following shall constitute an
Additional Termination Event pursuant to Section 5(b)(v):
(i) any acceleration of the Notes (provided such acceleration has
not been rescinded and annulled pursuant to Section 5.2(b) of
the Indenture) and liquidation of the Indenture Trust Estate
with Party B the sole Affected Party;
(ii) failure of Party A to comply with the requirements of
paragraph (a) of Part 5 hereof, with Party A as the sole
Affected Party; provided, that the amount of any payment by
Party B shall be limited to the amount, if any, received by
Party B from a replacement counterparty; or
(iii) any amendment or supplement to the Indenture or to any of the
Receivables Transfer and Servicing Agreements which may
adversely affect any of Party A's rights or obligations under
this Agreement or any Transaction that is made without the
consent of Party A, which consent shall not be unreasonably
withheld, provided that Party A's consent will be deemed to
have been given if Party A does not object in writing within
10 Business Days of receipt of a written request for such
consent, with Party B as the sole Affected Party.
PART 2. TAX REPRESENTATIONS.
(a) PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, Party A will make the following representation and Party B
will make the following representation: It is not required by any
applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on (i) the
accuracy of any representation made by the other party pursuant to
Section 3(f) of this Agreement, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii)
the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement, provided that it shall not be a breach
of this representation where reliance is placed on clause (ii) and the
other party does not deliver a form or document under Section 4(a)(iii)
by reason of material prejudice to its legal or commercial position.
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement:
S-2
(i) Party A will make the representations specified below:
It is a national banking association organized and existing under the
laws of the United States of America.
(ii) Party B will make the representations specified below:
Each payment received or to be received by it in connection with this
Agreement will be effectively connected with its conduct of a trade or
business in the United States.
PART 3. DOCUMENTS TO BE DELIVERED.
(a) For the purpose of Section 4(a)(i) and (ii) of this Agreement, each
party agrees to deliver the following documents as applicable:
(i) Tax forms, documents or certificates to be delivered are: Form
W-9 to be delivered by Party A, and Form W-9 to be delivered
by Party B.
(b) Other documents to be delivered are:
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE SECTION 3(d)
DELIVER DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
Party A and Party B Annual audited financial Promptly after request, Applicable
statements for such party (or in after such documents become
the case of Party A, its publicly available.
corporate parent) prepared in
accordance with generally
accepted accounting principles
in the country in which the
party is organized
Party A and Party B Certificate or other documents At or promptly following the Applicable
evidencing the authority of the execution of this Agreement,
party entering into this and, if a Confirmation so
Agreement or a Confirmation, as requires it, on or before
the case may be, including the date set forth therein.
copies of any board resolutions
and appropriate certificates of
incumbency as to the officers
executing such documents.
S-3
Party A and Party B Opinions of counsel in form and At or promptly following the Not Applicable
substance acceptable to the execution of this Agreement,
other party. and, if a Confirmation so
requires it, on or before
the date set forth therein.
Party B Monthly investor reports To be made available on Ford Not Applicable
Credit's website.
PART 4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES:
For the purpose of Section 12(a) of this Agreement, any notice
relating to a particular Transaction shall be delivered to the
address or fax or telex number specified in the Confirmation of
such Transaction. Any notice delivered for purposes of Section 5
and 6 of this Agreement shall be delivered to the following
address:
(1) TO PARTY A:
----------------------------
----------------------------
----------------------------
Attn: ____________________________
(2) TO PARTY B:
----------------------------,
as Owner Trustee for
Ford Credit Auto Owner Trust 200_-_
-----------------------------------
-----------------------------------
Attn: ____________________________
Fax: ____________________________
with a copy to:
----------------------------,
as Indenture Trustee for
Ford Credit Auto Owner Trust 200_-_
-----------------------------------
-----------------------------------
Attention: _______________________
Tel.: ____________________________
S-4
Fax: ____________________________
and with a copy to
Ford Motor Credit Company
c/o Ford Motor Company - WHQ
----------------------------
----------------------------
----------------------------
Office of the General Counsel
Attention of the Secretary
Fax: ____________________________
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10 of this Agreement:
(i) Party A is not a Multibranch Party.
(ii) Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party B, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) CREDIT SUPPORT DOCUMENT.
Party A: Not Applicable
Party B: Not Applicable
(g) CREDIT SUPPORT PROVIDER.
Party A: Not Applicable
Party B: Not Applicable
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
its choice of law doctrine).
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this
Agreement will apply to all Transactions under this Agreement.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
S-5
(k) APPROVAL OF AMENDMENTS OR ASSIGNMENT. No amendments to this Agreement
shall be effected, nor may the rights and obligations of Party A be
transferred or assigned, without the prior written confirmation of each
Rating Agency that such amendment, transfer or assignment will not
cause such Rating Agency to reduce or withdraw its then current rating
on any of the Notes.
(l) WAIVER OF JURY TRIAL. Each party waives, to the fullest extent
permitted by applicable law, its right to have a jury trial in respect
to any proceedings related to this Agreement. Each party (i) certifies
that no representative, agent or attorney of the other party has
represented, expressly or otherwise, that such other party would not,
in the event of such a suit, action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have
been induced to enter into this Agreement, by, among other things, the
mutual waivers and certifications in this Section.
PART 5. OTHER PROVISIONS.
(a) COUNTERPARTY RATING WITHDRAWAL OR REDUCTION. In the event that (w)
Party A's short-term unsecured and unsubordinated debt rating (or bank
deposit rating) is withdrawn or reduced below "A-1" by S&P, (x) Party
A's long- or short-term unsecured and unsubordinated debt rating is
withdrawn or reduced below "Aa3"/"P-1" by Xxxxx'x, (y) Party A's
long-term unsecured and unsubordinated debt rating is withdrawn or
reduced below "AA-" by Fitch (such rating thresholds, "Approved Rating
Thresholds") or (z) if any event set forth in clause (w), (x) or (y)
occurs and is continuing, any Rating Agency gives notice to Party B,
the Indenture Trustee or the Administrator that the credit support, if
any, with respect to Party A is no longer deemed adequate to maintain
the then-current rating on the Class A Notes, within 30 days of such
rating withdrawal or downgrade or notification (unless, within 30 days
after such withdrawal or downgrade each such Rating Agency has
reconfirmed the rating of each Class of Notes which was in effect
immediately prior to such withdrawal or downgrade or notification),
Party A shall (i) assign each Transaction to another counterparty with
the Approved Rating Thresholds and approved by Party B (which approval
shall not be unreasonably withheld) on terms substantially similar to
this Schedule and the related Confirmation, (ii) obtain a guaranty of,
or a contingent agreement of, another person with Approved Rating
Thresholds to honor Party A's obligations under this Agreement,
provided that such other person is approved by Party B (which approval
not to be unreasonably withheld), (iii) post xxxx-to-market collateral,
pursuant to a collateral support agreement acceptable to Party B, which
will be sufficient to restore any downgrade or withdrawal in the
ratings of each Class of Notes and Class D Certificates issued by Party
B attributable to Party A's failure to comply with the Approved Rating
Thresholds, or (iv) establish any other arrangement satisfactory to
Party B and to the applicable Rating Agency, in each case, sufficient
to satisfy the Rating Agency Condition. All costs and expenses in
connection with effecting any arrangements pursuant to clauses (i),
(ii), (iii) or (iv) shall be for the account of Party A.
(b) NON-RELIANCE. In connection with the negotiation of, the entering into,
and the confirming of the execution of this Master Agreement, any
Credit Support Document to which it is a party, each Transaction and
any other documentation relating to this Master Agreement to which it
is a party or that is required by this Master Agreement to deliver,
each of Party A and Party B acknowledge that:
(i) it is not relying (for the purposes of making any investment
decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the other party
to this
S-6
Master Agreement, such Credit Support Document, each
Transaction or such other documentation other than the
representations expressly set forth in this Master Agreement,
such Credit Support Document and in any Confirmation;
(ii) it has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisors to the
extent it has deemed necessary, and it has made its own
investment, hedging and trading decisions (including decisions
regarding the suitability of any Transaction pursuant to this
Master Agreement) based upon its own judgment and upon any
advice from such advisors as it has deemed necessary and not
upon any view expressed by the other party to this Master
Agreement, such Credit Support Document, each Transaction or
such other documentation;
(iii) it has a full understanding of all the terms, conditions and
risks (economic and otherwise) of the Master Agreement, such
Credit Support Document, each Transaction and such other
documentation and is capable of assuming and willing to, and
will, assume (financially and otherwise) those risks;
(iv) it is an "eligible contract participant" as defined in Section
1a(12) of the Commodity Exchange Act (7 U.S.C. 1a), as amended
by the Commodity Futures Modernization Act of 2000;
(v) it is entering into this Master Agreement, such Credit Support
Document, each Transaction and such other documentation for
the purposes of managing its borrowings or investments,
hedging its underlying assets or liabilities or in connection
with a line of business;
(vi) it is entering into this Master Agreement, such Credit Support
Document, each Transaction and such other documentation as
principal, and not as agent or in any other capacity,
fiduciary or otherwise; and
(vii) the other party to this Master Agreement, such Credit Support
Document, each Transaction and such other documentation (a) is
not acting as a fiduciary or financial, investment or
commodity trading advisor for it; (b) has not given to it
(directly or indirectly through any other person) any
assurance, guaranty or representation whatsoever as to the
merits (either legal, regulatory, tax, financial, accounting
or otherwise) of this Master Agreement, such Credit Support
Document, each Transaction or such other documentation; and
(c) has not committed to unwind the Transactions.
The representations and agreements in Part 5(b) above of this Schedule
shall be deemed representations and agreements for all purposes of this
Master Agreement, including without limitation Sections 3, 4, 5(a)(ii)
and 5(a)(iv) hereof.
(c) DEDUCTION OR WITHHOLDING FOR TAX. Party B shall not be required to pay
to Party A any amount relating to Indemnifiable Taxes pursuant to
Section 2(d)(i)(4) of the Agreement. However, if in the absence of this
paragraph, Party B would otherwise be required to pay such amounts,
Party A shall have the right, but not the obligation, to transfer its
rights and obligations under this Agreement to another of its Offices
or Affiliates or third party such that no Indemnifiable Tax would be
imposed, subject to the notice and consent provisions set forth in
Section 6(b)(ii) of the Agreement.
S-7
(d) NO PETITION. Party A hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of (i) all
of the Notes and Class D Certificates and (ii) any other securities
issued by a trust as to which FCAR Two LLC is the depositor and the
expiration of all applicable preference periods under the United States
Bankruptcy Code or other applicable law, it will not institute against,
or join with any other Person in instituting against, Party B or FCAR
Two LLC any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under United States
federal or state bankruptcy or similar law in connection with any
obligations of this Agreement. The provisions of this paragraph shall
survive the termination of this Agreement.
(e) LIMITED RECOURSE. Notwithstanding anything to the contrary contained in
this Agreement, the obligations of Party B under this Agreement and any
Transaction hereunder are solely the obligations of Party B and shall
be payable solely to the extent of funds received by and available to
Party B in accordance with the priority of payment provisions of the
Indenture and the Sale and Servicing Agreement and on the Distribution
Dates specified therein. Party A acknowledges that Party B has pledged
its assets constituting the Indenture Trust Estate to the Indenture
Trustee. Upon exhaustion of the assets of Party B and proceeds thereof
in accordance with the Indenture and the Sale and Servicing Agreement,
Party A shall not be entitled to take any further steps against Party B
to recover any sums due but still unpaid hereunder or thereunder, all
claims in respect of which shall be extinguished. No recourse shall be
had for the payment of any amount owing in respect of any obligation
of, or claim against, Party B arising out of or based upon this
Agreement or any Transaction hereunder against any holder of a
beneficial interest, employee, officer or Affiliate thereof and, except
as specifically provided herein, no recourse shall be had for the
payment of any amount owing in respect of any obligation of, or claim
against, Party B based on or arising out of or based upon this
Agreement against the Administrator (as defined in the Administration
Agreement), FCAR Two LLC or any stockholder, holder of a beneficial
interest, employee, officer, director, incorporator or Affiliate
thereof; provided, however, that the foregoing shall not relieve any
such person or entity from any liability they might otherwise have as a
result of gross negligence or fraudulent actions or omissions taken by
them.
(f) PARTY B PLEDGE. Notwithstanding Section 7 of this Agreement to the
contrary, Party A acknowledges that Party B will pledge its rights
under this Agreement to the Indenture Trustee for the benefit of the
holders of the Notes pursuant to the Indenture and agrees to such
pledge. The Indenture Trustee shall not be deemed to be a party to this
Agreement, provided, however, that the Indenture Trustee, acting on
behalf of the holders of the Notes, shall have the right to enforce
this Agreement against Party A. Party A shall be entitled to rely on
any notice or communication from the Indenture Trustee to that effect.
Party A acknowledges that Party B will pledge substantially all its
assets to the Indenture Trustee for the benefit of the Noteholders and
Party A and that all payments hereunder, including payments on early
termination, will be made in accordance with the priority of payment
provisions of the Indenture and the Sale and Servicing Agreement and on
the Distribution Dates specified therein.
(g) CONFIRMATION OF TRANSACTIONS. Each Transaction to be effectuated
pursuant to this Agreement shall be evidenced by a written confirmation
executed by each of Party A and Party B.
(h) RECORDING OF CONVERSATIONS. Each party (i) consents to the recording of
the telephone conversations of the trading and marketing personnel of
the parties in connection with this Agreement and
S-8
any potential or actual Transaction and (ii) agrees to obtain any
necessary consent of, and to give notice of such recording to, its
personnel.
(i) CONSENT BY PARTY A TO AMENDMENTS TO CERTAIN DOCUMENTS. Before any
amendment is made to the Indenture or any of the Receivables Transfer
and Servicing Agreements which may adversely affect any of Party A's
rights or obligations under this Agreement or any Transaction, or
modify the obligations of, or impair the ability of Party B to fully
perform any of Party B's obligations under this Agreement or any
Transaction, Party B shall provide Party A with a copy of the proposed
amendment or supplement and shall obtain the consent of Party A thereto
prior to its adoption, which consent shall not be unreasonably
withheld, provided that Party A's consent will be deemed to have been
given if Party A does not object in writing within 10 Business Days of
receipt of a written request for such consent.
(j) DEFINITIONS. Unless otherwise specified in a Confirmation, this
Agreement and the relevant Transaction between the parties are subject
to the 2000 ISDA Definitions (the "Definitions"), as published by the
International Swaps and Derivatives Association, Inc., and will be
governed in all relevant respects by the provisions set forth in the
Definitions, without regard to any amendment to the Definitions
subsequent to the date hereof. The provisions of the Definitions are
incorporated by reference in and shall be deemed a part of this
Agreement, except that references in the Definitions to a "Swap
Transaction" shall be deemed references to a "Transaction" for purposes
of this Agreement. In the event of any inconsistency between the
provisions of this Agreement and the Definitions, this Agreement will
prevail. In the event of any inconsistency between the provision of any
Confirmation and this Agreement or the Definitions, such Confirmation
will prevail for the purpose of the relevant Transaction.
(k) SET-OFF. Nothwithstanding any provision of this Agreement or any other
existing or future agreements, each of Party A and Party B irrevocably
waives as to itself any and all contractual rights it may have to set
off, net, recoup or otherwise withhold or suspend or condition its
payment or performance of any obligation to the other party hereto
arising outside of this Agreement (which Agreement includes without
limitation, the Master Agreement to which this Schedule is attached,
this Schedule and the Confirmations attached hereto).
(l) ADDITIONAL DEFINITIONS.
"ADMINISTRATION AGREEMENT" shall mean the administration
agreement (including Appendix A thereto) dated as of ______________,
200_, as amended, supplemented or otherwise modified and in effect, by
and among Party B, Ford Motor Credit Company and ___________.
"BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions or trust companies in New
York, New York or the State of Delaware are authorized or obligated by
law, regulation or executive order to remain closed.
"CLASS A NOTES" means the Class A Notes issued by Party B
pursuant to the Indenture.
"CLASS B NOTES" means the Class B Notes issued by Party B
pursuant to the Indenture.
"CLASS C NOTES" means the Class C Notes issued by Party B
pursuant to the Trust Agreement.
S-9
"CLASS D CERTIFICATES" means the Class D Certificates issued
by Party B pursuant to the Trust Agreement.
"CLOSING DATE" shall mean _______, 200_.
"DISTRIBUTION DATE" shall mean the _____________ day of each
calendar month or, if such day is not a Business Day, the next
succeeding Business Day, commencing _____, 200_
"FCAR TWO LLC" shall mean Ford Credit Auto Receivables Two
LLC.
"FITCH" means Fitch, Inc.
"INDENTURE" shall mean the indenture dated as of _______, 200_
(including Appendix A thereto), as amended, supplemented or otherwise
modified and in effect, between Party B and _____________, as Indenture
Trustee.
"INDENTURE TRUST ESTATE" shall mean all money, instruments,
rights and other property that are subject or intended to be subject to
the lien and security interest of the Indenture for the benefit of the
Noteholders and the Swap Counterparties (including, without limitation,
all property and interests granted to the Indenture Trustee), including
all proceeds thereof.
"INDENTURE TRUSTEE" shall mean _____________ or any successor
or replacement thereto pursuant to the Indenture.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc.
"NOTES" shall mean the Class A Notes, the Class B Notes, and
the Class C Notes issued by Party B pursuant to the Indenture.
"OWNER TRUSTEE" shall mean ________________, as owner trustee
under the Trust Agreement.
"PURCHASE AGREEMENT" shall mean the purchase agreement
(including Appendix A thereto) dated as of _______, 200_, as from time
to time amended, supplemented or otherwise modified and in effect,
between Ford Motor Credit Company and FCAR Two LLC.
"RATING AGENCIES" shall mean Xxxxx'x, S&P and Fitch or any
substitute rating agency that FCAR Two LLC requests to rate the Notes,
Class C Notes or Class D Certificates.
"RATING AGENCY CONDITION" shall mean, with respect to any
action, that each Rating Agency shall have been given prior notice
thereof and that each of the Rating Agencies shall have notified FCAR
Two LLC, the Servicer, the Owner Trustee and the Indenture Trustee in
writing that such action will not result in a reduction or withdrawal
of the then current rating of the Notes or the Class D Certificates.
"RECEIVABLES TRANSFER AND SERVICING AGREEMENTS" shall mean
collectively the Purchase Agreement, the Sale and Servicing Agreement,
the Trust Agreement and the Administration Agreement.
S-10
"S&P" shall mean Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
"SALE AND SERVICING AGREEMENT" shall mean the sale and
servicing agreement (including Appendix A thereto) dated as of _______,
200_, as amended, supplemented or otherwise modified and in effect, by
and among Party B, FCAR Two LLC, as seller, and Ford Motor Credit
Company, as servicer.
"SERVICER" shall mean Ford Motor Credit Company, as servicer
under the Sale and Servicing Agreement.
"SWAP COUNTERPARTIES" means Bank of America, N.A. and any
other institution becoming a successor or replacement under this
Agreement.
"TRUST AGREEMENT" shall mean the Amended and Restated Trust
Agreement (including Appendix A thereto), dated as of _______, 200_, as
amended, supplemented or otherwise modified and in effect, by and among
FCAR Two LLC, _________________, as Owner Trustee.
S-11
IN WITNESS WHEREOF, the parties have executed this Schedule to the
Master Agreement on the respective dates specified below with effect from the
date specified on the first page of this document.
FORD CREDIT AUTO OWNER TRUST
200_-_ [SWAP COUNTERPARTY]
By: ________________________________,
not in its individual capacity
but solely as Owner Trustee
By: By:
-------------------------- ------------------------------
Name: Name:
Title: Title:
Date: _______, 200_ Date: _______, 200_
____________ , 200_
To: [SWAP COUNTERPARTY]
Contact: ____________________________
Fax: _________________
From: FORD CREDIT AUTO OWNER TRUST 200_-_
Contact: ____________________________
Tel: _________________
Fax: _________________
Re: Interest Rate Swap Reference No.
-----------------------------------------------
Ladies and Gentlemen:
The purpose of this letter agreement is to confirm the terms
and conditions of the Swap Transaction entered into between [SWAP COUNTERPARTY]
("Party A") and Ford Credit Auto Owner Trust 200_-_ ("Party B") on the Trade
Date listed below (the "Transaction"). This letter constitutes a "Confirmation"
as referred to in the ISDA Agreement specified below.
The definitions and provisions contained in the 2000 ISDA
Definitions (as published by the International Swaps and Derivatives
Association, Inc.) are incorporated into this Confirmation. For these purposes,
all references in those Definitions to a "Swap Transaction" shall be deemed to
apply to the Transaction referred to herein. In the event of any inconsistency
between those Definitions and this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is
subject to, the Master Agreement dated as of ___________, 200_, as amended and
supplemented from time to time (the "Agreement") between you and us. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below. Other capitalized terms used herein and not otherwise
defined shall have the meanings given them in the Indenture referred to in the
Agreement. In the event of any inconsistency between those terms and this
Confirmation, this Confirmation will govern.
2. The terms of the particular Transaction to which this
Confirmation relates are as follows:
Party A: [SWAP COUNTERPARTY]
Party B: Ford Credit Auto Owner Trust 2002_-_.
Trade Date: _________, 200_.
Effective Date: _________, 200_.
Notional Amount: The Notional Amount initially shall equal US$________ and shall decrease by an
amount equal to the amount of the reduction in the aggregate outstanding
principal balance of the Class ___ Notes on each Distribution Date. Decreases
in the Notional Amount with respect to the calculation of Fixed Amounts and
Floating Amounts shall take effect as of the respective Period End Date
occurring in the month of the Distribution Date. Party B shall determine the
Notional Amount and shall inform Party A of such determination by the twelfth
day of each calendar month using the aggregate outstanding principal balance
for the Notes prior to giving effect to any payments of principal of Notes on
the following Distribution Date, as shown in the Servicer's monthly investor
report relating to such Distribution Date.
Termination Date: The earlier of ______, 200_ and the date the aggregate outstanding principal
balance of the Class ___ Notes has been reduced to zero.
Fixed Amounts
Fixed Rate Payer: Party B.
Fixed Rate Payer
Payment Date: The __ day of each calendar month, subject to adjustment in accordance with
the Following Business Day Convention.
Period End Date: The __ day of each calendar month, with No Adjustment. (This means
that each Calculation Period for the Fixed Amount shall have 30 days, except
for the Initial Calculation Period, which shall commence on _____, 200_ and
end on _________, 200_.)
Fixed Rate: ___%
Fixed Rate Day
Count Fraction: 30/360.
Floating Amounts
Floating Rate Payer: Party A.
2
Floating Rate Payer
Payment Dates: The ___ day of each calendar month, subject to adjustment in accordance with
the Following Business Day Convention.
Floating Rate for
Initial Calculation
Period: ____% (excluding spread)
Floating Rate Option: ________________.
Designated Maturity: ____ month.
Spread: ____%
Floating Rate Day
Count Fraction: Actual/360.
Reset Dates: The first day of each Floating Rate Payer Calculation Period.
Business Days: New York and Delaware.
3. Account Details
Payments to Party A: _______________________
_______________________
Acct # ________________
Payments to Party B: ______________________, in favor of
Ford Credit Auto Owner Trust 200_-_
_______________________
_______________________
Acct # _______________
3
Please confirm that the foregoing correctly sets forth the
terms of our agreement by executing this Confirmation and returning it to us.
Best Regards,
FORD CREDIT AUTO OWNER TRUST 200_-_
By: _______________________________,
not in its individual capacity
but solely as Owner Trustee
By:________________________________
Name:
Title:
[SWAP COUNTERPARTY]
By:______________________
Name:
Title:
