MASTER AGREEMENT
Exhibit 99.1
(Multicurrency—Cross Border)
International Swap Dealers Association, Inc.
dated as of May 30, 2007
XXXXXXX XXXXX CAPITAL MARKETS, L.P.
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and | TRIAD AUTOMOBILE RECEIVABLES TRUST 2007-A |
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 purposes 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 that such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy), or other
documentation reasonably acceptable to Y, evidencing such payment to such authorities;
and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to
which Y is otherwise entitled under this Agreement, such additional amount as is
necessary to ensure that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount Y
would have received had no such deduction or withholding been required. However, X
will not be required to pay any additional amount to Y to the extent that it would not
be required to be paid but for:—
(A) the failure by Y to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section 3(f) to be
accurate and true unless such failure would not have occurred but for (I) any
action taken by a taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such
action is taken or brought with respect to a party to this Agreement) or (II) a
Change in Tax Law.
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(ii) Liability. If: —
(1) X is required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, to make any deduction or withholding in respect of
which X would not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against X,
then, except to the extent Y has satisfied or then satisfies the liability resulting from
such Tax, Y will promptly pay to X the amount of such liability (including any related
liability for interest, but including any related liability for penalties only if Y has
failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party that defaults in the performance
of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be
required to pay interest (before as well as after judgment) on the overdue amount to the other
party on demand in the same currency as such overdue amount, for the period from (and including)
the original due date for payment to (but excluding) the date of actual payment, at the Default
Rate. Such interest will be calculated on the basis of daily compounding and the actual number of
days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in
respect of the relevant Transaction, a party defaults in the performance of any obligation required
to be settled by delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed to be repeated by
each party on each date on which a Transaction is entered into and, in the case of the
representations in Section 3(f), at all times until the termination of this Agreement) that:—
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of the jurisdiction
of its organisation or incorporation and, if relevant under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other documentation
relating to this Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by this Agreement to deliver
and to perform its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such
execution, delivery and performance do not violate or conflict with any law applicable to
it, any provision of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;
(iv) Consents. All
governmental and other consents that are required to have been obtained by it with respect
to this Agreement or any Credit Support Document to which it is a party have been obtained
and are in full force and effect and all conditions of any such consents have been complied
with; and
(v) Obligations Binding. Its obligations under this Agreement and any Credit
Support Document to which it is a party constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to applicable
bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors’
rights generally and subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in equity or at
law)).
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(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its
knowledge, Termination Event with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its obligations under this
Agreement or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any
of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to affect the legality,
validity or enforceability against it of this Agreement or any Credit Support Document to which it
is a party or its ability to perform its obligations under this Agreement or such Credit Support
Document.
(d) Accuracy of Specified Information. All applicable information that is furnished in writing by
or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the
Schedule is, as of the date of the information, true, accurate and complete in every material
respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for
the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it
for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have any obligation under
this Agreement or under any Credit Support Document to which it is a party:—
(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under
subparagraph (iii) below, to such government or taxing authority as the other party reasonably
directs:—
(i) any forms, documents or certificates relating to taxation specified in the Schedule
or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that may be required
or reasonably requested in writing in order to allow such other party or its Credit Support
Provider to make a payment under this Agreement or any applicable Credit Support Document
without any deduction or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or submission of such
form or document would not materially prejudice the legal or commercial position of the
party in receipt of such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to be executed and to
be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if none is specified,
as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and
effect all consents of any governmental or other authority that are required to be obtained by it
with respect to this Agreement or any Credit Support Document to which it is a party and will use
all reasonable efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all applicable laws and orders
to which it may be subject if failure so to comply would materially impair its ability to perform
its obligations under this Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made by it under Section
3(f) to be accurate and true promptly upon learning of such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon
it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is
incorporated,
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organised, managed and controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”)
and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or
in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any
Credit Support Provider of such party or any Specified Entity of such party of any of the following
events constitutes an event of default (an “Event of Default”) with respect to such party:—
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under
this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such
failure is not remedied on or before the third Local Business Day after notice of such
failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or
obligation (other than an obligation to make any payment under this Agreement or delivery
under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by
the party in accordance with this Agreement if such failure is not remedied on or before
the thirtieth day after notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such party to comply with
or perform any agreement or obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or the failing or
ceasing of such Credit Support Document to be in full force and effect for the purpose
of this Agreement (in either case other than in accordance with its terms) prior to
the satisfaction of all obligations of such party under each Transaction to which such
Credit Support Document relates without the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or
rejects, in whole or in part, or challenges the validity of, such Credit Support
Document;
(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or
(f)) made or repeated or deemed to have been made or repeated by the party or any Credit
Support Provider of such party in this Agreement or any Credit Support Document proves to
have been incorrect or misleading in any material respect when made or repeated or deemed
to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party (1) defaults under a Specified
Transaction and, after giving effect to any applicable notice requirement or grace period,
there occurs a liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving effect to any
applicable notice requirement or grace period, in making any payment or delivery due on the
last payment, delivery or exchange date of, or any payment on early termination of, a
Specified Transaction (or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims,
repudiates or rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act on its behalf);
(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
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described) in respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or instruments
relating to Specified Indebtedness of any of them (individually or collectively) in an
aggregate amount of not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or instruments,
before it would otherwise have been due and payable or (2) a default by such party, such
Credit Support Provider or such Specified Entity (individually or collectively) in making
one or more payments on the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after giving effect to
any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable
Specified Entity of such party: —
(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2)
becomes insolvent or is unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors; (4)
institutes or has instituted against it a proceeding seeking a judgment of insolvency
or bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors’ rights, or a petition is presented for its winding-up
or liquidation, and, in the case of any such proceeding or petition instituted or
presented against it, such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or the making of an order
for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or substantially all
its assets and such secured party maintains possession, or any such process is not
dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to it which, under the applicable
laws of any jurisdiction, has an analogous effect to any of the events specified in
clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the foregoing acts;
or
(viii) Merger Without Assumption. The party or any Credit Support Provider of such party
consolidates or amalgamates with, or merges with or into, or transfers all or substantially
all its assets to, another entity and, at the time of such consolidation, amalgamation,
merger or transfer: —
(1) the resulting, surviving or transferee entity fails to assume all the obligations
of such party or such Credit Support Provider under this Agreement or any Credit
Support Document to which it or its predecessor was a party by operation of law or
pursuant to an agreement reasonably satisfactory to the other party to this Agreement;
or
(2) the benefits of any Credit Support Document fail to extend (without the consent of
the other party) to the performance by such resulting, surviving or transferee entity
of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any
Credit Support Provider of such party or any Specified Entity of such party of any event specified
below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is
specified in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if
the event is specified pursuant to (v) below:—
(i) Illegality. Due to the adoption of, or any change in, any applicable law after the date
on which a Transaction is entered into, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority with competent jurisdiction of
any applicable law after such date, it becomes unlawful (other than as a result of a breach
by the party of Section 4(b)) for such party (which will be the Affected Party): —
(1) to perform any absolute or contingent obligation to make a payment or delivery or
to receive a payment or delivery in respect of such Transaction or to comply with any
other material provision of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to perform, any
contingent or other obligation which the party (or such Credit Support Provider) has
under any Credit Support Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with respect to a party to this
Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding Scheduled Payment
Date (1) be required to pay to the other party an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such
Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding
Scheduled Payment Date will either (1) be required to pay an additional amount in respect of
an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which the other party is
not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or
(B)), in either case as a result of a party consolidating or amalgamating with, or merging
with or into, or transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event described in
Section 5(a)(viii);
(iv) Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as
applying to the party, such party (“X”), any Credit Support Provider of X or any applicable
Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action does not constitute
an event described in Section 5(a)(viii) but the creditworthiness of the resulting,
surviving or transferee entity is materially weaker than that of X, such Credit Support
Provider or such Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate, will be the Affected
Party); or
(v) Additional Termination Event. If any “Additional Termination Event” is specified in the
Schedule or any Confirmation as applying, the occurrence of such event (and, in such event,
the Affected Party or Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute
or give rise to an Event of Default also constitutes an Illegality, it will be treated as an
Illegality and will not constitute an Event of Default.
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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 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 Party may, by not more than 20 days notice to the other party and provided
that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the
Early Termination Date will occur on the date so designated, whether or not the relevant
Event of Default or Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated
Transactions will be required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the occurrence of an
Early Termination Date, each party will make the calculations on its part, if any,
contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in
reasonable detail, such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant account to which
any amount payable to it is to be paid. In the absence of written confirmation from the
source of a quotation obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence and accuracy of such
quotation.
(ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date
under Section 6(e) will be payable on the day that notice of the amount payable is effective
(in the case of an Early Termination Date which is designated or occurs as a result of an
Event of Default) and on the day which is two Local Business Days after the day on which
notice of the amount payable is effective (in the case of an Early Termination Date which is
designated as a result of a Termination Event). Such amount will be paid together with (to
the extent permitted under applicable law) interest thereon (before as well as after
judgment) in the Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest
will be calculated on the basis of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the following provisions
shall apply based on the parties’ election in the Schedule of a payment measure, either “Market
Quotation” or “Loss”, and a payment method, either the “First Method” or the “Second Method”. If
the parties fail to designate a payment measure or payment method in the Schedule, it will be
deemed that “Market Quotation” or the “Second Method”, as the case may be, shall apply. The amount,
if any, payable in respect of an Early Termination Date and determined pursuant to this Section
will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event of Default: —
(1) First Method and Market Quotation. If the First Method and Market Quotation apply,
the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive
number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party
will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party’s
Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and Market Quotation
apply, an amount will be payable equal to (A) the sum of the Settlement Amount
(determined by the
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Non-defaulting Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of
that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable
equal to the Non-defaulting Party’s Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a Termination Event: —
(1) One Affected Party. If there is one Affected Party, the amount payable will be
determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting
Party and to the Non-defaulting Party will be deemed to be references to the Affected
Party and the party which is not the Affected Party, respectively, and, if Loss applies
and fewer than all the Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: —
(A) if Market Quotation applies, each party will determine a Settlement Amount in
respect of the Terminated Transactions, and an amount will be payable equal to (I) the
sum of (a) one-half of the difference between the Settlement Amount of the party with
the higher Settlement Amount (“X”) and the Settlement Amount of the party with the
lower Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the
Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in respect of this Agreement
(or, if fewer than all the Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal to one-half of the
difference between the Loss of the party with the higher Loss (“X”) and the Loss of
the party with the lower Loss (“Y”).
If the amount payable is a positive number, Y will pay it to X; if it is a negative
number, X will pay the absolute value of that amount
to Y.
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.
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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 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.
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9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the
parties with respect to its subject matter and supersedes all oral communication and prior
writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective
unless in writing (including a writing evidenced by a facsimile transmission) and executed by each
of the parties or confirmed by an exchange of telexes or electronic messages on an electronic
messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any
Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and
privileges provided in this Agreement are cumulative and not exclusive of any rights, powers,
remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect of it) may be
executed and delivered in counterparts (including by facsimile transmission), each of which
will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each Transaction from
the moment they agree to those terms (whether orally or otherwise). A Confirmation shall he
entered into as soon as practicable and may he executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which in each case will
be sufficient for all purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect
of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of
any right, power or privilege will not be presumed to preclude any subsequent or further exercise,
of that right, power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of reference only and are not
to affect the construction of or to be taken into consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a
Transaction through an Office other than its head or home office represents to the other party
that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation
of such party, the obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be repeated by such party on
each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives payments or deliveries
for the purpose of a Transaction without the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make
and receive payments or deliveries under any Transaction through any Office listed in the Schedule,
and the Office through which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party
by reason of the enforcement and protection of its rights under this Agreement or any Credit
Support Document
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to which the Defaulting Party is a party or by reason of the early termination of any Transaction,
including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in
any manner set forth below (except that a notice or other communication under Section 5 or 6 may
not be given by facsimile transmission or electronic messaging system) to the address or number or
in accordance with the electronic messaging system details provided (see the Schedule) and will be
deemed effective as indicated:—
(i) if in writing and delivered in person or by courier, on the date it is delivered;
(ii) if sent by telex, on the date the recipient’s answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is received by a
responsible employee of the recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a transmission report
generated by the sender’s facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent
(return receipt requested), on the date that mail is delivered or its delivery is
attempted; or
(v) if sent by electronic messaging system, on the date that electronic message is
received,
unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a
Local Business Day or that communication is delivered (or attempted) or received, as applicable,
after the close of business on a Local Business Day, in which case that communication shall be
deemed given and effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the address, telex or
facsimile number or electronic messaging system details at which notices or other communications
are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in accordance with the law
specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement
(“Proceedings”), each party irrevocably:—
(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be
governed by English law, or to the non-exclusive jurisdiction of the courts of the State of
New York and the United States District Court located in the Borough of Manhattan in New
York City, if this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings have been
brought in an inconvenient forum and further waives the right to object, with respect to
such Proceedings, that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed by English law, the
Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments 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
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reason any party’s Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to the other party.
The parties irrevocably consent to service of process given in the manner provided for notices in
Section 12. Nothing in this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by
applicable law, with respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit,
(ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance
or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and
(v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise
be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the
extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:—
“Additional Termination Event” has the meaning specified in Section 5(b).
“Affected Party” has the meaning specified in Section 5(b).
“Affected Transactions” means (a) with respect to any Termination Event consisting of an
Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all Transactions.
“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly or indirectly, the person
or any entity directly or indirectly under common control with the person. For this purpose,
“control” of any entity or person means ownership of a majority of the voting power of the entity
or person.
“Applicable Rate” means:—
(a) in respect of obligations payable or deliverable (or which would have been but for Section
2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after
the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the
Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would have been but for
Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and
(d) in all other cases, the Termination Rate.
“Burdened Party” has the meaning specified in Section 5(b).
“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change
in or amendment to, any law (or in the application or official interpretation of any law) that
occurs on or after the date on which the relevant Transaction is entered into.
“consent” includes a consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control consent.
“Credit Event Upon Merger” has the meaning specified in Section 5(b).
“Credit Support Document” means any agreement or instrument that is specified as such in this
Agreement.
“Credit Support Provider” has the meaning specified in the Schedule.
“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual
cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant
amount plus 1% per annum.
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“Defaulting Party” has the meaning specified in Section 6(a).
“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).
“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the
Schedule.
“Illegality” has the meaning specified in Section 5(b).
“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a
payment under this Agreement but for a present or former connection between the jurisdiction of the
government or taxation authority imposing such Tax and the recipient of such payment or a person
related to such recipient (including, without limitation, a connection arising from such recipient
or related person being or having been a citizen or resident of such jurisdiction, or being or
having been organised, present or engaged in a trade or business in such jurisdiction, or having or
having had a permanent establishment or fixed place of business in such jurisdiction, but excluding
a connection arising solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this Agreement or a Credit
Support Document).
“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the
practice of any relevant governmental revenue authority) and “lawful” and “unlawful” will be
construed accordingly.
“Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to
any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if
not so specified, as otherwise agreed by the parties in writing or determined pursuant to
provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other
payment, in the place where the relevant account is located and, if different, in the principal
financial centre, if any, of the currency of such payment, (c) in relation to any notice or other
communication, including notice contemplated under Section 5(a)(i), in the city specified in the
address for notice provided by the recipient and, in the case of a notice contemplated by Section
2(b), in the place where the relevant new
account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations for
performance with respect to such Specified Transaction.
“Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case
may be, and a party, the Termination Currency Equivalent of an amount that party reasonably
determines in good faith to be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at
the election of such party but without duplication, loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any
gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each applicable condition
precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a
party’s legal fees and out-of-pocket expenses referred to under Section 11. A party will determine
its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as
of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine
its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in
the relevant markets.
“Market Quotation” means, with respect to one or more Terminated Transactions and a party making
the determination, an amount determined on the basis of quotations from Reference Market-makers.
Each quotation will be for an amount, if any, that would be paid to such party (expressed as a
negative number) or by such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document with respect to the
obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the
“Replacement Transaction”) that would have the effect of preserving for such party the economic
equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent
and assuming the satisfaction of each applicable condition precedent) by the parties under Section
2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would,
but for the occurrence of the relevant Early Termination Date, have
ISDA® 1992
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been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated
Transaction or group of Terminated Transactions are to be excluded but, without limitation, any
payment or delivery that would, but for the relevant Early Termination Date, have been required
(assuming satisfaction of each applicable condition precedent) after that Early Termination Date is
to be included. The Replacement Transaction would be subject to such documentation as such party
and the Reference Market-maker may, in good faith, agree. The party making the determination (or
its agent) will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different time zones) on or
as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of
which those quotations are to be obtained will be selected in good faith by the party obliged to
make a determination under Section 6(e), and, if each party is so obliged, after consultation with
the other. If more than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and lowest values. If
exactly three such quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more than one quotation
has the same highest value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of
such Terminated Transaction or group of Terminated Transactions cannot be determined.
“Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of any
actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.
“Non-defaulting Party” has the meaning specified in Section 6(a).
“Office” means a branch or office of a party, which may be such party’s head or home office.
“Potential Event of Default” means any event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.
“Reference Market-makers” means four leading dealers in the relevant market selected by the party
determining a Market Quotation in good faith (a) from among dealers of the highest credit standing
which satisfy all the criteria that such party applies generally at the time in deciding whether to
offer or to make an extension of credit and (b) to the extent practicable, from among such dealers
having an office in the same city.
“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is
incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office
through which the party is acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through which such payment is
made.
“Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section
2(a)(i) with respect to a Transaction.
“Set-off” means set-off, offset, combination of accounts, right of retention or withholding or
similar right or requirement to which the payer of an amount under Section 6 is entitled or subject
(whether arising under this Agreement, another contract, applicable law or otherwise) that is
exercised by, or imposed on, such payer.
“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—
(a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative)
for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is
determined; and
(b) such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts)
for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation
cannot be determined or would not (in the reasonable belief of the party making the determination)
produce a commercially reasonable result.
“Specified Entity” has the meanings specified in the Schedule.
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“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.
“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement
with respect thereto) now existing or hereafter entered into between one party to this Agreement
(or any Credit Support Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or
equity index option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including any option with
respect to any of these transactions), (b) any combination of these transactions and (c) any other
transaction identified as a Specified Transaction in this Agreement or the relevant confirmation.
“Stamp Tax” means any stamp, registration, documentation or similar tax.
“Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature
(including interest, penalties and additions thereto) that is imposed by any government or other
taxing authority in respect of any payment under this Agreement other than a stamp, registration,
documentation or similar tax.
“Tax Event” has the meaning specified in Section 5(b).
“Tax Event Upon Merger” has the meaning specified in Section 5(b).
“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a
Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the effectiveness of the notice
designating that Early Termination Date (or, if “Automatic Early Termination” applies, immediately before that
Early Termination Date).
“Termination Currency” has the meaning specified in the Schedule.
“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination
Currency, such Termination Currency amount and, in respect of any amount denominated in a currency
other than the Termination Currency (the “Other Currency”), the amount in the Termination Currency
determined by the party making the relevant determination as being required to purchase such amount
of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market
Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the
Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent
(selected as provided below) for the purchase of such Other Currency with the Termination Currency
at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date
as would be customary for the determination of such a rate for the purchase of such Other Currency
for value on the relevant Early Termination Date or that later date. The foreign exchange agent
will, if only one party is obliged to make a determination under Section 6(e), be selected in good
faith by that party and otherwise will be agreed by the parties.
“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to
be applicable, a Credit Event Upon Merger or an Additional Termination Event.
“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof
or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of
funding such amounts.
“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate
of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would
have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to
such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in
respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or
would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or
prior to such Early Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market
ISDA® 1992
17
value of that which was (or would have been) required to be delivered as of the originally
scheduled date for delivery, in each case together with (to the extent permitted under applicable
law) interest, in the currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to (but excluding) such
Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. The fair market value of any
obligation referred to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it shall be the average
of the Termination Currency Equivalents of the fair market values reasonably determined by both
parties.
IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.
XXXXXXX XXXXX CAPITAL MARKETS, L.P. | TRIAD AUTOMOBILE RECEIVABLES TRUST 2007-A | |||||||
By:
|
Xxxxxxx Sachs Capital Markets, Inc. | By: | WILMINGTON TRUST COMPANY, not in | |||||
General Partner | its individual capacity but solely as Owner Trustee | |||||||
By: |
/s/ Xxxxx Xxxxx | By: | /s/ J. Xxxxxxxxxxx Xxxxxx | |||||
Name: Xxxxx Xxxxx | Name: J. Xxxxxxxxxxx Xxxxxx | |||||||
Title: Vice President | Title: Financial Services Officer | |||||||
Date: May 30, 2007 | Date: May 30, 2007 |
18
SCHEDULE
to the
1992 ISDA MASTER AGREEMENT
(Multicurrency — Cross Border)
(Multicurrency — Cross Border)
dated as of May 30, 2007
between
between
XXXXXXX XXXXX CAPITAL MARKETS, L.P.
a limited partnership organized
under the laws of Delaware
(“Party A”),
and
a limited partnership organized
under the laws of Delaware
(“Party A”),
and
TRIAD AUTOMOBILE RECEIVABLES TRUST 2007-A,
a Delaware statutory trust
(“Party B”)
a Delaware statutory trust
(“Party B”)
Reference is made to that certain Indenture dated as of May 30, 2007 (as amended, modified or
supplemented from time to time in accordance with its terms, the “Indenture”) between Party
B as the Issuer thereunder and Citibank, N.A. as Indenture Trustee, and to that certain Sale and
Servicing Agreement dated as of May 30, 2007 (as amended, modified or supplemented from time to
time in accordance with its terms, the “Sale and Servicing Agreement”) among Party B, Triad
Financial Special Purpose, LLC, as Depositor, Triad Financial Corporation, as the Servicer and
Custodian, and Citibank, N.A., as Backup Servicer and Indenture Trustee. Capitalized terms used
but not defined in this Agreement or this Schedule will have the meanings ascribed to them in the
Sale and Servicing Agreement and/or the Indenture.
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.
Section 5(a)(vi), Not Applicable.
Section 5(a)(vii), Not Applicable.
Section 5(b)(iv), Not Applicable.
and 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.
Section 5(a)(vi), Not Applicable.
Section 5(a)(vii), Not Applicable.
Section 5(b)(iv), Not Applicable.
(b) “Specified Transaction” shall have the meaning specified in Section 14 of this Agreement.
(c) The “Failure to Pay” provisions of Section 5(a)(i) will apply to Party A and to Party B.
(d) The “Breach of Agreement” provisions of Section 5(a)(ii) will apply to Party A and will
not apply to Party B.
(e) The “Credit Support Default” provisions of Section 5(a)(iii) will apply to Party A and
will not apply to Party B.
(f) The “Misrepresentation” provisions of Section 5(a)(iv) will apply to Party A and will not
apply to Party B.
(g) The “Cross Default” provisions of Section 5(a)(vi) will apply to Party A and will not
apply to Party B, provided that:
(i) the phrase “or becoming capable at such time of being declared” shall be deleted
from clause (1) of such Section 5(a)(vi);
(ii) the following language shall be added to the end thereof: “Notwithstanding the
foregoing, a default under subsection (2) hereof shall not constitute an Event of
Default if (i) the default was caused solely by error or omission of an
administrative or operational nature; (ii) funds were available to enable the party
to make the payment when due; and (iii) the payment is made within two Local
Business Days of such party’s receipt of written notice of its failure to pay.”
“Specified Indebtedness” will have the meaning specified in Section 14 of this Agreement.
“Threshold Amount” means for Party A, $50,000,000.
(h) The “Bankruptcy” provisions of Section 5(a)(vii) will apply to Party A and Party B;
provided that clauses (2), (7) and (9) thereof shall not apply to Party B; provided further that
clause (4) thereof: (i) shall not apply to Party B with respect to proceedings or petitions
instituted or presented by Party A or any Affiliate of Party A, and (ii) to the extent that clause
(4) otherwise applies, shall be amended by deleting the words “30 days” and replacing them with the
words “60 days”; provided further that clause (6) thereof shall not apply to Party B to the extent
that it refers to (i) any appointment that is effected by or contemplated in connection with the
Basic Documents (as defined in the Sale and Servicing Agreement) or (ii) any appointment to
which Party B has not become subject; and provided further that clause (8) thereof shall not apply
to Party B to the extent that clause (8) relates to clauses of Section 5(a)(vii) that are not
applicable to Party B.
(i) The “Merger without Assumption” provisions of Section 5(a)(viii) will apply to Party A and
to Party B.
(j) The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will not apply to Party A or
Party B.
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(k) The “Automatic Early Termination” provisions of Section 6(a) will not apply to Party A or
Party B.
(l) Payments on Early Termination. For the purpose of Section 6(e):
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(m) "Termination Currency” means U.S. Dollars.
(n) The “Illegality” provisions of Section 5(b)(i) will apply to Party A and to Party B.
(o) The “Additional Termination Event” provisions of Section 5(b)(v) will apply as set forth
in Part 5(l) hereof.
(p) The “Default under Specified Transaction” provisions of Section 5(a)(v) will not apply to
Party A or Party B.
(q) The “Tax Event” provisions of Section 5(b)(ii) will apply to Party A and to Party B.
(r) The “Tax Event Upon Merger” provisions of Section 5(b)(iii) will apply to Party A and to
Party B.
Part 2. Tax Representations.
(a) Payer Representations. For purposes of Section 3(e) of this Agreement, Party A and Party
B each 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
representations 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 subclause (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.
Payee Representations. For the purpose of Section 3(f) of this Agreement, Party A and Party B
each make the following representations:
(i) | It is a “U.S. payee” within the meaning of Treasury Regulation Section 1.1441-5(b). |
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(ii) | It is a United States person within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended. |
Part 3. Agreement to Deliver Documents.
For the purpose of Section 4(a), each party agrees to deliver the following documents, as
applicable:
(a) Tax forms, documents, or certificates to be delivered are:
Party A agrees to complete, execute, and deliver to Party B, United States Internal Revenue
Service Form W-9 or any successor of such form: (i) on a date which is before the first
Distribution Date; (ii) promptly upon reasonable demand by Party B; and (iii) promptly upon
learning that any such forms previously provided by Party A has become obsolete or
incorrect.
Party B agrees to complete, execute, and deliver to Party A, United States Internal Revenue
Service Form W-9 or any successor of such forms: (i) on a date which is before the first
Distribution Date; (ii) promptly upon reasonable demand by Party A; and (iii) promptly upon
learning that any such forms previously provided by Party B has become obsolete or
incorrect.
(b) Other documents to be delivered are:
Covered by | ||||||
Party required to | Form/Document/ | Date by which | Section 3(d) | |||
deliver document | Certificate | to be delivered | Representation | |||
Party A
|
Power of Attorney with respect to Party A | At execution of this Agreement | Yes | |||
Party A
|
The Standard Guaranty of The Xxxxxxx Sachs Group, Inc. (“Goldman Group”), dated as of the date hereof (the “Standard Guaranty”) | At execution of this Agreement | Yes | |||
Party A
|
Most recently prepared annual balance sheet of Party A | As soon as possible following request of Party B | Yes | |||
Party A
|
Legal opinions with respect to Party A concerning enforceability and related matters addressed and acceptable to Party B, the Insurer and the Rating Agencies | At execution of this Agreement | No | |||
Party
B
|
Incumbency certificate or other documents evidencing | At execution of this Agreement | Yes |
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Covered by | ||||||
Party required to | Form/Document/ | Date by which | Section 3(d) | |||
deliver document | Certificate | to be delivered | Representation | |||
the authority, incumbency and specimen signature of each person executing this Agreement, any Credit Support Document or any Confirmation, as the case may be | ||||||
Party B
|
A Servicer’s Certificate (as defined in the Sale and Servicing Agreement) pursuant to Section 4.9 of the Sale and Servicing Agreement; provided that failure to deliver such Servicer’s Certificate pursuant to this clause shall not constitute an Event of Default under this Agreement. | Promptly upon becoming available |
Yes | |||
Party B
|
Legal opinion with respect to Party B concerning enforceability and related matters addressed and acceptable to Party A, the Insurer and the Rating Agencies | At execution of this Agreement | No | |||
Party B
|
An executed Indenture | At execution of this Agreement. | No | |||
Party B
|
Swap Policy | At execution of this Agreement. | Yes |
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purpose of Section 12(a): Address for notices or
communications to Party A:
Address: |
00 Xxxxx Xxxxxx | |
Xxx Xxxx, Xxx Xxxx 00000 | ||
X.X.X. | ||
Attention: |
Swap Administration |
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Telex No.: |
421344 | |
Answerback: |
GOLSAX | |
Facsimile No.: |
(000) 000-0000 | |
Telephone No.: |
(000) 000-0000 | |
Electronic Messaging |
||
System Details: |
None |
With a copy to:
Address: |
00 Xxxxx Xxxxxx | |
Xxx Xxxx, Xxx Xxxx 00000 | ||
X.X.X. | ||
Attention: |
Treasury Administration | |
Telex No.: |
421344 | |
Answerback: |
GOLSAX | |
Facsimile No. : |
(000) 000-0000 | |
Telephone No.: |
(000) 000-0000 | |
Electronic Messaging |
||
System Details: |
None |
For the purpose of Section 12(a): Address for notices or communications to Party B:
Address: |
c/o Wilmington Trust Company | |
0000 X. Xxxxxx Xxxxxx | ||
Xxxxxxxxxx, Xxxxxxxx 00000 | ||
Attention: |
Corporate Trust Administration | |
Telephone No.: |
(000) 000-0000 | |
Facsimile No.: |
(000) 000-0000 |
With a copy to:
Address: |
Triad Financial Corporation | |
0000 Xxxxxx Xxxxxx, Xxxxx 000 | ||
Xxxxxxxxxx Xxxxx, XX 00000 | ||
Attention: |
Chief Financial Officer | |
Telephone No.: |
(000) 000-0000 | |
Facsimile No.: |
(000) 000-0000 |
Address for notices or communications to Insurer.
Address: |
Financial Security Assurance Inc. | |
00 Xxxx 00xx Xxxxxx |
-0-
Xxx Xxxx, Xxx Xxxx 00000 | ||
Attention: |
Managing Director - Transaction | |
Oversight | ||
Re: Triad Automobile Receivables | ||
Trust 2007-A | ||
Policy No.: 51840B-N | ||
Facsimile: |
(000) 000-0000 | |
Confirmation No.: |
(000) 000-0000 | |
E-mail: |
xxxxxxxxxx@xxx.xxx |
Address for notices or communications to S&P for purposes of satisfying any Rating Agency
Condition required hereunder:
Address: |
Standard & Poor's Ratings Services, a | |
division of McGraw Hill, Inc. | ||
00 Xxxxx Xxxxxx, | ||
Xxx Xxxx, Xxx Xxxx 00000-0000 | ||
Attention: |
Xxxx X'Xxxx | |
Telephone No.: |
(000) 000-0000 | |
Facsimile No.: |
(000) 000-0000 |
Address for notices or communications to Moody’s for purposes of satisfying any Rating
Agency Condition required hereunder:
Address: |
Xxxxx'x Investors Service, Inc. | |
00 Xxxxxx Xxxxxx | ||
Xxx Xxxx, Xxx Xxxx 00000 | ||
Attention: |
Xxxxx Xxxxxxxxxxx | |
Telephone No.: |
(000) 000-0000 | |
E-mail: |
Xxxxx.xxxxxxxxxxx@xxxxxx.xxx |
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable
Party B appoints as its Process Agent: Not Applicable
(c) Offices; Multibranch Parties.
(i) The provisions of Section 10(a) will be applicable.
(ii) For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
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(d) Calculation Agent. The Calculation Agent is Party A; provided, that if Party A is the
Defaulting Party, the Calculation Agent shall be any designated third party mutually agreed to by
the parties and the Insurer (as long as it is the Controlling Party) until such time as Party A is
no longer a Defaulting Party.
(e) Credit Support Document. Details of any Credit Support Document.
(i) With respect to Party A, the Standard Guaranty and if required by Part 5(l)
below, an ISDA Credit Support Annex to be entered into between Party A and Party B.
(ii) With respect to Party B, the Swap Policy.
Each Credit Support Document is incorporated by reference into and constitutes part
of this Agreement and each Confirmation as if set forth in full in this Agreement or
such Confirmation.
(f) Credit Support Provider.
(i) Credit Support Provider means in relation to Party A, Goldman Group.
(ii) Credit Support Provider means in relation to Party B, Not Applicable.
(g) Governing Law. This Agreement and each Confirmation will be governed by, and construed
and enforced in accordance with, the substantive law of the State of New York, without reference to
its choice of law doctrine.
(h) Netting of Payments. Subparagraph (ii) of Section 2(c) will apply to Transactions with
effect from the date of this Agreement.
(i) “Affiliate” will have the meaning specified in Section 14; provided, however, Party B
shall be deemed to have no Affiliates.
Part 5. Other Provisions.
(a) Accuracy of Specified Information. With respect to Party A, Section 3(d) is hereby
amended by adding in the third line thereof after the word “respect” and before the period
the words “or, in the case of audited or unaudited financial statements or balance sheets, a
fair presentation of the financial condition of the relevant person.”
(b) Transfer. Section 7 is hereby amended by:
(i) adding in the third line thereof after the word “party,” the words “which
consent shall not be unreasonably withheld or delayed” and adding in the third line
thereof after the clause “that: -” the words “provided that the Rating
Agency Condition is satisfied and the written consent of the Insurer is obtained in
all events (including in the event of a transfer under Section 6(b)(ii));
-8-
(ii) adding in the second line of subparagraph (a) thereof after the words “assets
to,” the words “or reorganization, incorporation, reincorporation, reconstitution,
or reformation into or as”;
(iii) deleting at the end of subparagraph (a) thereof the word “and”;
(iv) deleting in the second line of subparagraph (b) thereof the period and
replacing it with “; and”;
(v) adding after subparagraph (b) thereof the following subparagraph (c):
“(c) in addition to, and not in lieu of, the preceding transfer rights, Party A may,
without recourse by Party B or Party A’s transferee to or against Party A, transfer
this Agreement, in whole, but not in part, to any of Party A’s Affiliates or any of
the Affiliates of Goldman Group pursuant to documentation prepared by Party A,
provided that:
(i) | either (A) such transferee must have a long-term, unsecured, unsubordinated debt obligation ratings or financial program ratings (or other similar ratings) by each Rating Agency which are equal to or greater than the comparable long-term, unsecured, unsubordinated debt obligation ratings or financial program ratings (or other similar ratings) of Party A immediately prior to such transfer, or (B) the obligations transferred to such transferee must be guaranteed by Party A pursuant to a guaranty in substantially the form of the Standard Guaranty or other agreement or instrument consented to by Party B and the Insurer or other agreement or instrument mutually agreed upon by both parties and satisfactory to each Rating Agency and the Insurer; | ||
(ii) | the transferee will not, as a result of such transfer, be required to withhold or deduct on account of a Tax under Section 2(d)(i) on the next succeeding Distribution Date an amount in excess of that which Party A would have been required to so withhold or deduct on the next succeeding Distribution Date in the absence of such transfer unless the transferee will be required to make payments of additional amounts pursuant to Section 2(d)(i)(4) in respect of such excess; | ||
(iii) | an Event of Default or a Termination Event does not occur as a result of such transfer; | ||
(iv) | the Rating Agency Condition is satisfied and the written consent of the Insurer is obtained with respect to Section 7(c)(i)(B) above. With respect to the results described in subclause (ii) above, Party A will cause the transferee to make, and Party B will make, such reasonable Payer Tax Representations and Payee Tax Representations as may be mutually agreed upon by the transferee |
-9-
and Party B in order to permit such parties to determine that such results will not occur upon or after the transfer; |
(v) | Party A agrees to transfer only to a transferee in a jurisdiction, which it is aware is a “netting” jurisdiction, that is in which, by opinion of counsel published by ISDA, netting under this Agreement shall be enforceable; and | ||
(vi) | Party A will be responsible for any costs or expenses incurred in connection with such transfer.” |
(vi) adding at the end of Section 7 the following sentence:
“Except as may otherwise be stated in Section 7(c) hereof or in the documentation
evidencing a transfer, a transfer of all of the obligations of Party A made in
compliance with this Section will constitute an acceptance and assumption of such
obligations (and any related interests so transferred) by the transferee, a novation
of the transferee in place of Party A with respect to such obligations (and any
related interests so transferred), and a release and discharge by Party B of Party A
from, and an agreement by Party B not to make any claim for payment, liability, or
otherwise against Party A with respect to, such obligations from and after the
effective date of the transfer. Notwithstanding the foregoing provisions of this
Section 7, Party A consents to the pledge and assignment by Party B of Party B’s
rights and interests hereunder pursuant to the Indenture.”
(c) Set-Off. Notwithstanding the last sentence of the first paragraph of Section 6(e) of this
Agreement, but without affecting the provisions of this Agreement requiring the calculation of
certain net payment amounts, as a result of an Event of Default or Termination Event or otherwise,
all payments under this Agreement will be made without set-off or counterclaim.
(d) Reference Market-makers. The definition of “Reference Market-makers” in Section 14 is
hereby amended by adding in the fourth line thereof after the word “credit” the words “or to enter
into transactions similar in nature to Transactions”.
(e) Severability. If any term, provision, covenant, or condition of this Agreement, or the
application thereof to any party or circumstance, shall be held to be invalid or unenforceable (in
whole or in part) for any reason, the remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if this Agreement had been executed with the invalid or
unenforceable portion eliminated, so long as this Agreement as so modified continues
to express, without material change, the original intentions of the parties as to the subject
matter of this Agreement and the deletion of such portion of this Agreement will not substantially
impair the respective benefits or expectations of the parties to this Agreement; provided, however,
that this severability provision shall not be applicable if any provision of Section 2, 5, 6, or 13
(or any definition or provision in Section 14 to the extent it relates to, or is used in or in
connection with any such Section) shall be so held to be invalid or unenforceable.
-10-
(f) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives, to the fullest
extent permitted by applicable law, any right it may have to trial by jury in respect of any suit,
action or proceeding relating to this Agreement.
(g) Control Rights. Notwithstanding anything to the contrary in Section 6 of this Agreement,
if either an Event of Default or Termination Event has occurred and is continuing (other than with
respect to Section 5(b)(i) and Part 5(l)(i)), neither Party A nor Party B shall have the right to
designate an Early Termination Date unless (a) the Insurer has failed to pay any payment due to
Party A under the terms and conditions of the Swap Policy, which failure is continuing, or (b) the
Insurer has directed such designation in writing. Any purported designation in violation of this
provision will, at the election of the Insurer, be void and of no effect.
Notwithstanding any other provision of this Agreement, at any time after the occurrence of an Event
of Default for which Party B is the Defaulting Party, the Insurer (so long as it has not failed to
pay any payment due to Party A under the terms and conditions of the Swap Policy, which failure is
continuing,) shall have the right (but not the obligation) to direct Party A to designate an Early
Termination Date. For purposes of the foregoing sentence, an Event of Default for which Party B is
the Defaulting Party shall be considered to be continuing notwithstanding any payments made by the
Insurer pursuant to the Swap Policy..
(h) Additional Representations. Section 3 is hereby amended by adding the following
additional subsections:
(i) No Agency. With respect to Party A, it is entering into this Agreement and each
Transaction as principal (and not as agent or in any other capacity, fiduciary or
otherwise) and, with respect to Party B, Wilmington Trust Company is entering into
the Agreement in its capacity as Owner Trustee on behalf of Party B.
(ii) Eligible Contract Participant. It is an “eligible contract participant” as
defined in the U.S. Commodity Exchange Act.
(iii) Non-Reliance. Party A is acting for its own account and Wilmington Trust
Company is acting as Owner Trustee for Party B. It has made its own independent
decisions to enter into that Transaction and as to whether that Transaction is
appropriate or proper for it based upon its own judgment and upon advice from such
advisers as it has deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice or as a recommendation to
enter into that Transaction; it being understood that information and explanations
related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received from the other party shall
be deemed to be an assurance or guarantee as to the expected results of that
Transaction.
(iv) Assessment and Understanding; Status of Parties. It is capable of assessing
the merits of and understanding (on its own behalf or through
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independent
professional advice), and understands and accepts, the terms, conditions and risks
of that Transaction. It is also capable of assuming, and assumes, the risks of that
Transaction. The other party is not acting as a fiduciary for or an adviser to it
in respect of that Transaction.
(i) Regarding Party A. Party B acknowledges and agrees that Party A has had and will have no
involvement in and, accordingly, accepts no responsibility for: (i) the establishment, structure,
or choice of assets of Party B; (ii) the selection of any person performing services for or acting
on behalf of Party B; (iii) the selection of Party A as the counterparty; (iv) the terms of the
Notes; (v) except for the truth and accuracy of the information in the second through fifth
paragraphs under “The Swap Counterparty” in the prospectus supplement for the Notes as of the final
date of such prospectus supplement, which Party A furnished to Party B, the preparation of or
passing on the disclosure and other information contained in any prospectus or prospectus
supplement for the Notes, the Indenture, or any other agreements or documents used by Party B or
any other party in connection with the marketing and sale of the Notes; (vi) the ongoing operations
and administration of Party B, including the furnishing of any information to Party B which is not
specifically required under this Agreement; or (vii) any other aspect of Party B’s existence except
for those matters specifically identified in this Agreement.
(j) No Recourse. The Notes represent an interest in Party B only, and no recourse may be had
by the Holders of the Notes against Party A or its assets with respect to the Notes and/or this
Agreement.
(k) Indemnifiable Tax. Party A agrees that Party B will not be required to pay any additional
amounts pursuant to Section 2(d)(i)(4) of this Agreement in respect of an Indemnifiable Tax. If
Party A is required to pay additional amounts in respect of a withholding tax pursuant to Section
2(d)(i)(4) of this Agreement, Party A may transfer this Agreement, subject to satisfaction of the
Rating Agency Condition and the written consent of the Insurer, as provided in Section 6(b)(ii) of
this Agreement and such transfer shall require prior written notice to Party B.
(l) Additional Termination Events. The following shall constitute Additional Termination
Events in which Party A is the sole Affected Party:
(i) It shall be an Additional Termination Event, with Party A as the sole Affected
Party, if Party A determines that it is required for purposes of compliance with
Item 1115(b) of Regulation AB to provide any financial or other data relating to
Party A and, within 15 calendar days of such determination, Party A fails to assign
this Agreement and all of its obligations hereunder to a substitute counterparty
that (A) has agreed to provide any financial or other data required
under Regulation AB, (B) has agreed to provide indemnifications relating to such
financial or other data, (C) satisfies the Rating Agency Condition, (D) is
acceptable to the Insurer and (E) is approved by the Depositor (which approval shall
not be unreasonably withheld). For the avoidance of doubt, unless otherwise
specified in this Agreement, Party A shall be under no obligation to provide any
such financial or other data, whether in connection with this Termination Event or
otherwise. For purposes of this Termination Event, (i) “Commission” shall mean
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the
Securities and Exchange Commission, (ii) “Depositor” shall mean Triad Financial
Special Purpose LLC, and (iii) “Regulation AB” shall mean the Asset Backed
Securities Regulation AB, 17 C.F.R. §§229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by
the staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
(ii) (I) It shall also be an Additional Termination Event, with Party A as the sole
Affected Party (except as expressly provided herein) if Party A’s Credit Support
Provider, a replacement counterparty, or a person or an entity that guarantees the
obligations of such replacement counterparty, as the case may be, has a rating that
does not satisfy the Required Hedge Counterparty Rating (but is at least “A-” by S&P
and at least “A3” by Moody’s and none of the following events has occurred:
(A) | within 30 days of such failure to satisfy the Required Hedge Counterparty Rating, Party A or such replacement counterparty, as the case may be, transfers this Agreement, in whole, but not in part, to a counterparty that satisfies the Required Hedge Counterparty Rating, subject to satisfaction of the Rating Agency Condition; | ||
(B) | within 30 days of such failure to satisfy the Required Hedge Counterparty Rating, Party A or such replacement counterparty, as the case may be, collateralizes its Exposure to Party B pursuant to an ISDA Credit Support Annex, subject to satisfaction of the Rating Agency Condition, as applicable; | ||
(C) | within 30 days of such failure to satisfy the Required Hedge Counterparty Rating, the obligations of Party A or such replacement counterparty, as the case may be, under this Agreement are guaranteed by a person or entity that satisfies the Required Hedge Counterparty Rating, subject to satisfaction of the Rating Agency Condition; or | ||
(D) | within 30 days of such failure to satisfy the Required Hedge Counterparty Rating, Party A or such replacement counterparty, as the case may be, takes such other steps, if any, to enable the Issuer to satisfy the Rating Agency Condition. |
(II) It shall also be an Additional Termination Event, with Party A as the sole
Affected Party (except as expressly provided herein) if Party A’s Credit Support
Provider, a replacement counterparty, or a person or an entity that guarantees the
obligations of such counterparty, as the case may be, has a rating withdrawn or
reduced below “A-” by S&P or of less than “A3” by Moody’s and within 7 days
thereafter, Party A or such replacement counterparty, as the case may be, while
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collateralizing its Exposure to Party B, fails to transfer this Agreement, in whole,
but not in part, to a counterparty that satisfies the Required Hedge Counterparty
Rating, subject to satisfaction of the Rating Agency Condition.
Upon downgrade of Party A below the Required Hedge Counterparty Rating or below “A+”
by S&P or below “A1” by Moody’s, or if S&P or Moody’s withdraws its ratings for any
reason, Party A will promptly give notice of the circumstances to Party B and to the
rating agencies that at the time are providing ratings for the Notes.
Party B shall be entitled to (A)(1) in case of an Additional Termination Event
described in Part 5(l)(ii)(I), designate a date that is not earlier than the
expiration of the 30 day period referred to in Part 5(l)(ii)(I) as an Early
Termination Date in respect of all transactions under this Agreement by giving
notice to Party A at least 10 days prior to the date so designated (which notice may
be given prior to the expiration of such 30 day period) and (2) in case of an
Additional Termination Event described in this Part 5(l)(ii)(II), immediately
designate an Early Termination Date, in respect of all transactions under this
Agreement by giving notice to Party A and (B) no later than the respective dates
specified in clause (A)(1) and (A)(2), transfer the rights and obligations of Party
A hereunder to a counterparty that satisfies the Required Hedge Counterparty Rating,
subject to satisfaction of the Rating Agency Condition.
In connection with a transfer of this Agreement as described in this Part 5(l)(ii),
Party A shall, at its sole cost and expense, use commercially reasonable efforts to
seek a replacement counterparty. In addition, if Party A pursues any of the
alternative actions contemplated in paragraphs (A), (B), (C) and (D) of Part
5(l)(ii)(I) above, it shall do so at its sole cost and expense.
As used herein, “Required Hedge Counterparty Rating” means, with respect to Party
A’s Credit Support Provider, a replacement counterparty or an entity guaranteeing
the obligations of such replacement counterparty has (x) a long-term senior,
unsecured debt obligation rating, financial program rating or other similar rating
(as the case may be, the “Long-Term Rating”) of at least “A1” by Moody’s and
if rated “A1” by Xxxxx’x is not on negative credit watch by Moody’s or (y) a
long-term senior, unsecured debt obligation rating, financial program rating or
other similar rating of at least “A+” by S&P.
For the purposes of determining the Settlement Amount with respect to the
designation of an Early Termination Date arising from the Additional Termination
Event specified in Party 5(l)(ii), both Party A and Party B shall be Affected
Parties. If the Settlement Amount calculated pursuant to this subclause (ii) is an
amount owing by Party B to Party A, then such payment shall be a Swap Termination
Payment payable by Party B to Party A in accordance with the priority of payments
described in the Sale and Servicing Agreement; provided, however,
that (a) if Party A does not after the exercise of commercially reasonable efforts
cause any of the conditions specified in Part 5(l)(ii)(I)(A) to (D) to be satisfied,
Party B shall use commercially reasonable efforts to enter into a
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replacement
Transaction(s) with a counterparty acceptable to the Rating Agencies, in respect of
the Affected Transaction(s) relating to the Additional Termination Event; and (b)
where multiple quotations are available such replacement Transaction(s) shall be
entered into based on the quoted price(s) that would result in the largest payment
made to Party B by the replacement counterparty (it being understood that Party A
may be permitted to actively solicit and obtain such quotations on behalf of Party
B); and (c) to the extent that payments are received by Party B as a result of
entering into such replacement Transaction(s), then Party B shall pay the lesser of
(x) the amount so received and (y) the Swap Termination Payment to the extent not
already paid by Party B over to Party A.
As used herein, “Exposure” means, as of any date of determination, the amount, if
any, that would be payable to Party B by Party A under this Agreement if an Early
Termination Date were to occur as of such date of determination as a result of a
Termination Event, Party A were the sole Affected Party, all Transactions were
terminated in connection with such Early Termination Date and the amount of such
payment were calculated using Market Quotation.
For any Additional Termination Event, the date that Party A or Party B, as the case
may be, specifies in its notice of its election to terminate shall be the Early
Termination Date for the Transactions.
(m) Indemnifiable Tax. The definition of “Indemnifiable Tax” in Section 14 is hereby amended
by adding the following sentence at the end thereof:
Notwithstanding the foregoing, “Indemnifiable Tax” also means any Tax imposed in respect of
a payment under this Agreement by reason of a Change in Tax Law by a government or taxing
authority of a Relevant Jurisdiction of the party making such payment, unless the other
party is incorporated, organized, managed and controlled, or considered to have its seat in
such jurisdiction, or is acting for purposes of this Agreement through a branch or office
located in such jurisdiction.
(n) Limited Recourse; Non-petition. Party A agrees that the obligations of Party B hereunder
are limited recourse obligations payable solely from the Collateral, and due to the extent funds
are available for the payment thereof in accordance with the priority of payments described in the
Sale and Servicing Agreement. Party A agrees that it will not, prior to the date which is at least
one year and one day or, if longer, the then applicable preference period following the payment in
full of all the Notes issued pursuant to the Indenture, payment in full of all amounts due to the
Insurer under the Insurance Agreement and the expiration of all applicable preference periods under
Title 11 of the United States Code or other applicable law relating to any such payment, acquiesce,
petition or otherwise invoke or cause Party B to invoke the process
of any governmental authority for the purpose of commencing or sustaining a case (whether
voluntary or involuntary) against Party B under any bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar
official of Party B or any substantial part of its property or ordering the winding-up or
liquidation of the affairs of Party B. Nothing contained herein shall prohibit Party A from
submitting a claim, or proof of claim, in any proceeding or process instituted by or against Party
B by any
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person other than Party A or its Affiliates. Party A and Party B agree that this Part
5(o) shall survive the termination of this Agreement for any reason whatsoever.
(o) Additional Party A Covenant. Following a failure to satisfy the Required Hedge
Counterparty Rating in accordance with Part 5(l)(ii)(I), Party A shall take the actions described
in accordance with Part 5(l)(ii)(I)(A), (B), (C) or (D). Following a failure to satisfy the rating
requirements set forth in Part 5(l)(ii)(II), Party A shall take the actions described in accordance
with Part 5(l)(ii)(II).
(p) Agreements: Furnish Specified Information. Section 4(a) is hereby amended by adding at
the end thereof the following paragraph:
Notwithstanding the foregoing provisions of this Section 4(a), the parties agree that,
pursuant to the terms of the Power of Attorney with respect to Party A referred to in Part
3(b) of this Schedule, any one or more of the officers of Party A’s general partner who has
been designated as an agent and attorney in fact of Party A will so deliver to Party B or
such government or taxing authority the specified or requested forms, documents, or
certificates.
(q) Confirmations. Transactions shall be promptly confirmed by the parties by Confirmations
exchanged by mail, telex, facsimile or other electronic means. Where a Transaction is confirmed by
means of an electronic messaging system that the parties have elected to use to confirm such
Transaction (i) such confirmation will constitute a “Confirmation” as referred to in this Agreement
even where not so specified in the confirmation and (ii) such Confirmation will supplement, form
part of, and be subject to this Agreement and all provisions in this Agreement will govern the
Confirmation except as modified therein.
(r) Tax Documentation. Section 4(a)(iii) of the Agreement is hereby amended by adding prior
to the existing text:
“upon the earlier of learning that any such form or document is required or”
(s) Inconsistency-Trade Call. In the event of any inconsistency between a telephone
conversation, including a trade call and a Confirmation signed by both parties, the Confirmation
shall govern.
(t) Definitions. This Agreement shall be subject to the 2000 Definitions (the “2000
Definitions”) as published by the International Swaps and Derivatives Association Inc. The
provisions of the 2000 Definitions are incorporated by reference in and shall be deemed a part of
this Agreement, except that all references in the 2000 Definitions to a “Swap Transaction” shall be
deemed references to a “Transaction” for the purposes of this Agreement. Capitalized terms used and
not otherwise defined herein (or in the 2000 Definitions) shall have the respective meanings
ascribed to such terms in the Sale and Servicing Agreement and/or the Indenture. If in
relation to any Transaction there is any inconsistency between the 2000 Definitions, this
Agreement, the Sale and Servicing Agreement, the Indenture, any Confirmation and any other
definitions published by ISDA that are incorporated into any Confirmation, the following will
prevail for purposes of such Transaction in the order of precedence indicated: (i) such
Confirmation (without reference to any definitions or provisions incorporated therein); (ii) the
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Sale and Servicing Agreement and the Indenture; (iii) this Agreement; (iv) such other definitions;
and (v) the 2000 Definitions.
(u) | Amendments. Section 9(b) is hereby amended as follows: |
(i) by inserting the following phrase immediately prior to the period at the end of
the sentence: “the Rating Agency Condition is satisfied and the written consent of
the Insurer is obtained”; and
(ii) by adding the following text thereto immediately following the first sentence:
“Amendments to this Agreement or the Schedule may not be effected in a
Confirmation.”
Notwithstanding the foregoing, no Transactions may be entered into by Party A and
Party B pursuant to this Agreement other than the Transaction memorialized by the
Confirmation dated as of May 30, 2007, and no waiver, amendment or modification of
any provision of such Confirmation or any of the other terms of this Agreement may
be made without the prior written consent of the Insurer.
(v) “Rating Agency Condition” means, with respect to any action to which a Rating Agency
Condition applies, that each Rating Agency then rating the Notes shall have been given ten days (or
such shorter period as is acceptable to each such Rating Agency) prior notice of that action and
that each such Rating Agency shall have notified Party B in writing that such action will not
result in a reduction, qualification or withdrawal of the then current rating of the Notes (without
giving effect to the Note Policy) that it maintains.
(w) Limitation of Owner Trustee Liability. It is expressly understood and agreed by the
parties that (a) this document is executed and delivered by Wilmington Trust Company, not
individually or personally, but solely as Owner Trustee, in the exercise of the powers and
authority conferred and vested in it, pursuant to the Trust Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of Party B is made and
intended not as personal representations, undertakings and agreements by Wilmington Trust Company
but is made and intended for the purpose of binding only Party B, (c) nothing herein contained
shall be construed as creating any liability on Wilmington Trust Company, individually or
personally, to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of Party B or be
liable for the breach or failure of any obligation, representation, warranty or covenant made or
undertaken by Party B under this Agreement or any other related documents.
(x) Subrogation. Each of Party A and Party B hereby acknowledges that, to the extent of
payments made by the Insurer to Party A under the Swap Policy, the Insurer shall be
fully subrogated to the rights of Party A against Party B under the Transaction to which such
payments relate, including, but not limited to, the right to receive payment from Party B and the
enforcement of any remedies against Party B. Party A hereby agrees to assign to the Insurer its
right to receive payment from Party B under any Transaction to the extent of any payment thereunder
by the Insurer to Party A. Party B hereby acknowledges and consents to the
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assignment by Party A
to the Insurer of any rights and remedies that Party A has under any Transaction or any other
document executed in connection herewith.
(y) Expenses. Party B agrees to reimburse the Insurer immediately and unconditionally upon
demand for all reasonable expenses incurred by the Insurer in connection with the issuance of the
Swap Policy and the enforcement by the Insurer of Party B’s obligations under this Agreement and
any other documents executed in connection with the execution and delivery of this Agreement,
including, but not limited to, fees (including professional fees), costs and expenses incurred by
the Insurer which are related to or resulting from any breach by Party B of its obligations
hereunder.
Party A agrees that, for the purpose of calculating amounts that are owed by Party A pursuant to
Section 11 of this Agreement, to the extent that the Insurer incurs any such amounts in connection
with its enforcement and protection of its or Party B’s rights under this Agreement or any Credit
Support Document, such amounts, to the extent they are not duplicative of costs incurred by Party
B, shall be reimbursable to the Insurer by Party A.
(z) Notices. A copy of each notice or other communication between the parties with respect to
this Agreement must be sent at the same time to the Insurer.
(aa) Article 76. Party A and Party B acknowledge that the Swap Policy is not covered by the
property/casualty insurance security fund specified in Article 76 of the New York Insurance Law.
[Signature Pages Follow On Next Page]
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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.
XXXXXXX XXXXX CAPITAL MARKETS, L.P. | ||||
By: | Xxxxxxx Sachs Capital Markets, Inc., | |||
General Partner | ||||
By: | /s/ Xxxxx Xxxxx | |||
Name: Xxxxx Xxxxx | ||||
Title: Vice President | ||||
TRIAD AUTOMOBILE RECEIVABLES TRUST 2007-A | ||||
By: | WILMINGTON TRUST COMPANY, not in its | |||
individual capacity but solely as Owner Trustee | ||||
By: | /s/ J. Xxxxxxxxxxx Xxxxxx | |||
Name: J. Xxxxxxxxxxx Xxxxxx | ||||
Title: Financial Services Officer | ||||
Date: May 30, 2007 |
Schedule Signature Pages