SCHEDULE to the ISDA Master Agreement (1992 Multicurrency – Cross Border) dated as of October 16, 2007 between LEHMAN BROTHERS SPECIAL FINANCING INC., a Delaware corporation (“Party A”) and FORD CREDIT AUTO OWNER TRUST 2007-B, a Delaware statutory...
Exhibit
10.1
SCHEDULE
to
the
(1992
Multicurrency – Cross Border)
dated
as of October 16, 2007
between
XXXXXX
BROTHERS SPECIAL FINANCING INC.,
a
Delaware corporation
(“Party
A”)
and
a
Delaware statutory trust
(“Party
B”)
Part
1. Termination
Provisions.
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(a)
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“Specified
Entity” means in relation to Party A for
the purpose of:
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Section
5(a)(v),
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Not
applicable.
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Section
5(a)(vi),
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Not
applicable.
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Section
5(a)(vii),
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Not
applicable.
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Section
5(b)(iv),
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Not
applicable.
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in
relation to Party B for the purpose of:
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Section
5(a)(v),
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Not
applicable.
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Section
5(a)(vi),
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Not
applicable.
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Section
5(a)(vii),
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Not
applicable.
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Section
5(b)(iv),
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Not
applicable.
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(b)
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“Specified
Transaction” will have the meaning
specified in Section 14 of this Agreement unless another meaning
is
specified here: No change from Section
14.
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(c)
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The
“Breach of
Agreement” provisions of Section 5(a)(ii),
the
“Misrepresentation”
provisions of Section 5(a)(iv) and the
“Default under Specified
Transaction” provisions of Section 5(a)(v)
will not apply to Party B.
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(d)
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The
“Credit Support
Default” provisions of Section 5(a)(iii)
will not apply to Party B except that Section 5(a)(iii)(1) will
apply in
respect of Party B’s obligations under Paragraph 3(b) of the Credit
Support Annex.
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(e)
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The
“Cross
Default” provisions of
Section 5(a)(vi) will not apply to Party B and will apply to
Party A with a Threshold Amount equal to 3 percent of the shareholders’
equity (excluding deposits) of Party A’s Credit Support
Provider.
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(f)
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Bankruptcy
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Section
5(a)(vii)(2),(7) and (9) will not apply to Party B.
Section
5(a)(vii)(4) will not apply to Party B to the extent any such proceeding
or
petition was instituted or presented by Party A or any of its
Affiliates.
Section
5(a)(vii)(6) will not apply to Party B to the extent any such appointment
is
effected pursuant to the 2006-1 Basic Documents.
Section
5(a)(vii)(8) will not apply to Party B to the extent that it applies to Section
5(a)(vii)(2),(4),(6) or (7), except to the extent such provisions are not
disapplied with respect to Party B.
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(g)
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Tax
Event and Tax Event
Upon
Merger
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Section
5(b)(ii) will apply, provided that the words “(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)” are
hereby deleted.
Section
5(b)(iii) will apply, provided that Party A will not be entitled to designate
an
Early Termination Date by reason of a Tax Event Upon Merger in respect of
which
it is the Affected Party.
Section
6(b)(ii) will apply, provided that the words “or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party” are hereby
deleted.
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(h)
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The
“Credit Event Upon Merger” provisions of Section
5(b)(iv) will not apply to Party A or to Party
B.
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(i)
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The
“Automatic Early
Termination” provisions of Section
6(a) will not apply to Party A or to Party
B.
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(j)
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Payments
on Early Termination;
General. Subject to Part 1(k)
below, for the purpose of Section
6(e):
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(i)
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Market
Quotation will apply unless Party A is the Affected Party and Party
B has
contracted to enter into a replacement Transaction on or prior
to the
Early Termination Date, in which event Loss will
apply.
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(ii)
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The
Second Method will apply.
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(iii)
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Notwithstanding
anything to the contrary set forth in the Agreement, if (1) Party
B
designates an Early Termination Date pursuant to Part 5(n), 5(o)
or 5(t)
in respect of which any Transaction is a Terminated Transaction
and (2)
Party B enters into a replacement transaction with a third party
on or
before such Early Termination Date, then (x) the amount, if any,
payable
by Party B to Party A in respect of such Early Termination Date
and such
Transaction will not exceed the amount received by Party B from
such third
party in consideration of entering into such replacement transaction
and
(y) the amount, if any, payable by Party A to Party B in respect
of such
Early Termination Date and such Transaction will not be less than
the
amount payable by Party B to such third party in consideration
of entering
into such replacement transaction.
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(k)
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Payments
on Early Termination Due to Certain
Events. Notwithstanding Section 6, so long as (A)
an Additional Termination Event occurs pursuant to Part 1(m)(v)
or (vi),
or (B) Party A is the Affected Party in respect of a Tax Event
Upon Merger
or the Defaulting Party in respect of any Event of Default, paragraphs
(i)
to (ix) below will apply:
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(i) For
the purposes of Section 6(d)(i), Party B’s obligation with respect to the extent
of information to be provided with its calculations is limited to information
Party B has already received in writing which Party B is able to release
without
breaching any contractual obligations or the provisions of any law applicable
to
Party B.
(ii) The
definition of “Market Quotation” shall be deleted in its entirety and replaced
with the following:
“Market
Quotation” means, with respect to one or more Terminated
Transactions, a Firm Offer which is (1) made by a Reference Market-maker
that is
an Eligible Replacement, (2) for an amount that would be paid to Party B
(expressed as a negative number) or by Party B (expressed as a positive number)
in consideration of an agreement between Party B and such 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 Transactions or group of Terminated Transactions that
would,
but for the occurrence of the relevant Early Termination Date, have been
required after that Date, (3) made on the basis that Unpaid Amounts in respect
of the Terminated Transaction or group of 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 and (4) made in respect of a Replacement Transaction with commercial
terms substantially the same as those of this Agreement (save for the exclusion
of provisions relating to Transactions that are not Terminated
Transactions).”
(iii) The
definition of “Settlement Amount” shall be deleted in its entirety and replaced
with the following:
“Settlement
Amount” means, with respect to any Early Termination Date, an
amount (as determined by Party B) equal to:
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(A)
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If
a Market Quotation for the relevant Terminated Transaction or group
of
Terminated Transactions is accepted by Party B so as to become
legally
binding on or before the day falling ten Local Business Days after
the day
on which the Early Termination Date is designated (or such later
day as
Party B may specify in writing to Party A, which in any event will
not be
later than the Early Termination Date) (such day, the “Latest
Settlement Amount Determination Day”), the Termination
Currency Equivalent of the amount (whether positive or negative)
of such
Market Quotation; or
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(B)
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If
no Market Quotation for the relevant Terminated Transaction or
group of
Terminated Transactions is accepted by Party B so as to become
legally
binding on or before the Latest Settlement Amount Determination
Day, Party
B’s Loss (whether positive or negative and without reference to any
Unpaid
amounts) for the relevant Terminated Transaction or group of Terminated
Transactions.”
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(iv) For
the purpose of paragraph (4) of the definition of Market Quotation, Party
B
shall determine in its sole discretion, acting in a commercially reasonable
manner, whether a Firm Offer is made in respect of a Replacement Transaction
with commercial terms substantially the same as those of this Agreement (save
for the exclusion of provisions relating to Transactions that are not Terminated
Transactions).
(v) Party
B undertakes to use its reasonable efforts to obtain at least one Market
Quotation before the Latest Settlement Amount Determination Day.
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(vi) Party
B will be deemed to have discharged its obligations under (v) above if it
requests Party A to obtain Market Quotations, where such request is made
in
writing within two Local Business Days after the day on which the Early
Termination Date is designated.
(vii) If
Party B requests Party A in writing to obtain Market Quotations, Party A
shall
use its reasonable efforts to do so before the Latest Settlement Amount
Determination Day.
(viii) Any
amount calculated as being due in respect of an Early Termination Date will
be
payable in accordance with Section 6(d)(ii), provided that if such payment
is
owed to Party B, it will be payable on the day that notice of the amount
payable
is given to Party A.
(ix) If
the Settlement Amount is a negative number, Section 6(e)(i)(3) of this Agreement
will be deleted in its entirety and replaced with the following:
“Second
Method and Market Quotation. If Second Method and Market Quotation
apply, (1) Party B shall pay to Party A an amount equal to the absolute value
of
the Settlement Amount in respect of the Terminated Transactions, (2) Party
B
shall pay to Party A the Termination Currency Equivalent of the Unpaid Amounts
owing to Party A and (3) Party A shall pay to Party B the Termination Currency
Equivalent of the Unpaid Amounts owing to Party B, provided that, (i) the
amounts payable under (2) and (3) shall be subject to netting in accordance
with
Section 2(c) of this Agreement and (ii) notwithstanding any other provision
of
this Agreement, any amount payable by Party A under (3) shall not be netted-off
against any amount payable by Party B under (1).”
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(l)
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“Termination
Currency” means United States
Dollars.
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(m)
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Additional
Termination Events. Each of the
following will constitute an Additional Termination Event pursuant to
Section 5(b)(v):
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(i)
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Any
acceleration of the Notes pursuant to Section 5.2(a) of the Indenture
(provided such acceleration has not been rescinded pursuant to
Section
5.2(b) of the Indenture) and liquidation of the Indenture Trust
Estate
with Party B as the sole Affected
Party;
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(ii)
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Any
amendment or supplement to the Indenture or to the Sale and Servicing
Agreement that would materially adversely affect any of Party A’s rights
or obligations under this Agreement or any Transaction that is
made
without the consent of Party A if such consent is required, which
consent will not be unreasonably withheld or delayed; provided that
Party A’s consent will be deemed to have been given if Party A does not
object in writing within 10 Business Days of receipt of a written
request
for such consent, with Party B as the sole Affected
Party;
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(iii)
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Failure
of Party A to comply with the requirements of Part 5(n), with Party
A as
the sole Affected Party;
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(iv)
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Failure
of Party A to comply with the requirements of Part 5(s), with Party
A as
the sole Affected Party;
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(v)
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Xxxxx’x
First Rating Trigger. Party A failed to comply with the
requirements of Part 5(o)(ii), with Party A as the sole Affected
Party;
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(vi)
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Xxxxx’x
Second Rating Triggers.
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(A)
Party
A failed to comply with the requirements of Part 5(o)(iv), with Party A as
the
sole Affected Party;
(B)(1)
The Xxxxx’x Second Rating Trigger Requirements apply and 30 or more Local
Business Days have elapsed since the last time the Xxxxx’x Second Rating Trigger
Requirements did not apply and (2)(a) at least one Eligible Replacement has
made
a Firm Offer (which remains capable of becoming legally binding upon acceptance)
to be the transferee of a transfer to be made in accordance with Part 5(p)(ii)
below or (b) at least one entity meeting at least the Xxxxx’x Second Trigger
Required Ratings has made a Firm Offer (which remains capable of becoming
legally binding upon acceptance by the offeree) to provide an Eligible Guarantee
in respect of all of Party A’s present and future obligations under this
Agreement, with Party A as the sole Affected Party;
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(vii)
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Failure
of Party A to comply with the requirements of Part 5(t), with Party
A as
the sole Affected Party.
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Part
2. Tax
Representations.
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(a)
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Payer
Tax Representations. For the
purpose of Section 3(e), each of Party A and Party B makes the
following
representation:
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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)) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representation made by the other party pursuant to Section 3(f), (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) and
the accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii), and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d), provided that it
will not be a breach of this representation where reliance is placed on
clause (ii) above 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.
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(b)
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Payee
Tax Representations. For the purpose of Section
3(f):
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(i)
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Party
A makes the following representations: It is a United States
Person for U.S. federal income tax purposes and is duly organized
and
validly existing under the laws of the State of
Delaware.
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(ii)
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Party
B makes the following representations: It is a United States Person
for
U.S. federal income tax purposes and either (a) is a financial
institution
(within the meaning of Treasury Regulations section 1.1441-1(c)(5))
or (b)
is not acting as an agent for a person that is not a United States
Person
for U.S. federal income tax
purposes.
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Part
3. Agreement
to Deliver Documents.
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(a)
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For
purposes of Section 4(a)(i) and (ii), each party agrees to deliver
the
following documents, as applicable:
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Party
A and Party B
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Any
form or document that may be required or reasonably requested in
order to
allow the other party to make a payment under this Agreement without
any
deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate, including IRS Form
X-0, Xxxx
0XXX or Form W-8BEN, as applicable.
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On
the date of this Agreement, and promptly upon the earlier of (i)
reasonable demand by the other party and (ii) learning that the
form or
document is required.
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(b)
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Other
documents to be delivered are:
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Covered
by Section 3(d) Representation
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Party
A
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Annual
audited financial statements of Party A’s Credit Support Provider prepared
in accordance with generally accepted accounting
principles in the country in which the party is
organized.
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Promptly
upon Party B’s request.
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Yes
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Party
A, Party A's Credit Support Provider and Party B
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Certificate
or other documents evidencing the authority of the party
entering into this Agreement, any Credit Support Document or a
Confirmation, as the case may be, including copies of any board
resolutions and appropriate certificates of incumbency as to the
officers executing such documents.
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Upon
execution of this Agreement.
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Yes
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Party
A and Party B
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Opinions
of counsel in form and substance acceptable to the other
party.
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Upon
execution of this Agreement.
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No
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Party
A
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Financial
data relating to Party A, as required pursuant to Part 5(s) of
this
Schedule.
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As
required pursuant to Part 5(s) of this Schedule.
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Yes
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Party
A
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Executed
Indemnification and Contribution Agreement, among Party A, Party
A's
Credit Support Provider, Ford Motor Credit Company LLC and Ford
Credit
Auto Receivables Two LLC, relating to Party A’s furnished information for
use in the Prospectus.
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At
or promptly following execution of this Agreement.
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Yes
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Party
B
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Copies
of executed Indenture and Sale and Servicing Agreement.
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Upon
execution of such agreements.
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No
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Party
A
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Guarantee
by Xxxxxx Brothers Holdings Inc. in form and substance acceptable
to Party
B.
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At
or promptly following execution of this Agreement.
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No
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Party
A
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Opinion
of counsel of Guarantor re: the Guarantee in form and substance
acceptable to Party B.
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At
or promptly following execution of this Agreement.
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No
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Party
B
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Any
proposed amendment, modification or supplement required to be delivered
to
Party A under Part 5(i).
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As
required under Part 5(i).
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Yes
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Party
B
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Monthly
servicing reports.
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On
or about the 15th
day of each
month if not publicly available
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No
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Part
4. Miscellaneous
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(a)
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Addresses
for Notices:
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(1)
TO
PARTY A:
For
the
purpose of Section 12(a), notices will be delivered to the address or facsimile
number specified in the Confirmation of such Transaction. Any notice
delivered for purposes of Sections 5, 6 and 7 will be delivered to the following
address:
Xxxxxx
Brothers Special Financing Inc.
c/x
Xxxxxx Brothers Inc.
Corporate
Advisory Division
Transaction
Management Group
000
Xxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: Documentation
Manager
Telephone
No.: (000) 000-0000
Facsimile
No.: (000) 000-0000
(2)
TO
PARTY B:
For
the
purpose of Section 12(a), notices will be delivered to the address or facsimile
number specified in the Confirmation of such Transaction. Any notice
delivered for purposes of Sections 5, 6 and 7 will be delivered to the following
address:
U.S.
Bank
Trust National Association,
as
Owner Trustee for
000
Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxxxx,
Xxxxxxxx 00000
Attn: Corporate
Trust Department
Telephone:
(000) 000-0000
Fax: (000)
000-0000
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with
copies to:
The
Bank
of New York,
as
Indenture Trustee for
Ford
Credit Auto Owner Trust 0000-X
000
Xxxxxxx Xxxxxx
Xxxxx
8
West
Attn:
Structured Finance Services -
Asset
Backed Securities, Ford 2007-B
Telephone: (000)
000-0000
Fax: (000)
000-0000
and
Ford
Motor Credit Company LLC
Xxx
Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxx,
Xxxxxxxx 00000
Attention: Corporate
Secretary
Telephone: (000)
000-0000
Fax: (000)
000-0000
and
Ford
Motor Credit Company LLC
c/o
Ford
Motor Company WHQ
Xxx
Xxxxxxxx Xxxx, Xxxxx 000-X0
Xxxxxxxx,
Xxxxxxxx 00000
Attention:
Securitization Operations Supervisor
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
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(b)
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Process
Agent. For the purpose of Section
13(c):
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Party
A
appoints as its Process Agent:Not
applicable.
Party
B
appoints as its Process Agent: Not applicable.
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(c)
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Offices. The
provisions of Section 10(a) will
apply.
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(d)
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Multibranch
Party. For the purpose of
Section 10:
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(i)
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Party
A is not a Multibranch Party.
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(ii)
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Party
B is not a Multibranch Party.
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(e)
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Calculation
Agent. The Calculation Agent is Party
B.
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(f)
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Governing
Law. This Agreement will be
governed by and construed in accordance with the laws of the State
of New
York.
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(g)
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Single
Agreement. Section 1(c) will be amended by the addition of
the words “, the credit support annex entered into between Party A and
Party B in relation to this Master Agreement” after the words “Master
Agreement”.
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(h)
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Netting
of Payments. Subparagraph (ii)
of Section 2(c) will apply to all Transactions under this
Agreement.
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(i)
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“Affiliate”
will have the meaning specified in Section
14.
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(j)
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Waiver
of Jury Trial. Each party
waives, to the fullest extent permitted by applicable law, its
right to
have a jury trial in respect to any proceedings related to this
Agreement. Each party certifies that no representative, agent
or attorney of the other party has represented, expressly or otherwise,
that such other party would not, in the event of such a suit, action
or
proceeding, seek to enforce the foregoing
waiver.
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(k)
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The
definition of “Local Business Day” in Section 14
will be amended by the addition of the words “or any Credit
Support Document” after “Section 2(a)(i)” and the addition of the
words “or Credit Support Document” after
“Confirmation”.
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Part
5. Other
Provisions.
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(a)
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Non-Reliance. In
connection with the negotiation of, the entering into, and the
execution
of this Master Agreement, any Credit Support Document to which
it is a
party, each Transaction and any other documentation relating to
this
Master Agreement to which it is a party or that is required by
this Master
Agreement to deliver, each of Party A and Party B represents and
agrees
that:
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(i)
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it
is not relying (for the purposes of making any investment decision
or
otherwise) upon any advice, counsel or representations (whether
written or
oral) of the other party to this Master Agreement, such Credit
Support
Document, each Transaction or such other documentation other than the
representations expressly set forth in this Master Agreement,
such Credit Support Document and in any
Confirmation;
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(ii)
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it
has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisors to the extent it has deemed necessary,
and it has made its own investment, hedging and trading decisions
(including decisions regarding the suitability of any Transaction
pursuant to this Master Agreement) based upon its own judgment
and upon
any advice from such advisors as it has deemed necessary and not
upon any
view expressed by the other party to this Master Agreement, such
Credit
Support Document, each Transaction or such other
documentation;
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(iii)
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it
has a full understanding of all the terms, conditions and risks
(economic
and otherwise) of the Master Agreement, such Credit Support Document,
each Transaction and such other documentation and is capable of
assuming
and willing to, and will, assume (financially and otherwise) those
risks;
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(iv)
|
it
is an “eligible contract participant” as defined in Section 1a(12) of the
Commodity Exchange Act (7 U.S.C. 1a), as amended by the Commodity
Futures
Modernization Act of 2000;
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(v)
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it
is entering into this Master Agreement, such Credit Support Document,
each
Transaction and such other documentation for the purposes of managing
its borrowings or investments, hedging its underlying assets or
liabilities or in connection with a line of
business;
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(vi)
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it
is entering into this Master Agreement, such Credit Support Document,
each
Transaction and such other documentation as principal, and not as
agent or in any other capacity, fiduciary or otherwise;
and
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(vii)
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the
other party to this Master Agreement, such Credit Support Document,
each
Transaction and such other documentation (a) is not acting as a
fiduciary or financial, investment or commodity trading advisor
for it,
(b) has not given to it (directly or indirectly through any other
person)
any assurance, guaranty or representation whatsoever as to the
merits
(either legal, regulatory, tax, financial, accounting or otherwise)
of this Master Agreement, such Credit Support Document, each
Transaction or such other documentation, and (c) has not committed
to
unwind the Transactions.
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(b)
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Tax
Provisions.
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(i)
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Notwithstanding
the definition of “Indemnifiable Tax” in Section 14 of this Agreement, in
relation to payments by Party A, any Tax shall be an Indemnifiable
Tax
and, in relation to payments by Party B, no Tax shall be an Indemnifiable
Tax.
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(ii)
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Section
2(d)(i)(4) of this Agreement shall be deleted in its entirety and
replaced
with the words “if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment 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 against
X or
Y) will equal the full amount Y would have received had no such
deduction
or withholding been required”.
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(c)
|
Additional
Representation by Party A. Section 3 is
amended by adding the following additional representation by Party
A
only:
|
“(h) Pari
Passu. Its obligations under this Agreement rank pari
passu with all of its other unsecured, unsubordinated obligations except
those
obligations preferred by operation of law.”
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(d)
|
No
Petition. Party A covenants and
agrees that prior to the date that is one year and one day after
the
payment in full of (i) all of the Notes and any other securities
issued by
Party B and (ii) any other securities issued by a trust as to which
Ford
Credit Auto Receivables Two LLC is a depositor (or, if later, the
expiration of all applicable preference periods under the United
States
Bankruptcy Code or other applicable law), it will not institute
against,
or join with any other Person in instituting against, Party B or
Ford
Credit Auto Receivables Two LLC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other proceedings
under United States federal or state bankruptcy or similar law
in
connection with any obligations under this Agreement. The
provisions of this paragraph will survive the termination of this
Agreement.
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28
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(e)
|
Limited
Recourse;
Subordination.
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(i)
|
Notwithstanding
anything to the contrary contained in this Agreement, the obligations
of
Party B under this Agreement and any Transaction hereunder are solely
the obligations of Party B and will be payable solely to the extent
of
funds received by and available to Party B in accordance with the
priority
of payment provisions under the Indenture and on the Payment Dates
specified therein. Party A acknowledges that Party B has
pledged its assets constituting the Indenture Trust Estate to the
Indenture Trustee. Upon exhaustion of the assets of Party B and
the proceeds thereof in accordance with the Indenture and the Sale
and
Servicing Agreement, Party A will not be entitled to take any further
steps against Party B to recover any sums due but unpaid under
this
Agreement, all claims in respect of which will be
extinguished. No recourse may be taken for the payment of any
amount owing in respect of any obligation of, or claim against,
Party B
arising out of or based upon this Agreement or any Transaction
against any
holder of a beneficial interest, employee, officer or Affiliate of
Party B and, except as specifically provided in this Agreement,
no
recourse may be taken for the payment of any amount owing in respect
of
any obligation of, or claim against, Party B based on or arising
out of
this Agreement against the Administrator (as defined in the Administration
Agreement), Ford Credit Auto Receivables Two LLC or any stockholder,
holder of a beneficial interest, employee, officer, director, incorporator
or Affiliate of such person; provided, however, that the
foregoing will not relieve any such person or entity from any liability
they might otherwise have as a result of their gross negligence
or willful
misconduct.
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(ii)
|
The
parties intend that Part 5(e)(i) of this Schedule constitute an
enforceable subordination agreement under Section 510(a) of the
Bankruptcy
Code and will survive the termination of this
Agreement.
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(f)
|
Party
B Pledge. Notwithstanding
Section 7 to the contrary, Party A acknowledges that (i) Party
B will
pledge its rights under this Agreement to the Indenture Trustee
for the
benefit of the Noteholders and the Swap Counterparties pursuant
to the
Indenture and agrees to such pledge and (ii) Party A (as a Secured
Party
under the Basic Documents) has no voting rights in connection with
any
action to be taken on behalf of the Secured Parties. The
Indenture Trustee will not be deemed to be a party to this Agreement,
provided, however, the Indenture Trustee, acting on behalf
of the holders of the Notes, will have the right to enforce this
Agreement
against Party A. Party A will be entitled to rely on any notice
or communication from the Indenture Trustee to that
effect. Party A acknowledges that Party B will pledge
substantially all its assets to the Indenture Trustee for the benefit
of
the Noteholders and Party A and that all payments hereunder, including
payments on early termination, will be made in accordance with
the
priority of payment provisions of the Indenture and the Sale and
Servicing
Agreement and on the Payment Dates specified
therein.
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(g)
|
Severability. If
any term, provision, covenant, or condition of this Agreement,
or the
application thereof to any party or circumstance, will be held
to be
invalid or unenforceable (in whole or in part) for any reason,
the
remaining terms, provisions, covenants, and conditions hereof will
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.
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29
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|
(h)
|
Recording
of Conversations. Each party (i)
consents to the recording of the telephone conversations of the
trading and marketing personnel of the parties in connection
with this Agreement and any potential or actual Transaction and (ii)
agrees to obtain any necessary consent of, and to give notice of such
recording to, its personnel.
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(i)
|
Consent
by Party A to Amendments to Certain
Documents. Before any amendment,
modification or supplement is made to the Indenture or the Purchase
Agreement or the Sale and Servicing Agreement that (i) would materially
adversely affect any of Party A’s rights or obligations under this
Agreement or any Transaction or (ii) modify the obligations or
impair the
ability of Party B to fully perform any of Party B’s obligations under
this Agreement or any Transaction in such a way that would materially
adversely affect any of Party A’s rights or obligations under this
Agreement or any Transaction, Party B will provide Party A with
a copy of
the proposed amendment, modification or supplement and will, where
such
consent is required, obtain the consent of Party A prior to its
adoption,
which consent will not be unreasonably withheld or delayed, provided
that
Party A’s consent will be deemed to have been given if Party A does not
object in writing within 10 Business Days of receipt of a written
request
for such consent.
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(j)
|
Set-off.
|
|
|
(i)
|
All
payments under this Agreement will be made without set-off or
counterclaim, except as expressly provided for in Section 2(c),
Section 6
or Part 1(k)(ix).
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(ii)
|
Section
6(e) will be amended by the deletion of the following sentence;
“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.”
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(k)
|
Limitation
of Liability of Owner Trustee. Notwithstanding
anything contained in this Agreement to the contrary, this instrument
(and
any Confirmation pursuant to this instrument) has been or will
be signed
on behalf of Party B by U.S. Bank Trust National Association not
in its
individual capacity but solely in its capacity as Owner Trustee
of Party B
and in no event will U.S. Bank Trust National Association in its
individual capacity or any beneficial owner of Party B have any
liability
for the representations, warranties, covenants, agreements or other
obligations of Party B under this Agreement or under any such
Confirmation, as to all of which recourse will be had solely to
the assets
of Party B. For all purposes of this Agreement and any
Confirmation, in the performance of any duties or obligations of
Party B
hereunder, the Owner Trustee will be subject to, and entitled to
the
benefits of, the terms and provisions of the Trust Agreement;
provided, however, that the foregoing will not relieve the
Owner Trustee from any liability it might otherwise have under
the Trust
Agreement as a result of its gross negligence or willful
misconduct.
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(l)
|
Definitions. Unless
otherwise
specified in a Confirmation, this Agreement and the relevant Transaction
between the parties are subject to the 2000 ISDA Definitions (the
“Definitions”), as published by the International Swaps and Derivatives
Association, Inc., and will be governed in all relevant respects
by the
provisions set forth in the Definitions, without regard to any
amendment
to the Definitions subsequent to the date hereof. The
provisions of the Definitions are incorporated by reference in and
will be deemed a part of this Agreement, except that references
in the
Definitions to a “Swap Transaction” will be deemed references to a
“Transaction” for purposes of this Agreement. In the event of
any inconsistency between the provisions of this Agreement and
the
Definitions, this Agreement will prevail. In the event of any
inconsistency between the provision of any Confirmation and this
Agreement
or the Definitions, such Confirmation will prevail for the purpose
of the
relevant Transaction.
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30
For
the
purpose of this Agreement:
“Credit
Support Annex” means any credit support annex entered into between
Party A and Party B relating to this Agreement, as amended, supplemented
or
otherwise modified from time to time.
“Credit
Support Document” means the Credit Support Annex and any Eligible
Guarantee for Party A, including the Guarantee of Xxxxxx Brothers Holdings
Inc.
“Credit
Support Provider” means in relation to Party A, (1) Party
A in its capacity as a party to the Credit Support Annex and (2) Xxxxxx Brothers
Holdings Inc. and the guarantor under any Eligible Guarantee, and in relation
to
Party B, Party B in its capacity as a party to the Credit Support
Annex.
31
“Eligible Guarantee”
means an unconditional and irrevocable guarantee that is provided by a guarantor
that is a Financial Institution as principal debtor rather than surety and
is
directly enforceable by Party B, where either (A) a law firm has given a
legal
opinion confirming that none of the guarantor’s payments to Party B under such
guarantee will be subject to withholding for tax or (B) such guarantee provides
that, in the event that any of such guarantor’s payments to Party B are subject
to withholding for tax, such guarantor is required to pay such additional
amount
as is necessary to ensure that the net amount actually received by Party
B (free
and clear of any withholding tax) will equal the full amount Party B would
have
received had no such withholding been required.
“Eligible
Replacement” means a Financial Institution (i)(A) having the
Xxxxx’x First Trigger Required Ratings and/or the Xxxxx’x Second Trigger
Required Ratings or (B) whose present and future obligations owing to Party
B
are guaranteed pursuant to an Eligible Guarantee provided by a guarantor
having
the Xxxxx’x First Trigger Required Ratings and/or the Xxxxx’x Second Trigger
Required Ratings, and (ii)(A) having the S&P First Trigger Required Ratings
and/or the S&P Second Trigger Required Ratings or (B) whose present and
future obligations owing to Party B are guaranteed pursuant to an Eligible
Guarantee provided by a guarantor having the S&P First Trigger Required
Ratings and/or the S&P Second Trigger Required Ratings, and (iii)(A) having
the Fitch First Trigger Required Ratings or (B) whose present and future
obligations owing to Party B are guaranteed pursuant to an Eligible Guarantee
provided by a guarantor having the Fitch First Trigger Required
Ratings.
“Financial
Institution” means a bank, broker/dealer, insurance company,
structured investment vehicle or derivative product company.
“Firm
Offer” means an offer which, when made, was capable of becoming
legally binding upon acceptance.
“Xxxxx’x
Short-term Rating” means a rating assigned by Xxxxx’x under its
short-term rating scale in respect of an entity’s short-term, unsecured and
unsubordinated debt obligations
“Relevant
Entities” means Party A and any guarantor under an Eligible
Guarantee in respect of all of Party A’s present and future obligations under
this Agreement.
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(m)
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Additional
Defined Terms. Capitalized terms used but not
defined in this Agreement (including this Schedule) or any Confirmation
are defined in the Sale and Servicing Agreement, dated as of October
1,
2007 (including Appendix A to such Sale and Servicing Agreement),
as
amended, supplemented or otherwise modified, among Party B, Ford
Motor
Credit Company LLC, as Servicer, and Ford Credit Auto Receivables
Two LLC,
as Depositor.
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(n)
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Downgrade
or Withdrawal of Party A’s Rating by
Fitch.
|
(i) Fitch
First Rating Trigger. If no Relevant Entity has a short
term unsecured debt rating of “F1” or better or a long term unsecured debt
rating of “A” or better by Fitch (such rating thresholds, the “Fitch
First Trigger Required
Ratings”
and
such failure, the “Fitch First Rating
Trigger”)
and the Fitch Second Rating
Trigger has not occurred, then within 30 calendar days of such failure (or
on
the date of this Agreement, if no Relevant Entity has the Fitch First Trigger
Required Ratings as of the date of this Agreement), Party A will, at its
own
cost, (A) post collateral in the amount and manner as set forth in the
Credit Support Annex, (B) procure an Eligible Guarantee in respect of all
of Party A’s present and future obligations under this Agreement to be provided
by a guarantor having the Fitch First Trigger Required Ratings and which
procurement will not be effective without the prior written confirmation
of
Fitch that such procurement will not cause Fitch to reduce or withdraw its
then
current rating on the Notes, (C) effect a transfer in accordance with Part
5(p)(ii) above or (D) establish any other arrangement satisfactory to Party
B
and to Fitch as to not cause Fitch to reduce or withdraw its then current
rating
on the Notes.
32
(ii) Fitch
Second Rating Trigger. If no Relevant Entity has a short
term unsecured debt rating of “F3” or better or a long term unsecured debt
rating of “BBB-” or better by Fitch (such rating thresholds, the
“Fitch Second Trigger Required Ratings” and such
failure, the “Fitch Second
Rating
Trigger”), then within 30
calendar days of such failure, Party A will, at its own cost, procure either
(A)
an Eligible Guarantee in respect of all of Party A’s present and future
obligations under this Agreement to be provided by a guarantor having the
Fitch
First Trigger Required Ratings and which procurement will not be effective
without the prior written confirmation of Fitch that such procurement
will not cause Fitch to reduce or withdraw its then current rating on the
Notes
or (B) a transfer in accordance with Part 5(p)(ii) above; provided that Party
A
will promptly post collateral in the amount and manner as set forth in the
Credit Support Annex while a replacement or guarantor is being
sought.
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(o)
|
Downgrade
or Withdrawal of Party
A’s Rating by
Xxxxx’x.
|
(i) An
entity shall have the “Xxxxx’x First
Trigger Required Ratings”
(A) where such entity
is the subject of a Xxxxx’x Short-term Rating, if such
rating is “Prime-1” and its long-term, unsecured and unsubordinated debt
obligations are rated “A2” or above by Xxxxx’x and (B) where such entity is not
the subject of a Xxxxx’x Short-term Rating, if its long-term, unsecured and
unsubordinated debt obligations are rated “A1” or above by Xxxxx’x.
(ii) The
“Xxxxx’sFirst Rating Trigger
Requirements” shall apply so long as no Relevant Entity has the
Xxxxx’x First Trigger Required Ratings. Within 30 Local Business Days
after the Xxxxx’x First Rating Trigger Requirements apply, Party A will, at its
own cost, (A) procure an Eligible Guarantee in respect of all of Party A’s
present and future obligations under this Agreement to be provided by a
guarantor meeting the Xxxxx’x First Trigger Required Ratings, (B) effect a
transfer in accordance with Part 5(p)(ii) below or (C) post collateral in
the
amount and manner as set forth in the Credit Support Annex.
(iii) An
entity shall have the “Xxxxx’sSecond
Trigger Required Ratings” (A) where such entity is the subject of
a Xxxxx’x Short-term Rating, if such rating is “Prime-2” or above and its
long-term, unsecured and unsubordinated debt obligations are rated “A3” or above
by Xxxxx’x and (B) where such entity is not the subject of a Xxxxx’x Short-term
Rating, if its long-term, unsecured and unsubordinated debt obligations are
rated “A3” or above by Xxxxx’x.
(iv) The
“Xxxxx’x Second Rating Trigger
Requirements” shall apply so long as no Relevant Entity has the
Xxxxx’x Second Trigger Required Ratings. Within 30 Local Business Days
after the Xxxxx’x Second Rating Trigger Requirements apply, Party A
will post collateral in the amount and manner as set forth in the Credit
Support
Annex. Party A will also, at its own cost, use commercially
reasonable efforts to, as soon as reasonably practicable, procure either
(A) an
Eligible Guarantee in respect of all of Party A’s present and future obligations
under this Agreement to be provided by a guarantor meeting at least the
Xxxxx’x Second Trigger Required Ratings or (B) a transfer in accordance
with Part 5(p)(ii) below.
33
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|
(p)
|
Transfers.
|
(i) Section
7 of this Agreement shall not apply to Party A and, subject to Section 6(b)(ii)
and clause (ii) below, Party A may not transfer (whether by way of security
or
otherwise) any interest or obligation in or under this Agreement without
(x) the
prior written consent of Party B, which consent not to be unreasonably withheld
or delayed, and (y) complying with Part 5(q) below. Notwithstanding
the foregoing, any transfer by Party A to any Affiliate of Xxxxxx Brothers
Holdings Inc. (“LBHI”) is acceptable to Party B and does not require the consent
of Party B if such transfer is guaranteed by LBHI (such guarantee to be
identical to the Guarantee provided by LBHI on the date of this Agreement)
and
is an Eligible Replacement and otherwise meets the requirements of the Rating
Agencies.
(ii) Subject
to clause (i) above, Party A may (at its own cost) transfer all or substantially
all of its rights and obligations with respect to this Agreement to any other
entity (a “Transferee”) that is an Eligible
Replacement and which agrees to the same terms and conditions as those existing
under this Agreement, provided that Party B shall determine in its sole
discretion, acting in a commercially reasonable manner, whether or not a
transfer relates to all or substantially all of Party A’s rights and obligations
under this Agreement. Following such transfer, all references to Party A
shall
be deemed to be references to the Transferee.
(iii) If
an entity has made a Firm Offer (which remains capable of becoming legally
binding upon acceptance) to be the transferee of a transfer to be made in
accordance with (ii) above, Party B shall (at Party A’s cost) at Party A’s
written request, take any reasonable steps required to be taken by it to
effect
such transfer.
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(q)
|
Approval
of Amendments, Transfers or
Assignment. Notwithstanding any
other provisions of this Agreement, no amendments to this Agreement
will be effected, nor may the rights and obligations of Party A
be
transferred or assigned, without the prior written
confirmation of each Rating Agency that such
amendment, transfer or assignment will not cause such Rating Agency
to reduce or withdraw its then current rating on any of the
Notes.
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(r)
|
Party
B Agent. Party A acknowledges
that Party B has appointed Ford Motor Credit Company LLC as its
agent
under the Administration Agreement to carry out certain functions
on
behalf of Party B, and that Ford Motor Credit Company LLC shall
be
entitled to give notices and to perform and satisfy the obligations
of
Party B hereunder on behalf of Party
B.
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(s)
|
Regulation
AB Financial
Disclosure.
|
Party
A
acknowledges that for so long as there are reporting obligations with respect
to
any Transaction under this Agreement under Regulation AB, the Depositor is
required under Regulation AB to disclose certain information set forth in
Regulation AB regarding Party A or its group of affiliated entities, if
applicable, depending on the aggregate “significance percentage” of this
Agreement and any other derivative contracts between Party A or its group
of
affiliated entities, if applicable, and Party B, as calculated from time
to time
in accordance with Item 1115 of Regulation AB.
34
If
the
Depositor determines, reasonably and in good faith, that the “significance
percentage” of this Agreement has increased to 9%, then on any Business Day
after the date of such determination the Depositor may request from Party
A the
same information set forth in Item 1115(b) of Regulation AB that would have
been
required if the significance percentage had in fact increased to 10%
(such request, a “Swap Financial Disclosure Request” and such requested
information, subject to the last sentence of this paragraph, the “Swap Financial
Disclosure”). Party A and Party B further agree that the Swap
Financial Disclosure provided to meet the Swap Financial Disclosure Request
will
be the information set forth in Item 1115(b)(1) or Item 1115(b)(2) of Regulation
AB, as applicable, and as specified by Party B.
Upon
the
occurrence of a Swap Financial Disclosure Request, Party A, at its own expense,
shall within 30 days after receipt of such Swap Financial Disclosure
Request (or within 10 days after Party A being informed of the
significance percentage reaching 10% after such Swap Financial Disclosure
Request): (i) provide the Depositor with the Swap Financial Disclosure,
(ii) subject to Rating Agency Confirmation and approval by Party B (which
approval will not be unreasonably withheld), secure another entity to replace
Party A as party to this Agreement on terms substantially similar to this
Agreement which entity is able and will provide the Swap Financial Disclosure
for such entity within the time period specified above or (iii) subject to
Rating Agency Confirmation and approval by Party B (which approval will not
be
unreasonably withheld), obtain a guaranty of Party A’s obligations under this
Agreement from an affiliate of Party A that is able to provide the Swap
Financial Disclosure for such affiliate, such that disclosure provided in
respect of the affiliate will satisfy any disclosure requirements applicable
to
Party A, and cause such affiliate to provide Swap Financial Disclosure within
the time period specified above. If permitted by Regulation AB, any
required Swap Financial Disclosure may be provided by incorporation by reference
from reports filed pursuant to the Exchange Act.
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|
(t)
|
Downgrade
or Withdrawal of Party A’s Rating by
S&P.
|
(i) S&P
First Rating Trigger. If no Relevant Entity has a short
term unsecured debt rating of “A-1” or better by S&P or, if no Relevant
Entity has a short term unsecured debt rating by S&P, a long term unsecured
debt rating of “A+” or better by S&P (such rating thresholds, the
“S&P First Trigger Required
Ratings”
and
such failure, the “S&P First Rating
Trigger”) and the S&P Second Rating
Trigger has not occurred, then within 10 Local Business Days of such failure
(or
on the date of this Agreement, if no Relevant Entity has the S&P First
Trigger Required Ratings as of the date of this Agreement), Party A will,
at its
own cost, post collateral in the amount and manner as set forth in the
Credit Support Annex. Party A may also, at its own cost, procure
either (A) an Eligible Guarantee in respect of all of Party A’s present and
future obligations under this Agreement to be provided by a guarantor having
the
S&P First Trigger Required Ratings and which procurement will not be
effective without the prior written confirmation of S&P that such
procurement will not cause S&P to reduce or withdraw its then current rating
on the Notes or (B) a transfer to a Financial Institution in accordance with
Part 5(p)(ii) above, and upon either such procurement, Party A will no longer
be
required to post any collateral.
(ii) S&P
Second Rating Trigger. If no Relevant Entity has a short
term unsecured debt rating of “A-2” or better by S&P or, if no Relevant
Entity has a short term unsecured debt rating by S&P, a long term unsecured
debt rating of “BBB+” or better by S&P (such rating thresholds, the
“S&P Second Trigger Required
Ratings” and such failure, the “S&P Second Rating
Trigger”),
then within 10 Local Business
Days of such failure, Party A will, at its own cost, post additional
collateral in the amount and manner as set forth in the Credit Support
Annex. Party A will also, at its own cost, within 60 calendar
days of such failure, use commercially reasonable efforts to procure either
(A)
an Eligible Guarantee in respect of all of Party A’s present and future
obligations under this Agreement to be provided by a guarantor having the
S&P Second Trigger Required Ratings and which procurement will not be
effective without the prior written confirmation of S&P that such
procurement will not cause S&P to reduce or withdraw its then current rating
on the Notes or (B) a transfer to a Financial Institution in accordance with
Part 5(p)(ii) above.
[SIGNATURE
PAGE FOLLOWS]
35
|
EXECUTED
BY:
|
||||
|
XXXXXX
BROTHERS SPECIAL FINANCING INC.
|
||||
|
By:
|
U.S.
BANK TRUST NATIONAL ASSOCIATION,
|
|||
|
not
in its individual capacity
|
By:
|
/s/
Xxxxxxx X. Xxxxxx
|
||
|
but
solely as Owner Trustee
|
Name: Xxxxxxx
X. Xxxxxx
|
|||
|
Title: Authorized
Signatory
|
||||
|
By:
|
/s/
Xxxxxx Xxxxx
|
|||
|
Name: Xxxxxx
Xxxxx
|
Date: October
____, 2007
|
|||
|
Title: Vice
President
|
||||
|
Date: October
____, 2007
|
||||
[Signature
Page to Swap Schedule]
36
