Document:

ex10_2.htm

    
      

    

    Exhibit
      10.2

     

    
      	
              (Bilateral
                Form)

            	
               (ISDA
                Agreements Subject to New York Law
                Only)

            

    

    

    ISDA®

    International
      Swaps and Derivatives Association, Inc.

    

    CREDIT
      SUPPORT ANNEX

    

    to
      the 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 trust

    (“Party
      B”)

    

    This
      Annex supplements, forms part of, and is subject to, the above-referenced
      Agreement, is part of its Schedule and is a Credit Support Document under this
      Agreement with respect to each party.

    

    Accordingly,
      the parties agree as follows:—

    

    
      	
              Paragraph
                1.

            	
              Interpretation

            

    

    

    (a)           Definitions
      and Inconsistency.  Capitalized terms not otherwise
      defined herein or elsewhere in this Agreement have the meanings specified
      pursuant to Paragraph 12, and all references in this Annex to Paragraphs are
      to
      Paragraphs of this Annex. In the event of any
      inconsistency between this Annex and the other provisions of this Schedule,
      this
      Annex will prevail, and in the event of any inconsistency between Paragraph
      13
      and the other provisions of this Annex, Paragraph 13 will prevail.

    

    (b)           Secured
      Party and Pledgor.  All references in this
      Annex to the “Secured Party” will be to either party when acting in that
      capacity and all corresponding references to the “Pledgor” will be to the other
      party when acting in that capacity; provided, however, that if
      Other Posted Support is held by a party to this Annex, all references herein
      to
      that party as the Secured Party with respect to that Other Posted Support will
      be to that party as the beneficiary thereof and will not subject that support
      or
      that party as the beneficiary thereof to provisions of law generally relating
      to
      security interests and secured parties.

    

    
      	
              Paragraph
                2.

            	
              Security
                Interest

            

    

     

     

    Copyright
©1994
      by International Swaps and Derivatives
      Association, Inc.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Each
      party, as the Pledgor, hereby pledges to the other party, as the Secured Party,
      as security for its Obligations, and grants to the Secured Party a first
      priority continuing security interest in, lien on and right of Set-off against
      all Posted Collateral Transferred to or received by the Secured Party hereunder.
      Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral,
      the
      security interest and lien granted hereunder on that Posted Collateral will
      be
      released immediately and, to the extent possible, without any further action
      by
      either party.

    

    
      	
              Paragraph
                3.

            	
              Credit
                Support Obligations

            

    

    

    (a)           Delivery
      Amount.  Subject to Paragraphs 4 and 5, upon
      a demand made by the Secured Party on or promptly following a Valuation Date,
      if
      the Delivery Amount for that Valuation Date equals or exceeds the Pledgor’s
      Minimum Transfer Amount, then the Pledgor will Transfer to the Secured Party
      Eligible Credit Support having a Value as of the date of Transfer at least
      equal
      to the applicable Delivery Amount (rounded pursuant to Paragraph
      13).  Unless otherwise specified in Paragraph 13, the
“Delivery Amount” applicable to the Pledgor for any
      Valuation Date will equal the amount by which:

    

    
      	
               

            	
              (i)

            	
              the
                Credit Support Amount

            

    

    

    exceeds

    

    
      	
               

            	
              (ii)

            	
              the
                Value as of that Valuation Date of all Posted Credit Support held
                by the
                Secured Party.

            

    

    

    (b)           Return
      Amount.  Subject to Paragraphs 4 and 5, upon
      a demand made by the Pledgor on or promptly following a Valuation Date, if
      the
      Return Amount for that Valuation Date equals or exceeds the Secured Party’s
      Minimum Transfer Amount, then the Secured Party will Transfer to the Pledgor
      Posted Credit Support specified by the Pledgor in that demand having a Value
      as
      of the date of Transfer as close as practicable to the applicable Return Amount
      (rounded pursuant to Paragraph 13).  Unless otherwise specified in
      Paragraph 13, the “Return Amount” applicable to the
      Secured Party for any Valuation Date will equal the amount by
      which:

    

    
      	
               

            	
              (i)

            	
              the
                Value as of that Valuation Date of all Posted Credit Support held
                by the
                Secured Party

            

    

    

    exceeds

    

    
      	
               

            	
              (ii)

            	
              the
                Credit Support Amount.

            

    

    

    “Credit
      Support Amount” means, unless otherwise specified in Paragraph 13,
      for any Valuation Date (i) the Secured Party’s Exposure for that Valuation Date
      plus (ii) the aggregate of all Independent Amounts applicable to the Pledgor,
      if
      any, minus (iii) all Independent Amounts applicable to the Secured Party, if
      any, minus (iv) the Pledgor’s Threshold; provided, however,
      that the Credit Support Amount will be deemed to be zero whenever the
      calculation of Credit Support Amount yields a number less than
      zero.

    

    
      	
              Paragraph
                4.

            	
              Conditions
                Precedent, Transfer Timing, Calculations and
                Substitutions

            

    

    

    (a)           Conditions
      Precedent. Each Transfer obligation of the Pledgor under
      Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5
      and
      6(d) is subject to the conditions precedent that:

    

    (i)   
      no Event of Default, Potential Event of Default or Specified Condition has
      occurred and is continuing with respect to the other party; and

    

    (ii)  
      no Early Termination Date for which any unsatisfied payment obligations exist
      has occurred or been designated as the result of an Event of Default or
      Specified Condition with respect to the other party.

    

    (b)           Transfer
      Timing.  Subject to Paragraphs 4(a) and 5 and unless
      otherwise specified, if a demand for the Transfer of Eligible Credit Support
      or
      Posted Credit Support is made by the Notification Time, then the relevant
      Transfer will be made not later than the close of business on the next Local
      Business Day; if a demand is made after the Notification Time, then the relevant
      Transfer will be made not later than the close of business on the second Local
      Business Day thereafter.

     

    
      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    (c)           Calculations.
       All calculations of Value and Exposure for purposes
      of Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
      Time.  The Valuation Agent will notify each party (or the other party,
      if the Valuation Agent is a party) of its calculations not later than the
      Notification Time on the Local Business Day following the applicable Valuation
      Date (or in the case of Paragraph 6(d), following the date of
      calculation).

    

    (d)   Substitutions.

    

    (i)  
      Unless otherwise specified in Paragraph 13, upon notice to the Secured Party
      specifying the items of Posted Credit Support to be exchanged, the Pledgor
      may,
      on any Local Business Day, Transfer to the Secured Party substitute Eligible
      Credit Support (the “Substitute Credit Support”); and

    

    (ii)  
      subject to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the
      items of Posted Credit Support specified by the Pledgor in its notice not later
      than the Local Business Day following the date on which the Secured Party
      receives the Substitute Credit Support, unless otherwise specified in Paragraph
      13 (the “Substitution Date”); provided that the Secured Party will only
      be obligated to Transfer Posted Credit Support with a Value as of the date
      of
      Transfer of that Posted Credit Support equal to the Value as of that date of
      the
      Substitute Credit Support.

    

    
      	
              Paragraph
                5.

            	
              Dispute
                Resolution

            

    

    

    If
      a
      party (a “Disputing Party”) disputes (I) the Valuation Agent’s calculation of a
      Delivery Amount or a Return Amount or (II) the Value of any Transfer of Eligible
      Credit Support or Posted Credit Support, then (1) the Disputing Party will
      notify the other party and the Valuation Agent (if the Valuation Agent is not
      the other party) not later than the close of business on the Local Business
      Day
      following (X) the date that the demand is made under Paragraph 3 in the case
      of
      (I) above or (Y) the date of Transfer in the case of (II) above, (2) subject
      to
      Paragraph 4(a), the appropriate party will Transfer the undisputed amount to
      the
      other party not later than the close of business on the Local Business Day
      following (X) the date that the demand is made under Paragraph 3 in the case
      of
      (I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
      will consult with each other in an attempt to resolve the dispute and (4) if
      they fail to resolve the dispute by the Resolution Time, then:

    

    (i)  
      In the case of a dispute involving a Delivery Amount or Return Amount, unless
      otherwise specified in Paragraph 13, the Valuation Agent will recalculate the
      Exposure and the Value as of the Recalculation Date by:

    

    (A)  
      utilizing any calculations of Exposure for the Transactions (or Swap
      Transactions) that the parties have agreed are not in dispute;

    

    (B)  
      calculating the Exposure for the Transactions (or Swap Transactions) in dispute
      by seeking four actual quotations at mid-market from Reference Market-makers
      for
      purposes of calculating Market Quotation, and taking the arithmetic average
      of
      those obtained; provided that if four quotations are not available for
      a particular Transaction (or Swap Transaction), then fewer than four quotations
      may be used for that Transaction (or Swap Transaction); and if no quotations
      are
      available for a particular Transaction (or Swap Transaction), then the Valuation
      Agent’s original calculations will be used for that Transaction (or Swap
      Transaction); and

    

    (C)  
      utilizing the procedures specified in Paragraph 13 for calculating the Value,
      if
      disputed, of Posted Credit Support.

    

    (ii)  
      In the case of a dispute involving the Value of any Transfer of Eligible Credit
      Support or Posted Credit Support, the Valuation Agent will recalculate the
      Value
      as of the date of Transfer pursuant to Paragraph 13.

     

    
      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    Following
      a recalculation pursuant to this Paragraph, the Valuation Agent will notify
      each
      party (or the other party, if the Valuation Agent is a party) not later than
      the
      Notification Time on the Local Business Day following the Resolution
      Time.  The appropriate party will, upon demand following that notice
      by the Valuation Agent or a resolution pursuant to (3) above and subject to
      Paragraphs 4(a) and 4(b), make the appropriate Transfer.

    

    
      	
              Paragraph
                6.

            	
              Holding
                and Using Posted
                Collateral

            

    

    

    (a)           Care
      of Posted Collateral.  Without limiting the Secured
      Party’s rights under Paragraph 6(c), the Secured Party will exercise reasonable
      care to assure the safe custody of all Posted Collateral to the extent required
      by applicable law, and in any event the Secured Party will be deemed to have
      exercised reasonable care if it exercises at least the same degree of care
      as it
      would exercise with respect to its own property.  Except as specified
      in the preceding sentence, the Secured Party will have no duty with respect
      to
      Posted Collateral, including, without limitation, any duty to collect any
      Distributions, or enforce or preserve any rights pertaining
      thereto.

    

    (b)           Eligibility
      to Hold Posted Collateral; Custodians.

    

    (i)  
      General.  Subject to the satisfaction of
      any conditions specified in Paragraph 13 for holding Posted Collateral, the
      Secured Party will be entitled to hold Posted Collateral or to appoint an agent
      (a “Custodian”) to hold Posted Collateral for the Secured Party.  Upon
      notice by the Secured Party to the Pledgor of the appointment of a Custodian,
      the Pledgor’s obligations to make any Transfer will be discharged by making the
      Transfer to that Custodian.  The holding of Posted Collateral by a
      Custodian will be deemed to be the holding of that Posted Collateral by the
      Secured Party for which the Custodian is acting.

    

    (ii)  
      Failure to Satisfy Conditions.  If the
      Secured Party or its Custodian fails to satisfy any conditions for holding
      Posted Collateral, then upon a demand made by the Pledgor, the Secured Party
      will, not later than five Local Business Days after the demand, Transfer or
      cause its Custodian to Transfer all Posted Collateral held by it to a Custodian
      that satisfies those conditions or to the Secured Party if it satisfies those
      conditions.

    

    (iii) 
      Liability.  The Secured Party will be
      liable for the acts or omissions of its Custodian to the same extent that the
      Secured Party would be liable hereunder for its own acts or
      omissions.

    

    (c)           Use
      of Posted Collateral.  Unless otherwise specified in
      Paragraph 13 and without limiting the rights and obligations of the parties
      under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a
      Defaulting Party or an Affected Party with respect to a Specified Condition
      and
      no Early Termination Date has occurred or been designated as the result of
      an
      Event of Default or Specified Condition with respect to the Secured Party,
      then
      the Secured Party will, notwithstanding Section 9-207 of the New York Uniform
      Commercial Code, have the right to:

    

    (i)  
      sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose
      of, or otherwise use in its business any Posted Collateral it holds, free from
      any claim or right of any nature whatsoever of the Pledgor, including any equity
      or right of redemption by the Pledgor; and

    

    (ii)  
      register any Posted Collateral in the name of the Secured Party, its Custodian
      or a nominee for either.

    

    For
      purposes of the obligation to Transfer Eligible Credit Support or Posted Credit
      Support pursuant to Paragraphs 3 and 5 and any rights or remedies authorized
      under this Agreement, the Secured Party will be deemed to continue to hold
      all
      Posted Collateral and to receive Distributions made thereon, regardless of
      whether the Secured Party has exercised any rights with respect to any Posted
      Collateral pursuant to (i) or (ii) above.

    

    (d)    Distributions
      and Interest Amount

    

    (i)  
      Distributions.  Subject to Paragraph
      4(a), if the Secured Party receives or is deemed to receive Distributions on
      a
      Local Business Day, it will Transfer to the Pledgor not later than the following
      Local Business Day any Distributions it receives or is deemed to receive to
      the
      extent that a Delivery Amount would not be created or increased by that
      Transfer, as calculated by the Valuation Agent (and the date of calculation
      will
      be deemed to be a Valuation Date for this purpose).

    

      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    (ii)  
      Interest Amount.  Unless otherwise specified
      in Paragraph 13 and subject to Paragraph 4(a), in lieu of any interest,
      dividends or other amounts paid or deemed to have been paid with respect to
      Posted Collateral in the form of Cash (all of which may be retained by the
      Secured Party), the Secured Party will Transfer to the Pledgor at the times
      specified in Paragraph 13 the Interest Amount to the extent that a Delivery
      Amount would not be created or increased by that Transfer, as calculated by
      the
      Valuation Agent (and the date of calculation will be deemed to be a Valuation
      Date for this purpose).  The Interest Amount or portion thereof not
      Transferred pursuant to this Paragraph will constitute Posted Collateral in
      the
      form of Cash and will be subject to the security interest granted under
      Paragraph 2.

    

    
      	
              Paragraph
                7.

            	
              Events
                of Default

            

    

    

    For
      purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
      exist with respect to a party if:

    

    (i)  
      that party fails (or fails to cause its Custodian) to make, when due, any
      Transfer of Eligible Collateral, Posted Collateral or the Interest Amount,
      as
      applicable, required to be made by it and that failure continues for two Local
      Business Days after notice of that failure is given to that party;

    

    (ii)  
      that party fails to comply with any restriction or prohibition specified in
      this
      Annex with respect to any of the rights specified in Paragraph 6(c) and that
      failure continues for five Local Business Days after notice of that failure
      is
      given to that party; or

    

    (iii) 
      that party fails to comply with or perform any agreement or obligation other
      than those specified in Paragraphs 7(i) and 7(ii) and that failure continues
      for
      30 days after notice of that failure is given to that party.

    

    
      	
              Paragraph
                8.

            	
              Certain
                Rights and Remedies

            

    

    

    (a)           Secured
      Party’s Rights and Remedies.  If at any time (1) an
      Event of Default or Specified Condition with respect to the Pledgor has occurred
      and is continuing or (2) an Early Termination Date has occurred or been
      designated as the result of an Event of Default or Specified Condition with
      respect to the Pledgor, then, unless the Pledgor has paid in full all of its
      Obligations that are then due, the Secured Party may exercise one or more of
      the
      following rights and remedies:

    

    (i)  
      all rights and remedies available to a secured party under applicable law with
      respect to Posted Collateral held by the Secured Party;

    

    (ii)  
      any other rights and remedies available to the Secured Party under the terms
      of
      Other Posted Support, if any;

    

    (iii) 
      the right to Set-off any amounts payable by the Pledgor with respect to any
      Obligations against any Posted Collateral or the Cash equivalent of any Posted
      Collateral held by the Secured Party (or any obligation of the Secured Party
      to
      Transfer that Posted Collateral); and

    

    (iv) 
      the right to liquidate any Posted Collateral held by the Secured Party through
      one or more public or private sales or other dispositions with such notice,
      if
      any, as may be required under applicable law, free from any claim or right
      of
      any nature whatsoever of the Pledgor, including any equity or right of
      redemption by the Pledgor (with the Secured Party having the right to purchase
      any or all of the Posted Collateral to be sold) and to apply the proceeds (or
      the Cash equivalent thereof) from the liquidation of the Posted Collateral
      to
      any amounts payable by the Pledgor with respect to any Obligations in that
      order
      as the Secured Party may elect.

    

      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

    Each
      party acknowledges and agrees that Posted Collateral in the form of securities
      may decline speedily in value and is of a type customarily sold on a recognized
      market, and, accordingly, the Pledgor is not entitled to prior notice of any
      sale of that Posted Collateral by the Secured Party, except any notice that
      is
      required under applicable law and cannot be waived.

    

    (b)           Pledgor’s
      Rights and Remedies.  If at any time an Early
      Termination Date has occurred or been designated as the result of an Event
      of
      Default or Specified Condition with respect to the Secured Party, then (except
      in the case of an Early Termination Date relating to less than all Transactions
      (or Swap Transactions) where the Secured Party has paid in full all of its
      obligations that are then due under Section 6(e) of this
      Agreement):

    

    (i)  
      the Pledgor may exercise all rights and remedies available to a pledgor under
      applicable law with respect to Posted Collateral held by the Secured
      Party;

    

    (ii)  
      the Pledgor may exercise any other rights and remedies available to the Pledgor
      under the terms of Other Posted Support, if any;

    

    (iii) 
      the Secured Party will be obligated immediately to Transfer all Posted
      Collateral and the Interest Amount to the Pledgor; and

    

    (iv) 
      to the extent that Posted Collateral or the Interest Amount is not so
      Transferred pursuant to (iii) above, the Pledgor may:

    

    (A)  
      Set-off any amounts payable by the Pledgor with respect to any Obligations
      against any Posted Collateral or the Cash equivalent of any Posted Collateral
      held by the Secured Party (or any obligation of the Secured Party to Transfer
      that Posted Collateral); and

    

    (B)  
      to the extent that the Pledgor does not Set-off under (iv)(A) above, withhold
      payment of any remaining amounts payable by the Pledgor with respect to any
      Obligations, up to the Value of any remaining Posted Collateral held by the
      Secured Party, until that Posted Collateral is Transferred to the
      Pledgor.

    

    (c)           Deficiencies
      and Excess Proceeds.  The Secured Party will
      Transfer to the Pledgor any proceeds and Posted Credit Support remaining after
      liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b) after
      satisfaction in full of all amounts payable by the Pledgor with respect to
      any
      Obligations; the Pledgor in all events will remain liable for any amounts
      remaining unpaid after any liquidation, Set-off and/or application under
      Paragraphs 8(a) and 8(b).

    

    (d)           Final
      Returns.  When no amounts are or thereafter
      may become payable by the Pledgor with respect to any Obligations (except for
      any potential liability under Section 2(d) of this Agreement), the Secured
      Party
      will Transfer to the Pledgor all Posted Credit Support and the Interest Amount,
      if any.

    

    
      	
              Paragraph
                9.

            	
              Representations

            

    

    

    Each
      party represents to the other party (which representations will be deemed to
      be
      repeated as of each date on which it, as the Pledgor, Transfers Eligible
      Collateral) that:

    

    (i)  
      it has the power to grant a security interest in and lien on any Eligible
      Collateral it Transfers as the Pledgor and has taken all necessary actions
      to
      authorize the granting of that security interest and lien;

    

    (ii)  it
      is the sole owner of or otherwise has the right to Transfer all Eligible
      Collateral it Transfers to the Secured Party hereunder, free and clear of any
      security interest, lien, encumbrance or other restrictions other than the
      security interest and lien granted under Paragraph 2;

    

    (iii)
      upon the Transfer of any Eligible Collateral to the Secured Party under the
      terms of this Annex, the Secured Party will have a valid and perfected first
      priority security interest therein (assuming that any central clearing
      corporation or any third-party financial intermediary or other entity not within
      the control of the Pledgor involved in the Transfer of that Eligible Collateral
      gives the notices and takes the action required of it under applicable law
      for
      perfection of that interest); and

    

      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

    

    (iv)
      the
      performance by it of its obligations under this Annex will not result in the
      creation of any security interest, lien or other encumbrance on any Posted
      Collateral other than the security interest and lien granted under Paragraph
      2.

    

    
      	
              Paragraph
                10.

            	
              Expenses

            

    

    

    (a)           General. 
      Except as otherwise provided in Paragraphs 10(b) and 10(c), each party will
      pay
      its own costs and expenses in connection with performing its obligations under
      this Annex and neither party will be liable for any costs and expenses incurred
      by the other party in connection herewith.

    

    (b)           Posted
      Credit Support. The Pledgor will promptly
      pay when due all taxes, assessments or charges of any nature that are imposed
      with respect to Posted Credit Support held by the Secured Party upon becoming
      aware of the same, regardless of whether any portion of that Posted Credit
      Support is subsequently disposed of under Paragraph 6(c), except for those
      taxes, assessments and charges that result from the exercise of the Secured
      Party’s rights under Paragraph 6(c).

    

    (c)           Liquidation/Application
      of Posted Credit Support. All reasonable
      costs and expenses incurred by or on behalf of the Secured Party or the Pledgor
      in connection with the liquidation and/or application of any Posted Credit
      Support under Paragraph 8 will be payable, on demand and pursuant to the
      Expenses Section of this Agreement, by the Defaulting Party or, if there is
      no
      Defaulting Party, equally by the parties.

    

    
      	
              Paragraph
                11.

            	
              Miscellaneous

            

    

    

    (a)           Default
      Interest. A Secured Party that fails to
      make, when due, any Transfer of Posted Collateral or the Interest Amount will
      be
      obligated to pay the Pledgor (to the extent permitted under applicable law)
      an
      amount equal to interest at the Default Rate multiplied by the Value of the
      items of property that were required to be Transferred, from (and including)
      the
      date that Posted Collateral or Interest Amount was required to be Transferred
      to
      (but excluding) the date of Transfer of that Posted Collateral or Interest
      Amount.  This interest will be calculated on the basis of daily
      compounding and the actual number of days elapsed.

    

    (b)           Further
      Assurances.  Promptly following a demand
      made by a party, the other party will execute, deliver, file and record any
      financing statement, specific assignment or other document and take any other
      action that may be necessary or desirable and reasonably requested by that
      party
      to create, preserve, perfect or validate any security interest or lien granted
      under Paragraph 2, to enable that party to exercise or enforce its rights under
      this Annex with respect to Posted Credit Support or an Interest Amount or to
      effect or document a release of a security interest on Posted Collateral or
      an
      Interest Amount.

    

    (c)           Further
      Protection.  The Pledgor will promptly give
      notice to the Secured Party of, and defend against, any suit, action, proceeding
      or lien that involves Posted Credit Support Transferred by the Pledgor or that
      could adversely affect the security interest and lien granted by it under
      Paragraph 2, unless that suit, action, proceeding or lien results from the
      exercise of the Secured Party’s rights under Paragraph 6(c).

    

    (d)           Good
      Faith and Commercially Reasonable Manner. 
      Performance of all obligations under this Annex, including, but not limited
      to,
      all calculations, valuations and determinations made by either party, will
      be
      made in good faith and in a commercially reasonable manner.

    

    (e)           Demands
      and Notices.  All demands and notices made
      by a party under this Annex will be made as specified in the Notices Section
      of
      this Agreement, except as otherwise provided in Paragraph 13.

    

      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    

    (f)           Specifications
      of Certain Matters.  Anything referred to in this
      Annex as being specified in Paragraph 13 also may be specified in one or more
      Confirmations or other documents and this Annex will be construed
      accordingly.

    

    
      	
              Paragraph
                12.

            	
              Definitions

            

    

    

    As
      used
      in this Annex:—

    

    “Cash” means
      the lawful currency of the United States of America.

    

    “Credit
      Support Amount” has the meaning specified in
      Paragraph 3.

    

    “Custodian” has
      the meaning specified in Paragraphs 6(b)(i) and 13.

    

    “Delivery
      Amount” has the meaning specified in Paragraph 3(a).

    

    “Disputing
      Party” has the meaning specified in Paragraph 5.

    

    “Distributions”
      means with respect to Posted Collateral other than Cash, all
      principal, interest and other payments and distributions of cash or other
      property with respect thereto, regardless of whether the Secured Party has
      disposed of that Posted Collateral under Paragraph
      6(c).  Distributions will not include any item of property acquired by
      the Secured Party upon any disposition or liquidation of Posted Collateral
      or,
      with respect to any Posted Collateral in the form of Cash, any distributions
      on
      that collateral, unless otherwise specified herein.

    

    “Eligible
      Collateral” means, with respect to a party, the items, if any,
      specified as such for that party in Paragraph 13.

    

    “Eligible
      Credit Support” means Eligible Collateral and Other Eligible
      Support.

    

    “Exposure”
      means for any Valuation Date or other date for which Exposure
      is
      calculated and subject to Paragraph 5 in the case of a dispute, the amount,
      if
      any, that would be payable to a party that is the Secured Party by the other
      party (expressed as a positive number) or by a party that is the Secured Party
      to the other party (expressed as a negative number) pursuant to Section
      6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
      were being terminated as of the relevant Valuation Time; provided that
      Market Quotation will be determined by the Valuation Agent using its estimates
      at mid-market of the amounts that would be paid for Replacement Transactions
      (as
      that term is defined in the definition of “Market Quotation”).

    

    “Independent
      Amount” means, with respect to a party, the amount specified as
      such for that party in Paragraph 13; if no amount is specified,
      zero.

    

    “Interest
      Amount” means, with respect to an Interest Period, the aggregate
      sum of the amounts of interest calculated for each day in that Interest Period
      on the principal amount of Posted Collateral in the form of Cash held by the
      Secured Party on that day, determined by the Secured Party for each such day
      as
      follows:

    

    (x)
      the
      amount of that Cash on that day; multiplied by

    

    (y)
      the
      Interest Rate in effect for that day; divided by

    

    (z)
      360.

    

    “Interest
      Period” means the period from (and including) the last Local
      Business Day on which an Interest Amount was Transferred (or, if no Interest
      Amount has yet been Transferred, the Local Business Day on which Posted
      Collateral in the form of Cash was Transferred to or received by the Secured
      Party) to (but excluding) the Local Business Day on which the current Interest
      Amount is to be Transferred.

    

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    “Interest
      Rate” means the rate specified in Paragraph 13.

    

    “Local
      Business Day,” unless otherwise specified in Paragraph 13, has the
      meaning specified in the Definitions Section of this Agreement, except that
      references to a payment in clause (b) thereof will be deemed to include a
      Transfer under this Annex.

    

    “Minimum
      Transfer Amount” means, with respect to a party, the
      amount specified as such for that party in Paragraph 13; if no amount is
      specified, zero.

    

    “Notification
      Time” has the meaning specified in Paragraph 13.

    

    “Obligations”
      means, with respect to a party, all present and future obligations
      of that party under this Agreement and any additional obligations specified
      for
      that party in Paragraph 13.

    

    “Other
      Eligible Support” means, with respect to a party, the items, if
      any, specified as such for that party in Paragraph 13.

    

    “Other
      Posted Support” means all Other Eligible Support Transferred to
      the Secured Party that remains in effect for the benefit of that Secured
      Party.

    

    “Pledgor”
      means either party, when that party (i) receives a demand for
      or
      is required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii)
      has
      Transferred Eligible Credit Support under Paragraph 3(a).

    

    “Posted
      Collateral” means all Eligible Collateral, other property,
      Distributions, and all proceeds thereof that have been Transferred to or
      received by the Secured Party under this Annex and not Transferred to the
      Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
      Secured Party under Paragraph 8.  Any Interest Amount or portion
      thereof not Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted
      Collateral in the form of Cash.

    

    “Posted
      Credit Support” means Posted Collateral and Other Posted
      Support.

    

    “Recalculation
      Date” means the Valuation Date that gives rise to the dispute
      under Paragraph 5; provided, however, that if a subsequent Valuation
      Date occurs under Paragraph 3 prior to the resolution of the dispute, then
      the
“Recalculation Date” means the most recent Valuation Date under Paragraph
      3.

    

    “Resolution
      Time” has the meaning specified in Paragraph 13.

    

    “Return
      Amount” has the meaning specified in Paragraph 3(b).

    

    “Secured
      Party” means either party, when that party (i) makes a demand for
      or is entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii)
      holds or is deemed to hold Posted Credit Support.

    

    “Specified
      Condition” means, with respect to a party, any event specified as
      such for that party in Paragraph 13.

    

    “Substitute
      Credit Support” has the meaning specified in Paragraph
      4(d)(i).

    

    “Substitution
      Date” has the meaning specified in Paragraph
      4(d)(ii).

    

    “Threshold”
      means, with respect to a party, the amount specified as such
      for
      that party in Paragraph 13; if no amount is specified, zero.

    

    “Transfer”
      means, with respect to any Eligible Credit Support, Posted Credit
      Support or Interest Amount, and in accordance with the instructions of the
      Secured Party, Pledgor or Custodian, as applicable:

    

    (i)  
      in the case of Cash, payment or delivery by wire transfer into one or more
      bank
      accounts specified by the recipient;

     

    
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    (ii) 
      in the case of certificated securities that cannot be paid or delivered by
      book-entry, payment or delivery in appropriate physical form to the recipient
      or
      its account accompanied by any duly executed instruments of transfer,
      assignments in blank, transfer tax stamps and any other documents necessary
      to
      constitute a legally valid transfer to the recipient;

    

    (iii)
      in
      the case of securities that can be paid or delivered by book-entry, the giving
      of written instructions to the relevant depository institution or other entity
      specified by the recipient, together with a written copy thereof to the
      recipient, sufficient if complied with to result in a legally effective transfer
      of the relevant interest to the recipient; and

    

    (iv)
      in
      the case of Other Eligible Support or Other Posted Support, as specified in
      Paragraph 13.

    

    “Valuation
      Agent” has the meaning specified in Paragraph 13.

    

    “Valuation
      Date” means each date specified in or otherwise determined
      pursuant to Paragraph 13.

    

    “Valuation
      Percentage” means, for any item of Eligible Collateral, the
      percentage specified in Paragraph 13.

    

    “Valuation
      Time” has the meaning specified in Paragraph 13.

    

    “Value”
      means for any Valuation Date or other date for which Value is
      calculated and subject to Paragraph 5 in the case of a dispute, with respect
      to:

    

    
      	
               

            	
              (i)

            	
              Eligible
                Collateral or Posted Collateral that
                is:

            

    

    

    (A)  
      Cash, the amount thereof; and

    

    (B)   
      a security, the bid price obtained by the Valuation Agent multiplied by the
      applicable Valuation Percentage, if any;

    

    
      	
               

            	
              (ii)

            	
              Posted
                Collateral that consists of items that are not specified as Eligible
                Collateral, zero; and

            

    

    

    
      	
               

            	
              (iii)

            	
              Other
                Eligible Support and Other Posted Support, as specified in Paragraph
                13.

            

    

     

    
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              Paragraph
                13.

            	
              Elections
                and Variables

            

    

    

    (a)           Security
      Interest for “Obligations.”  The term
“Obligations” as used in this Annex includes the
      following additional obligations:

    

    With
      respect to Party A: None.

    

    With
      respect to Party B: None.

    

    
      	
              (b)

            	
              Credit
                Support
                Obligations.

            

    

    

    (i)      Delivery
      Amount, Return Amount and Credit Support Amount.

    

    (A)  
      “Delivery
      Amount” has the meaning specified in
      Paragraph 3(a), except that the words “upon a demand made by the Secured Party
      on or promptly following a Valuation Date” shall be deleted and replaced by the
      words “on each Valuation Date”.

    

    (B)  
      “Return Amount” has the meaning specified in Paragraph
      3(b).

    

    (C)  
      “Credit Support Amount” means the amount
      specified in (1), (2), (3), (4) or (5) below, except that if two or more amounts
      below apply, the highest amount:

    

    (1)  
      if the Moody’s First Rating Trigger Requirements apply to Party A and Party A
      chooses to post collateral, the following amount as determined by the Valuation
      Agent:

    

    The
      greater of (i) Secured Party's Exposure + (Notional Amount on such Valuation
      Date * the respective potential increase below) and (ii) 0

    

    
      	
              Potential
                Increase of Mid-Market Valuation

            
	 
	
              Weighted
                Average Life of Hedge in Years

            	
              Posting
                Frequency (Weekly)

            
	 	 
	
              1

            	
              0.25%

            
	 	 
	
              2

            	
              0.50%

            
	 	 
	
              3

            	
              0.70%

            

    

    

    

    (2)  
      if the Moody’s Second Rating Trigger Requirements apply to Party A, the
      following amount as determined by the Valuation Agent:

    

    The
      greater of (i) Floating Amount on next Payment Date, Secured Party's Exposure
      +
      (Notional Amount on such Valuation Date * the respective potential increase
      below) and (ii) 0

    

    
      	
              Potential
                Increase of Mid-Market Valuation

            
	 
	
              Weighted
                Average Life of Hedge in Years

            	
              Posting
                Frequency (Weekly)

            
	 	 
	
              1

            	
              0.60%

            
	 	 
	
              2

            	
              1.20%

            
	 	 
	
              3

            	
              1.70%

            

    

    

    

    (3)  
      if the S&P First Rating Trigger occurs and the S&P Second Rating
      Trigger has not occurred, within 10 Local Business Days of such occurrence
      (or
      on the date of this Annex, if no Relevant Entity has the S&P First Rating
      Thresholds as of the date of this Annex), Party A will post collateral in the
      following amount as determined by the Valuation Agent:

     

    
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    The
      greater of (i) Secured Party's Exposure * 100%, and (ii) 0

    

    (4)  
      if the S&P Second Rating Trigger occurs, within 10 Local Business Days of
      such occurrence, Party A will post collateral in the following amount as
      determined by the Valuation Agent:

    

    The
      greater of (i) Secured Party's Exposure * 125%, and (ii) 0

    

    (5)  
      if the Fitch First Rating Trigger occurs and Party A chooses to post collateral
      or if a Fitch Second Rating Trigger occurs, the following amount as determined
      by the Valuation Agent:

    

    The
      greater of (i) Secured Party's Exposure + (Volatility Buffer * Notional Amount),
      and (ii) 0

    

    "Volatility
      Buffer" means the percentage set forth in the following table with
      respect to any Transaction:

    

    
      	 	
              Weighted
                Average Life of Hedge in Years

            
	
              Notes’
                Rating

            	
              1

            	
              2

            	
              3

            	
              4

            	
              5

            	
              6

            	
              7

            	
              8

            	
              9

            	
              10

            
	
              USD
                Interest Rate Swaps

            
	
              AA-
                or Better

            	
              0.6

            	
              1.6

            	
              2.6

            	
              3.4

            	
              4.2

            	
              4.8

            	
              5.5

            	
              5.9

            	
              6.4

            	
              7.0

            
	
              A+/A

            	
              0.3

            	
              0.8

            	
              1.3

            	
              1.7

            	
              2.1

            	
              2.4

            	
              2.8

            	
              3.0

            	
              3.3

            	
              3.6

            
	
              A-/BBB+

            	
              0.2

            	
              0.6

            	
              1.0

            	
              1.3

            	
              1.6

            	
              1.9

            	
              2.1

            	
              2.3

            	
              2.5

            	
              2.7

            

    

    

    

    (ii)  
      Eligible Collateral.  The
      following items will qualify as “Eligible Collateral”
(unless noted below) for Party A:

    

    
      	 	 	
              The
                following Valuation Percentages(1) will
                apply to Eligible Collateral with respect to Party A upon the occurrence
                of the respective event below:

            	 
	 	 	 	 
	 	 	
              Moody’s
                First Rating Trigger Requirements

            	 	 	
              Moody’s
                Second Rating Trigger Requirements

            	 	 	
              S&P
                First Rating Trigger

            	 	 	
              S&P
                Second Rating Trigger

            	 	 	
              Fitch
                First and Second Rating Triggers

            	 
	
              (A) 
                Cash in U.S. Dollars

            	 	 	
              100%

            	 	 	 	
              100%

            	 	 	 	
              100%

            	 	 	 	
              80%

            	 	 	 	
              100%

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              (B)  Fixed
                rate negotiable debt obligations issued by the U.S. Treasury Department
                having a remaining maturity of not more than one year

            	 	 	
              100%

            	 	 	 	
              100%

            	 	 	 	
              98%

            	 	 	 	
              78.4%

            	 	 	 	
              99.5%

            	 
	 	 	 	 	 	 	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 	 
	
              (C) 
                Fixed rate negotiable debt obligations issued by the U.S. Treasury
                Department having a remaining maturity of more than one year but
                not more
                than 2 years

            	 	 	
              100%

            	 	 	 	
              99%

            	 	 	 	
              98%

            	 	 	 	
              78.4%

            	 	 	
              98.4%

              (1-3
                yrs)

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
               

            	 
	
              (D) 
                Fixed rate negotiable debt obligations issued by the U.S. Treasury
                Department having a remaining maturity of more than 2 years but not
                more
                than 3 years

            	 	 	
              100%

            	 	 	 	
              98%

            	 	 	 	
              98%

            	 	 	 	
              78.4%

            	 	 	
              98.4%

              (1-3
                yrs)

            	 

    

     

    
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              (E) 
                Fixed rate negotiable debt obligations issued by the U.S. Treasury
                Department having a remaining maturity of more than 3 years but not
                more
                than 5 years

            	 	 	
              100%

            	 	 	 	
              97%

            	 	 	 	
              98%

            	 	 	 	
              78.4%

            	 	 	
              97.0%

              (3-5
                yrs)

            	 
	 	 	 	 	 	 	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 
	
              (F) 
                Fixed rate negotiable debt obligations issued by the U.S. Treasury
                Department having a remaining maturity of more than 5 years but not
                more
                than 7 years

            	 	 	
              100%

            	 	 	 	
              95%

            	 	 	 	
              92.6%

            	 	 	 	
              74.1%

            	 	 	
              95.8%

              (5-7
                yrs)

            	 
	 	 	 	 	 	 	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 
	
              (G) 
                Fixed rate negotiable debt obligations issued by the U.S. Treasury
                Department having a remaining maturity of more than 7 years but not
                more
                than 10 years

            	 	 	
              100%

            	 	 	 	
              94%

            	 	 	 	
              92.6%

            	 	 	 	
              74.1%

            	 	 	
              94.6%

              (7-10
                yrs)

            	 
	 	 	 	 	 	 	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 
	
              (H) 
                Fixed rate negotiable debt obligations issued by the U.S. Treasury
                Department having a remaining maturity of more than 10 years but
                not more
                than 20 years

            	 	 	
              100%

            	 	 	 	
              89%

            	 	 	 	
              87.9%

            	 	 	 	
              70.3%

            	 	 	
              93.6%

              (10-15
                yrs)

            	 
	 	 	 	 	 	 	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 
	
              (I) 
                 Fixed rate negotiable debt obligations issued by the U.S. Treasury
                Department having a remaining maturity of more than 20
                years

            	 	 	
              100%

            	 	 	 	
              87%

            	 	 	 	
              84.6%

            	 	 	 	
              67.7%

            	 	 	
              NA

            	 
	 	 	 	 	 	 	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 
	
              (J) 
                Floating rate negotiable debt obligations issued by the U.S. Treasury
                Department

            	 	 	
              100%

            	 	 	 	
              99%

            	 	 	
              Not
                Eligible Collateral

            	 	 	
              Not
                Eligible Collateral

            	 	 	
              Same
                as fixed

            	 
	 	 	 	 	 	 	 	
               

            	 
              	 	 	
               

            	 	 	 	 	 	 	 	 
	
              (K) 
                Fixed rate U.S. Agency Debentures having a remaining maturity of
                not more
                than one year

            	 	 	
              100%

            	 	 	 	
              99%

            	 	 	 	
              98%

            	 	 	 	
              78.4%

            	 	 	 	
              98.5%    

            	 
	 	 	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              (L) 
                Fixed rate U.S. Agency Debentures having a remaining maturity of
                more than
                one year but not more than 2 years

            	 	 	
              100%

            	 	 	 	
              98%

            	 	 	 	
              98%

            	 	 	 	
              78.4%

            	 	 	
              97.4%

              (1-3
                yrs)

            	 
	 	 	 	 	 	 	 	
               

            	 	 	 	
               

            	 	 	 	 	 	 	 	 	 
	
              (M) Fixed
                rate U.S. Agency Debentures having a remaining maturity of more than
                2
                years but not more than 3 years

            	 	 	
              100%

            	 	 	 	
              97%

            	 	 	 	
              98%

            	 	 	 	
              78.4%

            	 	 	
              97.4%

              (1-3
                yrs)

            	
               

            
	 	 	 	 	 	 	 	
               

            	 	 	 	
               

            	 	 	 	 	 	 	 	 	 
	
              (N) 
                Fixed rate U.S. Agency Debentures having a remaining maturity of
                more than
                3 years but not more than 5 years

            	 	 	
              100%

            	 	 	 	
              96%

            	 	 	 	
              98%

            	 	 	 	
              78.4%

            	 	 	
              96%

              (3-5
                yrs)

            	 
	 	 	 	 	 	 	 	
               

            	 	 	 	
               

            	 	 	 	 	 	 	 	 	 
	
              (O) 
                Fixed rate U.S. Agency Debentures having a remaining maturity of
                more than
                5 years but not more than 7 years

            	 	 	
              100%

            	 	 	 	
              94%

            	 	 	 	
              92.6%

            	 	 	 	
              74.1%

            	 	 	
              94.8%

              (5-7
                yrs)

            	 
	 	 	 	 	 	 	 	
               

            	 	 	 	
               

            	 	 	 	 	 	 	 	
               

            	 
	
              (P) 
                Fixed rate U.S. Agency Debentures having a remaining maturity of
                more than
                7 years but not more than 10 years

            	 	 	
              100%

            	 	 	 	
              93%

            	 	 	 	
              92.6%

            	 	 	 	
              74.1%

            	 	 	
              93.7%

              (7-10
                yrs)

            	 
	 	 	 	 	 	 	 	
               

            	 	 	 	
               

            	 	 	 	 	 	 	 	 	 
	
              (Q) 
                Fixed rate U.S. Agency Debentures having a remaining maturity of
                more than
                10 years but not more than 20 years

            	 	 	
              100%

            	 	 	 	
              88%

            	 	 	 	
              82.6%

            	 	 	 	
              66.1%

            	 	 	
              92.7%

              (10-15
                yrs)

            	 

    

     

    
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        1994

       

    

    
      
        
          
          

        

        
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              (R) 
                Fixed rate U.S. Agency Debentures having a remaining maturity of
                more than
                20 years

            	 	 	
              100%

            	 	 	 	
              86%

            	 	 	 	
              77.9%

            	 	 	 	
              62.3%

            	 	
              NA

            
	 	 	 	 	 	 	 	
               

            	 	 	 	 	 	 	 	 	 	 
	
              (S) 
                Floating rate U.S. Agency Debentures

            	 	 	
              100%

            	 	 	 	
              98%

            	 	 	
              Not
                Eligible Collateral

            	 	 	
              Not
                Eligible Collateral

            	 	
              Same
                as fixed

            

    

    ___________________

    

    (1)  With
      respect to collateral types not listed in this table, such assets will be
      subject to review by S&P, Fitch or Moody’s, as applicable.

    

    
      	
               

            	
              (iii)

            	
              Thresholds.

            

    

    

    
      	
            	
              (A)

            	
              “Independent
                Amount” means with respect to Party
                A:  zero.

            

    

    “Independent
      Amount” means with respect to Party
      B:  zero.

    

    
      	
            	
              (B)

            	
              “Threshold”
                means with respect to Party A: infinity, provided that the Threshold
                with
                respect to Party A shall be zero for so long as, no Relevant Entity
                has
                the Moody's First Trigger Required Ratings, the Fitch First Trigger
                Required Ratings or the S&P First Trigger Required Ratings and (i) no
                Relevant Entity has had the Moody's First Trigger Required Ratings
                since
                this Annex was executed, or (ii) at least 30 Local Business days
                have
                elapsed since the last time a Relevant Entity had the Moody's First
                Trigger Required Ratings, or (iii) no Relevant Entity has had the
                Fitch's
                First Trigger Required Ratings since this Annex was executed, or
                (iv) at
                least 30 calendar days have elapsed since the last time a Relevant
                Entity
                had the Fitch's First Trigger Required Ratings, or (v) no Relevant
                Entity has had the S&P First Trigger Required Ratings since this Annex
                was executed or (vi) at least 10 Local Business days have elapsed
                since
                the last time a Relevant Entity had the S&P First Trigger Required
                Ratings.

            

    

    

    “Threshold”
      means with respect to Party B: infinity.

    

    
      	
            	
              (C)

            	
              “Minimum
                Transfer Amount” means with respect to Party A:
                U.S.$100,000, provided, however, that if the aggregate outstanding
                principal balance of the Notes rated by S&P is at the time of any
                transfer less than U.S.$50,000,000, the “Minimum Transfer
                Amount” shall mean
                U.S.$50,000.

            

    

    

    "Minimum
      Transfer Amount" means with respect to Party B:
      U.S.$100,000.

    

    
      	
            	
              (D)

            	
              Rounding.  The
                Delivery Amount will be rounded up to the nearest integral multiple
                of  U.S.$10,000. The Return Amount will be rounded down to the
                nearest integral multiple of
                U.S.$10,000.

            

    

    

    
      	
              (c)

            	
              Valuation
                and
                Timing.

            

    

    

    (i)  
      “Valuation Agent” means Party A in all
      circumstances.

    

    (ii)  
      “Valuation Date” means the first Local Business Day in
      each week.

    

    (iii)  
      “Valuation
      Time” means
      the close of business in the city of the Valuation Agent on the Local Business
      Day immediately preceding the Valuation Date or date of calculation, as
      applicable, provided that the calculations of Value and Credit Support Amount
      will, as far as practicable, be made as of approximately the same time on the
      same date.

    

    (iv)  
      “Value” has the meaning specified in Paragraph 12,
      except that clause (i) thereof will be replaced in its entirety with the
      following:

    

      ISDA®
        1994

       

    

    
      
        
          
          

        

        
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    “(i)  Eligible
      Collateral or Posted Collateral that is:

    

    (A)  
      Cash, the amount thereof multipled by the applicable Valuation Percentage but
      if
      more than one Valuation Percentage is applicable, the Valuation Percentage
      with
      the lowest percentage; and

    

    (B)  
      a security, the bid price obtained by the Valuation Agent multiplied by the
      applicable Valuation Percentage but if more than one Valuation Percentage is
      applicable, the Valuation Percentage with the lowest percentage;”

    

    (v)  
      “Notification Time” means 4:00 p.m., New York time, on
      a Local Business Day.

    

    (d)           Conditions
      Precedent and Secured Party’s Rights and Remedies.  The
      following Termination Event(s) will be a “Specified
      Condition” for the party specified (that party being the Affected
      Party if the Termination Event occurs with respect to that
      party):  None.

    

    (e)           Substitution.

    

    (i)  
      “Substitution Date” has the meaning specified in
      Paragraph 4(d)(ii).

    

    (ii)  
      Consent.  Not applicable.

    

    (f)           Dispute
      Resolution.

    

    (i)  
      “Resolution Time” means 4:00 p.m., New York time, on
      the Local Business Day following the date on which the notice is given that
      gives rise to a dispute under Paragraph 5.

    

    (ii)  
      Value.  For the purpose of Paragraphs
      5(i)(C) and 5(ii), on any date, the Value of the outstanding Posted Credit
      Support or of any transfer of Eligible Credit Support or Posted Credit
      Support, as the case may be, will be calculated as follows:

    

    
      	
               

            	
              (A)

            	
              with
                respect to any Eligible Credit Support or Posted Credit Support comprising
                securities (“Securities”) the sum of (a)(x) the last bid
                price on such date for such Securities on the principal national
                securities exchange on which such Securities are listed, multiplied
                by the
                applicable Valuation Percentage; or (y) where any Securities are
                not
                listed on a national securities exchange, the bid price for such
                Securities quoted as at the close of business on such date by any
                principal market maker (which shall not be and shall be independent
                from
                the Valuation Agent) for such Securities chosen by the Valuation
                Agent,
                multiplied by the applicable Valuation Percentage; or (z) if no such
                bid
                price is listed or quoted for such date, the last bid price listed
                or
                quoted (as the case may be), as of the day next preceding such date
                on
                which such prices were available, multiplied by the applicable Valuation
                Percentage; plus (b) the accrued interest where applicable on such
                Securities (except to the extent that such interest shall have been
                paid
                to the Pledgor pursuant to Paragraph 6(d)(ii) or included in the
                applicable price referred to in subparagraph (a) above) as of such
                date;
                and

            

    

    

    
      	
               

            	
              (B)

            	
              with
                respect to any Cash, the amount thereof in U.S.
                dollars.

            

    

    

    (iii)  
      Alternative.  The provisions of Paragraph 5
      will apply.

    

    (g)           Holding
      and Using Posted Collateral.

    

    (i)  
      Eligibility to Hold Posted Collateral;
      Custodians. A Custodian of Party B will be
      entitled to hold Posted Collateral on behalf of Party B pursuant to Paragraph
      6(c), provided that such Custodian has a short term rating of at least “A-1” by
      S&P.  Party B’s Custodian is the Indenture Trustee for Party
      B.   Initially, the Custodian for Party B is the Bank of New
      York.  If at any time the Custodian’s short term rating by S&P
      falls below “A-1”, Party B will within 60 days replace such Custodian with a new
      Custodian having a short term “A-1” rating by S&P.

     

    
      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    

    

    (ii)  
      Use of Posted Collateral. Paragraph 6(c)(i) will not
      apply to the Party B but Paragraph 6(c)(ii) will apply to Party B.

    

    (h)           Distributions
      and Interest Amount.

    

    (i)  
      Interest Rate.  The “Interest
      Rate” will be the weighted average rate
      of interest earned by the Secured Party in respect of the portion of the Posted
      Credit Support comprised of cash.

    

    (ii) 
      Transfer of Interest Amount.  The transfer
      of the Interest Amount will be made on the second Local Business Day following
      the end of each calendar month and on any other Local Business Day on which
      Posted Credit Support in the form of cash is transferred to the Secured Party
      pursuant to Paragraph 3(b), in each case to the extent
      that a Delivery Amount would not be created or increased by that transfer,
      provided that Party B shall not be obliged to so transfer any Interest
      Amount unless and until it has earned and received such interest.

    

    (iii) 
      Alternative to Interest Amount.  The provisions of
      Paragraph 6(d)(ii) will apply.

    

    (iv)
      “Distributions” means, with respect to any Eligible
      Credit Support comprised in the Posted Credit Support consisting of securities,
      all principal, interest and other payments and distributions of cash or other
      property to which a holder of securities of the same type, nominal value,
      description and amount as such Eligible Credit Support would have received
      from
      time to time.

    

    (v) 
      “Distribution Date”
      means, with respect to any Eligible Credit Support comprised in the Posted
      Credit Support other than cash, each date on which a holder of such Eligible
      Credit Support would have received Distributions or, if that date is not a
      Local
      Business Day, the next following Local Business Day.

    

    (i)           Additional
      Representation(s).

    

    There
      are
      no additional representations by either party.

    

    (j)           Other
      Eligible Support and Other Posted
      Support.

    

    (i)  
      “Value” with
      respect to Other Eligible Support and Other Posted Support shall have such
      meaning as the parties shall agree in writing from time to time.

    

    (ii) 
      “Transfer” with
      respect to Other Eligible Support and Other Posted Support shall have such
      meaning as the parties shall agree in writing from time to time.

    

    (k)           Demands
      and Notices. All demands,
      specifications and notices under this Annex will be made pursuant to the Notices
      Section of this Agreement, save that any demand, specification or
      notice:

    

    
      	
            	
              (A)

            	
              shall
                be given to or made at the following
                addresses:

            

    

     

    If
      to
      Party A:   The address set forth in the Schedule.

     

    If
      to
      Party B:   The addresses set forth in the Schedule.

     

    or
      at
      such other address as the relevant party may from time to time designate by
      giving notice (in accordance with the terms of this subparagraph)  to
      the other party;

    

    
      	
               

            	
              (B)

            	
              shall
                be deemed to be effective at the time such notice is actually received
                unless such notice is received on a day which is not a Local Business
                Day
                or after the Notification Time on any Local Business Day in which
                event
                such notice shall be deemed to be effective on the next succeeding
                Local
                Business Day.

            

    

    

    (l)           Addresses
      for Transfers.

    

      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    Party
      A:  To be notified to Party B by Party A at the time of the request
      for the transfer.

    

    Party
      B:  To be notified to Party A by Party B upon request by Party
      A.

    

    (m)           Other
      Provisions.

    

    
      	
            	
              (i)

            	
              Early
                Termination

            

    

    

    
      	
               

            	
              The
                heading for Paragraph 7 shall be deleted and replaced with “Early
                Termination” and the following shall be added after the word “Default” in
                the first line of Paragraph 7, “in relation to all Transactions or a
                Termination Event in relation to all Transactions”.  Paragraph
                7(iii) is hereby deleted.

            

    

    

    
      	
               

            	
              (ii)

            	
              Costs
                of Transfer on
                Exchange

            

    

    

    
      	
               

            	
              Notwithstanding
                Paragraph 9, the Pledgor will be responsible for, and will reimburse
                the
                Secured Party for, all transfer and other taxes and other costs involved
                in the transfer of Eligible Credit Support either from the Pledgor
                to the
                Secured Party or from the Secured Party to the Pledgor pursuant to
                Paragraph 4(d).

            

    

    

    
      	
               

            	
              (iii)

            	
              Cumulative
                Rights

            

    

    

    
      	
               

            	
              The
                rights, powers and remedies of the Secured Party under this Annex
                shall be
                in addition to all rights, powers and remedies given to the Secured
                Party
                by the Agreement or by virtue of any statute or rule of law, all
                of which
                rights, powers and remedies shall be cumulative and may be exercised
                successively or concurrently without impairing the rights of the
                Secured
                Party in the Posted Credit Support created pursuant to this
                Annex.

            

    

    

    
      	
            	
              (iv)

            	
              Single
                Pledgor and Single Secured
                Party

            

    

    

    For
      the
      avoidance of doubt Party A shall always be the Pledgor and Party B shall always
      be the Secured Party.

    

    
      	
               

            	
              (v)

            	
              “Exposure”
                has the meaning specified in Paragraph 12, except that after the
                word
                “Agreement” the words “(assuming, for this purpose only, that Part 1(l) of
                the Schedule is deleted)” shall be
                inserted.

            

    

    

    
      	
               

            	
              (vi)

            	
              Additional
                Defined Terms. Capitalized terms used but not
                defined in this Annex have the meanings assigned to them in the Agreement
                and the Schedule thereto. In the event of any inconsistency between
                the
                provisions of this Annex and the provisions in the Agreement or the
                Schedule thereto, this Annex will
                prevail.

            

    

    

    
      	
               

            	
              (vii)

            	
              Transfer
                timing.  Paragraph 4(b) shall be deleted and
                replaced with the following:

            

    

    

    Subject
      to Paragraphs 4(a) and 5 and unless otherwise specified, any transfer of
      Eligible Credit Support or Posted Credit Support (whether by the Pledgor
      pursuant to Paragraph 3(a) or by the Secured Party pursuant to Paragraph 3(b))
      shall be made not later than the close of business on the next Local Business
      Day, provided that, in the case of any transfer of Posted Credit Support by
      the
      Secured Party pursuant to Paragraph 3(b), if the demand for the transfer of
      Posted Credit Support is received by the Secured Party after the Notification
      Time, then such transfer will be made not later than the close of business
      on
      the second Local Business Day thereafter.

    

     [SIGNATURE
      PAGE FOLLOWS]

    

      ISDA®
        1994

       

    

    
      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

    
       

      IN
        WITNESS WHEREOF, the parties have executed this Annex by their duly
        authorized representatives as of the date of the Agreement.

       

    

    
      
        	FORD
                CREDIT AUTO OWNER TRUST 2007-B	 	LEHMAN
                BROTHERS SPECIAL FINANCING INC.	 
	 	 	 	 	 	 
	
                By:

              	
                U.S.
                  BANK TRUST

              	 	
                By:

              	
                /s/
                  Allyson M. Carine

              	 
	 	
                NATIONAL
                  ASSOCIATION,

              	 	
                Name:

              	
                Allyson
                  M. Carine

              	 
	 	
                not
                  in its individual capacity

              	 	
                Title:

              	
                Authorized
                  Signatory

              	 
	 	
                but
                  solely as Owner Trustee

              	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	
                By:

              	
                /s/
                  Nicole Poole

              	 	 	 	 
	
                Name:

              	
                Nicole
                  Poole

              	 	 	 	 
	
                Title:

              	
                Vice
                  President

              	 	 	 	 

      

      

      

      

      [SIGNATURE
        PAGE TO CREDIT
        SUPPORT ANNEX]

       

       

      Copyright
        ©1994 by International Swaps and Derivatives Association, Inc.ex10_3.htm

    
      

    

    Exhibit
      10.3

     

    Transaction

     

     

    
      
        
          	
                  Date:

                	
                  October
                    16, 2007

                	
                   

                
	 	 	 
	
                  To:

                	
                  FORD
                    CREDIT AUTO OWNER TRUST 2007-B

                	 
	 	
                  c/o
                    U.S. Bank Trust National Association,

                	 
	 	
                     as
                    Owner Trustee

                	 
	 	
                  300
                    Delaware Avenue, Ninth Floor

                	 
	 	
                  Wilmington,
                    Delaware 19801

                	 
	 	
                  Attention:
                    Corporate Trust Department

                	 
	 	
                  Telephone:  (302)
                    552-3200

                	 
	 	
                  Facsimile:  (302)
                    552-3129

                	 
	 	 	 
	
                  From:

                	
                  Lehman
                    Brothers Special Financing Inc.

                	 
	 	
                  Transaction
                    Management Group

                	 
	 	
                  Facsimile:             
                    

                	
                  (+1)
                    646-885-9551 (United States of America)

                	
                   

                
	 	
                  Telephone:

                	
                  212-526-9570
                    (Louis P. Bardos)

                	
                   

                
	
                   

                	 	 
	
                  Ref.
                    Numbers:

                	
                  Risk
                    ID: 1675493L / Effort ID: N1670141 / Global Deal ID:
                    3413451

                	 

        

      
        
          

        

      

    

    Dear
      Sir
      or Madam:

     

    The
      purpose of this letter agreement is to confirm the terms and conditions of
      the
      Swap Transaction entered into between Lehman Brothers Special Financing, Inc.
      (“Party A”) and Ford Credit Auto Owner Trust 2007-B (“Party B”) on the Trade
      Date listed below (the “Transaction”).  This letter constitutes a
“Confirmation” as referred to in the Agreement specified below.

     

    The
      definitions and provisions contained in the 2000 ISDA Definitions (as published
      by the International Swaps and Derivatives Association, Inc.) are incorporated
      into this Confirmation.  For these purposes, all references in those
      Definitions to a “Swap Transaction” will be deemed to apply to the Transaction
      referred to herein.  In the event of any inconsistency between those
      Definitions and this Confirmation, this Confirmation will govern.

    

    1.  This
      Confirmation supplements, forms part of, and is subject to, the ISDA Master
      Agreement and the Schedule thereto, both dated as of October 16, 2007,
      between you and us (as amended, supplemented or otherwise modified from time
      to
      time, the “Agreement”).  All provisions contained in the Agreement
      govern this Confirmation except as expressly modified below.  Other
      capitalized terms used herein and not otherwise defined will have the meanings
      given them in the Indenture referred to in the Agreement.   In
      the event of any inconsistency between those terms and this Confirmation, this
      Confirmation will govern.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      2.  The
        terms of the particular Transaction to which this Confirmation relates are
        as
        follows:

      

      
        	
                 

              	
                Party
                  A:

              	
                Lehman
                  Brothers Special Financing Inc.

              	 
	 	
                 

              	 	 
	 	
                Party
                  B:

              	
                Ford
                  Credit Auto Owner Trust 2007-B

              	 
	 	 	 	 
	 	
                Trade
                  Date:

              	
                October
                  10, 2007.

              	 
	 	 	 	 
	 	
                Effective
                  Date:

              	
                October
                  17, 2007.

              	 
	 	 	 	 
	 	
                Notional
                  Amount:

              	
                For
                  the first Calculation Period (from and including, October 17, 2007
                  to but
                  excluding November 15, 2007), the Notional Amount of this Transaction
                  for
                  purposes of calculating payments due by either party on the first
                  Payment
                  Date will be $863,700,000.  With respect to any subsequent
                  Calculation Period up through and including the Calculation Period
                  ending
                  on but excluding June 15, 2010, the Notional Amount will be the
                  Note
                  Balance of the Class A-2b Notes (after giving effect to all amounts
                  paid
                  on the Payment Date that is the first day of such Calculation Period)
                  as
                  stated on the Servicer’s monthly investor report relating to such Payment
                  Date (the “Actual Balance”).  Party B will determine the
                  Notional Amount and will inform Party A of such determination by
                  the
                  twelfth day of each calendar month using the aggregate outstanding
                  principal balance for the Class A-2b Notes prior to giving effect
                  to any
                  payments of principal of Class A-2b Notes on the following Payment
                  Date,
                  as shown in the Servicer's monthly investor report relating to
                  such
                  Payment Date.

              	 
	 	 	 	 
	 	
                Termination
                  Date:

              	
                The
                  earlier of June 15, 2010 and the date the aggregate outstanding
                  principal
                  balance of the Class A-2b Notes has been reduced to zero.

              	 
	 	 	 	 
	 	
                Fixed
                  Amounts

              	 	 
	 	 	 	 
	 	
                Fixed
                  Rate Payer:

              	
                Party
                  B.

              	 
	 	 	 	 
	 	
                Fixed
                  Rate Payer

              	 	 
	 	
                Payment
                  Date:

              	
                The
                  15th
                  day
                  of each calendar month, subject to adjust­ment in accordance with the
                  Following Business Day Convention.

              	 
	 	 	 	 
	 	
                Period
                  End Date:

              	
                The
                  15th
                  day
                  of each calendar month, with No Adjust­ment.  (This means
                  that each Calculation Period for the Fixed Amount will have 30
                  days,
                  except for the Initial Calculation Period, which will commence
                  on October
                  17, 2007 and end on and excluding November 15, 2007.)

              	 

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      
        	
                 

              	
                Fixed
                  Rate:

              	
                5.17%

              	 
	 	
                 

              	 	 
	 	
                Fixed
                  Rate Day

              	 	 
	 	
                Count
                  Fraction:

              	
                30/360

              	 
	 	 	 	 
	
                 

              	 
                
                Floating
                  Amounts

              	 	 
	 	 	 	 
	 	
                Floating
                  Rate Payer:

              	
                Party
                  A.

              	 
	 	 	 	 
	 	
                Floating
                  Rate Payer

              	 	 
	 	
                Payment
                  Dates:

              	
                The
                  15th
                  day
                  of each calendar month, subject to adjust­ment in accordance with the
                  Following Business Day Convention.

              	 
	 	 	 	 
	 	
                Floating
                  Rate for

              	 	 
	 	
                Initial
                  Calculation

              	 	 
	 	
                Period:

              	
                To
                  be determined on October 15, 2007 (excluding spread)

              	 
	 	 	 	 
	 	
                Floating
                  Rate Option:

              	
                USD-LIBOR-BBA.

              	 
	 	
                 

              	 	 
	 	
                Designated
                  Maturity:

              	
                One
                  month.

              	 
	 	
                 

              	 	 
	 	
                Spread:

              	
                Plus
                  0.33%

              	 
	 	
                 

              	 	 
	 	
                Floating
                  Rate Day

              	 	 
	 	
                Count
                  Fraction:

              	
                Actual/360.

              	 
	 	
                 

              	 	 
	 	
                Reset
                  Dates:

              	
                The
                  first day of each Floating Rate Payer Calculation Period.

              	 
	 	
                 

              	 	 
	 	
                Business
                  Days:

              	
                New
                  York and Delaware.

              	 
	 	 	 	 
	 	
                Miscellaneous:

              	 	 
	 	 	 	 
	 	
                Calculation
                  Agent:

              	
                Party
                  B

              	 
	 	 	 	 
	 	
                Office:

              	
                For
                  the purposes of this Transaction, Party A is not a Multibranch
                  Party, and
                  the Office of Party B is its Head Office.

              	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
               

            	 3.  Account
              Details	 
	 	
               

            	 
	 	
              Payments
                to Party A:

            	
              JPMorgan
                Chase Bank, New York

            
	 	 	
              ABA
                # 021000021

            
	 	 	
              A/C
                of Lehman Brothers Special Financing Inc.

            
	 	
               

            	
              A/C
                # 066-143543

            
	 	 	 
	 	
              Payments
                to Party B:

            	
              The
                Bank of New York

            
	 	 	
              ABA
                # 021000018

            
	 	 	
              Acct
                #  111-565

            
	 	 	
              Attn:  John
                Rooney

            
	 	 	
              For
                further credit to:  Ford Credit Auto Owner Trust 2007-B
                Collection Acct TAS #87494

            
	 	 	 
	 	
              Party
                A Operations

            	
              Settlements

            
	 	
              Contact:

            	
              Fax:
                212-526-0200

            
	 	 	 
	 	
              Party
                B Operations

            	 
	 	
              Contact:

            	
              Ford
                Credit Auto Owner Trust 2007-B

            
	 	 	
              c/o
                U.S. Bank Trust National Association, as Owner Trustee

            
	 	 	
              300
                Delaware Avenue, Ninth Floor

            
	 	 	
              Wilmington,
                Delaware 19801

            
	 	 	
              Attn:  Corporate
                Trust Administration

            
	 	 	
              Telephone:
                (302) 552-3102

            
	 	 	
              Fax:  (302)
                552-3129

            
	 	 	 
	 	
               

            	
              with
                copies to:

            
	 	 	 
	 	 	
              The
                Bank of New York,

            
	 	 	
                 as
                Indenture Trustee for

            
	 	 	
                 Ford
                Credit Auto Owner Trust 2007-B

            
	 	 	
              101
                Barclay Street

            
	 	 	
              Floor
                8 West

            
	 	 	
              New
                York, New York 10286

            
	 	 	
              Attn:
                Structured Finance Services -

            
	 	 	
              Asset
                Backed Securities, Ford 2007-B

            
	 	 	
              Telephone:
                (212) 815-4389

            
	 	 	
              Fax:  (212)
                815-2493;

            
	 	 	 
	 	 	
              and

            
	 	 	 
	 	 	
              Ford
                Motor Credit Company LLC

            
	 	 	
              c/o
                Ford Motor Company

            
	 	 	
              WHQ,
                One American Road

            
	 	 	
              Suite
                801-C1

            
	 	 	
              Dearborn,
                Michigan 48126

            
	 	 	
              Attention:  Securitization
                Operations Supervisor

            
	 	 	
              Telephone:
                (313) 206-5899

            
	 	 	
              Fax:
                (313) 390-4133

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Please
      confirm that the foregoing correctly sets forth the terms of our agreement
      by
      executing this Confirmation and returning it to us.

    

    
      	 	
              Best
                Regards,  

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	
              FORD
                CREDIT AUTO OWNER TRUST 2007-B

            	 
	 	 	 	 	 
	 	
              By:

            	
              U.S.
                BANK TRUST NATIONAL ASSOCIATION, 

            	 
	 	 	 	
              not
                in its individual capacity

            	 
	 	 	 	
              but
                solely as Owner Trustee

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	
              /s/
                Nicole Poole

            	 	 
	 	 	
              Name:  Nicole
                Poole 

            	 
	 	 	
              Title:   
                Vice President 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	
              LEHMAN
                BROTHERS SPECIAL FINANCING INC.

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	
              /s/
                Anatoly Kozlov

            	 	 
	 	 	
              Name:  Anatoly
                Kozlov 

            	 
	 	 	
              Title: 

            	 

    

    

    

    

    [SIGNATURE
      PAGE FOR CLASS A-2b FRONT END SWAP CONFIRM]

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