Document:

Exhibit 10.3

 

ISDA®

 

International Swap Dealers Association, Inc.

 

2002 MASTER AGREEMENT

 

dated as of September 16, 2008

 

among

 

	
  DEUTSCHE BANK AG, 

  New York Branch

  	
   

  	
  and

  	
   

  	
  LKQ CORPORATION

  

 

have entered and/or anticipate entering into one or
more transactions (each a “Transaction”) that are or will be governed by this
Master Agreement, which includes the schedule (the “Schedule”), and the
documents and other confirming evidence (each a “Confirmation”) exchanged
between the parties or otherwise effective for the purpose of confirming or
evidencing those Transactions. This 2002 Master Agreement and the Schedule are
together referred to as this “Master Agreement”.

 

Accordingly, the parties agree as follows: —

 

1.                                      Interpretation

 

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

 

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

 

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

 

2.                                      Obligations

 

(a)                                  General Conditions.

 

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

 

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

 

 

 

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

 

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

 

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

 

(i)      in the same currency; and

 

(ii)     in respect of the same Transaction,

 

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

 

The parties may elect in respect
of two or more Transactions that a net amount and payment obligation will be  determined in
respect of all amounts payable on the same date in the same currency in respect
of those Transactions,  regardless of whether such amounts are payable in respect
of the same Transaction. The election may be made in the Schedule or any
Confirmation by specifying that “Multiple Transaction Payment Netting” applies
to the Transactions identified as being subject to the election (in which
case clause (ii) above will not apply to such Transactions). If Multiple
Transaction Payment Netting is applicable to Transactions, it will apply to
those Transactions with effect from the starting date specified in
the Schedule or such Confirmation, or, if a starting date is not specified in
the  Schedule or such Confirmation, the starting date otherwise agreed by the
parties in writing. This election may be  made separately for different
groups of Transactions and will apply separately to each pairing of Offices
through which the parties make and receive payments or deliveries.

 

(d)           Deduction or Withholding for Tax.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)     Liability. If:—

 

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

 

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

 

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

 

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

 

3.             Representations

 

Each party makes the
representations contained in Sections 3(a), 3(b), 3(c), 3(d), 3(e) and 3(f) and,
if specified in the Schedule
as applying, 3(g) to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement). If any “Additional Representation” is
specified in the Schedule or any Confirmation as applying, the party or parties
specified for such Additional Representation will make and, if applicable, be
deemed to repeat such Additional Representation at the time or times specified
for such Additional Representation.

 

(a)           Basic Representations.

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)           No Agency. It is entering into this
Agreement, including each Transaction, as principal and not as agent of any
person or entity.

 

4.             Agreements

 

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

 

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

 

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

 

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

 

 

4

 

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

 

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

 

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

 

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

 

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

 

(e)           Payment
of Stamp Tax. Subject to Section 11, it will pay any Stamp
Tax levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated, organised,  managed and controlled, or considered to have its seat, or where an
Office through which it is acting for the purpose of this Agreement is
located (“Stamp Tax Jurisdiction”), and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party’s execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.

 

5.             Events of Default and Termination Events

 

(a)           Events
of Default. The
occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or any Specified Entity of such party of any of
the following events constitutes (subject to Sections 5(c) and 6(e)(iv))
an event of default (an “Event of Default”) with respect to such party:—

 

(i)      Failure to Pay or Deliver. Failure by
the party to make, when due, any payment under this Agreement or delivery under
Section 2(a)(i) or 9(h)(i)(2) or (4) required to be made by
it if such failure is
not
remedied on or before the first Local Business Day in the case of any such
payment or the first Local Delivery Day in the case of any such delivery after, in each case, notice of such
failure is given to the party;

 

(ii)     Breach
of Agreement; Repudiation of Agreement..

 

(1)       Failure
by the party to comply with or perform any agreement or obligation (other than
an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or
9(h)(i)(2) or (4) or to give notice of a Termination Event or any
agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to
be complied with or performed by the party in accordance with this Agreement if
such failure is not remedied within 30 days after notice of such failure is
given to the party; or

 

(2)       the
party disaffirms, disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, this Master Agreement, any Confirmation executed
and delivered by that party or any

 

 

5

 

Transaction evidenced by such a Confirmation (or such
action is taken by any person or entity appointed or empowered to operate it or
act on its behalf);

 

(iii)      Credit Support Default.

 

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

 

 

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

 

(3)      the party or such Credit
Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in
part, or challenges the validity of, such Credit Support Document (or such
action is taken by any person or entity appointed or empowered to operate it or
act on its behalf);

 

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

 

(v)     Default under Specified Transaction.
The party, any Credit Support Provider of such party or any  applicable Specified Entity of
such party:—

 

                             (1)           defaults (other than by failing to
make a delivery) under a Specified Transaction or any credit support arrangement relating to a
Specified
Transaction and, after giving effect to any  applicable notice requirement or grace period,
such default results in a liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction;

 

                                    (2)           defaults, after giving effect to any
applicable notice requirement or grace period, in making  any payment due on the last payment or exchange date
of, or any payment on early termination of, a Specified Transaction (or, if there is no applicable
notice requirement or grace period, such default continues for at least one
Local Business Day);

 

                                    (3)           defaults in making any delivery due
under (including any delivery due on the last delivery or exchange date of) a Specified
Transaction or any credit support arrangement relating to a Specified
Transaction and, after giving effect to any applicable notice requirement or
grace period, such default results in a liquidation of, an acceleration of obligations
under, or any early termination of, all transactions outstanding under the
documentation applicable to that Specified Transaction; or

 

                                    (4)           disaffirms,
disclaims, repudiates or rejects, in whole or in part, or challenges the
validity of, a Specified Transaction or any credit support arrangement relating
to a Specified Transaction that is, in either case, confirmed or evidenced by a
document or other confirming evidence executed and delivered by that party,
Credit Support Provider or Specified Entity (or such action is taken by any
person or entity appointed or empowered to operate it or act on its behalf);

 

 

6

 

(vi)    Cross Default. If
“Cross Default” is specified in the Schedule as applying to the party, the occurrence
or existence of:—

 

                             (1)          a default, event of default or other
similar condition or event (however described) in  respect of such party, any Credit Support Provider
of such party or any applicable Specified Entity  of such party under one or more agreements or
instruments relating to Specified Indebtedness of  any of them (individually or collectively) where
the aggregate principal amount of such agreements or instruments, either alone or together with the
amount, if any, referred to in clause (2) below is not less than the
applicable Threshold Amount (as specified in the Schedule) which has resulted
in such Specified Indebtedness becoming, or becoming capable at such time of
being declared, due and payable under such agreements or instruments before it
would otherwise have been due and payable; or

 

                             (2)          a default by such party, such Credit
Support Provider or such Specified Entity  (individually or collectively) in making one or
more payments under such agreements or  instruments on the due date for payment (after
giving effect to any applicable notice requirement or  grace period) in an aggregate
amount, either alone or together with the amount, if any, referred to in  clause (1) above, of not
less than the applicable Threshold Amount;

 

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

 

(1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes insolvent or is unable
to pay its debts or fails or admits in writing its inability generally to pay
its  debts as they become
due; (3) makes a general assignment, arrangement or composition with or
for  the benefit of its
creditors; (4)(A) institutes or has instituted against it, by a regulator,
supervisor or  any similar official
with primary insolvency, rehabilitative or regulatory jurisdiction over it in
the jurisdiction of
its incorporation or organisation or the jurisdiction of its head or home
office, a proceeding seeking a judgment of insolvency or bankruptcy or any other
relief under any  bankruptcy or
insolvency law or other similar law affecting creditors’ rights, or a petition
is  presented for its
winding-up or liquidation, by it or such regulator, supervisor or similar
official, or (B) has
instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors’ rights, or a petition is presented for its
winding-up or liquidation, and such proceeding or petition is instituted or
presented by a person or entity not described in clause (A) above and
either (I) results in a judgment of insolvency or bankruptcy or the entry
of an order for relief or the making of an order for its winding-up or liquidation
or (II) is not dismissed, discharged, stayed or restrained in each case
within 15 days of the institution or presentation thereof; (5) has a
resolution passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator,  provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for  all or substantially all its
assets; (7) has a secured party take possession of all or substantially
all its  assets or has a
distress, execution, attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its assets and such
secured party maintains possession,  or any such process is not dismissed, discharged,
stayed or restrained, in each case within 15 days  thereafter; (8) causes or is subject to any
event with respect to it which, under the applicable laws of  any jurisdiction, has an
analogous effect to any of the events specified in clauses (1) to (7) above (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of, or  acquiescence in, any of the
foregoing acts; or

 

 

7

 

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

 

(1)           the
resulting, surviving or transferee entity fails to assume all the obligations
of such party or such Credit Support Provider under this Agreement or any
Credit Support Document to which it  or its predecessor was a party; or

 

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

 

(b)           Termination Events.
The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes (subject  to Section 5(c))
an Illegality if the event is specified in clause (i) below, a Force
Majeure Event if the event is  specified
in clause (ii) below, a Tax Event if the event is specified in clause (iii) below,
a Tax Event Upon Merger if  the event
is specified in clause (iv) below, and, if specified to be applicable, a
Credit Event Upon Merger if the event  is
specified pursuant to clause (v) below or an Additional Termination Event
if the event is specified pursuant to  clause
(vi) below:—

 

(i)      Illegality. After giving effect to any applicable
provision, disruption fallback or remedy specified in, or pursuant to, the
relevant Confirmation or elsewhere in this Agreement, due to an event or
circumstance (other than any action taken by a party or, if applicable, any
Credit Support Provider of such party) occurring after a Transaction is entered
into, it becomes unlawful under any applicable law (including without
limitation the laws of any country in which payment, delivery or compliance is
required by either party or any Credit Support Provider, as the case may be),
on any day, or it would be unlawful if the relevant payment, delivery or
compliance were required on that day (in each case, other than as a result of a
breach by the party of Section 4(b)):—

 

(1)       for the Office through
which such party (which will be the Affected Party) makes and receives payments
or deliveries with respect to such Transaction to perform any absolute or contingent
obligation to make a payment or delivery in respect of such Transaction, to
receive a payment or delivery in respect of such Transaction or to comply with
any other material provision of this Agreement relating to such Transaction; or

 

(2)       for such party or any
Credit Support Provider of such party (which will be the Affected Party) to
perform any absolute or contingent obligation to make a payment or delivery
which such party or Credit Support Provider has under any Credit Support
Document relating to such Transaction, to receive a payment or delivery under
such Credit Support Document or to comply with any other material provision of
such Credit Support Document;

 

(ii)     Force Majeure Event. After giving
effect to any applicable provision, disruption fallback or  remedy specified in, or pursuant
to, the relevant Confirmation or elsewhere in this Agreement, by reason of  force majeure or act of state
occurring after a Transaction is entered into, on any day:—

 

(1)       the Office through which such party (which will be the
Affected Party) makes and receives  payments or deliveries with respect to such
Transaction is prevented from performing any absolute or contingent obligation to make a
payment or delivery in respect of such Transaction, from receiving a payment or
delivery in respect of such Transaction or from complying with any other material
provision of this Agreement relating to such Transaction (or would be so
prevented if such payment, delivery or compliance were required on that day),
or it becomes impossible or

 

 

8

 

impracticable for such Office so to perform, receive
or comply (or it would be impossible or impracticable for such Office so to
perform, receive or comply if such payment, delivery or compliance were
required on that day); or

 

(2)       such
party or any Credit Support Provider of such party (which will be the Affected
Party) is prevented from performing any absolute or contingent obligation to
make a payment or delivery which such party or Credit Support Provider has
under any Credit Support Document relating to such Transaction, from receiving
a payment or delivery under such Credit Support Document or from complying with
any other material provision of such Credit Support Document (or would be so
prevented if such payment, delivery or compliance were required on that day),
or it becomes impossible or impracticable for such party or Credit Support
Provider so to perform, receive or comply (or it would be impossible or
impracticable for such party or Credit Support Provider so to perform, receive
or comply if such payment, delivery or compliance were required on that day),

 

so long as the force majeure or
act of state is beyond the control of such Office, such party or such Credit Support Provider, as appropriate, and
such Office, party or Credit Support Provider could not, after using all reasonable
efforts (which will not require such party or Credit Support Provider to incur
a loss, other than immaterial, incidental expenses), overcome such prevention,
impossibility or impracticability;

 

(iii)    Tax Event. Due to (1) any
action taken by a taxing authority, or brought in a court of competent jurisdiction,
after a Transaction is entered into (regardless of whether such action is taken
or brought with respect
to a party to this Agreement) or (2) a Change in Tax Law, the party (which
will be the Affected Party) will, or there is a substantial likelihood that it
will, on the next succeeding Scheduled Settlement Date (A) be required to
pay to the other party an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section 9(h) or
(B) receive a payment from which an amount is required to be deducted or
withheld for or on account of a Tax (except in respect of interest under Section 9(h) and
no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));

 

(iv)    Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding
Scheduled Settlement Date will either (1) be required to pay an additional
amount in respect of an Indemnifiable Tax  under Section 2(d)(i)(4) (except in
respect of interest under Section 9(h)) or (2) receive a payment from  which an amount has been deducted
or withheld for or on account of any Tax in respect of which the other  party is not required to pay an
additional amount (other than by reason of Section 2(d)(i)(4)(A) or
(B)), in  either case as a
result of a party consolidating or amalgamating with, or merging with or into,
or transferring  all or substantially
all its assets (or any substantial part of the assets comprising the business
conducted by it as of
the date of this Master Agreement) to or reorganising, reincorporating or
reconstituting into or as, another entity (which will be the Affected Party)
where such action does not constitute a Merger Without Assumption;

 

(v)     Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule
as  applying to the
party, a Designated Event (as defined below) occurs with respect to such party,
any Credit  Support Provider of
such party or any applicable Specified Entity of such party (in each case, “X”)
and such Designated
Event does not constitute a Merger Without Assumption, and the creditworthiness
of X or, if applicable, the successor, surviving or transferee entity of X,
after taking into account any applicable Credit Support Document, is materially
weaker immediately after the occurrence of such Designated Event than that of X
immediately prior to the occurrence of such Designated Event (and, in any such
event, such party or its successor, surviving or transferee entity, as
appropriate, will be the Affected Party). A “Designated Event” with respect to
X means that:—

 

(1)       X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially  all its assets (or any substantial part of the
assets comprising the business conducted by X as of the

 

 

9

 

date of this Master Agreement) to, or reorganises,
reincorporates or reconstitutes into or as, another  entity;

 

(2)       any
person, related group of persons or entity acquires directly or indirectly the
beneficial ownership of (A) equity securities having the power to elect a
majority of the board of directors (or its equivalent) of X or (B) any
other ownership interest enabling it to exercise control of X; or

 

(3)       X effects any substantial change in its capital structure by
means of the issuance, incurrence or guarantee of debt or the issuance of (A) preferred
stock or other securities convertible into or exchangeable for debt or
preferred stock or (B) in the case of entities other than corporations,
any other form of ownership interest; or

 

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

 

(c)           Hierarchy
of Events.

 

(i)            An
event or circumstance that constitutes or gives rise to an Illegality or a
Force Majeure Event will not, for so long as that is the case, also constitute
or give rise to an Event of Default under Section 5(a)(i), 5(a)(ii)(1) or
5(a)(iii)(1) insofar as such event or circumstance relates to the failure
to make any payment or delivery or a failure to comply with any other material
provision of this Agreement or a Credit Support Document, as the case may be.

 

(ii)           Except
in circumstances contemplated by clause (i) above, if an event or
circumstance which would otherwise constitute or give rise to an Illegality or
a Force Majeure Event also constitutes an Event of Default or any other
Termination Event, it will be treated as an Event of Default or such other
Termination Event, as the case may be, and will not constitute or give rise to
an Illegality or a Force Majeure Event.

 

(iii)          If
an event or circumstance which would otherwise constitute or give rise to a
Force Majeure Event also constitutes an Illegality, it will be treated as an
Illegality, except as described in clause (ii) above, and not a Force
Majeure Event.

 

(d)           Deferral
of Payments and Deliveries During Waiting Period. If an
Illegality or a Force Majeure Event has occurred and is continuing with respect
to a Transaction, each payment or delivery which would otherwise be required to
be made under that Transaction will be deferred to, and will not be due until:—

 

(i)            the
first Local Business Day or, in the case of a delivery, the first Local
Delivery Day (or the first day that would have been a Local Business Day or
Local Delivery Day, as appropriate, but for the occurrence of the event or
circumstance constituting or giving rise to that Illegality or Force Majeure
Event) following the end of any applicable Waiting Period in respect of that
Illegality or Force Majeure Event, as the case may be; or

 

(ii)           if
earlier, the date on which the event or circumstance constituting or giving
rise to that Illegality or Force Majeure Event ceases to exist or, if such date
is not a Local Business Day or, in the case of a delivery, a Local Delivery
Day, the first following day that is a Local Business Day or Local Delivery
Day, as appropriate.

 

(e)           Inability of Head or Home
Office to Perform Obligations of Branch. If (i) an
Illegality or a Force Majeure Event occurs under Section 5(b)(i)(1) or
5(b)(ii)(1) and the relevant Office is not the Affected Party’s head or
home office, (ii) Section 10(a) applies, (iii) the other
party seeks performance of the relevant obligation or

 

 

10

 

compliance with the
relevant provision by the Affected Party’s head or home office and (iv) the
Affected Party’s head or home office fails so to perform or comply due to the
occurrence of an event or circumstance which would, if that head or home office
were the Office through which the Affected Party makes and receives payments
and deliveries with respect to the relevant Transaction, constitute or give rise
to an Illegality or a Force Majeure Event, and such failure would otherwise
constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1) with
respect to such party then, for so long as the relevant event or circumstance
continues to exist with respect to both the Office referred to in Section 5(b)(i)(1) or
5(b)(ii)(1), as the case may be, and the Affected Party’s head or home office,
such failure will not constitute an Event of Default under Section 5(a)(i) or
5(a)(iii)(1).

 

6.             Early Termination; Close-Out Netting

 

(a)           Right to Terminate Following Event of Default.  If at any time
an Event of Default with respect to a party  (the “Defaulting
Party”) has occurred and is then continuing, the other party (the
“Non-defaulting Party”) may, by not  more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier  than
the day such notice is effective as an Early Termination Date in respect of all
outstanding Transactions. If,  however,
“Automatic Early Termination” is specified in the Schedule as applying to a
party, then an Early  Termination Date
in respect of all outstanding Transactions will occur immediately upon the
occurrence with respect  to such party
of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or,
to the extent analogous thereto,  (8),
and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the  relevant petition upon the occurrence with respect
to such party of an Event of Default specified in  Section 5(a)(vii)(4) or, to the extent
analogous thereto, (8).

 

(b)           Right to Terminate
Following Termination Event.

 

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

 

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

 

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

 

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

 

(iii)    Two Affected Parties. If a Tax Event
occurs and there are two Affected Parties, each party will use all reasonable
efforts to reach agreement within 30 days after notice of such occurrence is
given under Section 6(b)(i) to avoid that Termination Event.

 

 

11

 

(iv)    Right to Terminate.

 

(1)               If:—

 

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

 

(B)       a
Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,

 

the Burdened Party in the case of
a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there are two Affected Parties, or the Non- affected
Party in the case of a Credit Event Upon Merger or an Additional Termination
Event if there is only one Affected Party may, if the relevant Termination
Event is then continuing, by not more than 20 days notice to the other party,
designate a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.

 

(2)     If at any time an Illegality or Force Majeure Event has occurred
and is then continuing and any applicable Waiting Period has expired:—

 

(A)        Subject to clause (B) below, either party may, by not
more than 20 days notice to the other party, designate (I) a day not
earlier than the day on which such notice becomes effective as an Early
Termination Date in respect of all Affected Transactions or (II) by specifying
in that notice the Affected Transactions in respect of which it is designating
the relevant day as an Early Termination Date, a day not earlier than two Local
Business Days following the day on which such notice becomes effective as an
Early Termination Date in respect of less than all Affected Transactions. Upon
receipt of a notice designating an Early Termination Date in respect of less
than all Affected Transactions, the other party may, by notice to the
designating party, if such notice is effective on or before the day so designated,
designate that same day as an Early Termination Date in respect of any or all other
Affected Transactions.

 

(b)         An Affected Party (if the Illegality or Force Majeure Event
relates to performance by such party or any Credit Support Provider of such party
of an obligation to make any payment or delivery under, or to compliance with
any other material provision of, the relevant Credit Support Document) will
only have the right to designate an Early Termination Date under Section 6(b)(iv)(2)(A) as
a result of an Illegality under Section 5(b)(i)(2) or a Force Majeure
Event under Section 5(b)(ii)(2) following the prior designation by
the other party of an Early Termination Date, pursuant to Section 6(b)(iv)(2)(A),
in respect of less than all Affected Transactions.

 

(c)           Effect of Designation.

 

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

 

(ii)     Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section 2(a)(i) or
9(h)(i) in respect of the Terminated Transactions will be required to be made,
but without prejudice to the other provisions of this Agreement. The amount, if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Sections 6(e) and 9(h)(ii).

 

 

12

 

(d)           Calculations; Payment Date.

 

(i)      Statement.  On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the calculations
on its part, if any, contemplated by Section 6(e) and  will provide to the
other party a statement (1) showing, in reasonable detail, such
calculations (including any  quotations, market data or
information from internal sources used in making such calculations), (2) specifying
(except where there are two Affected Parties) any Early Termination Amount payable
and (3) giving details of the relevant account to which any
amount payable to it is to be paid. In the absence of  written confirmation
from the source of a quotation or market data obtained in determining a
Close-out Amount, the records of the party obtaining such quotation or market
data will be conclusive evidence of the  existence and accuracy of such
quotation or market data.

 

(ii)     Payment Date. An
Early Termination Amount due in respect of any Early Termination Date will, together
with any amount of interest payable pursuant to Section 9(h)(ii)(2), be
payable (1) on the day on which notice of the amount payable is effective
in the case of an Early Termination Date which is designated or occurs as a
result of an Event of Default and (2) on the day which is two Local
Business Days after the day on which notice of the amount payable is effective
(or if there are two Affected Parties, after the day on which the statement
provided pursuant to clause (i) above by the second party to provide such
a statement is effective) in the case of an Early Termination Date which is
designated as a result of a Termination Event.

 

(e)           Payments on Early
Termination. If an Early
Termination Date occurs, the amount, if any, payable in respect of that Early
Termination Date (the “Early Termination Amount”) will be determined pursuant
to this Section 6(e) and will be subject to Section 6(f).

 

(i)      Events of Default. If the Early Termination Date results from an Event of
Default, the Early Termination Amount will be an amount equal to (1) the
sum of (A) the Termination Currency Equivalent of the Close-out Amount or
Close-out Amounts (whether positive or negative) determined by the
Non-defaulting Party for each Terminated Transaction or group of Terminated
Transactions, as the case may be, and (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (2) the
Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party. If the Early Termination Amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value of the Early
Termination Amount to the Defaulting Party.

 

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

 

(1)      One Affected Party. Subject to
clause (3) below, if there is one Affected Party, the Early Termination Amount
will be determined in accordance with Section 6(e)(i), except that
references to the Defaulting Party and to the Non-defaulting Party will be
deemed to be references to the Affected Party and to the Non-affected Party,
respectively.

 

(2)      Two Affected Parties. Subject to
clause (3) below, if there are two Affected Parties, each party will
determine an amount equal to the Termination Currency Equivalent of the sum of
the Close-out Amount or Close-out Amounts (whether positive or negative) for
each Terminated Transaction or group of Terminated Transactions, as the case
may be, and the Early Termination Amount will be an amount equal to (A) the
sum of (I) one-half of the difference between the higher amount so
determined (by party “X”) and the lower amount so determined (by party “Y”) and
(II) the Termination Currency Equivalent of the Unpaid Amounts owing to X
less (B) the Termination Currency Equivalent of the Unpaid Amounts owing
to Y. If the Early Termination Amount is a positive number, Y will pay it to X,
if it is a negative number, X will pay the absolute value of the Early
Termination Amount to Y.

 

 

13

 

(3)      Mid-Market Events. If that
Termination Event is an Illegality or a Force Majeure Event, then the Early
Termination Amount will be determined in accordance with clause (1) or (2) above,
as appropriate, except that, for the purpose of determining a Close-out Amount
or Close-out Amounts, the Determining Party will:—

 

(A) if obtaining quotations
from one or more third parties (or from any of the Determining Party’s
Affiliates), ask each third party or Affiliate (I) not to take account of the
current creditworthiness of the Determining Party or any existing Credit
Support Document and (II) to provide mid-market quotations; and

 

(B)   in any other case, use mid market values without regard to the
creditworthiness of the Determining Party.

 

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

 

(iv)   Adjust for Illegality or Force Majeure Event. The failure by a
party or any Credit Support Provider of such party to pay, when due, any Early
Termination Amount will not constitute an Event of Default under Section 5(a)(i) or
5(a)(iii)(1) if such failure is due to the occurrence of an event or circumstance
which would, if it occurred with respect to payment, delivery or compliance
related to a Transaction, constitute or give rise to an Illegality or a Force
Majeure Event. Such amount will (1) accrue interest and otherwise be
treated as an Unpaid Amount owing to the other party if subsequently an Early Termination
Date results from an Event of Default, a Credit Event Upon Merger or an
Additional Termination Event in respect of which all outstanding Transactions
are Affected Transactions and (2) otherwise accrue interest in accordance
with Section 9(h)(ii)(2).

 

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

 

(f)            Set-Off. Any
Early Termination Amount payable to one party (the “Payee”) by the other party
(the “Payer”), in circumstances where there is a Defaulting Party or where
there is one Affected Party in the case where either a Credit Event Upon Merger
has occurred or any other Termination Event in respect of which all outstanding
Transactions are Affected Transactions has occurred, will, at the option of the
Non-defaulting Party or the Non-affected Party, as the case may be (“X”) (and
without prior notice to the Defaulting Party or the Affected Party, as the case
may be), be reduced by its set-off against any other amounts (“Other Amounts”)
payable by the Payee to the Payer (whether or not arising under this Agreement,
matured or contingent and irrespective of the currency, place of payment or
place of booking of the obligation). To the extent that any Other Amounts are
so set off, those Other Amounts will be discharged promptly and in all
respects. X will give notice to the other party of any set-off effected under
this Section 6(f).

 

For this purpose, either the
Early Termination Amount or the Other Amounts (or the relevant portion of such amounts)
may be converted by X into the currency in which the other is denominated at
the rate of exchange at which such party would be able, in good faith and using
commercially reasonable procedures, to purchase the relevant amount of such
currency.

 

 

14

 

 

If an
obligation is unascertained, X may in good faith estimate that obligation and
set off in respect of the estimate,  subject to the
relevant party accounting to the other when the obligation is ascertained.

 

Nothing in
this Section 6(f) will be effective to create a charge or other
security interest. This Section 6(f) will be  without
prejudice and in addition to any right of set-off, offset, combination of
accounts, lien, right of retention or  withholding or
similar right or requirement to which any party is at any time otherwise entitled
or subject (whether by  operation of law, contract or
otherwise).

 

7.             Transfer

 

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

 

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

 

(b)           a party may make such a transfer of all or any part of its
interest in any Early Termination Amount payable to it by a Defaulting Party,
together with any amounts payable on or with respect to that interest and any
other rights associated with that interest pursuant to Sections 8, 9(h) and
11.

 

Any purported transfer that is
not in compliance with this Section 7 will be void.

 

8.             Contractual Currency

 

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

 

(b)           Judgments. To the extent permitted by applicable law, if any judgment
or order expressed in a currency  other than the
Contractual Currency is rendered (i) for the payment of any amount owing
in respect of this  Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in  respect of
a judgment or order of another court for the payment of any amount described in
(i) or (ii) above,  the
party seeking recovery, after recovery in full of the aggregate amount to which
such party is entitled pursuant to  the
judgment or order, will be entitled to receive immediately from the other party
the amount of any shortfall of the  Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund  promptly to
the other party any excess of the Contractual Currency received by such party
as a consequence of sums  paid in such
other currency if such shortfall or such excess arises or results from any
variation between the rate of  exchange
at which the Contractual Currency is converted into the currency of the
judgment or order for the purpose  of
such judgment or order and the rate of exchange at which such party is able,
acting in good faith and using

 

 

15

commercially reasonable
procedures in converting the currency received into the Contractual Currency,
to purchase  the Contractual Currency with the amount of the
currency of the judgment or order actually received by such party.

 

 (c)          Separate Indemnities. To the extent
permitted by applicable law, the indemnities in this Section 8  constitute
separate and independent obligations from the other obligations in this
Agreement, will be enforceable as separate and independent causes of action,
will apply notwithstanding any indulgence granted by the party to which any
payment is owed and will not be affected by
judgment being obtained or claim or proof being made for any other  sums payable in respect of this Agreement.

 

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

 

9.             Miscellaneous

 

(a)           Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with  respect to its
subject matter. Each of the parties acknowledges that in entering into this
Agreement it has not relied on any oral or written representation,
warranty or other assurance (except as provided for or referred to in this Agreement)
and waives all rights and remedies which
might otherwise be available to it in respect thereof, except that  nothing in this Agreement will limit or exclude
any liability of a party for fraud.

 

(b)           Amendments. An amendment, modification or waiver in respect of this
Agreement will only be effective if in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or  confirmed
by an exchange of telexes or by an exchange of electronic messages on an
electronic messaging system.

 

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

 

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

 

(e)           Counterparts and
Confirmations.

 

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

 

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

 

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

 

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

 

 

16

 

(h)           Interest and Compensation.

 

                                                (i)            Prior to Early
Termination. Prior to the occurrence or effective designation of
an Early Termination Date in respect of the relevant Transaction:—

 

                                                                                                (1)           Interest on Defaulted
Payments. If a party defaults in the performance of any payment obligation,
it will, to the extent permitted by applicable law and subject to Section 6(c),
pay interest (before as well as after judgment) on the overdue amount to the
other party on demand in the same currency as the overdue amount, for the
period from (and including) the original due date for payment to (but
excluding) the date of actual payment (and excluding any period in respect of which
interest or compensation in respect of the overdue amount is due pursuant to
clause (3)(B) or (C) below), at the Default Rate.

 

                                                                                                (2)           Compensation for Defaulted
Deliveries. If a party defaults in the performance of any obligation
required to be settled by delivery, it will on demand (A) compensate the
other party to the extent provided for in the relevant Confirmation or
elsewhere in this Agreement and (B) unless otherwise provided in the
relevant Confirmation or elsewhere in this Agreement, to the extent permitted
by applicable law and subject to Section 6(c), pay to the other party
interest (before as well as after judgment) on an amount equal to the fair
market value of that which was required to be delivered in the same currency as
that amount, for the period from (and including) the originally scheduled date
for delivery to (but excluding) the date of actual delivery (and excluding any
period in respect of which interest or compensation in respect of that amount
is due pursuant to clause (4) below), at the Default Rate. The fair market
value of any obligation referred to above will be determined as of the
originally scheduled date for delivery, in good faith and using commercially reasonable
procedures, by the party that was entitled to take delivery.

 

                                                                                                (3)           Interest on Deferred
Payment. If:—

 

(A)          a party does not pay
any amount that, but for Section 2(a)(iii), would have been payable, it
will, to the extent permitted by applicable law and subject to Section 6(c) and
clauses (B) and (C) below, pay interest (before as well as after
judgment) on that amount to the other party on demand (after such amount
becomes payable) in the same currency as that amount, for the period from (and
including) the date the amount would, but for Section 2(a)(iii), have been
payable to (but excluding) the date the amount actually becomes payable, at the
Applicable Deferral Rate;

 

(B)           a payment is deferred
pursuant to Section 5(d), the party which would otherwise have been
required to make that payment will, to the extent permitted by applicable law, subject
to Section 6(c) and for so long as no Event of Default or Potential
Event of Default with respect to that party has occurred and is continuing, pay
interest (before as well as after judgment) on the amount of the deferred
payment to the other party on demand (after such amount becomes payable) in the
same currency as the deferred payment, for the period from (and including) the
date the amount would, but for Section 5(d), have been payable to (but
excluding) the earlier of the date the payment is no longer deferred pursuant
to Section 5(d) and the date during the deferral period upon which an
Event of Default or Potential Event of Default with respect to that party
occurs, at the Applicable Deferral Rate; or

 

(C)           a party fails to make
any payment due to the occurrence of an Illegality or a Force Majeure Event
(after giving effect to any deferral period contemplated by clause (B) above),
it will, to the extent permitted by applicable law, subject to Section 6(c) and
for so long as the event or circumstance giving rise to that Illegality or
Force Majeure Event

 

 

17

 

continues and no Event of Default or Potential Event of Default with
respect to that party has occurred and is continuing, pay interest (before as
well as after judgment) on the overdue amount to the other party on demand in
the same currency as the overdue amount, for the period from (and including)
the date the party fails to make the payment due to the occurrence of the
relevant Illegality or Force Majeure Event (or, if later, the date the payment
is no longer deferred pursuant to Section 5(d)) to (but excluding) the
earlier of the date the event or circumstance giving rise to that Illegality or
Force Majeure Event ceases to exist and the date during the period upon which
an Event of Default or Potential Event of Default with respect to that party
occurs (and excluding any period in respect of which interest or compensation
in respect of the overdue amount is due pursuant to clause (B) above), at the
Applicable Deferral Rate.

 

                                                                                                (4)           Compensation for Deferred
Deliveries. If:—

 

(A)          a party does not
perform any obligation that, but for Section 2(a)(iii), would have been
required to be settled by delivery;

 

(B)           a delivery is
deferred pursuant to Section 5(d); or

 

(C)           a party fails to make
a delivery due to the occurrence of an Illegality or a Force Majeure Event at a
time when any applicable Waiting Period has expired,

 

                                                                                                the party required
(or that would otherwise have been required) to make the delivery will, to the extent
permitted by applicable law and subject to Section 6(c), compensate and
pay interest to the other party on demand (after, in the case of clauses (A) and
(B) above, such delivery is required) if and to the extent provided for in
the relevant Confirmation or elsewhere in this Agreement

 

                                                (ii)           Early Termination.
Upon the occurrence or effective designation of an Early Termination Date in respect
of a Transaction:—

 

                                                                                                (1)           Unpaid Amounts. For
the purpose of determining an Unpaid Amount in respect of the relevant
Transaction, and to the extent permitted by applicable law, interest will
accrue on the amount of any payment obligation or the amount equal to the fair
market value of any obligation required to be settled by delivery included in
such determination the same currency as that amount, for the period from (and
including) the date the relevant obligation was (or would have been but for Section 2(a)(iii) or
5(d)) required to have been performed to (but excluding) the relevant Early
Termination Date, at the Applicable Close-out Rate.

 

                                                                                                (2)           Interest on Early
Termination Amounts. If an Early Termination Amount is due in
respect of such Early Termination Date, that amount will, to the extent
permitted by applicable law, be paid together with interest (before as well as
after judgment) on that amount in the Termination Currency, for the period from
(and including) such Early Termination Date to (but excluding) the date the
amount is paid, at the Applicable Close-out Rate.

 

                                                (iii)          Interest Calculation.  Any interest pursuant to this Section 9(h) will
be calculated on the basis of daily compounding and the actual number of days
elapsed.

 

 

18

 

 10.         Offices;
Multibranch Parties

 

(a)           If Section 10(a) is specified in the Schedule as
applying, each party that enters into a Transaction through an Office other
than its head or home office represents to and agrees with the other party
that, notwithstanding the place of booking office or its jurisdiction of
incorporation or organisation, its obligations are the same in terms of
recourse against it as if it had entered into the Transaction through its head
or home office, except that a party will not have recourse to the head or home
office of the other party in respect of any payment or delivery deferred
pursuant to Section 5(d) for so long as the payment or delivery is so
deferred. This representation and agreement will be deemed to be repeated by
each party on each date on which the parties enter into a Transaction.

 

 (b)          If
a party is specified as a Multibranch Party in the Schedule, such party may,
subject to clause (c) below, enter into a Transaction through, book a
Transaction in and make and receive payments and deliveries with respect to a
Transaction through any Office listed in respect of that party in the Schedule
(but not any other Office unless otherwise agreed by the parties in writing).

 

(c)           The Office through which a party enters into a Transaction
will be the Office specified for that party in the relevant Confirmation or as
otherwise agreed by the parties in writing, and, if an Office for that party is
not specified in the Confirmation or otherwise agreed by the parties in
writing, its head or home office. Unless the parties otherwise agree in
writing, the Office through which a party enters into a Transaction will also
be the Office in which it books the Transaction and the Office through which it
makes and receives payments and deliveries with respect to the Transaction.
Subject to Section 6(b)(ii), neither party may change the Office in which
it books the Transaction or the Office through which it makes and receives
payments or deliveries with respect to a Transaction without the prior written
consent of the other party.

 

11.          Expenses

 

A Defaulting Party will on demand
indemnify and hold harmless the other party for and against all reasonable
out-of-pocket expenses, including legal fees, execution fees and Stamp Tax,
incurred by such other party by reason of the enforcement and protection of its
rights under this Agreement or any Credit Support Document to which the Defaulting
Party is a party or by reason of the early termination of any Transaction,
including, but not limited to, costs of collection.

 

12.          Notices

 

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

 

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

 

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

 

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

 

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

 

(v)     if sent by electronic messaging system, on the date it is
received, or

 

 

19

 

(vi)    if sent by e-mail, on the date it is delivered,

 

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

 

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

 

13.          Governing Law and Jurisdiction

 

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

 

(b)           Jurisdiction. With respect to any suit, action or proceedings relating
to any dispute arising out of or in connection with this Agreement (“Proceedings”),
each party irrevocably:—

 

(i)      submits:—

 

(1)         if this Agreement is expressed to be governed by English
law, to (A) the non-exclusive jurisdiction of the English courts if the
Proceedings do not involve a Convention Court and (B) the exclusive jurisdiction
of the English courts if the Proceedings do involve a Convention Court; or

 

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

 

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

 

(iii)    agrees, to the extent permitted by applicable law, that the
bringing of Proceedings in any one or more jurisdictions will not preclude the
bringing of Proceedings in any other jurisdiction.

 

(c)           Service of Process. Each party irrevocably appoints the Process Agent (if any)
specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party’s
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12(a)(i), 12(a)(iii) or
12(a)(iv). Nothing in this Agreement will affect the right of either party to
serve process in any other manner permitted by applicable law.

 

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

 

 

20

 

14.          Definitions

 

As used in this Agreement:—

 

“Additional
Representation” has the meaning specified in Section 3.

 

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

 

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

 

“Affected Transactions” means (a) with
respect to any Termination Event consisting of an Illegality, Force Majeure Event,
Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence
of such Termination Event (which, in the case of an Illegality under Section 5(b)(i)(2) or
a Force Majeure Event under Section 5(b)(ii)(2), means all Transactions
unless the relevant Credit Support Document references only certain Transactions,
in which case those Transactions and, if the relevant Credit Support Document
constitutes a Confirmation for a Transaction, that Transaction) and (b) with
respect to any other Termination Event, all Transactions.

 

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

 

“Agreement” has the meaning
specified in Section 1(c).

 

“Applicable Close-out
Rate” means:—

 

(a)     in respect of the determination of an
Unpaid Amount:—

 

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

 

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

 

(iii)        in respect of obligations deferred pursuant to Section 5(d),
if there is no Defaulting Party and for so long as the deferral period
continues, the Applicable Deferral Rate; and

 

(iv)        in all other cases following the occurrence of a Termination
Event (except where interest accrues pursuant to clause (iii) above), the
Applicable Deferral Rate; and

 

(b)     in respect of an Early Termination Amount:—

 

(i)          for the period from (and including) the relevant Early
Termination Date to (but excluding) the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable:—

 

(1)           if the Early Termination Amount is payable by a Defaulting
Party, the Default Rate;

 

(2)           if the Early Termination Amount is payable by a
Non-defaulting Party, the Non-default Rate; and

 

(3)           in all other cases, the Applicable Deferral Rate; and

 

 

 

21

 

 

(ii)         for the period from (and including) the date (determined in
accordance with Section 6(d)(ii)) on which that amount is payable to (but
excluding) the date of actual payment:—

 

(1)           if a party fails to pay the Early Termination Amount due
to the occurrence of an event or circumstance which would, if it occurred with
respect to a payment or delivery under a Transaction, constitute or give rise
to an Illegality or a Force Majeure Event, and for so long as the Early Termination
Amount remains unpaid due to the continuing existence of such event or
circumstance, the Applicable Deferral Rate;

 

(2)           if the Early Termination Amount is payable by a Defaulting
Party (but excluding any period in respect of which clause (1) above
applies), the Default Rate;

 

(3)           if the Early Termination Amount is payable by a
Non-defaulting Party (but excluding any period in respect of which clause (1) above
applies), the Non-default Rate; and

 

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

 

“Applicable Deferral Rate” means:—

 

(a)           for the purpose of Section 9(h)(i)(3)(A),
the rate certified by the relevant payer to be a rate offered to the payer by a
major bank in a relevant interbank market for overnight deposits in the
applicable currency, such bank to be selected in good faith by the payer for
the purpose of obtaining a representative rate that will reasonably reflect conditions
prevailing at the time in that relevant market;

 

(b)           for purposes of Section 9(h)(i)(3)(B) and
clause (a)(iii) of the definition of Applicable Close-out Rate, the rate
certified by the relevant payer to be a rate offered to prime banks by a major
bank in a relevant interbank market for overnight deposits in the applicable
currency, such bank to be selected in good faith by the payer after consultation
with the other party, if practicable, for the purpose of obtaining a
representative rate that will reasonably reflect conditions prevailing at the
time in that relevant market; and

 

(c)           for purposes of Section 9(h)(i)(3)(C) and
clauses (a)(iv), (b)(i)(3) and (b)(i)(3) and (b)(ii)(1) of the
definition of Applicable Close-out Rate, a rate equal to the arithmetic mean of
the rate determined pursuant to clause (a) above and a rate per annum
equal to the cost (without proof or evidence of any actual cost) to the
relevant payee (as certified by it) if it were to fund or of funding the
relevant amount.

 

“Automatic Early Termination” has the meaning specified in Section 6(a).

 

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

 

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

 

“Close-out Amount” means, with respect
to each Terminated Transaction or each group of Terminated Transactions and a
Determining Party, the amount of the losses or costs of the Determining Party
that are or would be incurred under then prevailing circumstances (expressed as
a positive number) or gains of the Determining Party that are or would be
realised under then prevailing circumstances (expressed as a negative number)
in replacing, or in providing for the Determining Party the economic equivalent
of, (a) the material terms of that Terminated Transaction or group of
Terminated Transactions, including the payments and deliveries by the parties
under Section 2(a)(i) in respect of that Terminated Transaction or
group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date (assuming
satisfaction of the conditions precedent in

 

 

22

 

Section 2(a)(iii) and (b) the
option rights of the parties in respect of that Terminated Transaction or group
of Terminated Transactions.

 

Any Close-out Amount will be
determined by the Determining Party (or its agent), which will act in good
faith and use commercially reasonable procedures in order to produce a
commercially reasonable result. The Determining Party may determine a Close-out
Amount for any group of Terminated Transactions or any individual Terminated Transaction
but, in the aggregate, for not less than all Terminated Transactions. Each
Close-out Amount will be determined as of the Early Termination Date or, if
that would not be commercially reasonable, as of the date or dates following
the Early Termination Date as would be commercially reasonable.

 

Unpaid Amounts in respect of a
Terminated Transaction or group of Terminated Transactions and legal fees and
out- of-pocket expenses referred to in Section 11 are to be excluded in
all determinations of Close-out Amounts.

 

In determining a Close-out
Amount, the Determining Party may consider any relevant information, including,
without limitation, one or more of the following types of information:—

 

(i)            quotations (either firm or indicative) for replacement
transactions supplied by one or more third parties that may take into account
the creditworthiness of the Determining Party at the time the quotation is
provided and the terms of any relevant documentation, including credit support
documentation, between the Determining Party and the third party providing the
quotation;

 

(ii)           information consisting of relevant market data in the
relevant market supplied by one or more third parties including, without
limitation, relevant rates, prices, yields, yield curves, volatilities,
spreads, correlations or other relevant market data in the relevant market; or

 

(iii)          information of the types described in clause (i) or (ii) above
from internal sources (including any of the Determining Party’s Affiliates) if
that information is of the same type used by the Determining Party in the
regular course of its business for the valuation of similar transactions.

 

The Determining Party will
consider, taking into account the standards and procedures described in this
definition, quotations pursuant to clause (i) above or relevant market
data pursuant to clause (ii) above unless the Determining Party reasonably
believes in good faith that such quotations or relevant market data are not
readily available or would produce a result that would not satisfy those
standards. When considering information described in clause (i), (ii) or (iii) above,
the Determining Party may include costs of funding, to the extent costs of
funding are not and would not be a component of the other information being
utilised. Third parties supplying quotations pursuant to clause (i) above or
market data pursuant to clause (ii) above may include, without limitation,
dealers in the relevant markets, end-users of the relevant product, information
vendors, brokers and other sources of market information.

 

Without duplication of amounts
calculated based on information described in clause (i), (ii) or (iii) above,
or other relevant information, and when it is commercially reasonable to do so,
the Determining Party may in addition consider in calculating a Close-out
Amount any loss or cost incurred in connection with its terminating,
liquidating or re-establishing any hedge related to a Terminated Transaction or
group of Terminated Transactions (or any gain resulting from any of them).

 

Commercially reasonable
procedures used in determining a Close-out Amount may include the following:—

 

(1)           application to relevant market data from third parties
pursuant to clause (ii) above or information from internal sources
pursuant to clause (iii) above of pricing or other valuation models that
are, at the time of the determination of the Close-out Amount, used by the
Determining Party in the regular course of its business in pricing or valuing
transactions between the Determining Party and unrelated third parties that are
similar to the Terminated Transaction or group of Terminated Transactions; and

 

 

23

 

(2)           application of different valuation methods to Terminated
Transactions or groups of Terminated Transactions depending on the type,
complexity, size or number of the Terminated Transactions or group of
Terminated Transactions.

 

“Confirmation” has the meaning
specified in the preamble.

 

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

 

“Contractual Currency” has the meaning
specified in Section 8(a).

 

“Convention Court” means any court
which is bound to apply to the Proceedings either Article 17 of the 1968 Brussels
Convention on Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters or Article 17 of the 1988 Lugano Convention on
Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters.

 

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

 

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

 

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

 

“Cross-Default” means the event
specified in Section 5(a)(vi).

 

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

 

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

 

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

 

“Determining Party” means the party
determining a Close-out Amount.

 

“Early Termination Amount”
has the meaning specified in Section 6(e).

 

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

 

“electronic messages” does not include
e-mails but does include documents expressed in markup languages, and “electronic messaging system” will
be construed accordingly.

 

“English Law” means the law of
England and Wales, and “English” will
be construed accordingly.

 

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

 

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

 

“General Business Day” means a day on which
commercial banks are open for general business (including dealings in foreign
exchange and foreign currency deposits).

 

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

 

 

24

 

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

 

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

 

“Local Business Day” means, (a) in
relation to any obligation under Section 2(a)(i), a General Business Day
in the place or places specified in the relevant Confirmation and a day on
which a relevant settlement system is open or operating as specified in the
relevant Confirmation or, if a place or a settlement system is not so specified,
as otherwise agreed by the parties in writing or determined pursuant to
provisions contained, or incorporated by reference, in this Agreement, (b) for
the purpose of determining when a Waiting Period expires, a General Business Day
in the place where the event or circumstance that constitutes or gives rise to
the Illegality or Force Majeure Event, as the case may be, occurs, (c) in
relation to any other payment, a General Business Day in the place where the relevant
account is located and, if different, in the principal financial centre, if
any, of the currency of such payment, and, if that currency does not have a
single recognised principal financial centre, a day on which the settlement system
necessary to accomplish such payment is open, (d) in relation to any
notice or other communication, including notice contemplated under Section 5(a)(i),
a General Business Day (or a day that would have been a General Business Day
but for the occurrence of an event or circumstance which would, if it occurred
with respect to payment, delivery or compliance related to a Transaction,
constitute or give rise to an Illegality or a Force Majeure Event) in the place
specified in the address for notice provided by the recipient and, in the case
of a notice contemplated by Section 2(b), in the place where the relevant
new account is to be located and (e) in relation to Section 5(a)(v)(2),
a General Business Day in the relevant locations for performance with respect
to such Specified Transaction.

 

“Local Delivery Day” means, for purposes
of Sections 5(a)(i) and 5(d), a day on which settlement systems necessary to
accomplish the relevant delivery are generally open for business so that the
delivery is capable of being accomplished in accordance with customary market
price, in the place specified in the relevant Confirmation or, if not so
specified, in a location as determined in accordance with customary market
practice for the relevant delivery.

 

“Master Agreement” has the meaning
specified in the preamble.

 

“Merger Without Assumption”
means the event specified in Section 5(a)(viii).

 

“Multiple Transaction
Payment Netting” has the meaning specified in Section 2(c).

 

“Non-affected Party” means, so long as
there is one Affected Party, the other party.

 

“Non-default Rate” means the rate
certified by the Non-defaulting Party to be a rate offered to the
Non-defaulting Party by a major bank in a relevant interbank market for
overnight deposits in the applicable currency, such bank to be selected in good
faith by the Non-defaulting Party for the purpose of obtaining a representative
rate that will reasonably reflect conditions prevailing at the time in that
relevant market.

 

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

 

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

 

“Other Amounts” has the meaning
specified in Section 6(f).

 

 

25

 

“Payee” has the meaning
specified in Section 6(f).

 

“Payer” has the meaning
specified in Section 6(f).

 

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

 

“Proceedings” has the meaning
specified in Section 13(b).

 

“Process Agent” has the meaning
specified in the Schedule.

 

“rate of exchange” includes, without
limitation, any premiums and costs of exchange payable in connection with the purchase
of or conversion into the Contractual Currency.

 

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

 

“Schedule” has the meaning
specified in the preamble.

 

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

 

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

 

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

 

“Specified Transaction” means, subject to
the Schedule, (a) any transaction (including an agreement with respect to any such
transaction) now existing or hereafter entered into between one party
to this Agreement (or any Credit  Support Provider of such party or
any applicable Specified Entity of such party) and the other party to this
Agreement  (or any Credit Support Provider of such other party or any applicable
Specified Entity of such other party) which is not a Transaction under this
Agreement but (i) which is a rate swap transaction, swap option, basis
swap, forward rate  transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond  option, interest
rate option, foreign exchange transaction, cap transaction, floor transaction,
collar transaction,  currency swap transaction, cross-currency rate swap
transaction, currency option, credit protection transaction, credit swap, credit
default swap, credit default option, total return swap, credit spread
transaction, repurchase transaction, reverse repurchase transaction,
buy/sell-back transaction, securities lending transaction, weather index
transaction or forward purchase or sale of a security, commodity or other
financial instrument or interest (including any option with respect to any of
these transactions) or (ii) which is a type of transaction that is similar
to any transaction referred to in clause (i) above that is currently, or
in the future becomes, recurrently entered into in the financial markets (including
terms and conditions incorporated by reference in such agreement) and which is
a forward, swap, future, option or other derivative on one or more rates,
currencies, commodities, equity securities or other equity instruments, debt securities
or other debt instruments, economic indices or measures of economic risk or
value, or other benchmarks against which payments or deliveries are to be made,
(b) any combination of these transactions and (c) any other
transaction identified as a Specified Transaction in this Agreement or the
relevant confirmation.

 

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

 

“Stamp Tax Jurisdiction” has the meaning
specified in Section 4(e).

 

 

26

 

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

 

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

 

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

 

“Terminated Transactions” means with respect
to any Early Termination Date (a) if resulting from an Illegality or a
Force Majeure Event, all Affected Transactions specified in the notice given
pursuant to Section 6(b)(iv), (b) if resulting from any other
Termination Event, all Affected Transactions and (c) if resulting from an
Event of Default, all Transactions in effect either immediately before the
effectiveness of the notice designating that Early Termination Date or, if
Automatic Early Termination applies, immediately before that Early Termination
Date.

 

“Termination Currency” means (a) if a
Termination Currency is specified in the Schedule and that currency is freely available,
that currency, and (b) otherwise, euro if this Agreement is expressed to
be governed by English law or United States Dollars if this Agreement is
expressed to be governed by the laws of the State of New York.

 

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

 

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

 

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

 

“Threshold Amount” means the amount, if
any, specified as such in the Schedule.

 

“Transaction” has the meaning
specified in the preamble.

 

“Unpaid Amounts” owing to any party
means, with respect to an Early Termination Date, the aggregate of (a) in respect
of all Terminated Transactions, the amounts that became payable (or that would have
become payable but for Section 2(a)(iii) or due but for Section 5(d))
to such party under Section 2(a)(i) or 2(d)(i)(4) on or prior to
such Early Termination Date and which remain unpaid as at such Early
Termination Date, and (b) in respect of each Terminated Transaction, for
each obligation under Section 2(a)(i) which was (or would have been
but for Section 2(a)(iii) or 5(d)) required to be settled by delivery
to such party on or prior to such Early Termination Date and which has not been
so settled as at such Early Termination Date, an amount equal to the fair
market value of that which was (or would have been) required to be delivered
and (c) if the Early Termination Date results from an Event of Default, a Credit
Event Upon Merger or an Additional Termination Event in respect of which all
outstanding Transactions are Affected Transactions, any Early Termination
Amount due prior to such Early Termination Date and which remains unpaid as of
such Early Termination Date, in each case together with any amount of interest
accrued or other

 

 

27

 

compensation in respect of that obligation or deferred
obligation, as the case may be, pursuant to Section 9(h)(ii)(1) or (2), as
appropriate. The fair market value of any obligation referred to in clause (b)
above will be determined as of the originally schedule date for delivery, in good
faith and using commercially reasonable procedures, by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
will be the average of the Termination Currency Equivalents of the fair market
values so determined by both parties.

 

“Waiting Period” means:—

 

(a)           in
respect of an event or circumstance under Section 5(b)(i), other than in the
case of Section 5(b)(i)(2) where the relevant payment, delivery or compliance
is actually required on the relevant day (in which case no Waiting Period will
apply), a period of three Local Business Days (or days that would have been
Local Business Days but for the occurrence of that event or circumstance)
following the occurrence of that event or circumstance; and

 

(b)           in
respect of any event or circumstance under Section 5(b)(ii), other than in the
case of Section 5(b)(ii)(2) where the relevant payment, delivery or compliance
is actually required on the relevant day (in which case no Waiting Period will
apply), a period of eight Local Business Days (or days that would have been
local Business Days but for the occurrence of that event or circumstance)
following the occurrence of that event of circumstance.

 

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

 

	
  DEUTSCHE BANK AG, New York Branch

  	
   

  	
   

  	
  LKQ CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Kathleen Yohe

  	
   

  	
   

  	
  /s/
  Victor M. Casini

  
	
  Name:

  	
  Kathleen
  Yohe

  	
   

  	
   

  	
  Name:
  

  	
  Victor
  M. Casini

  
	
  Title:
  

  	
  Director

  	
   

  	
   

  	
  Title:
  

  	
  Senior
  Vice President and General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/
  Steven Kessler

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Steven
  Kessler

  	
   

  	
   

  	
   

  	
   

  
	
  Title:
  

  	
  Director

  	
   

  	
   

  	
   

  	
   

  

 

 

28

SCHEDULE

to the

2002
MASTER AGREEMENT

 

dated as
of September 16, 2008

 

between

 

	
  DEUTSCHE
  BANK AG, New York Branch

  (“Party
  A”)

  	
   

  	
  and

  	
   

  	
  LKQ
  CORPORATION

  (“Party
  B”)

  

 

PART 1

Termination Provisions

 

(1)                                  “Specified Entity” means, in relation to Party A, for the purpose
of:

 

                                                Section 5(a)(v), none;

                                                Section 5(a)(vi), none;

                                                Section 5(a)(vii), none; and

                                                Section 5(b)(v), none;

 

                                                                                                and, in relation to Party B, for the
purpose of:

 

                                                Section 5(a)(v), any Credit Support Provider of Party B;

                                                Section 5(a)(vi), none;

                                                Section 5(a)(vii), none; and

                                                Section 5(b)(v), none.

 

(2)                                  “Specified Transaction” will have the meaning specified in Section 14
of this Agreement.

 

(3)                                  The “Cross-Default”
provisions of Section 5(a)(vi) will apply to Party A and Party B, subject to
amendment by adding at the end therefore the following:

 

“provided,
however, that, notwithstanding the foregoing, an Event of Default shall not
occur under either (1) or (2) above if (A) (I) the default,
or other similar event or condition referred to in (1) or the failure to
pay referred to in (2) is a failure to pay or deliver caused by an error
or omission of an administrative or operational nature, and (II) funds or
the asset to be delivered were available to such party to enable it to make the
relevant payment or delivery when due and (III) such payment or delivery
is made within three (3) Local Business Days following receipt of written
notice from an interested party of such failure to pay, or (B) such party was precluded from paying, or was unable
to pay, using reasonable means, through the office of the party through which
it was acting for purposes of the relevant Specified Indebtedness, by reason of
force majeure, act of State, illegality or impossibility.”

 

If
such provisions apply:

 

29

 

(a)           “Specified Indebtedness”
will have the meaning specified in Section 14 of this Agreement, except
that such term shall not include obligations in respect of deposits received in
the ordinary course of party’s banking business.

 

(b)           “Threshold Amount”
means, with respect to Party A, an amount equal to three percent of the
shareholder’s equity of Party A; and with respect to Party B USD 15,000,000 or
the equivalent thereof in any currency or currencies.  For purpose of this definition, any Specified
Indebtedness denominated in a currency other than the currency in which the
Threshold Amount is expressed shall be converted into the currency in which the
Threshold Amount is expressed of the exchange rate therefor as of the time of
any determination reasonably chosen by the other party.

 

(4)                                  The “Credit Event Upon
Merger” provisions of Section 5(b)(v) will apply to
Party A and Party B; provided, however, that if the applicable party has long
term, unsecured and unsubordinated indebtedness or deposits which is or are
publicly rated (such rating, a “Credit Rating”) by Moody’s Investor Services, Inc.
(“Moody’s”),  Standard and Poors Ratings
Group (“S&P”) or any other internationally recognized rating agency (a “Rating
Agency”), then the words “materially weaker” in line 6 of Section 5(b)(v) shall
mean that the Credit Rating of such party (or, if applicable, the Credit
Support Provider of such party) shall be rated lower than Baa3 by Moody’s, or
lower than BBB- by S&P or, in the event that there is no Credit Rating by
either Moody’s or S&P applicable to such party (or, if applicable, the
Credit Support Provider of such party) but such party’s long-term indebtedness
or deposits is or are rated by a Rating Agency, lower than a rating equivalent
to the foregoing by such Rating Agency.

 

(5)                                  The “Automatic Early
Termination” provision of Section 6(a) will not apply
to Party A or Party B.

 

(6)                                  “Termination Currency” will have the meaning set forth in Section 14
of this Agreement.

 

(7)                                  Additional Termination
Event   It
shall be an Additional Termination Event hereunder with respect to Party B as
the Affected Party if at any time:  (i) a
default (however described) occurs under the Loan Agreement (hereinafter
defined); or (ii) the Loan Agreement shall be paid or prepaid in full,
expire, terminate or otherwise cease to be in full force and effect.

 

(8)                                  Additional Condition
Precedent.  For the purposes of Section 2(a)(iii) it
shall be a condition precedent that no Additional Termination Event with respect
to such party shall have occurred and be continuing.

 

30

 

PART 2

Tax Representations

 

(a)                                  Payer
Tax Representations.  For the
purposes of Section 3(e) of this Agreement, Party A and Party B will
each make the following representations to the other:

 

It
is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 9(h) of this Agreement) to be made
by it to the other party under this Agreement. 
In making this representation, each party may rely on:

 

(i)                                     the accuracy of any
representations made by the other party pursuant to Section 3(f) of
this Agreement;

 

(ii)                                  the satisfaction of the
agreement of the other party contained in Section 4(a)(i) or 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement, and

 

(iii)                               the satisfaction of the
agreement of the other party contained in Section 4(d) of this
Agreement,

 

except
that it will not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.

 

(b)                                 Payee
Tax Representations.

 

For
the purpose of Section 3(f) of this Agreement, Party A makes the following
representations:

 

(1)                                  It is a “foreign person” within the meaning of the applicable U.S.
Treasury Regulations concerning information reporting and backup withholding
tax (as in effect on January 1, 2001), unless Party A provides written
notice to Party B that it is no longer a foreign person.  In respect of each Transaction it enters into
through an office or discretionary agent in the United States or which
otherwise is allocated for United States federal income tax purposes to such
United States trade or business, each payment received or to be received by it
under such Transaction will be effectively connected with its conduct of a
trade or business in the United States.

 

For purposes of transactions entered into with
Deutsche Bank AG, New York branch, Party B makes the following representations
under Section 3(f) of this Agreement:

 

(2)                                  It is a United
States Person for U.S. federal income tax purposes and either (a) is a
financial institution or (b) is not acting as an agent for a person that
is not a 

 

31

 

United
States Person for U.S. federal income tax purposes. Its’ taxpayer
identification number is 36 4215970.

 

PART 3

Agreement to Deliver Documents

 

For the purpose of
Sections 4(a)(i) and 4(a)(ii) of this Agreement, each party agrees to
deliver the following documents:

 

                                                (a)                                  Tax forms, documents or certificates to be delivered
are:

 

                                                (i)                                     Party A agrees to deliver a complete and accurate
United States Internal Revenue Service Form W-8ECI (or any applicable
successor form), in a manner reasonably satisfactory to Party B, (i) upon
execution of this Agreement; (ii) promptly upon reasonable demand of Party
A, and (iii) promptly upon learning that any such form previously provided
by Party A has become obsolete or incorrect. 
Such form is not covered by Section 3(d) of this Agreement.

 

                                                (ii)                                  Party B agrees to deliver a complete and accurate
United States Internal Revenue Service Form W-9 (or any applicable
successor form), in a manner reasonably satisfactory to Party A, (i) upon
execution of this Agreement; (ii) promptly upon reasonable demand of Party
A, and (iii) promptly upon learning that any such form previously provided
by Party B has become obsolete or incorrect. 
Such form is not covered by Section 3(d) of this Agreement.

 

(b)                                 Other documents to be delivered are:

 

	
  Party required

  to deliver

  document

  	
   

  	
  

  Form/Document/

  Certificate

  	
   

  	
  

  Date by which

  to be delivered

  	
   

  	
  Covered by

  Section 3(d)

  Representation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Most recently completed
  Annual Report of Party B and of its Credit Support Provider (as applicable)
  containing consolidated financial statements certified by independent
  certified public accountants and prepared in accordance with accounting
  principles that are generally accepted in the country or countries in which
  Party B and its Credit Support Provider (as applicable) is organized

  	
   

  	
  Upon request

  	
   

  	
  Yes

  

 

32

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Most recently
  completed, unaudited consolidated financial statements of Party B and of its
  Credit Support Provider (as applicable) for a fiscal quarter prepared in
  accordance with accounting principles that are generally accepted in the
  country or countries in which Party B and its Credit Support Provider (as
  applicable) is organized

  	
   

  	
  Upon request

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Certified copies of all
  corporate authorizations and any other documents with respect to the
  execution, delivery and performance of this Agreement

  	
   

  	
  Upon execution and
  delivery of this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party A and Party B

  	
   

  	
  Certificate of
  authority and specimen signatures of individuals executing this Agreement,
  Confirmations and each Credit Support Document (as applicable)

  	
   

  	
  Upon execution and
  delivery of this Agreement and thereafter upon request of the other party

  	
   

  	
  Yes

  

 

PART 4

Miscellaneous

 

(1)                                  Addresses for Notices. 
For the purpose of Section 12(a) of this Agreement:

 

Address for notice or
communications to Party A:

 

Any notice relating to a
particular Transaction shall be delivered to the address or facsimile number
specified in the Confirmation of such Transaction.  Any notice delivered for purposes of Sections
5 and 6 (other than notices under Section 5(a)(i)) of this Agreement shall be delivered to
the following address:

 

Deutsche Bank AG, Head Office

Theodor-Heuss-Allee
70

60486 Frankfurt am Main

GERMANY

Attention: 
Legal Department

Fax No:  0049
69 910 36097

 

33

 

Address for notice or
communications to Party B:

 

                                                LKQ Corporation

                                                120 N. LaSalle Street

                                                Suite 3300

                                                Chicago, Illinois 60602

                                                Attention: Mark Spears

                                                Telephone No.:  (312) 621-2730

                                                Facsimile No.:   (312) 621-1969

                                                Email Address:   MTSpears@LKQCORP.com

 

(2)                                  Process Agent. 
For the purpose of Section 13(c) of this Agreement:

 

                                                Party A appoints as its Process
Agent:  Not applicable.

                                                Party B appoints as its Process
Agent:  Not applicable.

 

(3)                                  Offices. 
The provisions of Section 10(a) will apply to this Agreement.

 

(4)                                  Multibranch Party. 
For the purpose of Section 10 of this Agreement:

 

Party
A is not a Multibranch Party and may act through its New York Branch only.

 

                                                Party B is not a Multibranch Party.

 

(5)                                  Calculation Agent. 
The
Calculation Agent  shall be Party A.

 

(6)                                  Credit Support Document. 
With respect to Party A does not apply, and with respect to Party B,
means the Loan Documents as defined in the Loan Agreement, and any other
document which by its terms secures, guarantees or otherwise supports the full
and timely performance of Party B’s obligations under this Agreement from time to
time.

 

Party B represents to
Party A at all times hereunder that its obligations under this Agreement remain
secured under the Credit Support Document(s), to the extent provided in such
documents.

 

(7)                                  Credit Support Provider. With respect to Party A does not apply,
and with respect to Party B means each party to any Credit Support Document of
Party B other than (i) Party A or Party B, (ii) any Affiliate of
Party A, or (iii) any other secured party under any such Credit Support
Document.

 

(8)                                  Governing Law. 
This Agreement will be governed by and construed in accordance with the
laws of the State of New York (without reference to choice of law doctrine).

 

(9)                                  Netting of Payments. “Multiple Transaction Payment Netting”
will apply for the purpose of Section 2(c) of this Agreement to all
Transactions starting from the date of this Agreement.

 

34

 

(10)                            Absence of Litigation. 
For the purpose of Section 3(c) of this Agreement:

 

“Specified
Entity” means, in
relation to Party A, any Affiliate of Party A.

“Specified
Entity” means, in relation to Party B, any Affiliate of Party B.

 

(11)                            No Agency. 
The provisions of Section 3(g) of this Agreement will apply to
this Agreement.

 

(12)                            Additional Representation will apply.  For the purpose of Section 3 of this
Agreement, the following will each constitute an Additional Representation:

 

(h)                                 Relationship Between Parties. 
Each party will be deemed to represent to the other party on the date on
which it enters into a Transaction that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for that
Transaction):

 

                                                                                                (i)                                     Non-Reliance. 
It is acting for its own account, and it has made its own independent
decisions to enter into that Transaction and as to whether that Transaction is
appropriate or proper for it based upon its own judgment and upon advice from
such advisers as it has deemed necessary. 
It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that
Transaction, it being understood that information and explanations related to
the terms and conditions of a Transaction will not be considered investment
advice or a recommendation to enter into that Transaction.  No communication (written or oral) received
from the other party will be deemed to be an assurance or guarantee as to the
expected results of that Transaction.

 

                                                                                                (ii)                                  Assessment and Understanding.  It is capable
of assessing the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. 
It is also capable of assuming, and assumes, the risks of that
Transaction.

 

                                                                                                (iii)                               Status of Parties.  The other party is not acting
as a fiduciary for or an adviser to it in respect of that Transaction.

 

                                                                                                (iv)                              Other Transactions.  It
understands and acknowledges that the other party may, either in connection
with entering into a Transaction or from time to time thereafter, engage in
open market transactions that are designed to hedge or reduce the risks
incurred by it in connection with such Transaction and that the effect of such
open market transactions may be to affect or reduce the value of such
Transaction.

 

(13)                            Eligible Contract
Participant. Each  party represents to the other party (which representation
will be deemed to be repeated by each party on each date on which a Transaction
is entered into) that it is an “eligible contract participant”, as defined in
the Commodity Futures Modernization Act of 2000.

 

35

 

(14)                            Recording of Conversations. 
Each party (i) consents to the recording of telephone conversations
between the trading, marketing and other relevant personnel of the parties and
their Affiliates in connection with this Agreement or any potential
Transaction, (ii) agrees to obtain any necessary consent of, and give any
necessary notice of such recording to, its relevant personnel and (iii) agrees,
to the extent permitted by applicable law, that recordings may be submitted in
evidence in any Proceedings.

 

PART 5

Other
Provisions

 

(1)                                  Waiver of Jury Trial.  Each party waives, to the fullest extent permitted by applicable law,
any right it may have to a trial by jury in respect of any suit, action or
proceeding relating to this Agreement or any Credit Support Document.  Each party (i) certifies that no
representative, agent or attorney of the other party or any Credit Support
Provider has represented, expressly or otherwise, that such other party would
not, in the event of such a suit, action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have
been induced to enter into this Agreement and provide for any Credit Support
Document, as applicable, by, among other things, the mutual waivers and
certifications in this Section.

 

(2)                                  ISDA Definitions. 
Reference is hereby made to the 2006 ISDA Definitions (the “2006
Definitions”), as published by the International Swaps and Derivatives
Association, Inc., which are hereby incorporated by reference herein.  Any terms used and not otherwise defined
herein which are contained in the ISDA Definitions shall have the meaning set
forth therein.

 

(3)                                  Scope of Agreement. 
Notwithstanding anything contained in this Agreement to the contrary,
any transaction (other than a repurchase transaction, reverse repurchase
transaction, buy/sell-back transaction or securities lending transaction) which
may otherwise constitute a “Specified Transaction” (without regard to the
phrase “which is not a Transaction under this Agreement but” in the definition
of “Specified Transaction”) for purposes of this Agreement which has been or
will be entered into between the parties shall constitute a “Transaction” which
is subject to, governed by, and construed in accordance with the terms of this
Agreement, unless any Confirmation with respect to a Transaction entered into
after the execution of this Agreement expressly provides otherwise.

 

(4)                                  Inconsistency. 
In the event of any inconsistency between any of the following
documents, the relevant document first listed below shall govern:  (i) a Confirmation; (ii) the
Schedule and Paragraph 13 of an ISDA Credit Support Annex (as applicable); (iii) the
ISDA Definitions; and (iv) the printed form of ISDA Master Agreement and
ISDA Credit Support Annex (as applicable).

 

(5)                                  Loan
Agreement.  Until all of Party B’s obligations
(whether absolute or contingent) under this Agreement have been satisfied in
full, Party B will at all times perform, comply with and observe all covenants
and agreements of the Loan Agreement 

 

36

 

applicable to it, which
covenants and agreements, together with related definitions and ancillary
provisions, are hereby incorporated by reference (mutatis mutandis) and, for
the avoidance of doubt, shall be construed to apply hereunder for the benefit
of Party A as though (i) all references therein to the party or parties making
loans, extensions of credit or financial accommodations thereunder or
commitments therefor (“Financings”) were to Party A and (ii) to the extent
that such covenants and agreements are conditioned on or relate to the
existence of such Financings or Party B having any obligations arising out of
or in connection therewith, all references to such Financings or obligations
were to Party B’s obligations under this Agreement.

 

“Loan Agreement” means
that certain Credit Agreement dated as of October 12, 2007 by and among
Party B, LKQ Delaware LLP, several banks and financial institutions party
thereto, as the Lenders, Lehman Brothers Inc. and Deutsche Bank Securities
Inc., as joint Lead Arrangers and Joint Bookrunners, Deutsche Bank Securities
Inc, as Syndication Agent, Lehman Commercial Paper Inc., as Administrative
Agent, Deutsche Bank AG New York Branch, as US Dual Currency  RCF Agent and Deutsche Bank AG Canada Branch,
as Canadian Agent and together with the Administration Agent and the US Dual
Currency RCF Agent, the Facility Agents, as the same may be amended, modified,
and supplemented from time to time, including by waiver or consent thereunder
or pursuant thereto, but without regard to any termination or cancellation
thereof, whether by reason of payment of all indebtedness incurred thereunder
or otherwise.

 

(6)                            Tax
Provisions.

 

(i)                                     The definition of Tax Event,
Section 5 (b)(iii), is modified by adding the following at the end
thereof:

 

“provided,
however, that for purposes of clarification, the parties acknowledge that the
introduction or proposal of legislation will not, in and of itself, give rise
to a presumption that a Tax Event has occurred.”

 

(7)                                  Amendments.  Section 9(b) is
modified by the deletion of the words “or confirmed by an exchange of telexes
or by an exchange of electronic messages on an electronic messaging system”.

 

(8)                                  Counterparts and Confirmation.  Section 9(e)(i) is
modified by the deletion of the words “and by electronic messaging system”.

 

(9)                                  Disclosure. 
Each party consents to the communication or disclosure by the other
party of information in respect of or relating to this Agreement and any
Transactions hereunder to such other party’s branches, subsidiaries and
Affiliates and, to the extent required by law or regulation, any government or
regulatory authority.

 

37

 

Please confirm
your agreement to the terms of the foregoing Schedule by signing below.

 

	
  DEUTSCHE BANK AG, New York
  Branch 

  	
   

  	
  LKQ CORPORATION  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Kathleen Yohe

  	
   

  	
   

  	
  By: 

  	
  /s/ Victor M. Casini

  	
   

  
	
   

  	
  Name: Kathleen Yohe

  	
   

  	
   

  	
   

  	
  Name:

  	
  Victor M. Casini

  
	
   

  	
  Title:Director

  	
   

  	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President and General Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   By: 

  	
  /s/ Steven Kessler

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Steven Kessler

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title: Director

  	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

38Exhibit 10.5

 

LKQ
CORPORATION

 

AMENDED AND
RESTATED

STOCK OPTION AND
COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

 

The Board of Directors of LKQ Corporation
adopted on June 5, 2003 the Stock Option and Compensation Plan for
Non-Employee Directors (the “Plan”), and the stockholders of LKQ Corporation
approved the Plan on September 10, 2003. 
The Plan was subsequently amended on March 3, 2005; December 15,
2005; March 5, 2007; October 12, 2007; and November 5, 2008.

 

1.                                       Statement of Purpose.  The purpose of this Stock Option and
Compensation Plan for Non-Employee Directors (the “Plan”) is to benefit LKQ
Corporation (the “Company”) and its subsidiaries by offering its non-employee
directors a favorable opportunity to become holders of stock in the Company
over a period of years, thereby giving them a stake in the growth and
prosperity of the Company and encouraging the continuance of their services
with the Company.

 

2.                                       Administration.  The Plan shall be administered by the board
of directors of the Company (the “Board of Directors”), whose interpretation of
the terms and provisions of the Plan and whose determination of matters
pertaining to options granted under the Plan shall be final and conclusive.

 

3.                                       Eligibility.  Only current directors of the Company who are
not officers or employees of the Company shall be entitled to receive options
or compensation under the Plan (each such individual receiving options granted
or compensation paid under the Plan is referred to herein as a “Director” and
each person entitled to exercise an option granted under the Plan is referred
to herein as an “Optionee”).

 

4.                                       Granting of Options; Annual Compensation.

 

(a)(i)        [intentionally left blank]

 

(ii)           [intentionally left blank]

 

(iii)          Each Director shall receive annual compensation of $110,000
payable (at the election of such Director) in cash, in shares of the Common
Stock (rounded up to the nearest whole share), or in a combination of cash and
such shares, in equal quarterly installments of $27,500 on the last day of each
quarter (March 31, June 30, September 30 and December 31),
provided such Director continues to be eligible at the time of such payment
under the terms of Paragraph 3 of this Plan. 
In addition, each Director who serves as a member of the Audit
Committee, Compensation Committee or Governance/Nominating Committee of the
Board of Directors shall receive annual compensation of $6,000 for each
committee on which such Director serves payable (at the election of such
Director) in cash, in shares of the Common Stock (rounded up to the nearest
whole share), or in a combination of cash and such shares,  in equal quarterly installments of $1,500 on
the last day of each quarter (March 

 

 

31, June 30,
September 30 and December 31), 
provided such Director continues to be eligible at the time of such
payment under the terms of Paragraph 3 of this Plan and continues to serve as a
member of the Audit Committee, Compensation Committee or Governance/Nominating
Committee of the Board of Directors.  If
such Director elects to receive the Common Stock as described in this Paragraph
4(a)(iii), the per share value of Common Stock shall equal the fair market
value on the respective payment date (or, if the payment date is not a trading
date, on the first trading date immediately preceding the payment date), which
shall be the average of the highest and lowest sales prices of the Common Stock
reported on the principal national stock exchange on which it is listed or
quotation service on which it is listed (as reported in The Wall
Street Journal) on the respective payment date.  Such election must be made prior to the start
of the calendar year in which the compensation described in this Paragraph 4(a)(iii) is
to be paid.

 

The aggregate number of shares
which shall be available to be so optioned or otherwise issued under the Plan
shall be 1,000,000 shares.  Such number
of shares, and the number of shares subject to options outstanding under the
Plan, shall be subject in all cases to adjustment as provided in
Paragraph 10 hereof.  Options granted
under the Plan are intended not be treated as incentive stock options as
defined in Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”).

 

(b)           No options shall be granted under the Plan subsequent to
the tenth anniversary of the adoption of the Plan.  In the event that an option expires or is
terminated or cancelled unexercised as to any shares, such released shares may
again be optioned (including a grant in substitution for a cancelled option).  Shares subject to options may be made
available from unissued or reacquired shares of Common Stock.

 

(c)           Nothing contained in the Plan or in any option granted
pursuant thereto shall confer upon any Director any right to continue serving
as a director of the Company or interfere in any way with the right of the
Board of Directors or stockholders of the Company to remove such Director
pursuant to the certificate of incorporation or bylaws of the Company or
pursuant to applicable law.

 

5.                                       Option Price.  Except with respect to those options granted
under the terms of Paragraph 4(a)(i) hereof and subject to the adjustment
in Paragraph 10 hereof, the option price for all options granted under
this Plan shall be the fair market value of the shares of Common Stock subject
to the option on the date of the grant of such option.  For purposes of this Paragraph 5, “fair
market value” shall be the average of the highest and lowest sales prices of
the Common Stock reported on the Nasdaq National Market (or on the principal
national stock exchange on which it is listed or quotation service on which it
is listed) (as reported in The Wall Street
Journal) on the date the option is granted (or, if the date of grant
is not a trading date, on the first trading date immediately preceding the date
of grant).  In the event that the Common
Stock is not listed or quoted on the Nasdaq National Market or any other
national stock exchange, the fair market value of the shares of Common Stock
for all purposes of this Plan shall be reasonably determined by the Board of
Directors.

 

 

6.                                       Duration of Options and Increments.  Subject to the provisions of Paragraph 8
hereof, each option shall be for a term of ten years.  Each option shall become exercisable with
respect to all of the shares subject to the option six months after the date of
its grant.

 

7.                                       Exercise of Option.

 

(a)           An option may be exercised by giving written notice to the
Secretary of the Company, specifying the number of shares to be purchased.  The option price for the number of shares of
Common Stock for which the option is exercised shall become immediately due and
payable; provided, however, that in lieu of cash an Optionee may, with the
approval of the Board of Directors, exercise his or her option by (i) delivering
a promissory note in accordance with the terms of the Plan and in a form
specified by the Company; (ii) tendering to the Company shares of Common
Stock owned by him or her and with the certificates therefor registered in his
or her name, having a fair market value equal to the cash exercise price of the
shares being purchased; or (iii) delivery of an irrevocable written notice
instructing the Company to deliver the shares of Common Stock being purchased
to a broker selected by the Company, subject to the broker’s written guarantee
to deliver the cash to the Company, in each case equal to the full
consideration of the exercise price of the shares being purchased.  For this purpose, the per share value of
Common Stock shall be the fair market value on the date of exercise (or, if the
date of exercise is not a trading date, on the first trading date immediately
preceding the date of exercise), which shall be the average of the highest and
lowest sales prices of the Common Stock reported on the Nasdaq National Market
(or on the principal national stock exchange on which it is listed or quotation
service on which it is listed) (as reported in The
Wall Street Journal) on such date.

 

(b)           If at any time an Optionee is required to pay an amount
required to be withheld under applicable income tax or other laws in connection
with the exercise of an option in order for the Company to obtain a deduction
for federal and state income tax purposes, the Company shall withhold shares of
Common Stock having a value equal to the amount required to be withheld.  The value of the shares to be withheld or
delivered shall be based on the fair market value of the shares of Common Stock
on the date of exercise, which shall be the average of the highest and lowest
sales prices of the Common Stock reported on the Nasdaq National Market (or on
the principal stock exchange on which it is listed or quotation service on
which it is listed) (as reported in The Wall
Street Journal) on the date of exercise.

 

(c)           At the time of any exercise of any option, the Company
may, if the Company shall determine it necessary or desirable for any reason,
require the Optionee (or his or her heirs, legatees, or legal representative,
as the case may be) as a condition upon the exercise thereof, to deliver to the
Company a written representation of present intention to purchase the shares
for investment and not for distribution. 
In the event such representation is required to be delivered, an
appropriate legend may be placed upon each certificate delivered to the Optionee
upon his or her exercise of part or all of the option and a stop order may be
placed with the transfer agent for the Common Stock.  Each option shall also be subject to the
requirement that, if at any time the Company 

 

 

determines, in
its discretion, that the listing, registration or qualification of the shares
subject to the option upon any securities exchange or under any state, federal
or foreign law, or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection with, the issue
or purchase of shares thereunder, the option may not be exercised in whole or
in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Company.

 

8.                                       Cessation of Board Membership - Exercise Thereafter.  In the event that an Optionee ceases to be a
director of the Company for any reason, such Optionee shall have five years
from the date such Optionee ceased to be a director of the Company to exercise
those options owned by such Optionee which were exercisable as of the date of
such cessation, but in no event shall such options be exercisable after the
initial term of such options as set forth in Paragraph 6 hereof shall have
expired.

 

9.                                       Non-Transferability
of Options.  No option shall be
transferable by the Optionee otherwise than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order, and each
option shall be exercisable during an Optionee’s lifetime only by the Optionee
or by the Optionee’s legal representative.

 

10.                                 Adjustment. 
The number of shares subject to the Plan and to options granted under
the Plan shall be adjusted as follows:  (a) in
the event that the number of outstanding shares of Common Stock is changed by
any stock dividend, stock split or combination of shares, the number of shares
subject to the Plan and to options granted thereunder shall be proportionately
adjusted; (b) in the event of any merger, consolidation or reorganization
of the Company with any other corporation or legal entity there shall be
substituted, on an equitable basis as determined by the Board of Directors, for
each share of Common Stock then subject to the Plan and for each share of
Common Stock then subject to an option granted under the Plan, the number and
kind of shares of stock or other securities to which the holders of shares of
Common Stock will be entitled pursuant to the transaction; and (c) in the
event of any other relevant change in the capitalization of the Company, the
Board of Directors shall provide for an equitable adjustment in the number of
shares of Common Stock then subject to the Plan and to each share of Common
Stock then subject to an option granted under the Plan.  In the event of any such adjustment, the
option price per share of Common Stock shall be proportionately adjusted.

 

11.                                 Amendment of the Plan.  The Board of Directors of the Company or any
authorized committee thereof may amend or discontinue the Plan at any time,
provided, however, that the Plan may not be amended more than once every six
months except to comport with changes in the Code, the Employee Retirement
Income Security Act, or the rules and regulations under each, and provided
further, that no such amendment or discontinuance shall (a) without the
consent of the Optionee change or impair any option previously granted, or (b) without
the approval of the holders of a majority of the shares of Common Stock which
vote in person or by proxy at a duly held stockholders’ meeting, (i) increase
the maximum number of shares which may be purchased by all eligible 

 

 

directors
pursuant to the Plan, (ii) change the purchase price of any option, or (iii) change
the option period or increase the time limitations on the grant of options.

 

12.                                 Effective Date.  The Plan is effective as of September 10,
2003.

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