Template:Nutshell 2002 ISDA 5

5. Events of Default and Termination Events
5(a) Events of Default
Any of the following events occurring to a party or its Credit Support Provider or Specified Entity will (subject to Sections 5(c) and 6(e)(iv)) be an “Event of Default”) for that such party:—

5(a)(i). Failure to Pay or Deliver. Failure by a party to make any payment or delivery when due under this Agreement which is not remedied by the first Local Business Day or Local Delivery Day after the party receives notice of the failure;

5(a)(ii) “Breach of Agreement” means:

(1) a party breaches any of its obligations under the Agreement and doesn’t remedy the breach within 30 days of the other party’s notice other than the following:

(a) a Failure to Pay or Deliver;

(b) owning up to a Termination Event;

(c) not providing any necessary tax documents;

(d) any of its tax representations not being true; or

(2) a party repudiates this ISDA Master Agreement or any Transaction.

5(a)(iii) Credit Support Default.

(1) The party or its Credit Support Provider defaults under any Credit Support Document after any grace period has expired;

(2) Any Credit Support Document (or any security interest granted under one) terminates or becomes ineffective (except according to its terms) while any covered Transaction without the other party’s written consent; or

(3) the party or its Credit Support Provider repudiates any obligations under Credit Support Document;

5(a)(iv) Misrepresentation. A representation (other than a Payee or Payer Tax Representation) made under this Agreement or a Credit Support Document was materially incorrect or misleading when it was made;

5(a)(v) Default Under Specified Transaction. The party or one of its Credit Support Providers or Specified Entities:―

(1) defaults on any payment due under a Specified Transaction (or any related credit support arrangement) and as a result that Specified Transaction is validly accelerated;

(2) defaults on any final payment due under a Specified Transaction after one Local Business Day;

(3) defaults on any delivery due under a Specified Transaction (or any related credit support arrangement) and, all Transactions under the relevant Master Agreement are validly accelerated; or

(4) repudiates any Specified Transaction (or any related credit support arrangement);

5(a)(vi) Cross-Default. If “Cross-Default” applies to a party, it will be an Event of Default if:

(1) any agreements it (or its Credit Support Providers or Specified Entities) has for Specified Indebtedness become capable of acceleration; or

(2) it (or its Credit Support Providers or Specified Entities) defaults on any payment of Specified Indebtedness (and any grace period expires);

And the total of the principal amounts in (1) and (2) exceeds the Threshold Amount.

5(a)(vii). Bankruptcy. A party of its Credit Support Provider or Specified Entity:―

(1) Dissolved: is dissolved (other than by merger);

(2) Insolvent: becomes insolvent, unable to pay its debts, or admits it in writing;

(3) Composition with Creditors: makes a composition with its creditors;

(4) Insolvency Proceedings: suffers insolvency proceedings instituted by:

(A) a regulator; or

(B) anyone other than a regulator, and

(I) it results in a winding up order; or

(II) those proceedings are not discharged within 15 days;

(5) Voluntary Winding Up: resolves to wind itself up (other than by merger);

(6) Put in Administration: has an administrator, provisional liquidator, or similar appointed for it or for substantially all its assets;

(7) Security Exercised: has a secured party take possession of, or a legal process is enforced against, substantially all its assets for at 15 days without a court dismissing it;

(8) Analogous events: suffers any event which, under the laws of any jurisdiction, has the same effect as any of the above events; or

(9) Action in furtherance: takes any action towards any of the above events.

5(a)(viii) Merger Without Assumption. The party (or a Credit Support Provider) merges with or transfers or all or substantially all its assets to another entity and:―

(1) the resulting entity does not assume all the original party’s obligations under this Agreement (or Credit Support Document); or

(2) the Credit Support Document does cover the resulting party’s obligations under this Agreement.

5(b) Termination Events
The events below occur to a party or its Credit Support Provider or Specified Entity (subject to Section 5(c)) it will be an Illegality (5(b)(i)); a Force Majeure Event (5(b)(ii)), a Tax Event (5(b)(iii)), a Tax Event Upon Merger (5(b)(iv)) and Credit Event Upon Merger (5(b)(v)):

5(b)(i) Illegality. Taking account of any fallbacks and remedies in the Transaction, for reasons beyond the Affected Party’s control, (not counting a lack of authorisation required under Section 4(b)), it would be illegal in any relevant jurisdiction to comply with any material term of a Transaction or Credit Support Document.

5(b)(ii) Force Majeure Event. A force majeure occurring after any Transaction is executed means:―

(1) the Affected Party’s relevant Office cannot practicably perform any obligation under the Transaction; or

(2) the Affected Party or its Credit Support Provider cannot practicably perform any obligation under the Transaction;

if the force majeure is outside the Affected Party’s control and it could not, using all reasonable efforts (without incurring more than incidental expenses by way of loss), overcome the necessary prevention;

5(b)(iii) Tax Event It will be a Termination Event when, following a change in tax law or practice after any trade date, an Affected Party is likely to have to either:

(1) Gross up an Indemnifiable Tax deduction (other than for interest under Section 9(h)); or

(2) receive a payment net of Tax which the Non-Affected Party is not required to gross up (other than where it is caused by the Non-Affected Party’s own omission or breach).

5(b)(iv) Tax Event Upon Merger. A party (the “Burdened Party”) on the next Scheduled Settlement Date will have to:

(1) Gross up an Indemnifiable Tax deduction (other than for interest under Section 9(h)); or

(2) receive payments net of Tax which are not required to be grossed up (other than where that is caused by the Non-Affected Party’s own omission or breach);

because a party has merged with, transferred substantially all of its assets into, or reorganised itself as, another entity (the Affected Party) where that does not amount to a Merger Without Assumption;

5(b)(v) Credit Event Upon Merger. If “Credit Event Upon Merger” applies and it or any of its Credit Support Providers or Specified Entities suffers a Designated Event (which is not a Merger Without Assumption) and the relevant entity’s (which will be the Affected Party) creditworthiness is materially weaker as a result.

A “Designated Event” means that the relevant entity:―

(1) merges with, or transfers substantially all of its assets into, or reorganises itself as another entity;

(2) comes under the effective voting control of another entity; or

(3) makes a substantial change in its capital structure by issuing or guaranteeing debt, equities or analogous interests, or securities convertible into them;

5(b)(vi) Additional Termination Event. If any “Additional Termination Event” is specified, the occurrence of that event (where the Affected Party will be as specified in the Confirmation or Schedule).

5(c) Hierarchy of Events

5(c)(i) As long as an event counts as an Illegality or a Force Majeure Event, it will not count as an Failure to Pay or Deliver, a non-repudiatory Breach of Agreement or the first limb of Credit Support Default.

5(c)(ii) In any other circumstances, an Illegality or a Force Majeure Event which also counts as an Event of Default or a Termination Event, will count as the relevant Event of Default or Termination Event, and not the Illegality or Force Majeure Event.

5(c)(iii) If a Force Majeure Event also counts as an Illegality, it will be treated as an Illegality and not a Force Majeure Event (unless covered by clause 5(c)(ii) above).

5(d) Deferral of Payments and Deliveries During Waiting Period. If an Illegality or a Force Majeure Event exists for a Transaction, payment and delivery obligations under that Transaction will be deferred until:―

5(d)(i) the first Local Business Day (or, for deliveries, the first Local Delivery Day) following the end of the Waiting Period for event in question; or, if earlier:

5(d)(ii) the first Local Business Day or Local Delivery Day on which the Illegality or Force Majeure Event does not exist.