Template:Nutshell 2002 ISDA 14

14. Definitions
“Additional Representation” is defined in Section 3.
“Additional Termination Event” is defined in Section 5(b).
“Affected Party” is defined in Section 5(b).
“Affected Transactions” means:

(a) for an Illegality, Force Majeure Event, Tax Event or TEUM, all Transactions affected by the Termination Event (and if it is an Illegality or Force Majeure Event that affects Credit Support Document covering only some Transactions, those Transactions) and

(b) for any other Termination Event, all Transactions.

An “Affiliate” of an entity is another entity that controls, is controlled by, or is under common control with, that entity, where to “control” means to own a majority of an entity’s voting power.
“Agreement” is defined in Section 1(c).
“Applicable Close-out Rate” means:—

(a) on an Unpaid Amount:—

(i) if the Defaulting Party’s obligation, the Default Rate;

(ii) if the Non-defaulting Party’s obligation, the Non-default Rate;

(iii) if a deferred obligation under Section 5(d), if there is no Defaulting Party during the deferral period, the Applicable Deferral Rate; and

(iv) in any other case following a Termination Event (except interest which accrues under (iii) above), the Applicable Deferral Rate; and

(b) on an Early Termination Amount:—

(i) from the Early Termination Date until the Early Termination Amount is payable:—

(1) if payable by a Defaulting Party, the Default Rate;

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

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

(ii) from the date the Early Termination Amount is payable until it is actually paid:—

(1) if unpaid because of an Illegality or Force Majeure Event the Applicable Deferral Rate;

(2) if payable by a Defaulting Party (excluding any period where (1) above applies), the Default Rate;

(3) if payable by a Non-defaulting Party (excluding any period where (1) above applies), the Non-default Rate; and

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

“Applicable Deferral Rate” means:—

(a) For Section 9(h)(i)(3)(A) [payments deferred under Section 2(a)(iii)], the market rate actually offered by a major bank in the interbank market for overnight deposits in that currency that the payer chose in good faith;

(b) For Section 9(h)(i)(3)(B) [payments deferred during a Waiting Period because of an Illegality or Force Majeure] and clause (a)(iii) of Applicable Close-out Rate, the market rate actually offered by a major bank in the interbank market for overnight deposits in that currency that the payer chose in good faith and in consultation with the other party; and

(c) For Section 9(h)(i)(3)(C) [payments not made after a Waiting Period expires while the Illegality or Force Majeure subsists] and clauses (a)(iv), (b)(i)(3) and (b)(ii)(l) of Applicable Close-out Rate, the average of the rate the payer obtains under (a) above and the annual rate of the payee’s cost of funding of that amount.

“Automatic Early Termination” is defined in Section 6(a).
“Burdened Party” is defined in Section 5(b)(iv).
“Change in Tax Law” means the enactment of or amendment to any law (or official interpretation) after the relevant Transaction is executed.
“Close-out Amount” means the losses the Determining Party would incur (positive) or gains it would realise (negative) in replacing the material terms and the option rights of the parties under a Terminated Transaction, determined as of the Early Termination Date (or, if that would not be commercially reasonable, such dates following that date as would be commercially reasonable) in good faith and in a commercially reasonable manner. The Determining Party may determine Close-out Amounts for groups of Terminated Transactions as long as all Terminated Transactions are accounted for.
Unpaid Amounts and Expenses in respect of Terminated Transactions are excluded from the Close-out Amount calculation.
The Determining Party may consider any of the following (unless it thinks they aren’t available or would produce an unconscionable result):

(i) quotations for replacement transactions that factor in the Determining Party’s creditworthiness and the ISDA terms between the Determining Party and the quoting party;

(ii) third party market data; or

(iii) internal quotes or market data if used by the Determining Party in the regular course to value similar transactions.

“Confirmation” is defined in the preamble.
“consent” includes things that are functionally like consents.
“Contractual Currency” is defined in Section 8(a).
“Convention Court” means any court which must apply Article 17 of the 1968 Brussels Convention or Article 17 of the 1988 Lugano Convention.
“Credit Event Upon Merger” is defined in Section 5(b).
“Credit Support Document” means anything described as such in the Schedule.
“Credit Support Provider” is defined in the Schedule.
“Cross Default” is defined in Section 5(a)(vi).
“Default Rate” means the payee’s self-certified cost of funding plus 1% per annum.
“Defaulting Party” is defined in Section 6(a).
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;

“Determining Party” means the party who determines the Close-out Amount.
“Early Termination Amount” is defined in Section 6(e).
“Early Termination Date” means the date determined under Section 6(a) or 6(b)(iv).
“electronic messages” and “electronic messaging system” excludes e-mails but includes XML documents and similar markup languages.
“English law” means the law of England and Wales. “Event of Default” is defined Section 5(a) as modified by the Schedule.
“Force Majeure Event” is defined in Section 5(b).
“General Business Day” means a day on which commercial banks are open for business.
“Illegality” is defined in Section 5(b).
An Indemnifiable Tax is any Tax that is not a Stamp Tax that is not a tax that would not be imposed if there were not a connection between the taxing authority’s jurisdiction and the recipient that did not arise solely from the recipient having performed any part of this Agreement in that jurisdiction.
“law” includes any treaty, law, rule or regulation, or tax practice.
“Local Business Day” means a General Business Day:

(a) For performing one’s general obligations: where specified in the Confirmation and where any relevant settlement system is operating;

(b) For working out when a Waiting Period expires: Where the Illegality or Force Majeure Event occurs,

(c) For any other payment: Where the account is located and, the principal financial centre for the relevant currency;

(d) For communications: For the recipient (and, for a Change of Account, where the new account will be located); and

(e) For a Default under Specified Transaction: In the relevant locations for performance under the Specified Transaction.

“Local Delivery Day” means, for purposes of Sections 5(a)(i) and 5(d), a day on which settlement systems are generally operating in the location specified in the Confirmation are open for business so delivery can be settled by usual market practice.
“Master Agreement” is defined in the preamble.
“Merger Without Assumption” is defined in Section 5(a)(viii).
“Multiple Transaction Payment Netting” is defined in Section 2(c).
“Non-affected Party” means the party that isn’t the Affected Party, if there is one.
“Non-default Rate” means a rate obtained in good faith by the Non-defaulting Party from a major bank in the interbank market for overnight deposits to reasonably reflect prevailing market conditions.
“Non-defaulting Party” is defined in Section 6(a).
“Office” means any of a party’s branches or offices.
“Other Amounts” is defined in Section 6(f).
“Payee” is defined in Section 6(f).
“Payer” is defined in Section 6(f).
“Potential Event of Default” means an event which, with the giving of notice or the passing of time, would be an Event of Default.
“Proceedings” is defined in Section 13(b).
“Process Agent” is defined in the Schedule.
“Rate of exchange” includes any premiums or exchange costs of buying or converting into the Contractual Currency.
“Relevant Jurisdiction” means any jurisdictions where a party (a) is incorporated and controlled, (b) has a specified Office (c) executes this Agreement; or (d) makes payments under this Agreement.
“Schedule” is defined in the preamble.
“Scheduled Settlement Date” means a due date for payment or delivery under Section 2(a)(i).
“Specified Entity” is defined in the Schedule.
“Specified Indebtedness” means any borrowed money.
“Specified Transaction” means:

(a) any transaction between the parties to this Agreement (or their respective Credit Support Providers or Specified Entities) which is not governed by this Agreement, but

(i) is a swap, option, forward, foreign exchange, cap, floor, collar, credit protection or spread transaction, repo, buy/sell-back, securities lending, index or forward purchase or sale of a security, commodity or other financial instrument;or

(ii) is a similar transaction forward, swap, future, option or other derivative on any rates, currencies, commodities, financial instruments, benchmarks, indices or other measures of economic risk that is at any time common in the financial markets;

(b) any combination of the above; and

(c) any transaction specified as a Specified Transaction in the Schedule or confirmation.

“Stamp Tax” means any stamp or documentation tax.
“Stamp Tax Jurisdiction” is defined in Section 4(e).
“Tax” means any tax of any kind (including interest or penalties added to it) imposed by a taxing authority on any payment under this Agreement other than a Stamp Tax.
“Tax Event” is defined in Section 5(b).
“Tax Event Upon Merger” is defined in Section 5(b).
“Terminated Transactions” means, for a Early Termination Date resulting from:

(a) an Illegality or a Force Majeure Event, all Affected Transactions specified in the Section 6(b)(iv) notice;

(b) any other Termination Event, all Affected Transactions; and

(c) an Event of Default, all Transactions :

that were in effect immediately before the the Section 6(a) notice designating that Early Termination Date took effect or, if Automatic Early Termination applies, immediately before the Early Termination Date.
“Termination Currency” means the Termination Currency specified in the Schedule if it is freely available, and failing that euro for English law-governed Agreements or US Dollars for New York law-governed Agreements.
“Termination Currency Equivalent” means, for an amount denominated in any other currency, the Termination Currency amount needed to buy that other currency using the FX agent’s spot exchange rate at 11:00 a.m. (in its location) on the day one would customarily fix a rate to purchase that currency for value the relevant termination date.

If there is an Innocent Party, it will select the FX agent in good faith. If not, the parties must agree the FX agent. “Termination Event” means an Illegality, a Force Majeure Event, a Tax Event, a Tax Event Upon Merger an applicable Credit Event Upon Merger or an Additional Termination Event.
“Termination Rate” means each party’s self-certified average cost of funding.
“Threshold Amount” will be specified in the Schedule.
“Transaction” is defined in the Preamble.
“Unpaid Amounts” owing to any party means, with respect to a Early Termination Date, the aggregate, in each case as at such Early Termination Date, and together with any the Non-Defaulting Party’s Expenses, of:

(a) in respect of all Terminated Transactions, all amounts that had become payable but which remain unpaid;

(b) in respect of each Terminated Transaction, the fair market value of each obligation which had become due for delivery but has not been delivered; and

(c) where all Transactions are being terminated on the Early Termination Date, any due but unpaid Early Termination Amounts relating to a prior Termination Event,

together in each case with accrued but unpaid interest.
“Waiting Period” means:―

(a) for an Illegality (other than where performance under a Credit Support Document is required on the relevant day (here no Waiting Period will apply), three Local Business Days after the Illegality happened; and

(b) for a Force Majeure Event (other than where performance under a Credit Support Document is required on the relevant day (here no Waiting Period will apply), eight Local Business Days after the Illegality happened.