Template:IETA Master Agreement 7: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "{{ietaprov|7}} '''{{ietaprov|Option Transaction}}s'''<br> {{ietaprov|7.1}} The {{ietaprov|Premium}} in respect of the purchase of an {{ietaprov|Option}} shall be paid by the {{ietaprov|Buyer}} to the {{ietaprov|Seller}} on the {{ietaprov|Payment Due Date}} in relation to the relevant {{ietaprov|Option Transaction}}. For the avoidance of doubt, all payments in relation to any {{ietaprov|Transaction}} deemed to be entered into pursuant to clause 8 (Effect of Exercise) will..." |
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{{ietaprov|7}} '''{{ietaprov|Option Transaction}}s'''<br> | {{ietaprov|7}} '''{{ietaprov|Option Transaction}}s'''<br> | ||
{{ietaprov|7.1}} The {{ietaprov|Premium}} in respect of the purchase of an {{ietaprov|Option}} shall be paid by the {{ietaprov|Buyer}} to the {{ietaprov|Seller}} on the {{ietaprov|Payment Due Date}} in relation to the relevant {{ietaprov|Option Transaction}}. For the avoidance of doubt, all payments in relation to any {{ietaprov|Transaction}} deemed to be entered into pursuant to clause 8 (Effect of Exercise) will be made in accordance with the provisions of clause 9 (Billing and Payment) (to the extent that they do not relate to an {{ietaprov|Option Transaction}}). The Parties agree that any {{ietaprov|Option | {{ietaprov|7.1}} The {{ietaprov|Premium}} in respect of the purchase of an {{ietaprov|Option}} shall be paid by the {{ietaprov|Buyer}} to the {{ietaprov|Seller}} on the {{ietaprov|Payment Due Date}} in relation to the relevant {{ietaprov|Option Transaction}}. For the avoidance of doubt, all payments in relation to any {{ietaprov|Transaction}} deemed to be entered into pursuant to clause {{ietaprov|8}} (''{{ietaprov|Effect of Exercise}}'') will be made in accordance with the provisions of clause {{ietaprov|9}} (''{{ietaprov|Billing and Payment}}'') (to the extent that they do not relate to an {{ietaprov|Option Transaction}}). The Parties agree that any {{ietaprov|Option Transaction}} entered into between them shall be substantially in the form of {{ietaprov|Confirmation}} for {{ietaprov|Option Transaction}}s set out in {{ietaprov|Schedule 3B}} (''{{ietaprov|Form of Confirmation for Option Transactions}}'').<br> | ||
{{ietaprov|7.2}} Where the {{ietaprov|Buyer}} exercises an {{ietaprov|Option}}, it may do so by giving notice within the {{ietaprov|Exercise Period}} for the relevant {{ietaprov|Option Transaction}}:<br> | {{ietaprov|7.2}} Where the {{ietaprov|Buyer}} exercises an {{ietaprov|Option}}, it may do so by giving notice within the {{ietaprov|Exercise Period}} for the relevant {{ietaprov|Option Transaction}}:<br> | ||
:{{ietaprov|7.2(a)}} in writing to the {{ietaprov|Seller}} in accordance with Clause {{ietaprov|18.5}} (Notices); or<br> | :{{ietaprov|7.2(a)}} in writing to the {{ietaprov|Seller}} in accordance with Clause {{ietaprov|18.5}} (Notices); or<br> | ||
:{{ietaprov|7.2(b)}} orally to a representative of the {{ietaprov|Seller}} on a recorded telephone line (but not by a message left on a voicemail or other messaging system).<br> | :{{ietaprov|7.2(b)}} orally to a representative of the {{ietaprov|Seller}} on a recorded telephone line (but not by a message left on a voicemail or other messaging system).<br> | ||
{{ietaprov|7.3}} Unless otherwise agreed by the Parties, a notice of exercise is effective in the case of an {{ietaprov|American Option}}, (a) if received by the {{ietaprov|Seller}} at or prior to 16:00 hours on any {{ietaprov|Banking Day}} in the {{ietaprov|Exercise Period}} other than the {{ietaprov|Expiration Date}}, or (b) if received by the {{ietaprov|Seller}} at or prior to the {{ietaprov|Expiration Time}} on the {{ietaprov|Expiration Date}}, or (c) if received by the {{ietaprov|Seller}} after 16:00 hours on any {{ietaprov|Banking Day}} other than the {{ietaprov|Expiration Date}}, as of 09:00 hours on the next following {{ietaprov|Banking Day}} (if any) in the {{ietaprov|Exercise Period}} or, in the alternative, on the {{ietaprov|Expiration Date}}.<br> | {{ietaprov|7.3}} Unless otherwise agreed by the Parties, a notice of exercise is effective in the case of an {{ietaprov|American Option}}, | ||
{{ietaprov|7.4}} The {{ietaprov|Buyer}} will, within three (3) {{ietaprov|Banking Day}}s after exercising such {{ietaprov|Option}} by giving notice orally, confirm such exercise by written notice to the {{ietaprov|Seller}} in accordance with Clause {{ietaprov|18.5}} (Notices). Any failure by the {{ietaprov|Buyer}} to send such written notice and/or any failure by the {{ietaprov|Seller}} to inform the {{ietaprov|Buyer}} of any inaccuracies in such written notice will not: (a) affect the validity or enforceability of the exercise of such {{ietaprov|Option}} or of the {{ietaprov|Option | :(a) if received by the {{ietaprov|Seller}} at or prior to 16:00 hours on any {{ietaprov|Banking Day}} in the {{ietaprov|Exercise Period}} other than the {{ietaprov|Expiration Date}}, or | ||
{{ietaprov|7.5}} If the Parties agree in the relevant {{ietaprov|Confirmation}} that “'''{{ietaprov|Automatic Exercise}}'''” will apply in respect of an {{ietaprov|Option Transaction}}, then, unless the {{ietaprov|Seller}} is otherwise instructed by the {{ietaprov|Buyer}} at or prior to the {{ietaprov|Expiration Time}} in respect of an {{ietaprov|Option}}, that {{ietaprov|Option}} will have been deemed to have been exercised at the {{ietaprov|Expiration Time}} where the {{ietaprov|Positive Mark to Market Amount}} payable to the {{ietaprov|Buyer}} equals or exceeds the product of (a) ten per cent (10%) (or such other percentage as may have been agreed by the Parties) of the {{ietaprov|Strike Price}} and (b) the {{ietaprov|PTA Quantity}}.<br> | :(b) if received by the {{ietaprov|Seller}} at or prior to the {{ietaprov|Expiration Time}} on the {{ietaprov|Expiration Date}}, or | ||
{{ietaprov|7.6}} For the purposes of this Clause {{ietaprov|7}}, “'''{{ietaprov|Positive Mark to Market Amount}}'''” means:<br> | :(c) if received by the {{ietaprov|Seller}} after 16:00 hours on any {{ietaprov|Banking Day}} other than the {{ietaprov|Expiration Date}}, as of 09:00 hours on the next following {{ietaprov|Banking Day}} (if any) in the {{ietaprov|Exercise Period}} or, in the alternative, on the {{ietaprov|Expiration Date}}.<br> | ||
{{ietaprov|7.4}} The {{ietaprov|Buyer}} will, within three (3) {{ietaprov|Banking Day}}s after exercising such {{ietaprov|Option}} by giving notice orally, confirm such exercise by written notice to the {{ietaprov|Seller}} in accordance with Clause {{ietaprov|18.5}} (Notices). Any failure by the {{ietaprov|Buyer}} to send such written notice and/or any failure by the {{ietaprov|Seller}} to inform the {{ietaprov|Buyer}} of any inaccuracies in such written notice will not: (a) affect the validity or enforceability of the exercise of such {{ietaprov|Option}} or of the {{ietaprov|Option Transaction}} deemed to be entered into pursuant to Clause {{ietaprov|8}} (''{{ietaprov|Effect of Option Exercise}}''); or (b) be a material breach of obligations under this {{ietaprov|Agreement}} under Clause {{ietaprov|14.2(c)}} (''{{ietaprov|Material Obligations}}'').<br> | |||
{{ietaprov|7.5}} If the Parties agree in the relevant {{ietaprov|Confirmation}} that “'''{{ietaprov|Automatic Exercise}}'''” will apply in respect of an {{ietaprov|Option Transaction}}, then, unless the {{ietaprov|Seller}} is otherwise instructed by the {{ietaprov|Buyer}} at or prior to the {{ietaprov|Expiration Time}} in respect of an {{ietaprov|Option}}, that {{ietaprov|Option}} will have been deemed to have been exercised at the {{ietaprov|Expiration Time}} where the {{ietaprov|Positive Mark to Market Amount}} payable to the {{ietaprov|Buyer}} equals or exceeds the product of (a) ten per cent (10%) (or such other percentage as may have been agreed by the Parties) of the {{ietaprov|Strike Price}} and (b) the {{ietaprov|PTA Quantity}}.<br> | |||
{{ietaprov|7.6}} For the purposes of this Clause {{ietaprov|7}}, “'''{{ietaprov|Positive Mark to Market Amount}}'''” means:<br> | |||
:{{ietaprov|7.6(a)}} in the case of a {{ietaprov|Call Option}}, the amount, if any, by which (x) the product of the {{ietaprov|PTA Quantity}} times the {{ietaprov|Reference Price}} exceeds (y) the product of the {{ietaprov|PTA Quantity}} times the {{ietaprov|Strike Price}}; and<br> | :{{ietaprov|7.6(a)}} in the case of a {{ietaprov|Call Option}}, the amount, if any, by which (x) the product of the {{ietaprov|PTA Quantity}} times the {{ietaprov|Reference Price}} exceeds (y) the product of the {{ietaprov|PTA Quantity}} times the {{ietaprov|Strike Price}}; and<br> | ||
:{{ietaprov|7.6(b)}} in the case of a {{ietaprov|Put Option}}, the amount, if any, by which (x) the product of the {{ietaprov|PTA Quantity}} and the {{ietaprov|Strike Price}} exceeds (y) the product of the {{ietaprov|PTA Quantity}} times the {{ietaprov|Reference Price}}.<br> | :{{ietaprov|7.6(b)}} in the case of a {{ietaprov|Put Option}}, the amount, if any, by which (x) the product of the {{ietaprov|PTA Quantity}} and the {{ietaprov|Strike Price}} exceeds (y) the product of the {{ietaprov|PTA Quantity}} times the {{ietaprov|Reference Price}}.<br> | ||
{{ietaprov|7.7}} Where the {{ietaprov|Option}} is not exercised or deemed to be exercised in accordance with this Clause 7 by the {{ietaprov|Buyer}} at or prior to the {{ietaprov|Expiration Time}} on the {{ietaprov|Expiration Date}}, it will expire unexercised (except that any outstanding {{ietaprov|Premium}} will remain payable by the {{ietaprov|Buyer}} in accordance with Clause {{ietaprov|9}} (''{{ietaprov|Billing and Payment}}'')).<br> | {{ietaprov|7.7}} Where the {{ietaprov|Option}} is not exercised or deemed to be exercised in accordance with this Clause {{ietaprov|7}} by the {{ietaprov|Buyer}} at or prior to the {{ietaprov|Expiration Time}} on the {{ietaprov|Expiration Date}}, it will expire unexercised (except that any outstanding {{ietaprov|Premium}} will remain payable by the {{ietaprov|Buyer}} in accordance with Clause {{ietaprov|9}} (''{{ietaprov|Billing and Payment}}'')).<br> | ||
Latest revision as of 10:02, 17 October 2023
7 Option Transactions
7.1 The Premium in respect of the purchase of an Option shall be paid by the Buyer to the Seller on the Payment Due Date in relation to the relevant Option Transaction. For the avoidance of doubt, all payments in relation to any Transaction deemed to be entered into pursuant to clause 8 (Effect of Exercise) will be made in accordance with the provisions of clause 9 (Billing and Payment) (to the extent that they do not relate to an Option Transaction). The Parties agree that any Option Transaction entered into between them shall be substantially in the form of Confirmation for Option Transactions set out in Schedule 3B (Form of Confirmation for Option Transactions).
7.2 Where the Buyer exercises an Option, it may do so by giving notice within the Exercise Period for the relevant Option Transaction:
- 7.2(a) in writing to the Seller in accordance with Clause 18.5 (Notices); or
- 7.2(b) orally to a representative of the Seller on a recorded telephone line (but not by a message left on a voicemail or other messaging system).
7.3 Unless otherwise agreed by the Parties, a notice of exercise is effective in the case of an American Option,
- (a) if received by the Seller at or prior to 16:00 hours on any Banking Day in the Exercise Period other than the Expiration Date, or
- (b) if received by the Seller at or prior to the Expiration Time on the Expiration Date, or
- (c) if received by the Seller after 16:00 hours on any Banking Day other than the Expiration Date, as of 09:00 hours on the next following Banking Day (if any) in the Exercise Period or, in the alternative, on the Expiration Date.
7.4 The Buyer will, within three (3) Banking Days after exercising such Option by giving notice orally, confirm such exercise by written notice to the Seller in accordance with Clause 18.5 (Notices). Any failure by the Buyer to send such written notice and/or any failure by the Seller to inform the Buyer of any inaccuracies in such written notice will not: (a) affect the validity or enforceability of the exercise of such Option or of the Option Transaction deemed to be entered into pursuant to Clause 8 (Effect of Option Exercise); or (b) be a material breach of obligations under this Agreement under Clause 14.2(c) (Material Obligations).
7.5 If the Parties agree in the relevant Confirmation that “Automatic Exercise” will apply in respect of an Option Transaction, then, unless the Seller is otherwise instructed by the Buyer at or prior to the Expiration Time in respect of an Option, that Option will have been deemed to have been exercised at the Expiration Time where the Positive Mark to Market Amount payable to the Buyer equals or exceeds the product of (a) ten per cent (10%) (or such other percentage as may have been agreed by the Parties) of the Strike Price and (b) the PTA Quantity.
7.6 For the purposes of this Clause 7, “Positive Mark to Market Amount” means:
- 7.6(a) in the case of a Call Option, the amount, if any, by which (x) the product of the PTA Quantity times the Reference Price exceeds (y) the product of the PTA Quantity times the Strike Price; and
- 7.6(b) in the case of a Put Option, the amount, if any, by which (x) the product of the PTA Quantity and the Strike Price exceeds (y) the product of the PTA Quantity times the Reference Price.
7.7 Where the Option is not exercised or deemed to be exercised in accordance with this Clause 7 by the Buyer at or prior to the Expiration Time on the Expiration Date, it will expire unexercised (except that any outstanding Premium will remain payable by the Buyer in accordance with Clause 9 (Billing and Payment)).