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| Section {{eqderivprov|1.45}}. '''{{eqderivprov|Knock-out Event}}'''. | | Section {{eqderivprov|1.45}}. '''{{eqderivprov|Knock-out Event}}'''. |
| :{{eqderivprov|1.45(a)}} If “'''{{eqderivprov|Knock-out Event}}'''” applies then unless otherwise specified in the related {{isdaprov|Confirmation}}, a party's right to exercise an {{eqderivprov|Option}} under an {{eqderivprov|Option Transaction}} and its right to receive, or its obligation to make, a payment or delivery under an {{eqderivprov|Option Transaction}} (once exercised or deemed exercised), a {{eqderivprov|Forward Transaction}} or {{eqderivprov|Equity Swap Transaction}} where such right or obligation is subject to a {{eqderivprov|Knock-out Event}} shall be conditional upon the {{eqderivprov|Knock-out Event}} not having occurred on any {{eqderivprov|Knock-out Determination Day}} as of the time of such exercise, deemed exercise, payment or delivery, and the parties shall have any other rights and obligations set forth in the related {{eqderivprov|Confirmation}} from and after the occurrence of the {{eqderivprov|Knock-out Event}}. | | :(a) If “'''{{eqderivprov|Knock-out Event}}'''” applies, a party’s right to exercise an {{eqderivprov|Option}} under a {{eqderivprov|Transaction}} will be conditional upon the {{eqderivprov|Knock-out Event}} not having occurred on any {{eqderivprov|Knock-out Determination Day}} as of the time of such exercise, and the parties’ respective rights and obligations will be altered from the occurrence of the {{eqderivprov|Knock-out Event}} as specified in the {{eqderivprov|Confirmation}}. |
| :{{eqderivprov|1.45(b)}} “'''{{eqderivprov|Knock-out Event}}'''” means the event or occurrence specified as such in the related {{isdaprov|Confirmation}}. In the event that the related {{isdaprov|Confirmation}} does not specify such an event or occurrence but specifies a {{eqderivprov|Knock-out Reference Security}} and/or a {{eqderivprov|Knock-out Price}}, a {{eqderivprov|Knock-out Event}} shall occur for a {{eqderivprov|Transaction}} for which such {{eqderivprov|Knock-out Reference Security}} is also the {{eqderivprov|Index}}, {{eqderivprov|Share}} or {{eqderivprov|Basket}} specified in the related {{eqderivprov|Confirmation}}: (i) where, on the {{eqderivprov|Trade Date}}, the {{eqderivprov|Knock-out Price}} is greater than the {{eqderivprov|Initial Price}}, {{eqderivprov|Strike Price}}, {{eqderivprov|Forward Price}} or other initial level set for the {{eqderivprov|Transaction}}, when the level, price or amount of the {{eqderivprov|Knock-out Reference Security}} determined as of the {{eqderivprov|Knock-out Valuation Time}} on any Knock-out Determination Day is greater than or equal to the Knock-out Price; and (ii) where, on the Trade Date, the {{eqderivprov|Knock-out Price}} is less than the {{eqderivprov|Initial Price}}, {{eqderivprov|Strike Price}}, {{eqderivprov|Forward Price}} or other initial level set for the {{eqderivprov|Transaction}}, when the level, price or amount of the {{eqderivprov|Knock-out Reference Security}} determined as of the {{eqderivprov|Knock-out Valuation Time}} on any {{eqderivprov|Knock-out Determination Day}} is less than or equal to the {{eqderivprov|Knock-out Price}}. In the event of a dispute between the parties as to whether a Knock-out Event has occurred, the {{eqderivprov|Calculation Agent}} shall determine whether a {{eqderivprov|Knock-out Event}} has occurred.
| | :(b) “'''{{eqderivprov|Knock-out Event}}'''” must be specified in the {{eqderivprov|Confirmation}}. If it is not, but the {{eqderivprov|Confirmation}} specifies a {{eqderivprov|Knock-out Price}} for a {{eqderivprov|Knock-out Reference Security}} that is also the specified {{eqderivprov|Index}}, {{eqderivprov|Share}} or {{eqderivprov|Basket}} for that {{eqderivprov|Transaction}}, the {{eqderivprov|Knock-out Event}} will occur: |
| | | ::(i) If the {{eqderivprov|Knock-out Price}} on the {{eqderivprov|Trade Date}} was ''higher'' than the initial level set for the {{eqderivprov|Transaction}}: when the level of the {{eqderivprov|Knock-out Reference Security}} at the {{eqderivprov|Knock-out Valuation Time}} on any {{eqderivprov|Knock-out Determination Day}} is at least equal to the {{eqderivprov|Knock-out Price}}; and |
| {{eqderivprov|1.44}}. '''{{eqderivprov|Knock-in Event}}'''. <br>
| | ::(ii) If the {{eqderivprov|Knock-out Price}} on the {{eqderivprov|Trade Date}} was ''lower'' than the initial level set for the {{eqderivprov|Transaction}}: when the level of the {{eqderivprov|Knock-out Reference Security}} at the {{eqderivprov|Knock-out Valuation Time}} on any {{eqderivprov|Knock-out Determination Day}} is equal to or lower than the {{eqderivprov|Knock-out Price}}. |
| :(a) If “'''{{eqderivprov|Knock-in Event}}'''” applies, a party’s right to exercise an {{eqderivprov|Option}} under an {{eqderivprov|Transaction}} such {{eqderivprov|Option}} will be conditional upon the {{eqderivprov|Knock-in Event}} occurring on any {{eqderivprov|Knock-in Determination Day}} as of the time of such exercise and the parties’ respective rights and obligations will be altered from the occurrence of the {{eqderivprov|Knock-in Event}} as specified in the {{eqderivprov|Confirmation}}.
| | :If the parties cannot agree whether a {{eqderivprov|Knock-out Event}} has occurred, the {{eqderivprov|Calculation Agent}} will decide. <br> |
| :(b) “'''{{eqderivprov|Knock-in Event}}'''” must be specified in the {{eqderivprov|Confirmation}}. If it is not, but the {{eqderivprov|Confirmation}} specifies a {{eqderivprov|Knock-in Price}} for a {{eqderivprov|Knock-in Reference Security}} that is also the specified {{eqderivprov|Index}}, {{eqderivprov|Share}} or {{eqderivprov|Basket}} for that {{eqderivprov|Transaction}}, the {{eqderivprov|Knock-in Event}} will occur: | |
| ::(i) If the {{eqderivprov|Knock-in Price}} on the {{eqderivprov|Trade Date}} was ''higher'' than the initial level set for the {{eqderivprov|Transaction}}: when the level of the {{eqderivprov|Knock-in Reference Security}} at the {{eqderivprov|Knock-in Valuation Time}} on any {{eqderivprov|Knock-in Determination Day}} is at least equal to the {{eqderivprov|Knock-in Price}}; and | |
| ::(ii) If the {{eqderivprov|Knock-in Price}} on the {{eqderivprov|Trade Date}} was ''lower'' than the initial level set for the {{eqderivprov|Transaction}}: when the level of the {{eqderivprov|Knock-in Reference Security}} at the {{eqderivprov|Knock-in Valuation Time}} on any {{eqderivprov|Knock-in Determination Day}} is equal to or lower than the {{eqderivprov|Knock-in Price}}. | |
| :If the parties cannot agree whether a {{eqderivprov|Knock-in Event}} has occurred, the {{eqderivprov|Calculation Agent}} will decide. <br> | |
Section 1.45. Knock-out Event.
- (a) If “Knock-out Event” applies, a party’s right to exercise an Option under a Transaction will be conditional upon the Knock-out Event not having occurred on any Knock-out Determination Day as of the time of such exercise, and the parties’ respective rights and obligations will be altered from the occurrence of the Knock-out Event as specified in the Confirmation.
- (b) “Knock-out Event” must be specified in the Confirmation. If it is not, but the Confirmation specifies a Knock-out Price for a Knock-out Reference Security that is also the specified Index, Share or Basket for that Transaction, the Knock-out Event will occur:
- (i) If the Knock-out Price on the Trade Date was higher than the initial level set for the Transaction: when the level of the Knock-out Reference Security at the Knock-out Valuation Time on any Knock-out Determination Day is at least equal to the Knock-out Price; and
- (ii) If the Knock-out Price on the Trade Date was lower than the initial level set for the Transaction: when the level of the Knock-out Reference Security at the Knock-out Valuation Time on any Knock-out Determination Day is equal to or lower than the Knock-out Price.
- If the parties cannot agree whether a Knock-out Event has occurred, the Calculation Agent will decide.