Template:ATE detail

Trick for young players

There is no Section 5(b)(vii) of the 2002 ISDA, nor a Section 5(b)(vi) under the 1992 ISDA and nor should you make one.

A “{{{{{1}}}|Termination Event}}” is defined as “an {{{{{1}}}|Illegality}}, a {{{{{1}}}|Tax Event}} or a {{{{{1}}}|Tax Event Upon Merger}} or, if specified to be applicable, a {{{{{1}}}|Credit Event Upon Merger}} or an {{{{{1}}}|Additional Termination Event}}”. Therefore, adding any new {{{{{1}}}|Termination Event}} must ALWAYS be achieved by labelling it a new “{{{{{1}}}|Additional Termination Event}}” under Section 5(b)(vi) (under the 2002 ISDA) or 5(b)(v) (under the 1992 ISDA), and not a separate new {{{{{1}}}|Termination Event}} under a new Section {{{{{1}}}|5(b)(vii)}}, or anything like that.

If you try to make it into a new “{{{{{1}}}|5(b)(vii)}}” it is therefore neither an “{{{{{1}}}|Illegality}}”, “{{{{{1}}}|Tax Event}}”, “{{{{{1}}}|Tax Event Upon Merger}}”, “{{{{{1}}}|Credit Event Upon Merger}}” nor an “{{{{{1}}}|Additional Termination Event}}”. Read literally, is will not be caught by the definition of “{{{{{1}}}|Termination Event}}” and none of the Section {{{{{1}}}|6(b)}} {{{{{1}}}|Right to Terminate following Termination Event}} provisions will bite on it.

I mention this because I have seen it happen. Yes, you can take a “fair, large and liberal view” that what the parties intended was to create an {{{{{1}}}|ATE}}, but, in our age of anxiety, why suffer that one?