Template:Nutshell Equity Derivatives 12.8

12.8. Cancellation Amount.

12.8(a): “Cancellation Amount” means the gains or losses the Determining Party would incur under prevailing circumstances in replacing (i) the material terms of the Transaction, including payments and deliveries that would, but for the Extraordinary Event, have been required after termination and (ii) the parties’ option rights under the Transaction.

12.8(b): Any Cancellation Amount will be determined by the Determining Party in good faith using commercially reasonable procedures as of the date the Transaction was terminated (or such other dates as would be commercially reasonable).

12.8(c): In determining a Cancellation Amount, the Determining Party may consider:

(i) Dealer quotations: dealer quotations for replacement transactions

(ii) Market data: market data; and

(iii) Internal valuations: similar material from internal sources and Affiliates where they are regularly used by the Determining Party in its business for similar valuations.

12.8(d): The Determining Party will consider quotations under Section 12.8(c)(i) or relevant market data under Section 12.8(c)(ii) unless it reasonably believes in good faith that they are not readily available or would produce a result that would not satisfy standards described in this definition. The Determining Party may include costs of funding. Third parties supplying quotations or market data pursuant may include dealers, end-users, information vendors, brokers and other sources.

12.8(e): Without duplication and when it is commercially reasonable to do so, when calculating a Cancellation Amount the Determining Party may consider any loss or cost (or gain) incurred in terminating, liquidating or re-establishing any hedge.

12.8(f): The Determining Party will be specified in the confirmation.

12.8(g): “Commercially reasonable procedures” may include:

(i) Determining Party’s pricing and valuation models for similar transactions with third parties; and

(ii) different valuation methods depending on the type, complexity or size of the Transaction.