Template:Nutshell Commodity Definitions Change in Law

“Change in Law” means that due to any change in any Rule, or any Regulator promulgating or changing its interpretation of any Rule, after the Trade Date, the Hedging Party determines in good faith that it is not permitted by such Rule to hold, acquire or dispose of its Hedge Positions, including where such change the Hedging Party’s Hedge Positions would exceed of any permitted position limits on any exchange or trading facility (it being within the Hedging Party’s sole discretion to determine which of its positions count towards any such limit).

If “Change in Law” applies and a Change in Law occurs, the Hedging Party may terminate the Transaction upon at least two Business Days’ notice to the other party specifying the date of such termination (or such lesser notice as may be required to comply with the Change in Law), and the Transaction will terminate and the Hedging Party will determine the Cancellation Amount payable by one party to the other in good faith using commercially reasonable procedures as of the date the Transaction was terminated (or such other dates as would be commercially reasonable), which may include Hedging Party’s pricing and valuation models for similar transactions with third parties which may differ depending on the type, complexity or size of the Transaction.

In determining a Cancellation Amount, the Hedging 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 Hedging Party in its business for similar valuations.

In this section:

“Rule” means any applicable law, regulation or rule binding on the hedging Party, including the rules of any Exchange.

“Regulator” means any court, tribunal or regulatory authority with competent jurisdiction.

“Hedge Positions” means any positions in commodities, exchange-traded commodity derivatives or over-the-counter commodity derivatives entered into in order to hedge the Hedging Party’s obligations under this Transaction.

“Hedging Party” means the party specified as such in the Confirmation or, if none, either party.

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