Template:2014 ISDA Credit Derivatives Definitions 11

Article 11. Additional Representations And Agreements Of The Parties
Section 11.1 Additional Representations and Agreements of the Parties.

(a) Buyer and Seller shall each be deemed to represent to the other party on the Trade Date that, in connection with such Credit Derivative Transaction, neither the other party nor any of the other party’s Affiliates have made any representation whatsoever with respect to the Reference Entity, the Reference Obligation, any Obligation, any Deliverable Obligation, any Underlying Obligor or any Underlying Obligation on which it is relying or is entitled to rely.

(b) On the Trade Date, Buyer and Seller shall each be deemed to agree with the other that, so long as either party has or may have any obligation under the Credit Derivative Transaction:

(i) the parties will be obligated to perform their respective obligations, in accordance with Section 5.1 (Settlement), irrespective of the existence or amount of the parties’ credit exposure to the Reference Entity, and Buyer need not suffer any loss nor provide evidence of any loss as a result of the occurrence of a Credit Event;

(ii) such Credit Derivative Transaction does not create any rights or impose any obligations in respect of any entity that is not a party to such Credit Derivative Transaction;

(iii) each party and its Affiliates and the Calculation Agent may deal in the Reference Obligation, each Obligation, each Deliverable Obligation and each Underlying Obligation and may, where permitted, accept deposits from, make loans or otherwise extend credit to, and generally engage in any kind of commercial or investment banking or other business with, the Reference Entity, any Underlying Obligor, any Affiliate of the Reference Entity or of the Underlying Obligor, or any other person or entity having obligations relating to the Reference Entity, any Underlying Obligor, or any Affiliate of the Reference Entity or of the Underlying Obligor, and may act (but is not obliged to act) with respect to such business in the same manner as each of them would if such Credit Derivative Transaction did not exist, regardless of whether any such action might have an adverse effect on the Reference Entity, any Underlying Obligor, any Affiliate of the Reference Entity or of the Underlying Obligor, or the position of the other party to such Credit Derivative Transaction or otherwise (including, without limitation, any action which might constitute or give rise to a Credit Event);

(iv) each party and its Affiliates and the Calculation Agent may, whether by virtue of the types of relationships described herein or otherwise, on the Trade Date or at any time thereafter, be in possession of information in relation to the Reference Entity, any Underlying Obligor or any Affiliate of the Reference Entity or of the Underlying Obligor, that is or may be material in the context of such Credit Derivative Transaction and that may or may not be publicly available or known to the other party, and such Credit Derivative Transaction does not create any obligation on the part of such party, its Affiliates or the Calculation Agent to disclose to the other party any such relationship or information (whether or not confidential);

(v) unless it is otherwise bound by or subject to a confidentiality obligation or agreement, a party receiving any information from the other party with respect to such Credit Derivative Transaction shall not become subject to any obligation of confidentiality in respect of that information and the transferor of such information shall indemnify and hold harmless the transferee for any loss, liability, claim, damage and expense whatsoever incurred by the transferee arising out of the breach of any law or understanding or agreement with respect to the confidentiality of that information to which the transferor may be party;

(vi) each party has determined to enter into such Credit Derivative Transaction notwithstanding any information described in Section 11.1(b)(iv) that the other party may have possession of, and notwithstanding that such party may be contractually prohibited from disclosing or offering to disclose such information to the other party by virtue of any credit agreement or other agreement with the Reference Entity, any Underlying Obligor, any Affiliate of the Reference Entity or of the Underlying Obligor, or any other person or entity having obligations relating to the Reference Entity, any Underlying Obligor, any Affiliate of the Reference Entity or the Underlying Obligor or otherwise; and

(vii) neither party shall have any liability to the other party (or its officers, directors, agents, partners, members, controlling entities or employees) and each party waives and releases any claims that it might have against the other party (or its officers, directors, agents, partners, members, controlling entities or employees) whether under applicable securities laws or otherwise, with respect to the non-disclosure of any information described in Section 11.1(b)(iv) in connection with such Credit Derivative Transaction; provided, however, that such information does not and shall not affect the truth or accuracy of any representation made by such party herein or in the related Confirmation.

(c) On the Trade Date, Buyer and Seller shall each be deemed to agree with the other:

(i) that no DC Party and no legal counsel or other third-party professional hired by a DC Party in connection with such DC Party ’s performance of its respective duties under the DC Rules and/or any Credit Derivatives Auction Settlement Terms, as applicable, shall be liable, whether for negligence or otherwise, to Buyer or Seller for any form of damages, whether direct, indirect, special, consequential or otherwise, that might arise in connection with such DC Party ’s performance of its duties, or any advice given by legal counsel or any other thirdparty professional hired by such DC Party in connection with such DC Party ’s performance of its respective duties, under the DC Rules and/or any Credit Derivatives Auction Settlement Terms, as applicable, except in the case of fraud or willful misconduct on the part of such DC Party , legal counsel or other third-party professional, as applicable; provided that, notwithstanding the foregoing, legal counsel or any other third-party professional hired by a DC Party in connection with such DC Party ’s performance of its duties under the DC Rules and/or any Credit Derivatives Auction Settlement Terms, as applicable, may still be liable to such DC Party ;

(ii) to waive any claim, whether for negligence or otherwise, that may arise against a DC Party and any legal counsel or other third-party professional hired by such DC Party in connection with such DC Party ’s performance of its duties under the DC Rules, except in the case of fraud or willful misconduct on the part of such DC Party , legal counsel or other third-party professional, as applicable; provided that, notwithstanding the foregoing, legal counsel or any other third-party professional hired by a DC Party in connection with such DC Party ’s performance of its duties under the DC Rules and/or any Credit Derivatives Auction Settlement Terms, as applicable, may still be liable to such DC Party ;

(iii) that no DC Party is (A) under any obligation to research, investigate, supplement, or verify the veracity of, any information on which the relevant Credit Derivatives Determinations Committee bases its decision and (B) acting as a fiduciary for, or as an advisor to, Buyer or Seller in connection with the relevant Credit Derivative Transaction;

(iv) that, in reaching any DC Resolution that is applicable to such Credit Derivative Transaction, the relevant Credit Derivatives Determinations Committee shall be under no requirement to consult with, or individually notify, Buyer or Seller, notwithstanding any provision of the Definitions, as supplemented, or of the relevant additional provisions published by ISDA and incorporated in the related Confirmation to the contrary; and

(v) that, with respect to any DC Resolution of the relevant Credit Derivatives Determinations Committee, if there is any inconsistency between (A) any provision of either (I) the Definitions, as supplemented, or (II) any provisions incorporated in the related Confirmation and (B) the DC Rules, the DC Rules will govern.

(d) On the Trade Date, Buyer and Seller shall be deemed to acknowledge the Disclaimer by the DC Parties provision contained in the DC Rules.

Section 11.2 Additional Representations and Agreements for Physical Settlement.

(a) If Physical Settlement applies to a Credit Derivative Transaction (except in relation to Direct Loan Participations), Buyer shall be deemed to represent to Seller on each Delivery Date (which representation shall survive any such Delivery Date) that it has conveyed (or, if applicable, caused to be conveyed) to Seller (or, if applicable, its designee) all right, title (or, with respect to Deliverable Obligations where only equitable title is customarily conveyed, all equitable title) and interest in the Deliverable Obligations being Delivered on such date free and clear of any and all liens, charges, claims or encumbrances (excluding any liens routinely imposed on all securities in a relevant clearance system, but including, without limitation, any counterclaim, defense (other than a counterclaim or defense based on the factors set forth in Section 4.1(a) to (d) (Credit Event)) or right of set-off by or of the Reference Entity or any applicable Underlying Obligor). Subject to reasonable verification by Buyer, Buyer shall indemnify, and hold harmless, Seller for any loss, liability, claim, damage and expense whatsoever incurred arising out of Buyer’s breach of the representations contained in Section 11.2(a). The indemnification in the preceding sentence shall survive the Termination Date. Any breach of the representations contained in Section 11.2(a) shall not constitute an event of default in any master agreement governing the Credit Derivative Transaction.

(b) If Physical Settlement applies to a Credit Derivative Transaction, Buyer shall be deemed to represent to Seller on each Delivery Date (which representation shall survive any such Delivery Date) that, unless Seller has received an indemnity acceptable to Seller from Buyer with respect to the following, Delivery of such Deliverable Obligations to Seller and transfer of such Deliverable Obligations by Seller to a third party will not require or cause Seller to assume, and will not subject Seller to, any obligation, liability or commitment to lend additional funds (including any outstanding contingent commitment) (in each case other than (i) immaterial, non-payment obligations and any assignment or transfer fee in respect of Loans and (ii) obligations arising under customary provisions in respect of Borrowed Money, including but not limited to requirements that holders thereof indemnify or reimburse a trustee, fiscal agent, administrative agent, clearing agent, paying agent, facility agent or agent bank or similar person or entity for costs, liabilities or expenses

(c) and customary pro rata sharing provisions requiring any amount received by a lender through payment, set-off or otherwise other than through the procedures set forth in the relevant Loan documentation to be shared with other lenders).

(d) If Physical Settlement applies to a Credit Derivative Transaction, the following will apply:

(i) Buyer and Seller agree (which agreement shall survive the Termination Date) to execute, deliver, file and record any specific assignment, novation or other document and to take any other action that may be necessary or customary or desirable and reasonably requested by the other party in connection with Buyer’s Delivery of the Deliverable Obligations specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable (including demonstrating to the reasonable satisfaction of Seller that Buyer has taken all reasonable steps to obtain any requisite consents and keeping Seller apprised of any occurrence of which Buyer is (or reasonably should be) aware that may affect Buyer’s ability to Deliver to Seller Deliverable Obligations as specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable) and Buyer and Seller agree to cooperate reasonably in connection with the foregoing.

(ii) Subject to Sections 8.1 (Physical Settlement), 9.1 (Partial Cash Settlement Due to Impossibility or Illegality), 9.2 (Partial Cash Settlement of Consent Required Loans), 9.3 (Partial Cash Settlement of Assignable Loans), 9.4 (Partial Cash Settlement of Participations), 9.7 (Buy-in of Bonds Not Delivered), 9.8 (Alternative Procedures Relating to Loans Not Delivered), 9.9 (Alternative Procedures Relating to Assets Not Delivered) and 9.10 (Cap on Settlement), Buyer may Deliver only the Deliverable Obligations specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable and only up to the amounts specified therein for each such Deliverable Obligation. Buyer may continue to attempt to Deliver the whole of the Deliverable Obligations specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable after the Physical Settlement Date.

If Buyer fails to Deliver Deliverable Obligations as specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable, such failure shall not constitute a breach of agreement, or an event of default in any master agreement governing the Credit Derivative Transaction.
Subject to Sections 9.1 (Partial Cash Settlement Due to Impossibility or Illegality), 9.2 (Partial Cash Settlement of Consent Required Loans), 9.3 (Partial Cash Settlement of Assignable Loans), 9.4 (Partial Cash Settlement of Participations) and 9.10 (Cap on Settlement), the latest of (A) the date that Buyer completes Delivery of the Deliverable Obligations specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable, (B) the date that Seller completes a buyin pursuant to Section 9.7 (Buy-in of Bonds Not Delivered) with respect to all Bonds specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable, that Buyer has failed to Deliver (or, if earlier, the latest date all such Bonds cease to exist), (C) the date that alternative delivery pursuant to Section 9.8 (Alternative Procedures Relating to Loans Not Delivered) has been completed with respect to all Loans specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable, that Buyer has failed to Deliver and (D) the date that alternative delivery pursuant to Section 9.9 (Alternative Procedures Relating to Assets Not Delivered) has been completed with respect to all Assets specified in the Notice of Physical Settlement or any NOPS Amendment Notice, as applicable, that Buyer has failed to Deliver, shall be deemed to be the Termination Date.

(iii) If an event that would otherwise constitute or give rise to an impossibility or illegality under Section 9.1 (Partial Cash Settlement Due to Impossibility or Illegality) occurs and would also constitute an event which would entitle a party to terminate such Credit Derivative Transaction under a master agreement governing the Credit Derivative Transaction, it will be governed by Section 9.1 (Partial Cash Settlement Due to Impossibility or Illegality) and will not entitle a party to terminate such Credit Derivative Transaction under a master agreement governing the Credit Derivative Transaction.

(iv) Either party (the “designator”) may designate any of its Affiliates (the “designee”) to Deliver or take Delivery, as the case may be, and otherwise to perform such party’s obligations to Deliver or take Delivery, as the case may be, in respect of a Credit Derivative Transaction and the designee may assume such obligations. Such designation shall not relieve the designator of any of its obligations under such Credit Derivative Transaction. If the designee has performed the obligations of the designator under such Credit Derivative Transaction, then the designator shall be discharged of its obligations to the other party to the extent of such performance. If, as a result of such designation, (A) it would be illegal due to any applicable law or regulation for the designee to so Deliver or take Delivery, the designator shall not be permitted to designate such designee to Deliver or to take Delivery, or (B) such Delivery would give rise to any Tax, any transaction tax or any loss or cost to the non-designating party, then the designator shall not be permitted to designate such designee to Deliver or to take Delivery unless the non-designating party has received an indemnity acceptable to it from the designating party with respect to such Tax, transaction tax, loss or cost.

(v) Unless otherwise specified in the related Confirmation, any recordation, processing or similar fee reasonably incurred by Buyer and payable to the agent under a Loan in connection with an assignment or novation (where Deliverable Obligations include Assignable Loans or Consent Required Loans) or participation (where Deliverable Obligations include Direct Loan Participations) shall be payable by Buyer and Seller equally on the Delivery Date or Latest Permissible Physical Settlement Date, as applicable.

(vi) Notwithstanding any other provision of the Credit Derivative Transaction, if any Stamp Tax or transaction tax is payable in connection with the Delivery of Deliverable Obligations, payment of such Stamp Tax or transaction tax (as applicable) shall be made by the party or parties that would in the ordinary course bear such cost under a contract for purchase of the Deliverable Obligation.

Section 11.3 No Frustration. In the absence of other reasons, a Credit Derivative Transaction will not be considered frustrated, or otherwise void or voidable (whether for mistake or otherwise) solely because:

(a) the Reference Entity does not exist on, or ceases to exist on or following, the Trade Date; and/or

(b) Obligations, Deliverable Obligations or the Reference Obligation do not exist on, or cease to exist on or following, the Trade Date.

Section 11.4 Merger of Reference Entity and Seller. If Seller or the Reference Entity consolidates or amalgamates with, or merges into, or transfers all or substantially all its assets to, the Reference Entity or Seller, as applicable, or Seller and the Reference Entity become Affiliates, an Additional Termination Event under the 2002 ISDA Master Agreement will be deemed to have occurred with Seller as the sole Affected Party, with each Credit Derivative Transaction referencing the Reference Entity as the Affected Transactions and Close-out Amount as the applicable payment measure (irrespective of the payment measure specified by the parties in any master agreement between them) and each such Credit Derivative Transaction will be terminated in accordance with any applicable provisions set forth in the 2002 ISDA Master Agreement.