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ISDA Anatomy™
In a Nutshell™ Section 9:
9. Miscellaneous
9(a) Entire Agreement. This Agreement is the entire agreement between the parties on its subject matter. Neither party has relied on any representation (except the actual Representations) when entering into it and each party therefore waives all rights it might otherwise have to claim it has. That said, nothing will limit either party’s liability for fraud.
9(b) Amendments. An amendment of, or waiver given under, this Agreement will only be effective if in writing and executed by each of the parties otherwise suitably electronically confirmed.
9(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the parties’ obligations will survive the termination of any Transaction.
9(d) Remedies Cumulative. Except otherwise stated, a party’s rights under this Agreement are additional to any rights it happens to have at law.
9(e) Counterparts and Confirmations.
- 9(e)(i) Counterparts: This Agreement (and any amendment) may be executed in counterparts.
- 9(e)(ii) Confirmations: The parties will be bound by the terms of each Transaction from the moment they agree to those terms. They must agree a confirmation (which they will designate as a Confirmation) as soon as practicable afterwards. The Confirmation will be evidence of a binding supplement to this Agreement. They may do this electronically (including by email!).
9(f) No Waiver of Rights. A failure to exercise any right under this Agreement will not waive that right. Any exercise of a right will not be preclude any later exercise of that right, or the exercise of any other right.
9(g) Headings. Headings in this Agreement are for convenience only and should not be considered when interpreting this Agreement.
9(h)(i) Prior to Early Termination. Before an Early Termination Date is designated for the relevant Transaction:―
- (1) Interest on Defaulted Payments. If a party defaults on any payment obligation, it will pay interest on the overdue amount from the original due date to the actual payment date (excluding any relevant Waiting Period), at the Default Rate.
- (2) Compensation for Defaulted Deliveries. If a party defaults on any delivery obligation, it will, on demand:
- (A) compensate the other party per the relevant Confirmation; and
- (B) pay interest on the fair market value of the delivery obligation from the original due date to the actual delivery date (excluding any period to which clause (4) below applies), at the Default Rate. The innocent party will determine the fair market value as of the scheduled delivery date in good faith and a commercially reasonable manner.
- (3) Interest on Deferred Payments. If:―
- (A) a party does not pay an amount that, but for Section 2(a)(iii), would have been payable, it will, subject to (B) and (C) below, pay interest on demand from the date the amount would otherwise have been payable to the date it actually becomes payable, at the Applicable Deferral Rate;
- (B) a payment is deferred under Section 5(d), the party which would otherwise have been required to make it will (as long as no Event of Default or Potential Event of Default exists, pay interest on demand from the original due date to the earlier of the date it is no longer deferred and the date on which the Event of Default or Potential Event of Default occurs, at the Applicable Deferral Rate; or
- (C) a party fails (after giving effect to any deferral period set out in (B) above) to make any payment because of an Illegality or a Force Majeure Event it will, as long as the Illegality or Force Majeure Event continues and no Event of Default or Potential Event of Default exists, pay interest on demand from the date the party failed to make the payment (or, if later, the date the payment is no longer deferred) to the earlier of the date on which the Illegality or Force Majeure Event ceases and the date on which an Event of Default or Potential Event of Default occurs to that party (excluding any period in which compensation is due under clause (B) above), at the Applicable Deferral Rate.
- (4) Compensation for Deferred Deliveries. If:―
- (A) a party does not settle any delivery that, but for Section 2(a)(iii), it would have been required to make; or
- (B) a delivery is deferred under Section 5(d); or
- (C) a party fails to deliver because of an Illegality or Force Majeure Event when any applicable Waiting Period has expired,
- that party will compensate and pay interest to the other party on demand (after such delivery becomes required) as required the relevant Confirmation.
9(h)(ii) Early Termination. Upon an Early Termination Date on a Transaction:―
- 9(h)(ii)(1) Unpaid Amounts. To determine an Unpaid Amount for that Transaction, interest will accrue on any payment obligation or the fair market value of any delivery obligation from the date the obligation was due to be performed until the Early Termination Date, at the Applicable Close-out Rate.
- 9(h)(ii)(2) Interest on Early Termination Amounts. If an Early Termination Amount is due it must be paid with interest in the Termination Currency from the Early Termination Date until the date it is paid, at the Applicable Close-out Rate.
9(h)(iii) Interest Calculation. Any interest under this Section will compound daily and be for the actual number of days elapsed.
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2002 ISDA full text of Section 9:
9. Miscellaneous
9(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter. Each of the parties acknowledges that in entering into this Agreement it has not relied on any oral or written representation, warranty or other assurance (except as provided for or referred to in this Agreement) and waives all rights and remedies which might otherwise be available to it in respect thereof, except that nothing in this Agreement will limit or exclude any liability of a party for fraud.
9(b) Amendments. An amendment, modification or waiver in respect of this Agreement will only be effective if in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system.
9(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction.
9(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.
9(e) Counterparts and Confirmations.
- 9(e)(i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission and by electronic messaging system), each of which will be deemed an original.
- 9(e)(ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation will be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes, by an exchange of electronic messages on an electronic messaging system or by an exchange of e-mails, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex, electronic message or e-mail constitutes a Confirmation.
9(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege.
9(g) Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement.
9(h). Interest and Compensation.
9(h)(i) Prior to Early Termination. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction:―
- (1) Interest on Defaulted Payments. If a party defaults in the performance of any payment obligation, it will, to the extent permitted by applicable law and subject to Section 6(c), pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as the overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment (and excluding any period in respect of which interest or compensation in respect of the overdue amount is due pursuant to clause (3)(B) or (C) below), at the Default Rate.
- (2) Compensation for Defaulted Deliveries. If a party defaults in the performance of any obligation required to be settled by delivery, it will on demand (A) compensate the other party to the extent provided for in the relevant Confirmation or elsewhere in this Agreement and (B) unless otherwise provided in the relevant Confirmation or elsewhere in this Agreement, to the extent permitted by applicable law and subject to Section 6(c), pay to the other party interest (before as well as after judgment) on an amount equal to the fair market value of that which was required to be delivered in the same currency as that amount, for the period from (and including) the originally scheduled date for delivery to (but excluding) the date of actual delivery (and excluding any period in respect of which interest or compensation in respect of that amount is due pursuant to clause (4) below), at the Default Rate. The fair market value of any obligation referred to above will be determined as of the originally scheduled date for delivery, in good faith and using commercially reasonable procedures, by the party that was entitled to take delivery.
- (3) Interest on Deferred Payments. If:―
- (A) a party does not pay any amount that, but for Section 2(a)(iii), would have been payable, it will, to the extent permitted by applicable law and subject to Section 6(c) and clauses (B) and (C) below, pay interest (before as well as after judgment) on that amount to the other party on demand (after such amount becomes payable) in the same currency as that amount, for the period from (and including) the date the amount would, but for Section 2(a)(iii), have been payable to (but excluding) the date the amount actually becomes payable, at the Applicable Deferral Rate;
- (B) a payment is deferred pursuant to Section 5(d), the party which would otherwise have been required to make that payment will, to the extent permitted by applicable law, subject to Section 6(c) and for so long as no Event of Default or Potential Event of Default with respect to that party has occurred and is continuing, pay interest (before as well as after judgment) on the amount of the deferred payment to the other party on demand (after such amount becomes payable) in the same currency as the deferred payment, for the period from (and including) the date the amount would, but for Section 5(d), have been payable to (but excluding) the earlier of the date the payment is no longer deferred pursuant to Section 5(d) and the date during the deferral period upon which an Event of Default or Potential Event of Default with respect to that party occurs, at the Applicable Deferral Rate; or
- (C) a party fails to make any payment due to the occurrence of an Illegality or a Force Majeure Event (after giving effect to any deferral period contemplated by clause (B) above), it will, to the extent permitted by applicable law, subject to Section 6(c) and for so long as the event or circumstance giving rise to that Illegality or Force Majeure Event continues and no Event of Default or Potential Event of Default with respect to that party has occurred and is continuing, pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as the overdue amount, for the period from (and including) the date the party fails to make the payment due to the occurrence of the relevant Illegality or Force Majeure Event (or, if later, the date the payment is no longer deferred pursuant to Section 5(d)) to (but excluding) the earlier of the date the event or circumstance giving rise to that Illegality or Force Majeure Event ceases to exist and the date during the period upon which an Event of Default or Potential Event of Default with respect to that party occurs (and excluding any period in respect of which interest or compensation in respect of the overdue amount is due pursuant to clause (B) above), at the Applicable Deferral Rate.
- (4) Compensation for Deferred Deliveries. If:―
- (A) a party does not perform any obligation that, but for Section 2(a)(iii), would have been required to be settled by delivery;
- (B) a delivery is deferred pursuant to Section 5(d); or
- (C) a party fails to make a delivery due to the occurrence of an Illegality or a Force Majeure Event at a time when any applicable Waiting Period has expired,
- the party required (or that would otherwise have been required) to make the delivery will, to the extent permitted by applicable law and subject to Section 6(c), compensate and pay interest to the other party on demand (after, in the case of clauses (A) and (B) above, such delivery is required) if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement.
9(h)(ii) Early Termination. Upon the occurrence or effective designation of an Early Termination Date in respect of a Transaction:―
- 9(h)(ii)(1) Unpaid Amounts. For the purpose of determining an Unpaid Amount in respect of the relevant Transaction, and to the extent permitted by applicable law, interest will accrue on the amount of any payment obligation or the amount equal to the fair market value of any obligation required to be settled by delivery included in such determination in the same currency as that amount, for the period from (and including) the date the relevant obligation was (or would have been but for Section 2(a)(iii) or 5(d)) required to have been performed to (but excluding) the relevant Early Termination Date, at the Applicable Close-out Rate.
- 9(h)(ii)(2) Interest on Early Termination Amounts. If an Early Termination Amount is due in respect of such Early Termination Date, that amount will, to the extent permitted by applicable law, be paid together with interest (before as well as after judgment) on that amount in the Termination Currency, for the period from (and including) such Early Termination Date to (but excluding) the date the amount is paid, at the Applicable Close-out Rate.
9(h)(iii) Interest Calculation. Any interest pursuant to this Section 9(h) will be calculated on the basis of daily compounding and the actual number of days elapsed.
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Click here for the text of Section 9 in the 1992 ISDA
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