How Magic Circle drafting works

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The Noteholder shall use reasonable endeavours to grant (or procure the granting of), within the 15 Business Days following the occurrence of a Credit Event or such later date as agreed between the Noteholder and the Hedge Counterparty, a unilateral, unconditional guarantee (the “Credit Event Contingent Guarantee”) to the Hedge Counterparty (provided that the Hedge Counterparty approves such form of Credit Event Contingent Guarantee) in respect of the performance of the Issuer’s obligations under the Swap Transaction from the time of the occurrence of any Credit Event, including, for the avoidance of doubt (i) the delivery of the relevant Deliverable Allowances (as defined in the Swap Agreement) in the event of any Early Delivery (as defined in the Swap Agreement), (ii) the payment of any Early Termination Amount due from the Issuer to the Hedge Counterparty in respect of a Non-Exchange Delivery Failure Event (as defined in the Swap Agreement) and (iii) if the Swap Transaction is still outstanding on the Delivery Date (as defined in the Swap Agreement), the delivery of the Asset Collateral on the Delivery Date (as defined in the Swap Agreement) in accordance with the terms of the Swap Transaction (and including in respect of (i) and (iii) above procuring that sufficient Assets are held in the Custody Account for the Issuer to perform such delivery obligations at the relevant time or (if applicable) such that Liquidation may occur in respect of those Assets at the relevant time). Where a Credit Event has occurred and the transaction is restructured in accordance with Clause 18.2 (Exercise of Noteholder unwind option), any Credit Event Contingent Guarantee that is in place shall be deemed to be redundant in respect of the relevant Credit Event.	The Noteholder shall use reasonable endeavours to grant (or procure the granting of), within the 15 Business Days following the occurrence of a Credit Event or such later date as agreed between the Noteholder and the Hedge Counterparty, a unilateral, unconditional guarantee (the “Credit Event Contingent Guarantee”) to the Hedge Counterparty (provided that the Hedge Counterparty approves such form of Credit Event Contingent Guarantee) in respect of the performance of the Issuer’s obligations under the Swap Transaction from the time of the occurrence of any Credit Event, including, for the avoidance of doubt (i) the delivery of the relevant Deliverable Allowances (as defined in the Swap Agreement) in the event of any Early Delivery (as defined in the Swap Agreement), (ii) the payment of any Early Termination Amount due from the Issuer to the Hedge Counterparty in respect of a Non-Exchange Delivery Failure Event (as defined in the Swap Agreement) and (iii) if the Swap Transaction is still outstanding on the Delivery Date (as defined in the Swap Agreement), the delivery of the Asset Collateral on the Delivery Date (as defined in the Swap Agreement) in accordance with the terms of the Swap Transaction (and including in respect of (i) and (iii) above procuring that sufficient Assets are held in the Custody Account for the Issuer to perform such delivery obligations at the relevant time or (if applicable) such that Liquidation may occur in respect of those Assets at the relevant time). Where a Credit Event has occurred and the transaction is restructured in accordance with Clause 18.2 (Exercise of Noteholder unwind option), any Credit Event Contingent Guarantee that is in place shall be deemed to be redundant in respect of the relevant Credit Event.
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