2016 ISDA VM NY CSA: Difference between revisions

(i) no {{isdaprov|Event of Default)}}, {{isdaprov|Potential Event of Default)}} or {{nyvmcsaprov|Specified Condition}} has occurred and is continuing with respect to the other party; and<br>

(ii) no {{isdaprov|Early Termination Date)}} for which any unsatisfied payment obligations exist has occurred or been designated as the result of an {{isdaprov|Event of Default)}} or {{nyvmcsaprov|Specified Condition}} with respect to the other party.<br>

{{nyvmcsaprov|6(c)}} {{nyvmcsaprov|Use of Posted Collateral (VM)}}. Unless otherwise specified in Paragraph {{nyvmcsaprov|13}} and without limiting the rights and obligations of the parties under Paragraphs {{nyvmcsaprov|3}}, {{nyvmcsaprov|4(d)(ii)}}, {{nyvmcsaprov|5}}, {{nyvmcsaprov|6(d)}} and {{nyvmcsaprov|8}}, if the {{nyvmcsaprov|Secured Party}} is not a {{isdaprov|Defaulting Party}} or an {{isdaprov|Affected Party}} with respect to a {{nyvmcsaprov|Specified Condition}} and no {{isdaprov|Early Termination Date)}} has occurred or been designated as the result of an {{isdaprov|Event of Default)}} or {{nyvmcsaprov|Specified Condition}} with respect to the {{nyvmcsaprov|Secured Party}}, then the {{nyvmcsaprov|Secured Party}} will, notwithstanding Section 9-207 of the New York Uniform Commercial Code, have the right to:<br>

For purposes of Section 5(a)(iii)(1) of this Agreement, an {{isdaprov|Event of Default)}} will exist with respect to a party if:<br>

Paragraph {{nyvmcsaprov|8}} '''{{nyvmcsaprov|Certain Rights and Remedies)}}'''<br>

{{nyvmcsaprov|8(a)}} '''{{nyvmcsaprov|Secured Party’s Rights and Remedies}}'''. If at any time (1) an {{isdaprov|Event of Default)}} or {{nyvmcsaprov|Specified Condition}} with respect to the {{nyvmcsaprov|Pledgor}} has occurred and is continuing or (2) an {{isdaprov|Early Termination Date)}} has occurred or been designated as the result of an {{isdaprov|Event of Default)}} or {{nyvmcsaprov|Specified Condition}} with respect to the {{nyvmcsaprov|Pledgor}}, then, unless the {{nyvmcsaprov|Pledgor}} has paid in full all of its {{isdaprov|Obligations}} that are then due, the {{nyvmcsaprov|Secured Party}} may exercise one or more of the following rights and remedies:<br>

:{{nyvmcsaprov|(iv)}} the right to liquidate any {{nyvmcsaprov|Posted Collateral (VM)}} held by the {{nyvmcsaprov|Secured Party}} through one or more public or private sales or other dispositions with such notice, if any, as may be required under applicable law, free from any claim or right of any nature whatsoever of the {{nyvmcsaprov|Pledgor}}, including any equity or right of redemption by the {{nyvmcsaprov|Pledgor}} (with the {{nyvmcsaprov|Secured Party}} having the right to purchase any or all of the {{nyvmcsaprov|Posted Collateral (VM)}} to be sold) and to apply the proceeds (or the {{nyvmcsaprov|Cash)}} equivalent thereof) from the liquidation of the {{nyvmcsaprov|Posted Collateral (VM)}} to (A) any amounts payable by the {{nyvmcsaprov|Pledgor}} with respect to any {{isdaprov|Obligations}} and (B) any {{nyvmcsaprov|Cash)}} amounts and the {{nyvmcsaprov|Cash)}} equivalent of any non-{{nyvmcsaprov|Cash)}} items posted to the {{nyvmcsaprov|Pledgor}} by the {{nyvmcsaprov|Secured Party}} as margin under any {{nyvmcsaprov|Other CSA}} (other than any {{nyvmcsaprov|Other CSA Excluded Credit Support}}) the return of which is due to the {{nyvmcsaprov|Secured Party}} in that order as the {{nyvmcsaprov|Secured Party}} may elect.<br>

:{{nyvmcsaprov|8(b)}} '''{{nyvmcsaprov|Pledgor’s Rights and Remedies}}'''. If at any time an {{isdaprov|Early Termination Date)}} has occurred or been designated as the result of an {{isdaprov|Event of Default)}} or {{nyvmcsaprov|Specified Condition}} with respect to the {{nyvmcsaprov|Secured Party}}, then (except in the case of an {{isdaprov|Early Termination Date)}} relating to fewer than all {{isdaprov|Transaction)}}s where the {{nyvmcsaprov|Secured Party}} has paid in full all of its obligations that are then due under Section 6(e) of this Agreement):<br>

:{{nyvmcsaprov|(i)}} the {{nyvmcsaprov|Pledgor}} may exercise all rights and remedies available to a {{nyvmcsaprov|Pledgor}} under applicable law with respect to {{nyvmcsaprov|Posted Collateral (VM)}} held by the {{nyvmcsaprov|Secured Party}};<br>

:{{nyvmcsaprov|(ii)}} the {{nyvmcsaprov|Pledgor}} may exercise any other rights and remedies available to the {{nyvmcsaprov|Pledgor}} under the terms of {{nyvmcsaprov|Other Posted Support (VM)}}, if any;<br>

:{{nyvmcsaprov|(iii)}} the {{nyvmcsaprov|Secured Party}} will be obligated immediately to {{nyvmcsaprov|Transfer}} all {{nyvmcsaprov|Posted Collateral (VM)}} and, if the {{nyvmcsaprov|Secured Party}} is an {{nyvmcsaprov|Interest Payer (VM)}}, the {{nyvmcsaprov|Interest Payment (VM)}} to the {{nyvmcsaprov|Pledgor}}; and<br>

:{{nyvmcsaprov|(iv)}} to the extent that {{nyvmcsaprov|Posted Collateral (VM)}} or the {{nyvmcsaprov|Interest Payment (VM)}} is not so {{nyvmcsaprov|Transfer}}red pursuant to<br>

:{{nyvmcsaprov|(v)}} above, the {{nyvmcsaprov|Pledgor}} may:<br>

::::{{nyvmcsaprov|8(b)(v)(A)}} {{nyvmcsaprov|Set-off}} any amounts payable by the {{nyvmcsaprov|Pledgor}} with respect to any {{isdaprov|Obligations}} against any {{nyvmcsaprov|Posted Collateral (VM)}} or the {{nyvmcsaprov|Cash)}} equivalent of any {{nyvmcsaprov|Posted Collateral (VM)}} held by the {{nyvmcsaprov|Secured Party}} (or any obligation of the {{nyvmcsaprov|Secured Party}} to {{nyvmcsaprov|Transfer}} that {{nyvmcsaprov|Posted Collateral (VM)}});<br>

::::{{nyvmcsaprov|8(b)(v)(B)}} {{nyvmcsaprov|Set-off}}, net, or apply credit support received under any {{nyvmcsaprov|Other CSA}} or the proceeds thereof against any {{nyvmcsaprov|Posted Collateral (VM)}} or the {{nyvmcsaprov|Cash)}} equivalent of any {{nyvmcsaprov|Posted Collateral (VM)}} held by the {{nyvmcsaprov|Secured Party}} (or any obligation of the {{nyvmcsaprov|Secured Party}} to {{nyvmcsaprov|Transfer}} that {{nyvmcsaprov|Posted Collateral (VM)}}); and<br>

::::{{nyvmcsaprov|8(b)(v)(C)}} to the extent that the {{nyvmcsaprov|Pledgor}} does not {{nyvmcsaprov|Set-off}} under (iv)(A) or (iv)(B) above, withhold payment of any remaining amounts payable by the {{nyvmcsaprov|Pledgor}} with respect to any {{isdaprov|Obligations}}, up to the {{nyvmcsaprov|Value}} of any remaining {{nyvmcsaprov|Posted Collateral (VM)}} held by the Secured Party, until that {{nyvmcsaprov|Posted Collateral (VM)}} is {{nyvmcsaprov|Transfer}}red to the {{nyvmcsaprov|Pledgor}}.<br>

:{{nyvmcsaprov|8(c)}} Deficiencies and Excess Proceeds. The {{nyvmcsaprov|Secured Party}} will {{nyvmcsaprov|Transfer}} to the {{nyvmcsaprov|Pledgor}} any proceeds and {{nyvmcsaprov|Posted Credit Support (VM)}} remaining after liquidation, {{nyvmcsaprov|Set-off}} and/or application under Paragraphs {{nyvmcsaprov|8(a)}} and {{nyvmcsaprov|8(b)}} after satisfaction in full of all amounts payable by the {{nyvmcsaprov|Pledgor}} with respect to any {{isdaprov|Obligations}}; and the {{nyvmcsaprov|Pledgor}} in all events will remain liable for any amounts remaining unpaid after any liquidation, {{nyvmcsaprov|Set-off}} and/or application under {{nyvmcsaprov|8(a)}} and {{nyvmcsaprov|8(b)}.<br>

:{{nyvmcsaprov|8(d)}} '''{{nyvmcsaprov|Final Returns}}'''. When no amounts are or thereafter may become payable by the {{nyvmcsaprov|Pledgor}} with respect to any {{isdaprov|Obligations}} (except for any potential liability under Section {{isdaprov|2(d)}} of this Agreement, any obligation to {{nyvmcsaprov|Transfer}} any {{nyvmcsaprov|Interest Payment (VM)}} under this Paragraph {{nyvmcsaprov|8(d)}} or any obligation to {{nyvmcsaprov|Transfer}} any interest payment under any {{nyvmcsaprov|Other CSA}}), (i) the {{nyvmcsaprov|Secured Party}} will {{nyvmcsaprov|Transfer}} to the {{nyvmcsaprov|Pledgor}} all {{nyvmcsaprov|Posted Credit Support (VM)}}, and (ii) the {{nyvmcsaprov|Interest Payer (VM)}} will {{nyvmcsaprov|Transfer}} to the {{nyvmcsaprov|Interest Payee (VM)}} any {{nyvmcsaprov|Interest Payment (VM)}}.<br> Paragraph {{nyvmcsaprov|9}} '''{{nyvmcsaprov|Representations)}}'''<br>

:{{nyvmcsaprov|(i)}} it has the power to grant a security interest in and lien on any {{nyvmcsaprov|Eligible Collateral (VM)}} it {{nyvmcsaprov|Transfer}}s as the {{nyvmcsaprov|Pledgor}} and has taken all necessary actions to authorize the granting of that security interest and lien;<br>

:{{nyvmcsaprov|(ii)}} it is the sole owner of or otherwise has the right to {{nyvmcsaprov|Transfer}} all {{nyvmcsaprov|Eligible Collateral (VM)}} it {{nyvmcsaprov|Transfer}}s to the {{nyvmcsaprov|Secured Party}} hereunder, free and clear of any security interest, lien, encumbrance or other restrictions other than the security interest and lien granted under Paragraph 2;<br>

:{{nyvmcsaprov|(iii)}} upon the {{nyvmcsaprov|Transfer}} of any {{nyvmcsaprov|Eligible Collateral (VM)}} to the {{nyvmcsaprov|Secured Party}} under the terms of this Annex, the {{nyvmcsaprov|Secured Party}} will have a valid and perfected first priority security interest therein (assuming that any central clearing corporation or any third-party financial intermediary or other entity not within the control of the {{nyvmcsaprov|Pledgor}} involved in the {{nyvmcsaprov|Transfer}} of that {{nyvmcsaprov|Eligible Collateral (VM)}} gives the notices and takes the action required of it under applicable law for perfection of that interest); and<br>

:{{nyvmcsaprov|(iv)}} the performance by it of its obligations under this Annex will not result in the creation of any security interest, lien or other encumbrance on any {{nyvmcsaprov|Posted Collateral (VM)}} other than the security interest and lien granted under Paragraph 2.<br> Paragraph {{nyvmcsaprov|10}} '''{{nyvmcsaprov|Expenses)}}'''<br>

10(a) General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each party will pay its own costs and expenses in connection with performing its obligations under this Annex and neither party will be liable for any costs and expenses incurred by the other party in connection herewith.<br>

10(b) {{nyvmcsaprov|Posted Credit Support (VM)}}. The {{nyvmcsaprov|Pledgor}} will promptly pay when due all taxes, assessments or charges of any nature that are imposed with respect to {{nyvmcsaprov|Posted Credit Support (VM)}} held by the {{nyvmcsaprov|Secured Party}} upon becoming aware of the same, regardless of whether any portion of that {{nyvmcsaprov|Posted Credit Support (VM)}} is subsequently disposed of under Paragraph 6(c), except for those taxes, assessments and charges that result from the exercise of the {{nyvmcsaprov|Secured Party}}’s rights under Paragraph 6(c).<br>

10(c) '''{{nyvmcsaprov|Liquidation/Application of Posted Credit Support (VM)}}'''. All reasonable costs and expenses incurred by or on behalf of the {{nyvmcsaprov|Secured Party}} or the {{nyvmcsaprov|Pledgor}} in connection with the liquidation and/or application of any {{nyvmcsaprov|Posted Credit Support (VM)}} under Paragraph 8 will be payable, on demand and pursuant to the '''{{nyvmcsaprov|Expenses)}}''' Section of this Agreement, by the {{isdaprov|Defaulting Party}} or, if there is no {{isdaprov|Defaulting Party}}, equally by the parties.<br> Paragraph {{nyvmcsaprov|11}} '''{{nyvmcsaprov|Miscellaneous)}}'''<br>

:{{nyvmcsaprov|11(a)}} '''{{nyvmcsaprov|Default Interest}}'''. A {{nyvmcsaprov|Secured Party}} that fails to make, when due, any {{nyvmcsaprov|Transfer}} of {{nyvmcsaprov|Posted Collateral (VM)}} will be obligated to pay the {{nyvmcsaprov|Pledgor}} (to the extent permitted under applicable law) an amount equal to interest at the Default Rate multiplied by the {{nyvmcsaprov|Value}} of the items of property that were required to be {{nyvmcsaprov|Transfer}}red, from (and including) the date that {{nyvmcsaprov|Posted Collateral (VM)}} was required to be {{nyvmcsaprov|Transfer}}red to (but excluding) the date of {{nyvmcsaprov|Transfer}} of that {{nyvmcsaprov|Posted Collateral (VM)}}. This interest will be calculated on the basis of daily compounding and the actual number of days elapsed. An {{nyvmcsaprov|Interest Payer (VM)}} that fails to make, when due, any {{nyvmcsaprov|Transfer}} of an {{nyvmcsaprov|Interest Payment (VM)}} will be obligated to pay the {{nyvmcsaprov|Interest Payee (VM)}} (to the extent permitted under applicable law) an amount equal to interest at the Default Rate (and for such purposes, if the Default Rate is less than zero, it will be deemed to be zero) multiplied by that {{nyvmcsaprov|Interest Payment (VM)}}, from (and including) the date that {{nyvmcsaprov|Interest Payment (VM)}} was required to be {{nyvmcsaprov|Transfer}}red to (but excluding) the date of {{nyvmcsaprov|Transfer}} of that {{nyvmcsaprov|Interest Payment (VM)}}. This interest will be calculated on the basis of daily compounding and the actual number of days elapsed.<br>

:{{nyvmcsaprov|11(b)}} '''{{nyvmcsaprov|Further Assurances}}'''. Promptly following a demand made by a party, the other party will execute, deliver, file and record any financing statement, specific assignment or other document and take any other action that may be necessary or desirable and reasonably requested by that party to create, preserve, perfect or validate any security interest or lien granted under Paragraph 2, to enable that party to exercise or enforce its rights under this Annex with respect to {{nyvmcsaprov|Posted Credit Support (VM)}} or an {{nyvmcsaprov|Interest Payment (VM)}} or to effect or document a release of a security interest on {{nyvmcsaprov|Posted Collateral (VM)}} or an {{nyvmcsaprov|Interest Payment (VM)}}.<br>

:{{nyvmcsaprov|11(c)}} '''{{nyvmcsaprov|Further Protection}}'''. The {{nyvmcsaprov|Pledgor}} will promptly give notice to the {{nyvmcsaprov|Secured Party}} of, and defend against, any suit, action, proceeding or lien that involves {{nyvmcsaprov|Posted Credit Support (VM)}} {{nyvmcsaprov|Transfer}}red by the {{nyvmcsaprov|Pledgor}} or that could adversely affect the security interest and lien granted by it under Paragraph 2, unless that suit, action, proceeding or lien results from the exercise of the {{nyvmcsaprov|Secured Party}}’s rights under Paragraph 6(c).<br>

:{{nyvmcsaprov|11(d)}} '''{{nyvmcsaprov|Good Faith and Commercially Reasonable Manner}}'''. Performance of all obligations under this Annex, including, but not limited to, all calculations, valuations and determinations made by either party, will be made in good faith and in a commercially reasonable manner.<br>

:{{nyvmcsaprov|11(e)}} {{nyvmcsaprov|Demands and Notices}}. All {{nyvmcsaprov|Demands and Notices}} made by a party under this Annex will be made as specified in the Notices Section of this Agreement, except as otherwise provided in Paragraph {{nyvmcsaprov|13}}.<br>

:{{nyvmcsaprov|11(f)}} '''{{nyvmcsaprov|Specifications of Certain Matters}}'''. Anything referred to in this Annex as being specified in Paragraph {{nyvmcsaprov|13}} also may be specified in one or more Confirmations or other documents and this Annex will be construed accordingly.<br>

:{{nyvmcsaprov|11(g)}} '''{{nyvmcsaprov|Legally Ineligible Credit Support (VM)}}'. Unless otherwise specified in Paragraph {{nyvmcsaprov|13}}, upon delivery of a {{nyvmcsaprov|Legal Ineligibility Notice}} by a party, each item of {{nyvmcsaprov|Eligible Credit Support (VM)}} (or a specified amount of such item) identified in such notice (i) will cease to be {{nyvmcsaprov|Eligible Credit Support (VM)}} for purposes of {{nyvmcsaprov|Transfer}}s to such party as the {{nyvmcsaprov|Secured Party}} hereunder as of the applicable {{nyvmcsaprov|Transfer Ineligibility Date}}, (ii) will cease to be {{nyvmcsaprov|Eligible Credit Support (VM)}} for the other party as the {{nyvmcsaprov|Pledgor}} for all purposes hereunder as of the {{nyvmcsaprov|Total Ineligibility Date}} and (iii) will have a {{nyvmcsaprov|Value}} of zero on and from the {{nyvmcsaprov|Total Ineligibility Date}}.<br>

:{{nyvmcsaprov|11(h)}} '''{{nyvmcsaprov|Return of Posted Credit Support (VM) with a Value of Zero}}'''. Subject to Paragraph {{nyvmcsaprov|4(a)}}, the {{nyvmcsaprov|Secured Party}} will, promptly upon demand (but in no event later than the time at which a {{nyvmcsaprov|Transfer}} would be due under Paragraph 4(b) with respect to a demand for the {{nyvmcsaprov|Transfer}} of {{nyvmcsaprov|Eligible Credit Support (VM)}} or {{nyvmcsaprov|Posted Credit Support (VM)}}), {{nyvmcsaprov|Transfer}} to the {{nyvmcsaprov|Pledgor}} any item of {{nyvmcsaprov|Posted Credit Support (VM)}} (or the specified amount of such item) that as of the date of such demand has a {{nyvmcsaprov|Value}} of zero; provided that the {{nyvmcsaprov|Secured Party}} will only be obligated to {{nyvmcsaprov|Transfer}} any {{nyvmcsaprov|Posted Credit Support (VM)}} in accordance with this Paragraph 11(h), if, as of the date of {{nyvmcsaprov|Transfer}} of such item, the {{nyvmcsaprov|Pledgor}} has satisfied all of its {{nyvmcsaprov|Transfer}} obligations under this Annex, if any.<br>

:{{nyvmcsaprov|11(i)}} '''{{nyvmcsaprov|Reinstatement of Credit Support Eligibility}}'''. Upon a reasonable request by the {{nyvmcsaprov|Pledgor}}, the {{nyvmcsaprov|Secured Party}} will determine whether an item (or a specified amount of such item) of {{nyvmcsaprov|Eligible Credit Support (VM)}} that was the subject of a prior {{nyvmcsaprov|Legal Ineligibility Notice}} would currently satisfy the {{nyvmcsaprov|Legal Eligibility Requirements}} applicable to the {{nyvmcsaprov|Secured Party}}. If the {{nyvmcsaprov|Secured Party}} determines that as of such date of determination such item (or specified amount of such item) satisfies the {{nyvmcsaprov|Legal Eligibility Requirements}} applicable to the {{nyvmcsaprov|Secured Party}}, the {{nyvmcsaprov|Secured Party}} will promptly following such determination rescind the relevant {{nyvmcsaprov|Legal Ineligibility Notice}} with respect to such item (or specified amount of such item) by written notice to the {{nyvmcsaprov|Pledgor}}. Upon the delivery of such notice, the relevant item (or specified amount of such item) will constitute {{nyvmcsaprov|Eligible Credit Support (VM)}} hereunder.<br>

:{{nyvmcsaprov|11(j)}} '''{{nyvmcsaprov|Credit Support Offsets}}'''. If the parties specify that “{{nyvmcsaprov|Credit Support Offsets}}” is applicable in Paragraph {{nyvmcsaprov|13}}, and on any date:<br>

:{{nyvmcsaprov|(i)}} a {{nyvmcsaprov|Transfer}} of {{nyvmcsaprov|Eligible Credit Support (VM)}} is due under this Annex to satisfy a {{nyvmcsaprov|Delivery Amount (VM)}} or a {{nyvmcsaprov|Return Amount (VM)}} obligation, and a {{nyvmcsaprov|Transfer}} of credit support (other than any {{nyvmcsaprov|Other CSA Excluded Credit Support}}) is also due under any {{nyvmcsaprov|Other CSA}};<br>

:{{nyvmcsaprov|(ii)}} the parties have notified each other of the credit support that they intend to {{nyvmcsaprov|Transfer}} under this Annex and {{nyvmcsaprov|Transfer}} under such {{nyvmcsaprov|Other CSA}} (other than any {{nyvmcsaprov|Other CSA Excluded Credit Support}}) to satisfy their respective obligations; and<br>

:{{nyvmcsaprov|(iii)}} in respect of Paragraph 11(j)(ii), each party intends to {{nyvmcsaprov|Transfer}} one or more types of credit support that is fully fungible with one or more types of credit support the other party intends to {{nyvmcsaprov|Transfer}} (each such credit support, a “'''{{nyvmcsaprov|Fungible Credit Support Type}}'''”),<br>

then, on such date and in respect of each such {{nyvmcsaprov|Fungible Credit Support Type}}, each party’s obligation to make a {{nyvmcsaprov|Transfer}} of any such {{nyvmcsaprov|Fungible Credit Support Type}} hereunder or under such {{nyvmcsaprov|Other CSA}} will be automatically satisfied and discharged and, if the aggregate amount that would have otherwise been {{nyvmcsaprov|Transfer}}red by one party exceeds the aggregate amount that would have otherwise been {{nyvmcsaprov|Transfer}}red by the other party, replaced by an obligation hereunder or under such {{nyvmcsaprov|Other CSA}}, as applicable, upon the party by which the larger aggregate amount would have been {{nyvmcsaprov|Transfer}}red to {{nyvmcsaprov|Transfer}} to the other party the excess of the larger aggregate amount over the smaller aggregate amount. If a party’s obligation to make a {{nyvmcsaprov|Transfer}} of credit support under this Annex or an {{nyvmcsaprov|Other CSA}} is automatically satisfied and discharged pursuant to this Paragraph 11(j), then, for purposes of this Annex or the {{nyvmcsaprov|Other CSA}}, as applicable, the other party will be deemed to have received credit support of the applicable {{nyvmcsaprov|Fungible Credit Support Type}} in the amount that would otherwise have been required to be {{nyvmcsaprov|Transfer}}red, in each case on the day on which the relevant {{nyvmcsaprov|Transfer}} was due.<br> Paragraph {{nyvmcsaprov|12}} '''{{nyvmcsaprov|Definitions)}}'''<br>