1992 ISDA Master Agreement
A Jolly Contrarian owner’s manual™
4 in a Nutshell™
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Original text
4 Agreements
Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party:—
4(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:—
- 4(a)(i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation;
- 4(a)(ii) any other documents specified in the Schedule or any Confirmation; and
- 4(a)(iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification,
- in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably practicable.
4(b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future.
4(c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party.
4(d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure.
4(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.
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Resources and Navigation
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Comparisons
Redlines
Discussion
The 1992 ISDA introduced a new 4(a)(iii) to cover such tax representations as are needed to allow Credit Support Providers to pay without withholding. Beyond that there were minimal changes between the versions, down to punctuation changes, though in Section 4(e) a clearer reference to offices and branches. So that is nice.
Basics
A hodge-podge of “state the bleeding obvious” rules, breach of some of which justifies (eventual) close-out as a “breach of agreement” — agreeing to provide the credit information you have patiently listed in your schedule, flagrantly breaking the law, carelessly losing one’s regulatory authorisations — and random tax provisions and indemnities (providing the necessary tax forms to minimise tax, and pay tax if you don’t).
These are the dull agreements — which by and large don’t justify close-out.
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- The slooow default of not providing documents for delivery
- “Covered by the Section 3(d) Representation”: vitally necessary ninja negotiator stuff, or ... ?
- Legal opinions and financial statements? They can be excluded, can’t they — no? — oh, help, JC!
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See also
References