ISDA Nutshell

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ISDA Anatomy™
incorporating our exclusive ISDA in a Nutshell™


Index: Click to expand:Navigation
The Varieties of ISDA Experience
Subject 2002 (wikitext) 1992 (wikitext) 1987 (wikitext)
Preamble Pre Pre Pre
Interpretation 1 1 1
Obligns/Payment 2 2 2
Representations 3 3 3
Agreements 4 4 4
EODs & Term Events 5

Events of Default
FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA
Termination Events
IllegalityTax EventTEUMCEUMATE

5

Events of Default
FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA
Termination Events
IllegalityTax EventTEUMCEUMATE

5

Events of Default
FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA
Termination Events
IllegalityFMTax EventTEUMCEUMATE

Early Termination 6

Early Termination
ET right on EODET right on TEEffect of DesignationCalculations

6

Early Termination
ET right on EODET right on TEEffect of DesignationCalculationsSet-off

6

Early Termination
ET right on EODET right on TEEffect of DesignationCalculationsSet-off

Transfer 7 7 7
Contractual Currency 8 8 8
Miscellaneous 9 9 9
Offices; Multibranch Parties 10 10 10
Expenses 11 11 11
Notices 12 12 12
Governing Law 13 13 13
Definitions 14 14 14
Schedule Schedule Schedule Schedule
Termination Provisions Part 1 Part 1 Part 1
Tax Representations Part 2 Part 2 Part 2
Documents for Delivery Part 3 Part 3 Part 3
Miscellaneous Part 4 Part 4 Part 4
Other Provisions Part 5 Part 5 Part 5

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2002 ISDA Master Agreement

between

[SPECIFY] and [SPECIFY]

will be entering into “Transactions” governed by this 2002 Master Agreement and its “Schedule”, and a “Confirmation” evidencing those Transactions. The 2002 Master Agreement with its Schedule are the “Master Agreement”.
So:―
1 Interpretation
1(a) Definitions. Most of the definitions are in Section 14 but some are scattered throughout the Master Agreement.
1(b) Inconsistency. Where they conflict, each Confirmation overrides the Schedule, and the Schedule overrides the Master Agreement.
1(c) Single Agreement. When they enter each Transaction the parties are relying on the Master Agreement and all outstanding Confirmations being a single agreement. They would not otherwise enter into any Transaction.
2. Obligations
2(a) General Conditions

2(a)(i) Each party must perform its obligations under each Transaction Confirmation.
2(a)(ii) Parties must make:
(a) Payments for value the specified due date, in freely transferable funds and in the regular fashion for making payments in the currency in question.
(b) Deliveries for receipt on the due date and in the regular fashion for making deliveries of the asset in question.
2(a)(iii) Each party’s obligations under each Transaction are conditional upon:
(1) there being no uncured Event of Default or Potential Event of Default against the other party.
(2) no Early Termination Date having been designated for the Transaction.
(3) each other condition precedent in this Agreement being met.

2(b) Change of Account. Either party may change its standard settlement instructions by five Local Business Days’ notice before any Scheduled Settlement Date but the other party may make reasonable objections to such a change.
2(c) Netting of Payments . If on any date amounts would otherwise be payable by each party to the other

(i) in the same currency; and
(ii) under the same Transaction,

then those obligations will be satisfied and replaced by an obligation on the party owing the larger amount to pay the difference. The parties may net payments across multiple specified Transactions by applying “Multiple Transaction Payment Netting” (and clause 2(c)(ii) will therefore not apply). Multiple Transaction Payment Netting arrangements may apply to different groups of Transactions, will apply separately to each pairing of specified Offices and will take effect as agreed between the parties.
2(d) Deduction or Withholding for Tax

2(d)(i) Gross-Up. The parties must pay without withholding unless required by law. Where a payer has to withhold, it must:—
(1) promptly tell the recipient;
(2) promptly pay the withheld amount to the relevant authorities (including the withholding on any required gross-up);
(3) give the recipient a receipt for the tax payment; and
(4) gross up any Indemnifiable Tax, so that the recipient receives the amount it would otherwise have received (free of Indemnifiable Taxes). However, the payer need not gross up any withholding that arose only because:—
(A) the recipient did not provide Section 4(a) tax information, or breached its Payee Tax Representations; or
(B) the recipient's Payee Tax Representations were not true (other than because of regulatory action taken after execution of the Transaction or a Change in Tax Law.
2(d)(ii) Liability. If the payer :—
(1) is required by law to withhold a non-Indemnifiable Tax;
(2) nonetheless does not do so; and
(3) suffers by direct assessment a liability for that Tax,
then, unless the recipient has satisfied the Tax liability directly, it must reimburse the payer for that liability (plus interest, but not penalties unless it failed to provide tax information required under Section 4(a), or breached any Payee Tax Representations.

3. Representations
Each party makes the representations below (with Section 3(g) representations only if specified in the Schedule) and repeats them on the date it enters into each Transaction and, for Section 3(f) representations, at all times until they terminate this Agreement). Any “Additional Representations” will be made and repeated as specified.
3(a) Basic Representations

3(a)(i) Status. It is duly organised and validly existing under the laws of its jurisdiction and is, where relevant, in good standing;
3(a)(ii) Powers. It has the power to execute, deliver and perform this Agreement and any Credit Support Document to which it is a party and has done everything needed to do so;
3(a)(iii) No Violation or Conflict. Its entry into and performance of this Agreement is not contrary to law, its constitutional documents, or any court or government order or contractual restriction affecting it or its assets;
3(a)(iv) Consents. It has all regulatory approvals needed to enter and perform this Agreement and any Credit Support Document to which it is a party and they remain unconditional and in full force; and
3(a)(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party are its legal, valid and binding obligations, enforceable in accordance with their terms (subject to general laws affecting creditors’ rights and equitable principles).

3(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event is in existence for that party or would happen if it entered or performed this Agreement or any Credit Support Document.
3(c) Absence of Litigation. There is no pending or threatened litigation against it, any Credit Support Providers or any Specified Entities before any court or government agency that could affect the legality, enforceability or its ability to perform this Agreement or any Credit Support Document.
3(d) Accuracy of Specified Information. The Specified Information designated as being subject to this Section 3(d) representation is, as at its stated date, materially accurate and complete.
3(e) Payer Tax Representation. Each of its Payer Tax Representations specified in the Schedule is true.
3(f) Payee Tax Representation. Each Payee Tax Representation it has made to which this Section 3(f) applies (as specified in the Schedule) is true.
3(g) No Agency. It is a principal and not an agent under this Agreement.
4. Agreements
While either party has any obligation under this Agreement or any Credit Support Document:—
4(a) Furnish Specified Information. It will deliver to the other party (or to such government or taxing authority as it reasonably directs):—

(i) any tax documents specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) any other document the other party reasonably requests to minimise withholding tax on any payment (and which would not materially prejudice the provider’s position), if need be accurately completed and executed and delivered as specified in the Schedule or such Confirmation or, otherwise as soon as reasonably practicable.

4(b) Maintain Authorisations. It will use all reasonable efforts to maintain all regulatory consents and licences it needs to perform this Agreement or any Credit Support Document and will use all reasonable efforts to obtain any it may need in the future.
4(c) Comply With Laws. It will comply with all applicable laws if not doing so would materially impair its performance of this Agreement or any Credit Support Document.
4(d) Tax Agreement. It will tell the other party promptly after learning that any of its Section 3(f) representations have ceased to be accurate.
4(e) Payment of Stamp Tax. Unless incurred closing out a Transaction against a Defaulting Party (as to that, see Section 11), it will pay any Stamp Tax it incurs performing this Agreement by reason of it being in a Stamp Tax Jurisdiction, and will indemnify the other party against any such Stamp Tax that that party suffers, unless the jurisdiction in question also happens to be a Stamp Tax Jurisdiction for that other party.
5. Events of Default and Termination Events
5(a) Events of Default
Any of the following events occurring to a party or its Credit Support Provider or Specified Entity will (subject to Sections 5(c) and 6(e)(iv)) be an “Event of Default”) for that such party:—

5(a)(i). Failure to Pay or Deliver. Failure by a party to make any payment or delivery when due under this Agreement which is not remedied by the first Local Business Day or Local Delivery Day after the party receives notice of the failure;
5(a)(ii)Breach of Agreement” means:
(1) a party breaches any of its obligations under the Agreement and doesn’t remedy the breach within 30 days of the other party’s notice other than the following:
(a) a Failure to Pay or Deliver;
(b) owning up to a Termination Event;
(c) not providing any necessary tax documents;
(d) any of its tax representations not being true; or
(2) a party repudiates this ISDA Master Agreement or any Transaction.
5(a)(iii) Credit Support Default.
(1) The party or its Credit Support Provider defaults under any Credit Support Document after any grace period has expired;
(2) Any Credit Support Document (or any security interest granted under one) terminates or becomes ineffective (except according to its terms) while any covered Transaction without the other party’s written consent; or
(3) the party or its Credit Support Provider repudiates any obligations under Credit Support Document;
5(a)(iv) Misrepresentation. A representation (other than a Payee or Payer Tax Representation) made under this Agreement or a Credit Support Document was materially incorrect or misleading when it was made;
5(a)(v) Default Under Specified Transaction. The party or one of its Credit Support Providers or Specified Entities:―
(1) defaults on any payment due under a Specified Transaction (or any related credit support arrangement) and as a result that Specified Transaction is validly accelerated;
(2) defaults on any final payment due under a Specified Transaction after one Local Business Day;
(3) defaults on any delivery due under a Specified Transaction (or any related credit support arrangement) and, all Transactions under the relevant Master Agreement are validly accelerated; or
(4) repudiates any Specified Transaction (or any related credit support arrangement);
5(a)(vi) Cross-Default. If “Cross-Default” applies to a party, it will be an Event of Default if:
(1) any agreements it (or its Credit Support Providers or Specified Entities) has for Specified Indebtedness become capable of acceleration; or
(2) it (or its Credit Support Providers or Specified Entities) defaults on any payment of Specified Indebtedness (and any grace period expires);
And the total of the principal amounts in (1) and (2) exceeds the Threshold Amount.
5(a)(vii). Bankruptcy. A party of its Credit Support Provider or Specified Entity:―
(1) Dissolved: is dissolved (other than by merger);
(2) Insolvent: becomes insolvent, unable to pay its debts, or admits it in writing;
(3) Composition with Creditors: makes a composition with its creditors;
(4) Insolvency Proceedings: suffers insolvency proceedings instituted by:
(A) a regulator; or
(B) anyone other than a regulator, and
(I) it results in a winding up order; or
(II) those proceedings are not discharged within 15 days;
(5) Voluntary Winding Up: resolves to wind itself up (other than by merger);
(6) Put in Administration: has an administrator, provisional liquidator, or similar appointed for it or for substantially all its assets;
(7) Security Exercised: has a secured party take possession of, or a legal process is enforced against, substantially all its assets for at 15 days without a court dismissing it;
(8) Analogous events: suffers any event which, under the laws of any jurisdiction, has the same effect as any of the above events; or
(9) Action in furtherance: takes any action towards any of the above events.
5(a)(viii) Merger Without Assumption. The party (or a Credit Support Provider) merges with or transfers or all or substantially all its assets to another entity and:―
(1) the resulting entity does not assume all the original party’s obligations under this Agreement (or Credit Support Document); or
(2) the Credit Support Document does cover the resulting party’s obligations under this Agreement.

5(b) Termination Events
The events below occur to a party or its Credit Support Provider or Specified Entity (subject to Section 5(c)) it will be an Illegality (5(b)(i)); a Force Majeure Event (5(b)(ii)), a Tax Event (5(b)(iii)), a Tax Event Upon Merger (5(b)(iv)) and Credit Event Upon Merger (5(b)(v)):

5(b)(i) Illegality. Taking account of any fallbacks and remedies in the Transaction, for reasons beyond the Affected Party’s control, (not counting a lack of authorisation required under Section 4(b)), it would be illegal in any relevant jurisdiction to comply with any material term of a Transaction or Credit Support Document.
5(b)(ii) Force Majeure Event. A force majeure occurring after any Transaction is executed means:―
(1) the Affected Party’s relevant Office cannot practicably perform any obligation under the Transaction; or
(2) the Affected Party or its Credit Support Provider cannot practicably perform any obligation under the Transaction;
if the force majeure is outside the Affected Party’s control and it could not, using all reasonable efforts (without incurring more than incidental expenses by way of loss), overcome the necessary prevention;
5(b)(iii) Tax Event It will be a Termination Event when, following a change in tax law or practice after any trade date, an Affected Party is likely to have to either:
(1) Gross up an Indemnifiable Tax deduction (other than for interest under Section 9(h)); or
(2) receive a payment net of Tax which the Non-Affected Party is not required to gross up (other than where it is caused by the Non-Affected Party’s own omission or breach).
5(b)(iv) Tax Event Upon Merger. A party (the “Burdened Party”) on the next Scheduled Settlement Date will have to:
(1) Gross up an Indemnifiable Tax deduction (other than for interest under Section 9(h)); or
(2) receive payments net of Tax which are not required to be grossed up (other than where that is caused by the Non-Affected Party’s own omission or breach);
because a party has merged with, transferred substantially all of its assets into, or reorganised itself as, another entity (the Affected Party) where that does not amount to a Merger Without Assumption;
5(b)(v) Credit Event Upon Merger. If “Credit Event Upon Merger” applies and it or any of its Credit Support Providers or Specified Entities suffers a Designated Event (which is not a Merger Without Assumption) and the relevant entity’s (which will be the Affected Party) creditworthiness is materially weaker as a result.
A “Designated Event” means that the relevant entity:―
(1) merges with, or transfers substantially all of its assets into, or reorganises itself as another entity;
(2) comes under the effective voting control of another entity; or
(3) makes a substantial change in its capital structure by issuing or guaranteeing debt, equities or analogous interests, or securities convertible into them;
5(b)(vi) Additional Termination Event. If any “Additional Termination Event” is specified, the occurrence of that event (where the Affected Party will be as specified in the Confirmation or Schedule).

5(c) Hierarchy of Events

5(c)(i) As long as an event counts as an Illegality or a Force Majeure Event, it will not count as an Failure to Pay or Deliver, a non-repudiatory Breach of Agreement or the first limb of Credit Support Default.
5(c)(ii) In any other circumstances, an Illegality or a Force Majeure Event which also counts as an Event of Default or a Termination Event, will count as the relevant Event of Default or Termination Event, and not the Illegality or Force Majeure Event.
5(c)(iii) If a Force Majeure Event also counts as an Illegality, it will be treated as an Illegality and not a Force Majeure Event (unless covered by clause 5(c)(ii) above).

5(d) Deferral of Payments and Deliveries During Waiting Period. If an Illegality or a Force Majeure Event exists for a Transaction, payment and delivery obligations under that Transaction will be deferred until:―

5(d)(i) the first Local Business Day (or, for deliveries, the first Local Delivery Day) following the end of the Waiting Period for event in question; or, if earlier:
5(d)(ii) the first Local Business Day or Local Delivery Day on which the Illegality or Force Majeure Event does not exist.

6. Early Termination
6(a) Right to Terminate following Event of Default. If one party (“Defaulting Party”) suffers an Event of Default, the other (the “Non-defaulting Party”) may, by not more than 20 days’ notice, designate an Early Termination Date for all outstanding Transactions. If Automatic Early Termination applies to the Defaulting Party and the Event of Default it is qualifying Bankruptcy event, the Early Termination Date will occur:

(i) upon the Bankruptcy event, if under 5(a)(vii)(1), (3), (5) or (6) or if analogous, (8); and
(ii) immediately before institution of the relevant proceeding, if under 5(a)(vii)(4) or if analogous, (8).


6(b) Right to Terminate Following Termination Event.

6(b)(i) Notice. Upon becoming aware of a Termination Event the Affected Party will promptly give the other party with reasonable details of it and each Affected Transaction (or, if it is a Force Majeure Event, make reasonable efforts to do so).
6(b)(ii) Transfer to Avoid Termination Event
If there is a Tax Event with only one Affected Party or a Tax Event Upon Merger where the Burdened Party is the Affected Party, before designating an Early Termination Date the Affected Party must use all reasonable efforts to transfer, within 20 days of giving notice of the Termination Event, all its rights and obligations under the Affected Transactions to one of its Offices or Affiliates so that the Termination Event ceases to exist.
If it cannot make such a transfer, it will advise the other party within the 20 day period, and the other party may effect such a transfer within 30 days after the original notice of Termination Event.
Any such transfer by a party under this Section will require the of the other party’s prior written consent (which may not be withheld if the other party’s prevailing policies would permit it to enter into transactions on the terms proposed).
6(b)(iii) Two Affected Parties. If there is a Tax Event with two Affected Parties, each must use all reasonable efforts agree within 30 days after the Termination Event Notice to avoid it.
6(b)(iv) Right to Terminate
(1) Termination Events other than Illegality and Force Majeure Events: If the Termination Event still exists but:―
(A) Tax Termination Events: a neither party has managed to avoid a Tax Event or Tax Event Upon Merger as contemplated in Section 6(b)(ii) or 6(b)(iii) within 30 days of a Termination Event Notice; or
(B) Other Termination Events: there is a Credit Event Upon Merger, an Additional Termination Event or a Tax Event Upon Merger where the Burdened Party is not the Affected Party:
either party (if both are Affected Parties) or the Non-Affected Party (in any other case) may, on not more than 20 days’ notice, designate an Early Termination Date for all Affected Transactions.
(2) Illegality and Force Majeure Events: If an Illegality or Force Majeure Event still exists when its Waiting Period has expired:―
(A) Subject to clause (B) below, either party may, on not more than 20 days’ notice, designate an Early Termination Date:
(I) for all Affected Transactions, or
(II) for fewer than all Affected Transactions by specifying which Affected Transactions it wishes to terminate, effective no earlier than two Local Business Days following the effective day of its notice, as an Early Termination Date for those designated Affected Transactions only. In this case the other party may, by notice, terminate any of the outstanding Affected Transactions as of the same Early Termination Date.
(B) Where the Illegality or Force Majeure Event relates to performance under a Credit Support Document, an Affected Party may only designate an Early Termination Date following designation by the other party of an Early Termination Date, for fewer than all Affected Transactions under this Section.

6(c) Effect of Designation: If an Early Termination Date is designated:

(i) it will take place when designated, even if the event which triggered no longer exists.
(ii) no more payments or deliveries will be required under any Terminated Transactions.

Any Close-out Amount will be determined under Section 6(e).
6(d) Calculations; Payment Date.

(i) Statement. As soon as practicable following an Early Termination Date, each party will calculate its Section 6(e) amount and give the other party a statement:
(1) showing reasonable detail of its calculations;
(2) specifying any Early Termination Amount payable; and
(3) giving its bank details for payment of the Early Termination Amount.
Its records of any quotation or market data it uses will be conclusive of their accuracy.
(ii) Payment Date. An Early Termination Amount due in respect of any Early Termination Date will, together with any applicable interest, be payable
(1) on the day its Section 6(d) statement is effective (if the Early Termination Date follows an Event of Default) and
(2) two Local Business Days after the day its Section 6(d) statement is effective (or, where there were two Affected Parties, after the second statement is effective) (where the Early Termination Date follows a Termination Event.

6(e) Payments on Early Termination. If an Early Termination Date occurs, the “Early Termination Amount” will be determined as follows (subject to Section 6(f)).

6(e)(i) Events of Default. On an Early Termination Date following an Event of Default, the Non-defaulting Party will determine Early Termination Amount in the Termination Currency as the sum of:
(a) the Close-out Amounts for each Terminated Transaction plus
(b) Unpaid Amounts due to the Non-defaulting Party; minus
(c) Unpaid Amounts due to the Defaulting Party.
If the Early Termination Amount is positive, the Defaulting Party will pay it to the Non-defaulting Party. If negative, the Non-defaulting Party will pay its absolute value to the Defaulting Party.
6(e)(ii) Termination Events. If the Early Termination Date results from a Termination Event:―
(1) One Affected Party. If there is one Affected Party, the Early Termination Amount will be determined as if they were Events of Default under Section 6(e)(i) (but subject to the Mid-Market Events rider below).
(2) Two Affected Parties. If there are two Affected Parties, each party will determine the Termination Currency Equivalent of the Close-out Amounts for all Terminated Transaction and the Early Termination Amount will be:
(A) the sum of
(I) half of the difference between the higher amount (determined by party “X”) and the lower amount (determined by party “Y”) and
(II) the Termination Currency Equivalent of the Unpaid Amounts owing to X minus
(B) the Termination Currency Equivalent of the Unpaid Amounts owing to Y.
If the Early Termination Amount is a positive number, Y will pay it to X; if negative , X will pay its absolute value to Y.
(3) Mid-Market Events. In either case where the Termination Event is an Illegality or a Force Majeure Event, when determining a Close-out Amount the Determining Party will use mid-market valuations that do not take the Determining Party’s own creditworthiness into account.
6(e)(iii) Adjustment for Bankruptcy. If an “Automatic Early Termination” happens, one can adjust the Early Termination Amount to reflect payments or deliveries actually made between the automatic Early Termination Date and the payment date determined under Section 6(d)(ii).
6(e)(iv) Adjustment for Illegality or Force Majeure Event. The failure by a party or its Credit Support Provider to pay an Early Termination Amount when due will not be a Failure to Pay or Deliver or a Credit Support Default if caused by an Illegality or a Force Majeure Event. The unpaid amount will:
(1) be treated as an Unpaid Amount for a subsequent Early Termination Date resulting from an Event of Default, a Credit Event Upon Merger or an Additional Termination Event affecting all outstanding Transactions; and
(2) otherwise accrue interest in accordance with Section 9(h)(ii)(2).
6(e)(v) Pre-Estimate. The parties acknowledge that:
(a) Each Early Termination Amount is a reasonable pre-estimate of loss and not a penalty; and
(b) neither party may recover any additional damages as a consequence of terminating Terminated Transactions.

6(f) An Innocent Party may, by notice, set-off any part of an Early Termination Amount payable by one party against any Other Amounts payable by the other under any other agreement, converting currencies if necessary and estimating unascertained obligations in good faith, but it must account for any difference between its estimate and the amount when it is finally ascertained.
7. Transfer
Subject to Section 6(b)(ii), neither party may transfer any interest in or obligation under this Agreement without the other party’s prior written consent, except:―

7(a) Due to a merger with, or consolidation of substantially all of its assets into, another entity; and
7(b) A transfer of its rights to an Early Termination Amount under Sections 8, 9(h) and 11.

8. Contractual Currency
8(a) Payment in the Contractual Currency: Each payment under this Agreement must be made in the currency specified for that payment (the “Contractual Currency”). Payments made in a Non-Contractual Currency will only discharge an obligation to the extent the recipient, having converted it into the Contractual Currency in good faith using commercially reasonable procedures, achieves the full amount payable in the Contractual Currency.

(i) If the converted amount falls short of the amount payable in the Contractual Currency, the payer must immediately pay the necessary balance in the Contractual Currency.
(ii) If the converted amount exceeds the full amount payable in the Contractual Currency, the payee must promptly refund the excess.

8(b) Judgments. If a party obtains judgment in a Non-Contractual Currency against the other for any amount due under this Agreement and, having recovered that judgment debt, a shortfall or excess remains over the original amount due in the Contractual Currency (due to the exchange rate at which the judgment creditor, in good faith and a commercially reasonable manner, converted the judgement debt into the Contractual Currency), that judgment creditor:

(i) will be entitled to immediately receive from the other party, the value of any such shortfall in the Contractual Currency; and
(ii) must promptly refund to the other party any such excess in the Contractual Currency.

8(c) Separate Indemnities. The indemnities in this Section 8 are independent of the parties’ other obligations in this Agreement. They create separate causes of action. They will apply notwithstanding any indulgence granted to the payer by the payee, or any other claims made or judgments awarded for amounts due under this Agreement.
8(d) Evidence of Loss. Under Section 8, it will be enough if a party can show that it would have suffered a loss had it actually made the currency conversion.
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.
10. Offices; Multibranch Parties

10(a) If this Section applies, whenever a party enters a Transaction through a branch Office, it represents that recourse against it will be the same as if it had entered through its head office (subject to any Waiting Period for an Illegality or a Force Majeure Event).
10(b) If a party is a Multibranch Party it may, subject to clause 10(c) below, enter into and book Transactions and make and receive payments through Office listed for that party in the Schedule.
10(c) The Office through which a party enters into a Transaction will be specified in the Confirmation or, if not specified, that party’s head office. The specified Office will also be the Office in which that party books and makes and receives payments and deliveries under Transaction. Except to make a Transfer to Avoid Termination Event neither party may change its specified Office for a Transaction without the the other’s prior written consent.

11 Expenses
A Defaulting Party will on demand indemnify the Non-Defaulting Party for all reasonable costs — including Stamp Tax — that the Non-Defaulting Party incurs in closing out Transactions and enforcing its rights against the Defaulting Party.
12. Notices
12(a) Effectiveness. Any communication under this Agreement may be given in any manner described below (except that communications about Events of Default and Termination Events or Early Termination may not be given by electronic messaging system or e-mail) as set out in the Schedule) and will be effective when delivered:―

(i) By hand: when delivered;
(ii) By telex: are you kidding me? Who has a telex these days? OK when the recipient’s answerback is received;
(iii) By fax: FAX??? When were you born Grampa? Ok when received in legible form (the burden of proof being on the sender and, no, a transmission report won’t do);
(iv) By registered mail: when delivered (or when delivery is attempted);
(v) By electronic messaging system: when received; or
(vi) By e-mail: when delivered delivered,

unless delivery or receipt happenens outside ordinary business hours on a Local Business Day, in which case it will be deemed effective on the following Local Business Day.
12(b) Change of Details. Either party may change its contact details by notice.
13. Governing Law and Jurisdiction
13(a) Governing Law. The governing law will be set out in the Schedule.
13(b) Jurisdiction. For any proceedings under this Agreement (“Proceedings”), each party irrevocably:―

13(b)(i) submits to:―
(1) for English law-governed Agreements, the non-exclusive jurisdiction of the English courts (or their exclusive jurisdiction where Proceedings involve a Convention Court); or
(2) for New York law-governed Agreements, the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in Manhattan;
13(b)(ii) waives its right to object to such court as a venue for any Proceedings brought in, or claim it is an inconvenient forum, or that it has no jurisdiction; and
13(b)(iii) agrees that Proceedings brought in one jurisdictions will not preclude Proceedings in any other jurisdiction.

13(c) Service of Process. Each party appoints any Process Agent specified for it in the Schedule to receive service of process in any Proceedings. If a Process Agent cannot act, the appointing party must tell the other party and within 30 days appoint an acceptable substitute. The parties consent to service of process by hand, fax or registered mail per Section 12. This clause does not stop parties serving process in any other permissible manner.
13(d) Waiver of immunities. Each party irrevocably waives all sovereign immunity relating to any Proceedings and agrees not to claim any such immunity in any Proceedings.
14. Definitions
Additional Representation” is defined in Section 3.
Additional Termination Event” is defined in Section 5(b).
Affected Party” is defined in Section 5(b).
Affected Transactions” means:

(a) for an Illegality, Force Majeure Event, Tax Event or TEUM, all Transactions affected by the Termination Event (and if it is an Illegality or Force Majeure Event that affects Credit Support Document covering only some Transactions, those Transactions) and
(b) for any other Termination Event, all Transactions.

An “Affiliate” of an entity is another entity that controls, is controlled by, or is under common control with, that entity, where to “control” means to own a majority of an entity’s voting power.
Agreement” is defined in Section 1(c).
Applicable Close-out Rate” means:—

(a) on an Unpaid Amount:—
(i) if the Defaulting Party’s obligation, the Default Rate;
(ii) if the Non-defaulting Party’s obligation, the Non-default Rate;
(iii) if a deferred obligation under Section 5(d), if there is no Defaulting Party during the deferral period, the Applicable Deferral Rate; and
(iv) in any other case following a Termination Event (except interest which accrues under (iii) above), the Applicable Deferral Rate; and
(b) on an Early Termination Amount:—
(i) from the Early Termination Date until the Early Termination Amount is payable:—
(1) if payable by a Defaulting Party, the Default Rate;
(2) if payable by a Non-defaulting Party, the Non-default Rate; and
(3) in all other cases, the Applicable Deferral Rate; and
(ii) from the date the Early Termination Amount is payable until it is actually paid:—
(1) if unpaid because of an Illegality or Force Majeure Event the Applicable Deferral Rate;
(2) if payable by a Defaulting Party (excluding any period where (1) above applies), the Default Rate;
(3) if payable by a Non-defaulting Party (excluding any period where (1) above applies), the Non-default Rate; and
(4) in all other cases, the Termination Rate.

Applicable Deferral Rate” means:—

(a) For Section 9(h)(i)(3)(A) [payments deferred under Section 2(a)(iii)], the market rate actually offered by a major bank in the interbank market for overnight deposits in that currency that the payer chose in good faith;
(b) For Section 9(h)(i)(3)(B) [payments deferred during a Waiting Period because of an Illegality or Force Majeure] and clause (a)(iii) of Applicable Close-out Rate, the market rate actually offered by a major bank in the interbank market for overnight deposits in that currency that the payer chose in good faith and in consultation with the other party; and
(c) For Section 9(h)(i)(3)(C) [payments not made after a Waiting Period expires while the Illegality or Force Majeure subsists] and clauses (a)(iv), (b)(i)(3) and (b)(ii)(l) of Applicable Close-out Rate, the average of the rate the payer obtains under (a) above and the annual rate of the payee’s cost of funding of that amount.

Automatic Early Termination” is defined in Section 6(a).
Burdened Party” is defined in Section 5(b)(iv).
Change in Tax Law” means the enactment of or amendment to any law (or official interpretation) after the relevant Transaction is executed.
Close-out Amount” means the losses the Determining Party would incur (positive) or gains it would realise (negative) in replacing the material terms and the option rights of the parties under a Terminated Transaction, determined as of the Early Termination Date (or, if that would not be commercially reasonable, such dates following that date as would be commercially reasonable) in good faith and in a commercially reasonable manner. The Determining Party may determine Close-out Amounts for groups of Terminated Transactions as long as all Terminated Transactions are accounted for.
Unpaid Amounts and Expenses in respect of Terminated Transactions are excluded from the Close-out Amount calculation.
The Determining Party may consider any of the following (unless it thinks they aren’t available or would produce an unconscionable result):

(i) quotations for replacement transactions that factor in the Determining Party’s creditworthiness and the ISDA terms between the Determining Party and the quoting party;
(ii) third party market data; or
(iii) internal quotes or market data if used by the Determining Party in the regular course to value similar transactions.

Confirmation” is defined in the preamble.
consent” includes things that are functionally like consents.
Contractual Currency” is defined in Section 8(a).
Convention Court” means any court which must apply Article 17 of the 1968 Brussels Convention or Article 17 of the 1988 Lugano Convention.
Credit Event Upon Merger” is defined in Section 5(b).
Credit Support Document” means anything described as such in the Schedule.
Credit Support Provider” is defined in the Schedule.
Cross Default” is defined in Section 5(a)(vi).
Default Rate” means the payee’s self-certified cost of funding plus 1% per annum.
Defaulting Party” is defined in Section 6(a).
A “Designated Event” means that the relevant entity:―

(1) merges with, or transfers substantially all of its assets into, or reorganises itself as another entity;
(2) comes under the effective voting control of another entity; or
(3) makes a substantial change in its capital structure by issuing or guaranteeing debt, equities or analogous interests, or securities convertible into them;

Determining Party” means the party who determines the Close-out Amount.
Early Termination Amount” is defined in Section 6(e).
Early Termination Date” means the date determined under Section 6(a) or 6(b)(iv).
electronic messages” and “electronic messaging systemexcludes e-mails but includes XML documents and similar markup languages.
English law” means the law of England and Wales. “Event of Default” is defined Section 5(a) as modified by the Schedule.
Force Majeure Event” is defined in Section 5(b).
General Business Day” means a day on which commercial banks are open for business.
Illegality” is defined in Section 5(b).
An Indemnifiable Tax is any Tax that is not[1] a Stamp Tax that is not[2] a tax that would not[3] be imposed if there were not[4] a connection between the taxing authority’s jurisdiction and the recipient that did not[5] arise solely from the recipient having performed any part of this Agreement in that jurisdiction.
law” includes any treaty, law, rule or regulation, or tax practice.
Local Business Day” means a General Business Day:

(a) For performing one’s general obligations: where specified in the Confirmation and where any relevant settlement system is operating;
(b) For working out when a Waiting Period expires: Where the Illegality or Force Majeure Event occurs,
(c) For any other payment: Where the account is located and, the principal financial centre for the relevant currency;
(d) For communications: For the recipient (and, for a Change of Account, where the new account will be located); and
(e) For a Default under Specified Transaction: In the relevant locations for performance under the Specified Transaction.

Local Delivery Day” means, for purposes of Sections 5(a)(i) and 5(d), a day on which settlement systems are generally operating in the location specified in the Confirmation are open for business so delivery can be settled by usual market practice.
Master Agreement” is defined in the preamble.
Merger Without Assumption” is defined in Section 5(a)(viii).
Multiple Transaction Payment Netting” is defined in Section 2(c).
Non-affected Party” means the party that isn’t the Affected Party, if there is one.
Non-default Rate” means a rate obtained in good faith by the Non-defaulting Party from a major bank in the interbank market for overnight deposits to reasonably reflect prevailing market conditions.
Non-defaulting Party” is defined in Section 6(a).
Office” means any of a party’s branches or offices.
Other Amounts” is defined in Section 6(f).
Payee” is defined in Section 6(f).
Payer” is defined in Section 6(f).
Potential Event of Default” means an event which, with the giving of notice or the passing of time, would be an Event of Default.
Proceedings” is defined in Section 13(b).
Process Agent” is defined in the Schedule.
Rate of exchange” includes any premiums or exchange costs of buying or converting into the Contractual Currency.
Relevant Jurisdiction” means any jurisdictions where a party (a) is incorporated and controlled, (b) has a specified Office (c) executes this Agreement; or (d) makes payments under this Agreement.
Schedule” is defined in the preamble.
Scheduled Settlement Date” means a due date for payment or delivery under Section 2(a)(i).
Specified Entity” is defined in the Schedule.
Specified Indebtedness” means any borrowed money.
Specified Transaction” means:

(a) any transaction between the parties to this Agreement (or their respective Credit Support Providers or Specified Entities) which is not governed by this Agreement, but
(i) is a swap, option, forward, foreign exchange, cap, floor, collar, credit protection or spread transaction, repo, buy/sell-back, securities lending, index or forward purchase or sale of a security, commodity or other financial instrument;or
(ii) is a similar transaction forward, swap, future, option or other derivative on any rates, currencies, commodities, financial instruments, benchmarks, indices or other measures of economic risk that is at any time common in the financial markets;
(b) any combination of the above; and
(c) any transaction specified as a Specified Transaction in the Schedule or confirmation.

Stamp Tax” means any stamp or documentation tax.
Stamp Tax Jurisdiction” is defined in Section 4(e).
Tax” means any tax of any kind (including interest or penalties added to it) imposed by a taxing authority on any payment under this Agreement other than a Stamp Tax.
Tax Event” is defined in Section 5(b).
Tax Event Upon Merger” is defined in Section 5(b).
Terminated Transactions” means, for a Early Termination Date resulting from:

(a) an Illegality or a Force Majeure Event, all Affected Transactions specified in the Section 6(b)(iv) notice;
(b) any other Termination Event, all Affected Transactions; and
(c) an Event of Default, all Transactions :

that were in effect immediately before the the Section 6(a) notice designating that Early Termination Date took effect or, if Automatic Early Termination applies, immediately before the Early Termination Date.
Termination Currency” means the Termination Currency specified in the Schedule if it is freely available, and failing that euro for English law-governed Agreements or US Dollars for New York law-governed Agreements.
Termination Currency Equivalent” means, for an amount denominated in any other currency, the Termination Currency amount needed to buy that other currency using the FX agent’s spot exchange rate at 11:00 a.m. (in its location) on the day one would customarily fix a rate to purchase that currency for value the relevant termination date.

If there is an Innocent Party, it will select the FX agent in good faith. If not, the parties must agree the FX agent. “Termination Event” means an Illegality, a Force Majeure Event, a Tax Event, a Tax Event Upon Merger an applicable Credit Event Upon Merger or an Additional Termination Event.
Termination Rate” means each party’s self-certified average cost of funding.
Threshold Amount” will be specified in the Schedule.
Transaction” is defined in the Preamble.
Unpaid Amounts” owing to any party means, with respect to a Early Termination Date, the aggregate, in each case as at such Early Termination Date, and together with any the Non-Defaulting Party’s Expenses, of:

(a) in respect of all Terminated Transactions, all amounts that had become payable but which remain unpaid;
(b) in respect of each Terminated Transaction, the fair market value of each obligation which had become due for delivery but has not been delivered; and
(c) where all Transactions are being terminated on the Early Termination Date, any due but unpaid Early Termination Amounts relating to a prior Termination Event,

together in each case with accrued but unpaid interest.
Waiting Period” means:―

(a) for an Illegality (other than where performance under a Credit Support Document is required on the relevant day (here no Waiting Period will apply), three Local Business Days after the Illegality happened; and
(b) for a Force Majeure Event (other than where performance under a Credit Support Document is required on the relevant day (here no Waiting Period will apply), eight Local Business Days after the Illegality happened.

References

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