Agreement to Deliver Documents - ISDA Provision
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2002 ISDA Master Agreement
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Crosscheck: Schedule Part 3 in a Nutshell™
Original text
See ISDA Comparison for a comparison between the 1992 ISDA and the 2002 ISDA.
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Comparisons
The part of the ISDA Schedule where you agree who is going to deliver what documents to whom, when, and whether they’ll be covered by the Section 3(d) representation — in other words whether you’re warranting as to their accuracy, completeness and truth.
Also the part of the ISDA suite most likely to challenge the Microsoft Word formatting skills of an ISDA negotiator. That table’s a bastard.
Basics
Not providing documents for delivery is an Event of Default ... eventually
The importance of promptly sending required documents for delivery goes as follows:
- By dint of Section 4(a) you agree to furnish each other Specified Information set out in Part 3 of the Schedule.
- By dint of Section 5(a)(ii) if you don’t then that can be a Breach of Agreement Event of Default (Section 5(a)(ii)). Be warned: you must pursue a tortured chain of nested double negatives and carefully parse the interplay between Sections 4(a) and 5(a)(ii) to grasp this, but it is true.
- But, Section 5(a)(ii) imposes a thirty freaking day grace period following notice before a Breach of Agreement counts as an Event of Default allowing termination. (A Failure to Pay or Deliver is excluded from that definition, by the way, because it has its own EOD with a much tighter grace period).
- So if you need a document “furnished” urgently and can’t wait a month for it (you might not, if you are a credit officer and it is a monthly NAV statement, for example) then you must upgrade a simple 5(a)(ii) Breach of Agreement to a full-blown Additional Termination Event.
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