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Additional Termination Event - ISDA Provision: Difference between revisions
Additional Termination Event - ISDA Provision (view source)
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{{isdaprov|Termination Event}} is defined as "an {{isdaprov|Illegality}}, a {{isdaprov|Tax Event}} or a {{isdaprov|Tax Event Upon Merger}} or, if specified to be applicable, a {{isdaprov|Credit Event Upon Merger}} or an {{isdaprov|Additional Termination Event}}". | {{isdaprov|Termination Event}} is defined as "an {{isdaprov|Illegality}}, a {{isdaprov|Tax Event}} or a {{isdaprov|Tax Event Upon Merger}} or, if specified to be applicable, a {{isdaprov|Credit Event Upon Merger}} or an {{isdaprov|Additional Termination Event}}". | ||
'''Best Practice Note''': Therefore adding any new Termination Event must ALWAYS be achieved by labelling it a new "{{isdaprov|Additional Termination Event}} under Section 5(b)(v), and not a separate event under a new Section 5(b)(vi) etc. | '''Best Practice Note''': Therefore adding any new Termination Event must ALWAYS be achieved by labelling it a new "'''{{isdaprov|Additional Termination Event}} under Section 5(b)(v), and not a separate event under a new Section 5(b)(vi) etc. | ||
If, instead of being expressed as an “Additional Termination Event” under section 5(b)(v), which is how the ISDA Mechanism is intended to operate, it is set out as a new “5(b)(vi)” it is not designated therefore as any of an “Illegality”, “Tax Event”, “Tax Event Upon Merger”, “Credit Event Upon Merger” or “Additional Termination Event”, so therefore, read literally, is not caught by the definition of “Termination Event” and none of the Termination provisions bite on it. | If, instead of being expressed as an “Additional Termination Event” under section 5(b)(v), which is how the ISDA Mechanism is intended to operate, it is set out as a new “5(b)(vi)” it is not designated therefore as any of an “Illegality”, “Tax Event”, “Tax Event Upon Merger”, “Credit Event Upon Merger” or “Additional Termination Event”, so therefore, read literally, is not caught by the definition of “Termination Event” and none of the Termination provisions bite on it. | ||
I mention this because we have seen it happen. You can take a "Fair, large and liberal view" that what the parties intended was to create an [[ATE]], but why suffer that anxiety? | I mention this because we have seen it happen. You can take a "Fair, large and liberal view" that what the parties intended was to create an [[ATE]], but why suffer that anxiety? | ||