2016 ISDA VM NY CSA: Difference between revisions

Accordingly, the parties agree as follows:—<br>  

Each party, as the {{nyvmcsaprov|Pledgor}}, hereby pledges to the other party, as the {{nyvmcsaprov|Secured Party}}, as security for its {{isdaprov|Obligations}}, and grants to the {{nyvmcsaprov|Secured Party}} a first priority continuing security interest in, lien on and right of {{nyvmcsaprov|Set-off}} against all {{nyvmcsaprov|Posted Collateral (VM)}} {{nyvmcsaprov|Transfer}}red to or received by the {{nyvmcsaprov|Secured Party}} hereunder. Upon the {{nyvmcsaprov|Transfer}} by the {{nyvmcsaprov|Secured Party}} to the {{nyvmcsaprov|Pledgor}} of {{nyvmcsaprov|Posted Collateral (VM)}}, the security interest and lien granted hereunder on that {{nyvmcsaprov|Posted Collateral (VM)}} will be released immediately and, to the extent possible, without any further action by either party.<br>

{{nyvmcsaprov|3(a)}} {{nyvmcsaprov|Delivery Amount (VM)}}. Subject to Paragraphs 4 and 5, upon a demand made by the {{nyvmcsaprov|Secured Party}} on or promptly following a {{nyvmcsaprov|Valuation Date}}, if the {{nyvmcsaprov|Delivery Amount (VM)}} for that {{nyvmcsaprov|Valuation Date}} equals or exceeds the {{nyvmcsaprov|Pledgor}}’s {{nyvmcsaprov|Minimum Transfer Amount}}, then the {{nyvmcsaprov|Pledgor}} will {{nyvmcsaprov|Transfer}} to the {{nyvmcsaprov|Secured Party}} {{nyvmcsaprov|Eligible Credit Support (VM)}} having a {{nyvmcsaprov|Value}} as of the date of {{nyvmcsaprov|Transfer}} at least equal to the applicable {{nyvmcsaprov|Delivery Amount (VM)}} (rounded pursuant to Paragraph {{nyvmcsaprov|13}}). Unless otherwise specified in Paragraph {{nyvmcsaprov|13}}, the “'''{{nyvmcsaprov|Delivery Amount (VM)}}'''” applicable to the {{nyvmcsaprov|Pledgor}} for any {{nyvmcsaprov|Valuation Date}} will equal the amount by which:<br>

:(i) the {{nyvmcsaprov|Secured Party}}’s {{nyvmcsaprov|Exposure}}  

:(ii) the {{nyvmcsaprov|Secured Party}}’s {{nyvmcsaprov|Exposure}}.<br>  

{{nyvmcsaprov|4(a)}} '''{{nyvmcsaprov|Conditions Precedent}}'''. Unless otherwise specified in Paragraph {{nyvmcsaprov|13}}, each {{nyvmcsaprov|Transfer}} obligation of the {{nyvmcsaprov|Pledgor}} under Paragraphs 3, 5 and 6(d) and of the {{nyvmcsaprov|Secured Party}} under Paragraphs 3, 4(d)(ii), 5, 6(d) and 11(h) is subject to the conditions precedent that:<br>

(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) subject to Paragraph {{nyvmcsaprov|4(a)}}, the {{nyvmcsaprov|Secured Party}} will {{nyvmcsaprov|Transfer}} to the {{nyvmcsaprov|Pledgor}} the items of {{nyvmcsaprov|Posted Credit Support (VM)}} specified by the {{nyvmcsaprov|Pledgor}} in its notice not later than the {{nyvmcsaprov|Local Business Day}} following the date on which the {{nyvmcsaprov|Secured Party}} receives the {{nyvmcsaprov|Substitute Credit Support (VM)}}, unless otherwise specified in Paragraph {{nyvmcsaprov|13 }} (the “'''{{nyvmcsaprov|Substitution Date}}'''”); provided that the {{nyvmcsaprov|Secured Party}} will only be obligated to {{nyvmcsaprov|Transfer}} {{nyvmcsaprov|Posted Credit Support (VM)}} with a {{nyvmcsaprov|Value}} as of the date of {{nyvmcsaprov|Transfer}} of that {{nyvmcsaprov|Posted Credit Support (VM)}} equal to the {{nyvmcsaprov|Value}} as of that date of the {{nyvmcsaprov|Substitute Credit Support (VM)}}.<br>  

If a party (a “'''{{nyvmcsaprov|Disputing Party}}'''”) disputes (I) the {{nyvmcsaprov|Valuation Agent}}’s calculation of a {{nyvmcsaprov|Delivery Amount (VM)}} or a {{nyvmcsaprov|Return Amount (VM)}} or (II) the {{nyvmcsaprov|Value}} of any {{nyvmcsaprov|Transfer}} of {{nyvmcsaprov|Eligible Credit Support (VM)}} or {{nyvmcsaprov|Posted Credit Support (VM)}}, then:<br>

:(i) the {{nyvmcsaprov|Disputing Party}} will notify the other party and the {{nyvmcsaprov|Valuation Agent}} (if the {{nyvmcsaprov|Valuation Agent}} is not the other party) not later than the close of business on (X) the date that the {{nyvmcsaprov|Transfer}} is due in respect of such {{nyvmcsaprov|Delivery Amount (VM)}} or {{nyvmcsaprov|Return Amount (VM)}} in the case of (I) above, or (Y) the {{nyvmcsaprov|Local Business Day}} following the date of {{nyvmcsaprov|Transfer}} in the case of (II) above,<br>

:Following a recalculation pursuant to this Paragraph, the {{nyvmcsaprov|Valuation Agent}} will notify each party (or the other party, if the {{nyvmcsaprov|Valuation Agent}} is a party) not later than the Paragraph {{nyvmcsaprov|Notification Time}} on the {{nyvmcsaprov|Local Business Day}} following the {{nyvmcsaprov|Resolution Time}}. The appropriate party will, upon demand following that notice by the {{nyvmcsaprov|Valuation Agent}} or a resolution pursuant to (iii) above and subject to Paragraphs 4(a) and 4(b), make the appropriate {{nyvmcsaprov|Transfer}}.<br>  

{{nyvmcsaprov|6(a)}} '''{{nyvmcsaprov|Care of Posted Collateral (VM)}}'''. Without limiting the {{nyvmcsaprov|Secured Party}}’s rights under Paragraph 6(c), the {{nyvmcsaprov|Secured Party}} will exercise reasonable care to assure the safe custody of all {{nyvmcsaprov|Posted Collateral (VM)}} to the extent required by applicable law, and in any event the {{nyvmcsaprov|Secured Party}} will be deemed to have exercised reasonable care if it exercises at least the same degree of care as it would exercise with respect to its own property. Except as specified in the preceding sentence, the {{nyvmcsaprov|Secured Party}} will have no duty with respect to {{nyvmcsaprov|Posted Collateral (VM)}}, including, without limitation, any duty to collect any {{nyvmcsaprov|Distributions}}, or enforce or preserve any rights pertaining thereto.<br>

{{nyvmcsaprov|6(b)}} '''{{nyvmcsaprov|Eligibility to Hold Posted Collateral (VM); Custodians (VM)}}'''.<br>

:::{{nyvmcsaprov|6(d)(ii)(B)(II)}} if the {{nyvmcsaprov|Interest Amount (VM)}} for an {{nyvmcsaprov|Interest Period}} is a negative number and any {{nyvmcsaprov|Posted Collateral (VM)}} is in the form of {{nyvmcsaprov|Cash}} in the {{nyvmcsaprov|Base Currency}}, the {{nyvmcsaprov|Interest Amount (VM)}} will constitute a reduction of {{nyvmcsaprov|Posted Collateral (VM)}} in the form of such {{nyvmcsaprov|Cash}} in an amount (such amount, the “'''{{nyvmcsaprov|Interest Adjustment Reduction Amount (VM)}}'''”) equal to the absolute {{nyvmcsaprov|Value}} of the {{nyvmcsaprov|Interest Amount (VM)}}; provided that if the amount of {{nyvmcsaprov|Posted Collateral (VM)}} which is comprised of such {{nyvmcsaprov|Cash}} is less than the {{nyvmcsaprov|Interest Adjustment Reduction Amount (VM)}}, such reduction will only be to the extent of the amount of such {{nyvmcsaprov|Cash}} which is {{nyvmcsaprov|Posted Collateral (VM)}} and the {{nyvmcsaprov|Pledgor}} will be obligated to {{nyvmcsaprov|Transfer}} the remainder of the {{nyvmcsaprov|Interest Adjustment Reduction Amount (VM)}} to the {{nyvmcsaprov|Secured Party}} on the day that such reduction occurred.<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>

:{{nyvmcsaprov|7(i)}} that party fails (or fails to cause its {{nyvmcsaprov|Custodian (VM)}}) to make, when due, any {{nyvmcsaprov|Transfer}} of {{nyvmcsaprov|Eligible Collateral (VM)}}, {{nyvmcsaprov|Posted Collateral (VM)}} or the {{nyvmcsaprov|Interest Payment (VM)}}, as applicable, required to be made by it and that failure continues for two {{nyvmcsaprov|Local Business Day}}s after notice of that failure is given to that party;<br>

:{{nyvmcsaprov|7(iii)}} that party fails to comply with or perform any agreement or obligation other than those specified in Paragraphs {{nyvmcsaprov|7(i)}} and {{nyvmcsaprov|7(ii)}} and that failure continues for 30 days after notice of that failure is given to that party.<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|8(a)(i)}} all rights and remedies available to a {{nyvmcsaprov|Secured Party}} under applicable law with respect to {{nyvmcsaprov|Posted Collateral (VM)}} held by the {{nyvmcsaprov|Secured Party}};<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>  

Each party represents to the other party (which representations will be deemed to be repeated as of each date on which it, as the {{nyvmcsaprov|Pledgor}}, {{nyvmcsaprov|Transfer}}s {{nyvmcsaprov|Eligible Collateral (VM)}}) that:<br>

:{{nyvmcsaprov|9(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|9(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>  

{{nyvmcsaprov|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>

{{nyvmcsaprov|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>

{{nyvmcsaprov|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 {{nyvmcsaprov|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>  

{{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>

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>  

As used in this Annex:—<br>

“'''{{nyvmcsaprov|Base Currency}}'''” means the currency specified as such in Paragraph {{nyvmcsaprov|13}}.<br>

:{{nyvmcsaprov|(iii)}} {{nyvmcsaprov|Other Eligible Support (VM) and Other Posted Support (VM)}}, as specified in Paragraph {{nyvmcsaprov|13}}.<br>

(a) {{nyvmcsaprov|Base Currency and Eligible Currency}}.<br>

(i) “'''{{nyvmcsaprov|Base Currency}}'''” means United States Dollars, unless otherwise specified here: [...]<br>