Deduction or Withholding for Tax - ISDA Provision: Difference between revisions

Deduction or Withholding for Tax - ISDA Provision (view source)

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 This is, therefore, the apex of all possible derivatives drafting. Make you feel great to be alive, doesn't it.
+But here: let *me* have a go.
+{{isdaprov|2(d)(i)}} Gross-Up. All payments will be made deduction for {{isdaprov|Tax}} unless deduction is required by applicable law. Where a party (X) is obliged to deduct for {{isdaprov|Tax}} it will promptly: <br>
+:(1) notify the other party (Y); <br>
+:(2) pay the full amount of {{isdaprov|Tax}} required (including on any grossed up amount required under this Section);
+:(3) forward evidencing such payment to Y; and <br>
+:(4) where the {{isdaprov|Tax}} is an {{isdaprov|Indemnifiable Tax}}, pay to Y such additional amount as is necessary to ensure that the net amount received by Y (free of {{isdaprov|Indemnifiable Taxes}}) will equal the full amount Y would have received had there been no such deduction ("'''gross up'''"). <br>
+However, X will '''not''' be required to gross up any tax which would not be required but for:―<br>
+:(A) Y's failure to comply with Section {{isdaprov|4(a)(i)}}, {{isdaprov|4(a)(iii)}} or {{isdaprov|4(d)}}; or
+:(B) Y's breach of any Section {{isdaprov|3(f)}} representation (unless such breach would not have occurred but for (I) any governmental action ''after'' entry into a Transaction or (II) a {{isdaprov|Change in Tax Law}}.
 {{isdaanatomy}}