Template:M gen 2002 ISDA 6(b)(ii)

Section 6(b)(ii): Transfer to Avoid Termination Event

Things start to go a bit wobbly. You sense that ISDA’s crack drafting squad™ has been on the sauce, or marching powder or something, and became attached to the idea of trying to codify the unknowable future. It gets worse before it gets better but here the permutations are about the parties tax status: either the Tax law has changed for one or other party — a Tax Event — or a party has executed some fancy cross-border merger which has somehow changed its tax residence, status, or eligibility of favourable tax treatment: this is a Tax Event Upon Merger. Here, in essence, you have a little window to sort yourself out, if you hadn’t done that before the merger (isn’t that what Tax advisors are for, by the way?).

Tax Event Upon Merger is also apt to create magnificent rounds of three-dimensional ninja combat drafting, because there is an Affected Party, and a Burdened Party, and they are not ~ necessarily ~ the same, and that is even before you worry about what has happened if there is a Credit Event Upon Merger (could be, right? There is a merger... so why not?) and/or a Force Majeure going on at the same time.

In any case: the Affected Party of a simple Tax Event, or the Affected Party of a TEUM who is also the Burdened Party must try doggedly for twenty days to transfer its rights and obligations to an unaffected Office or Affiliate before it is allowed to trigger an Early Termination Date. In any case the innocent, Unaffected Party, has a varnished right to decline the transfer if it can’t trade with the designated transferee.