2002 ISDA Master Agreement Sample Clauses

2002 ISDA Master Agreement. Section 1.18 (2002 ISDA Master Agreement) will be deleted in its entirety and replaced with the following:

2002 ISDA Master Agreement. In January 2003 ISDA published a new version of its Master Agreement known as the “2002 ISDA Master Agreement”. The entire Guide other than Part 20 was updated in March 2003 (see Update 4) so that it now operates on the assumption that parties newly entering into an ISDA Master Agreement do so using the 2002 ISDA Master Agreement. Part 20 is now updated on the same basis, save that it retains some suggested language for users that remain on the 1992 ISDA Master Agreement. By publishing Update 6, AFMA is not to be taken to be recommending that parties redocument existing 1992 ISDA Master Agreements or that it is no longer appropriate to enter into a 1992 ISDA Master Agreement. ▇▇▇▇ recognises that parties may have commercial and legal reasons for wanting to retain or enter into new 1992 ISDA Master Agreements. Commentary referencing the 1992 ISDA Master Agreement can be found in the history versions of Part 20 of this Guide replaced on 1 August 2003. Of course, care needs to be taken when using historical commentary to ensure that all relevant legal issues are taken into account. For example, it is recommended that the decision in Enron Australia Pty Limited (In Liquidation) v Integral Energy Australia [2002] NSW SC 753 be considered in the context of any new or existing 1987, 1992 or 2002 ISDA Master Agreement (see [3.17] and [20.19A]). Generally, and subject to the comments in the previous paragraph, given that there are a number of improvements in the 2002 version, we recommend that it is preferable for parties to agree to adopt the 2002 version. Part 20 has been updated to include a suggested clause for use by parties that wish to protect themselves against the risk that the National Electricity Code may be amended so that spot prices for electricity are published on a GST inclusive basis, rather than the current GST exclusive basis.

2002 ISDA Master Agreement. In January 2003 ISDA published a new version of its Master Agreement known as the “2002 ISDA Master Agreement”. The entire Guide has been updated so that it now operates on the assumption that parties newly entering into an ISDA Master Agreement do so using the 2002 ISDA Master Agreement (however, there are some references to the 1992 ISDA Master Agreement in Parts 22 and 26 that have not yet been updated). Before the publication of Update 4 of this Guide on 28 March 2003, this Guide provided commentary on the 1992 ISDA Master Agreement. By publishing Update 4, AFMA is not to be taken to be recommending that parties redocument existing 1992 ISDA Master Agreements or that it is no longer appropriate to enter into a 1992 ISDA Master Agreement. ▇▇▇▇ recognises that parties may have commercial and legal reasons for wanting to retain or enter into new 1992 ISDA Master Agreements. Commentary referencing the 1992 ISDA Master Agreement can be found in the history versions of this Guide replaced on 28 March 2003. Of course, care needs to be taken when using historical commentary to ensure that all relevant legal issues are taken into account. For example, it is recommended that the decision in Enron Australia Pty Limited (In Liquidation) v Integral Energy Australia [2002] NSW SC 753 be considered in the context of any new or existing 1987, 1992 or 2002 ISDA Master Agreement (see [3.17]). Generally, and subject to the comments in the previous paragraph, given that there are a number of improvements in the 2002 version, we recommend that it is preferable for parties to agree to adopt the 2002 version.

2002 ISDA Master Agreement. The 2002 ISDA master agreement is an update of the 1992 version. The ISDA master agreement may, at the election of the contracting parties, be governed by English or New York law. The close-out netting provision is found in Section 6 under the heading ‘Early Termination; Close-Out Netting’. The termination phase is constituted under Section 6 of the 2002 ISDA master agreement. Upon the occurrence of an event of default such as the opening of insolvency proceedings in relation to one of the parties, Section 6(a) stipulates that the non-defaulting party may designate an early termi- nation date for all outstanding transactions, unless automatic early termina- tion applies. As stated, the early termination of derivatives takes the form of extinguishing outstanding obligations upon the occurrence of an event of default. This extinguishment is provided by Section 6(c)(ii) of the ISDA agreement, in terms of which: ‘Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries […] in respect of the Terminated Transactions will be required to be made […].’ The valuation phase is constituted under Section 6(e) of the agreement. The valuation is based on the non-defaulting party’s calculations of replacement losses, costs or gains in respect of terminated transactions in order to enable the non-defaulting party to obtain the economic equivalent of the material terms of the terminated transactions. The determination of the net balance is provided under Section 6(e)(i) whereby the close-out amount consists of the following: (i) payments for the future replacement value of terminated transactions calculated by the non- defaulting party in reaching the close-out amount; (ii) contractual payment 53 PAECH (2010) 22. 54 For a more general discussion of the differences in close-out provisions of a number of master agreements, see EFMLG 2010 Symposium Report. or delivery obligations due under Section 2(a)(i)55 which were due before the early termination date but not paid, i.e. the unpaid amounts; and (iii) payments or deliveries which would have been due before the early termi- nation date if all conditions precedent, such as no event of default having taken place, had been satisfied or if the early termination date had not been designated. These amounts are referred to under Section 2(a)(iii)56 and also form part of the unpaid amounts. The close-out amount is arrived at by adding the net termination currency equivalent of the c...