Derivative Contracts Clause Samples
The Derivative Contracts clause defines the terms and conditions under which parties may enter into financial agreements whose value is derived from underlying assets, such as swaps, options, or futures. This clause typically outlines the permissible types of derivatives, the procedures for entering into and settling these contracts, and any limitations or requirements for collateral and reporting. By establishing clear rules for the use and management of derivative instruments, the clause helps manage financial risk and ensures both parties understand their obligations and exposures.
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Derivative Contracts. (a) The Trustee shall, at the written direction of the Master Servicer, on behalf of the Trust Fund, enter into Derivative Contracts, solely for the benefit of the Class SB Certificates. Any such Derivative Contract shall constitute a fully prepaid agreement. The Master Servicer shall determine, in its sole discretion, whether any Derivative Contract conforms to the requirements of clauses (b) and (c) of this Section 4.09. Any acquisition of a Derivative Contract shall be accompanied by an appropriate amendment to this Agreement, including an Opinion of Counsel, as provided in Section 11.01, and either (i) an Opinion of Counsel to the effect that the existence of the Derivative Contract will not adversely affect the availability of the exemptive relief afforded under ERISA by U.S. Department of Labor Prohibited Transaction Exemption ("PTE") 94-29, as most recently amended, 67 Fed. Reg. 54487 (Aug. 22, 2002), to the Holders of the Class A Certificates or the Class M Certificates, as of the date the Derivative Contract is acquired by the Trustee; or (ii) the consent of each holder of a Class A Certificate or Class M Certificate to the acquisition of such Derivative Contract. All collections, proceeds and other amounts in respect of the Derivative Contracts payable by the Derivative Counterparty shall be distributed to the Class SB Certificates on the Distribution Date following receipt thereof by the Trustee. In no event shall such an instrument constitute a part of any REMIC created hereunder. In addition, in the event any such instrument is deposited, the Trust Fund shall be deemed to be divided into two separate and discrete sub-trusts. The assets of one such sub-trust shall consist of all the assets of the Trust Fund other than such instrument and the assets of the other sub-trust shall consist solely of such instrument.
(b) Any Derivative Contract that provides for any payment obligation on the part of the Trust Fund must (i) be without recourse to the assets of the Trust Fund, (ii) contain a non-petition covenant provision from the Derivative Counterparty, (iii) limit payment dates thereunder to Distribution Dates and (iv) contain a provision limiting any cash payments due to the Derivative Counterparty on any day under such Derivative Contract solely to funds available therefor in the Certificate Account to make payments to the Holders of the Class SB Certificates on such Distribution Date.
(c) Each Derivative Contract must (i) provide for the direct ...
Derivative Contracts. (a) At the direction of the Seller, the Owner Trustee shall, on behalf of the Trust, enter into derivative contracts for the benefit of the Certificates; provided however the counterparty to such derivative contract shall not be an Affiliate of the Depositor. Any acquisition of a derivative contract shall be accompanied by (i) an appropriate amendment to this Agreement, and (ii) any Opinion of Counsel required by Section 10.01.
(b) All collections, proceeds and other amounts in respect of the derivative contracts payable by the derivative counterparty shall be distributed to the Certificates on the Payment Date following receipt thereof by the Certificate Paying Agent.
(c) Any derivative contract that provides for any payment obligation on the part of the Trust must (i) be without recourse to the assets of the Trust, (ii) contain a non-petition covenant provision from the derivative counterparty, (iii) limit payment dates thereunder for payments, if any, by the Trust to Payment Dates (iv) contain a provision limiting any cash payments due to the derivative counterparty on any, day under such derivative contract solely to funds available therefor in the Certificate Distribution Account available to make payments to the Holders of the Certificates on such Payment Date, and (v) provide for copies of all notices and correspondence to be provided to the Certificate Paying Agent.
(d) Each derivative contract must (i) provide for the direct payment of any amounts by the derivative counterparty thereunder to the Certificate Distribution Account at least one Business Day prior to the related Payment Date, (ii) contain an assignment of all of the Trust’s rights (but none of its obligations) under such derivative contract to the Owner Trustee on behalf the Certificateholders and shall include an express consent to the derivative counterparty to such assignment, (iii) provide that in the event of the occurrence of an Event of Default, such derivative contract shall terminate upon the direction of a 50.01% or greater Percentage Interest of the Certificates, and (iv) prohibit the derivative counterparty from “setting-off’ or “netting” other obligations of the Trust and its Affiliates against such derivative counterparty’s payment obligations thereunder.
(e) The Seller shall determine, in its sole discretion, whether any derivative contract conforms to the requirements of Section 6.11(c) and (d).
(f) Neither the Seller nor the Depositor shall have any direct or indirect ...
Derivative Contracts. No Loan Party shall, or permit any of its Subsidiaries to, enter into or in any manner be liable on any Derivative Contract except:
(a) Derivative Contracts entered into by the Company with the purpose and effect of limiting or reducing the market price risk of Oil and Gas expected to be produced by the Company, the Acquired Company and their respective Subsidiaries provided that at all times: (i) each such Derivative Contract limits or reduces such market price risk for a term of no more than sixty (60) months; (ii) no such contract, at the time it is entered into, when aggregated with all Derivative Contracts permitted under this Section 8.10(a) (but excluding put option contracts or similar “floor” arrangements) requires the Loan Parties, collectively, to deliver volumes in excess of the greater of (x) 85% of Total Proved Reserves or (y) the following percentages of Proved Producing Reserves: Year Volumes 1 100 % 2 100 % 3 90 % 4 90 % 5 85 % provided, however, that with regard to a "costless collar" that involves the purchase of a put and the sale of a call for the same volumes and dates and commodities, only the volumes associated with the put or the call (but not both) will be included in calculating the applicable percentage threshold, and (iii) each such contract shall be between the Company and a Lender Derivative Provider, or with an unsecured counterparty or have a guarantor of the obligation of the unsecured counterparty who, at the time the contract is made, has long-term obligations rated BBB+ or Baal or better, respectively, by Standard & Poor’s Corporation or M▇▇▇▇’▇ Investors Services, Inc. (or a successor credit rating agency) (excluding Derivative Contracts offered by national commodity exchange for which no credit rating is required);
(b) Derivative Contracts entered into by the Company with the purpose and effect of fixing interest rates on a principal amount of Indebtedness of the Company that is accruing interest at a variable rate, provided that (i) the floating rate index of each such contract generally matches the index used to determine the floating rates of interest on the corresponding Indebtedness of the Company to be hedged by such contract, (ii) no such contract, except those with a Lender or its Affiliate, when aggregated with all Derivative Contracts permitted under Sections 8.10(a) and (b), requires the Company to put up money, assets, letters of credit, or other security against the event of its non-performance prior to a...
Derivative Contracts. 102 Section 4.12. Tax Treatment of Yield Maintenance Payments.....................103 ARTICLE V THE CERTIFICATES Section 5.01. The Certificates................................................103 Section 5.02. Registration of Transfer and Exchange of Certificates...........105 Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...............110 Section 5.04. Persons Deemed Owners...........................................111 Section 5.05. Appointment of Paying Agent.....................................111 ARTICLE VI
Derivative Contracts. (a) The Trustee shall, at the written direction of the Servicer, enter into Derivative Contracts on behalf of the Trust solely for the benefit of the Holder of the Class R Certificate. Any such Derivative Contract shall constitute a fully prepaid agreement. The Servicer shall determine, in its sole discretion, whether any Derivative Contract conforms to the requirements of clauses (b) and (c) of this Section 3.13. Any acquisition of a Derivative Contract shall be accompanied by (i) an appropriate amendment to this Agreement, including an Opinion of Counsel to the effect that all such conditions precedent, if any, to such amendment have been complied with, (ii) either (A) an Opinion of Counsel addressed to the Trustee to the effect that the existence of the Derivative Contract will not adversely affect the availability of the exemptive relief afforded under ERISA by the Underwriter Exemption to the holders of the Offered Certificates, as of the date the Derivative Contract is acquired by the Trustee on behalf of the Trust; or (B) the consent of each Holder of a Certificate to the acquisition of such Derivative Contract, and (iii) an Opinion of Counsel to the effect that entering into the Derivative Contract will not adversely affect the income tax treatment of the Trust or any interest in the Trust. All collections, proceeds and other amounts in respect of the Derivative Contracts payable by the Derivative Counterparty shall first be deposited into a reserve fund (“Derivative Contract Reserve Fund”) especially created for such collections, proceeds and other amounts, and thereafter distributed to the Holder of the Class R Certificate on the Distribution Date following receipt and deposit thereof by the Administrator. The Derivative Contract Reserve Fund shall be created, and funded with no less than $1,000, before the Trustee enters into such Derivative Contract. In the event any Derivative Contract is entered into, the Trust shall be deemed to be divided into two separate and discrete sub-trusts. The assets of one such sub-trust shall consist of all the assets of the Trust other than such Derivative Contract and the assets of the other sub-trust shall consist solely of the Derivative Contract and the funds held in the Derivative Contract Reserve Fund.
(b) Any Derivative Contract that imposes any obligation to make a payment to the Derivative Counterparty (other than the obligation to pay any prepaid amount) must (i) impose such obligation solely on the Hol...
Derivative Contracts. 49 ARTICLE V THE CERTIFICATES..........................................................................50 Section 5.01. The Certificates.................................................................50 Section 5.02. Registration of Transfer and Exchange of Certificates............................50 ARTICLE VI THE COMPANY AND THE MASTER SERVICER.......................................................56 ARTICLE VII DEFAULT...................................................................................57
Derivative Contracts. (a) The Trustee shall, at the written direction of the Master Servicer, on behalf of the Trust Fund, enter into Derivative Contracts, solely for the benefit of the Class SB Certificates. Any such Derivative Contract shall constitute a fully prepaid agreement. The Master Servicer shall determine, in its sole discretion, whether any Derivative Contract conforms to the requirements of clauses (b) and (c) of this Section 4.
Derivative Contracts. Neither the Company nor any of its Subsidiaries shall enter into any Hedge Agreement or other financial or commodity derivative contracts except to provide hedge protection for an underlying economic transaction in the ordinary course of business.
Derivative Contracts. Enter into any foreign currency exchange contracts, interest rate swap arrangements or other derivative contracts or transactions, other than such contracts, arrangements or transactions entered into in the ordinary course of business for the purpose of hedging (a) any asset or obligation of the Company or any of its Subsidiaries with respect to their operations outside of the United States, (b) the interest rate exposure of the Company or any of its Subsidiaries, and (c) the purchase requirements of the Company or any of its Subsidiaries with respect to raw materials and inventory.
Derivative Contracts. As of the date hereof Schedule 6.21 sets forth, a true and complete list of all Derivative Contracts of the Loan Parties, the material terms thereof (including the type, term, effective date, termination date and notional amounts or volumes), the net ▇▇▇▇-to-market value thereof, all credit support agreements relating thereto (including any margin required or supplied) and the counterparty to each such agreement.