Common use of Default of the Bank Clause in Contracts

Default of the Bank. (1) Where the Contracting PartyCounterparty has elected omnibus client segregation or individual client segregation or a comparable segregation model, and where the relevant Rules and Regulations provide in this case that some or all of the Contracts entered into by the Bank are to be terminated in the event of a default of the Bank within the meaning of such Rules and Regulations, the Transactions corresponding to the Contracts which have been terminated shall, in deviation from Section 4, terminate simultaneously with such termination of the Contracts and without any declaration of termination. Section 4 paragraph (3) and SectionsSection 5 and 6 shall apply to these Transactions subject to the proviso that separate compensation claims for non-performance are to be determined in relation to each segregation model (to the extent so provided by the Rules and Regulation) on the basis of the valuations of the central counterparty for the Contracts and collateral. These separate compensation claims for non-performance between the Bank and the Contracting PartyCounterparty shall arise simultaneously with the compensation claims for non-performance determined by the central counterparty arising as a consequence of the termination of the Contracts. Where Contracts are terminated in accordance with more than one set of Rules and Regulations, the above provisions of this paragraph shall apply separately in relation to each central counterparty. ▪ Provision governing the default of the Bank: The provision addresses the account segregation and establishes special rules which supersede the general netting provisions under Section 4 to 5, inter alia by establishing − that separate claims-for non-performance will be determined in relation to each segregation model and − that such separate claims are netted against each other however, only where this does not conflict with the client protection measures of the CCP (thereby giving precedence to such CCP client protection measures – which is one further consequence of the principle that the rules and regulations prevail over the framework agreement in case of conflict). ▪ Modifications: New terminology (“claim for non-performances” replacing “compensation claim” reflecting new approach to netting provisions). (2) Separate compensation claims for non-performance determined in accordance with the paragraph (1) shall be netted against each other in accordance with Section 5 paragraph (1) sentence 7 and included into the single compensation claim, as for non-performance determined in accordance with Section 6, as other unperformed obligations. The foregoing sentence 5. Sentence 1 shall not apply where such inclusion would conflict with any protective measures for client positions provided by the Rules and Regulations. ▪ Modifications: New terminology (“claim for non-performances”- see above) and adjustment of cross-references. (3) In order to ensure that Contracts may be transferred to another clearing member, either Party may demand that the other Party take any measures and perform any legal acts required under the Rules and Regulations of the relevant central counterparty. ▪ Provision establishing cooperation obligations in order to support porting of contracts. ▪

Default of the Bank. (1) Where the Contracting PartyCounterparty has elected omnibus client segregation or individual client segregation or a comparable segregation model, and where the relevant Rules and Regulations provide in this case that some or all of the Contracts entered into by the Bank are to be terminated in the event of a default of the Bank within the meaning of such Rules and Regulations, the Transactions corresponding to the Contracts which have been terminated shall, in deviation from Section 4, terminate simultaneously with such termination of the Contracts and without any declaration of termination. Section 4 paragraph (3) and SectionsSection 5 and 6 shall apply to these Transactions subject to the proviso that separate compensation claims for non-performance are to be determined in relation to each segregation model (to the extent so provided by the Rules and Regulation) on the basis of the valuations of the central counterparty for the Contracts and collateral. These separate compensation claims for non-performance between the Bank and the Contracting PartyCounterparty shall arise simultaneously with the compensation claims for non-performance determined by the central counterparty arising as a consequence of the termination of the Contracts. Where Contracts are terminated in accordance with more than one set of Rules and Regulations, the above provisions of this paragraph shall apply separately in relation to each central counterparty. ▪  Provision governing the default of the Bank: The provision addresses the account segregation and establishes special rules which supersede the general netting provisions under Section 4 to 5, inter alia by establishing −  that separate claims-for non-performance will be determined in relation to each segregation model and −  that such separate claims are netted against each other however, only where this does not conflict with the client protection measures of the CCP (thereby giving precedence to such CCP client protection measures – which is one further consequence of the principle that the rules and regulations prevail over the framework agreement in case of conflict). ▪  Modifications: New terminology (“claim for non-performances” replacing “compensation claim” reflecting new approach to netting provisions). (2) Separate compensation claims for non-performance determined in accordance with the paragraph (1) shall be netted against each other in accordance with Section 5 paragraph (1) sentence 7 and included into the single compensation claim, as for non-performance determined in accordance with Section 6, as other unperformed obligations. The foregoing sentence 5. Sentence 1 shall not apply where such inclusion would conflict with any protective measures for client positions provided by the Rules and Regulations. ▪  Modifications: New terminology (“claim for non-performances”- see above) and adjustment of cross-references. (3) In order to ensure that Contracts may be transferred to another clearing member, either Party may demand that the other Party take any measures and perform any legal acts required under the Rules and Regulations of the relevant central counterparty. ▪  Provision establishing cooperation obligations in order to support porting of contracts. ▪