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. (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. 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. 105- ARTICLE V THE CERTIFICATES SECTION 5.01. The Certificate....................................................................-106- SECTION 5.02. Registration of Transfer and Exchange of Certificates..............................-108- SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..................................-112- SECTION 5.04. Persons Deemed Owners..............................................................-112- SECTION 5.05. Certain Available Information......................................................-113- ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER
Derivative Contracts. (a) The Company and each Guarantor shall not, directly or indirectly, enter into or in any manner be liable on any Derivative Contract except:
(i) Derivative Contracts entered into with the purpose and effect of fixing prices on oil or gas expected to be produced by such Person; provided, however, that at all times (i) no such contract shall be for speculative purposes; (ii) as of any date (the “Calculation Date”) no such contract, when aggregated with all Derivative Contracts permitted under this Section 8.10(a)(i), but excluding Derivative Contracts described in clause (v) of this Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable Percentage of the total Projected Oil and Gas Production to be produced in any month from the Proved Developed Producing Reserves reflected in the most recent Reserve Report; (iii) each such contract (excluding Derivative Contracts offered by a national commodity exchange) shall be with the Administrative Agent, or any of the Lenders (or Affiliate of a Lender), the First Lien Credit Agent or any First Lien Lender (or Affiliate of a First Lien Lender), or with a counterparty or have a Guarantor of the obligation of the counterparty which, at the time the contract is made, has long-term obligations rated BBB+ or Baa1 or better, respectively, by S&P or ▇▇▇▇▇’▇; (iv) no such contract requires the Company to put up money, Property, letters of credit or other security against the event of its non-performance prior to actual default by the Company in performing its obligations thereunder, except Liens in favor of the Administrative Agent for the benefit of the Lenders under the Security Documents, or the First Liens; and (v) with respect to Derivative Contracts under which the Company’s or a Guarantor’s only interest is a “put” right or which is a commodity price hedge by means of a price “floor” (A) there exists no deferred obligation to pay the related premium or other purchase price and (B) all such contracts are with Qualifying Derivative Contract Counterparties.
(ii) The Existing Derivative Contracts; provided, however, that no Existing Derivative Contract may be amended, restated, supplemented or otherwise modified or extended without the prior written consent of the Administrative Agent unless such modified Derivative Contract satisfies the requirements set forth in clause (i) or clause (ii) of this Section 8.10(a); or
(iii) Derivative Contracts entered into with the purpose and effect of fixing inter...
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. 40 ARTICLE V THE CERTIFICATES..........................................................................41 Section 5.01 The Certificates.................................................................41 Section 5.02 Registration of Transfer and Exchange of Certificates............................41 Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates................................42 Section 5.04 Persons Deemed Owners............................................................42 Section 5.05 Appointment of Paying Agent......................................................42 Section 5.06 U.S.A. Patriot Act Compliance....................................................42 ARTICLE VI THE COMPANY AND THE MASTER SERVICER.......................................................42 Section 6.01 Respective Liabilities of the Company and Master Servicer........................42 Section 6.02 Merger or Consolidation of the Company or Master Servicer; Assignment of Rights and Delegation of Duties by Master Servicer...............................42 Section 6.03 Limitation on Liability of the Company, Master Servicer and Others...............43 Section 6.04 Company and Master Servicer Not to Resign........................................43