Liability for Swap Obligations Clause Samples
The "Liability for Swap Obligations" clause defines the responsibility of a party to fulfill financial obligations arising from swap agreements, such as interest rate or currency swaps. It typically clarifies whether a guarantor or other related party is liable for the debts or exposures created by these derivative transactions, and may specify any limitations or exclusions to such liability. This clause is essential for allocating risk between parties and ensuring that all involved understand who is ultimately responsible for swap-related obligations, thereby reducing uncertainty and potential disputes.
Liability for Swap Obligations. No Loan Guarantor hereunder shall be deemed to be a guarantor of any Swap Obligations if such Loan Guarantor is not an “Eligible Contract Participant” as defined in § 1(a)(18) of the Commodity Exchange Act and the applicable rules issued by the Commodity Futures Trading Commission and/or the Securities and Exchange Commission (collectively, and as now or hereafter in effect, “the ECP Rules”) to the extent that the providing of such guaranty by such Loan Guarantor would violate the ECP Rules or any other applicable law or regulation.