Termination of course of dealings by notice - OSLA Provision
1995 Overseas Securities Lender’s Agreement
Clause 15 in a Nutshell™ Use at your own risk, campers!
Full text of Clause 15
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The equivalent of this clause in the 2010 GMSLA is Clause 16:
By way of further comparison, the ISDA Master Agreement doesn’t have a general termination right of this sort at all. You can only terminate Transactions, not the master agreement construct which sits around them itself. It is an immortal husk. This is to do with paranoid fears about the efficacy of the ISDA’s sainted close-out netting terms — meh; maybe — but I like to think it has unleashed on the world an army of wight-walker zombie ISDAs, doomed to roam the earth until the day of judgment, apropos nothing but there, undead, and ready to animate and rally to the banner of Sauron, Beelzebub, Lehman Brothers etc., should they be reincarnated, to rain apocalyptic hell on the armies of men.
Summary
What on earth, you might muse, is a “course of dealing”? According to BusinessDictionary.com, it is “a pattern of normal business conduct between two parties. It is established over a period involving several transactions, and may be used as a reliable indicator of how they intend to deal in the future.”
In any weather, it adds nothing but heft to this clause. This is a standard termination on notice clause for the 1995 OSLA itself, but doesn’t cut across the terms — and in particular, any stipulated term for any loan, which will be set out in a Borrowing Request[1] They made a much better fist of it in the GMSLA.
So before you can use this clause, you must validly terminate each loan under the terms of its Borrowing Request.
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- ↑ Curiously, the OSLA doesn’t define a “loan” as such, but rather refers to the terms, accepted by the Lender, of a Borrowing Request. This is counting-sheep-legs-and-dividing-by-four behaviour, calculated to discombobulate non-specialists and keep them away.