Template:Nutshell Pledge GMSLA 11: Difference between revisions
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Amwelladmin (talk | contribs) (Created page with "{{pgmslaprov|11}} '''{{pgmslaprov|Consequences of an Event of Default}}''' <br> {{pgmslaprov|11.1}} If an {{pgmslaprov|Event of Default}} occurs to either Party: <br> {{pgmsla...") |
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:{{pgmslaprov|11.2(a)}} The {{pgmslaprov|Non-Defaulting Party}} will determine the {{pgmslaprov|Default Market Value}} of the {{pgmslaprov|Borrower}}’s delivery and payment obligations as at the {{pgmslaprov|Termination Date}} as set out in paragraph {{pgmslaprov|11.4}}. | :{{pgmslaprov|11.2(a)}} The {{pgmslaprov|Non-Defaulting Party}} will determine the {{pgmslaprov|Default Market Value}} of the {{pgmslaprov|Borrower}}’s delivery and payment obligations as at the {{pgmslaprov|Termination Date}} as set out in paragraph {{pgmslaprov|11.4}}. | ||
:{{pgmslaprov|11.2(b)}} Using those {{pgmslaprov|Default Market Value}}, [the {{pgmslaprov|Non-Defaulting Party}} will determine ''and notify'']<ref>Well, we ''assume'' it will be the [[Non-Defaulting Party - Pledge GMSLA Provision|NDP]]: the {{pgmsla}} rather brilliantly puts it into an unattributed [[passive]], as if God is going to to it, or it will magically happen by itself. Go, {{islacds}}.</ref>what each Party owes under this Agreement as at the {{pgmslaprov|Termination Date}}, converting amounts into the {{pgmslaprov|Base Currency}} where necessary, will set those sums off against each other and Party owing the greater amount must pay the balance on the {{pgmslaprov|Business Day}} after notification. | :{{pgmslaprov|11.2(b)}} Using those {{pgmslaprov|Default Market Value}}, [the {{pgmslaprov|Non-Defaulting Party}} will determine ''and notify'']<ref>Well, we ''assume'' it will be the [[Non-Defaulting Party - Pledge GMSLA Provision|NDP]]: the {{pgmsla}} rather brilliantly puts it into an unattributed [[passive]], as if God is going to to it, or it will magically happen by itself. Go, {{islacds}}.</ref>what each Party owes under this Agreement as at the {{pgmslaprov|Termination Date}}, converting amounts into the {{pgmslaprov|Base Currency}} where necessary, will set those sums off against each other and Party owing the greater amount must pay the balance on the {{pgmslaprov|Business Day}} after notification. | ||
{{pgmslaprov|11.3}} The {{pgmslaprov|Non-Defaulting Party}} will determine the '''{{pgmslaprov|Default Market Value}}''' of any {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} according to paragraphs {{pgmslaprov|11.4}} to {{pgmslaprov|11.6}}, where the '''{{pgmslaprov|Appropriate Market}}''' is the most appropriate market for {{pgmslaprov|Securities}} of that description, as determined by the {{pgmslaprov|Non-Defaulting Party}}, the '''{{pgmslaprov|Default Valuation Time}}''' means the {{pgmslaprov|Close of Business}} in the {{pgmslaprov|Appropriate Market}} on the fifth dealing day after the {{pgmslaprov|Termination Date}}, '''{{pgmslaprov|Net Value}}''' means the {{pgmslaprov|Non-Defaulting Party}}’s reasonable opinion of their fair {{pgmslaprov|Market Value}} less (where {{pgmslaprov|Lender}} is the {{pgmslaprov|Defaulting Party}}) or plus (where {{pgmslaprov|Borrower}} is the {{pgmslaprov|Defaulting Party}}), all reasonable costs of any transaction needed under paragraph {{pgmslaprov|11.4}} or {{pgmslaprov|11.5}} ('''{{pgmslaprov|Transaction Costs}}'''). | {{pgmslaprov|11.3}} The {{pgmslaprov|Non-Defaulting Party}} will determine the '''{{pgmslaprov|Default Market Value}}''' of any {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} according to paragraphs {{pgmslaprov|11.4}} to {{pgmslaprov|11.6}}, where the '''{{pgmslaprov|Appropriate Market}}''' is the most appropriate market for {{pgmslaprov|Securities}} of that description, as determined by the {{pgmslaprov|Non-Defaulting Party}}, the '''{{pgmslaprov|Default Valuation Time}}''' means the {{pgmslaprov|Close of Business}} in the {{pgmslaprov|Appropriate Market}} on the fifth dealing day after the {{pgmslaprov|Termination Date}}, '''{{pgmslaprov|Net Value}}''' means the {{pgmslaprov|Non-Defaulting Party}}’s reasonable opinion of their fair {{pgmslaprov|Market Value}} less (where {{pgmslaprov|Lender}} is the {{pgmslaprov|Defaulting Party}}) or plus (where {{pgmslaprov|Borrower}} is the {{pgmslaprov|Defaulting Party}}), all reasonable costs of any transaction needed under paragraph {{pgmslaprov|11.4}} or {{pgmslaprov|11.5}} ('''{{pgmslaprov|Transaction Costs}}''').<br> | ||
{{pgmslaprov|11.4}} If, between the {{pgmslaprov|Termination Date}} and the {{pgmslaprov|Default Valuation Time | {{pgmslaprov|11.4}} If, between the {{pgmslaprov|Termination Date}} and the {{pgmslaprov|Default Valuation Time}}: | ||
:{{pgmslaprov|11.4(a)}} {{pgmslaprov| | :{{pgmslaprov|11.4(a)}} as {{pgmslaprov|Non-Defaulting Party}}, the {{pgmslaprov|Borrower}} has sold or the {{pgmslaprov|Lender}} has purchased, [[fungible]] {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} it may treat as the {{pgmslaprov|Default Market Value}}: | ||
::{{pgmslaprov|11.4(a)(i)}} in the case of | ::{{pgmslaprov|11.4(a)(i)}} in the case of a sale, the net proceeds of sale after deducting all {{pgmslaprov|Transaction Costs}}; | ||
::{{pgmslaprov|11.4(a)(ii)}} in the case of a purchase, the aggregate cost of such purchase, including {{pgmslaprov|Transaction Costs}}; | |||
:provided that, where the {{pgmslaprov|Securities}} sold or purchased are not in identical in amount to the {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}}, {{pgmslaprov|Non-Defaulting Party}} may [[in good faith]] pro rate those values to determine the necessary {{pgmslaprov|Default Market Value}}. | |||
:{{pgmslaprov|11.4(b)}} the {{pgmslaprov|Non-Defaulting Party}} has received [[bid]]s (where it is {{pgmslaprov|Borrower}}) or [[offer]]s (where it is {{pgmslaprov|Lender}}) for [[fungible]] {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} from at least two regular participants in the {{pgmslaprov|Appropriate Market}} in what it determines to be a commercially reasonable size, it may treat as the {{pgmslaprov|Default Market Value}} the arithmetic mean of the quoted prices as reasonably adjusted to account for for accrued but unpaid interest and {{pgmslaprov|Transaction Costs}}. | |||
{{pgmslaprov|11.5}} If, having tried in [[good faith]], the {{pgmslaprov|Non-Defaulting Party}} has managed neither to sell or purchase {{pgmslaprov|Securities}} under paragraph {{pgmslaprov|11.4(a)}}, nor obtain quotations under paragraph {{pgmslaprov|11.4(b)}}, or it has determined it would not be commercially reasonable to trade the {{pgmslaprov|Securities}} at the prices quoted under paragraph 11.4(b) above, the {{pgmslaprov|Non-Defaulting Party}} may determine the {{pgmslaprov|Net Value}} of the {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} treat that {{pgmslaprov|Net Value}} as their {{pgmslaprov|Default Market Value}}. | |||
{{pgmslaprov|11.6}} If the {{pgmslaprov|Non-Defaulting Party}} has not determined the {{pgmslaprov|Default Market Value}} under paragraph {{pgmslaprov|11.4}}, it will equal the {{pgmslaprov|Net Value}} of the {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} at the {{pgmslaprov|Default Valuation Time}} unless the {{pgmslaprov|Non-Defaulting Party}} it is not commercially reasonable to determine such {{pgmslaprov|Net Value}} at that time, in which case it will equal the {{pgmslaprov|Net Value}} that the {{pgmslaprov|Non-Defaulting Party}} determines as soon as reasonably practicable after the {{pgmslaprov|Default Valuation Time}}. <br> | |||
{{pgmslaprov|11.7}} '''{{pgmslaprov|Other costs, expenses and interest payable in consequence of an Event of Default}}''': The {{pgmslaprov|Defaulting Party}} must pay the {{pgmslaprov|Non-Defaulting Party}} all its reasonable professional expenses in connection with the {{pgmslaprov|Event of Default}} with interest at the rate specified in paragraph 10 of the Schedule or, if not specified, the overnight [[LIBOR]] rate as at 11.00 a.m., London time. Interest will accrue daily on a compound basis. <br> | |||
{{pgmslaprov|11.8}} '''{{pgmslaprov|Set-off}}''': The {{pgmslaprov|Non-Defaulting Party}} may [[set off]] any amount due under paragraph {{pgmslaprov|11.2(b)}} against any amount payable the other way under any other agreement between the Parties and for that purpose may in [[good faith]] estimate any unascertained obligations but must account for any difference when the obligation is finally ascertained. This paragraph does not create a [[security interest]] and operates in addition to and without affecting any other right of [[set-off]], [[combination of accounts]], [[lien]] or other right to which any {{pgmslaprov|Party}} may be entitled. <br> | |||
Revision as of 17:45, 23 June 2020
11 Consequences of an Event of Default
11.1 If an Event of Default occurs to either Party:
11.2 Borrower’s obligations under the Agreement will be accelerated so as to require immediate performance at the time of the Event of Default (the Termination Date). Performance will happen as follows.
- 11.2(a) The Non-Defaulting Party will determine the Default Market Value of the Borrower’s delivery and payment obligations as at the Termination Date as set out in paragraph 11.4.
- 11.2(b) Using those Default Market Value, [the Non-Defaulting Party will determine and notify][1]what each Party owes under this Agreement as at the Termination Date, converting amounts into the Base Currency where necessary, will set those sums off against each other and Party owing the greater amount must pay the balance on the Business Day after notification.
11.3 The Non-Defaulting Party will determine the Default Market Value of any Equivalent Securities according to paragraphs 11.4 to 11.6, where the Appropriate Market is the most appropriate market for Securities of that description, as determined by the Non-Defaulting Party, the Default Valuation Time means the Close of Business in the Appropriate Market on the fifth dealing day after the Termination Date, Net Value means the Non-Defaulting Party’s reasonable opinion of their fair Market Value less (where Lender is the Defaulting Party) or plus (where Borrower is the Defaulting Party), all reasonable costs of any transaction needed under paragraph 11.4 or 11.5 (Transaction Costs).
11.4 If, between the Termination Date and the Default Valuation Time:
- 11.4(a) as Non-Defaulting Party, the Borrower has sold or the Lender has purchased, fungible Equivalent Securities it may treat as the Default Market Value:
- 11.4(a)(i) in the case of a sale, the net proceeds of sale after deducting all Transaction Costs;
- 11.4(a)(ii) in the case of a purchase, the aggregate cost of such purchase, including Transaction Costs;
- provided that, where the Securities sold or purchased are not in identical in amount to the Equivalent Securities, Non-Defaulting Party may in good faith pro rate those values to determine the necessary Default Market Value.
- 11.4(b) the Non-Defaulting Party has received bids (where it is Borrower) or offers (where it is Lender) for fungible Equivalent Securities from at least two regular participants in the Appropriate Market in what it determines to be a commercially reasonable size, it may treat as the Default Market Value the arithmetic mean of the quoted prices as reasonably adjusted to account for for accrued but unpaid interest and Transaction Costs.
11.5 If, having tried in good faith, the Non-Defaulting Party has managed neither to sell or purchase Securities under paragraph 11.4(a), nor obtain quotations under paragraph 11.4(b), or it has determined it would not be commercially reasonable to trade the Securities at the prices quoted under paragraph 11.4(b) above, the Non-Defaulting Party may determine the Net Value of the Equivalent Securities treat that Net Value as their Default Market Value.
11.6 If the Non-Defaulting Party has not determined the Default Market Value under paragraph 11.4, it will equal the Net Value of the Equivalent Securities at the Default Valuation Time unless the Non-Defaulting Party it is not commercially reasonable to determine such Net Value at that time, in which case it will equal the Net Value that the Non-Defaulting Party determines as soon as reasonably practicable after the Default Valuation Time.
11.7 Other costs, expenses and interest payable in consequence of an Event of Default: The Defaulting Party must pay the Non-Defaulting Party all its reasonable professional expenses in connection with the Event of Default with interest at the rate specified in paragraph 10 of the Schedule or, if not specified, the overnight LIBOR rate as at 11.00 a.m., London time. Interest will accrue daily on a compound basis.
11.8 Set-off: The Non-Defaulting Party may set off any amount due under paragraph 11.2(b) against any amount payable the other way under any other agreement between the Parties and for that purpose may in good faith estimate any unascertained obligations but must account for any difference when the obligation is finally ascertained. This paragraph does not create a security interest and operates in addition to and without affecting any other right of set-off, combination of accounts, lien or other right to which any Party may be entitled.
- ↑ Well, we assume it will be the NDP: the 2018 Pledge GMSLA rather brilliantly puts it into an unattributed passive, as if God is going to to it, or it will magically happen by itself. Go, ISLA’s crack drafting squad™.