OSLA nutshell wikitext

Template:Nutshell Pledge GMSLA 1 Template:Nutshell Pledge GMSLA 2 3 Loans of Securities
3.1 Loans: Subject to the Conditions Precedent below, Lender will lend and Borrower will borrow Securities under this Agreement. The parties will agree the terms of Loans in advance and will confirm them afterwards, though the confirmations will not override the originally agreed terms without further agreement.
3.2 Conditions Precedent: The Lender’s obligations to lend and deliver Securities under a Loan are conditional on:

(a) no Event of Default or potential Event of Default existing in relation to Borrower; and

(b) the Borrower having posted Collateral having a Market Value at least equal to the Required Collateral Value by the time at which Lender is due to deliver the Loaned Securities.

Template:Nutshell Pledge GMSLA 4 5 Collateral
Template:Nutshell Pledge GMSLA 5.1 Template:Nutshell Pledge GMSLA 5.2 Template:Nutshell Pledge GMSLA 5.3 5.4 Instructions relating to the Required Collateral Value and responsibility for the Custodian

5.4(a) By the Notification Time on each Business Day each Party will notify the other Party the Custodian of its determination of the Required Collateral Value.

5.4(b) Borrower will be liable for Custodian’s performance as if it were its own and the Custodian’s actions will be deemed to be those of the Borrower when assessing Events of Default. Lender will not be liable for the Custodian’s performance.

5.4(c) The Lender’s obligation to instruct Custodian to transfer Posted Collateral to Borrower will be deemed satisfied if the Lender validly instructs the Custodian under the Control Agreement. Lender will not be liable for any failure by Custodian to comply with its instructions and nor will such a failure be an Event of Default for Lender.

Template:Nutshell Pledge GMSLA 6 Template:Nutshell Pledge GMSLA 7 8. Delivery of Equivalent Securities
8.1 Lender’s right to terminate a Loan: Unless it is a term Loan, Lender may terminate a Loan and call for Equivalent Securities by giving notice on any Business Day. Lender must allow the Borrower at least the standard settlement cycle to return Equivalent Securities.
8.2 Borrower’s right to terminate a Loan: The Borrower may terminate a Loan at any time and deliver outstanding Equivalent Securities to Lender per its instructions. The Lender must accept such delivery.
8.3 Non-Defaulting Party’s right to terminate all Loans: If any of the circumstances giving rise to the Events of Default in paragraphs 10.1(a) to (j) exist but the actual Event of Default hasn’t been triggered, the Non-Defaulting Party may on any Business Day terminate all Loans by written notice to Defaulting Party whereupon:

(i) each Loan will terminate at the expiry of the standard settlement time following the Non-Defaulting Party's notice and Borrower will deliver Equivalent Securities to Lender for each Loan by that time per the Lender's instruction; and

(ii) the Borrower must immediately pay accrued lending fees due under paragraph 7.

8.4 Delivery of Equivalent Securities on termination of a Loan: When any Loan terminates for any reason under this Agreement, Borrower must deliver Equivalent Securities to Lender in accordance with this Agreement and the Loan.
9. Failure to Deliver
9.1 Borrower’s failure to deliver Equivalent Securities : If Borrower doesn’t deliver Equivalent Securities under paras 8.1 to 8.3 Lender may:

(a) continue the Loan; or

(b) terminate the individual Loan per para 11.2 as if the Borrower was subject to an Event of Default but the Loan were the only outstanding Loan.

Notwithstanding the above, such a failure will not be an Event of Default.
9.3 Failure by either Party to deliver or instruct delivery
Where Borrower fails to deliver Equivalent Securities or Lender fails to instruct Custodian to deliver Posted Collateral when due (such party the Transferor) and the other Party (the Transferee) incurs interest, overdraft expenses or Buy in costs the Transferor must, within one Business Day of a demand, pay the Transferee and hold it harmless against those costs that arise directly from that failure other than (i) costs arising from the Transferee’s negligence or wilful default and (ii) any consequential losses).
10 Events of Default
10.1 Any of the following occurring and continuing in relation to a Party (the Defaulting Party; the other being the Non-Defaulting Party) becomes an Event of Default when the Non-Defaulting Party serves written notice to that effect on the Defaulting Party:

10.1(a) Borrower failure to deliver Collateral: Borrower failing to deliver Collateral under paragraph 5 when required;

10.1(b) Borrower failing to manufacture payments: Borrower failing to manufacture payments under paragraph 6.1 when due and not curing the failure within three Business Days of Lender’s written notice to do so;

10.1(c) Failure to settle mini-closeout: Borrower failing to pay any sum due on mini-closeout under paragraph 9.1(b) or 9.2 when due;

10.1(d) Insolvency: either party suffering an Act of Insolvency;

10.1(e) Breach of warranty: any of the Lender’s warranties in paragraph 13 or the Borrower's in paragraphs 14(a) to 14(h) or in the Security Agreement being materially wrong when made or repeated;

10.1(f) Repudiation: either party stating that it cannot, or will not, perform any obligations under this Agreement, the Security Agreement or any Loan which failure would (upon expiry of grace periods and so on) be an Event of Default;

10.1(g) Regulator intervention: a regulator directs a material part of either party’s assets to be transferred to a trustee or receiver under any legislation;

10.1(h) Suspension of exchange membership: either party being suspended, expelled of declared in default by any Securities exchange or any regulatory authority, because it has failed to meet ratings or capital adequacy requirements;

10.1(i) Breach of Agreement: either party breaching any of its other obligations and not remedying the failure within 30 days after the Non-Defaulting Party requires it to remedy the failure in writing; or

10.1(j) Security Agreement failures: Borrower breaches, repudiates or challenges the validity of the Security Agreement, or it expires or is terminated, or any security interest granted by Borrower under it is not fully effective.

10.2 Each Party must notify the other (in writing) if it suffers an Event of Default or potential Event of Default.
10.3 Subject to paragraphs 9 and 11, neither Party may claim any consequential losses for breach of this Agreement.
11 Consequences of an Event of Default
11.1 If an Event of Default happens to either Party:
11.2 Acceleration: Borrower’s obligations will be accelerated as at the time of the Event of Default (the Termination Date) as follows:

11.2(a) The Non-Defaulting Party will determine the Default Market Value of the Borrower’s delivery and payment obligations under paragraph 11.4 as at the Termination Date.

11.2(b) Using those values, [the Non-Defaulting Party will determine and notify]what each Party owes as at the Termination Date, converting amounts into the Base Currency at the Spot Rate where necessary, and will set those sums off against each other. The Party owing the greater amount must pay the difference on the Business Day after notification.

11.3 The Default Market Value of any Equivalent Securities will be determined under paragraphs 11.4 to 11.6 below, where:

Appropriate Market is the most appropriate market for any securities determined by the Non-Defaulting Party;

Default Valuation Time means the Close of Business in the Appropriate Market on the fifth dealing day after the Event of Default;

Net Value of any securities 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 Transactions and quotes: If, between the Termination Date and the Default Valuation Time:

11.4(a) Actual sale or purchase: as Non-Defaulting Party, the Borrower has sold or the Lender has purchased, fungible Equivalent Securities it may treat as the Default Market Value the net proceeds of any sale (after deducting Transaction Costs) or the total cost of any purchase (including Transaction Costs). Were 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) Market quotes: 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 Where there’s no commercially reasonable value: If, having tried in good faith, the Non-Defaulting Party has not been able to sell nor purchase Securities under paragraph 11.4(a) or obtain quotations under paragraph 11.4(b), or it considers the quotations it did obtain are not commercially reasonable, it may determine the Net Value of the Equivalent Securities and treat that as their Default Market Value.
11.6 If the Non-Defaulting Party has not determined the Default Market Value under 11.4, it will equal the Net Value of the securities in question at the Default Valuation Time. However, if the Non-Defaulting Party determines it is not practicable to calculate a commercially reasonable Net Value at that time, the Default Market Value will be the Net Value it determines as soon as reasonably practicable after the Default Valuation Time.
11.7 Costs and expenses following an Event of Default: The Defaulting Party must pay the Non-Defaulting Party’s reasonable professional expenses in connection with the Event of Default plus interest at the rate agreed by the Parties or, failing that, the overnight LIBOR rate as at 11.00 a.m., London time. Interest will accrue and compound daily.
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. The Non Defaulting Party may estimate any unascertained obligation but must account for any difference once finally ascertained. This paragraph does not create a security interest, or prejudice any other rights either party may have.
12. Taxes
12.1. Withholding, gross up and provision of information: Payments under this Agreement must be made without Tax deduction unless it is required by Applicable Law.
12.2 if the paying Party is required to deduct Tax, it must:

(a) promptly notify the Recipient;

(b) pay the full Tax amount required to the relevant authority;

(c) provide the Recipient with evidence of such payment to such authorities; and

(d) gross up the payment so the Recipient receives what it would have received had the deduction not been required; provided Payer need not gross up any amount if it would not have had to deduct had Recipient provided information required under paragraph 12.3.

12.3 Each Party must upon written demand deliver to the other Party any tax documents and otherwise assist as the other Party reasonably requires to enable it to make payments with as little withholding or deduction as possible (as long as doing so would not materially prejudice its legal or commercial position). Any documents must be accurate, complete, on time and appropriately certified to the receiving Party’s reasonable satisfaction.
12.4 Stamp Tax: Borrower must promptly account for any Stamp Tax chargeable on any transaction effected under this Agreement (that would not be chargeable but for Lender’s failure to comply with its obligations under this Agreement).
12.5 Borrower indemnifies Lender against liabilities it suffers because Borrower failed to comply with paragraph 12.4.
12.6 Sales Tax. All sums payable under this Agreement are exclusive of Sales Taxes and the relevant Party must in each case pay applicable Sales Tax by upon receipt of an suitable invoice.
Template:Nutshell Pledge GMSLA 12.7 13. Lender’s Warranties
Each Party warrants on a continuing basis that when it is a Lender:

(a) it has capacity and authority to perform its obligations;

(b) there are no restrictions on it lending Securities or performing its obligations under this Agreement;

(c) it is able to pass legal and beneficial ownership of Securities lent under this Agreement to Borrower free from encumbrances; and

(d) it is acts as a principal (except under Agency Loans).

Template:Nutshell Pledge GMSLA 14 15. Interest: If either Party fails to make payments when due it must pay interest on the outstanding balance between the original due date and the date of actual payment at the default interest rate set out in paragraph 11.7. Interest will compound and accrue daily on an actual/actual basis. No interest is payable on any day where one Party tries to make a payment the other cannot receive it.
16 Termination of this Agreement
Each Party may terminate this Agreement on 15 Business Days’ written notice specifying the date of termination but the Security Agreement and the Control Agreement remain in place under all Loans are terminated.
17 Single Agreement
The parties enter into this Agreement and each Loan on the assumption that Loans constitute a single business and contractual relationship and are made in consideration of each other and therefore agrees:

(a) that its default under one Loan will be a default under all of them (except where provided otherwise); and

(b) that its performance under any one Loan is in consideration of the other Party’s performance under all Loans.

Template:Nutshell Pledge GMSLA 18 Template:Nutshell Pledge GMSLA 19 Template:Nutshell Pledge GMSLA 20 21. Assignment
Other than its rights to net close out amounts due under 11.2(b) or payment of close-out costs under 11.7 neither Party may charge, assign or deal with any of its rights or obligations without the other Party’s consent.
Template:Nutshell Pledge GMSLA 22 Template:Nutshell Pledge GMSLA 23 Template:Nutshell Pledge GMSLA 24 Template:Nutshell Pledge GMSLA 25 26. Waiver of Immunity
Each Party waives all immunity it might otherwise have in any legal action relating to this Agreement and agrees not to claim such an immunity during any such action.
27 Expenses
Each Party will pay its own expenses (including transfer taxes) relating to this Agreement and the Security Agreement and neither will be liable for the other’s expenses. Borrower will be liable for the Custodian’s expenses relating to the Security Agreement.
Template:Nutshell Pledge GMSLA Schedule Template:Nutshell Pledge GMSLA Agency Annex Template:Nutshell Pledge GMSLA Addendum for Pooled Principal Agency