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2000 Global Master Repurchase Agreement
A Jolly Contrarian owner’s manual™
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Paragraph 16 in a Nutshell™
Use at your own risk, campers!
16. Non assignability; Termination
- (a) No assignment: Neither party may assign, charge or otherwise deal with its rights or obligations under this Agreement without the other party’s prior written consent. This Agreement and any Transactions will bind and confer rights on the parties and their respective successors and assigns.
- (b) Assignment on default: Notwithstanding 16 (a) parties may assign, charge or otherwise deal with their interests in any sum payable to it upon an Event of Default under paragraph 10(c) or 10(f).
- (c) Termination by notice: Either party may terminate this Agreement upon written notice to the other. However, such termination will not affect outstanding Transactions.
- (d) Remedies survive: The parties’ remedies under this Agreement will survive its Termination.
- (e) New EU member states: If any new state joins the European Union after 1 January 1999 that will not alter the terms of this Agreement or any Transaction, nor give rise to any unilateral termination or alteration rights that the parties did not already have.
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Full text of Paragraph 16
16. Non assignability; Termination
(a) Subject to sub paragraph (b) below, neither party may assign, charge or otherwise deal with (including without limitation any dealing with any interest in or the creation of any interest in) its rights or obligations under this Agreement or under any Transaction without the prior written consent of the other party. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns.
(b) Sub paragraph (a) above shall not preclude a party from assigning, charging or otherwise dealing with all or any part of its interest in any sum payable to it under paragraph 10(c) or 10(f) above.
(c) Either party may terminate this Agreement by giving written notice to the other, except that this Agreement shall, notwithstanding such notice, remain applicable to any Transactions then outstanding.
(d) All remedies hereunder shall survive Termination in respect of the relevant Transaction and termination of this Agreement.
(e) The participation of any additional member State of the European Union in economic and monetary union after 1 January 1999 shall not have the effect of altering any term of the Agreement or any Transaction, nor give a party the right unilaterally to alter or terminate the Agreement or any Transaction.
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Related agreements and comparisons
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Related agreements: Click here for the same clause in the 1996 MRA, when we get round to finding out the first thing about it.
Comparison: Knowing and, really, caring very little about other kinds of repo agreement, we have nothing presently to compare the Global Master Repurchase Agreement with.
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Content and comparisons
Template:M comp disc GMRA 16
Summary
Properly into the boilerplate here. Especially fun is the tangle ICMA’s crack drafting squad™ gets itself in about assignment. You can’t — but you can with permission, and you can upon default. We know how gravely securities lawyers regard the idea of unilaterally assigning rights, but really — we wonder what the harm is.[1] For the record, 10(c) is the provision that determines the net amount due on close-out, and 10(f) is the amount the Defaulting Party owes the non-Defaulting Party for its professional legal expenses incurred in closing out. The good news is you can assign these rights away to your heart’s content, the theory supposedly being your counterparty is a twisted smouldering hulk lying in its own wreckage at the bottom of a large crater and not really in a position to do anything about it anyway — the bad news is your counterparty is a twisted smouldering hulk lying in its own wreckage at the bottom of a large crater and not really in a position to pay you these amounts either. Boon and bane, I guess.
Elsewhere we have the termination provision that does not bark in the night-time: Terminating a master agreement under which neither party is, in any case, obliged to do anything (outside the terms of a Transaction) is a fairly pointless right, especially if the Agreement lives on to the extent any Transactions remain afoot, and the default remedies continue to apply should you need them in any case. Look: at least they tried: our friend the dear old ISDA Master Agreement doesn’t have any way of terminating the master agreement at all!
Note also the historical artefact of the “I never said it would” variety — at some point people feared that come the millennium lifts would stop working, planes would fall out of the sky and the EU’s monetary union might wreak all kinds of havoc on the repo market (apparently). We rather think this clause doesn’t get negotiated so much these days.
See also
Template:M sa GMRA 16
References
- ↑ And no, it is not that it might upset netting or set-off.