2018 Global Master Securities Lending Agreement (Pledge Version)
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Clause 28 in a Nutshell™
Use at your own risk, campers!
Full text of Clause 28
28.1 This Agreement constitutes the entire agreement and understanding of the Parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.
28.2 The Party (the Relevant Party) who has prepared the text of this Agreement for execution (as indicated in paragraph 9 of the Schedule) warrants and undertakes to the other Party that such text conforms exactly to the text of the standard form Global Master Securities Lending Agreement (Security Interest Over Collateral - 2018 version) posted by the International Securities Lending Association on its website except as notified by the Relevant Party to the other Party in writing prior to the execution of this Agreement.
28.3 Unless otherwise provided for in this Agreement, no amendment in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the Parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.
28.4 The Parties agree that where paragraph 11 of the Schedule indicates that this paragraph applies, each may use the services of a third party vendor to automate the processing of Loans under this Agreement and that any data relating to such Loans received from the other Party may be disclosed to such third party vendors.
28.5 The obligations of the Parties under this Agreement will survive the termination of any Loan.
28.6 The warranties contained in paragraphs 13, 14 and 28.2 will survive termination of this Agreement for so long as any obligations of either of the Parties pursuant to this Agreement remain outstanding.
28.7 Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.
28.8 This Agreement (and each amendment in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999
to enforce any terms of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.
Related agreements and comparisons
Related agreements: Click here for the same clause in the 2010 GMSLA
Comparison: There being no equivalent provision, as Sinead O’Connor once said, nothing to compares 2 u.
Content and comparisons
Largely untouched between the 2010 GMSLA and the 2018 Pledge GMSLA but for the omission of what I call the “supersession” clause: the one that automatically hoovers up all the outstanding stock loans documented under existing, but due-to-be-superseded, stock loan agreements, which is not used in the transition between title transfer and pledge stock loans because there are some fairly fiddly manual re-bookings required for each Loan, given the change in legal theory of the transactions.
Also because, due to the multi-principal nature of the 2018 Pledge GMSLA, and the high likelihood that the agent lenders will not be prepared to move their principals to the pledge format without first obtaining consent — the theory being that moving from outright title transfer to pledge only is not unequivocally in the principal’s best interest, so client’s will like to have the option — the process of moving a given agent lending agreement from title transfer to pledge will happen over months, so the “automatic supercession” language is not really appropriate.
Purists will remark that an agency master agreement entered into on behalf of separate unconnected principals whose liability is several and not joint is, in legal theory, multiple distinct agreements, and each one is transferred only when its principal formally consents, so this succession point is somewhat moot, but look, let’s not get wildly obsessed about this.
A grab-bag of the usual miscellany, paranoia and wrong-headedness that populates the back-end of most commercial contracts these days, with pointless things (like a counterparts clause), logically self-defeating ones (like a warranty in a standard form that the standard form hasn’t been subsequently amended, except where it has been), and positively pernicious ones (like a no oral modification clause, though admittedly the JC is in a minority in seeing these as pernicious).
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