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GMSLA Anatomy™
- (view template)
- 9. Failure to Deliver
9.1 Borrower’s failure to deliver Equivalent Securities: If Borrower fails to deliver Equivalent Securities in accordance with paragraph 8.3 Lender may:
- (a) elect to continue the Loan (which, for the avoidance of doubt, shall continue to be taken into account for the purposes of paragraph 5.4 or 5.5 as applicable); or
- (b) at any time while such failure continues, by written notice to Borrower declare that that Loan (but only that Loan) shall be terminated immediately in accordance with paragraph 11.2 as if:
- (i) an Event of Default had occurred in relation to the Borrower,
- (ii) references to the Termination Date were to the date on which notice was given under this sub paragraph, and
- (iii) the Loan were the only Loan outstanding.
- For the avoidance of doubt, any such failure shall not constitute an Event of Default (including under paragraph 10.1(i)) unless the Parties otherwise agree.
9.2 Lender’s failure to deliver Equivalent Collateral: If Lender fails to deliver Equivalent Collateral comprising Non Cash Collateral in accordance with paragraph 8.4 or 8.5, Borrower may:
- (a) elect to continue the Loan (which, for the avoidance of doubt, shall continue to be taken into account for the purposes of paragraph 5.4 or 5.5 as applicable); or
- (b) at any time while such failure continues, by written notice to Lender declare that that Loan (but only that Loan) shall be terminated immediately in accordance with paragraph 11.2 as if
- (i) an Event of Default had occurred in relation to the Lender,
- (ii) references to the Termination Date were to the date on which notice was given under this sub paragraph, and
- (iii) the Loan were the only Loan outstanding.
For the avoidance of doubt, any such failure shall not constitute an Event of Default (including under paragraph 10.1(i)) unless the Parties otherwise agree.
9.3 Failure by either Party to deliver: Where a Party (the Transferor) fails to deliver Equivalent Securities or Equivalent Collateral by the time required under this Agreement or within such other period as may be agreed between the Transferor and the other Party (the Transferee) and the Transferee:
- (a) incurs interest, overdraft or similar costs and expenses; or
- (b) incurs costs and expenses as a direct result of a Buy in exercised against it by a third party,
then the Transferor agrees to pay within one Business Day of a demand from the Transferee and hold harmless the Transferee with respect to all reasonable costs and expenses listed in sub paragraphs (a) and (b) above properly incurred which arise directly from such failure other than (i) such costs and expenses which arise from the negligence or wilful default of the Transferee and (ii) any indirect or consequential losses.
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9. Failure to Deliver
- 9.1 Borrower’s failure to deliver Equivalent Securities
- 9.2 Lender’s failure to deliver Equivalent Collateral
- 9.3 Failure by either Party to deliver
This is the fabled mini close-out provision of the 2010 GMSLA.