Pledge GMSLA nutshell wikitext

1. Applicability
1.1 The Parties may enter into Loans through their Designated Offices where one (Lender) transfers securities and financial instruments (Securities) to the other (Borrower) against the transfer by the other of Collateral, with a simultaneous agreement by the Borrower to transfer Equivalent Securities back to Lender at a future date against the return of Equivalent Collateral.
1.2 Each Loan will be governed by this Agreement (and the Schedule, Addenda and Annexes). If there is any inconsistency between an Addendum or Annex and this Agreement, the former will prevail unless otherwise agreed.
2. Interpretation
2.1. In this agreement:
Act of Insolvency means for either Party:

(a) a general assignment for the benefit of, or entering into a reorganisation, arrangement, or composition with creditors; or

(b) its admission it is unable to pay its debts when due; or

(c) an administrator is appointed over a material part of its business (or it seeks one); or

(d) a bankruptcy petition is filed on it (other than in by reference to Agreement) and is not stayed or dismissed within 30 days; or

(e) its creditors meet to consider a voluntary arrangement between them;

Agency Annex means the Annex to this Agreement under which a Lender to act as an agent lender for Loans;
Alternative Collateral means Collateral with a Market Value equal to delivered Collateral provided by way of substitution under paragraph 5.3;
Applicable Law means all relevant laws, rules, regulations, taxes, practice notes and rulings published in connection with them;
Automatic Early Termination is defined in paragraph 10.1(d);
Base Currency is specified in paragraph 2 of the Schedule;
Business Day means a weekday on which banks and markets are generally open:

(a) For Delivery: where the Securities, Collateral and their Equivalents are to be delivered;

(b) For payments: in the principal financial centre for the relevant currency and where any relevant account designated in the Agreement is situated (or for euro, a day when TARGET operates);

(c) For notices: where the notice is due to be delivered (per Schedule paragraph 3); and

(d) Any other case: in each place stated in Schedule paragraph 6;

Buy-In means an agreement where a transferee who buys in equivalent securities to cover a settlement failure can recover its costs of doing so from a failing transferor;
Cash Collateral means, you know, Collateral in cash;
Close of Business for any business centre is the time of day when banks and settlement systems close;
Collateral means the financial instruments and cash meeting eligibility criteria in paragraph 1 of the Schedule which Borrower has delivered to Lender to collateralise any Loan, as replaced by Alternative Collateral;
Defaulting Party is defined in paragraph 10;
Delivery and deliver means to credit Securities, Collateral or Equivalents to the transferee’s account or as it directs;
Designated Office means the office of a Party specified in paragraph 6 of the Schedule;
Equivalent: securities that are fungible with the securities in question, as long as:

(a) Where the securities are partly paid or have been converted, subdivided, consolidated, made the subject of a takeover, rights of pre-emption, or include rights to receive securities, it includes securities a holder would be entitled after that event (having complied with all formalities) and provided that the party being paid the equivalent amount has given notice and paid the all sums required in time for the holder to exercise its rights.

(b) Where the securities:

(i) have been redeemed, it means the redemption proceeds;

(ii) are subject to a call, it means fungible securities, provided that receiving party thas paid the holder the amounts due in respect of the call;

(iii) are subject to a capitalisation issue, it includes securities allotted by way of bonus on the securities in question;

(iv) are subject to any similar event, it means those securities with (or replaced by) the cash and securities received by the holder in connection with the event.

Income means interest, dividends and similar distributions made under any Securities or Collateral;
Income Record Date means the date by reference to which holders of Securities or Collateral become entitled to Income;
Letter of Credit means an irrevocable, non-negotiable bank letter of credit acceptable to Lender;
Loaned Securities means Securities that are presently out on Loan;
Margin is defined in paragraph 1 of the Schedule.
Market Value means:
(a) Securities: For Securities the mid price market quotation at Close of Business on the previous Business Day

(i) published on a reputable information service chosen by the Lender; or failing that

(ii) derived from a mid price from a dealer chosen by the Lender

(unless either party thinks there’s been an unusual market movement since then, in which case the latest available price) plus:

(iii) accrued Income if not included in the quote.

Where the assets in question are not trading freely the Parties may agree their Market Value. Failing that, they can ask an mutually acceptable dealer to quote. If they can’t agree on one of those, they can seek an average of Reference Dealer quotations (with a laborious mechanism for figuring our what to include and how to average it). If all else fails the Market Value giving up altogether and falling back on the reasonable determination of the Party originally making the determination).
(b) Letters of credit: for any Letter of Credit, its face value.
(c) Cash: for Cash its face value.
Nominee means an agent a Party appoints to hold its Securities or Collateral or to handle its payments;
Non Cash Collateral means Collateral that isn't cash;
Non-Defaulting Party is defined in Paragraph 10;
Notification Time is defined in Paragraph 1.5 of the Schedule;
Parties (and Party) means Lender and Borrower; Posted Collateral is defined in Paragraph 5.4;
Reference Dealers means four leading dealers in the relevant market chosen by the person determining an Market Value.
Required Collateral Value is defined in Paragraph 5.4;
Sales Tax means any VAT, sales tax or similar Tax;
Settlement Date is the date on which Securities are due to be transferred to Borrower;
Stamp Tax is any stamp, transfer, registration or similar Tax;
Tax means any kind of tax imposed by any taxing authority on any transaction or payment under this Agreement.
2.2 Headings
Headings do not count when interpreting this Agreement.
2.3 Market terminology
Even though we say “borrow”, “lend”, “Collateral”, “Margin” etc. as participants do in the market, Securities “borrowed” or “lent” and “Collateral” provided under this Agreement pass by outright title transfer.
2.4 Currency conversions: Subject to paragraph 11, values stated in other currencies other must be converted into the Base Currency at the spot rate obtained by Lender (or if it is subject to an Event of Default, the Borrower) on the relevant day (or, if it isn’t a Business Day, at the Close of Business on the previous Business Day on which a quotation was available).
2.5 The substitution of the lawful currency in a country will not alter the parties’ obligations under the Agreement or any Loan. Securities will be regarded as equivalent to other securities notwithstanding their redenomination into the new currency or their nominal value changing as a result.
2.6 Modifications etc. to legislation
Any reference in this Agreement to legislation or regulation is to the relevant instrument as updated and in force for the time being.
3. Loans of Securities
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.
4. Delivery
4.1 Delivery of Securities on commencement of Loan
Lender must Deliver Securities to Borrower as required by the terms of the relevant Loan.
4.2 Requirements to effect Delivery
The Parties do whatever is needed to ensure that all interests in:

(a) any Securities borrowed under paragraph 3;

(b) any Equivalent Securities delivered under paragraph 8;

(c) any Collateral delivered under paragraph 5;

(d) any Equivalent Collateral delivered under paragraphs 5 or 8;

passes as required by this Agreement with full title guarantee, free from all encumbrances. For dematerialised Securities, Collateral delivery and transfer of title will take place under the prevailing rules of the relevant settlement system. The Party acquiring such interests does not have to return the actual assets it recceives but must, subject to the terms of this Agreement, to deliver Equivalent assets as appropriate.
4.3 Deliveries to be simultaneous unless otherwise agreed
Even where a Party is entitled to require simultaneous Payment or Delivery under paragraph 8.6 (Delivery obligations to be reciprocal) it may waive that right in light of prevailing circumstances. Such a waiver will not affect any other Delivery or Payment.
4.4 Deliveries of Income
Where a party receives Income on any Loaned Securities or Collateral, it must provide to the other Party any customary endorsements or assignments needed to effect payment or delivery of Equivalent Income in accordance with paragraph 6, whether or not it received such endorsements or assignments under the Loaned Securities or Collateral.
5. Collateral
5.1 Delivery of Collateral on commencement of Loan
Borrower must deliver Collateral to Lender simultaneously with Delivery of the Securities to which the Loan relates, by Close of Business on the Settlement Date.
5.2 Deliveries through securities settlement systems generating automatic payments
Where any Securities or Collateral securities are transferred through a settlement system that automatically generates return payments and deliveries against transfer any such automatically generated payment will satisfy the transferee’s corresponding obligation under this Agreement. [NB there are a lot of words we have just ignored here: treat with caution].
5.3 Substitutions of Collateral
Borrower may substitute any Collateral it has posted with Alternative Collateral that is acceptable to Lender long as it delivers the Alternative Collateral first, and otherwise meets the Required Collateral Value requirement at all times.
5.4 Required Collateral Value (aggregated Loans): Unless Single Loan margining under 5.5 applies:

(a) Required Collateral Value: The aggregate Market Value of Collateral delivered to Lender (Posted Collateral) for all outstanding Loans must equal the aggregate Market Value of the Loaned Securities plus the Margin (Required Collateral Value).

(b) Excess Collateral: if the aggregate Market Value of the Posted Collateral (plus unpaid income etc) exceeds the aggregate of the Required Collateral Value the Lender must deliver to Borrower enough Equivalent Collateral to eliminate the excess;

(c) Collateral Deficiency: if the aggregate Market Value of the Posted Collateral (plus unpaid income etc) falls below the aggregate Required Collateral Value the Borrower must provide further Collateral to Lender to eliminate the deficiency.

(d) Shorts and Longs: where a Party acts as both Lender and Borrower, paragraphs 5.4(b) and 5.4(c) apply separately to Loans where it is a Lender and Loans where it is a Borrower.

5.5 Required Collateral Value (Single Loans): Where 5.5 applies, the Posted Collateral on any Loan must bear the same proportion to the Market Value of the Loaned Securities as it bore at the beginning of the Loan. Therefore:

(a) Required Collateral Value: the Market Value of the Posted Collateral (including income etc.) must always equal the Required Collateral Value;

(b) Returns: whenever the Market Value of the Posted Collateral for any Loan exceeds the Required Collateral Value Lender must return enough Equivalent Collateral to Borrower to eliminate the excess; and

(c) Further deliveries: whenever the Market Value of the Posted Collateral falls below the Required Collateral Value Borrower must provide further Collateral to Lender on demand to eliminate the deficiency.

5.6: Where Collateral values are aggregated under paragraph 5.4 and, on any day, both Parties would otherwise have to deliver Collateral to each other, the respective Market Values will be set-off and, in full settlement of both parties’ obligations, the Party having the larger delivery obligation must deliver Collateral having a Market Value equal to the difference. 5.7 Where Equivalent Collateral is delivered and the Parties have not agreed otherwise it will be attributed to the earliest outstanding Loan up to the point at which the Market Value of Collateral for that Loan equals its Required Collateral Value, and then to the next earliest outstanding Loan and so on.
5.8. Timing of returns and further deliveries of Collateral: Where any Equivalent Collateral must be returned or further Collateral provided and demand is received by the Notification Time specified in paragraph Schedule 1.5 then it must be made by Close of Business on the Business Day of the demand. If received after the Notification Time, it must be made by Close of Business on the following Business Day.
5.9 Substitutions and extensions of Letters of Credit

(a) Substitution right: Lender may by notice to Borrower require Borrower to substitute other eligible Collateral for any Letter of Credit it has provided by way of Collateral on the third Business Day after that notice.

(b) Extension/replacement: Borrower must extend or replace any Letter of Credit it has provided by way of Collateral by 10.30 a.m. UK time on the second Business Day before such Letter of Credit expires.

6. Distributions and Corporate Actions
6.1 In this paragraph, Income recevied on any Loaned Securities or Non Cash Collateral means the amount received after any withholdings or deductions of Tax.
6.2 Where a Loan extends over an Income Record Date, on the distribution date the Borrower must manufacture the Income the Lender would have received had it held the Loaned Securities on the Income Record Date.
6.3 Manufactured payments in respect of Non-Cash Collateral
Where Borrower provides the Lender with Non Cash Collateral over an Income Record Date Lender must, on the date the Income is paid, manufacture an equivalent amount of Income to Borrower that Lender would have received on that Non Cash Collateral had it held it on the Income Record Date and not been entitled to any Tax relief on that payment under Applicable Law.
Template:Nutshell GMSLA 6.4 Template:Nutshell GMSLA 6.5 6.6 Exercise of voting rights
If any voting rights arise under any Loaned Securities or Collateral, the party holding the asset in question is not required to vote it at the direction of the party that originally delivered it.
6.7 Corporate actions
Where a holder is entitled to exercise any “corporate rights” under any Loaned Securities or any Collateral (“assets”) before the receiver can return equivalent ones to the provider, then the provider can, within a reasonable time before the relevant deadline, notify the receiver that it wishes to receive the assets as if the corporate rights been exercised.

“Corporate rights” include any:
(i) conversion, sub-division, consolidation or pre-emption rights;
(ii) rights arising under a takeover offer;
(iii) rights to receive securities now or in the future; or
(iv) other rights, including ones that require the holder to make an election.
7. Rates applicable to Loaned Securities and Cash Collateral
7.1 Rates in respect of Loaned Securities: Borrower must pay to Lender, a sum determined by multiplying the agreed rate to the daily Market Value of the Loaned Securities.
7.2. Rates in respect of Cash Collateral: Where Lender holds Cash Collateral for any Loan, it must pay to Borrower, sum determined by multiplying the agreed rate to the amount of such Cash Collateral. The parties may set off amounts due under paragraphs 7.1 and 7.2.
7.3 Payment of rates: Payment amounts due under this paragraph accrue daily from (and including) the Settlement Date to (but excluding) of the Business Day on which Equivalent Securities are delivered or Cash Collateral is repaid. Accrued sums for each calendar month are payable in arrears by the tenth Business Day after the end of that calendar month.
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 Delivery of Equivalent Securities on termination of a Loan: On termination of the Loan, Borrower will Deliver Equivalent Securities to Lender in accordance with the terms of the Loan.
8.4 Delivery of Equivalent Collateral on termination of a Loan: At the point where Borrower is obliged to deliver Equivalent Securities to Lender on termination of a Loan, Lender must simultaneously deliver to Borrower Equivalent Collateral orCash Collateral relating to the Loan.
8.5 Delivery of Letters of Credit: Where Collateral takes the form of a Letter of Credit, the Lender can satisfy its obligation to redeliver Equivalent Collateral by delivering the Letter of Credit for cancellation, or consenting to a reduction in its value.
8.6 Delivery obligations to be reciprocal: Neither Party has to pay or deliver anything unless it is satisfied that the other Party will make the corresponding payment or delivery to it. If it is not, as long as it is willing and able to perform its own obligations it may, by notice to the other Party, withhold delivery or payment until the other Party has made sufficient arrangements to assure full delivery or payment.
9. Failure to Deliver
9.1 Borrower’s failure to deliver Equivalent Securities : If Borrower doesn’t deliver Equivalent Securities under para 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.
9.2 Lender’s failure to deliver Equivalent Collateral: If Lender fails to deliver Equivalent Non Cash Collateral on termination of a Loan (See 8.4), Borrower may:

9.2(a) continue the Loan; or

9.2(b) terminate the Loan under paragraph 11.2 by written notice to Lender, as if:

(i) an Event of Default had occurred to the Lender;

(ii) the Termination Date were the date of such written notice, and

(iii) the Loan were the only Loan outstanding.

However this will not be an Event of Default.
9.3 Failure by either Party to deliver
Where a Party (the Transferor) fails to deliver Equivalent Securities or Collateral when due 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 The following events happening to a Party (the Defaulting Party) will be an Event of Default but (barring Automatic Early Termination) only once the Non Defaulting Party has notified the Defaulting Party:

10.1(a) Failure to Deliver: The failure, when required under Paragraph 5, of:

(i) either party to pay or repay Cash Collateral; or

(ii) the Borrower to deliver any other Collateral to the Lender;

10.1(b) Unremedied failure to manufacture Income: Lender or Borrower fails to manufacture Income on Loaned Securities or Collateral when due and has not remedied that failure within three Business Days of notice from the Non Defaulting Party requiring remediation;

10.1(c) Mini-Closeout failure: Either party failing to pay any sum when due following a mini-closeout (that is, under paragraphs 9.1(b) or 9.2(b) or 9.3;

10.1(d) Act of Insolvency: An Act of Insolvency occurring to Lender or Borrower. If Automatic Early Termination applies, if anyone presents a winding up petition or appoints a liquidator, it will be an Automatic Early Termination and the Non Defaulting Party need not serve written notice.

10.1(e) Breach of warranty: any Lender’s Warranty, or any of the Borrower’s Warranties except the ast one (14(e), about voting on Borrowed Securities) is materially incorrect when made or “deemed”;

10.1(f) Repudiation: Either party admitting that it cannot or will not perform any of its obligations hereunder where, upon completion of formalities, that non-performance would be an Event of Default;

10.1(g) Seizure of assets: a material part of its assets are ordered to be transferred to a trustee by a regulatory authority under any legislation.

10.1(h) Regulatory default: It is declared in default by the appropriate authority or is suspended or expelled from any securities exchange or other self-regulatory organisation, or is suspended from securities dealing by any government agency, for not meeting any requirements relating to financial resources or credit rating;

10(i) Other unremedied breach of agreement: Either party defaults on any of its other obligations under this Agreement and does not remedy them within 30 days of the Non Defaulting Party’s written notice requiring remedy.

10.2 Each Party must formally notify the other it if suffers any Event of Default or potential Event of Default.
10.3 There are no remedies for any Event of Default other than those set out in this Agreement. 10.4 Subject to the Failure to Deliver and Consequences of an Event of Default clauses, neither Party may claim consequential losses if the other Party breaches this Agreement.
11 Consequences of an Event of Default
11.1 If an Event of Default happens to either Party:
11.2 Acceleration: The Parties’ obligations will be accelerated as at the Event of Default (the Termination Date) as follows:

(a) The Non-Defaulting Party will determine the Default Market Value of all amounts (and securities) due by each Party under paragraph 11.4 as at the Termination Date.

(b) Using those values, [the Non-Defaulting Party will determine and notify]what each Party owes as at the Termination Date, converting 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.

(c) and (d) [(d) being the vice-versa] If that balance is payable by a Party who had delivered a Letter of Credit to the other Party the other Party must draw on the Letter of Credit to settle the amount due and then deliver it for cancellation.

11.3 The Default Market Value of a Letter of Credit will be zero. For any Equivalent Securities or any other Equivalent Non-Cash Collateral it 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 (or where Automatic Early Termination applies, the day the Non Defaulting Party became aware of it);

Deliverable Securities means Equivalent Securities or Equivalent Non-Cash Collateral to be delivered by the Defaulting Party;

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); and

Receivable Securities means Equivalent Securities or Equivalent Non-Cash Collateral to be delivered to the Defaulting Party.

11.4 Transactions and quotes: If, between the Termination Date and the Default Valuation Time:

(a) Actual sale or purchase: the Non-Defaulting Party has sold securities equivalent to those it owes the Defaulting Party or bought in securities equivalent to those the Defaulting Party owes it, the Non-Defaulting Party may treat the Default Market Value as the net proceeds that sale or purchase. Where it sells or Buys In a different amount of Equivalent Securities, Non-Defaulting Party may in good faith pro rate those values to determine the Default Market Value.

(b) Market quotes: the Non-Defaulting Party has received offer quotations for securities it is owed by the Defaulting Party; or bid quotations for securities it owes the Defaulting Party 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 or Collateral and treat that as their Default Market Value.
11.6 If the Non-Defaulting Party has not determined a 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: Any amount payable to one Party by the other under 11.2(b) may, at the Non Defaulting Party’s option, be set off 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.
12.1. 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) other than for manufactured payments in respect of Non-Cash Collateral, 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.
12.7 Retrospective changes in law: Amounts payable under this Agreement must determined by reference to Applicable Law when the payment is made, and must not be adjusted for:

(a) any retrospectives change in Applicable Law enacted after the relevant payment date; or

(b) any court decision made after the relevant payment date (other that one specifically concerning this Agreement).

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).

14. Borrower’s Warranties
Each Borrower hereby warrants and undertakes on a continuing basis for time immemorial, that:

14(a) it licenced, approved and authorised to perform its obligations under this Agreement;

14(b) it is not otherwise restricted from borrowing Securities and performing its obligations under this Agreement;

14(c) it is can give full unencumbered legal and beneficial ownership of Collateral to Lender;

14(d) it is acting as principal; and

14(e) it is not borrowing for the primary purpose of voting on Loaned Securities.

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 as long as all outstanding Loans have first been discharged in accordance with this Agreement.
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.

18. Severance

If any part of the Agreement is declared unenforceable, the Parties will ignore it and carry on with the rest of the Agreement. Later, the Parties will amend the agreement as best they can to give effect to what they intended by the unenforceable part, only in away that is enforceable. Template:Nutshell GMSLA 19 Template:Nutshell 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 GMSLA 22 Template:Nutshell GMSLA 23 24. Time
Time is of the essence. 25. Recording
The parties may record their telephone conversations. 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. Miscellaneous
27.1 Entire agreement: This Agreement is the entire agreement between the Parties on its subject matter. It supersedes all previous communications about the subjects matter
27.2 Conformity with standard form: The Party (the Relevant Party) who drafted this Agreement for execution (as indicated in paragraph Schedule 9) warrants that the text conforms exactly to standard 2010 GMSLA posted on the International Securities Lending Association’s website.
27.3 Amendments: Amendments must be in writing and executed or confirmed by an exchange of messages over an electronic messaging system.
27.4 Supercession: Where this paragraph applies, from the date of this Agreement it will apply to all outstanding loans entered into under the securities lending agreements specified in the Schedule as if they had been entered into under this Agreement.
27.5 Automation: where this paragraph applies, each party may use third party vendors to process Loans and may disclose relevant Loan data to those vendors.
27.6 Survival of obligations: The Parties’ obligations under this Agreement survive the termination of any Loan.
27.7 Survival of warranties: As long as any obligations remain outstanding under this Agreement the warranties in paragraphs 13, 14 and 27.2 and in the Agency Annex will survive termination of this Agreement.
27.8 Rights cumulative: The Parties’ contractual rights, remedies and privileges are cumulative of their rights, remedies and privileges that arise at law.
27.9 This Agreement can be executed and delivered in counterparts. 27.10 CRTPA: Those who are not party to this Agreement may not use the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms. But other third-party rights, outside that Act, still apply.