2018 Global Master Securities Lending Agreement (Pledge Version)
A Jolly Contrarian owner’s manual
Clause 17 in a Nutshell™
Use at your own risk, campers!
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.
Clause 17 in full
17 Single Agreement
Each Party acknowledges that, and has entered into this Agreement and the related agreements referred to herein and will enter into each Loan in consideration of and in reliance upon the fact that, all Loans constitute a single business and contractual relationship and are made in consideration of each other. Accordingly, each Party agrees:
- (a) to perform all of its obligations in respect of each Loan, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Loans, subject always to the other provisions of this Agreement and such related agreements; and
- (b) that payments, deliveries and other transfers made by either of them in respect of any Loan shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Loan.
Related agreements and comparisons
Related agreements: Click here for the same clause in the 2010 GMSLA
Comparison: Click to compare the 2010 GMSLA and 2018 Pledge GMSLA versions of this clause.
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Content and comparisons
The same, but for a rather pernickety reference to “related agreements”.
“But true,” says ICMA’s crack drafting squad™.
“But pernickety,” says the JC.
Interestingly ICMA’s crack drafting squad™ elected not to use the expression “single agreement”, so beloved of ISDA’s crack drafting squad™ and the ninjas of the eye-ess-dee-aye that is has more or less become a term of art.
Why so? We may never know. But the point is purely to defeat the mendacious designs of insolvency administrators in far flung locales who may take it into their heads to pick apart valuable Loan exposures in their estate’s favour. That is to say — is that the dramatic look gopher I hear? — to be a cherry-picker.