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| {{pgmslaprov|11}} '''{{pgmslaprov|Consequences of an Event of Default}}''' <br> | | {{pgmslaprov|11}} '''{{pgmslaprov|Consequences of an Event of Default}}''' <br> |
| {{pgmslaprov|11.1}} If an {{pgmslaprov|Event of Default}} happens to either Party: <br> | | {{pgmslaprov|11.1}} If an {{pgmslaprov|Event of Default}} happens to either Party: <br> |
| {{pgmslaprov|11.2}} '''[[Acceleration]]''': {{pgmslaprov|Borrower}}’s obligations will be accelerated as at the time of the {{pgmslaprov|Event of Default}} (the '''{{pgmslaprov|Termination Date}}''') as follows:<br> | | {{Nutshell Pledge GMSLA 11.2}} |
| :{{pgmslaprov|11.2(a)}} The {{pgmslaprov|Non-Defaulting Party}} will determine the {{pgmslaprov|Default Market Value}} of the {{pgmslaprov|Borrower}}’s delivery and payment obligations under paragraph {{pgmslaprov|11.4}} as at the {{pgmslaprov|Termination Date}}.
| | {{Nutshell Pledge GMSLA 11.3}} |
| :{{pgmslaprov|11.2(b)}} Using those values, [the {{pgmslaprov|Non-Defaulting Party}} will determine ''and notify'']<ref>Well, we ''assume'' it will be the [[Non-Defaulting Party - Pledge GMSLA Provision|NDP]]: the {{pgmsla}} rather brilliantly puts it into an unattributed [[passive]], as if God is going to to it, or it will magically happen by itself. Go, {{islacds}}.</ref>what each Party owes as at the {{pgmslaprov|Termination Date}}, converting amounts into the {{pgmslaprov|Base Currency}} at the {{pgmslaprov|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 {{pgmslaprov|Business Day}} after notification.
| | {{Nutshell Pledge GMSLA 11.4}} |
| {{pgmslaprov|11.3}} '''Determining the {{pgmslaprov|Default Market Value}}''': The {{pgmslaprov|Non-Defaulting Party}} will determine the '''{{pgmslaprov|Default Market Value}}''' of any {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} according to paragraphs {{pgmslaprov|11.4}} to {{pgmslaprov|11.6}}, where:
| | {{pgmslaprov|11.5}} '''Where there’s no [[commercially reasonable]] value''': If, having tried in [[good faith]], the {{pgmslaprov|Non-Defaulting Party}} has not been able to sell nor purchase {{pgmslaprov|Securities}} under paragraph {{pgmslaprov|11.4(a)}} or obtain quotations under paragraph {{pgmslaprov|11.4(b)}}, or it considers the quotations it did obtain are not commercially reasonable, it may determine the {{pgmslaprov|Net Value}} of the {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} and treat that as their {{pgmslaprov|Default Market Value}}. <br> |
| :'''{{pgmslaprov|Appropriate Market}}''' is the most appropriate market for {{pgmslaprov|Securities}} of that description, as determined by the {{pgmslaprov|Non-Defaulting Party}};
| | {{pgmslaprov|11.6}} If the {{pgmslaprov|Non-Defaulting Party}} has not determined the {{pgmslaprov|Default Market Value}} under {{pgmslaprov|11.4}}, it will equal the {{pgmslaprov|Net Value}} of the securities in question at the {{pgmslaprov|Default Valuation Time}}. However, if the {{pgmslaprov|Non-Defaulting Party}} determines it is not practicable to calculate a [[commercially reasonable]] {{pgmslaprov|Net Value}} at that time, the {{pgmslaprov|Default Market Value}} will be the {{pgmslaprov|Net Value}} it determines as soon as reasonably practicable after the {{pgmslaprov|Default Valuation Time}}. <br> |
| :'''{{pgmslaprov|Default Valuation Time}}''' means the {{pgmslaprov|Close of Business}} in the {{pgmslaprov|Appropriate Market}} on the fifth dealing day after the {{pgmslaprov|Termination Date}};
| | {{Nutshell Pledge GMSLA 11.7}} |
| ::'''{{pgmslaprov|Net Value}}''' of any securities means the {{pgmslaprov|Non-Defaulting Party}}’s reasonable opinion of their fair {{pgmslaprov|Market Value}} less (where {{pgmslaprov|Lender}} is the {{pgmslaprov|Defaulting Party}}) or plus (where {{pgmslaprov|Borrower}} is the {{pgmslaprov|Defaulting Party}}), all reasonable costs of any transaction needed under paragraph {{pgmslaprov|11.4}} or {{pgmslaprov|11.5}} ('''{{pgmslaprov|Transaction Costs}}''').<br>
| | {{pgmslaprov|11.8}} '''{{pgmslaprov|Set-off}}''': The {{pgmslaprov|Non-Defaulting Party}} may [[set off]] any amount due under paragraph {{pgmslaprov|11.2(b)}} against any amount payable the other way under any other agreement between the {{pgmslaprov|Parties}}. The {{pgmslaprov|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. <br> |
| {{pgmslaprov|11.4}} '''Transactions and quotes''': If, between the {{pgmslaprov|Termination Date}} and the {{pgmslaprov|Default Valuation Time}}:
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| :{{pgmslaprov|11.4(a)}} as {{pgmslaprov|Non-Defaulting Party}}, the {{pgmslaprov|Borrower}} has sold or the {{pgmslaprov|Lender}} has purchased, [[fungible]] {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} it may treat as the {{pgmslaprov|Default Market Value}}:
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| ::{{pgmslaprov|11.4(a)(i)}} in the case of a sale, the net proceeds of sale after deducting all {{pgmslaprov|Transaction Costs}};
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| ::{{pgmslaprov|11.4(a)(ii)}} in the case of a purchase, the aggregate cost of such purchase, including {{pgmslaprov|Transaction Costs}};
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| :provided that, where the {{pgmslaprov|Securities}} sold or purchased are not in identical in amount to the {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}}, {{pgmslaprov|Non-Defaulting Party}} may [[in good faith]] pro rate those values to determine the necessary {{pgmslaprov|Default Market Value}}.
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| :{{pgmslaprov|11.4(b)}} the {{pgmslaprov|Non-Defaulting Party}} has received [[bid]]s (where it is {{pgmslaprov|Borrower}}) or [[offer]]s (where it is {{pgmslaprov|Lender}}) for [[fungible]] {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} from at least two regular participants in the {{pgmslaprov|Appropriate Market}} in what it determines to be a commercially reasonable size, it may treat as the {{pgmslaprov|Default Market Value}} the arithmetic mean of the quoted prices as reasonably adjusted to account for for accrued but unpaid interest and {{pgmslaprov|Transaction Costs}}. <br>
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| {{pgmslaprov|11.5}} '''Where there’s no [[commercially reasonable]] value''': If, having tried in [[good faith]], the {{pgmslaprov|Non-Defaulting Party}} has managed neither to sell nor purchase {{pgmslaprov|Securities}} under paragraph {{pgmslaprov|11.4(a)}}, nor obtain quotations under paragraph {{pgmslaprov|11.4(b)}}, or it has determined that the quotations are not commercially reasonable, it may determine the {{pgmslaprov|Net Value}} of the {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} treat that {{pgmslaprov|Net Value}} as their {{pgmslaprov|Default Market Value}}. <br> | |
| {{pgmslaprov|11.6}} If the {{pgmslaprov|Non-Defaulting Party}} has not determined the {{pgmslaprov|Default Market Value}} under paragraph {{pgmslaprov|11.4}}, it will equal the {{pgmslaprov|Net Value}} of the {{pgmslaprov|Equivalent}} {{pgmslaprov|Securities}} at the {{pgmslaprov|Default Valuation Time}} unless it is not [[commercially reasonable]] to determine such {{pgmslaprov|Net Value}} at that time, in which case it will equal the {{pgmslaprov|Net Value}} that the {{pgmslaprov|Non-Defaulting Party}} determines as soon as reasonably practicable after the {{pgmslaprov|Default Valuation Time}}. <br> | |
| {{pgmslaprov|11.7}} '''{{pgmslaprov|Other costs, expenses and interest payable in consequence of an Event of Default}}''': The {{pgmslaprov|Defaulting Party}} must pay the {{pgmslaprov|Non-Defaulting Party}} all its reasonable professional expenses in connection with the {{pgmslaprov|Event of Default}} with interest at the rate specified in paragraph 10 of the Schedule or, if not specified, the overnight [[LIBOR]] rate as at 11.00 a.m., London time. Interest will accrue daily on a compound basis. <br> | |
| {{pgmslaprov|11.8}} '''{{pgmslaprov|Set-off}}''': The {{pgmslaprov|Non-Defaulting Party}} may [[set off]] any amount due under paragraph {{pgmslaprov|11.2(b)}} against any amount payable the other way under any other agreement between the Parties and for that purpose may in [[good faith]] estimate any unascertained obligations but must account for any difference when the obligation is finally ascertained. This paragraph does not create a [[security interest]] and operates in addition to and without affecting any other right of [[set-off]], [[combination of accounts]], [[lien]] or other right to which any {{pgmslaprov|Party}} may be entitled. <br> | |