Global Master Securities Lending Agreement (2005)Full Document 

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INTERNATIONAL SECURITIES LENDERS ASSOCIATION

 

ISLA

 

GLOBAL MASTER SECURITIES LENDING AGREEMENT


CONTENTS

 

1.    Applicability    1
2.    Interpretation    1
3.    Loans Of Securities    5
4.    Delivery    6
5.    Collateral    7
6.    Distributions And Corporate Actions    10
7.    Rates Applicable To Loaned Securities And Cash Collateral    11
8.    Redelivery Of Equivalent Securities    12
9.    Failure To Redeliver    13
10.    Set-Off Etc    15
11.    Transfer Taxes    18
12.    Lender’s Warranties    18
13.    Borrower’s Warranties    18
14.    Events Of Default    19
15.    Interest On Outstanding Payments    20
16.    Transactions Entered Into As Agent    20
17.    Termination Of This Agreement    22
18.    Single Agreement    22
19.    Severance    22
20.    Specific Performance    22
21.    Notices    23
22.    Assignment    23
23.    Non-Waiver    23
24.    Governing Law And Jurisdiction    23
25.    Time    24
26.    Recording    24
27.    Waiver Of Immunity    24
28.    Miscellaneous    24
SCHEDULE    27


AGREEMENT DATED 18 January 2005

 

BETWEEN:

 

UBS LIMITED (“Party A”) a company incorporated under the laws of England and Wales acting through a Designated Office; and

 

LAROUGE B.V. (“Party B”) a private company with limited liability with its seat in Amsterdam and incorporated under the laws of the Netherlands acting through a Designated Office.

 

1. APPLICABILITY

 

1.1 From time to time the parties may enter into transactions in which one party (“Lender”) will transfer to the other (“Borrower”) securities and financial instruments (“Securities”) against the transfer of Collateral (as defined in paragraph 2) with a simultaneous agreement by Borrower to transfer to Lender Securities equivalent to such Securities on a fixed date or on demand against the transfer to Borrower by Lender of assets equivalent to such Collateral.

 

1.2 Each such transaction shall be referred to in this Agreement as a “Loan” and shall be governed by the terms of this Agreement, including the supplemental terms and conditions contained in the Schedule and any Addenda or Annexures attached hereto, unless otherwise agreed in writing.

 

1.3 Either party may perform its obligations under this Agreement either directly or through a Nominee.

 

2. INTERPRETATION

 

2.1 In this Agreement:-

 

Act of Insolvency” means in relation to either Party

 

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

 

  (ii) its stating in writing that it is unable to pay its debts as they become due; or

 

  (iii) its seeking, consenting to or acquiescing in the appointment of any trustee, administrator, receiver or liquidator or analogous officer of it or any material part of its property; or

 

  (iv) the presentation or filing of a petition in respect of it (other than by the other Party to this Agreement in respect of any obligation under this Agreement) in any court or before any agency alleging or for the bankruptcy, winding-up or insolvency of such Party (or any analogous proceeding) or seeking any reorganisation, arrangement, composition, re-adjustment, administration, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such petition not having been stayed or dismissed within 30 days of its filing (except in the case of a petition for winding-up or any analogous proceeding in respect of which no such 30 day period shall apply); or

 

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  (v) the appointment of a receiver, administrator, liquidator or trustee or analogous officer of such Party over all or any material part of such Party’s property; or

 

  (vi) the convening of any meeting of its creditors for the purpose of considering a voluntary arrangement as referred to in Section 3 of the Insolvency Act 1986 (or any analogous proceeding);

 

Alternative Collateral” means Collateral having a Market Value equal to the Collateral delivered pursuant to paragraph 5 and provided by way of substitution in accordance with the provisions of paragraph 5.3;

 

Base Currency” means the currency indicated in paragraph 2 of the Schedule;

 

Business Day” means a day other than a Saturday or a Sunday on which banks and securities markets are open for business generally in each place stated in paragraph 3 of the Schedule and, in relation to the delivery or redelivery of any of the following in relation to any Loan, in the place(s) where the relevant Securities, Equivalent Securities, Collateral or Equivalent Collateral are to be delivered;

 

Cash Collateral” means Collateral that takes the form of a transfer of currency;

 

Close of Business” means the time at which the relevant banks, securities exchanges or depositaries close in the business centre in which payment is to be made or Securities or Collateral is to be delivered;

 

Collateral” means such securities or financial instruments or transfers of currency as are referred to in the table set out under paragraph 1 of the Schedule as being acceptable or any combination thereof as agreed between the Parties in relation to any particular Loan and which are delivered by Borrower to Lender in accordance with this Agreement and shall include Alternative Collateral;

 

Defaulting Party” shall have the meaning given in paragraph 14;

 

Designated Office” means the branch or office of a Party which is specified as such in paragraph 4 of the Schedule or such other branch or office as may be agreed to in writing by the Parties;

 

Equivalent “ or “equivalent to” in relation to any Securities or Collateral provided under this Agreement means securities, together with cash or other property (in the case of Collateral) as the case may be, of an identical type, nominal value, description and amount to particular Securities or Collateral, as the case may be, so provided. If and to the extent that such Securities or Collateral, as the case may be, consists of securities that are partly paid or have been converted, subdivided, consolidated, made the subject of a takeover, rights of pre-emption, rights to receive securities or a certificate which may at a future date be exchanged for securities, the expression shall include such securities or other assets to which Lender or Borrower as the case may

 

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be, is entitled following the occurrence of the relevant event, and, if appropriate, the giving of the relevant notice in accordance with paragraph 6.4 and provided that Lender or Borrower, as the case may be, has paid to the other Party all and any sums due in respect thereof. In the event that such Securities or Collateral, as the case may be, have been redeemed, are partly paid, are the subject of a capitalisation issue or are subject to an event similar to any of the foregoing events described in this paragraph, the expression shall have the following meanings:-

 

  (a) in the case of redemption, a sum of money equivalent to the proceeds of the redemption;

 

  (b) in the case of a call on partly paid securities, securities equivalent to the relevant Loaned Securities or Collateral, as the case may be, provided that Lender shall have paid Borrower, in respect of Loaned Securities, and Borrower shall have paid to Lender, in respect of Collateral, an amount of money equal to the sum due in respect of the call;

 

  (c) in the case of a capitalisation issue, securities equivalent to the relevant Loaned Securities or Collateral, as the case may be, together with the securities allotted by way of bonus thereon;

 

  (d) in the case of any event similar to any of the foregoing events described in this paragraph, securities equivalent to the Loaned Securities or the relevant Collateral, as the case may be, together with or replaced by a sum of money or securities or other property equivalent to that received in respect of such Loaned Securities or Collateral, as the case may be, resulting from such event;

 

Income” means any interest, dividends or other distributions of any kind whatsoever with respect to any Securities or Collateral;

 

Income Payment Date”, with respect to any Securities or Collateral means the date on which Income is paid in respect of such Securities or Collateral, or, in the case of registered Securities or Collateral, the date by reference to which particular registered holders are identified as being entitled to payment of Income;

 

Letter of Credit” means an irrevocable, non-negotiable letter of credit in a form, and from a bank, acceptable to Lender;

 

Loaned Securities” means Securities which are the subject of an outstanding Loan;

 

Margin” shall have the meaning specified in paragraph 1 of the Schedule with reference to the table set out therein;

 

Market Value” means:

 

  (a) in relation to the valuation of Securities, Equivalent Securities, Collateral or Equivalent Collateral (other than Cash Collateral or a Letter of Credit):

 

  (i) such price as is equal to the market quotation for the bid price of such Securities, Equivalent Securities, Collateral and/or Equivalent Collateral as derived from a reputable pricing information service reasonably chosen in good faith by Lender; or

 

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  (ii) if unavailable the market value thereof as derived from the prices or rates bid by a reputable dealer for the relevant instrument reasonably chosen in good faith by Lender,

 

in each case at Close of Business on the previous Business Day or, at the option of either Party where in its reasonable opinion there has been an exceptional movement in the price of the asset in question since such time, the latest available price; plus (in each case)

 

  (iii) the aggregate amount of Income which has accrued but not yet been paid in respect of the Securities, Equivalent Securities, Collateral or Equivalent Collateral concerned to the extent not included in such price,

 

(provided that the price of Securities, Equivalent Securities, Collateral or Equivalent Collateral that are suspended shall (for the purposes of paragraph 5) be nil unless the Parties otherwise agree and (for all other purposes) shall be the price of such Securities, Equivalent Securities, Collateral or Equivalent Collateral, as the case may be, as of Close of Business on the dealing day in the relevant market last preceding the date of suspension or a commercially reasonable price agreed between the Parties;

 

  (b) in relation to a Letter of Credit the face or stated amount of such Letter of Credit; and

 

  (c) in relation to Cash Collateral the amount of the currency concerned;

 

Nominee” means an agent or a nominee appointed by either Party to accept delivery of, hold or deliver Securities, Equivalent Securities, Collateral and/or Equivalent Collateral or to receive or make payments on its behalf;

 

Non-Defaulting Party” shall have the meaning given in paragraph 14;

 

Parties” means Lender and Borrower and “Party” shall be construed accordingly;

 

Posted Collateral” has the meaning given in paragraph 5.4;

 

Required Collateral Value” shall have the meaning given in paragraph 5.4;

 

Settlement Date” means the date upon which Securities are transferred to Borrower in accordance with this Agreement.

 

2.2 Headings

 

All headings appear for convenience only and shall not affect the interpretation of this Agreement.

 

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2.3 Market terminology

 

Notwithstanding the use of expressions such as “borrow”, “lend”, “Collateral”, “Margin”, “redeliver” etc. which are used to reflect terminology used in the market for transactions of the kind provided for in this Agreement, title to Securities “borrowed” or “lent” and “Collateral” provided in accordance with this Agreement shall pass from one Party to another as provided for in this Agreement, the Party obtaining such title being obliged to redeliver Equivalent Securities or Equivalent Collateral as the case may be.

 

2.4 Currency conversions

 

For the purposes of determining any prices, sums or values (including Market Value, Required Collateral Value, Relevant Value, Bid Value and Offer Value for the purposes of paragraphs 5 and 10 of this Agreement) prices, sums or values stated in currencies other than the Base Currency shall be converted into the Base Currency at the latest available spot rate of exchange quoted by a bank selected by Lender (or if an Event of Default has occurred in relation to Lender, by Borrower) in the London interbank market for the purchase of the Base Currency with the currency concerned on the day on which the calculation is to be made or, if that day is not a Business Day the spot rate of exchange quoted at Close of Business on the immediately preceding Business Day.

 

2.5 The parties confirm that introduction of and/or substitution (in place of an existing currency) of a new currency as the lawful currency of a country shall not have the effect of altering, or discharging, or excusing performance under, any term of the Agreement or any Loan thereunder, nor give a party the right unilaterally to alter or terminate the Agreement or any Loan thereunder. Securities will for the purposes of this Agreement be regarded as equivalent to other securities notwithstanding that as a result of such introduction and/or substitution those securities have been redenominated into the new currency or the nominal value of the securities has changed in connection with such redenomination.

 

2.6 Modifications etc to legislation

 

Any reference in this Agreement to an act, regulation or other legislation shall include a reference to any statutory modification or re-enactment thereof for the time being in force.

 

3. LOANS OF SECURITIES

 

Lender will lend Securities to Borrower, and Borrower will borrow Securities from Lender in accordance with the terms and conditions of this Agreement. The terms of each Loan shall be agreed prior to the commencement of the relevant Loan either orally or in writing (including any agreed form of electronic communication) and confirmed in such form and on such basis as shall be agreed between the Parties. Any confirmation produced by a Party shall not supersede or prevail over the prior oral, written or electronic communication (as the case may be).

 

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4. DELIVERY

 

4.1 Delivery of Securities on commencement of Loan

 

Lender shall procure the delivery of Securities to Borrower or deliver such Securities in accordance with this Agreement and the terms of the relevant Loan. Such Securities shall be deemed to have been delivered by Lender to Borrower on delivery to Borrower or as it shall direct of the relevant instruments of transfer, or in the case of Securities held by an agent or within a clearing or settlement system on the effective instructions to such agent or the operator of such system which result in such Securities being held by the operator of the clearing system for the account of the Borrower or as it shall direct, or by such other means as may be agreed.

 

4.2 Requirements to effect delivery

 

The Parties shall execute and deliver all necessary documents and give all necessary instructions to procure that all right, title and interest in:

 

  (a) any Securities borrowed pursuant to paragraph 3;

 

  (b) any Equivalent Securities redelivered pursuant to paragraph 8;

 

  (c) any Collateral delivered pursuant to paragraph 5;

 

  (d) any Equivalent Collateral redelivered pursuant to paragraphs 5 or 8;

 

shall pass from one Party to the other subject to the terms and conditions set out in this Agreement, on delivery or redelivery of the same in accordance with this Agreement with full title guarantee, free from all liens, charges and encumbrances. In the case of Securities, Collateral, Equivalent Securities or Equivalent Collateral title to which is registered in a computer based system which provides for the recording and transfer of title to the same by way of book entries, delivery and transfer of title shall take place in accordance with the rules and procedures of such system as in force from time to time. The Party acquiring such right, title and interest shall have no obligation to return or redeliver any of the assets so acquired but, in so far as any Securities are borrowed or any Collateral is delivered to such Party, such Party shall be obliged, subject to the terms of this Agreement, to redeliver Equivalent Securities or Equivalent Collateral as appropriate.

 

4.3 Deliveries to be simultaneous unless otherwise agreed

 

Where under the terms of this Agreement a Party is not obliged to make a delivery unless simultaneously a delivery is made to it, subject to and without prejudice to its rights under paragraph 8.6 such Party may from time to time in accordance with market practice and in recognition of the practical difficulties in arranging simultaneous delivery of Securities, Collateral and cash transfers waive its right under this Agreement in respect of simultaneous delivery and/or payment provided that no such waiver (whether by course of conduct or otherwise) in respect of one transaction shall bind it in respect of any other transaction.

 

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4.4 Deliveries of Income

 

In respect of Income being paid in relation to any Loaned Securities or Collateral, Borrower in the case of Income being paid in respect of Loaned Securities and Lender in the case of Income being paid in respect of Collateral shall provide to the other Party, as the case may be, any endorsements or assignments as shall be customary and appropriate to effect the delivery of money or property equivalent to the type and amount of such Income to Lender, irrespective of whether Borrower received the same in respect of any Loaned Securities or to Borrower, irrespective of whether Lender received the same in respect of any Collateral.

 

5. COLLATERAL

 

5.1 Delivery of Collateral on commencement of Loan

 

Subject to the other provisions of this paragraph 5, Borrower undertakes to deliver to or deposit with Lender (or in accordance with Lender’s instructions) Collateral simultaneously with delivery of the Securities to which the Loan relates and in any event no later than Close of Business on the Settlement Date. In respect of Collateral comprising securities, such Collateral shall be deemed to have been delivered by Borrower to Lender on delivery to Lender or as it shall direct of the relevant instruments of transfer, or in the case of such securities being held by an agent or within a clearing or settlement system, on the effective instructions to such agent or the operator of such system, which result in such securities being held by the operator of the clearing system for the account of the Lender or as it shall direct, or by such other means as may be agreed.

 

5.2 Deliveries through payment systems generating automatic payments

 

Unless otherwise agreed between the Parties, where any Securities, Equivalent Securities, Collateral or Equivalent Collateral (in the form of securities) are transferred through a book entry transfer or settlement system which automatically generates a payment or delivery, or obligation to pay or deliver, against the transfer of such securities, then:-

 

  (i) such automatically generated payment, delivery or obligation shall be treated as a payment or delivery by the transferee to the transferor, and except to the extent that it is

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