Securities Lending and Borrowing

Transcription

1 Securities Lending and Borrowing Rules

2 Securities Lending and Borrowing Rules Document number: 6118 This document is the property of Clearstream Banking S.A. ( Clearstream Banking ). No part of this document may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, for any purpose without the express written consent of Clearstream Banking. Copyright Clearstream International S.A. (2013). All rights reserved. Clearstream is a registered trademark of Clearstream International S.A. Clearstream International S.A. is a Deutsche Börse Group company.

3 Contents 1. Definitions General operation Organisation of the Loan Operation of Loan Borrowing request by the Customer Selection of Lenders Confirmation to the Borrower and the Lender Collateral Availability of the Loan Management of the Loan and Collateral Collateral management by Clearstream Banking Income Distributions and Corporate Actions Recalls Redelivery of Loaned Securities and return of Collateral Default of Borrower Events of default Reimbursement of Lender Enforcement of the Collateral Lending Income and Borrowing Fees Liability Confidentiality Lenders warranty Borrowers warranty Termination of services Regulatory amendments Notifications Severability Entire agreement Amendments Assignments Non-waiver Headings Governing law and jurisdiction Appendix A. Letter of Agreement and Acceptance A-1 Appendix B. Eligible Securities B-1 Appendix C. Lender Profile Authorisation C-1 Appendix D. Borrower Profile Authorisation D-1 Appendix E. Securities Borrowing Request Form E-1 Appendix F. Designation of Collateral Account F-1 Appendix G. Deadlines G-1 Clearstream Banking SA SLB Rules Contents i

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5 General The Rules are designed to allow Customers of Clearstream Banking to borrow Securities from or lend Securities to other Customers in Clearstream Banking. All rights and obligations under these Rules to reimburse, deliver or redeliver Securities, Equivalent Securities, Collateral or Equivalent Collateral, to account for any of the same, to make payment or otherwise, shall be the rights and obligations of the Lender or the Borrower as principals in the transaction. All transactions carried out under the Rules will be effected in accordance with the terms of the Rules and the Clearstream Banking General Terms and Conditions, as in effect from time to time, which govern the general rights and responsibilities of Clearstream Banking and its Customers. The Rules includes all Securities accepted in Clearstream Banking and listed in Appendix B, as amended from time to time. Any such amendments will be announced to Borrowers and Lenders via Clearstream Banking announcements. These Rules shall be considered a Clearstream Banking Governing Document as set forth in the Clearstream Banking General Terms and Conditions. Upon signature of Appendix A (the Letter of Agreement and Acceptance), Clearstream Banking Customers expressly agree to be bound by the terms and conditions of these Rules. 1. Definitions For purposes of the Rules, the following terms shall have the following meanings: Alternative Collateral Equivalent Collateral having the same Collateral Value as the Collateral. Authenticated Message A communication that is in writing and signed by duly authorised signatories, or that is sent by SWIFT, CreationOnline or any other secure communication method accepted from time to time by Clearstream Banking. Base Currency U.S. Dollar (USD). Borrower A Clearstream Banking Customer for whom a Loan has been or is to be arranged. Borrower s Account Account(s) held by the Borrower in Clearstream Banking and detailed in the Borrower s Letter of Agreement and Acceptance (Appendix A). Borrowing Fees The amount due from the Borrower pursuant to Article 6 of the Rules in connection with Loaned Securities. Business Day A day other than a Saturday or a Sunday on which Clearstream Banking is open for business. Cash Any and all currencies (including compound currency units) as may be accepted in Clearstream Banking from time to time, as set forth in Clearstream Banking Governing Documents as amended from time to time. Clearstream Banking SA SLB Rules Page 1

6 Securities Lending and Borrowing CBL Deadlines For corporate actions, deadlines as specified in Clearstream Banking Governing Documents as amended from time to time. Clearstream Banking Clearstream Banking, a duly licensed bank and securities settlement system organised as a société anonyme incorporated under the laws of the Grand Duchy of Luxembourg. Collateral All present and future Securities or precious metals, other property (including any substitutions and additions thereto) or any combination thereof, Cash and all claims of the Borrower with respect thereto, now or in the future, that are held by a Borrower (or on behalf of a Borrower) in Clearstream Banking on a Collateral Account and pledged to Clearstream Banking and to the Lender to secure the satisfaction of all obligations of the Borrower arising under the Rules, both now and in the future, and shall include Alternative Collateral. Collateral Value The Market Value of the Collateral or Equivalent Collateral less the deduction of a certain percentage of such Market Value, as determined by Clearstream Banking and set forth in Clearstream Banking Governing Documents from time to time. Coverage Value The Market Value of Securities loaned plus an additional percentage of such market value as determined by Clearstream Banking from time to time. Customer A legal entity that has been admitted as a participant in Clearstream Banking. Delivery In relation to any Securities or Equivalent Securities, the book-entry crediting of such Securities to an account of the Borrower or Lender or to the Collateral Account, as the case may be. Event of Default Any of those events specified in Article 5.1. Equivalent or Equivalent to In relation to any Loaned Securities or Collateral provided under these Rules, Securities or other property, of a type, nominal value, description and amount identical to particular Loaned Securities or Collateral (as the case may be) so provided. If and to the extent that such Loaned 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 preemption, 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 be) is entitled following the occurrence of the relevant event 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 Loaned 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 to 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; Clearstream Banking SA Page 2 SLB Rules

7 Rules 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. Governing Documents The Clearstream Banking General Terms and Conditions and the Customer Handbook, which may be amended from time to time, and such other documents as Clearstream Banking may, from time to time, so designate. Any amendment to Clearstream Banking Governing Documents shall be notified in advance by Clearstream Banking via Clearstream Banking Announcement. Income Any interest, dividends or other distributions of any kind whatsoever with respect to any Securities or other property (including any substitutions and additions thereto) or any combination thereof but excluding distributions which are a payment or repayment of principal in respect of the relevant Securities or other property (including any substitutions and additions thereto) or any combination thereof. Income Record Date With respect to any Securities or other property (including any substitutions and additions thereto) or any combination thereof, means the date by reference to which holders of such Securities or other property (including any substitutions and additions thereto) or any combination thereof are identified as being entitled to payment of Income. Lender The Customer who has agreed to make available Securities for Loans to Borrower(s), pursuant to these Rules. Lender s Account Account(s) held by the Lender in Clearstream Banking and detailed in the Lender s Letter of Agreement and Acceptance (Appendix A). Lending Income The amount due to the Lender pursuant to Article 6 of the Rules in connection with Loaned Securities. Letter of Agreement and Acceptance The Letter of Agreement and Acceptance of the terms and conditions of these Rules, included in Appendix A. Loan An actual Loan of Securities made pursuant to and subject to these Rules. Loaned Security Any Security that is subject to a Loan. Manufactured Payment An amount of Cash or property that is paid or delivered to the Lender by the Borrower under the Rules by way of compensation for the loss of Income on Loaned Securities. Market Value The market value of any Collateral, Securities or Equivalent Securities or Collateral determined by Clearstream Banking by using the pricing information services selected by Clearstream Banking or, if no such market value can be determined on the basis thereof, determined by Clearstream Banking in its sole discretion on the basis of information available to it. Clearstream Banking SA SLB Rules Page 3

8 Securities Lending and Borrowing Purchase A purchase of Equivalent Securities against the Borrower failing to return Equivalent Securities upon expiry of the Recall Period, in accordance with Article 5.2, it being understood that during the Purchase Period, Clearstream Banking may, but is not obliged to, accept the delivery of Securities Equivalent to Loaned Securities by the Borrower, without prejudice to any interest accruing hereunder as a result of any late delivery by the Borrower. Purchase Agent An agent instructed by Clearstream Banking on behalf and for the account of the Borrower to purchase Equivalent Securities in the event of a Purchase, in accordance with Article 5.2. Purchase Period A period of time as defined in Appendix G starting upon the end of the Recall Period. Recall Period A period of time as defined in Appendix G. Rules These Clearstream Banking Securities Lending and Borrowing Rules including all Appendices, as amended or modified from time to time, unless otherwise stated. Securities or Security Any share, bond, note, certificate, certificate of deposit, instrument or right representing property rights or claims (including a right not represented by certificate), as well as all other debentures or any other financial instrument eligible in Clearstream Banking. Tax or Taxes Any present or future levy, impost, duty, charge or assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any Tax Authority in respect of any assets, transactions effected pursuant to or contemplated by, or any payments (whether income or capital) arising under or in respect of, the Rules. Tax Authority Any governmental entity or political subdivision thereof that is responsible for the administration, regulation, enforcement and imposition of Taxes in the jurisdiction, including the operation of applicable Tax Laws. Tax Detriment Any increase in withholding tax, capital gains tax, stamp duty or other similar tax, levied by the relevant jurisdiction over and above that which the Lender would have borne on such Security where such Security had been retained and not made subject to a Loan, or that of incurring fines, penalties or other censure due to non-compliance with any Tax Laws. Tax Laws The laws, rules, regulations codes and any other enactments (including double taxation conventions) of any relevant jurisdiction, including as may be augmented (through concessions or interpretations), explained or otherwise expanded upon by the published practice of any Tax Authority in connection therewith. 2. General operation All Customers desiring to participate in the Rules, either as Borrowers or Lenders, must submit Appendix A to Clearstream Banking, completed and signed by duly authorised signatories. In addition and as an option: (a) Lenders can submit to Clearstream Banking an Appendix C, completed and signed by duly authorised signatories; and (b) Borrowers can submit to Clearstream Banking an Appendix D completed and signed by duly authorised signatories. Clearstream Banking SA Page 4 SLB Rules

9 Rules These Rules shall not be construed as granting the Borrower the right to obtain a Loan, but merely set forth the terms and conditions under which a Loan, if granted, shall be carried out. If granted, without prejudice to the eligibility requirements selected in Appendix C by Lenders and Appendix D by Borrowers, as may be amended from time to time, Loans consist of any and all Securities as set forth in Appendix B, as may be amended by Clearstream Banking from time to time. Clearstream Banking reserves the right to refuse any Loan request for any reason whatsoever. Clearstream Banking shall not be required to disclose the reasons underlying such refusal and shall not be liable for any consequences of such refusal. Customers may choose to be either automatic or case by case Lenders. Automatic Lenders authorise Clearstream Banking to lend Securities pursuant to these Rules and debit their Lender s Accounts whenever needed and such authorisation shall remain valid until Clearstream Banking receives written notification of revocation of such authorisation. Such revocation shall become effective on the third Business Day of its receipt by Clearstream Banking. Case by case Lenders are required to authorise each Loan on an individual basis. Customers may choose to be either automatic or case by case Borrowers. Loans for automatic Borrowers are started whenever needed but only for pre-matched against payment instructions. Automatic Borrowers authorise Clearstream Banking to effect such Loans and such authorisation shall remain valid until Clearstream Banking receives written notification of revocation of such authorisation. Such revocation shall become effective on the third Business Day of its receipt by Clearstream Banking. Case by case Borrowers must contact Clearstream Banking to request each Loan. Except if provided otherwise in these Rules (Article 5.1 and Article 8), Clearstream Banking is not authorised to disclose the identities of the Lenders and Borrowers to their counterparties, who shall remain anonymous to each other. 3. Organisation of the Loan 3.1 Operation of Loan The Lender will lend Securities to the Borrower, and the Borrower will borrow Securities from the Lender by book entry in Clearstream Banking and in accordance with the terms and conditions of these Rules. Clearstream Banking undertakes to locate the required Securities from among participating Lenders and to effect transfers of Securities to the Borrower subject to availability of such Securities and the limitations established under these Rules. The Borrower shall return Loaned Securities according to the terms of these Rules. (Re)Delivery shall take place by book entry in Clearstream Banking. If the Borrower fails to return Loaned Securities pursuant to the terms of these Rules, in addition to the consequences of such failure as described in Article 5, the Borrower shall pay penalty fees. 3.2 Borrowing request by the Customer For automatic Borrowers, Loans may be initiated when an insufficiency of provision in a Borrower s Account is identified by Clearstream Banking, provided that there is an adequate number of Securities available from participating Lenders and that the Borrower is eligible to borrow under the terms of these Rules, including the Borrower having sufficient Securities available as Collateral and a credit line granted by CBL. There is no need to contact Clearstream Banking in advance of such automatic Loans. For case by case borrowing, Customers wishing to borrow Securities must make a request to Clearstream Banking by specifying, in an Authenticated Message sent to Clearstream Banking, the relevant issue and the nominal amount of Securities or by sending to Clearstream Banking, by fax, Appendix E, duly completed, dated and signed by authorised signatories. All Loans are subject to availability of the required Securities. Any borrowing requests will be handled following the settlement sequence on a first come, first served basis. Clearstream Banking SA SLB Rules Page 5

10 Securities Lending and Borrowing 3.3 Selection of Lenders For automatic lending, Clearstream Banking will check the Securities balances in the relevant issue of all Customers who have notified their willingness to lend on an automatic basis, in order to locate the requested Securities. Participating Lenders having positions in the requested Security will be considered for the Loan. Securities may be automatically debited from the Lender's Account upon the identification of an insufficiency of provision in a Borrower's Account and determination that the Lender is eligible to loan such Securities. For case by case lending, Lenders who have balances in the requested Security and who have indicated their willingness to lend on a case by case basis will be contacted individually and must approve the Loan before Clearstream Banking will effect the transfer. Securities may be debited from the Lender s Account upon receipt by Clearstream Banking of the Lender's approval, subject to Clearstream Banking's confirmation by Authenticated Message. Potential Lenders are contacted on a random basis and will be notified of the specification of issue and nominal amount of Securities requested. 3.4 Confirmation to the Borrower and the Lender Both the Borrower and the Lender will receive written confirmation of the Delivery by Clearstream Banking in the form of daily reports, according to the Clearstream Banking reporting policy in force from time to time. For the execution of this Agreement, this written confirmation shall constitute prima facie evidence of the agreed terms and conditions of a particular Loan under these Rules. 3.5 Collateral As security for its present and future obligations under these Rules, the Borrower herewith grants a first ranking pledge in the Collateral to Clearstream Banking and a second ranking pledge in the Collateral to the Lender. Any and all Collateral required from the Borrower to secure its present and future obligations arising under these Rules shall be delivered by the Borrower and blocked in one account held with and opened in the name of the Borrower with and earmarked by Clearstream Banking as pledged in favour of Clearstream Banking as first ranking pledgee and the Lender as second ranking pledgee (the Collateral Account ). Unless otherwise specified by the Borrower to Clearstream Banking in Appendix F, the Collateral Account is the Borrower s Account. The Borrower shall bear all costs of perfecting such pledge, if any. For each Loan, the Borrower shall ensure that sufficient Collateral is available on the Collateral Account prior to or simultaneously with the Delivery of the Loaned Securities. Upon written request from the Lender, Clearstream Banking shall provide a Collateral report to the Lender. 3.6 Availability of the Loan All Loans, automatic and case by case, may be effected only if adequate Securities are available and no Event of Default has occurred. Securities are debited from the Lender's Account and credited to the Borrower s Account through book entry in Clearstream Banking. 4. Management of the Loan and Collateral 4.1 Collateral management by Clearstream Banking Clearstream Banking will review the Coverage Value of the Loaned Securities and the Collateral Value of the Collateral on each Business Day. Foreign exchange rates will be reviewed on a daily basis. For this purpose, Clearstream Banking shall, in its absolute discretion, convert all sums into the Base Currency, if necessary. The Collateral Value of the Collateral pledged under the Rules must at all times be no less than the required Coverage Value of the Loaned Securities. Clearstream Banking SA Page 6 SLB Rules

11 Rules Collateral Value and Coverage Value calculation criteria for Securities are made available to Lenders and Borrowers upon request. Clearstream Banking reserves the right to change at its discretion Collateral Value and its calculation criteria and/or, if applicable, Coverage Value and its calculation criteria at any time and to enforce such changes. Clearstream Banking reserves the right to allocate a zero Collateral Value to Collateral at its own discretion and to demand that a Borrower provide Alternative Collateral for Collateral that has been previously allocated a Collateral Value. In the event that the Collateral Value is lower than the Coverage Value, Clearstream Banking shall request the Borrower and the Borrower agrees to irrevocably deposit sufficient additional Collateral, no later than the next Business Day of such request, so as to ensure that the Collateral Value equals at least the Coverage Value of the Loaned Securities. In the event that the Collateral Value is higher than the Coverage Value, the Lender and the Borrower expressly authorise Clearstream Banking to release Collateral and redeliver Collateral to the Borrower's Account so as to ensure that the Collateral Value equals the Coverage Value of the Loaned Securities. The Borrower may substitute by Equivalent Collateral any Collateral delivered. At any time between the Delivery of the Loaned Securities and the Loan closing date in respect of each Loan, Clearstream Banking shall, at the request of the Borrower, proceed to transfer Eligible Assets or Equivalent Eligible Assets out of the Collateral Account in exchange for the simultaneous transfer by the Borrower in the Collateral Account of any or all of Eligible Assets. Clearstream Banking shall check that Equivalent Collateral shall have a Collateral Value equal to or greater than the Collateral Value of the item(s) of Collateral to be withdrawn. Any transfer of Eligible Assets or Equivalent Eligible Assets pursuant to this Article shall be effected by Clearstream Banking as a same-day transfer if the Borrower's request is received by Clearstream Banking within the deadlines detailed in Governing Documents. It is expressly agreed that such substitution shall not affect the validity of the Collateral and shall not lead to novation. 4.2 Income Distributions and Corporate Actions Income and redemptions Manufactured Payments arising on Loaned Securities and any associated Tax Detriment, plus full or partial redemption shall be automatically debited from the Borrower's Account and credited to the Lender's Account. For a full redemption, the Loan is deemed to be terminated; for a partial redemption, the redelivery obligation of the Borrower is deemed to be executed pro rata with respect to the redemption amount. Income paid on Collateral plus full or partial redemption shall be automatically credited to the Borrower s Account and Article 4.1 shall apply. Borrowers and Lenders expressly authorise Clearstream Banking to make such debits and credits Corporate Actions Unless otherwise agreed in writing, for any other right whatsoever attached to Loaned Securities, it is the responsibility of the Borrower to return the Loaned Securities in such time as is necessary, before the earliest of either record date, the exercise date or the CBL Deadline to permit the Lender to exercise such right(s). If the Loaned Securities are not returned in sufficient time to permit the Lender to exercise such right(s), the Borrower shall be liable to the Lender(s) for any loss borne by the Lender(s). Without prejudice to the foregoing, where, in accordance with the terms and conditions of a Loaned Security, there is a record date (including but not limited to Income Record Date) for determining who is entitled to exercise a right or to receive a distribution in cash or in securities and where such a record date and the CBL Deadline have passed at the time a notification of the right or the distribution is made by the issuer, the Borrower shall not be obliged to return the Loaned Securities to the Lender and shall not be liable to the Lender(s) for any loss borne by the Lender(s). Clearstream Banking shall bear no liability related to the exercise or non-exercise of a right described in this Article Clearstream Banking SA SLB Rules Page 7

12 Securities Lending and Borrowing Taxation All Borrowers expressly authorise Clearstream Banking to debit the Borrower's Account in Clearstream Banking to pay the amounts due by the Borrower under this Article (a) Withholding, gross-up and provision of information Unless otherwise specified in the Rules, all Income plus full or partial redemption paid by Clearstream Banking under these Rules shall be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any Tax Law. (b) Borrower and Taxes The Borrower shall promptly pay and account for all Taxes where applicable. (c) Retrospective Changes in Tax Law Amounts payable under the Rules shall be determined by reference to applicable Tax Law as at the date of the relevant payment and no adjustment shall be made to amounts paid under the Rules as a result of a retrospective changes in applicable Tax Law or as a result of a decision of a court of competent jurisdiction which is announced or enacted after the date of the relevant payment. (d) Tax disclaimer The Lender and the Borrower acknowledge and agree that Clearstream Banking is not, and shall not be considered to be a legal or tax advisor nor shall Clearstream Banking be requested to provide, or be deemed to have provided, any Tax or related advice to the Lender or the Borrower. In no event shall Clearstream Banking have any liability of any kind whatsoever for any Taxes or Tax Detriment arising from or in connection with a retrospective change in Tax Law, including but not limited to, a change resulting from a decision of a court of competent jurisdiction which is announced or enacted after the date of any relevant payment. (e) Due diligence For the avoidance of doubt, Clearstream Banking shall not be responsible to ascertain the Tax Laws of the relevant jurisdiction. Lender and Borrower acknowledge and agree that they must perform their own due diligence into the Tax, Tax Law and other requirements of each relevant jurisdiction that are relevant and applicable to the Lender and Borrower that neither lender nor Borrower (nor their tax advisors or any third party, without limitation) are entitled to rely on any information provided by Clearstream Banking hereunder. 4.3 Recalls Loans are granted for an undetermined period of time. For one or several Loans, the Lender, by notification to Clearstream Banking, or Clearstream Banking, by notification to the Lender and the Borrower, may elect to recall the Loaned Securities. Notifications shall be done by Authenticated Message. Either of the following shall be deemed to be a recall notification: (a) The notification by Clearstream Banking to the Borrower of the Income Record Date and of corporate actions on the Loaned Securities. In such cases and notwithstanding Appendix G, the Borrower shall redeliver the Loaned Securities not later than before the earliest of either record date, the exercise date or the CBL Deadline. (b) An instruction from the Lender to Clearstream Banking to transfer the Loaned Securities. If a recall is notified or deemed notified, the Borrower shall redeliver the Loaned Securities within the deadlines specified in Appendix G. If the Borrower fails to redeliver the recalled securities by the end of the Recall Period, and if the Lender has incurred settlement losses due to its failure to settle a sale of such loaned securities within Clearstream Banking s securities settlement system on the original contractual settlement date, CBL shall be authorised to charge the borrower upon request of the Lender an amount equal to the LIBOR Clearstream Banking SA Page 8 SLB Rules

13 Rules rate applicable to the sale proceeds of such sale and any direct losses and costs (including any fail charges or penalties and overdraft interest) in respect of such loaned securities not redelivered. The Interest shall accrue daily from and including the end date of the Recall Period until (but excluding) the redelivery or allocation date of the Loaned Securities or Equivalent Securities to the Lender pursuant to Article 5.2 a) or the credit of the Lender Reimbursement Amount to the Lender account pursuant to Article 5.2 b), as the case may be, and will be calculated according to the actual number of days elapsed on the basis of a 365-day year. Any such interest and direct costs and losses of the Lender notified by the Lender to Clearstream Banking and documented in a manner satisfactory to Clearstream Banking, which shall apply in addition to any interests or amounts due by the Borrower under Article 5.2 (a) and (b), will be debited from the Borrower's Account. Clearstream Banking shall be entitled to rely on any such information and documentation provided to it by the Lender. 4.4 Redelivery of Loaned Securities and return of Collateral Without prejudice to Article 4.3, the Borrower may, during a Loan, elect to redeliver all or a part of the Loaned Securities. Redelivery of Loaned Securities shall be done by the credit of Securities or Equivalent Securities to the Lender s Account in Clearstream Banking. Redelivery of Loaned Securities does not terminate the Borrower's responsibility to fulfil all other obligations required under these Rules. Upon redelivery, the Collateral shall be simultaneously released from designation as pledged, provided that all of the Borrower s obligations under these Rules have been fulfilled. Partial redelivery shall not lead to novation of the Loan. Without prejudice to Article 4.1, the Collateral shall be simultaneously released from designation as pledged, in proportion to the redelivery of Loaned Securities, provided that the Borrower s relevant obligations under these Rules have been fulfilled. 5. Default of Borrower 5.1 Events of default Specific Default For a Loan, the occurrence of any of the following events shall be considered a Specific Default: (a) Failure of the Borrower to redeliver Loaned Securities within the deadlines specified in Appendix G. (b) Failure of the Borrower to provide additional Collateral as specified under Article 4.1 of the Rules. In the event of a Specific Default, the Loan shall terminate automatically and Article 5.2 shall automatically apply for this Loan General Default Without prejudice to a Specific Default, any of the following events shall be considered a General Default: (a) Occurrence for the Borrower of any of the termination provisions set forth in Article 55 of the Clearstream Banking General Terms and Conditions; (b) If so determined by Clearstream Banking at its own discretion, by notification to the Borrower by Authenticated Message: i) Upon occurrence of a Specific Default; ii) Upon breach by the Borrower of any obligation arising under these Rules or any obligation arising under any other Securities lending or financing agreements which may be in force between the Borrower and Clearstream Banking; iii) Upon any indebtedness of the Borrower towards the Lender or Clearstream Banking not paid when due. Clearstream Banking SA SLB Rules Page 9

14 Securities Lending and Borrowing In the event of a General Default, any and all outstanding Loans shall terminate automatically and Article 5.2. shall automatically apply. The Lender shall not have the right to exercise its option between Article 5.2 (a) or Article 5.2 (b) for each Loan. Either Article 5.2 (a) or Article 5.2 (b) shall apply to all Loans General provisions Clearstream Banking may, in its discretion, notify the Lenders accordingly on the date of an Event of Default by Authenticated Message. In cases of an Event of Default, Clearstream Banking may disclose the identity of the Borrower to the Lender. Notwithstanding the above list of events, Clearstream Banking expressly retains the right to determine, on a case by case basis, that a particular event does not constitute an Event of Default. 5.2 Reimbursement of Lender Subject to the provisions of Article 5.1 above, upon the occurrence of an Event of Default, the following shall apply: (a) Redelivery of Securities Equivalent to Loaned Securities Unless the Lender has notified within the deadlines as stipulated in Appendix G to Clearstream Banking by Authenticated Message that it wishes to receive an Equivalent Cash payment as defined under Article 5.2 (b), Clearstream Banking will use reasonable efforts for a period of time as defined in Appendix G, via a Purchase procedure, to acquire Securities Equivalent to Loaned Securities not redelivered by the Borrower. The Borrower hereby irrevocably appoints Clearstream Banking to carry out such Purchase on the Borrower's behalf and at the Borrower's cost and risk. Clearstream Banking may appoint a Purchase Agent of its discretionary choice for this purpose. The Purchase Agent shall be instructed to purchase the Securities from a recognised market maker for guaranteed delivery in such market, wherever possible, on such terms and at such price as Clearstream Banking in its sole discretion may judge as reasonable. Clearstream Banking shall notify the Borrower and the Lender of the appointment of the Purchase Agent. Upon such notification, the Purchase Agent shall be deemed to be irrevocably appointed by the Borrower to proceed with the Purchase. The Borrower will be notified upon successful execution of the Purchase and the Lender will be credited with the Equivalent Securities. The Lender hereby expressly agrees that upon redelivery to the Lender of the Equivalent Securities, in accordance with this Article the Lender shall have no further claims against Clearstream Banking regarding the Loaned Securities. If despite several attempts within the deadlines defined in Appendix G, Clearstream Banking or the Purchase Agent fail to successfully purchase Equivalent Securities, Clearstream Banking will inform the Lender and the Borrower accordingly. Thereupon, the Lender may notify to Clearstream Banking by Authenticated Message either that it wishes to receive an equivalent cash payment as defined under Article 5.2 (b) or that the Lender wishes the Loan to be reconducted. In the absence of such notice, the Loan will be reconducted and continue until further notice. All costs associated with the Purchase (the Purchase Costs ) will be debited from the Borrower s Account in Clearstream Banking. The Purchase Costs shall bear interest at the rate of 4% above the daily London Interbank Offer Rate ( LIBOR ) rate from the date of the Purchase and as it will be determined by Clearstream Banking from time to time. The Borrower will be notified in due course by Clearstream Banking of the exact amount and value date of the debit. In the event of the Borrower's failure to ensure that its account in Clearstream Banking has adequate funds provision to cover the cost of closing out this Loan on the settlement date of the Purchase during Clearstream Banking's overnight processing, continuous settlement processing or daytime processing, then, Article 5.3 shall apply. If the Borrower defaults in the full redelivery of Loaned Securities from more than one Lender and due for redelivery on the same date, then Clearstream Banking shall allocate to such Lenders the redelivered Securities in proportion to the number of the relevant Securities loaned to the Borrower by each such Lender. Clearstream Banking SA Page 10 SLB Rules

15 Rules (b) Cash reimbursement equal to the Market Value of the Securities on Loan If the Lender has given notice that it wishes to receive Cash payment within the deadlines as stipulated in Appendix G to Clearstream Banking by Authenticated Message, Clearstream Banking shall credit the Lender's Account with a Cash amount equivalent to the Market Value of the Loaned Securities which were not returned, plus accrued interest on such equivalent Cash amount at the LIBOR rate from and including the end date of the Recall Period and plus the Lending Income due to the Lender, both up to (but excluding) the date of such credit (together, the Lender Reimbursement Amount ). The LIBOR rate applicable to each month or part thereof that any such equivalent amount remains outstanding is the LIBOR rate determined on the first Business Day of any such period of one month or any part thereof. Interest will accrue daily on a compound basis and will be calculated according to the actual number of days elapsed. The value of the Loaned Securities shall be their Market Value based on the closing price at the beginning of the Recall Period, as determined by Clearstream Banking, provided that if coupon interest is payable in respect of the Securities, such value shall be adjusted to include (if not already included) such coupon interest calculated from (and including) the last coupon interest payment date up to (but excluding) the end date of the Recall Period. The Lender Reimbursement Amount shall be paid to the Lender by Clearstream Banking in the currency of the Loaned Securities. Clearstream Banking shall be authorised to debit the Borrower s Account for the Lender Reimbursement Amount paid to the Lender. Lenders and Borrowers expressly give Clearstream Banking the right to make such debits and credits as are necessary in order to act in accordance with the Rules. In the event the Borrower's cash balance is not sufficient to cover the Lender Reimbursement Amount Clearstream Banking undertakes to pay such amount to the Lender. The amounts paid by Clearstream Banking and due for repayment by the Borrower shall bear interest at the rate of 4% above the daily LIBOR rate as it will be determined by Clearstream Banking from time to time. Clearstream Banking may then also enforce the Collateral, in accordance with the provisions of Article 5.3. The Lender hereby expressly agrees that, upon payment to the Lender of the Lender Reimbursement Amount, in accordance with this Article the Lender shall have no further claims against Clearstream Banking regarding the Loaned Securities, and under these Rules. In the event of an opening of reorganisation or winding-up proceeding against Clearstream Banking in Luxembourg, Clearstream Banking shall be discharged from its obligations under this Article Enforcement of the Collateral If, for a Loan, Clearstream Banking fails to fulfil its payment obligations to the Lender pursuant to Article 5.2 (a) or (b) above within five (5) Business Days upon receipt by the Clearstream Banking of the Lender's instruction to receive a Cash payment, Clearstream Banking, acting as collateral agent in the name and on behalf of the Lender, shall be authorised without prior notice in accordance with Luxembourg law to enforce the Collateral up to the Lender Reimbursement Amount either by appropriation, sale of the Collateral at Market Value or otherwise provided by Luxembourg law. In the event that (i) Clearstream Banking reimburses the Lender pursuant to Article 5.2 (a) or (b) above and that (ii) the Borrower does not maintain sufficient Cash balances in its accounts with Clearstream Banking to cover the Purchase Costs or Lender Reimbursement Amount plus related interests due to Clearstream Banking according to Article 5.2, Clearstream Banking shall be authorised without prior notice in accordance with Luxembourg law to enforce the Collateral up to the amounts due to Clearstream Banking either by appropriation, sale of the Collateral at Market Value or otherwise provided by Luxembourg law. Currency conversions to the Base Currency, if necessary, shall be performed at the then applicable exchange rate and credited to an account of Clearstream Banking. The value of Cash Collateral shall be calculated based on the face value converted at the market rate on the day of realisation. Clearstream Banking SA SLB Rules Page 11

16 Securities Lending and Borrowing Upon any such realisation, Clearstream Banking shall have the right to deliver, assign and transfer to the purchaser thereof any or all of the Collateral, and to endorse the Collateral in the Borrower's name. Each purchaser at any such sale shall hold the Collateral or the portion purchased absolutely free from any claim or right of whatever kind, including any equity of redemption of the Borrower, which hereby specifically waives all rights of redemption, stay or appraisal which it has or may have under any rule of law or statute now existing or hereafter adopted. In case of any sale of all or any part of the Collateral on credit or for future delivery, the Collateral may be retained until the selling price is paid by the purchaser thereof, but Clearstream Banking shall not incur any liability in case of the failure of such purchaser to take up and pay for the Collateral so sold and in case of any failure the Collateral may be sold again. The Borrower hereby undertakes to sign, execute and deliver any transfer, deed or documents which Clearstream Banking may require in order to ensure the validity and perfection of the interests in the Collateral and for such other purposes as Clearstream Banking may determine, including, without limitation, for the purpose of vesting any rights on the Collateral in, or delivering any Collateral to, any purchaser or purchasers thereof. The proceeds of any enforcement of the Collateral shall be applied by Clearstream Banking first to the first ranking pledge of Clearstream Banking, including for the payment of the costs and expenses of such realisation, including reasonable counsel fees, broker's fees, taxes and commissions owed to Clearstream Banking, and the balance and all other cash proceeds received shall be applied, in the following order in favour of Clearstream Banking, to (i) the payment of interest on any amounts due and payable, (ii) the payment of the principal of all amounts due and payable in favour of Clearstream Banking, and (iii) the payment of all other payment obligations of the Borrower towards Clearstream Banking acting in whatever capacity under or in connection with these Rules. The balance, if any, shall be applied towards any remaining outstanding obligations of the Borrower towards the Lender under these Rules. Any proceeds that remain available after full discharge of all payment obligations of the Borrower under or in connection with these Rules or otherwise shall be transferred to or held at the disposal of the Borrower. If there are insufficient assets to repay all amounts due under the Rules, it will constitute an indebtedness of the Borrower to Clearstream Banking. 6. Lending Income and Borrowing Fees Lending Income and Borrowing Fees are calculated daily by Clearstream Banking pro rata temporis on the Market Value of the Loaned Securities. Lending Income is credited by Clearstream Banking to the Lender in EUR monthly. The Borrower is charged a fixed handling fee for each Loan. Borrowing Fees are payable by the Borrower to Clearstream Banking and are debited from the Borrower s Account monthly. The Borrower expressly authorises Clearstream Banking to debit the Borrower's Account to the extent required to pay the Borrowing Fees. A fee schedule listing Lending Income, Borrowing Fees and penalty fees, as established by Clearstream Banking from time to time, is available to Borrowers and Lenders upon request. Rates are subject to change upon prior notification by Clearstream Banking via Clearstream Banking Announcement or Authenticated Message at least ten (10) Business Days in advance. The Customer shall be deemed to have consented to any such amendment unless the Customer terminates the services provided under this Programme before such modification takes effect. Clearstream Banking SA Page 12 SLB Rules

17 Rules 7. Liability Neither Clearstream Banking nor any of its directors, officers, employees or agents shall be liable to the Lender and the Borrower for any liability, obligation, damage, claim, loss, cost or expense of any kind or nature whatsoever ( Damages ) at any time imposed on, incurred or suffered by, or occasioned to the Lender and the Borrower, including but not limited to: (a) by reason of any action taken or omitted to be taken by any one or all of Clearstream Banking, its directors, officers, employees or agents under or in connection with these Rules or any other agreement, document or instrument delivered in connection with these Rules; (b) as a result of the reliance of Clearstream Banking, any of its directors, officers, employees or agents on any information upon which it/they is/are entitled to rely pursuant to these Rules; (c) in the event of any loss, damage, destruction or deficient delivery of any Collateral, howsoever caused; (d) in connection with any inaccuracy of any information received from any recognised pricing source that Clearstream Banking employs in the ordinary course of business, including but not limited to any incorrect reference data or price data received by Clearstream Banking from service providers and used by Clearstream Banking to determine the Market Value; (e) any act or omission or insolvency of any person not associated with Clearstream Banking (including, for the avoidance of doubt, the depository, subdepository, custodian or subcustodian (a Depository ) or carrier of Clearstream Banking and any clearing system with which Clearstream Banking transacts business), provided that, in the case of a Depository or carrier of Clearstream Banking, Clearstream Banking shall have taken reasonable care in its appointment of any Depository or carrier and shall at all times take reasonable care as to the safekeeping facilities or collection, delivery or transfer procedures of any Depository or carrier; (f) the collection or deposit or crediting to the Collateral Account of invalid, fraudulent or forged Securities; (g) any enforcement by Clearstream Banking of its rights on the assets in the Collateral Account granted, as the case may be, to Clearstream Banking under a separate written agreement; or (h) any malfunction of, or error in, the transmission of information and caused by any electrical or mechanical machine or system or any interception of communication facilities, abnormal operating conditions, labour difficulties, acts of God, or any similar or dissimilar causes beyond the reasonable control of Clearstream Banking; unless caused by negligence or wilful misconduct of Clearstream Banking or its directors, officers, or employees, in which case Clearstream Banking shall be liable only for direct Damages in the case of negligence and shall be liable for direct and indirect Damages in the case of gross negligence or wilful misconduct. Clearstream Banking shall not be liable for any Damages resulting directly or indirectly from the nonexecution by the Lender or the Borrower of its obligations under these Rules. Clearstream Banking shall not be liable and the Lender expressly agrees that it shall indemnify and hold harmless Clearstream Banking against any damages, claims, costs and expenses, that may result from any information and documentation provided by it under or in relation to the Rules and Clearstream Banking s reliance thereon. 8. Confidentiality Information concerning the transactions of Borrowers and Lenders which are effected under these Rules shall be kept confidential and shall not be disclosed to the counterparties or to any third party unless such disclosure is required in writing to Clearstream Banking by the Lender in relation to the Borrower or by the Borrower in relation to the Lender or authorised by law, regulation, court order, competent authority or under the terms of these Rules. Clearstream Banking SA SLB Rules Page 13