Redemptions through the Clearing Process: Delivery Fails; Posting of Cash Clause Samples

This clause governs the procedures and consequences when a redemption transaction processed through a clearing system fails due to non-delivery of securities. In such cases, the party responsible for the failed delivery may be required to post cash as collateral or compensation until the securities are delivered or the issue is otherwise resolved. This mechanism ensures that the non-defaulting party is protected against potential losses or delays, thereby maintaining the integrity and reliability of the clearing process.
Redemptions through the Clearing Process: Delivery Fails; Posting of Cash. 1. The Trust recognizes that on the redemption of Creation Units of an ETF Series through the Clearing Process Bank, on behalf of the applicable ETF Series, is obligated to deliver to NSCC on the settlement date the required type and amount of Redemption Securities to redeem the Creation Units of the applicable ETF Series. It shall be the responsibility of the Trust and each ETF Series to maintain in the custody account the required type and amount of Redemption Securities for the redemption of Creation Units of each ETF Series. Should the custody account of an ETF Series for any reason (for example, through the Trust’s participation in a securities lending program on behalf of the ETF Series) have a short position in respect of any of the securities issues comprising the basket of Redemption Securities (a “short delivery position”) with the result that, on settlement date, Bank is unable to deliver a sufficient quantity of the Redemption Securities to NSCC, the Trust acknowledges that Bank shall be obligated under NSCC’s rules to fund the short delivery position with cash pending delivery of the quantity of securities needed to cover the short delivery position. Bank shall be entitled to charge to the account of the applicable ETF Series the amount of cash needed to cover the short delivery position. In the event that Bank advances its own funds to cover an ETF Series short delivery position, Bank, in its discretion, may charge the applicable EFT Series interest on the amount of the advance at the rate that Bank charges for advances of a similar nature to similar customers of Bank, unless Bank and the Trust have mutually agreed in writing upon another rate. 2. In the event that Bank shall have advanced its own funds to cover a short delivery position at NSCC for an ETF Series, Bank shall have, to the extent of the amount of the advance, a security interest in the securities that remain in the ETF Series custody account and Bank shall have all the rights and remedies of a secured party under the New York Uniform Commercial Code. Nothing herein or in the Custody Agreement shall be construed to mandate that Bank, acting as Index Receipt Agent for the Trust and each ETF Series, effect redemptions of Creation Units where Bank, acting in good faith, believes that it may not be repaid an advance by the Trust or the ETF Series or otherwise not receive from the ETF Series delivery of the Redemption Securities that are the subject of a short delivery position.
View SourceView Similar (11)
Redemptions through the Clearing Process: Delivery Fails; Posting of Cash. 1. The Trust recognizes that on the redemption of Creation Units of an ETF Series through the Clearing Process ▇.▇. ▇▇▇▇▇▇, on behalf of the applicable ETF Series, is obligated to deliver to NSCC on the settlement date the required type and amount of Redemption Securities to redeem the Creation Units of the applicable ETF Series. It shall be the responsibility of the Trust and each ETF Series to maintain in the custody account the required type and amount of Redemption Securities for the redemption of Creation Units of each ETF Series. Should the custody account of an ETF Series for any reason (for example, through the Trust’s participation in a securities lending program on behalf of the ETF Series) have a short position in respect of any of the securities creates comprising the basket of Redemption Securities (a “short delivery position”) with the result that, on settlement date, ▇.▇. ▇▇▇▇▇▇ is unable to deliver a sufficient quantity of the Redemption Securities to NSCC, the Trust acknowledges that ▇.▇. ▇▇▇▇▇▇ shall be obligated under NSCC’s rules to fund the short delivery position with cash pending delivery of the quantity of securities needed to cover the short delivery position. ▇.▇. ▇▇▇▇▇▇ shall be entitled to charge to the account of the applicable ETF Series the amount of cash needed to cover the short delivery position. In the event that ▇.▇. ▇▇▇▇▇▇ advances its own funds to cover an ETF Series short delivery position, ▇.▇. ▇▇▇▇▇▇, in its discretion, may charge the applicable EFT Series interest on the amount of the advance at the rate that ▇.▇. ▇▇▇▇▇▇ charges for advances of a similar nature to similar customers of ▇.▇. ▇▇▇▇▇▇, unless ▇.▇. ▇▇▇▇▇▇ and the Trust have mutually agreed in writing upon another rate. 2. In the event that ▇.▇. ▇▇▇▇▇▇ shall have advanced its own funds to cover a short delivery position at NSCC for an ETF Series, ▇.▇. ▇▇▇▇▇▇ shall have, to the extent of the amount of the advance, a security interest in the securities that remain in the ETF Series custody account and ▇.▇. ▇▇▇▇▇▇ shall have all the rights and remedies of a secured party under the New York Uniform Commercial Code. Nothing herein or in the Custody Agreement shall be construed to mandate that ▇.▇. ▇▇▇▇▇▇, acting as Index Receipt Agent for the Trust and each ETF Series, effect redemptions of Creation Units where ▇.▇. ▇▇▇▇▇▇, acting in good faith, believes that it may not be repaid an advance by the Trust or the ETF Series or otherwise not receive from the ETF S...
View SourceView Similar (7)
Redemptions through the Clearing Process: Delivery Fails; Posting of Cash. 1. The Trust recognizes that on the redemption of Creation Units of an ETF Series through the Clearing Process ▇.▇. ▇▇▇▇▇▇, on behalf of the applicable ETF Series, is obligated to deliver to NSCC on the settlement date the required type and amount of Redemption Securities to redeem the Creation Units of the applicable ETF Series. It shall be the responsibility of the Trust and each ETF Series to maintain in the custody account the required type and amount of Redemption Securities for the redemption of Creation Units of each ETF Series. Should the custody account of an ETF Series for any reason (for example, through the Trust’s participation in a securities lending program on behalf of the ETF Series) have a short position in respect of any of the securities creates comprising the basket of Redemption Securities (a “short delivery position”) with the result that, on settlement date, ▇.▇. ▇▇▇▇▇▇ is unable to deliver a sufficient quantity of the Redemption Securities to NSCC, the Trust acknowledges that ▇.▇. ▇▇▇▇▇▇ shall be obligated under NSCC’s rules to fund the short delivery position with cash pending delivery of the quantity of securities needed to cover the short delivery position. ▇.▇. ▇▇▇▇▇▇ shall be entitled to charge to the account of the applicable ETF Series the amount of cash needed to cover the short delivery position. In the event that ▇.▇. ▇▇▇▇▇▇
View Source
Redemptions through the Clearing Process: Delivery Fails; Posting of Cash. 1. The Trust recognizes that on the redemption of Creation Units of a Fund through the Clearing Process ▇.▇. ▇▇▇▇▇▇, on behalf of the applicable Fund, is obligated to deliver to NSCC on the settlement date the required type and amount of Redemption Securities to redeem the Creation Units of the applicable Fund. It shall be the responsibility of the Trust and each Fund to maintain in the custody account the required type and amount of Redemption Securities for the redemption of Creation Units of each Fund. Should the custody account of a Fund for any reason (for example, through the Trust’s participation in a securities lending program on behalf of the Fund) have a short position in respect of any of the securities issues comprising the basket of Redemption Securities (a “short delivery position”) with the result that, on settlement date, ▇.▇. ▇▇▇▇▇▇ is unable to deliver a sufficient quantity of the Redemption Securities to NSCC, the Trust acknowledges that ▇.▇. ▇▇▇▇▇▇ shall be obligated under NSCC’s rules to fund the short delivery position with cash pending delivery of the quantity of securities needed to cover the short delivery position. ▇.▇. ▇▇▇▇▇▇ shall be entitled to charge to the account of the applicable Fund the amount of cash needed to cover the short delivery position. In the event that ▇.▇. ▇▇▇▇▇▇ advances its own funds to cover a Fund short delivery position, ▇.▇. ▇▇▇▇▇▇, in its discretion, may charge the applicable Fund interest on the amount of the advance at the rate that ▇.▇. ▇▇▇▇▇▇ charges for advances of a similar nature to similar customers of ▇.▇. ▇▇▇▇▇▇, unless ▇.▇. ▇▇▇▇▇▇ and the Trust have mutually agreed in writing upon another rate. ETF Agency Services Agreement – March 2010 version 2. In the event that ▇.▇. ▇▇▇▇▇▇ shall have advanced its own funds to cover a short delivery position at NSCC for a Fund, ▇.▇. ▇▇▇▇▇▇ shall have, to the extent of the amount of the advance, a security interest in the securities that remain in the Fund custody account and[, to the extent that the ▇.▇. ▇▇▇▇▇▇ constitutes a secured party under the New York Uniform Commercial Code,] ▇.▇. ▇▇▇▇▇▇ shall have all the rights and remedies of a secured party under the New York Uniform Commercial Code. Nothing herein or in the Custody Agreement shall be construed to mandate that ▇.▇. ▇▇▇▇▇▇, acting as Index Receipt Agent for the Trust and each Fund, effect redemptions of Creation Units where ▇.▇. ▇▇▇▇▇▇, acting in good faith, believes that it may not be repaid an ...
View Source

Related to Redemptions through the Clearing Process: Delivery Fails; Posting of Cash

  • Mandatory Redemption at Subscriber’s Election In the event the Company is prohibited from issuing Conversion Shares, or fails to timely deliver Shares on a Delivery Date, or upon the occurrence of any other Event of Default (as defined in this Note or in the Subscription Agreement) or for any reason other than pursuant to the limitations set forth in Section 2.3 hereof, then at the Subscriber's election, the Company must pay to the Subscriber ten (10) business days after request by the Subscriber, at the Subscriber's election, a sum of money in immediately available terms equal to the greater of (i) the product of the outstanding principal amount of the Note designated by the Subscriber multiplied by 120%, or (ii) the product of the number of Conversion Shares otherwise deliverable upon conversion of an amount of Note principal and/or interest designated by the Subscriber (with the date of giving of such designation being a “Deemed Conversion Date”) at the then Conversion Price that would be in effect on the Deemed Conversion Date multiplied by the average of the closing bid prices for the Common Stock for the five consecutive trading days preceding either: (1) the date the Company becomes obligated to pay the Mandatory Redemption Payment, or (2) the date on which the Mandatory Redemption Payment is made in full, whichever is greater, together with accrued but unpaid interest thereon and any liquidated damages then payable (“Mandatory Redemption Payment”). The Mandatory Redemption Payment must be received by the Subscriber on the same date as the Company Shares otherwise deliverable or within ten (10) business days after request, whichever is sooner (“Mandatory Redemption Payment Date”). Upon receipt of the Mandatory Redemption Payment, the corresponding Note principal and interest will be deemed paid and no longer outstanding. Liquidated damages calculated pursuant to Section 2.5(c) hereof, that have been paid or accrued for the twenty (20) day period prior to the actual receipt of the Mandatory Redemption Payment by the Subscriber shall be credited against the Mandatory Redemption Payment.

  • Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion In addition to any other rights available to the Holder, if Borrower fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder or Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then Borrower shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if Borrower had timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, Borrower shall be required to pay the Holder $1,000. The Holder shall provide Borrower written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of Borrower, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to Borrower’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

  • DELIVERY: FOB DESTINATION, INSIDE DELIVERY, FREIGHT PAID Whenever possible, contractors should give the ordering entities 3 working days prior notice of any deliveries and/or installations. Furniture contractors will not be responsible for the removal/moving of existing furnishings unless requested by the ordering entity. Contractors should verify site readiness prior to delivery. All deliveries will be made during normal working hours unless otherwise arranged with the ordering entity. Contractor will communicate any scheduling delays and/or changes immediately. Agencies will not be responsible for any freight damage, concealed or otherwise.

  • Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

  • Tender and Exchange Offers; Redemption, Replacement or Cancellation of Deposited Securities (a) The Depositary shall not tender any Deposited Securities in response to any voluntary cash tender offer, exchange offer or similar offer made to holders of Deposited Securities (a “Voluntary Offer”), except when instructed in writing to do so by an Owner surrendering American Depositary Shares and subject to any conditions or procedures the Depositary may require. (b) If the Depositary receives a written notice that Deposited Securities have been redeemed for cash or otherwise purchased for cash in a transaction that is mandatory and binding on the Depositary as a holder of those Deposited Securities (a “Redemption”), the Depositary, at the expense of the Company, shall (i) if required, surrender Deposited Securities that have been redeemed to the issuer of those securities or its agent on the redemption date, (ii) Disseminate a notice to Owners (A) notifying them of that Redemption, (B) calling for surrender of a corresponding number of American Depositary Shares and (C) notifying them that the called American Depositary Shares have been converted into a right only to receive the money received by the Depositary upon that Redemption and those net proceeds shall be the Deposited Securities to which Owners of those converted American Depositary Shares shall be entitled upon surrenders of those American Depositary Shares in accordance with Section 2.5 or 6.2 and (iii) distribute the money received upon that Redemption to the Owners entitled to it upon surrender by them of called American Depositary Shares in accordance with Section 2.5 (and, for the avoidance of doubt, Owners shall not be entitled to receive that money under Section 4.1). If the Redemption affects less than all the Deposited Securities, the Depositary shall call for surrender a corresponding portion of the outstanding American Depositary Shares and only those American Depositary Shares will automatically be converted into a right to receive the net proceeds of the Redemption. The Depositary shall allocate the American Depositary Shares converted under the preceding sentence among the Owners pro-rata to their respective holdings of American Depositary Shares immediately prior to the Redemption, except that the allocations may be adjusted so that no fraction of a converted American Depositary Share is allocated to any Owner. A Redemption of all or substantially all of the Deposited Securities shall be a Termination Option Event. (c) If the Depositary is notified of or there occurs any change in nominal value or any subdivision, combination or any other reclassification of the Deposited Securities or any recapitalization, reorganization, sale of assets substantially as an entirety, merger or consolidation affecting the issuer of the Deposited Securities or to which it is a party that is mandatory and binding on the Depositary as a holder of Deposited Securities and, as a result, securities or other property have been or will be delivered in exchange, conversion, replacement or in lieu of, Deposited Securities (a “Replacement”), the Depositary shall, if required, surrender the old Deposited Securities affected by that Replacement of Shares and hold, as new Deposited Securities under this Deposit Agreement, the new securities or other property delivered to it in that Replacement. However, the Depositary may elect to sell those new Deposited Securities if in the opinion of the Depositary it is not lawful or not practical for it to hold those new Deposited Securities under this Deposit Agreement because those new Deposited Securities may not be distributed to Owners without registration under the Securities Act of 1933 or for any other reason, at public or private sale, at such places and on such terms as it deems proper and proceed as if those new Deposited Securities had been Redeemed under paragraph (b) above. A Replacement shall be a Termination Option Event. (d) In the case of a Replacement where the new Deposited Securities will continue to be held under this Deposit Agreement, the Depositary may call for the surrender of outstanding Receipts to be exchanged for new Receipts specifically describing the new Deposited Securities and the number of those new Deposited Securities represented by each American Depositary Share. If the number of Shares represented by each American Depositary Share decreases as a result of a Replacement, the Depositary may call for surrender of the American Depositary Shares to be exchanged on a mandatory basis for a lesser number of American Depositary Shares and may sell American Depositary Shares to the extent necessary to avoid distributing fractions of American Depositary Shares in that exchange and distribute the net proceeds of that sale to the Owners entitled to them. (e) If there are no Deposited Securities with respect to American Depositary Shares, including if the Deposited Securities are cancelled, or the Deposited Securities with respect to American Depositary Shares have become apparently worthless, the Depositary may call for surrender of those American Depositary Shares or may cancel those American Depositary Shares, upon notice to Owners, and that condition shall be a Termination Option Event.