938

NEW ZEALAND GAZETTE

No. 17

January 1995 shall not in any way be affected or abrogated by the execution of this agreement. That Notice of Termination shall continue in force unless this Deed comes into effect before and continues in effect beyond midnight on 20 January 1995.

3. NON CASH COVER

3.1 On no later than 15 Business Days prior to the Agreed Date, LCH will provide to SFECH full particulars of all guarantees, securities and other non cash cover including currency held other than in New Zealand Dollars then held by it in respect of the liability of any Clearing Member to LCH arising out of NZFOE Contracts. LCH will not thereafter accept any other non cash cover in respect of any such liabilities.

4. NO ALTERATION OF INITIAL MARGIN

4.1 LCH will not after 15 Business Days prior to the Agreed Date either alter the method of calculation of initial margin amounts then in force or reduce initial margin rates below those then in force for NZFOE Contracts without, in either case, obtaining the prior consent of SFECH, which consent shall not be unreasonably withheld or delayed.

5. COVENANTS BY LCH

5.1 LCH covenants that it will on the last Business Day prior to the Agreed Time (or if the Agreed Time is a Business Day, on that day):

(a) by 10.00am advise the Exchange and SFECH of the amount of money which it expects to hold for each Clearing Member in respect of initial margin liabilities for NZFOE Contracts upon the payment of all calls which have then been made by LCH;

(b) by 11.30am provide to the Exchange and SFECH full particulars of NZFOE Contracts then registered in the name of each Clearing Member;

(c) by 2.00pm advise the Exchange and SFECH of the amount held for each Clearing Member in respect of initial margin liabilities and buffer amounts for NZFOE Contracts; and

(d) by 5.00pm pay to the Escrow Agent the Escrow Funds through the New Zealand Austraclear cash payment system.

6. ESCROW FUNDS, COMMISSION

6.1 SFECH shall appoint the Escrow Agent on or before 14 Business Days prior to the Agreed Date, failing which LCH may appoint the Escrow Agent. The Escrow Agent shall be appointed to hold and to deal with the Escrow Funds in accordance with this Deed. The Escrow Funds may be invested by the Escrow Agent in any manner nominated by SFECH and agreed to by LCH and such investment shall not be altered prior to the Agreed Time without the consent of LCH, such consent not to be unreasonably withheld or delayed. Any interest earned on such investments shall accrue for the benefit of and be paid by the Escrow Agent to SFECH or as SFECH shall in writing direct, however, SFECH shall remit to LCH an amount comprising:

(a) interest earned up to the Agreed Time, on that part of the Escrow Funds which comprises the first $50,000 held by LCH on behalf of each Clearing Member as at 2.00pm on the last Business Day prior to the Agreed Date (or if the Agreed Date is a Business Day on that day); and

(b) a margin of 0.75% per annum on the interest earned on the remainder of the Escrow Funds up to midnight at the end of the Agreed Date.

6.2 Until the Agreed Time the Escrow Agent shall hold the Escrow Funds on account of LCH. As from that time the Escrow Agent shall hold the Escrow Funds on account of SFECH or as it shall in writing direct.

6.3 The reasonable costs and charges of the Escrow Agent shall be shared equally by the Exchange and LCH.

6.4 The parties acknowledge that LCH shall account directly to Clearing Members in respect of commission collections on the NZFOE Contracts at midnight at the end of the Business Day prior to the Agreed Date (or if the Agreed Date is a Business Day, by the Agreed Time) and shall have no responsibility for the collection and remittance of commission thereafter.

7. RELEASE OF LCH AND TERMINATION OF AGREEMENTS

7.1 Subject to compliance by LCH with all of its obligations under clause 5, the Exchange:

(a) on behalf of itself forever releases LCH from all Clearing Obligations and all Guarantee Obligations (other than in each case arising from any default of any Clearing Member or LCH prior to the Agreed Time) and the Novation Agreement and other than in relation to provisions expressed to survive the termination of those agreements the Ticker Service Agreement and the Information Disclosure Agreement;

(b) on behalf of the Clearing Members and each of them, forever releases LCH from the Clearing Guarantees and from all or any liability or obligation thereunder after the Agreed Time and hereby terminates the Clearing Guarantees;

(c) on behalf of the Clearing Members and each of them authorises LCH and confirms and ratifies the authority of LCH to pay the Escrow Funds to the Escrow Agent in accordance with this deed and acknowledges that no Clearing Member has any claim against LCH in respect of the Escrow Funds or in respect of such payment;

7.2 (a) LCH releases all guarantees, securities and other non cash cover held by LCH or any currency not in New Zealand Dollars held by LCH in respect of the liability of any Clearing Member to LCH arising out of NZFOE Contracts;

(b) to the extent that any guarantees, indemnities or other non cash cover referred to in this clause is incapable of release by way of this Deed, LCH covenants forthwith to take such further steps and to execute such further documents as may be necessary to effect the release, discharge or abandonment of such guarantees, securities or other non cash cover, and to arrange for the redelivery of such non cash cover as is capable of delivery to the relevant Clearing Member or as it may direct;

(c) LCH agrees to deliver to SFECH any commodity or instrument held by it pursuant to delivery obligations under open contracts and not due for delivery on the Agreed Date by not later than the time provided by clause 5.1 for the delivery of Escrow Funds.

7.3 LCH acknowledges and agrees that the provisions of this Deed, and in particular those of clauses 5, 6 and 7 and the assumption by SFECH of the obligations of a Clearing House for the Exchange referred to in Recital F(c) constitute satisfactory arrangements for the treatment of open positions for the purposes of Clause 9.04 of the Clearing Agreement, and LCH agrees that it has no further rights under Clause 9.04 of the Clearing Agreement.

7.4 This clause 7 shall come into effect at the Agreed Time.

7.5 In the event that at any time after the execution of this Deed and prior to the Agreed Time, a Clearing