Common use of Hedging Strategy Clause in Contracts

Hedging Strategy. 4.01 The Borrower acknowledges the significance of addressing the interest rate risk inherent in this Agreement in cooperation with the Lender. Along these lines: 4.01.01 the Borrower undertakes to establish, together with the Lender, mechanisms to monitor the interest rate exposure and evaluate available hedge strategies; 4.01.02 the Borrower invites the Lender to provide on a regular basis hedging ideas and products; and 4.01.03 the Borrower undertakes that it shall, by no later than the date falling six (6) months from the Drawdown Date, enter into a Designated Transaction so as to limit its exposure under this Agreement to interest rate fluctuations on terms and conditions mutually agreed between the Borrower and the Lender. 4.02 Any Designated Transaction shall be entered into on the basis of the Master Agreement and pursuant to the strategy set out herein and shall be concluded with the Lender. 4.03 No Designated Transaction may be entered into by the Borrower: 4.03.01 if a material adverse change occurs in the financial condition or operation of any one or more of the Security Parties or any other member of the Group and/or if any other Event of Default or a Possible Event of Default occurs; 4.03.02 for a period longer than five (5) years, commencing on the date of the conclusion of the first Designated Transaction (by the time provided for in Clause 4.01.03); 4.03.03 for an amount less than or equal to the whole amount of the Facility, as reducing from time to time thereafter pursuant to Clause 10.01 so that the notional principal amount of the continuing Designated Transactions does not (taking into account the scheduled amortisation) exceed at any relevant time the amount of the Facility as reducing from time to time thereafter pursuant to Clause 10.01; 4.03.04 if the Lender determines that at the relevant time the Swap Exposure exceeds, or might exceed as a result thereof, the amount of One million Five hundred thousand Dollars ($1,500,000); 4.04 Without prejudice and in addition to the Borrower's obligations under Clause 21, if at any time during the Security Period, the Lender determines that the Swap Exposure exceeds the amount of One hundred thousand Dollars ($100,000), the Borrower shall provide the Lender, within fifteen (15) days of being advised by the Lender of such excess, with additional security in form and substance in all respects acceptable to the Lender (valued in accordance with normal banking practice) and which in the sole opinion of the Lender provides security in an amount at least equal to the amount of such excess. Such additional security to be constituted by: 4.04.01 pledged cash deposits to the credit of the Retention Account in an amount sufficient to cover such excess and/or; 4.04.02 any other security acceptable to the Lender, provided in a manner satisfactory to the Lender in its sole discretion. 4.05 Notwithstanding any provision of this Agreement and/or the Master Agreement to the contrary, if for any reason a Designated Transaction has been entered into but the Facility is not drawn under this Agreement then, subject to clause 4.06, the Lender shall be entitled but not obliged (and, where relevant, may do so without the consent of the Borrower where it would otherwise be required whether under the Master Agreement or otherwise) to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or any part of the rights, benefits and obligations created by such Designated Transaction and/or the Master Agreement and/or to obtain or re-establish any hedge or related trading position in any manner and with any person the Lender in its absolute discretion may determine. 4.06 If a Designated Transaction has been entered into but the Facility is not drawn down under this Agreement and the Lender in its absolute discretion agrees, following a written request of the Borrower, that the Borrower may be permitted to maintain all or part of a Designated Transaction, the Borrower shall, within fifteen (15) days of being notified by the Lender of such requirement, provide the Lender with, or procure the provision to the Lender of, such additional security as shall in the opinion of the Lender be adequate to secure the performance of such Designated Transaction, which additional security shall take such form and be constituted by such documentation, as the Lender in its absolute discretion may approve or require. 4.07 The Borrower shall on the first written demand of the Lender indemnify the Lender in respect of all losses, costs and expenses (including, but not limited to, legal costs and expenses) incurred or sustained by the Lender as a consequence of or in relation to the effecting of any matter or transactions referred to in Clauses 4.05 and 4.06. 4.08 Without prejudice to or limitation of the obligations of the Borrower under Clause 4.07, in the event that the Lender exercises any of its rights under Clauses 4.05 or 4.06 and such exercise results in all or part of a Designated Transaction being terminated such termination shall be treated under the Master Agreement in the same manner as if it were a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default (as so defined in that section 14) by the Borrower and, accordingly, the Lender shall be permitted to recover from the Borrower a payment for early termination calculated in accordance with the provisions of section 6(e)(i) of the Master Agreement.

Hedging Strategy. 4.01 The Borrower acknowledges the significance of addressing the interest rate risk inherent in this Agreement in cooperation with the Lender. Along these lines: 4.01.01 the Borrower undertakes to establish, together with the Lender, mechanisms to monitor the interest rate exposure and evaluate available hedge strategies; 4.01.02 the Borrower invites the Lender to provide on a regular basis hedging ideas and products; and 4.01.03 the Borrower undertakes that it shall, by no later than the date falling six (6) months from the Drawdown Date, may enter into a Designated Transaction so as to limit its exposure under this Agreement to interest rate fluctuations on terms and conditions mutually agreed between the Borrower and the Lender. 4.02 Any Designated Transaction shall be entered into on the basis of the Master Agreement and pursuant to the strategy set out herein and shall be concluded with the Lender. 4.03 No Designated Transaction may be entered into by the Borrower: 4.03.01 if there is a material adverse change occurs Material Adverse Effect in the financial condition or operation of relation to any one or more of the Security Parties or any other member of the Group and/or if any other Event of Default or a Possible Potential Event of Default occurs; 4.03.02 for a period longer than five (5) years, commencing on from the date of the conclusion of the first Designated Transaction (by the time provided for in Clause 4.01.03)Drawdown Date; 4.03.03 for an amount less than or equal to which, when aggregated with the whole amount of any other Designated Transaction entered by the Borrower will not, at any relevant time, exceed the amount of the Facility, as reducing from time to time thereafter pursuant to Clause 10.01 11.01 so that the notional principal amount of the continuing Designated Transactions does not (taking into account the scheduled amortisation) exceed at any relevant time the amount of the Facility as reducing from time to time .time thereafter pursuant to Clause 10.0111.01; 4.03.04 if the Lender determines that at the relevant time the Swap Exposure exceeds, or might exceed as a result thereof, the amount of One million Five hundred thousand Dollars ($1,500,000)Maximum Permitted Swap Exposure; 4.04 Without prejudice and in addition to the Borrower's obligations under Clause 21, if at any time during the Security Period, the Lender determines that the Swap Exposure exceeds the amount of One hundred thousand Dollars ($100,000), the Borrower shall provide the Lender, within fifteen (15) days of being advised by the Lender of such excess, with additional security in form and substance in all respects acceptable to the Lender (valued in accordance with normal banking practice) and which in the sole opinion of the Lender provides security in an amount at least equal to the amount of such excess. Such additional security to be constituted by: 4.04.01 pledged cash deposits to the credit of the Retention Account in an amount sufficient to cover such excess and/or; 4.04.02 any other security acceptable to the Lender, provided in a manner satisfactory to the Lender in its sole discretion. 4.05 Notwithstanding any provision of this Agreement and/or the Master Agreement to the contrary, if for any reason a Designated Transaction has been entered into but the Facility is not drawn under this Agreement then, subject to clause 4.064.05, the Lender shall be entitled but not obliged (and, where relevant, may do so without the consent of the Borrower where it would otherwise be required whether under the Master Agreement or otherwise) to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or any part of the rights, benefits and obligations created by such Designated Transaction and/or the Master Agreement and/or to obtain or re-establish any hedge or related trading position in any manner and with any person the Lender in its absolute discretion may determine. 4.06 4.05 If a Designated Transaction has been entered into but the Facility is not drawn down under this Agreement and the Lender in its absolute discretion agrees, following a written request of the Borrower, that the Borrower may be permitted to maintain all or part of a Designated Transaction, the Borrower shall, within fifteen (15) days of being notified by the Lender of such requirementrequirement in writing, provide the Lender with, or procure the provision to the Lender of, such additional security as shall in the opinion of the Lender be adequate to secure the performance of such Designated Transaction, which additional whichadditional security shall take such form and be constituted by such documentation, as the Lender in its absolute discretion may approve or require. 4.07 4.06 The Borrower shall on the first written demand of the Lender indemnify the Lender in respect of all losses, costs and expenses (including, but not limited to, legal costs and expenses) incurred or sustained by the Lender as a consequence of or in relation to the effecting of any matter or transactions referred to in Clauses 4.05 4.04 and 4.064.05. 4.08 4.07 Without prejudice to or limitation of the obligations of the Borrower under Clause 4.074.06, in the event that the Lender exercises any of its rights under Clauses 4.04 or 4.05 or 4.06 and such exercise results in all or part of a Designated Transaction being terminated such termination shall be treated under the Master Agreement in the same manner as if it were a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default (as so defined in that section 14) by the Borrower and, accordingly, the Lender shall be permitted to recover from the Borrower a payment for early termination calculated in accordance with the provisions of section 6(e)(i) of the Master Agreement. 4.08 In the event that the Lender fails to enter into a Designated Transaction with the Borrower, the Lender shall not be liable to the Borrower to enter into such Designated Transaction nor to compensate the Borrower for such failure. 4.09 The Borrower hereby undertakes to ensure that, throughout the Security Period any and all payments by the Lender to the Borrower under each Designated Transaction are paid to the Earnings Account.