(a) "Act of Insolvency" shall occur with respect to any party hereto upon -

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

(ii)  all or substantially all assets of such party, provided the relevant process is not dismissed, discharged, stayed or restrained within 15 days; or

(iii) its becoming insolvent or becoming unable to pay its debts as they become due or failing or admitting in writing its inability generally to pay its debts as they become due; or

(iv) 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

(v) 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 or the commencement of any proceeding by any Competent Authority 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 15 days of its filing (except in the case of a petition presented by a Competent Authority or for winding-up or any analogous proceeding, in respect of which no such 15 day period shall apply); or

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

(vii) the filing of any application for the commencement of any protective settlement or any financial restructuring procedure or any liquidation (including any such procedure in respect of small debtors) under the Saudi Arabian Bankruptcy Law (issued pursuant to Royal Decree no. M/50 dated 28/5/1439H (corresponding to 13 February 2018));

(b) "Applicable Rate", in relation to any sum in any currency, the rate selected in a commercially reasonable manner by the Affected Party;

(c) "Appropriate Market", the meaning specified in paragraph 12;

(d) "Base Currency", the currency indicated in Annex1;

(e) "Business Day" means -

(i) in relation to the settlement of a Transaction or delivery of Securities under this Agreement through a settlement system, a day on which that settlement system is open for business;

(ii) in relation to the settlement of a Transaction or delivery of Securities under this Agreement otherwise than through a settlement system, a day on which banks are open for business in the place where the relevant Securities are to be delivered and, if different, the place in which the relevant payment is to be made; and

(iii) in relation to the payment of any amount under this Agreement not falling within (i) or (ii) above, a day other than a Friday, Saturday or Sunday on which banks are open for business in the principal financial centre of the country of which the currency in which the payment is denominated is the official currency and, if different, in the place where any account designated by the parties for the making or receipt of the payment is situated.

(f) “Buyer Exercise Condition”, the meaning specified in paragraph 4(b)(ii);

(g) “Cash Equivalent Amount” has the meaning given in paragraph 6(h);

(h) “Cash Margin”, a cash sum paid or to be paid to Buyer or Seller in accordance with paragraph 4;

(i) "Cash Settlement Amount", the meaning specified in paragraph 12(e)(iii);

(j) "Cash Settlement Payment Date”, the meaning specified in paragraph 12(e)(iii);

(k) "Competent Authority”, a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over a party in the jurisdiction of its incorporation or establishment or the jurisdiction of its head office;

(l) “Confirmation”, the meaning specified in paragraph 3(b);

(m) "Contractual Currency”, the meaning specified in paragraph 9(a);

(n) "Defaulting Party", the meaning specified in paragraph 12;

(o) "Default Market Value”, the meaning specified in paragraph 12;

(p) “Default Notice", a written notice served by the non-Defaulting Party on the Defaulting Party under paragraph 12(b) designating a day as an Early Termination Date;

(q) “Deliverable Securities”, the meaning specified in paragraph 12;

(r) “Designated Office”, a branch or office which is specified as such in Annex1 or such other branch or office as may be agreed in writing by the parties;

(s) "Distribution(s)”, the meaning specified in sub-paragraph (gg) below;

(t) “Early Termination Date”, the date designated as such in a Default Notice or as otherwise determined in accordance with paragraph 12(b);

(u) “Electronic Messaging System”, an electronic system for communication capable of reproducing communication in hard copy form, including email;

(v) "Equivalent Margin Securities”, Securities equivalent to Securities previously transferred as Margin Securities;

(w) “Equivalent Securities”, with respect to a Transaction, Securities equivalent to the First purchased Securities under that Transaction. If and to the extent that such First Purchased Securities have been redeemed, the expression shall mean a sum of money equivalent to the proceeds of the redemption (other than Distributions);

(x) Securities are “equivalent to” other Securities for the purposes of this Agreement if they are: (i) of the same issuer; (ii) part of the same issue; and (iii) of an identical type, nominal value, description and (except where otherwise stated) amount as those other Securities, provided that -

(A) Securities will be equivalent to other Securities notwithstanding that those Securities have been redenominated into Saudi Riyal or that the nominal value of those Securities has changed in connection with such redenomination; and
 

(B) where Securities have been converted, subdivided or consolidated or have become the subject of a takeover or the holders of Securities have become entitled to receive or acquire other Securities or other property or the Securities have become subject to any similar event other than a Distribution, the expression “equivalent to” shall mean Securities equivalent to (as defined in the provisions of this definition preceding the proviso) the original Securities together with or replaced by a sum of money or Securities or other property equivalent to (as so defined) that receivable by holders of such original Securities resulting from such event;

(y) "Event of Default”, the meaning specified in paragraph 12;

(z) “Exercise Date”, in respect of a Transaction, the earlier of (i) the date specified in the Confirmation for that Transaction and (ii) the Early Termination Date;

(aa) "Exercise Notice”, a notice substantially in the form set out in Annex III of this Agreement;

(bb) “Exercised Transaction”, in respect of an Early Termination Date, each Transaction in respect of which the Exercising Party has delivered an Exercise Notice to the Undertaking Party in accordance with paragraph 5(a) prior to the occurrence of that Early Termination Date;

(cc) "Exercising Party”, in respect of any Exercise Date:

(i) if such Exercise Date is not an Early Termination Date, if the Seller Exercise Condition with respect to that Exercise Date is satisfied, Buyer, and if the Buyer Exercise Condition with respect to that Exercise Date is satisfied, Seller; or

(ii) if such Exercise Date is an Early Termination Date, if the Cash Settlement Amount is payable to Seller, Seller, and if the Cash Settlement Amount is payable to Buyer, Buyer;

(dd) “First Purchase Date”, with respect to any Transaction, the date on which First Purchased Securities are to be sold by Seller to Buyer in relation to that Transaction;

(ee) “First Purchased Securities”, with respect to any Transaction, the Securities sold or to be sold by Seller to Buyer under that Transaction, and any New Purchased Securities transferred by Seller to Buyer under paragraph 10 in respect of that Transaction;

(ff) “First Purchase Price”, on the First Purchase Date, the price at which the First Purchased Securities are sold or are to be sold by Seller to Buyer;

(gg) “Income”, with respect to any Security at any time, all profit by way of distribution, dividends or other distributions thereon, including distributions which are a payment or repayment of principal in respect of the relevant securities ("Distribution(s)”);

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

(ii) “Margin Percentage”, with respect to any Margin Securities or Equivalent Margin Securities, the percentage, if any, agreed by the parties acting in a commercially reasonable manner;

(jj) “Margin Securities”, in relation to a Margin Transfer, Securities of the type and value (having applied Margin Percentage, if any) reasonably acceptable to the party calling for such Margin Transfer;

(kk) "Margin Transfer", any, or any combination of, the payment or repayment of Cash Margin and the transfer of Margin Securities or Equivalent Margin Securities;

(ll) “Market Value”, with respect to any Securities as of any time on any date, the price for such Securities (after having applied the Margin Percentage, if any, in the case of Margin Securities) at such time on such date obtained from a generally recognised source agreed by the parties or as otherwise agreed by the parties (and where different prices are obtained for different delivery dates, the price so obtainable for the earliest available such delivery date) having regard to market practice for valuing Securities of the type in question plus the aggregate amount of Income which, as at such date, has accrued but not yet been paid in respect of the Securities to the extent not included in such price as of such date, and for these purposes any sum in a currency other than the Contractual Currency for the Transaction in question shall be converted into such Contractual Currency at the Spot Rate prevailing at the time of the determination;

(mm) “Net Exposure”, the meaning specified in paragraph 6(c);

(nn) the “Net Margin” provided to a party at any time, the excess (if any) at that time of (i) the sum of the amount of Cash Margin paid to that party and the Market Value of Margin Securities transferred to that party under paragraph 6(a) (excluding any Cash Margin which has been repaid to the other party and any Margin Securities in respect of which Equivalent Margin Securities have been transferred or a Cash Equivalent Amount has been paid to the other party) over (ii) the sum of the amount of Cash Margin paid to the other party and the Market Value of Margin Securities transferred to the other party under paragraph 6(a) (excluding any Cash Margin which has been repaid by the other party and any Margin Securities in respect of which Equivalent Margin Securities have been transferred or a Cash Equivalent Amount has been paid by the other party) and for this purpose any amounts not denominated in the Base Currency shall be converted into the Base Currency at the Spot Rate prevailing at the time of the determination;

(oo) “Net Value”, the meaning specified in paragraph 12;

(pp) “New Purchased Securities", the meaning specified in paragraph 10(a);

(qq) “Non-Exercised Transaction”, in respect of an Early Termination Date, each Transaction that is not an Exercised Transaction;

(rr) "Price Differential”, with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the First Purchase Price for such Transaction (on a 360 day, 365 day or other day basis in accordance with the applicable market convention, unless otherwise agreed between the parties for the Transaction) for the actual number of days during the period commencing on (and including) the First Purchase Date for such Transaction and ending on (but excluding) the date of calculation or, if earlier, the Second Purchase Date;

(ss) “Pricing Rate”, with respect to any Transaction, the per annum percentage rate for calculation of the Price Differential agreed to by Buyer and Seller in relation to that Transaction;

(tt) “Receivable Securities”, the meaning specified in paragraph 12;

(uu) “Second Purchase Date", with respect to any Transaction, the date on which Buyer is to sell the Second Purchased Securities to Seller in relation to that Transaction, pursuant to the exercise by the Exercising Party of the undertaking given to it by the Undertaking Party;

(vv) “Second Purchased Securities”, with respect to any Transaction, Equivalent Securities or such other Securities as agreed between Seller and Buyer.

(ww) “Second Purchase Price”, with respect to any Transaction and as of any date, the sum of the First Purchase Price and the Price Differential as of such date;

(xx) "Securities", Shari'ah-compliant securities or financial instruments, or such other securities or financial instruments as specified in Annex 1;

(yy) “Seller Exercise Condition", the meaning specified in paragraph 4(b)(i);

(zz) “Spot Rate”, where an amount in one currency is to be converted into a second currency on any date, unless the parties otherwise agree:

(i) for the purposes of paragraph 12, the spot rate of exchange obtained by reference to a pricing source or quoted by a bank, in each case specified by the non-Defaulting Party, in the Saudi Arabia inter-bank market for the purchase of the second currency with the first currency at such dates and times determined by the non-Defaulting Party; and

(ii) for any other purpose, the latest available spot rate of exchange obtained by reference to a pricing source or quoted by a bank, in each case agreed by the parties (or in the absence of such agreement, specified by Buyer), in the Saudi Arabia inter-bank market for the purchase of the second currency with the first currency on the day on which the calculation is to be made or, if that day is not a day on which banks are open for business in Saudi Arabia, the spot rate of exchange quoted at close of business in Saudi Arabia on the immediately preceding day in Saudi Arabia on which such a quotation was available;

(aaa) “Term”, with respect to any Transaction, the interval of time commencing with the First Purchase Date and ending with the Second Purchase Date;

(bbb) "Termination”, with respect to any Transaction, refers to the requirement with respect to such Transaction for Buyer to sell the Second Purchased Securities against payment by Seller of the Second Purchase Price, pursuant to the exercise by the Exercising Party of the undertaking given to it by the Undertaking Party;

(ccc) “Transaction Costs”, the meaning specified in paragraph 12;

(ddd) “Transaction Exposure”, with respect to any Transaction at any time during the period from the First Purchase Date to the Second Purchase Date (or, if later, the date on which the Second Purchased Securities are delivered to Seller or the Transaction is terminated under paragraph 12(i) or 12(j)) the amount “E” determined as the result of the formula E = R - V, where:

R=the Second Purchase Price at such time; and

V=the Adjusted Value of the Second Purchased Securities at such time

or, where a Transaction relates to Securities of more than one description or to which different haircuts apply, the sum of the Adjusted Values of the Securities of each such description.

For this purpose the “Adjusted Value” of any Securities is their value determined on the basis of the formula, (MV(1 - H)), where:

MV= the Market Value of the Second Purchased Securities at such time

H= the “haircut” for the relevant Securities, if any, as agreed by

the parties from time to time, being a discount from the Market Value of the Securities.

If E is greater than zero, Buyer has a Transaction Exposure equal to E and if E is less than zero, Seller has a Transaction Exposure equal to the absolute value of E;

(eee) "Undertaking Party", in respect of any Exercise Date, the party that is not the Exercising Party; and

(fff) except in paragraphs 16(b)(i) and 20, references in this Agreement to “written” communications and communications "in writing” include communications made through any Electronic Messaging System agreed between the parties.