Translation of "Contrat de dépôt entre les mains d'un tiers " (French → English) :

Mr. MacKenzie: When we developed the initial vision for this, we saw the opportunity to involve farmers throughout the entire durum-producing region of North America, including Montana and North Dakota, because the durum triangle reaches into those states and we had significant membership there prior to our escrow drive.

With respect to subjective expectation, when we sign a contract with an Internet service provider, our expectation is that our IP address and the sites we visit are not made public and that our information will not fall into the hands of third parties.

Further, where the law of a third country requires that certain financial instruments be held in custody by a local entity and there are no local entities that satisfy all depositary delegation requirements, the depositary should be able to discharge itself of liability provided that: the rules or instruments of incorporation of the AIF concerned expressly allow for such a discharge; the investors have been duly informed of that discharge and the circumstances justifying the discharge prior to their investment; the AIF or the AIFM on behalf of the AIF instructed the depositary to delegate the c ...[+++]ustody of such financial instruments to a local entity; there is a written contract between the depositary and the AIF or the AIFM acting on behalf of the AIF, which expressly allows such a discharge; and there is a written contract between the depositary and the third party which expressly transfers the liability of the depositary to that third party and makes it possible for the AIF, or the AIFM acting on behalf of the AIF, to make a claim against the third party in respect of the loss of financial instruments or for the depositary to make such a claim on their behalf.

However, provided that the depositary is expressly allowed to discharge itself of liability subject to a contractual transfer of such liability to that third party, pursuant to a written contract between the depositary and the AIF or the AIFM acting on behalf of the AIF, in which such a discharge is objectively justified, and that the third party can be held liable for the loss based on a contract between the depositary and the third party, the depositary should be able to discharge itself of liability if it can prove that it has exercised due skill, care and diligence and that the specific requirements for delegation are met.

This was in turn reflected in the high interest rate which, in recognition of the business risks, was higher than the range put forward by the Government’s advisors for the appropriate opportunity cost of equity. The arrangement had been confirmed by the Government’s advisors to be ‘fully commercial’.

The commercial nature of the package, and in particular of the escrow arrangement, were analysed by Deloitte and Credit Suisse and the Government relied on their advice.