Common use of Fungibility Clause in Contracts

Fungibility. (a) Unless the Customer stipulates that the Custody Property are to be held under individual safe custody and bears the charges for this Service, the Customer agrees that the Custody Property held by the Bank directly or indirectly through any nominee, agent, sub-custodian, representative, correspondent or depository, in or outside Hong Kong, shall be treated as fungible with all other securities of the same issue which means, subject to any Agreement, that the Customer shall have no right to any specific Custody Property but shall instead be entitled to transfer, deliver or repossess from the Bank an amount of Custody Property of any issue that is equivalent to the amount of such Custody Property credited to its Safe Custody Account, without regard to the certificate numbers of any Custody Property certificates, so long as the Custody Property returned are of the same class, denomination and nominal amount and rank pari passu with those accepted, subject always to any capital reorganization or share exchange or other relevant corporate event which may have occurred. This shall not apply to Custody Property registered in the name of the Customer, or to any Custody Property which for other reasons must be kept separately in safe custody. The Bank may, where permitted under applicable laws, co-mingle the Custody Property so deposited by the Customer with other assets owned by the Bank or other parties. (b) The Bank shall be entitled at its discretion to make such arrangements as it thinks fit for the purposes of keeping the Custody Property in safe custody. The Customer acknowledges and agrees that the Custody Property may be pooled with assets belonging to the Bank’s other customers, such that they may not be separately identifiable, by means of separate certificates or physical documents or equivalent electronic records, as belonging to or attributable to the Customer. In this event: (i) the Bank shall be entitled to treat the Custody Property as fungible, or at any time allocate specific Custody Property to the Customer, and such treatment or allocation shall be binding on the Customer if for any reason whatsoever (other than by reason of the Bank’s own gross negligence, wilful misconduct or fraud) all or any part of the Custody Property deposited or lodged with the Bank or its Nominee and treated as fungible are lost or otherwise become unavailable for delivery. In the event of an irreconcilable shortfall after the default of the Bank, its Nominee or their respective sub- custodians, nominees or agents, the Customer may not receive its full entitlement and may share in that shortfall pro-rata among the Bank’s other clients or those of the sub-custodian. Any pro-rata entitlement in this respect shall be dealt with by the sale of the relevant Custody Property and the distribution of the proceeds of sale thereof. Notwithstanding the foregoing, no reduction shall be made if and to the extent that the Bank will be able to replace or recover any of the Custody Property; (ii) any distribution of entitlements to any benefits or entitlements arising as a result of corporate action will be allocated pro rata provided that (1) fractions of entitlements that arise as a result of this process will be rounded down to the nearest whole unit or share and (2) the Bank shall be entitled to retain or deal with the accumulated amount of any undistributed entitlements arising as a result of this process for the Bank’s own accounts and benefit, provided that the Bank may, in its absolute discretion, choose to distribute all or any part of such undistributed entitlements as amongst one or more of its customers, including the Customer as the Bank deems fit; (iii) where there is an allocation or Securities issue with rights weighted towards smaller investors, the Customer’s allocation may be less than it otherwise would have been; and (iv) the Bank will maintain a record of the Customer’s interest in the Custody Property.

Fungibility. (a) Unless the Customer stipulates that the Custody Property are to be held under individual safe custody and bears the charges for this Service, the Customer agrees that (i) the Bank shall be entitled to commingle assets of the Customer with the Bank’s other customers in the same custody account and (ii) the Custody Property held by the Bank directly or indirectly through any nominee, agent, sub-custodian, representative, correspondent or depository, in or outside Hong KongSingapore, shall be treated as fungible with all other securities of the same issue which means, subject to any Agreement, that the Customer shall have no right to any specific Custody Property but shall instead be entitled to transfer, deliver or repossess from the Bank an amount of Custody Property of any issue that is equivalent to the amount of such Custody Property credited to its Safe Custody Account, without regard to the certificate numbers of any Custody Property certificates, so long as the Custody Property returned are of the same class, denomination and nominal amount and rank pari passu with those accepted, subject always to any capital reorganization or share exchange or other relevant corporate event which may have occurred. This shall not apply to Custody Property registered in the name of the Customer, or to any Custody Property which for other reasons must be kept separately in safe custody. The Bank may, where permitted under applicable laws, co-mingle commingle the Custody Property so deposited by the Customer with other assets owned by the Bank or other parties. (b) The Bank shall be entitled at its discretion to make such arrangements as it thinks fit for the purposes of keeping the Custody Property in safe custody. The Customer acknowledges and agrees that the Custody Property may be pooled with assets belonging to the Bank’s other customers, such that they may not be separately identifiable, by means of separate certificates or physical documents or equivalent electronic records, as belonging to or attributable to the Customer. In this event: (i) the Bank shall be entitled to treat the Custody Property as fungible, or at any time allocate specific Custody Property to the Customer, and such treatment or allocation shall be binding on the Customer if for any reason whatsoever (other than by reason of the Bank’s own gross negligence, wilful misconduct or fraud) all or any part of the Custody Property deposited or lodged with the Bank or its Nominee and treated as fungible are lost or otherwise become unavailable for delivery. In the event of an irreconcilable shortfall after the default of the Bank, its Nominee or their respective sub- custodians, nominees or agents, the Customer may not receive its full entitlement and may share in that shortfall pro-rata among the Bank’s other clients or those of the Nominee, or their respective sub-custodiancustodians, nominees or agents. Any pro-rata entitlement in this respect shall be dealt with by the sale of the relevant Custody Property and the distribution of the proceeds of sale thereof. Notwithstanding the foregoing, no reduction shall be made if and to the extent that the Bank will be able to replace or recover any of the Custody Property; (ii) any distribution of entitlements to any benefits or entitlements arising as a result of corporate action will be allocated pro rata provided that that (1) fractions of entitlements that arise as a result of this process will be rounded down to the nearest whole unit or share and (2) the Bank shall be entitled to retain or deal with the accumulated amount of any undistributed entitlements arising as a result of this process for the Bank’s own accounts and benefit, provided that the Bank may, in its absolute discretion, choose to distribute all or any part of such undistributed entitlements as amongst one or more of its customers, including the Customer as the Bank deems fit; (iii) where there is an allocation or Securities Specified Products issue with rights weighted towards smaller investors, the Customer’s allocation may be less than it otherwise would have been; and (iv) the Bank will maintain a record of the Customer’s interest in the Custody Property.