Exhibit 4.2


 


EXECUTION COPY


 


 


PRUDENTIAL plc


Issuer


 


 


and


 


 


CITIBANK, N.A.


Subordinated Trustee


 


 












 


SUBORDINATED INDENTURE



Dated as of August 6, 2004


 












 


 


Subordinated Debt Securities


 

















 


Reconciliation
and tie showing the location in this Subordinated Indenture of the provisions
inserted pursuant to Sections 310 to 318(a), inclusive, of the Trust Indenture
Act of 1939.


 


	
  Trust Indenture Act Section

  	
   

  	
  Subordinated Indenture Section

  
	
  §310

  	
  (a)(1)

  	
   

  	
  6.09

  
	
   

  	
  (a)(2)

  	
   

  	
  6.09

  
	
   

  	
  (a)(3)

  	
   

  	
  Not Applicable

  
	
   

  	
  (a)(4)

  	
   

  	
  Not Applicable

  
	
   

  	
  (a)(5)

  	
   

  	
  6.09

  
	
   

  	
  (b)

  	
   

  	
  6.08 and 6.10

  
	
   

  	
  (c)

  	
   

  	
  Not Applicable

  
	
  §311

  	
  (a)

  	
   

  	
  6.13

  
	
   

  	
  (b)

  	
   

  	
  6.13

  
	
   

  	
  (c)

  	
   

  	
  Not Applicable

  
	
  §312

  	
  (a)

  	
   

  	
  7.01 and 7.02(a)

  
	
   

  	
  (b)

  	
   

  	
  7.02(b)

  
	
   

  	
  (c)

  	
   

  	
  7.02(c)

  
	
  §313

  	
  (a)

  	
   

  	
  7.03(a)

  
	
   

  	
  (b)

  	
   

  	
  7.03(a)

  
	
   

  	
  (c)

  	
   

  	
  7.03(a)

  
	
   

  	
  (d)

  	
   

  	
  7.03(b)

  
	
  §314

  	
  (a)

  	
   

  	
  7.04 and 10.04

  
	
   

  	
  (b)

  	
   

  	
  Not Applicable

  
	
   

  	
  (c)

  	
   

  	
  1.02

  
	
   

  	
  (c)(1)

  	
   

  	
  1.02

  
	
   

  	
  (c)(2)

  	
   

  	
  1.02

  
	
   

  	
  (c)(3)

  	
   

  	
  1.01

  
	
   

  	
  (d)

  	
   

  	
  Not Applicable

  
	
   

  	
  (e)

  	
   

  	
  1.02

  
	
  §315

  	
  (a)

  	
   

  	
  6.01(a)

  
	
   

  	
  (b)

  	
   

  	
  6.02

  
	
   

  	
  (c)

  	
   

  	
  6.01(b)

  
	
   

  	
  (d)

  	
   

  	
  6.01(c)

  
	
   

  	
  (d)(1)

  	
   

  	
  6.01(c)(1)

  
	
   

  	
  (d)(2)

  	
   

  	
  6.01(c)(2)

  
	
   

  	
  (d)(3)

  	
   

  	
  6.01(c)(3)

  
	
   

  	
  (e)

  	
   

  	
  5.13

  
	
  §316

  	
  (a)(1)(A)

  	
   

  	
  5.02(b) and 5.11

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  5.12

  
	
   

  	
  (a)(2)

  	
   

  	
  Not Applicable

  
	
   

  	
  (b)

  	
   

  	
  5.07

  
	
   

  	
  (c)

  	
   

  	
  1.04(a)

  
	
  §317

  	
  (a)(1)

  	
   

  	
  5.03

  
	
   

  	
  (a)(2)

  	
   

  	
  5.04

  
	
   

  	
  (b)

  	
   

  	
  10.03

  
	
  §318

  	
  (a)

  	
   

  	
  1.07

  



 












NOTE:  This reconciliation and
tie shall not, for any purpose, be deemed to be a part of this Subordinated
Indenture.


 


i

















 


TABLE OF CONTENTS


 


	
  ARTICLE ONE

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND OTHER PROVISIONS OF GENERAL
  APPLICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.02.

  	
  COMPLIANCE CERTIFICATES AND OPINIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.03.

  	
  FORM OF DOCUMENTS DELIVERED TO SUBORDINATED
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.04.

  	
  ACTS OF HOLDERS; COMMUNICATION BY HOLDERS
  WITH OTHER HOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.05.

  	
  NOTICES, ETC., TO SUBORDINATED TRUSTEE OR
  ISSUER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.06.

  	
  NOTICE TO HOLDERS; WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.07.

  	
  CONFLICT WITH TRUST INDENTURE ACT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.08.

  	
  EFFECT OF HEADINGS AND TABLE OF CONTENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.09.

  	
  SUCCESSORS AND ASSIGNS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.10.

  	
  SEPARABILITY CLAUSE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.11.

  	
  BENEFITS OF SUBORDINATED INDENTURE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.12.

  	
  GOVERNING
  LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.13.

  	
  NON-BUSINESS
  DAY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.14.

  	
  IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
  OFFICERS AND DIRECTORS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.15.

  	
  CERTAIN MATTERS RELATING TO CURRENCIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.16.

  	
  LANGUAGE OF NOTICES, ETC

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.17.

  	
  APPOINTMENT OF AGENT FOR SERVICE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.18.

  	
  RULES BY THE SUBORDINATED TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  
	
   

  	
   

  	
   

  
	
  SECURITY FORMS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  FORMS OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.02.

  	
  FORM OF CERTIFICATE OF AUTHENTICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.03.

  	
  SECURITIES IN GLOBAL FORM

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  	
   

  
	
   

  	
   

  	
   

  
	
  THE SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  TITLE;
  PAYMENT AND TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.02.

  	
  DENOMINATIONS
  AND CURRENCIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.03.

  	
  EXECUTION, AUTHENTICATION, DELIVERY AND
  DATING

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.04.

  	
  TEMPORARY SECURITIES AND EXCHANGE OF
  SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.05.

  	
  REGISTRATION, REGISTRATION OF TRANSFER AND
  EXCHANGE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.06.

  	
  MUTILATED, DESTROYED, LOST AND STOLEN
  SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.07.

  	
  PAYMENT OF INTEREST

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.08.

  	
  PERSONS DEEMED OWNERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.09.

  	
  CANCELLATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.10.

  	
  COMPUTATION OF INTEREST

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.11.

  	
  CURRENCY AND MANNER OF PAYMENTS IN RESPECT
  OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.12.

  	
  CURRENCY DETERMINATION AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.13.

  	
  COMMON CODE, CUSIP OR ISIN NUMBERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.14.

  	
  AUTHENTICATING AGENTS

  	
   

  
	
   

  	
   

  	
   

  



 


ii

















 


	
  ARTICLE FOUR

  	
   

  
	
   

  	
   

  	
   

  
	
  SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  SATISFACTION AND DISCHARGE OF SECURITIES OF
  ANY SERIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.02.

  	
  APPLICATION OF TRUST MONEY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.03.

  	
  SATISFACTION AND DISCHARGE OF SUBORDINATED
  INDENTURE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.04.

  	
  REINSTATEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  	
   

  
	
   

  	
   

  	
   

  
	
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  EVENTS OF DEFAULT.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.02.

  	
  ACCELERATION OF MATURITY; RESCISSION AND
  ANNULMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.03.

  	
  PAYMENT DEFAULTS, CAPITAL SECURITY
  DEFAULTS, PAYMENT EVENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.04.

  	
  SUBORDINATED TRUSTEE MAY FILE PROOFS OF
  CLAIM

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.05.

  	
  SUBORDINATED TRUSTEE MAY ENFORCE CLAIMS
  WITHOUT POSSESSION OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.06.

  	
  APPLICATION OF MONEY COLLECTED

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.07.

  	
  LIMITATION ON SUITS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.08.

  	
  UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
  PRINCIPAL (AND PREMIUM, IF ANY) AND INTEREST, IF ANY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.09.

  	
  RESTORATION OF RIGHTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.10.

  	
  RIGHTS AND REMEDIES CUMULATIVE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.11.

  	
  DELAY OR OMISSION NOT WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.12.

  	
  CONTROL BY HOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.13.

  	
  WAIVER OF PAST DEFAULTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.14.

  	
  UNDERTAKING FOR COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.15.

  	
  WAIVER OF STAY OR EXTENSION LAWS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.16.

  	
  JUDGMENT
  CURRENCY

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  
	
   

  	
   

  	
   

  
	
  THE SUBORDINATED TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  CERTAIN DUTIES AND RESPONSIBILITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.02.

  	
  NOTICE
  OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.03.

  	
  CERTAIN RIGHTS OF SUBORDINATED TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.04.

  	
  NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
  SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.05.

  	
  MAY HOLD SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.06.

  	
  MONEY HELD IN TRUST

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.07.

  	
  COMPENSATION AND REIMBURSEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.08.

  	
  DISQUALIFICATION; CONFLICTING INTERESTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.09.

  	
  CORPORATE SUBORDINATED TRUSTEE REQUIRED;
  DIFFERENT SUBORDINATED TRUSTEES FOR DIFFERENT SERIES; ELIGIBILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.10.

  	
  RESIGNATION AND REMOVAL; APPOINTMENT OF
  SUCCESSOR

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.11.

  	
  ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.12.

  	
  MERGER, CONVERSION, CONSOLIDATION OR
  SUCCESSION TO BUSINESS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.13.

  	
  PREFERENTIAL COLLECTION OF CLAIMS AGAINST
  ISSUER

  	
   

  
	
   

  	
   

  	
   

  



 


iii

















 


	
  ARTICLE SEVEN

  	
   

  
	
   

  	
   

  	
   

  
	
  HOLDERS’ LISTS AND REPORTS BY SUBORDINATED
  TRUSTEE AND ISSUER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  ISSUER TO FURNISH SUBORDINATED TRUSTEE
  NAMES AND ADDRESSES OF HOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.02.

  	
  PRESERVATION OF INFORMATION; COMMUNICATIONS
  TO HOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.03.

  	
  REPORTS BY SUBORDINATED TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.04.

  	
  REPORTS
  BY ISSUER

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  	
   

  
	
   

  	
   

  	
   

  
	
  CONSOLIDATION, MERGER, CONVEYANCE OR
  TRANSFER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN
  TERMS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.02.

  	
  SUCCESSOR CORPORATION SUBSTITUTED

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  	
   

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL INDENTURES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  SUPPLEMENTAL SUBORDINATED INDENTURES
  WITHOUT CONSENT OF HOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.02.

  	
  SUPPLEMENTAL SUBORDINATED INDENTURES WITH
  CONSENT OF HOLDERS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.03.

  	
  EXECUTION OF SUPPLEMENTAL SUBORDINATED
  INDENTURES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.04.

  	
  EFFECT OF SUPPLEMENTAL SUBORDINATED
  INDENTURES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.05.

  	
  CONFORMITY WITH TRUST INDENTURE ACT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.06.

  	
  REFERENCE IN SECURITIES TO SUPPLEMENTAL
  SUBORDINATED INDENTURES

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  PAYMENT OF PRINCIPAL (AND PREMIUM, IF ANY)
  AND INTEREST AND DEFERRED INTEREST, IF ANY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.02.

  	
  MAINTENANCE OF OFFICE OR AGENCY

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.03.

  	
  MONEY FOR SECURITIES PAYMENTS TO BE HELD IN
  TRUST

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.04.

  	
  STATEMENTS AS TO COMPLIANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.05.

  	
  CORPORATE EXISTENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.06.

  	
  WAIVER OF CERTAIN COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.07.

  	
  PAYMENT OF ADDITIONAL AMOUNTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.08.

  	
  CALCULATION OF ORIGINAL ISSUE DISCOUNT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.01.

  	
  APPLICABILITY OF THIS ARTICLE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.02.

  	
  ELECTION TO REDEEM; NOTICE TO SUBORDINATED
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.03.

  	
  SELECTION OF SECURITIES TO BE REDEEMED

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.04.

  	
  NOTICE OF REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.05.

  	
  DEPOSIT OF REDEMPTION PRICE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.06.

  	
  SECURITIES PAYABLE ON REDEMPTION DATE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.07.

  	
  SECURITIES REDEEMED IN PART

  	
   

  



 


iv

















 


	
   

  	
   

  	
   

  
	
  SECTION 11.08.

  	
  TAX EVENT REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 11.09.

  	
  REGULATORY EVENT REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE

  	
   

  
	
   

  	
   

  	
   

  
	
  SINKING FUNDS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.01.

  	
  APPLICABILITY OF THIS ARTICLE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.02.

  	
  SATISFACTION OF SINKING FUND PAYMENTS WITH
  SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.03.

  	
  REDEMPTION OF SECURITIES FOR SINKING FUND

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE THIRTEEN

  	
   

  
	
   

  	
   

  	
   

  
	
  SUBORDINATION OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.01.

  	
  SECURITIES SUBORDINATE TO CERTAIN
  CREDITORS; DEFINITION OF RELATIVE RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.02.

  	
  PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.03.

  	
  SUBORDINATED TRUSTEE TO EFFECTUATE
  SUBORDINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.04.

  	
  NO WAIVER OF SUBORDINATION PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.05.

  	
  NOTICE TO SUBORDINATED TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.06.

  	
  RELIANCE ON JUDICIAL ORDER OR CERTIFICATE
  OF LIQUIDATING AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.07.

  	
  SUBORDINATED TRUSTEE NOT FIDUCIARY FOR
  CREDITORS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.08.

  	
  RIGHTS OF SUBORDINATED TRUSTEE AS CREDITOR;
  PRESERVATION OF SUBORDINATED TRUSTEE’S RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.09.

  	
  ARTICLE APPLICABLE TO PAYING AGENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 13.10.

  	
  CONVERSION OR EXCHANGE NOT DEEMED PAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOURTEEN

  	
   

  
	
   

  	
   

  	
   

  
	
  CONVERSION OR EXCHANGE OF SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.01.

  	
  APPLICABILITY OF ARTICLE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.02.

  	
  ELECTION TO CONVERT OR EXCHANGE; NOTICE TO
  SUBORDINATED TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.03.

  	
  NOTICE OF CONVERSION OR EXCHANGE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.04.

  	
  DEPOSIT OF PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.05.

  	
  SURRENDER OF SECURITIES.

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.06.

  	
  ISSUANCE OF PREFERENCE SHARES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.07.

  	
  EFFECT OF CONVERSION OR EXCHANGE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.08.

  	
  VALIDITY OF PREFERENCE SHARES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.09.

  	
  LEGAL AND REGULATORY COMPLIANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.10.

  	
  TAXES AND CHARGES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 14.11.

  	
  SUBORDINATED TRUSTEE NOT LIABLE

  	
   

  
				



 


v

















 


PRUDENTIAL
SUBORDINATED INDENTURE


 


This is a
SUBORDINATED INDENTURE dated as of August 6, 2004, among Prudential plc, a
public limited company duly organized and existing under the laws of England
and Wales, and having its principal office at Laurence Pountney Hill, London
EC4R 0HH, England, (hereinafter called the “Issuer”), and Citibank, N.A., a
national banking association, duly incorporated and existing under the laws of
the United States of America and having its Corporate Trust Office at 111 Wall
Street, 14th Floor, New York, New York 10005, as Subordinated Trustee
(hereinafter called the “Subordinated Trustee”).


 


RECITALS OF THE
ISSUER


 


The Issuer
deems it necessary to issue from time to time for its lawful purposes
subordinated securities (herein called the “Securities”) evidencing its
unsecured indebtedness and has duly authorized the execution and delivery of
this Subordinated Indenture to provide for the issuance from time to time of
the Securities, unlimited as to principal amount, to have such titles, to bear
such rates of interest, to mature at such time or times and to have such other
provisions as shall be established as hereinafter provided.


 


All things
necessary to make this Subordinated Indenture a valid agreement of the Issuer,
in accordance with its terms, have been done, and the Issuer proposes to do all
things necessary to make the Securities, when executed by the Issuer and
authenticated and delivered by the Subordinated Trustee hereunder and duly
issued by the Issuer, the valid obligations of the Issuer as hereinafter
provided.


 


NOW THEREFORE, THIS
SUBORDINATED INDENTURE WITNESSETH:


 


For and in
consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities, as follows:


 


ARTICLE ONE



DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION


 


SECTION 1.01.                             Definitions.


 


For all
purposes of this Subordinated Indenture and all Securities issued hereunder,
except as otherwise expressly provided herein or in one or more indentures
supplemental hereto or in an Officers’ Certificate pursuant to
Section 3.01, or unless the context otherwise requires:


 


(1)                                  the
terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular;


 


(2)                                  all
other terms used herein which are defined in the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them therein;


 


(3)                                  all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles in the United
Kingdom, and the term “generally accepted accounting principles” with respect
to any computation


 


1

















 


required or permitted hereunder
shall mean such accounting principles as are generally accepted in the United
Kingdom at the date or time of such computation; and


 


(4)                                  the
words “herein”, “hereof” and “hereunder” and other words of similar import
refer to this Subordinated Indenture as a whole and not to any particular
Article, Section or other subdivision.


 


Certain terms,
used principally in Article Three and Article Six, are defined in
those Articles.


 


“Act”,
when used with respect to any Holder, has the meaning specified in
Section 1.04.


 


“ADR Custodian” means the custodian under
the ADR Deposit Agreement.


 


“ADR Deposit Agreement” means the deposit
agreement, dated as of August 6, 2004, between the Issuer,  Citibank, N.A., as depositary, and holders
from time to time of American Depositary Receipts issued thereunder.


 


“ADR Depositary” means the depositary under
the ADR Deposit Agreement.


 


“ADRs” means the American Depositary
Receipts issued pursuant to the ADR Deposit Agreement.


 


“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person.  For the purposes
of this definition, “control”, when used with respect to any specified Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.


 


“Alternative
Coupon Satisfaction Mechanism” means, with respect to the Perpetual
Subordinated Capital Securities, the procedure for raising cash through the
issuance of shares by which the Issuer may be required or elect to satisfy a
payment of Deferred Interest or a principal payment on the Perpetual
Subordinated Capital Securities, as and to the extent provided in the
applicable Board Resolution or supplemental indenture executed pursuant to
Section 3.01 hereof establishing the terms of such series of Perpetual
Subordinated Capital Securities.


 


“Assets”
means the Issuer’s non-consolidated gross assets, as shown in the Issuer’s
latest published balance sheet, but adjusted for contingencies and subsequent
events, all in such manner as the Person or Persons giving the relevant report
under Section 13.01(b) may determine.


 


“Auditors”
means the auditors for the time being of the Issuer, or if there shall be joint
auditors of the Issuer, any one or more of such joint auditors.


 


2

















 


“Authenticating
Agent” means any Person authorized to authenticate and deliver
Securities in the name of, and as the agent of, the Subordinated Trustee for
the Securities of any series pursuant to Section 3.14.


 


“Bankruptcy
Law” means any bankruptcy, insolvency, reorganization or other
similar law of the United States or any State thereof, England or Wales or any
other applicable country or jurisdiction.


 


“Board of
Directors” means the board of directors of the Issuer or any duly
authorized committee of that board or any director or directors and/or officer
or officers of the Issuer to whom that board or committee shall have duly
delegated its authority.


 


“Board
Resolution” means (1) a copy of a resolution certified by a
director, the Secretary or a Deputy or Assistant Secretary of the Issuer, to
have been duly adopted by the Board of Directors or an authorized committee
thereof and to be in full force and effect on the date of such certification,
or (2) a certificate signed by the director or directors and/or officer or
officers to whom the Board of Directors of the Issuer shall have duly delegated
its authority, and, delivered to the Subordinated Trustee for the Securities of
any series.


 


“Business Day”,
when used with respect to any particular Place of Payment, means, unless
otherwise specified in the Securities of a series, each day, other than a
Saturday or Sunday, which is not a day on which commercial banking institutions
in The City of New York, or in London, England or in the applicable Place of
Payment, or, in respect of any payment to be made in a Foreign Currency, in the
principal financial center of the country issuing such Foreign Currency, are
authorized or required by law, regulation or executive order to close, and
shall otherwise mean each day, other than a Saturday or Sunday, which is not a
day on which banking institutions, at the place where any specified act
pursuant to this Subordinated Indenture is to occur, are authorized or required
by law, regulation or executive order to close.


 


“Calculation
Agency Agreement” means the Calculation Agency Agreement dated
August 6, 2004, as amended from time to time, among Cazenove & Co. Ltd, as
Calculation Agent, Citibank, N.A., as Subordinated Trustee and the Issuer, in
respect of a series of Perpetual Subordinated Capital Securities.


 


“Calculation
Agent” means Cazenove & Co. Ltd, as Calculation Agent under the
Calculation Agency Agreement or such other Person which may be appointed as
Calculation Agent pursuant to the Calculation Agency Agreement.


 


“Capital
Regulations” means the rules and regulations of the Financial
Services Authority or any successor regulatory body that require the Issuer or
any of its EEA Insurance Subsidiaries to meet a Regulatory Capital Requirement,
including, without limitation, pursuant to the Directive or any legislation,
rules or regulations (whether having the force of law or otherwise) in any
state within the European Economic Area implementing the Directive.


 


“Capital
Security Default” has the meaning specified in Section 5.03(b).


 


3

















 


“Certificate
of a Firm of Independent Public Accountants” means a certificate
signed by any firm of independent public accountants of nationally recognized
standing in the United Kingdom selected by the Issuer which may include the
Auditors of the Issuer.


 


“Commission”
means the United States Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act (as defined below), or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act,
then the body performing such duties on such date.


 


“Component
Currency” has the meaning specified in Section 3.11(h).


 


“Compulsory Interest Payment Date”
means, in respect of the Perpetual Subordinated Capital Securities, any
Interest Payment Date on which (i) the Issuer satisfies the
Solvency Condition,
(ii) the Issuer is not prohibited from making such payment under the terms
of any Parity Security or Senior Security, and (iii) which is not an Optional Interest Payment Date.


 


“Conversion
Date” has the meaning specified in Section 3.11(d).


 


“Conversion
Event” means the unavailability of any Foreign Currency or currency
unit due to the imposition of exchange controls or other circumstances beyond
the control of the Issuer.


 


“Corporate
Trust Office” means the office of the Subordinated Trustee for
Securities of any series at which at any particular time its corporate trust
business shall be principally administered, which office of Citibank, N.A., at
the date of the execution of this Subordinated Indenture, is located at 111
Wall Street, 14th Floor, New York, New York 10005.


 


“corporation”
includes corporations, associations, companies and business trusts.


 


“Currency
Determination Agent”, with respect to Securities of any series,
means, unless otherwise specified in the Securities of a series, a New York
Clearing House bank designated pursuant to Section 3.01 or
Section 3.12.


 


“Currency
Determination Agent’s Certificate” means a certificate or facsimile
thereof setting forth (i) the applicable Market Exchange Rate and (ii) the
Dollar, Foreign Currency or currency unit amounts of principal (and premium, if
any) and interest and Deferred Interest, if any (on an aggregate basis and on
the basis of a Security having the lowest denomination principal amount
determined in accordance with Section 3.02 in the relevant currency or
currency unit), payable with respect to a Security of any series on the basis
of such Market Exchange Rate, signed by the Currency Determination Agent.


 


“Dated
Subordinated Debt Securities” means securities evidencing unsecured
subordinated indebtedness of the Issuer authenticated and delivered under this
Subordinated Indenture and that have a fixed Stated Maturity or Redemption
Date.


 


“Defaulted
Interest” has the meaning specified in Section 3.07(d).


 


4

















 


“Deferred
Interest” has the meaning specified in Section 3.07 and as may
be further provided in the applicable Board Resolution or supplemental
indenture executed pursuant to Section 3.01 hereof establishing the terms
of such series.


 


“Deferred
Interest Payment” means any payment that the Issuer makes in respect
of Deferred Interest.


 


“Deferred Interest
Payment Date” has the meaning specified in Section 3.07.


 


“Deferred
Principal Payment Date” has the meaning specified in
Section 3.07.


 


“Definitive
Suspension” means, with respect to any series of Perpetual
Subordinated Capital Securities, the suspension of the Alternative Coupon
Satisfaction Mechanism with respect to such series as referred to in
Section 3.01(22) hereof and as further provided in the applicable Board
Resolution or supplemental indenture executed pursuant to Section 3.01 hereof
establishing the terms of such series of Perpetual Subordinated Capital
Securities.


 


“Depositary”
means, with respect to the Securities of any series issuable or issued in the
form of a global Security, the Person designated as Depositary by the Issuer
pursuant to Section 3.01 until a successor Depositary shall have become
such pursuant to the applicable provisions of this Subordinated Indenture, and
thereafter “Depositary” shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such Person,
“Depositary” as used with respect to the Securities of any such series shall
mean each Depositary with respect to the Securities of that series.


 


“Directives” means the Directive 98/78/EC
of the European Union and the Directive 2002/87/EC of the European Union.


 


“Discounted
Security” means any Security which provides for an amount (excluding
any amounts attributable to accrued but unpaid interest thereon) less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.02.


 


“Dollar
Equivalent of the Currency Unit” has the meaning specified in
Section 3.11(g).


 


“Dollar
Equivalent of the Foreign Currency” has the meaning specified in
Section 3.11(f).


 


“Dollars”
and the sign “$” mean the currency of the United States that as at the
time of payment is legal tender for the payment of public and private debts.


 


“EEA
Insurance Subsidiary” means any Subsidiary of Prudential plc engaged
in the insurance business and regulated as such by a member state of the
European Economic Area.


 


“Election
Date” has the meaning specified in Section 3.11(h).


 


“euro”
means the single currency of the participating member states of the European
Union that adopted the euro as their lawful currency pursuant to the Treaty
establishing the European Union (as amended from time to time), and “participating
member states” means those member states of the European Union from
time to time which adopt a single, shared currency in the Third Stage, as
defined and identified in European Union legislation.


 


“European
Economic Area” means the European Union together with Norway,
Liechtenstein and Iceland.


 


5

















 


“Event Date”
has the meaning specified in Section 3.01(26).


 


“Event of
Default” has the meaning specified in Section 5.01.


 


“Excepted Person” has the meaning specified
in Section 14.10.


 


“Exchange Act”
means the United States Securities Exchange Act of 1934, as amended.


 


“Exchange
Rate Officers’ Certificate” means a certificate or facsimile thereof
setting forth (i) the applicable Market Exchange Rate and (ii) the Dollar,
Foreign Currency or currency unit amounts of principal (and premium, if any)
and interest and Deferred Interest, if any (on an aggregate basis and on the
basis of a Security having the lowest denomination principal amount determined
in accordance with Section 3.02 in the relevant currency or currency
unit), payable with respect to a Security of any series on the basis of such
Market Exchange Rate, signed by the finance director or treasurer of the
Issuer.


 


“Financial
Services Authority” means the United Kingdom Financial Services
Authority, or any successor regulatory body or such other governmental
authority in the United Kingdom (or if the Issuer becomes domiciled in a
jurisdiction other than the United Kingdom, in such other jurisdiction) having
primary supervisory authority with respect to the capital requirements of the
Issuer.


 


“Foreign
Currency” means a currency issued and actively maintained as a
country’s or countries’ recognized unit of domestic exchange by the government
of any country other than the United States.


 


“Holder”,
when used with respect to any Security, means the Person in whose name a
Security is registered in the Security Register.


 


“interest”,
when used with respect to a Discounted Security which by its terms bears
interest only after Maturity, means interest payable after Maturity.


 


“Interest
Payment Date”, when used with respect to any Dated Subordinated Debt
Securities or Perpetual Subordinated Debt Securities, means the Stated Maturity
of an installment of interest on such Dated Subordinated Debt Securities or
Perpetual Subordinated Debt Securities and, when used with respect to any
Perpetual Subordinated Capital Securities, means each date defined as an
Interest Payment Date in accordance with the terms thereof; provided, however,
that, unless otherwise provided with respect to the Securities of any series,
if the Issuer does not pay any installment of interest on an Interest Payment
Date with respect to any Dated Subordinated Debt Securities or Perpetual
Subordinated Debt Securities, the obligation to make such payment and such
Interest Payment Date shall be deferred until the Deferred Interest Payment
Date (it being understood for the avoidance of doubt that any such deferral
shall take place only once with respect to any payment of interest).


 


“Interest
Period” means, in respect of any series, the period from and
including each Interest Payment Date for such series (or, as the case may be,
the issue date of such series) up to but excluding the next (or first) Interest
Payment Date in respect of such series or such other period as is specified to
apply to such series in the applicable Board Resolution or supplemental
indenture establishing the terms of such series.


 


6

















 


“Issuer”
means the Person named as an “Issuer” in the first paragraph of this
Subordinated Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Subordinated Indenture, and
thereafter “Issuer” shall mean such successor corporation.


 


“Issuer
Request” and “Issuer Order” mean, respectively, a
written request or order (a) signed in the name of the Issuer by (i) any two of
its chairman of the board, deputy chairman of the board, group chief executive
officer, treasurer, group finance director or director group finance and risk,
(ii) any one of the foregoing Persons together with any group secretary or
deputy group secretary of the Issuer, or (iii) any two Persons designated by
the Issuer in an Issuer Order previously delivered to the Subordinated Trustee
for Securities of any series and (b) delivered to the Subordinated Trustee for
Securities of any series in accordance with the provisions of this Subordinated
Indenture.


 


“Judgment
Date” has the meaning specified in Section 5.16.


 


“Junior
Securities” means, with respect to the Securities, the ordinary
shares of the Issuer or any other securities of the Issuer which rank, as
regards to distributions on a return of assets on a winding up of the Issuer or
in respect of distributions or payment of dividends or any other payments
thereon, after such Securities, as the case may be.


 


“Liabilities”
means the total amount of the non-consolidated gross liabilities of the Issuer
as shown by the latest published balance sheet of the Issuer but adjusted for
contingencies and subsequent events in such manner as the Person or Persons
giving the relevant report under Section 13.01(b) may determine.


 


“Market
Disruption Event” means, with respect to the Perpetual Subordinated
Capital Securities, (i) the occurrence or existence of any material suspension
of or limitation imposed on trading or on settlement procedures for
transactions in the Issuer’s ordinary shares on the London Stock Exchange (or
other national securities exchange or designated offshore securities market
constituting the principal trading market for the Issuer’s ordinary shares), or
(ii) in the Issuer’s reasonable opinion, there has been a substantial
deterioration in the price and/or value of its ordinary shares or circumstances
are such as to prevent or to a material extent restrict the issue or delivery
of the ordinary shares to be issued in accordance with the Alternative Coupon
Satisfaction Mechanism or (iii) where, pursuant to provisions of the Perpetual
Subordinated Capital Securities, monies are required to be converted from one
currency upon sale of ordinary shares into another currency in respect of any
payment of Deferred Interest, the occurrence of any event that makes it
impracticable to effect such conversion.


 


“Market
Exchange Rate” means, unless otherwise specified in the Securities
of a series, (i) for any conversion involving a currency unit on the one hand
and Dollars or any Foreign Currency on the other, the exchange rate between the
relevant currency unit and Dollars or such Foreign Currency calculated by the
method specified pursuant to Section 3.01 for the Securities of the relevant
series and (ii) for any conversion of Dollars into any Foreign Currency or for
any conversion of one Foreign Currency into Dollars or another Foreign
Currency, the spot rate at noon local time in the relevant market at which, in
accordance with normal banking procedures, the Dollars or Foreign Currency into
which conversion is being made could be purchased with the Dollars or Foreign
Currency from which conversion is being made from major banks located in either
New York City, New York, London, England, or any other principal market for
Dollars or such Foreign Currency, in each case determined by the Issuer or the
Currency Determination Agent.  In the
event of the unavailability of any of the exchange rates provided for in the
foregoing clauses (i) and (ii), the Issuer or the 


 


7

















 


Currency Determination Agent
shall use, in its sole discretion and without liability on its part, such
quotation of the Federal Reserve Bank of New York as of the most recent available
date, or quotations from one or more major banks in New York City, New York,
London, England, or other principal market for such currency or currency unit
in question, or such other quotations as the Issuer or the Currency
Determination Agent shall deem appropriate. 
Unless otherwise specified by the Issuer or the Currency Determination
Agent, if there is more than one market for dealing in any currency or currency
unit by reason of foreign exchange regulations or otherwise, the market to be
used in respect of such currency or currency unit shall be that upon which a
nonresident issuer of securities designated in such currency or currency unit
would purchase such currency or currency unit in order to make payments in
respect of such securities.  For purposes
of this definition, a “nonresident issuer” shall mean an issuer that is not a
resident of the country or countries that issue such currency or whose
currencies are included in such currency unit.


 


“Maturity”,
when used with respect to any Security, means the date, if any, on which the
principal (or, if the context so requires, lesser amount in the case of
Discounted Securities) of (or premium, if any, on) that Security becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, request for redemption,
repayment at the option of the holder, pursuant to any sinking fund provisions
or otherwise; provided, however, that, unless otherwise provided with
respect to the Dated Subordinated Debt Securities of any series, if the Issuer
does not pay all or any part of principal (or any premium or interest thereon)
at Maturity (other than principal due by declaration of acceleration), the
obligation to make such payment and such Maturity shall be deferred until the
Deferred Principal Payment Date (it being understood for the avoidance of doubt
that any such deferral shall take place only once with respect to any payment).


 


“OECD”
means the Organisation for Economic Co-operation and Development.


 


“Officers’
Certificate” means a certificate of the Issuer signed by (i) any two
of its chairman of the board, deputy chairman of the board, group chief
executive officer, treasurer, group finance director or director group finance
and risk or (ii) any one of the foregoing Persons together with any group
secretary or deputy group secretary of the Issuer and delivered in form and
substance reasonably acceptable to the Subordinated Trustee for the Securities
of any series in accordance with the provisions of this Subordinated Indenture.


 


“Opinion of
Counsel” means a written opinion of outside legal counsel, in form
and substance and by counsel, both reasonably acceptable to the Subordinated
Trustee for the Securities of any series and who may be regular outside counsel
to the Issuer.


 


“Optional
Interest Payment Date” means, with respect to any Perpetual
Subordinated Capital Securities, any Interest Payment Date on which the Issuer
may elect to defer the payment of interest, as and to the extent provided in
the applicable Board Resolution or supplemental indenture executed pursuant to
Section 3.01 hereof establishing the terms of such Perpetual Subordinated
Capital Securities.


 


8

















 


“Outstanding”,
when used with respect to Securities, means, as of the date of determination,
all Securities which have been authenticated and delivered under this
Subordinated Indenture, except:


 


(1)                                  Securities
which have been cancelled by the Subordinated Trustee for such Securities or
delivered to such Subordinated Trustee for cancellation;


 


(2)                                  Securities
or portions thereof for whose payment or redemption money in the necessary
amount and in the required currency or currency unit has been deposited with
the Subordinated Trustee for such Securities or any Paying Agent (other than
the Issuer, or any other obligor upon the Securities) in trust or set aside and
segregated in trust by the Issuer, or any other obligor upon the Securities (if
the Issuer or any other obligor upon the Securities shall act as its own Paying
Agent) for the Holders of such Securities; provided, however, that, if such
Securities or portions thereof are to be redeemed, notice of such redemption
has been duly given pursuant to this Subordinated Indenture, or provision
therefor satisfactory to such Subordinated Trustee has been made unless, in
each case, there is a default in such payment or redemption; and


 


(3)                                  Securities
which have been paid pursuant to Section 3.06 or in exchange for or in
lieu of which other Securities have been authenticated and delivered pursuant
to this Subordinated Indenture, other than any such Securities in respect of
which there shall have been presented proof reasonably satisfactory to the
Subordinated Trustee for such Securities that any such Securities are held by bona fide holders
in due course;


 


provided, however,
that in determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver or taken any other action hereunder (a)
Securities owned by the Issuer, or any other obligor upon the Securities or any
Affiliate of the Issuer, or such other obligor shall be disregarded and deemed
not to be Outstanding, except that, (i) in determining whether the Subordinated
Trustee for such Securities shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or action,
only Securities which a Responsible Officer of such Subordinated Trustee
actually knows to be so owned shall be so disregarded and (ii) Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of such Subordinated Trustee the
pledgee’s right so to act with respect to such Securities and that the pledgee
is not the Issuer, or any other obligor upon the Securities or any Affiliate of
the Issuer, or of such other obligor and (b) the principal amount of a
Discounted Security that shall be deemed to be Outstanding for such purposes
shall be equal to the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
pursuant to Section 5.02.


 


“Parity
Securities” means, (i) with respect to the Perpetual Subordinated
Capital Securities, the Perpetual Subordinated Capital Securities, the Issuer's
other perpetual capital instruments, preferred or preference shares or other
securities issued directly or indirectly by it ranking pari passu with the
Perpetual Subordinated Capital Securities, as to participation in the assets of
the Issuer in the event of liquidation or winding up of the Issuer, and (ii)
with respect to the Dated Subordinated Debt Securities and the Perpetual
Subordinated Debt Securities, any securities issued directly or indirectly by
the Issuer ranking pari passu with such Securities as to
rights to interest or dividend payments and participation in the assets of the
Issuer in the event of liquidation or winding up of the Issuer.


 


9

















 


“Paying Agent”
means any Person authorized by the Issuer to pay the principal of (and premium,
if any, on), interest, Deferred Interest, if any, or any additional amounts in
respect of, any Securities on behalf of the Issuer and shall include the
Subordinated Trustee.


 


“Payment
Default” has the meaning specified in Section 5.03(a).


 


“Payment
Event” has the meaning specified in Section 5.03(d).


 


“Perpetual
Subordinated Capital Securities” means securities of the Issuer
evidencing unsecured subordinated indebtedness of the Issuer authenticated and
delivered under this Subordinated Indenture, which have no fixed Stated
Maturity for the payment of principal or Redemption Date, to which the subordination
provisions of Section 13.01(e) apply, and which have such further terms as
are established pursuant to a Board Resolution or supplemental indenture
executed pursuant to Section 3.01 hereof.


 


“Perpetual
Subordinated Debt Securities” means securities evidencing unsecured
subordinated indebtedness of the Issuer authenticated and delivered under this
Subordinated Indenture, which have no fixed Stated Maturity for the payment of
principal or Redemption Date, to which the subordination provisions of Section 13.01(d)
apply, and which have such further terms as are established pursuant to a Board
Resolution or supplemental indenture executed pursuant to Section 3.01
hereof.


 


“Person”
means any individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof or any other entity.


 


“Place of
Payment”, when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any, on) and
interest and Deferred Interest, if any, on, and any additional amounts in
respect of, the Securities of that series are payable, as contemplated by
Section 3.01.


 


“Predecessor
Security” of any particular Security means every previous Security
evidencing all or a portion of the same debt as that evidenced by that
particular Security, and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, lost, destroyed or stolen Security.


 


“Preference
Shares”  means an authorized series of preference shares of the
Issuer for which, if applicable to a particular series of Securities, the
Issuer may convert or exchange any series of Securities.


 


“Redemption
Date”, when used with respect to any Security to be redeemed in
whole or in part, means the date fixed for such redemption by or pursuant to
this Subordinated Indenture; provided, however, that, unless otherwise
provided with respect to the Securities (other than Perpetual Subordinated
Capital Securities) of any series, if the Issuer does not pay all or any part
of principal (or any premium or interest thereon) on the Redemption Date, the
obligation to make such payment on such Redemption Date shall be deferred until
the Deferred Principal Payment Date (it being understood for the avoidance of
doubt that any such deferral shall take place only once with respect to any
payment).


 


10

















 


“Redemption
Price”, when used with respect to any Security to be redeemed,
means, unless otherwise specified in the Securities of a series, the aggregate
of the amounts payable on redemption being the principal amount thereof plus
accrued interest thereon, including any Deferred Interest.


 


“Registered
Security” means any Security established pursuant to
Section 2.01 which is registered in the Security Register.


 


“Regular
Record Date” for the interest payable on any Interest Payment Date
on the Securities of any series, means the date, if any, specified for that
purpose as contemplated by Section 3.01.


 


“Regulatory
Capital Requirement” means any minimum or notional margin of
solvency or minimum regulatory capital or capital ratios required for insurance
companies, insurance holding companies or financial groups by the Financial
Services Authority or any successor regulatory body.


 


“Regulatory
Event”, with respect to Dated Subordinated Debt Securities, Perpetual
Subordinated Debt Securities and Perpetual Subordinated Capital Securities of
any series, shall be deemed to have occurred if the Dated Subordinated Debt
Securities, Perpetual Subordinated Debt Securities and Perpetual Subordinated
Capital Securities of such series would not be of a kind capable of counting as
cover for the minimum or notional margin of solvency or minimum capital or
capital ratios required of the Issuer by any Regulatory Capital Requirement as
a result of any change to the Capital Regulations or the application or
official interpretation thereof at any relevant time.


 


“Responsible
Officer”, when used with respect to the Subordinated Trustee for any
series of Securities, means any vice president (whether or not designated by a
number or a word or words added before or after the title “vice president”),
any senior trust officer or trust officer or any other officer associated with
the corporate trust department of such Subordinated Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.


 


“Securities”
means the Dated Subordinated Debt Securities, the Perpetual Subordinated Debt
Securities and the Perpetual Subordinated Capital Securities.


 


“Security
Register” and “Security Registrar” have the respective meanings
specified in Section 3.05.


 


“Senior Creditors”
has with respect to (i) Dated Subordinated Debt Securities, the meaning set
forth in Section 13.01(c), (ii) Perpetual Subordinated Debt Securities,
the meaning specified in Section 13.01(d) and (iii) Perpetual Subordinated
Capital Securities, the meaning specified in Section 13.01(e).


 


“Senior
Securities” means the securities held by Senior Creditors in their
capacity as such.


 


A “series”
of Securities means all Securities denoted as part of the same series
authorized by or pursuant to a particular Board Resolution or a particular
indenture supplemental hereto.


 


11

















 


“Solvency
Condition” means, when used with respect to any series of
Securities, that, at and immediately after the relevant time, the Issuer is
solvent by virtue of, (a) it being able to pay its debts to its Senior
Creditors (as such term is defined for such series of Securities) as they fall
due and (b) its total Assets exceeding its total Liabilities other than
Liabilities to persons that are not Senior Creditors (as such term is defined
for such series of Securities) by at least 4% or such other percentage
specified by the Financial Services Authority from time to time as the
Regulatory Capital Requirement (or such other percentage as may be specified by
the Issuer in the Board Resolution and Officers’ Certificate or supplemental
indenture establishing such series of Securities).  The determination of whether the Solvency Condition has been
satisfied shall be made in accordance with Section 13.01(b) or as
otherwise provided in the Board Resolution or supplemental indenture
establishing the terms of such series of Securities.


 


“Special
Record Date” for the payment of any Defaulted Interest on the
Securities of any series means a date fixed by the Issuer for such series
pursuant to Section 3.07.


 


“Specified
Amount” has the meaning specified in Section 3.11(h).


 


“Stated
Maturity”, when used with respect to any Security or any installment
of principal thereof (or premium, if any, thereon) or interest, if any,
thereon, means the date, if any, specified in such Security as the fixed date
on which the principal of such Security (or premium, if any, thereon) or such
installment of principal (or premium, if any, thereon) or interest is due and
payable; provided, however, that, unless otherwise provided with respect to the
Securities of any series, if the Issuer does not pay all or any part of
principal (or any premium or interest thereon) on the Stated Maturity, the
obligation to make such payment and such Stated Maturity shall be deferred
until the Deferred Principal Payment Date (it being understood for the
avoidance of doubt that any such deferral shall take place only once with
respect to any payment).


 


“Stock
Exchange”, unless specified otherwise with respect to any particular
series of Securities, means any stock exchange or securities association upon
which any Securities of that series are duly listed.


 


“Sterling”
and the sign “£” mean United Kingdom Pounds Sterling.


 


“Subordinated
Indebtedness” means all indebtedness of the Issuer which by its
terms is subordinated in the event of the bankruptcy, winding up or liquidation
of the Issuer in right of payment to the claims of other unsubordinated
creditors of the Issuer and so that, for the purpose of this definition,
indebtedness shall include all liabilities, whether actual or contingent, under
guarantees or indemnities.


 


“Subordinated
Indenture” means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and, unless the context
otherwise requires, shall include the terms of a particular series of
Securities established as contemplated by Section 3.01.


 


“Subordinated
Trustee” means the Person named as the “Subordinated Trustee” in the
first paragraph of this instrument and, subject to the provisions of
Article Six hereof, shall also include its successors and assigns as
Subordinated Trustee hereunder.  If
there shall be at one time more than one Subordinated Trustee hereunder,
“Subordinated Trustee” shall mean each such Subordinated Trustee and shall
apply to each such Subordinated Trustee only with respect to those series of
Securities with respect to which it is serving as Subordinated Trustee.


 


12

















 


“Substitute
Date” has the meaning specified in Section 5.16.


 


“Tax Call
Event” has the meaning ascribed to it in a Board Resolution or
supplemental indenture, pursuant to Section 3.01.


 


“Tax Event”
means a determination by the Issuer that: 
(i) in making any interest payments or Deferred Interest Payments on the
Securities of any series, the Issuer has paid, or will or would on the next
Interest Payment Date be required to pay, additional amounts required by
Section 10.07 hereof; (ii) payments, including Deferred Interest Payments,
on the next Interest Payment Date in respect of any Perpetual Subordinated
Capital Securities would be treated as “distributions” within the meaning of
Section 209 of the Income and Corporation Taxes Act 1988 of the United
Kingdom (as amended, re-enacted or replaced); or (iii) as a result of a change
in or amendment to the laws or regulations of the United Kingdom or any
political subdivision or any authority thereof or therein having power to tax,
including any treaty to which the United Kingdom is a party, or any change in
an application or official interpretation of those laws or regulations,
(including a change or amendment resulting from a holding by a court or tribunal
of competent jurisdiction), which change or amendment becomes effective on or
after the initial issue date of such series, the Issuer would not be entitled
to claim a deduction in computing its U.K. taxation liabilities in respect of
any interest payment (including any Deferred Interest Payment) on the Perpetual
Subordinated Capital Securities or the value of the deduction to the Issuer
would be materially reduced.


 


“Trust
Indenture Act” means the U.S. Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990, as in force at the date as
of which this instrument was executed, except as provided in Section 9.05.


 


“United
Kingdom” and “U.K.” mean The United Kingdom of Great
Britain and Northern Ireland.


 


“United
States” and “U.S.” mean, unless otherwise specified
with respect to the Securities of a series pursuant to Section 3.01, the
United States of America (including the States and the District of Columbia),
its territories, its possessions (which include at the date of this Subordinated
Indenture Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands) and other areas subject to its
jurisdiction.


 


“U.S.
Government Obligations” means non-callable (i) direct obligations
(or certificates representing an ownership interest in such obligations) of the
United States for which its full faith and credit are pledged or (ii)
obligations of a Person controlled or supervised by, and acting as an agency or
instrumentality of, the United States, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation of the United
States.


 


“Valuation
Date” has the meaning specified in Section 3.11(c).


 


13

















 


“Yield to
Maturity”, when used with respect to any Discounted Security, means
the yield to maturity, if any, set forth in such Discounted Security.


 


SECTION 1.02.                             Compliance
Certificates and Opinions.


 


Upon any
application or request by the Issuer to the Subordinated Trustee for any series
of Securities to take any action under any provision of this Subordinated
Indenture, the Issuer shall furnish to such Subordinated Trustee an Officers’
Certificate stating that all conditions precedent, if any, provided for in this
Subordinated Indenture relating to the proposed action have been complied with,
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, provided that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Subordinated
Indenture relating to such particular application or request the requirements
hereof and thereof may be satisfied by the same documents as contemplated by
Section 1.03 such that no duplicate certificate or opinion need be
furnished.


 


Every
certificate (other than certificates provided pursuant to Section 10.04)
or opinion with respect to compliance with a condition or covenant provided for
in this Subordinated Indenture shall include the following (or such other
statements or information as the Subordinated Trustee may reasonably request):


 


(1)                                  a
statement that each individual signing such certificate or opinion has read
such condition or covenant and the definitions herein relating thereto;


 


(2)                                  a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;


 


(3)                                  a
statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such condition or covenant has been
complied with; and


 


(4)                                  a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.


 


SECTION 1.03.                             Form of
Documents Delivered to Subordinated Trustee.


 


In any case
where several matters are required to be certified by, or covered by an opinion
of, any of a number of specified Persons, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person, or
that they be so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.


 


Any
certificate or opinion of an officer of the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
matters upon which his certificate or opinion is based are erroneous.


 


14

















 


Any such
certificate or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Issuer stating that the information with respect to
such factual matters is in the possession of the Issuer unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.


 


Where any
Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this
Subordinated Indenture, they may, but need not, be consolidated and form one
instrument.


 


SECTION 1.04.                             Acts of
Holders; Communication by Holders with Other Holders.


 


(a)                                  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Subordinated Indenture to be given or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent duly appointed in
writing.  Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Subordinated Trustee for the appropriate
series of Securities and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Subordinated Indenture
and (subject to Section 6.01) conclusive in favor of the Subordinated
Trustee for the appropriate series of Securities, the Issuer and any agent of such
Subordinated Trustee or the Issuer, if made in the manner provided in this
Section.


 


The Issuer may
set at its discretion a record date for purposes of determining the identity of
Holders of Securities entitled to vote or consent to any action by vote or
consent authorized or permitted under this Subordinated Indenture, but the
Issuer shall have no obligation to do so. 
If not set by the Issuer prior to the first solicitation of Holders of
Securities of such series made by any Person in respect of any such action, or,
in the case of any such vote, prior to such vote, the record date for any such
action or vote shall be the 30th day prior to the first solicitation of such
vote or consent or, if later, the date of the most recent list of Holders
furnished to the Subordinated Trustee prior to such solicitation pursuant to
Section 7.01.  Upon the fixing of
such a record date, those persons who were Holders of Securities at such record
date (or their duly designated proxies), and only those persons, shall be entitled
with respect to such Securities to take such action by vote or consent or to
revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date.


 


(b)                                 The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by the
certificate of any notary public, commissioner for oaths or other officer
authorized by law to take acknowledgements of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution
thereof.  Where such execution is by an
officer of a corporation or association or a member of a partnership, or an
official of a public or governmental body, on behalf of such corporation,
association, partnership or public or governmental body or by a fiduciary, such
certificate or affidavit shall also constitute sufficient proof of this
authority.


 


15

















 


(c)                                  The
fact and date of the execution by any Person of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Subordinated Trustee for the appropriate series of
Securities deems sufficient.


 


(d)                                 The
principal amount and serial numbers of Registered Securities held by any
Person, and the date of holding the same, shall be proved by the Security
Register.


 


(e)                                  In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver under this Subordinated Indenture, the
principal amount of a Discounted Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes
shall be equal to the amount of the principal thereof that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.02 at the time the taking of such action by the Holders of such
requisite aggregate principal amount is evidenced to the Subordinated Trustee
for such Securities.


 


(f)                                    Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Security shall bind every future Holder of the same
Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Subordinated Trustee for
such Securities, the Security Registrar, any Paying Agent or the Issuer, in
reliance thereon, whether or not notation of such action is made upon such
Security.


 


SECTION 1.05.                             Notices,
Etc., to Subordinated Trustee or Issuer.


 


Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Subordinated Indenture to be made
upon, given or furnished to, or filed with:


 


(1)                                  the
Subordinated Trustee for a series of Securities by any Holder or the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with such Subordinated Trustee at its Corporate Trust
Office, Attention: Citibank Agency and Trust; or


 


(2)                                  the
Issuer, by the Subordinated Trustee, or any Holder shall be sufficient for
every purpose hereunder (except as provided in clause (g) of Section 5.03)
if (a) addressed to Prudential plc, “Attention: Group Secretarial” and (b) in
writing and mailed, first class postage prepaid, or hand delivered, to the
Issuer, addressed to it at the address of its principal office specified in the
first paragraph of this Subordinated Indenture or at any other address
previously furnished in writing to such Subordinated Trustee by the Issuer or
if sent by facsimile transmission addressed to the Issuer at facsimile number
+44 (0)20 7548 3739 or at any other facsimile number previously furnished in
writing to such Subordinated Trustee by the Issuer.


 


SECTION 1.06.                             Notice to
Holders; Waiver.


 


Except as set
forth in a supplemental indenture or a Board Resolution pursuant to Section
3.01, where this Subordinated Indenture provides for notice to Holders of a
series of 


 


16

















 


Registered Securities of any event, such notice shall be given (unless
otherwise expressly provided herein or in the Securities of a series) in
writing and mailed, first class postage prepaid, to each Holder, at his address
as it appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice.


 


In any case
where notice to Holders of Registered Securities is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder of a Registered Security shall affect the sufficiency of such
notice with respect to other Holders. 
Any notice mailed in the manner prescribed by this Subordinated
Indenture shall be deemed to have been given whether or not received by any
particular Holder.  In case by reason of
the suspension of regular mail service or by reason of any other cause it shall
be impracticable to give such notice to Holders of Registered Securities by
mail, then such notification as shall be made with the approval of the
Subordinated Trustee for such Securities shall constitute a sufficient
notification for every purpose hereunder.


 


Notwithstanding
the first paragraph of this Section 1.06, if the entire principal amount
of the Securities of a series or a portion thereof is represented by one or
more global Securities held by a Depositary, all notices with respect to such
principal amount or portion thereof, as the case may be, shall be sent to such
Depositary or its nominee, as the Holder,


and such Depositary will
communicate such notices to its participants in accordance with its standard
procedures.


 


Where this
Subordinated Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such
notice.  Waivers of notice by Holders
shall be filed with the Subordinated Trustee for such Securities, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.


 


A copy of any
notice or communication sent by the Issuer to any Holder of Securities shall
also be provided to the Subordinated Trustee at the same time in the manner
provided for to the Subordinated Trustee under Section 1.05.


 


SECTION 1.07.                             Conflict
with Trust Indenture Act.


 


If any
provision of this Subordinated Indenture limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under the Trust Indenture
Act to be a part of and govern this Subordinated Indenture, the latter
provision shall control.  If any
provision of this Subordinated Indenture modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Subordinated Indenture as so
modified or excluded, as the case may be.


 


SECTION 1.08.                             Effect of
Headings and Table of Contents.


 


The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.


 


SECTION 1.09.                             Successors
and Assigns.


 


All covenants
and agreements in this Subordinated Indenture by the Issuer shall bind its
respective successors and assigns, whether so expressed or not.


 


17

















 


SECTION 1.10.                             Separability
Clause.


 


In any case
any provision in this Subordinated Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.


 


SECTION 1.11.                             Benefits of
Subordinated Indenture.


 


Nothing in
this Subordinated Indenture or in the Securities, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Subordinated Indenture.


 


SECTION 1.12.                             Governing
Law.


 


This
Subordinated Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, except as stated in
Section 2.01 and except for Section 13.01, which shall be governed by
and construed in accordance with the laws of England and Wales.


 


SECTION 1.13.                             Non-Business
Day.


 


Unless
otherwise specified in the Securities of a series, in any case where any
Interest Payment Date, Redemption Date, Event Date or Stated Maturity of a
Security of any particular series shall not be a Business Day at any Place of
Payment with respect to Securities of that series, then (notwithstanding any
other provision of this Subordinated Indenture) payment of principal (or, if
the context so requires, lesser amount in the case of Discounted Securities) of
(and premium, if any, on) and interest and Deferred Interest, if any, with
respect to such Security and the exchange or conversion of such Security need
not be made or occur at such Place of Payment on such date, but may be made or
occur on the next succeeding Business Day at such Place of Payment with the
same force and effect as such payment, or conversion or exchange, had occurred
on the Interest Payment Date, Redemption Date, Event Date, as the case may be,
or at the Stated Maturity; provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Event Date
or Stated Maturity, as the case may be; and provided further, that if such next
succeeding Business Day at any Place of Payment would fall in the succeeding
fiscal year of the Issuer, payment may be made in full or such conversion or
exchange may occur on the immediately preceding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date,
Redemption Date, Event Date or Stated Maturity, as the case may be.


 


SECTION 1.14.                             Immunity of
Incorporators, Stockholders, Officers and Directors.


 


No recourse
shall be had for the payment of the principal of (or premium, if any, on), or
interest or Deferred Interest, if any, on any Security of any series, or for
any claim based thereon, or upon any obligation, covenant or agreement of this
Subordinated Indenture or any indenture supplemental hereto, or any Security,
or because of any indebtedness evidenced thereby, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Issuer or of any predecessor or successor corporations thereto, either directly
or indirectly through the Issuer or any predecessor or successor corporations,
whether by virtue 


 


18

















 


of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise; it being expressly agreed and
understood that this Subordinated Indenture and all the Securities of each
series are solely corporate obligations, and that no personal liability
whatsoever shall attach to, or is incurred by, any incorporator, stockholder,
officer or director, past, present or future, of the Issuer or of any
predecessor or successor corporations thereto, either directly or indirectly
through the Issuer or any such predecessor or successor corporations, because
of the incurring of the indebtedness hereby authorized or under or by reason of
any of the obligations, covenants or agreements contained in this Subordinated
Indenture or in any of the Securities of any series, as the case may be, or to
be implied herefrom or therefrom; and that all such personal liability is
hereby expressly released and waived as a condition of, and as part of the
consideration for, the execution of this Subordinated Indenture and the
issuance of the Securities of each series.


 


SECTION 1.15.                             Certain
Matters Relating to Currencies.


 


Whenever any
action or Act is to be taken hereunder by the Holders of Securities denominated
in different currencies or currency units, then for purposes of determining the
principal amount of Securities held by such Holders, the aggregate principal
amount of the Securities denominated in a Foreign Currency or currency unit
shall be deemed to be that amount of Dollars that could be obtained for such
principal amount on the basis of a spot rate of exchange specified to the
Subordinated Trustee for such series in an Exchange Rate Officers’ Certificate
or a Currency Determination Agent’s Certificate for such Foreign Currency or
currency unit into Dollars as of the date the taking of such action or Act by
the Holders of the requisite percentage in aggregate principal amount of the
Securities.


 


SECTION 1.16.                             Language of
Notices, Etc.


 


Any request,
demand, authorization, direction, notice, consent, waiver or other action
required or permitted under this Subordinated Indenture shall be in the English
language, and any published notice may also be in an official language of the
country or province of publication.


 


SECTION 1.17.                             Appointment
of Agent for Service.


 


By the
execution and delivery of this Subordinated Indenture, the Issuer designates
and appoints Jackson National Life Insurance Company at 1 Corporate Way,
Lansing, Michigan 48951, as its authorized agent upon which process may be
served in any suit or proceeding arising out of or relating to the Securities
or this Subordinated Indenture which may be instituted in any Federal or New
York State Court located in the Borough of Manhattan, City and State of New
York but for that purpose only, and agrees that service of process upon said
Jackson National Life Insurance Company, directed to the attention of Thomas J.
Meyer and written notice of said service given by the Person serving the same
to it, addressed as provided in Section 1.05, shall be deemed in every respect
effective service of process upon it in any such suit or proceeding in any
Federal or State court in such Borough, City and State.  The Issuer hereby submits (for the purposes
of any such suit or proceeding) to the jurisdiction of any such court in which
any such suit or proceeding is so instituted, and irrevocably waives, to the
fullest extent it may lawfully do so, any objection it may have now or
hereafter to the laying of the venue of any such suit, action or proceeding in
any such court and irrevocably waives, to the fullest extent it may lawfully do
so, any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient 


 


19

















 


forum.  Such submission and waiver
shall be irrevocable so long as any of the Securities remain Outstanding and
such appointment shall be irrevocable until the appointment of a successor by
the Issuer and such successor’s acceptance of such appointment.  Upon such acceptance, the Issuer shall
notify the Subordinated Trustee of the name and address of such successor.  The Issuer further agrees to take any and
all action, including the execution and filing of any and all such documents
and instruments, as may be necessary to continue such designation and
appointment of said Jackson National Life Insurance Company or its successor in
full force and effect so long as any of the Securities shall be
Outstanding.  The Subordinated Trustee
shall not be obligated and shall have no responsibility with respect to any
failure by the Issuer to take any such action.


 


The Issuer
agrees, to the fullest extent that it lawfully may do so, that final judgment
in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Issuer, and may be enforced in the courts of
England and Wales (or any other courts to the jurisdiction of which the Issuer
is subject) by a suit upon such judgment, provided that service of process is
effected upon the Issuer in the manner specified in the foregoing paragraph or
as otherwise permitted by law; provided, however, that the Issuer does
not waive, and the foregoing provisions of this sentence shall not constitute
or be deemed to constitute a waiver of, (i) any right to appeal any such judgment,
to seek any stay or otherwise to seek reconsideration or review of any such
judgment, (ii) any stay of execution or levy pending an appeal from, or a suit,
action or proceeding for reconsideration of, any such judgment, or (iii) any
other right or remedy of the Issuer to the extent not expressly waived in
accordance with this Section 1.17.


 


Notwithstanding
the foregoing, any actions arising out of or relating to the Securities or this
Subordinated Indenture may be instituted by any party hereto and, subject to
the limitations set forth in Article Five of this Subordinated Indenture,
by the Holder of any Security in any competent court in England and Wales.


 


Nothing in
this Section shall affect the right of the Subordinated Trustee or any
Holder of any Security to serve process in any manner permitted by applicable
law or limit the right of the Subordinated Trustee or any Holder of any
Security to bring proceedings against the Issuer in the courts of any other
jurisdiction or jurisdictions.


 


SECTION 1.18.                             Rules by the
Subordinated Trustee


 


The
Subordinated Trustee may make reasonable rules for action by or a meeting of
Holders.


 


ARTICLE TWO



SECURITY FORMS


 


SECTION 2.01.                             Forms of
Securities.


 


The Registered
Securities of each series shall be in such form or forms as shall be
established by or pursuant to a Board Resolution or in an indenture
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Subordinated Indenture or any indenture supplemental hereto and may have such
letters, numbers or other marks of identification and such legends 


 


20

















 


or endorsements placed thereon as may be required to comply with any law,
with any rule or regulation made pursuant thereto, with any rules of any
securities exchange or any automated quotation system or to conform to usage,
as may, consistently herewith, be determined by the officers executing such
Securities.  Such execution of such
Securities shall be conclusive evidence as regards the Issuer as to any such
determination by the Issuer.


 


Each Security
issued hereunder shall have endorsed thereon a statement in the following form
or in substantially the following form:


 


THE RIGHTS OF
THE HOLDER OF THIS SECURITY ARE, TO THE EXTENT AND IN THE MANNER SET FORTH IN
SECTION 13.01 OF THE SUBORDINATED INDENTURE HEREINAFTER REFERRED TO,
SUBORDINATED TO THE CLAIMS OF OTHER CREDITORS OF THE ISSUER AND THIS SECURITY
IS ISSUED SUBJECT TO THE PROVISIONS OF THAT SECTION 13.01, AND THE HOLDER
OF THIS SECURITY BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH
PROVISIONS.  THE PROVISIONS OF
SECTION 13.01 OF THE SUBORDINATED INDENTURE AND THE TERMS OF THIS
PARAGRAPH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
ENGLAND AND WALES.


 


The definitive
Securities shall be printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner, all as
determined by the officers executing such Securities.  Such execution of such definitive Securities shall be conclusive
evidence as regards the Issuer as to any such determination made by the Issuer.


 


SECTION 2.02.                             Form of
Certificate of Authentication.


 


Unless
otherwise specified as contemplated by Section 3.01, the Certificate of
Authentication on all Securities shall be in substantially the following form:


 


“This is one
of the Securities of the series designated in, and referred to in, the
Subordinated Indenture described herein.


 


	
   

  	
  CITIBANK, N.A.

  
	
   

  	
  as Subordinated Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  ’

  



 


SECTION 2.03.                             Securities
in Global Form.


 


If any
Security of a series is issuable in global form, such Security may provide that
it shall represent the aggregate amount of Outstanding Securities from time to
time endorsed thereon and may also provide that the aggregate amount of
Outstanding Securities represented thereby may from time to time be increased
or reduced to reflect exchanges.  


 


21

















 


Any endorsement of a Security in global form to reflect the amount, or
any increase or decrease in the amount, of Outstanding Securities represented
thereby shall be made by the Subordinated Trustee or Security Registrar and in
such manner as shall be specified in such Security.  Any instructions by the Issuer with respect to a Security in
global form, after its initial issuance, shall be in writing but need not
comply with Section 1.02.


 


Global
Securities may be issued in registered form.


 


Unless
otherwise specified in the Securities of a series, every global Registered
Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:


 


THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE SUBORDINATED INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY OR A NOMINEE THEREOF.  UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE
REGISTERED FORM IN ACCORDANCE WITH THE TERMS HEREOF AND OF THE INDENTURE,
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR’S NOMINEE OR TO THE DEPOSITORY TRUST COMPANY OR A
SUCCESSOR THEREOF BY A NOMINEE OF THE DEPOSITORY TRUST COMPANY OR A SUCCESSOR
THEREOF AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
SUBORDINATED INDENTURE. 


 


UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER ENTITY AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


ARTICLE THREE



THE SECURITIES


 


SECTION 3.01.                             Title;
Payment and Terms.


 


The aggregate
principal amount of Securities which may be authenticated and delivered and
Outstanding under this Subordinated Indenture is unlimited.  The Securities may be issued up to the
aggregate principal amount of Securities from time to time authorized by or
pursuant to a Board Resolution of the Issuer.


 


The Securities may be issued in one or more series.  There shall be established in one or more
Board Resolutions or pursuant to authority granted by one or more Board 


 


22

















 


Resolutions and, subject to Section 3.03, set forth in, or
determined in the manner provided in, an Officers’ Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series any or all of the following, as applicable (each of
which, if so provided, may be determined from time to time by the Issuer with
respect to unissued Securities of the series and set forth in such Securities
of the series when issued from time to time):


 


(1)                                  whether
Securities of that series are to be Dated Subordinated Debt Securities,
Perpetual Subordinated Debt Securities or Perpetual Subordinated Capital
Securities;


 


(2)                                  the
title of the Securities of that series (which shall distinguish the Securities
of that series from all other series of Securities); if the Securities of that
series will be in bearer rather than registered form, the forms, procedures and
mechanisms to be employed in connection therewith; any limit upon the aggregate
principal amount of the Securities of that series which may be authenticated
and delivered under this Subordinated Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of that series pursuant to
Section 3.04, 3.05, 3.06, 9.06 or 11.07 and except for any Securities
which, pursuant to Section 3.03, are deemed never to have been
authenticated and delivered hereunder);


 


(3)                                  the
percentage or percentages of principal amount at which the debt securities of
the series will be issued;


 


(4)                                  certain
dates or periods, including:  (a) the
original issue date or dates or periods during which the Securities of that
series may be issued; (b) the date or dates (or manner of determining the same)
on which, or the range of dates within which, the principal of (and premium, if
any, on) the Securities of that series is payable; and (c) the record dates, if
any, for the determination of Holders of Securities of such series to whom such
principal (and premium, if any) is payable;


 


(5)                                  information
with regard to interest, including:  (a)
the rate or rates (or the manner of calculation thereof, including any
provisions for the increase or decrease of such rate or rates upon the
occurrence of specific events) at which the Securities of that series shall
bear interest (if any), or the discount, if any, at which any Discounted
Securities may be issued; (b) the date or dates from which such interest shall
accrue; (c) the Interest Payment Dates on which such interest shall be payable
(or manner of determining the same); (d) the Regular Record Date for the
interest payable on any Securities on any Interest Payment Date; and
(e) the manner in which such interest shall be paid (including whether such
interest may be paid in accordance with the Alternative Coupon Satisfaction
Mechanism);


 


(6)                                  the
place or places where, subject to the provisions of Section 10.02:  (a) the principal of (and premium, if any,
on) and interest or Deferred Interest, if any, on Securities of that series
shall be payable; (b) any Registered Securities of that series may be
surrendered for registration of transfer, any Securities of that series may be
surrendered for exchange; and (c) notices and demands to or upon the Issuer in
respect of the Securities of that series and this Subordinated Indenture may be
served;


 


(7)                                  the
terms and conditions, if any, upon which Securities of that series may be
redeemed, purchased or repaid in whole or in part, at the option of the Issuer
or otherwise, including the period or periods within which or manner of
determining the same, the price or 


 


23

















 


prices at which or manner of determining the same, and the currency or
currency unit in which the Securities may be redeemed;


 


(8)                                  the
obligation (which may be fixed or contingent upon events), if any, of the
Issuer to redeem, purchase or repay Securities of that series pursuant to any
sinking fund or analogous provisions or at the option of a Holder thereof, and
the period or periods within which or manner of determining the same, the price
or prices at which or manner of determining the same, the currency or currency
unit in which, and the terms and conditions upon which, Securities of that
series shall be redeemed, purchased or repaid, in whole or in part, pursuant to
such obligation;


 


(9)                                  the
minimum denomination or denominations in which any Registered Securities of
that series shall be issuable if other than integral multiples of $1,000;


 


(10)                            with
respect to Securities other than Perpetual Subordinated Debt Securities or
Perpetual Subordinated Capital Securities, if other than the principal amount
thereof, the portion of the principal amount of Securities of that series which
shall be payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.02;


 


(11)                            any
additional covenants or agreements with respect to Securities of that series;


 


(12)                            if
other than as set forth in this Subordinated Indenture, any Events of Default,
Payment Defaults, Capital Security Defaults and Payment Events (including the
Events of Default, Payment Defaults, Capital Security Defaults and Payment
Events described in Sections 5.01 and 5.03) and any covenants or agreements of
the Issuer with respect to the Securities of that series, whether or not such
Events of Default, Payment Defaults, Capital Security Defaults or Payment
Events or covenants or agreements are consistent with the Events of Default,
Payment Defaults, Capital Security Defaults or Payment Events or covenants or
agreements set forth herein;


 


(13)                            if
a Person other than Citibank, N.A. is to act as Subordinated Trustee for the
Securities of that series, the name and location of the Corporate Trust Office
of such Subordinated Trustee;


 


(14)                            if
other than Dollars, the currency or currency unit in which payment of the
principal of (and premium, if any, on) and interest or Deferred Interest, if
any, on the Securities of that series shall be made or in which the Securities
of that series shall be denominated and the particular provisions applicable
thereto in accordance with, in addition to or in lieu of the provisions of
Section 3.11;


 


(15)                            if
the principal of (and premium, if any, on) and interest and Deferred Interest,
if any, on the Securities of that series are to be payable, at the election of
the Issuer or a Holder thereof, in a currency or currency unit other than that
in which such Securities are denominated or stated to be payable, in accordance
with provisions in addition to, in lieu of or in accordance with the provisions
of Section 3.11, the period or periods within which (including the
Election Date), and the terms and conditions upon which, such election may be
made, and the time and manner of determining the exchange rate between the currency
and currency unit in which such Securities are denominated or stated to be
payable and the currency or currency unit in which such Securities are to be so
payable;


 


24

















 


(16)                            the
designation of the original Currency Determination Agent, if any, and in what
circumstances a Currency Determination Agent’s Certificate or an Exchange Rate
Officers’ Certificate shall be delivered for Securities of that series;


 


(17)                            the
index, if any, used to determine the amount of payments of principal of (and
premium, if any, on) and interest and Deferred Interest, if any, on the
Securities of that series;


 


(18)                            if
other than as set forth in Section 4.01, provisions for the satisfaction
and discharge of this Subordinated Indenture with respect to the Securities of
that series;


 


(19)                            if
the amount of payments of principal of (and premium, if any, on) and interest
and Deferred Interest, if any, on the Securities of that series may be
determined, at the election of the Issuer or a Holder thereof, with reference
to an index based on a currency or currency unit other than that in which such
Securities are denominated or stated to be payable or any other index, the
manner in which such amounts shall be determined;


 


(20)                            the
date as of which any global Security representing Outstanding Securities of
that series shall be dated if other than the date of original issuance of the
first Security of that series to be issued;


 


(21)                            the
application, if any, of Sections 10.07 and 11.08 to the Securities of that
series;


 


(22)                            the
form of the Securities of that series (including the terms and conditions of
such Securities);


 


(23)                            whether
the Securities of the series shall be issued in whole or in part in the form of
a global Security or Securities and, in such case, the Depositary for such
global Security or Securities;


 


(24)                            whether
any legends shall be stamped or imprinted on all or a portion of the Securities
of such series, and the terms and conditions upon which any such legends may be
removed;


 


(25)                            in
the case of any series of Perpetual Subordinated Capital Securities, the
particular terms of such series, including those relating to the Optional
Interest Payment Dates, Alternative Coupon Satisfaction Mechanism, Definitive
Suspension, optional redemption, and such other terms relating to Deferred
Interest, Events of Default, Capital Security Defaults, Payment Events, Tax
Events, Tax Call Events, Regulatory Events, Senior Securities, Junior
Securities, Parity Securities and subordination;


 


(26)                            whether
the Securities of the series shall be convertible or exchangeable into
Preference Shares at the option of the Issuer pursuant to
Article Fourteen; the dates on which such conversion or exchange may occur
(the date upon which the Issuer opts to exchange or convert the Securities
being referred to as the “Event Date”); and the nature of the Preference Shares
and any additional or other provisions relating to such conversion or exchange;
and


 


(27)                            any
other terms of that series (which terms shall be consistent with the provisions
of this Subordinated Indenture except as such terms are otherwise expressly 


 


25

















 


provided for in an applicable Board Resolution or supplemental
indenture executed hereunder with respect to such series).


 


All Securities
of any particular series shall be identical except as to authentication date,
public offering price, denomination and issue date except as may otherwise be
provided in or pursuant to such Board Resolutions and set forth in such
Officers’ Certificates relating thereto or provided in or pursuant to any
supplemental indenture hereto (provided that the Securities of a series shall
be fungible with all other Securities of such series).  The terms of such Securities may be
determined by the Issuer from time to time if so provided in or established
pursuant to the authority granted in the Board Resolutions.  All Securities of any one series need not be
issued at the same time, and unless otherwise provided, a series may be
reopened for issuance of additional Securities of such series.


 


If any of the
terms of the Securities of a series are established by action taken pursuant to
one or more Board Resolutions, a copy of an appropriate record of such action
shall be certified by an appropriate officer of the Issuer and delivered to the
Subordinated Trustee at or prior to the delivery of the Officers’ Certificate
setting forth the terms of such Securities.


 


Prior to the
delivery of a Security of any series in any such form to the Subordinated
Trustee for authentication, the Issuer shall deliver to the Subordinated
Trustee (and the Subordinated Trustee shall be fully protected in relying upon)
the following:


 


(1)                                  the
Board Resolution of the Issuer and, if applicable, the supplemental indenture
by or pursuant to which such form of Security to be endorsed thereon have been
approved;


 


(2)                                  an
Officers’ Certificate of the Issuer dated the date such certificate is
delivered to the Subordinated Trustee stating that all conditions precedent
provided for in this Subordinated Indenture relating to the authentication and
delivery of such Securities in such form have been complied with; and


 


(3)                                  an
Opinion of Counsel stating that each of the Securities when (a) completed by
appropriate insertions and executed and delivered by the Issuer to the
Subordinated Trustee for authentication in accordance with this Subordinated
Indenture, (b) authenticated (if appropriate) and delivered by the Subordinated
Trustee in accordance with this Subordinated Indenture within the authorization
as to aggregate principal amount established from time to time by the Board of
Directors of the Issuer and (c) sold in the manner specified in such Opinion of
Counsel, will be the valid, binding and enforceable obligations of the Issuer
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
other laws relating to or affecting creditors’ rights generally, to general
equitable principles, to an implied covenant of good faith and fair dealing and
to such other qualifications as such counsel shall conclude do not materially
affect the rights of Holders of such Securities.


 


26

















 


SECTION 3.02.                             Denominations
and Currencies.


 


Unless
otherwise provided with respect to any series of Securities as contemplated by
Section 3.01, any Registered Securities of a series shall be issuable in
denominations of $1,000 and any integral multiple thereof.


 


SECTION 3.03.                             Execution,
Authentication, Delivery and Dating.


 


The Securities
shall be executed on behalf of the Issuer by any two of its directors or by one
director and the group secretary of the Issuer.  The signature of any of these officers on the Securities may be
manual or facsimile or, as and to the extent required by the Depositary,
manual.


 


Securities
bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Issuer shall bind the Issuer, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities.


 


At any time
and from time to time after the execution and delivery of this Subordinated
Indenture, the Issuer may deliver Securities of any series as executed by the
Issuer to the Subordinated Trustee for the Securities of such series for
authentication, together with an Issuer Order for the authentication and
delivery of such Securities, and such Subordinated Trustee, in accordance with such
Issuer Order, shall authenticate and deliver such Securities.  If any Security shall be represented by a
global Security, then, for purposes of this Section and Section 3.04,
the notation of a beneficial owner’s interest therein upon original issuance of
such Security shall be deemed to be delivered in connection with the original
issuance of such beneficial owner’s interest in such global Security.  If all the Securities of any one series are
not to be issued at one time and if a Board Resolution or indenture
supplemental hereto relating to such Securities shall so permit, such Issuer
Order may set forth procedures acceptable to the Subordinated Trustee for the
issuance of such Securities, including without limitation, procedures with
respect to interest rate, Stated Maturity, if any, date of issuance and date
from which interest, if any, shall accrue. 
Such procedures may authorize authentication and delivery pursuant to
oral or electronic instruction from the Issuer or its duly authorized agent.


 


Notwithstanding
any contrary provision herein, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary to deliver the Board
Resolution and/or indenture supplemental hereto, Officers’ Certificate and
Opinion of Counsel otherwise required pursuant to Sections 1.02 and 3.01 at or
prior to the time of authentication of each Security of such series if such
documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.


 


Each
Registered Security shall be dated the date of its authentication.


 


No Security
shall be entitled to any benefit under this Subordinated Indenture or be valid
or obligatory for any purpose unless there appears on such Security a certificate
of authentication substantially in the form provided for herein executed by
manual signature by the Subordinated Trustee for such Security or in the name
of any Authenticating Agent pursuant to Section 3.14, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that
such Security has been duly authenticated and delivered 


 


27

















 


hereunder.  Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Issuer, and the Issuer shall deliver
such Security to the Subordinated Trustee for cancellation as provided in
Section 3.09, for all purposes of this Subordinated Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Subordinated
Indenture.


 


In case any
Securities shall have been authenticated, but not delivered, by the
Subordinated Trustee for such series then in office, any successor Subordinated
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Subordinated Trustee
had itself authenticated such Securities.


 


Any global
Security shall, unless otherwise provided therein, be delivered to a Depositary
designated pursuant to Section 3.01. 
Each Depositary designated pursuant to Section 3.01 for a global
Security must at the time of its designation and at all times while it serves
as such Depositary be a clearing agency registered under the Exchange Act and
any other applicable statute or regulation.


 


The
Subordinated Trustee shall have the right to decline to authenticate and
deliver any Securities if the Subordinated Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Subordinated
Trustee in good faith shall determine that such action would expose the
Subordinated Trustee to personal liability to existing Holders or would affect
the Subordinated Trustee’s own rights, duties or immunities under the
Securities, this Indenture or otherwise in a manner which is not reasonably
acceptable to the Subordinated Trustee acting in good faith.


 


SECTION 3.04.                             Temporary
Securities and Exchange of Securities.


 


Pending the
preparation of definitive Securities of any particular series, the Issuer may
execute, and upon an Issuer Order the Subordinated Trustee for the Securities
of such series shall authenticate and deliver, in the manner specified in
Section 3.03, temporary Securities which are printed, lithographed,
typewritten, photocopied or otherwise produced in any authorized denomination,
with like terms and conditions as the definitive Securities of the series in
lieu of which they are issued in registered form and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine. 
Such execution of such Securities shall be conclusive evidence as
regards the Issuer as to any such determination made by the Issuer.


 


If temporary
Securities of any particular series are issued, the Issuer will cause
definitive Securities of that series to be prepared without unreasonable
delay.  After the preparation of such
definitive Securities, the temporary Securities of such series shall be
exchangeable for such definitive Securities and of a like Stated Maturity, if
any, and with like terms and provisions upon surrender of the temporary
Securities of such series at the office or agency of the Issuer in a Place of
Payment for that series, without charge to the Holder.  Upon surrender for cancellation of any one
or more temporary Securities of any particular series, the Issuer shall execute
and (in accordance with an Issuer Order delivered at or prior to the authentication
of the first definitive Security of such series) the Subordinated Trustee for
the Securities of such series shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations of the same series and of a like Stated Maturity, if any, and
with like terms and provisions.  Until
exchanged as 


 


28

















 


hereinabove provided, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Subordinated Indenture
as definitive Securities of the same series with like terms and conditions,
except where specified therein with respect to certification requirements prior
to payment of interest in certain cases.


 


SECTION 3.05.                             Registration,
Registration of Transfer and Exchange.


 


The Issuer
shall cause to be kept for the Registered Securities of each series a security
register (such security register or registers herein sometimes collectively
referred to as the “Security Register”) in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration
of Registered Securities and of transfers of Registered Securities.  Unless and until otherwise determined by the
Issuer, the Subordinated Trustee shall act as Security Registrar and the
Security Register shall be kept at the Corporate Trust Office of the
Subordinated Trustee.  At all reasonable
times the Security Register shall be open for inspection by the Issuer and its
duly authorized agents.  The Issuer may
appoint co-Security Registrars, provided that at any given time there shall be
only one Security Register with respect to a series of Securities.


 


Upon surrender
for registration of transfer of any Registered Security of any particular
series at the office or agency of the Issuer in a Place of Payment for that
series, the Issuer shall execute, and upon an Issuer Order the Subordinated
Trustee for the Securities of each series shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Registered Securities of any authorized denominations, and of a like Stated
Maturity, if any, and of a like series and aggregate principal amount and with
like terms and conditions.


 


Except as set
forth below, at the option of the Holder, Registered Securities of any
particular series may be exchanged for other Registered Securities (and only
Registered Securities) of any authorized denominations and of a like Stated
Maturity, if any, and of a like series and aggregate principal amount and with
like terms and conditions, upon surrender of the Registered Securities to be
exchanged at such office or agency. 
Whenever any Securities are so surrendered for exchange, the Issuer
shall execute, and upon an Issuer Order the Subordinated Trustee for such
Securities shall authenticate and deliver the Securities which the Holder
making the exchange is entitled to receive.


 


Notwithstanding
any other provision of this Section or Section 3.04, unless and until
it is exchanged in whole or in part for Registered Securities in definitive
form, a global Security representing all or a portion of the Registered
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.


 


If at any time
the Depositary for Securities of a series in registered form notifies the
Issuer that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities
for such series shall no longer be eligible under Section 3.03, the Issuer
shall appoint a successor Depositary with respect to the Securities for such
series.  If a successor Depositary for
the Securities of such series is not appointed by the Issuer within 120 days
after the Issuer receives such notice or becomes aware of such ineligibility,
the Issuer’s election pursuant to Section 3.01 shall no longer be 


 


29

















 


effective with respect to the Securities for such series and the Issuer
will execute, and the Subordinated Trustee, upon receipt of an Issuer Order
from the Issuer for the authentication and delivery of definitive Securities of
such series, will authenticate and deliver Securities of such series in
definitive form, in an aggregate principal amount equal to the principal amount
of the global Security or Securities representing such series in exchange for
such global Security or Securities.


 


The Issuer may
at any time and in its sole discretion determine that the Registered Securities
of any series issued in the form of one or more global Securities shall no
longer be represented by such global Security. 
In such event the Issuer will execute, and the Subordinated Trustee,
upon receipt of an Issuer Order from the Issuer for the authentication and
delivery of definitive Registered Securities of such series, will authenticate
and deliver Registered Securities of such series in definitive form in an
aggregate principal amount equal to the principal amount of the global Security
representing such series in exchange for such global Security.


 


If specified
by the Issuer pursuant to Section 3.01 with respect to a series of
Securities in registered form, the Depositary for such series of Securities may
surrender a global Security for such series of Securities in exchange in whole
or in part for Securities of such series of like tenor and terms, and in
definitive form, on such terms as are acceptable to the Issuer and such
Depositary.  Thereupon the Issuer shall
execute, and the Subordinated Trustee, upon an Issuer Order, shall authenticate
and deliver, without service charge, (i) to each Person specified by such
Depositary a new Security or Securities of the same series, of like tenor and
terms and of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person’s
beneficial interest in the global Security; and (ii) to such Depositary a new
global Security of like tenor and terms and in a denomination equal to the
difference, if any, between the principal amount of the surrendered global
Security and the aggregate principal amount of Securities delivered to Holders
thereof.


 


Upon the
exchange of a global Security for Securities in definitive form, such global
Security if so exchanged in its entirety shall, upon an Issuer Order, be
cancelled by the Subordinated Trustee. 
Registered Securities issued in exchange for a global Security pursuant
to this Section 3.05 shall be registered in such names and in such
authorized denominations as the Depositary for such global Security, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Subordinated Trustee in writing. 
The Subordinated Trustee shall deliver, or cause to be delivered, such
Registered Security to the persons in whose names such Securities are so
requested.


 


All Securities
issued upon any registration of transfer or exchange of Securities shall be the
valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Subordinated Indenture, as the Securities surrendered
upon such registration of transfer or exchange.


 


Every Security
presented or surrendered for registration of transfer or exchange shall (if so
required by the Issuer or the Subordinated Trustee for such Security) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar for such series duly
executed, by the Holder thereof or his attorney duly authorized in writing.


 


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No service
charge shall be made for any registration of transfer or exchange of
Securities, but the Issuer may require payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of such Holder’s
Securities, other than exchanges pursuant to Section 3.04, 9.06 or 11.07
not involving any transfer.


 


The Issuer
shall not be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
of that series selected for redemption under Section 11.04 and ending at
the close of business on the day of mailing of the relevant notice of
redemption or (ii) to register the transfer of or exchange any Security so
selected for redemption as a whole or in part, except the unredeemed portion of
any Security being redeemed in part.


 


SECTION 3.06.                             Mutilated,
Destroyed, Lost and Stolen Securities.


 


If (i) any
mutilated Security is surrendered to the Subordinated Trustee for such
Security, or the Issuer and the Subordinated Trustee for a Security receive
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) there is delivered to the Issuer and the Subordinated Trustee
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Issuer or the Subordinated Trustee that such Security has been acquired by a
bona fide purchaser, the Issuer shall execute and upon its request the
Subordinated Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for such mutilated Security,
a new Security of the same series and in a like principal amount and of a like
Stated Maturity, if any, and with like terms and conditions and bearing a
number not contemporaneously outstanding.


 


In case any
such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Issuer in its discretion may, instead of issuing a
new Security, pay such Security (without surrender thereof except in the case of
a mutilated Security) if the applicant for such payment shall furnish to the
Issuer and the Subordinated Trustee for such Security such security or
indemnity as may be required by them to save each of them harmless, and in case
of destruction, loss or theft, evidence satisfactory to the Issuer and such
Subordinated Trustee and any agent of any of them of the destruction, loss or
theft of such Security and the ownership thereof.


 


Upon the
issuance of any new Security under this Section, the Issuer may require the
payment by the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including all fees and expenses of the Subordinated Trustee for such
Security) connected therewith.


 


Every new
Security of any series issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security or in exchange for any mutilated Security,
shall constitute an original additional contractual obligation of the Issuer
whether or not the destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Subordinated Indenture equally and proportionately with any and all other
Securities of the same series duly issued hereunder.


 


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The provisions
of this Section are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities.


 


SECTION 3.07.                             Payment of
Interest.


 


(a)                                  General.  Unless otherwise specified with respect to
the Securities of any series, interest, if any, on any Security which is due
and payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid, in the case of Registered Securities, to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest payment; provided, however, that interest, if any, payable at
Maturity will be payable to the Person to whom principal shall be payable.


 


Pursuant to Section 3.01, the Issuer shall designate the manner in
which interest shall be paid (including whether such interest may be paid in
accordance with the Alternative Coupon Satisfaction Mechanism).


 


Unless
otherwise provided with respect to the Securities of any series, payment of
interest may be made at the option of the Issuer by check mailed or delivered
to the address of the Person entitled thereto as such address shall appear in
the Security Register or by transfer to a bank account maintained by the payee.


 


(b)                                 Payments
of Interest on Dated Subordinated Debt Securities or Perpetual Subordinated
Debt Securities.  Unless otherwise
provided in the Board Resolution or supplemental indenture pursuant to
Section 3.01 hereof establishing the terms of the particular series, if
the Issuer fails to pay an installment of interest on an Interest Payment Date
with respect to any Dated Subordinated Debt Securities or Perpetual
Subordinated Debt Securities, or does not pay all or any part of the principal
of (or premium, if any, on) any such Securities on the Stated Maturity, if any,
or any other date set for redemption, the obligation to make such payment on
such Interest Payment Date, Stated Maturity or other date set for redemption,
as the case may be, shall be deferred until: (i) in the case of a payment of
interest, the date upon which the Issuer pays a dividend on any class of its
share capital or the Issuer makes any payment on any series of Securities
ranking junior to or pari passu with such series of Dated Subordinated Debt
Securities or Perpetual Subordinated Debt Securities (a “Deferred Interest
Payment Date”) or, in the case of Dated Subordinated Debt Securities, the
earlier to occur of the Stated Maturity for the payment of principal or the
Deferred Principal Payment Date, as the case may be; and (ii) in the case of a
payment of principal (or premium, if any), the first Business Day after the
date that falls six months after such payment was originally due (a “Deferred
Principal Payment Date”).


 


Except as
otherwise provided in a supplemental indenture or Board Resolution pursuant to
Section 3.01 for the Securities of such series, no payment deferred in
accordance with the foregoing will accrue interest and no payment so deferred
shall be treated as due for payment for any purpose until the Deferred Interest
Payment Date or Deferred Principal Payment Date, as the case may be.  Accordingly, no such deferral will
constitute a Payment Default, Capital Security Default, Payment Event or an
Event of Default under Section 5.03 hereof with respect to such
Securities.


 


Unless otherwise provided in the Board Resolution or supplemental
indenture pursuant to Section 3.01 hereof establishing the terms of a
series of the Securities, if the


 


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Issuer defers an interest payment with respect to any Dated
Subordinated Debt Securities or Perpetual Subordinated Debt Securities, as the
case may be, in accordance with the terms of this Subordinated Indenture
(including any Board Resolution or supplemental indenture pursuant to
Section 3.01 hereof establishing the terms of such series), then neither
the Issuer nor any entity the Issuer controls, directly or indirectly, shall be
permitted: (a) to declare or pay a dividend or distribution or make any other
payment on any Preference Shares, Parity Securities or on any Junior Securities
(other than (i) a final dividend declared by the Issuer with respect to its
ordinary shares prior to the date that the decision to defer such interest
payment is made or (ii) a payment made by one of the Issuer’s wholly-owned
subsidiaries to another wholly-owned subsidiary or directly to the Issuer); or
(b) to redeem, purchase or otherwise acquire any Preference Shares, Parity
Securities or any Junior Securities, in each case unless or until the interest
otherwise due and payable on the next succeeding Interest Payment Date in
respect of such Securities is duly set aside and provided for or paid in full.


 


For purposes
of the foregoing, the payment (or declaration of payment) of a dividend or
distribution on Preference Shares, Junior Securities and Parity Securities
shall be deemed to include the making of any interest, coupon or dividend
payment (or payment under any guarantee in respect thereof) and the redemption,
purchase or other acquisition of such securities (save where the funds used to
redeem, purchase or acquire those securities are derived from an issue of
Preference Shares, Junior Securities or Parity Securities (i) made at any time
within the six-month period prior to the time of such redemption, purchase or
acquisition, and (ii) with the same or junior ranking on a return of assets on
a winding up or in respect of a distribution or payment of interest, coupons or
dividends and/or any other amounts thereunder to those securities being
redeemed, purchased or acquired).  The
Subordinated Trustee shall be entitled to rely on an Officers’ Certificate as
to whether the redemption, purchase or acquisition falls within the exception
set out above and, if the Subordinated Trustee does so rely, such Officers’
Certificate shall, in the absence of clear error, be conclusive and binding on the
Issuer and the holders of the Securities.


 


(c)                                  Payments
of Interest on Perpetual Subordinated Capital Securities.  Unless otherwise provided in the Board
Resolution or supplemental indenture pursuant to Section 3.01 hereof
establishing the terms of a series of Perpetual Subordinated Capital
Securities, (i) interest on the Perpetual Subordinated Capital Securities will
be due and payable on each Compulsory Interest Payment Date and (ii) any
accrued interest for an Interest Period on any Perpetual Subordinated Capital
Securities of a particular series which is not paid by the Issuer either (x)
because the issuer elects not to make a payment of interest on any Optional
Interest Payment Date, or (y) because the Issuer is prohibited from making a
payment of interest under the terms of any Parity Securities or Senior
Securities or (z) because the Solvency Condition is not so met on an
Interest Payment Date, together with any other accrued interest for previous
Interest Periods in respect of such Perpetual Subordinated Capital Securities
which was not paid by the Issuer so long as the same remains unpaid, shall
constitute “Deferred Interest”.  Unless
otherwise provided in the Board Resolution or supplemental indenture pursuant
to Section 3.01 hereof establishing the terms of a series of Perpetual
Subordinated Capital Securities, Deferred Interest shall not itself bear
interest and will be payable only pursuant to the Alternative Coupon
Satisfaction Mechanism provided for in the Board Resolution or supplemental indenture
pursuant to Section 3.01 hereof, or in such other circumstances and in
such manner as is set forth therein.


 


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Unless
otherwise provided in the Board Resolution or supplemental indenture pursuant
to Section 3.01 hereof establishing the terms of a series of Perpetual
Subordinated Capital Securities, if the Issuer defers an interest payment with
respect to any Perpetual Subordinated Capital Securities in accordance with the
terms of this Subordinated Indenture (including any Board Resolution or
supplemental indenture pursuant to Section 3.01 hereof establishing the
terms of such series), then neither the Issuer nor any entity the Issuer
controls, directly or indirectly, shall be permitted: (a) to declare or pay a
dividend or distribution or make any other payment on any Preference Shares,
Parity Securities or on any Junior Securities (other than (i) a final dividend
declared by the Issuer with respect to its ordinary shares prior to the date
that the decision to defer such interest payment is made or (ii) a payment made
by one of the Issuer’s wholly-owned subsidiaries to another wholly-owned
subsidiary or directly to the Issuer); or (b) to redeem, purchase or otherwise
acquire any Preference Shares, Parity Securities or any Junior Securities, in
each case unless or until the interest otherwise due and payable on the next
succeeding Interest Payment Date (but excluding Deferred Interest, if any) in
respect of such Securities is duly set aside and provided for or paid in full.


 


For purposes
of the foregoing, the payment (or declaration of payment) of a dividend or
distribution on Preference Shares, Junior Securities and Parity Securities
shall be deemed to include the making of any interest, coupon or dividend
payment (or payment under any guarantee in respect thereof) and the redemption,
purchase or other acquisition of such securities (save where the funds used to
redeem, purchase or acquire those securities are derived from an issue of
Preference Shares, Junior Securities or Parity Securities (i) made at any time
within the six-month period prior to the time of such redemption, purchase or
acquisition, and (ii) with the same or junior ranking on a return of assets on
a winding up or in respect of a distribution or payment of interest, coupons or
dividends and/or any other amounts thereunder to those securities being
redeemed, purchased or acquired).  The
Subordinated Trustee shall be entitled to rely on an Officers’ Certificate as
to whether the redemption, purchase or acquisition falls within the exception
set out above and, if the Subordinated Trustee does so rely, such Officers’
Certificate shall, in the absence of clear error, be conclusive and binding on
the Issuer and the holders of the Securities.


 


The Board
Resolution or supplemental indenture pursuant to Section 3.01 hereof
establishing the terms of each series of Perpetual Subordinated Capital
Securities, shall set forth additional matters with respect to Deferred
Interest with respect to such series, including: (a) the manner in which the
Alternative Coupon Satisfaction Mechanism will apply to such series; (b) the
dates, times and manner in which the Issuer will be obligated to satisfy any
Deferred Interest; (c) the consequences of the occurrence of a Market
Disruption Event or a Definitive Suspension; and (d) such other matters with
respect to Deferred Interest as are set forth therein.


 


(d)                                 Payment
of Defaulted Interest.  Any interest
(a) on any Dated Subordinated Debt Securities and the Perpetual Subordinated
Debt Securities of any particular series which is due and payable, but is not
punctually paid or duly provided for, on any Deferred Interest Payment Date or
(b) on any Perpetual Subordinated Capital Securities of any particular series
which is due and payable, but is not punctually paid or duly provided for, on
any Compulsory Interest Payment Date (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest may be paid
by the Issuer, at its election in each case, as provided in clause (1) or (2)
below:


 


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(1)                                  the
Issuer may elect to make payment of any Defaulted Interest to the Persons in
whose names any Registered Securities of that series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner.  The Issuer shall
notify the Subordinated Trustee for such Securities of such series in writing
at least thirty days prior to the date of the proposed payment of the amount of
Defaulted Interest proposed to be paid on each Security of that series and the
date of the proposed payment, and at the same time the Issuer shall deposit
with such Subordinated Trustee an amount of money in the currency or currency
unit in which interest on the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.01 for the Securities of such
series and except as provided in Sections 3.11(b), 3.11(d) and 3.11(e)), equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to such Subordinated Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. 
The Issuer shall fix a Special Record Date, and promptly give notice
thereof to the Subordinated Trustee, for the payment of such Defaulted Interest
which shall not be more than 15 days and not less than 10 days prior to the
date of the proposed payment.  The
Issuer or such Subordinated Trustee, in the name and at the expense of the
Issuer, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
in the case of Registered Securities, to each Holder of Registered Securities
of that series at his address as it appears in the Security Register no less
than 7 days prior to such Special Record Date. 
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names any such Registered
Securities of that series (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable pursuant
to the following clause (2); or


 


(2)                                  the
Issuer may make payment of any Defaulted Interest on Securities of any
particular series in any other lawful manner not inconsistent with the
requirements of any Stock Exchange on which the Registered Securities may be
listed, and upon such notice as may be required by such Stock Exchange, unless,
after notice is given by the Issuer to the Subordinated Trustee for the
Securities of such series of such proposed manner of payment pursuant to this
clause, such manner of payment shall be deemed impracticable by such
Subordinated Trustee.


 


Subject to the
foregoing provisions of this Section and Section 3.05, each Security
delivered under this Subordinated Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.


 


(e)                                  Payment
of Interest on Deferred Interest. 
To the extent provided for in the Board Resolution or supplemental
indenture pursuant to Section 3.01 hereof establishing the terms of a
particular series of Perpetual Subordinated Capital Securities, a Redemption
Date on which any Deferred Interest Payments are due to be satisfied may be postponed
following the occurrence of a Market Disruption Event, or in other
circumstances where the Issuer is otherwise not able to raise sufficient funds
through the Alternative Coupon Satisfaction Mechanism to satisfy all Deferred
Interest Payments payable on such Redemption Date.  In such event, the Perpetual Subordinated Capital Securities of
such series will remain Outstanding and will continue to accrue and pay
interest in accordance with their terms, and 


 


35

















 


such postponement of the Redemption Date will not constitute a Capital
Security Default; provided that if any Deferred Interest has not been paid, or
an amount set aside for payment, within 14 days after the date on which any
such Market Disruption Event is no longer continuing, such failure will
constitute a Capital Security Default, subject to Section 5.03(b)(2).  In addition, to the extent set forth in such
Board Resolution or supplemental indenture interest will accrue on outstanding
Deferred Interest Payments that would otherwise have been satisfied on such
initially scheduled Redemption Date from (and including) the initial Redemption
Date to (but excluding) the date such Deferred Interest Payments are paid, at
the rate of interest applicable to such series of Perpetual Subordinated
Capital Securities.


 


SECTION 3.08.                             Persons
Deemed Owners.


 


Prior to due
presentment of a Registered Security for registration of transfer, the Issuer
and the Subordinated Trustee and any agent of the Issuer or the Subordinated
Trustee may treat the Person in whose name any such Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
(and premium, if any, on) and (subject to Section 3.07) interest and
Deferred Interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and none of the Issuer,
such Subordinated Trustee or any agent of the Issuer or such Subordinated
Trustee shall be affected by notice to the contrary.


 


None of the Issuer, the Subordinated Trustee, any Paying Agent or the
Security Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.


 


SECTION 3.09.                             Cancellation.


 


Unless otherwise specified in the Securities of a series, all
Securities surrendered for payment, redemption, registration of transfer or on
an exchange, or delivered in satisfaction of any sinking fund payment, shall,
if surrendered to any Person other than the Subordinated Trustee for such
Securities, be delivered to such Subordinated Trustee and shall be promptly
cancelled by it.  The Issuer may at any
time deliver to the Subordinated Trustee for Securities of a series for
cancellation any Securities previously authenticated and delivered hereunder
which the Issuer may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by such Subordinated Trustee.  Notwithstanding any other provision of this
Subordinated Indenture to the contrary, in the case of a series, all the
Securities of which are not to be originally issued at one time, a Security of
such series shall not be deemed to have been Outstanding at any time hereunder
if and to the extent that, subsequent to the authentication and delivery
thereof, such Security is delivered to the Subordinated Trustee for such
Security for cancellation by the Issuer or any agent thereof upon the failure
of the original purchaser thereof to make payment therefor against delivery
thereof, and any Security so delivered to such Subordinated Trustee shall be
promptly cancelled by it.  No Securities
shall be authenticated in lieu of or in exchange for any Securities cancelled
as provided in this Section, except as expressly permitted by this Subordinated
Indenture.  All cancelled Securities
held by the Subordinated Trustee for such Securities shall be disposed of by
the Subordinated Trustee in accordance with its standard procedures and a
certificate of disposition evidencing such disposition of Securities shall be


 


36

















 


provided to the Issuer by the Subordinated Trustee, unless by an Issuer
Order the Issuer shall direct that such cancelled Securities shall be returned
to it.  Global Securities shall not be
disposed of until exchanged in full for definitive Securities or until payment
thereon is made in full.


 


SECTION 3.10.                             Computation
of Interest.


 


Except as otherwise specified as contemplated by Section 3.01 for
Securities of any particular series, interest on the Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day months.


 


SECTION 3.11.                             Currency and
Manner of Payments in Respect of Securities.


 


(a)                                  With
respect to Securities of any series not permitting the election provided for in
paragraph (b) below or the Holders of which have not made the election provided
for in paragraph (b) below, payment of the principal of (and premium, if any,
on) and interest and Deferred Interest, if any, on any Security of such series
will be made in the currency or currency unit in which such Security is
payable.


 


(b)                                 It
may be provided pursuant to Section 3.01 with respect to Securities of any
series that Holders shall have the option, subject to paragraphs (d) and (e)
below, to receive payments of principal of (or premium, if any, on) or interest
or Deferred Interest, if any, on such Securities in any of the currencies or
currency units which may be designated for such election by delivering to the
Subordinated Trustee for such series of Securities a written election with
signature guarantees and in form and substance satisfactory to such
Subordinated Trustee, not later than the close of business on the Election Date
immediately preceding the applicable payment date.  If a Holder so elects to receive such payments in any such
currency or currency unit, such election will remain in effect for such Holder
until changed by such Holder by written notice to the Subordinated Trustee for
such series of Securities (but any such change may be made not later than the
close of business on the Election Date immediately preceding the next payment date
to be effective for the payment to be made on such payment date and no such
change of election may be made with respect to payments to be made on any
Security of such series with respect to which an Event of Default, Payment
Default, Capital Security Default or Payment Event has occurred and is
continuing or notice of redemption has been given by the Issuer pursuant to
Article Eleven).  In the event that
any Holder makes any such election pursuant to the preceding sentence, such
election will not be effective as to any transferee of such Holder and such
transferee shall be paid in the currency or currency unit indicated pursuant to
paragraph (a) above unless such transferee makes an election pursuant to the
preceding sentence; provided, however, that such election, if
in effect while funds are on deposit with respect to the Securities of such
series as described in Section 4.01(a)(1)(B), will be effective as to any
transferee of such Holder unless otherwise specified pursuant to
Section 3.01 for the Securities of such series.  Any Holder of any such Security who shall not have delivered any
such election to the Subordinated Trustee of such series of Securities not
later than the close of business on the applicable Election Date will be paid
the amount due on the applicable payment date in the relevant currency or
currency unit as provided in paragraph (a) of this Section 3.11.  In no case may a Holder of Securities of any
series elect to receive payments in any currency or currency unit as described
in this Section 3.11(b) following deposit of funds or U.S. Government
Obligations with respect to the Securities of such series as described in
Section 4.01(a)(1)(B).  The
Subordinated Trustee for each such series of Securities shall notify the


 


37

















 


Currency Determination Agent as soon as practicable after the Election
Date of the aggregate principal amount of Securities for which Holders have
made such written election.


 


(c)                                  If
the election referred to in paragraph (b) above has been provided for pursuant
to Section 3.01, then not later than the fourth Business Day after the
Regular Record Date for each payment date for Securities of any series, the
Currency Determination Agent will deliver to the Issuer a written notice
specifying, in the currency or currency unit in which Securities of such series
are payable, the respective aggregate amounts of principal of (and premium, if
any, on) and interest and Deferred Interest, if any, on the Securities to be
paid on such payment date, specifying the amounts in such currency or currency
unit so payable in respect of the Securities of such series as to which the
Holders thereof shall have elected to be paid in a currency or currency unit
other than that in which such series is denominated as provided in paragraph
(b) above.  If the election referred to
in paragraph (b) above has been provided for pursuant to Section 3.01 and
if at least one Holder has made such election, then, on the second Business Day
preceding such payment date the Issuer will deliver or cause to be delivered to
the Subordinated Trustee for such series of Securities an Exchange Rate
Officers’ Certificate or a Currency Determination Agent’s Certificate in
respect of the Dollar, Foreign Currency or currency unit payments to be made on
such payment date.  The Dollar, Foreign
Currency or currency unit amount receivable by Holders of Securities who have
elected payment in a currency or currency unit as provided in paragraph (b)
above shall, unless otherwise provided pursuant to Section 3.01, be
determined by the Issuer or the Currency Determination Agent on the basis of
the applicable Market Exchange Rate in effect on the third Business Day (the
“Valuation Date”) immediately preceding each payment date.


 


(d)                                 Unless
otherwise specified for Securities of a series pursuant to Section 3.01,
if a Conversion Event occurs with respect to a Foreign Currency or any other
currency unit in which any of the Securities are denominated or payable other
than pursuant to an election provided for pursuant to paragraph (b) above, then
with respect to each date for the payment of principal of (and premium, if any,
on) and interest and Deferred Interest, if any, on the applicable Securities
denominated or payable in such Foreign Currency or such other currency unit
occurring after the last date on which such Foreign Currency or such other
currency unit was available (the “Conversion Date”), the Dollar shall be the
currency of payment for use on each such payment date.  The Dollar amount to be paid by the Issuer
to the Subordinated Trustee of each such series of Securities and with respect
to such payment date shall be the Dollar Equivalent of the Foreign Currency or,
in the case of a currency unit, the Dollar Equivalent of the Currency Unit, in
each case as determined by the Currency Determination Agent in the manner
provided in paragraph (f) or (g) below.


 


(e)                                  Unless
otherwise specified for Securities of a series pursuant to Section 3.01,
if the Holder of a Security denominated in any currency or currency unit shall
have elected to be paid in another currency or currency unit as provided in
paragraph (b) above, and a Conversion Event occurs with respect to such elected
currency or currency unit, such Holder shall receive payment in the currency or
currency unit in which payment would have been made in the absence of such
election.  Unless otherwise specified
for Securities of a series pursuant to Section 3.01, if a Conversion Event
occurs with respect to the currency or currency unit in which payment would
have been made in the absence of such election, such Holder shall receive
payment in Dollars as provided in paragraph (d) of this Section 3.11 or,
in the case of a Conversion Event with respect to Dollars, in such currency or
currency units as the Trustee shall select.


 


38

















 


(f)                                    Unless
otherwise specified for Securities of a series pursuant to Section 3.01,
the “Dollar Equivalent of the Foreign Currency” shall be determined by the
Currency Determination Agent and shall be obtained for each subsequent payment
after the Conversion Date by converting the specified Foreign Currency into
Dollars at the Market Exchange Rate on the Conversion Date.


 


(g)                                 Unless
otherwise specified for Securities of a series pursuant to Section 3.01,
the “Dollar Equivalent of the Currency Unit” shall be determined by the
Currency Determination Agent and subject to the provisions of paragraph (h)
below shall be the sum of each amount obtained by converting the Specified Amount
of each Component Currency into Dollars at the Market Exchange Rate for such
Component Currency on the Valuation Date with respect to each payment.


 


(h)                                 For
purposes of this Section 3.11 the following terms shall have the following
meanings:


 


A “Component
Currency” shall mean any currency which, on the Conversion Date, was
a component currency of the relevant currency unit.


 


“Election
Date” shall mean any date for any series of Securities as specified
pursuant to Section 3.01(14) by which the written election referred to in
Section 3.11(b) may be made, such date to be not later than the Regular
Record Date for the earliest payment for which such election may be effective.


 


A “Specified
Amount” of a Component Currency shall mean the number of units of such
Component Currency or fractions thereof which were represented in the relevant
currency unit on the Conversion Date. 
If after the Conversion Date the official unit of any Component Currency
is altered by way of combination or subdivision, the Specified Amount of such
Component Currency shall be divided or multiplied in the same proportion.  If after the Conversion Date two or more
Component Currencies are consolidated into a single currency, the respective
Specified Amounts of such Component Currencies shall be replaced by an amount
in such single currency equal to the sum of the respective Specified Amounts of
such consolidated Component Currencies expressed in such single currency, and
such amount shall thereafter be a Specified Amount and such single currency
shall thereafter be a Component Currency. 
If after the Conversion Date any Component Currency shall be divided
into two or more currencies, the Specified Amount of such Component Currency
shall be replaced by amounts of such two or more currencies, each of whose
Dollar Equivalent at the Market Exchange Rate on the date of such replacement
shall be equal to the Dollar Equivalent of the Specified Amount of such former
Component Currency at the Market Exchange Rate on such date divided by the
number of currencies into which such Component Currency was divided, and such
amounts shall thereafter be Specified Amounts and such currencies shall
thereafter be Component Currencies.  If,
on or after the Conversion Date of the relevant currency unit, a Conversion
Event (other than any event referred to above in this definition of “Specified
Amount”) occurs with respect to any Component Currency of such currency unit
and is continuing on the applicable Valuation Date, the Specified Amount of
such Component Currency shall, for purposes of calculating the Dollar
Equivalent of the Currency Unit, be converted into Dollars at the Market
Exchange Rate in effect on the Conversion Date of such Component Currency.


 


39

















 


All decisions and determinations of the Currency Determination Agent
regarding the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent
of the Currency Unit, the Market Exchange Rate and changes in the Specified
Amounts as specified above shall be in its sole discretion and shall, in the
absence of manifest error, be conclusive for all purposes and irrevocably
binding upon the Issuer and the Subordinated Trustee for the appropriate series
of Securities and all Holders of such Securities denominated or payable in the
relevant currency or currency units. 
The Currency Determination Agent shall promptly give written notice to
the Issuer and the Subordinated Trustee for the appropriate series of
Securities of any such decision or determination.


 


In the event of a Conversion Event with respect to a Foreign Currency,
the Issuer, after learning thereof, will immediately give written notice
thereof to the Subordinated Trustee of the appropriate series of Securities and
the Currency Determination Agent (and the Subordinated Trustee will promptly
thereafter give notice in the manner provided in Section 1.06 to the
Holders) specifying the Conversion Date. 
In the event of a Conversion Event with respect to the euro or any other
currency unit in which Securities are denominated or payable, the Issuer, after
learning thereof, will immediately give written notice thereof to the
Subordinated Trustee of the appropriate series of Securities and the Currency
Determination Agent (and the Subordinated Trustee will promptly thereafter give
notice in the manner provided in Section 1.06 to the Holders) specifying
the Conversion Date and the Specified Amount of each Component Currency on the
Conversion Date.  In the event of any
subsequent change in any Component Currency as set forth in the definition of
Specified Amount above, the Issuer, after learning thereof, will similarly give
written notice to the Subordinated Trustee of the appropriate series of
Securities and the Currency Determination Agent.


 


The Subordinated Trustee of the appropriate series of Securities shall
be fully justified and protected in relying and acting upon information
received by it from the Issuer and the Currency Determination Agent and shall
not otherwise have any duty or obligation to determine such information
independently.


 


SECTION 3.12.                             Currency
Determination Agent.


 


(a)                                  Unless
otherwise specified pursuant to Section 3.01, if and so long as the
Securities of any series (i) are denominated in a currency unit or a currency
other than Dollars or (ii) may be payable in a currency unit or a currency
other than Dollars, or so long as it is required under any other provision of
this Subordinated Indenture, then the Issuer will maintain with respect to each
such series of Securities, or as so required, a Currency Determination
Agent.  The Issuer will cause the
Currency Determination Agent to make the necessary foreign exchange
determinations at the time and in the manner specified pursuant to
Section 3.01 for the purpose of determining the applicable rate of
exchange and for the purpose of converting the issued currency or currency unit
into the applicable payment currency or currency unit for the payment of
principal (and premium, if any) and interest and Deferred Interest, if any,
pursuant to Section 3.11.


 


(b)                                 The
Issuer shall procure that no resignation of the Currency Determination Agent
and no appointment of a successor Currency Determination Agent pursuant to this
Section shall become effective until the acceptance of appointment by the
successor Currency Determination Agent as evidenced by a written instrument
delivered to the Issuer and the 


40

















 


Subordinated Trustee of the appropriate series of Securities accepting
such appointment executed by the successor Currency Determination Agent.


 


(c)                                  If
the Currency Determination Agent shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of the Currency
Determination Agent for any cause, with respect to the Securities of one or
more series, the Issuer, by a Board Resolution, shall promptly appoint a
successor Currency Determination Agent or Currency Determination Agents with
respect to the Securities of that or those series (it being understood that any
such successor Currency Determination Agent may be appointed with respect to
the Securities of one or more or all of such series and that at any time there
shall only be one Currency Determination Agent with respect to the Securities
of any particular series).


 


SECTION 3.13.                             Common Code,
CUSIP or ISIN Numbers.


 


The Issuer in issuing any series of the Securities may use Common Code,
CUSIP or ISIN numbers, if then generally in use, and thereafter with respect to
such series, the Subordinated Trustee may use such numbers in any notice of
redemption with respect to such series; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Securities, and any such redemption shall not be affected by any defect in
or omission of such numbers.  The Issuer
will promptly notify the Subordinated Trustee of any change in the Common Code,
CUSIP or ISIN numbers.


 


SECTION 3.14.                             Authenticating
Agents.


 


From time to time the Subordinated Trustee for the Securities of any
series may, subject to its sole discretion, and shall, upon an Issuer Order
from the Issuer and for such period as such Issuer shall elect, appoint one or
more Authenticating Agents with respect to the Securities of such series, which
may include the Issuer or any Affiliate, with power to act in the name of the
Subordinated Trustee and subject to its discretion in the authentication and
delivery of Securities of such series in connection with transfers and
exchanges under Sections 3.04, 3.05, 3.06 and 11.07 as fully to all intents and
purposes as though such Authenticating Agent had been expressly authorized by those
Sections of this Subordinated Indenture to authenticate and deliver Securities
of such series.  For all purposes of
this Subordinated Indenture, the authentication and delivery of such Securities
of such series by an Authenticating Agent for such Securities pursuant to this
Section shall be deemed to be authentication and delivery of such
Securities “by the Subordinated Trustee” for the Securities of such
series.  Any such Authenticating Agent
shall (except in the case of the Issuer, an Affiliate or an officer or director
of the Issuer or an Affiliate) at all times be a corporation organized and
doing business under the laws of the United States, any State thereof or the
District of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal, State or District of Columbia
authority, as the case may be.  If such
corporation publishes reports of condition at least annually pursuant to law or
the requirements of such supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  If at any time an Authenticating Agent for any series of
Securities shall cease to be eligible in 


41

















 


accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.


 


Any Authenticating Agent for any series of Securities may resign at any
time by giving written notice of resignation to the Subordinated Trustee for
such series and to the Issuer.  The
Subordinated Trustee for any series of Securities may at any time and shall,
upon an Issuer Request, terminate the appointment of any Authenticating Agent
by giving written notice of termination to such Authenticating Agent and to the
Issuer in the manner set forth in Section 1.05.  Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent for any series of
Securities shall cease to be eligible under this Section, the Subordinated Trustee
for such series may and shall, upon an Issuer Request, appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Issuer and shall give written notice of such appointment to all Holders of
Securities of such series in the manner set forth in Section 1.06.  Any successor Authenticating Agent, upon
acceptance of his appointment hereunder, shall become vested with all the
rights, powers and duties of his predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. 
No successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section.


 


The Issuer agrees to pay to any corporation of which any director or
officer has been appointed as Authenticating Agent for such series from time to
time reasonable compensation for such services.


 


If an appointment with respect to one or more series of Securities is
made pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Subordinated Trustee’s certificate of
authentication, an alternate certificate of authentication substantially in the
form specified in Section 2.02.


 


ARTICLE FOUR



SATISFACTION AND DISCHARGE


 


SECTION 4.01.                             Satisfaction
and Discharge of Securities of any Series.


 


(a)                                  The
Issuer shall be deemed to have satisfied and discharged the entire indebtedness
on all the Securities of any particular series and, so long as no Event of
Default, Payment Default, Capital Security Default or Payment Event shall be
continuing, the Subordinated Trustee for the Securities of such series, upon an
Issuer Request from the Issuer and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of such
indebtedness, when:


 


(1)                                  either:


 


(A)                              all
Securities of such series theretofore authenticated and delivered (other than
(i) any Securities of such series which have been mutilated, destroyed, lost or
stolen and which have been replaced or paid as provided in Section 3.06
and (ii) Securities of such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in the last
paragraph of Section 10.03) have


 


42

















 


been delivered
to the Subordinated Trustee for the Securities of such series for cancellation;
or


 


(B)                                except
as otherwise specified pursuant to Section 3.01 for the Securities of such
series, with respect to all Outstanding Securities of such series


described in
(A) above not theretofore so delivered to the Subordinated Trustee for the
Securities of such series for cancellation:


 


(i)                                     the
Issuer has irrevocably deposited, or caused to be deposited, with the Subordinated
Trustee for the Securities of such series as trust funds in trust an amount in
the currency or currency unit in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 3.01 for the
Securities of such series and subject as to currency to Sections 3.11(b),
3.11(d) and 3.11(e), in which case the deposit to be made with respect to
Securities for which an election has occurred pursuant to Section 3.11(b)
or a Conversion Event has occurred as provided in Sections 3.11(d) and 3.11(e)
shall be made in the currency or currency unit in which such Securities are
payable as a result of such election or Conversion Event), sufficient (without
consideration of any reinvestment thereof) to pay and discharge the entire indebtedness
on all such Outstanding Securities of such series for unpaid principal (and
premium, if any) and interest and Deferred Interest, if any, to the Stated
Maturity, if any, or any Redemption Date as contemplated by Section 4.02,
as the case may be; or


 


(ii)                                  the
Issuer has deposited, or caused to be deposited, with such Subordinated Trustee
as obligations in trust such amount of U.S. Government Obligations as will, as
evidenced by a Certificate of a Firm of Independent Public Accountants
delivered to such Subordinated Trustee, together with the predetermined and
certain income to accrue thereon (without consideration of any reinvestment
thereof), be sufficient to pay and discharge when due the entire indebtedness
on all such Outstanding Securities of such series for unpaid principal (and
premium, if any) and interest and Deferred Interest, if any, to the Stated
Maturity, if any, or Redemption Date as contemplated by Section 4.02, as
the case may be;


 


(iii)                               the
Issuer has deposited, or caused to be deposited, with such Subordinated Trustee
in trust an amount equal to the amount referred to in clause (i) or (ii) in any
combination of currency or currency unit or U.S. Government Obligations and has
delivered a Certificate of a Firm of Independent Public Accountants to such
Subordinated Trustee verifying that such combination of funds and U.S.
Government Obligations will be sufficient to pay and discharge the entire
indebtedness on all Outstanding Securities of such series for unpaid principal
(and premium, if any) and interest and Deferred Interest, if any to the extent
provided for in a Board Resolution or supplemental indenture pursuant to
Section 3.01, to the Stated Maturity, if any, or any Redemption Date as
contemplated by Section 4.02, as the case may be, taking into account the
predetermined and certain income to accrue on such U.S. Government Obligations
(but without any consideration of any reinvestment thereof) and without taking
consideration of any reinvestment of any such funds; or


 


43

















 


(iv)                              such
Securities are converted or exchanged for Preference Shares in accordance with
Article Fourteen and the applicable supplemental indenture for each series
of such Securities.


 


(2)                                  the
Issuer has paid or caused to be paid all other sums payable with respect to the
Securities of such series;


 


(3)                                  the
Issuer has delivered to such Subordinated Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of the entire
indebtedness on all Securities of such series have been complied with;


 


(4)                                  except
in the circumstances set out in Section 4.01(a)(1)(B)(iv), if the
Securities of such series are not to become due and payable at their Stated
Maturity, if any, within one year of the date of a deposit pursuant to
Section 4.01(a)(1)(B) or are not to be called for redemption within one
year of the date of such deposit under arrangements satisfactory to such
Subordinated Trustee as of the date of such deposit, then the Issuer shall have
given, not later than the date of such deposit, notice of such deposit to the
Holders of such Securities; and


 


(5)                                  except
in the circumstances set out in Section 4.01(a)(1)(B)(iv), if the conditions
set forth in Section 4.01(a)(1)(A) have not been satisfied, and unless
otherwise specified pursuant to Section 3.01 for the Securities of such
series, the Issuer has delivered to the Subordinated Trustee an Opinion of
Counsel to the effect that (A) the Issuer has received from, or there has been
published by, the Internal Revenue Service a ruling, or (B) since the date of
this Subordinated Indenture there has been a change in applicable United States
Federal income tax law, in either case to the effect that, and based upon which
such Opinion of Counsel shall confirm that, the beneficial owners of Securities
of such series will not recognize income, gain or loss for United States
Federal income tax purposes as a result of such deposit, satisfaction and
discharge and will be subject to United States Federal income tax on the same
amount and in the same manner and at the same time as would have been the case
if such deposit, satisfaction and discharge had not occurred.


 


(b)                                 Upon
the satisfaction of the conditions set forth in this Section 4.01 with
respect to all the Securities of any series, the terms and conditions of the
Securities of such series, including the terms and conditions with respect
thereto set forth in this Subordinated Indenture, as applicable, shall no
longer be binding upon, or applicable to, the Issuer and the Holder of the
Securities of such series shall look for payment only to the funds or
obligations deposited with the Subordinated Trustee pursuant to
Section 4.01(a)(1)(B)(i)-(iii); provided, however, that in no event shall
the Issuer be discharged from (i) any payment obligations in respect of
Securities of such series which are deemed not to be Outstanding under clause
(3) of the definition thereof if such obligations continue to be valid
obligations of the Issuer under applicable law, (ii) any obligations under
Sections 4.02(b), 6.07 and 6.10 and (iii) any obligations under Sections 3.04,
3.05 and 3.06 (except that Securities of such series issued upon registration
of transfer or exchange or in lieu of mutilated, destroyed, lost or stolen
Securities shall not be obligations of the Issuer) and Sections 3.11, 5.16,
7.01 and 10.02; and provided, further, that in the event a petition seeking
relief under any applicable Bankruptcy Law is filed and not discharged with
respect to the Issuer within 123 days after the deposit, the entire
indebtedness on all Securities of such series shall not be discharged, and in
such event the Subordinated Trustee shall return such deposited funds or obligations
as it is then 


 


44

















 


holding to the Issuer upon an Issuer Request.  Notwithstanding the satisfaction of the conditions set forth in
this Section 4.01 with respect to all the Securities of any series not
denominated in Dollars, upon the happening of any Conversion Event the
indebtedness represented by such Securities shall be converted from the
currency or currency unit in which such Security is payable into Dollars at the
Dollar Equivalent of the Foreign Currency or the Dollar Equivalent of the
Currency Unit and the Issuer shall be obligated to make the payments in Dollars
(or such other currency as set out in Section 3.11(e)) required by
Section 3.11(d) or 3.11(e) to the extent that the Currency Determination
Agent is unable to convert any Foreign Currency or currency unit so deposited
with the Subordinated Trustee pursuant to Section 4.01(a)(1)(B)(i)-(iii)
into the Dollar Equivalent of the Foreign Currency or the Dollar Equivalent of
the Currency Unit, as the case may be. 
The Subordinated Trustee for such series of Securities shall return to
the Issuer any non-converted funds or securities in its possession after such
payments have been made.


 


SECTION 4.02.                             Application
of Trust Money.


 


(a)                                  All
money and obligations deposited with the Subordinated Trustee for any series of
Securities pursuant to Section 4.01 shall be held irrevocably in trust and
shall be made under the terms of an escrow trust agreement in form satisfactory
to such Subordinated Trustee.  Such
money and obligations shall be applied by such Subordinated Trustee, in
accordance with the provisions of the Securities, this Subordinated Indenture
and such escrow trust agreement, to the payment, either directly or through any
Paying Agent (including the Issuer acting as its own Paying Agent) as such
Subordinated Trustee may determine, to the Persons entitled thereto, of the
principal of (and premium, if any, on) and interest and Deferred Interest, if
any, on the Securities for the payment of which such money and obligations have
been deposited with such Subordinated Trustee. 
If Securities of any series are to be redeemed prior to their Stated
Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory sinking fund requirement, the Issuer shall make
such arrangements as are satisfactory to the Subordinated Trustee for any
series of Securities for the giving of notice of redemption by such
Subordinated Trustee in the name, and at the expense, of the Issuer.


 


(b)                                 The
Issuer shall pay and shall indemnify the Subordinated Trustee for any series of
Securities against any tax, fee or other charge imposed on or assessed against
U.S. Government Obligations deposited pursuant to Section 4.01 or the
interest and principal received in respect of such U.S. Government Obligations
other than any such tax, fee or other charge which by law is payable by or on
behalf of Holders.  The obligation of
the Issuer under this Section 4.02(b) shall be deemed to be an obligation
of the Issuer under Section 6.07(2).


 


(c)                                  Anything
in this Article Four to the contrary notwithstanding, the Subordinated
Trustee for any series of Securities shall deliver or pay to the Issuer from
time to time upon an Issuer Request any money or U.S. Government Obligations
held by it as provided in Section 4.01 which, as expressed in a
Certificate of a Firm of Independent Public Accountants delivered to such
Subordinated Trustee, are in excess of the amount thereof which would then have
been required to be deposited for the purpose for which such money or U.S.
Government Obligations were deposited or received.


 


45

















 


SECTION 4.03.                             Satisfaction
and Discharge of Subordinated Indenture.


 


Upon compliance by the Issuer with the provisions of Section 4.01
as to the satisfaction and discharge of each series of Securities issued
hereunder, and if the Issuer has paid or caused to be paid all other sums
payable under this Subordinated Indenture, this Subordinated Indenture shall
cease to be of any other effect (except as otherwise provided herein).  Upon an Issuer Request and receipt of an
Opinion of Counsel and an Officers’ Certificate complying with the provisions
of Section 1.02, the Subordinated Trustees for all series of Securities
(at the expense of the Issuer) shall execute proper instruments acknowledging
satisfaction and discharge of this Subordinated Indenture.


 


Notwithstanding the satisfaction and discharge of this Subordinated
Indenture, any obligations of the Issuer under Sections 3.04, 3.05, 3.06, 3.11,
4.02(b), 4.04, 5.16, 6.07, 6.10, 7.01 and 10.02 and the obligations of the
Subordinated Trustee for any series of Securities under Section 4.02 shall
survive.


 


SECTION 4.04.                             Reinstatement.


 


If the Subordinated Trustee for any series of Securities is unable to
apply any of the amounts (for purposes of this Section 4.04,  “Amounts”) or U.S. Government Obligations,
as the case may be, described in Section 4.01(a)(1)(B)(i), (ii) or (iii),
respectively, in accordance with the provisions of Section 4.01 by reason
of any legal proceeding or any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
each of the obligations of the Issuer under this Subordinated Indenture and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to Section 4.01 until such time as the Subordinated
Trustee for such series is permitted to apply all such Amounts or U.S. Governmental
Obligations, as the case may be, in accordance with the provisions of
Section 4.01; provided, however, that if, due to the
reinstatement of its rights or obligations hereunder, the Issuer has made any
payment of principal of (or premium, if any, on) or interest or Deferred
Interest, if any, on such Securities, the Issuer shall be subrogated to the
rights of the Holders of such Securities to receive payment from such Amounts
or U.S. Government Obligations, as the case may be, held by the Subordinated
Trustee for such series.


 


ARTICLE FIVE



REMEDIES


 


SECTION 5.01.                             Events of
Default.


 


“Event
of Default” wherever used herein with respect to any particular
series of Securities means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):


 


(a)                                  if
an order is made by a court of competent jurisdiction and is not successfully
appealed within 30 days of the making of such order, or an effective
shareholders’ resolution is validly adopted, for the winding up of the Issuer
in England and Wales (except in the case of winding-up solely for the purpose
of a reconstruction or amalgamation or substitution in 


 


46

















 


place of the Issuer of a successor in business in each case where the
Securities remain outstanding and are assumed by such successor in business on
terms previously approved in writing by the Holders of not less than 75% in
aggregate principal amount of the Outstanding Securities of that series); or


 


(b)                                 any
other events of default provided with respect to Securities of that series as
set forth in the Board Resolution or supplemental indenture pursuant to
Section 3.01 hereof establishing the terms of such series.


 


SECTION 5.02.                             Acceleration
of Maturity; Rescission and Annulment.


 


(a)                                  Acceleration
of Maturity.  If an Event of Default
with respect to any particular series of Securities occurs and is continuing,
the Subordinated Trustee for the Securities of such series or the Holders of
not less than 25% in aggregate principal amount of the Outstanding Securities
of that series shall have the right to declare the principal amount of
(including premium, if any, on), or (in the case of Discounted Securities) such
lesser amount as may be provided for with respect to the Securities of such
series and, to the extent provided for in a Board Resolution or supplemental
indenture pursuant to Section 3.01 hereof, any accrued but unpaid interest
payments on, all the Outstanding Securities of that series to be due and
payable immediately, by a notice in writing to the Issuer (and to the Subordinated
Trustee if given by Holders).  Upon any
such declaration of acceleration such principal or such lesser amount, as the
case may be, including premium, if any, thereon, together with any accrued
interest, Deferred Interest (but only to the extent specifically provided for),
and all other amounts owing thereunder and hereunder (with respect to such
series of Securities), shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived.


 


(b)                                 Recission
and Annulment by Holders.  At any
time after such a declaration of acceleration has been made, but before a
judgment or decree for payment of the money due has been obtained by the
Subordinated Trustee for the Securities of any series as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount
of the Outstanding Securities of that series, by written notice to the Issuer
and such Subordinated Trustee, may rescind and annul such declaration and its consequences,
provided:


 


(1)                                  the
Issuer has paid or deposited with such Subordinated Trustee a sum sufficient to
pay:


 


(A)                              in
the currency or currency unit in which that series of Securities is payable
(except as otherwise specified pursuant to Section 3.01 for the Securities
of such series and except as provided in Sections 3.11(b), 3.11(d), and
3.11(e)), all overdue interest and, to the extent provided for a series of
Securities pursuant to Section 3.01, all Deferred Interest on all
Securities of that series;


 


(B)                                in
the currency or currency unit in which that series of Securities is payable
(except as provided in Sections 3.11(b), 3.11(d), and 3.11(e)), the principal
of (and premium, if any, on) any Securities of that series which have become
due otherwise than by such declaration of acceleration and interest thereon
from the date such principal became due at a rate per annum equal to the rate
borne by the Securities of such series (or, in the case of Discounted
Securities, the Securities’ Yield 


 


47

















 


to Maturity),
to the extent that the payment of such interest shall be legally enforceable;


 


(C)                                in
the currency or currency unit in which that series of Securities is payable
(except as provided in Sections 3.11(b), 3.11(d), and 3.11(e)), to the extent
that payment of such interest is lawful (unless otherwise provided with respect
to a series of Securities pursuant to Section 3.01), interest upon overdue
interest at the rate or rates prescribed therefor in the Securities of such
series (or, unless otherwise specified pursuant to Section 3.01, in the
case of Discounted Securities, the Securities’ Yield to Maturity); and


 


(D)                               in
Dollars, all sums paid or advanced by the Subordinated Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of such
Subordinated Trustee, its agents and counsel and all other amounts then due to
such Subordinated Trustee under Section 6.07; and


 


(2)                                  all
Events of Default with respect to the Securities of such series have been cured
or remedied.


 


No such rescission shall affect any subsequent default or impair any
right consequent thereon.


 


SECTION 5.03.                             Payment
Defaults, Capital Security Defaults, Payment Events.


 


(a)                                  Payment
Defaults. Unless otherwise provided in the Board Resolution or supplemental
indenture pursuant to Section 3.01 establishing the terms of the
particular series, with respect to the Securities of any series of Dated
Subordinated Debt Securities or Perpetual Subordinated Debt Securities, a “Payment
Default” shall occur if the Issuer fails to pay, or set aside, principal of (or
premium, if any, on) or accrued interest, if any, on any such Securities when
due, and such failure continues for 14 days, provided that:


 


(1)                                  if
the Issuer does not pay or set aside for payment an installment of interest on
an Interest Payment Date with respect to any Dated Subordinated Debt Securities
or Perpetual Subordinated Debt Securities, or


 


(2)                                  the
Issuer does not pay or set aside for payment all or any part of the principal
of (or premium, if any, on) any such Subordinated Debt Securities on the Stated
Maturity (if any) or any Redemption Date,


 


the failure to
make such payment shall not constitute a “Payment Default” and the obligation to
make such payment shall be deferred until (i) in the case of payment of
interest, the applicable Deferred Interest Payment Date and (ii) in the case of
a payment of principal (or premium, if any), the Deferred Principal Payment
Date.


 


(b)                                 Capital
Security Defaults.  Unless otherwise
provided in the Board Resolution or supplemental indenture pursuant to
Section 3.01 establishing the terms of the particular series of Perpetual
Subordinated Capital Securities, a “Capital Security Default” shall occur if:


 


48

















 


(1)                                  the
Issuer fails to pay or set aside for payment the amount due to satisfy any
interest payment on a Compulsory Interest Payment Date, and such failure
continues for a period of 14 days; or


 


(2)                                  the
Issuer fails to pay or set aside a sum to provide for payment of the principal
amount, or fails to pay or set aside a sum to provide for payment of any
accrued but unpaid interest and any Deferred Interest on the date fixed for
redemption of such series and such failure continues for a period of 14 days.


 


provided that,


 


(A)          if
the Issuer does not pay, or set aside, an installment of interest on any
Compulsory Interest Payment Date, or


 


(B)           if
the Issuer does not pay, or set aside, all or any part of the principal of (or
premium, if any, on), any accrued but unpaid interest and any Deferred Interest
on any such Perpetual Subordinated Capital Securities on a date set for
redemption,


 


then, the failure to make or
set aside such payment shall not constitute a Capital Security Default and the
obligation to make such payment shall be deferred until (i) in the case of a
payment of interest, the date upon which the Issuer pays a dividend on any
class of its share capital or makes any payment on any series of debt
secruities ranking junior to or pari passu with such series of Perpetual
Subordinated Capital Securities and (ii) in the case of a payment of principal
(or premium) any accrued interest and any Deferred Interest on a date set for
redemption, the first Business Day after the date that falls six months after
such payment was originally due.


 


(c)                                  Proceedings
upon Occurrence of a Payment Default or Capital Security Default.  Unless otherwise provided in the Board
Resolution or supplemental indenture pursuant to Section 3.01 establishing
the terms of the particular series, if a Payment Default (with respect to
Securities of any series of Dated Subordinated Debt Securities or Perpetual
Subordinated Debt Securities), or a Capital Security Default (with respect to
any series of Perpetual Subordinated Capital Securities), occurs and is
continuing, the Subordinated Trustee for the Securities of such series may in
its discretion commence (1) a proceeding in England and Wales (but not
elsewhere) for the winding up of the Issuer or (2) a judicial proceeding for
the collection of the sums so due and unpaid; provided that the Subordinated
Trustee may not declare the principal amount of any such Securities to be due
and payable.


 


(d)                                 Payment
Events.  Unless otherwise provided
in the Board Resolution or supplemental indenture pursuant to Section 3.01
establishing the terms of the particular series of Securities, if the Issuer
fails to pay the amount due to satisfy any principal or interest payment that
would have become due with respect to such Securities but for the Solvency
Condition not being satisfied, such failure continues for fourteen days and the
Solvency Condition is not satisfied at the end of such fourteen-day period,
such failure will not constitute a “Payment Default” or a “Capital Security
Default”, as the case may be, but instead will constitute a “Payment Event”,
together with any other Payment Event with respect to any other series of
Securities.


 


(e)                                  Certain
Limitations.  It shall not be a
Payment Event, Payment Default or Capital Security Default if such sums were
not paid in order to comply with a statute, 


 


49

















 


regulation or order of any court of competent jurisdiction. Where there
is doubt as to the validity or applicability of any such statute, regulation or
order, it shall not be a Payment Event, Payment Default or Capital Security
Default if the Issuer acts on the advice given to it and to the Subordinated
Trustee, in the form of an Opinion of Counsel acceptable to the Subordinated
Trustee. However, the Issuer shall take action, including proceedings for a
court declaration, to resolve the doubt, if counsel to the Issuer advises that
the action is appropriate and reasonable. In this case, the Issuer shall
proceed with the action promptly and be bound by any final resolution of the
doubt. If such resolution is a determination that the Issuer can make the
relevant payment without violating any statute, regulation or order then the
payment shall become due and payable immediately after the Issuer has been
informed of the determination.


 


(f)                                    Proceeding
upon the Occurrence of a Payment Event. 
Unless otherwise provided in the Board Resolution or supplemental
indenture pursuant to Section 3.01 establishing the terms of the
particular series, if a Payment Event with respect to a series of Perpetual
Subordinated Debt Securities or Perpetual Subordinated Capital Securities
occurs and is continuing, the Subordinated Trustee may institute proceedings in
England and Wales (but not elsewhere) for the winding up of the Issuer, but may
not pursue any other legal remedy, including a judicial proceedings for the
collection of the sums so due and unpaid.


 


(g)                                 Waiver
of Certain Rights.  The Subordinated
Trustee for the Securities of a series waives on behalf of the Holders of such
Securities, and the Holder of any Security by his acceptance thereof will be
deemed to have waived, any right of set-off or counterclaim that such Holders
might otherwise have against the Issuer as the case may be, whether prior to or
in any such bankruptcy or winding up as referred to in this Section 5.03.
Notwithstanding the preceding sentence, if any of the rights and claims of any
Holder are discharged by set-off, such Holder will immediately pay an amount
equal to the amount of such discharge to the Issuer or, if applicable, the
liquidator or trustee or receiver in bankruptcy of the Issuer, and until such
time as payment is made will hold a sum equal to such amount in trust for the
Issuer or, if applicable, the liquidator or trustee or receiver in bankruptcy
of the Issuer. Accordingly, such discharge will be deemed not to have taken
place.


 


(h)                                 Certain
Other Proceedings.  If the Issuer
fails to perform or observe any of its respective obligations or covenants
under the Securities of any particular series or the Subordinated Indenture
(other than any obligation or covenant (1) with respect to the payment of any
principal, interest, or Deferred Interest on such Securities or (2) which has
expressly been included in this Subordinated Indenture solely for the benefit
of Securities other than Securities of such a series) and such failure
continues for a period of 30 days after the date on which there has been given,
by registered or certified mail, to the Issuer by the Subordinated Trustee or to
the Issuer and the Subordinated Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of such a series a
written notice specifying such default or breach and requiring it to be
remedied, then the Subordinated Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of such a series may
institute such proceedings or take such other actions as they shall determine
in their sole discretion to enforce such obligation or covenant; provided that
the Issuer shall not as a consequence of such proceedings or other actions be
obligated to pay any sum or sums representing or measured by reference to the
principal, premium, if any, or interest (including Deferred Interest) in respect
of any such Securities sooner than the same would otherwise have been due and
payable by the Issuer.


 


50

















 


SECTION 5.04.                             Subordinated
Trustee May File Proofs of Claim.


 


In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relating to the Issuer or any other obligor upon the
Securities of any series or the property of the Issuer or of such other obligor
or their creditors, the Subordinated Trustee for the Securities of such series
(irrespective of whether the principal (or lesser amount in the case of
Discounted Securities) of any Security of such series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether such Subordinated Trustee shall have made any demand on the Issuer for
the payment of overdue principal, interest, or Deferred Interest (if the same
has not been paid on the date on which the same shall have become due and
payable as provided for in the Board Resolution or supplemental indenture
pursuant to Section 3.01) shall be entitled and empowered, by intervention
in such proceeding or otherwise:


 


(1)                                  to
file and prove a claim for the whole amount of principal (or lesser amount in
the case of Discounted Securities) (and premium, if any) and interest, Deferred
Interest, if any, owing and unpaid in respect of the Securities of such series
and to file such other papers or documents as may be necessary or advisable in
order to have the claims of such Subordinated Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of such
Subordinated Trustee, its agents and counsel and all other amounts due to such Subordinated
Trustee under Section 6.07) and of the Holders of the Securities of such
series allowed in such judicial proceeding;


 


(2)                                  to
collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same; and


 


(3)                                  unless
prohibited by law or applicable regulations, to vote on behalf of the Holders
of the Securities of such series in any election of a trustee in bankruptcy,
liquidator or other persons performing similar functions; and any receiver,
assignee, trustee, liquidator, sequestrator (or other similar official) in any
such judicial proceeding is hereby authorized by each Holder of Securities to
make such payments to such Subordinated Trustee, and in the event that such
Subordinated Trustee shall consent to the making of such payments directly to
the Holders of Securities, to pay to such Subordinated Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
such Subordinated Trustee, its agents and counsel and any other amounts due
such Subordinated Trustee under Section 6.07.


 


Nothing herein contained shall be deemed to authorize the Subordinated
Trustee for the Securities of any series to authorize or consent to or accept
or adopt on behalf of any Holder of a Security any plan of reorganization,
arrangement, adjustment or composition affecting the Securities of such series
or the rights of any Holder thereof, or to authorize the Subordinated Trustee
for the Securities of any series to vote in respect of the claim of any Holder
in any such proceeding, except as aforesaid, for the election of a trustee in
bankruptcy or other person performing similar functions.


 


51

















 


SECTION 5.05.                             Subordinated
Trustee May Enforce Claims Without Possession of Securities.


 


All rights of action and claims under this Subordinated Indenture or
the Securities of any series may be prosecuted and enforced by the Subordinated
Trustee for the Securities of any series without the possession of any of the
Securities of such series or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by such Subordinated Trustee shall
be brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of such Subordinated Trustee, its agents
and counsel and all other amounts due to such Subordinated Trustee under
Section 6.07, be for the ratable benefit of the Holders of the Securities
of such series in respect of which such judgment has been recovered.


 


SECTION 5.06.                             Application
of Money Collected.


 


Subject to Article Thirteen, any money collected by the
Subordinated Trustee for the Securities of any series pursuant to this
Article with respect to the Securities of such series shall be applied in
the following order, at the date or dates fixed by such Subordinated Trustee
and, in case of the distribution of such money on account of principal (or lesser
amount in the case of Discounted Securities) (or premium, if any) or interest
or Deferred Interest, if any, upon presentation of the Securities of such
series and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:


 


First: To the payment of all amounts due such Subordinated Trustee
under Section 6.07;


 


Second: To the payment of the amounts then due and unpaid upon the
Securities of such series for principal (or lesser amount in the case of
Discounted Securities) of (and premium, if any, on) and interest and Deferred
Interest, if any, on such Securities in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Securities for
principal (or lesser amount in the case of Discounted Securities) (and premium,
if any) and interest and Deferred Interest, if any, respectively; and


 


Third: The balance, if any, to the Person or Persons entitled thereto.


 


SECTION 5.07.                             Limitation
on Suits.


 


Except as set forth in Section 5.08, no Holder of any Security of
any particular series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Subordinated Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:


 


(a)                                  an
Event of Default, Payment Default, Capital Security Default, Payment Event or
other default as specified in Section 5.03(g) with respect to that series
shall have occurred and be continuing and such Holder shall have previously
given written notice to the Subordinated Trustee for the Securities of such
series of such Event of Default, Payment Default, Capital Security Default,
Payment Event or other default as specified in Section 5.03(g) and the
continuance thereof;


 


52

















 


(b)                                 the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of that series shall have made written request to the Subordinated
Trustee for the Securities of such series to institute proceedings in respect
of such Event of Default, Payment Default, Capital Security Default, Payment
Event or other default as specified in Section 5.03(g) in its own name as
Trustee hereunder;


 


(c)                                  such
Holder or Holders have offered to such Subordinated Trustee indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred
in compliance with such request;


 


(d)                                 such
Subordinated Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and


 


(e)                                  no
direction inconsistent with such written request has been given to such
Subordinated Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities of that series;


 


it being
understood and intended that no one or more Holders of Securities of that
series shall have any right in any manner whatever by virtue of, or by availing
of, any provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Securities of that series, or to enforce any right
under this Subordinated Indenture, except in the manner herein provided and for
the equal and ratable benefit of all the Holders of Securities of that series.


 


SECTION 5.08.                             Unconditional
Right of Holders to Receive Principal (and Premium, if any) and Interest, if
any.


 


Notwithstanding any other provision in this Subordinated Indenture, but
subject to Section 3.07 hereof, and subject further to the obligation to
make Deferred Interest Payments pursuant to the Alternative Coupon Satisfaction
Mechanism, as and to the extent set forth in a Board Resolution or supplemental
indenture pursuant to Section 3.01 hereof, the Holder of any Security
shall have the right which is absolute and unconditional to receive payment of
the principal of (and premium, if any, on) 
and interest, if any, on such Security on the Stated Maturity, Deferred
Interest Payment Date or Deferred Principal Payment Date, as the case may be,
expressed in any such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment
and such right shall not be impaired without the consent of such Holder.


 


SECTION 5.09.                             Restoration
of Rights and Remedies.


 


If the Subordinated Trustee for the Securities of any series or any
Holder of a Security has instituted any proceeding to enforce any right or
remedy under this Subordinated Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
such Subordinated Trustee or to such Holder, then and in every such case the
Issuer such Subordinated Trustee and the Holders of Securities shall, subject
to any determination in such proceeding, be restored severally and respectively
to their former positions hereunder, and thereafter all rights and remedies of
such Subordinated Trustee and such Holders shall continue as though no such
proceeding had been instituted.


 


53

















 


SECTION 5.10.                             Rights and
Remedies Cumulative.


 


Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.06, no right or remedy herein conferred upon or reserved to the
Subordinated Trustee for the Securities of any series or to the Holders of
Securities is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. 
The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.


 


SECTION 5.11.                             Delay or
Omission Not Waiver.


 


No delay or omission of the Subordinated Trustee for the Securities of
any series or of any Holder of any Security of such series to exercise any
right or remedy accruing upon any Event of Default, Payment Default, Capital
Security Default, Payment Event or other default as specified in
Section 5.03(g) with respect to the Securities of such series shall impair
any such right or remedy or constitute a waiver of any such Event of Default,
Payment Default, Capital Security Default, Payment Event or other default as
specified in Section 5.03(g) or an acquiescence therein.  Every right and remedy given by this
Article or by law to such Subordinated Trustee for the Securities of any
series or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by such Subordinated Trustee or by the Holders, as the
case may be.


 


SECTION 5.12.                             Control by
Holders.


 


Subject to Section 6.03, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of any particular series shall
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Subordinated Trustee for the
Securities of such series with respect to the Securities of that series or
exercising any trust or power conferred on such Subordinated Trustee with
respect to such Securities;  provided
that:


 


(1)                                  the
Subordinated Trustee may refuse to follow any direction in conflict with any
rule of law or with this Subordinated Indenture or which is unjustly
prejudicial to the Holders of the Securities of that series not taking part in
the direction;


 


(2)                                  the
Subordinated Trustee need not take any action which might involve it in
personal liability; and


 


(3)                                  such
Subordinated Trustee may take any other action deemed proper by such
Subordinated Trustee which is not inconsistent with such direction.


 


SECTION 5.13.                             Waiver of
Past Defaults.


 


The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any particular series may on behalf of the
Holders of all the Securities of that series waive any past default hereunder
with respect to that series and its consequences, except:


 


54

















 


(1)                                  a
default in the payment of the principal of (or premium, if any, on) or interest
or Deferred Interest, if any, on any Security of that series; or


 


(2)                                  a
default with respect to a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of that series affected.


 


Upon any such waiver, such default shall cease to exist, and shall be
deemed to have been cured, for every purpose of this Subordinated Indenture;
but no such waiver shall extend to any subsequent or other default or impair
any right consequent thereon.


 


SECTION 5.14.                             Undertaking
for Costs.


 


All parties to this Subordinated Indenture agree, and each Holder of
any Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Subordinated Indenture or in any suit against the
Subordinated Trustee for the Securities of any series for any action taken or
omitted by it as Subordinated Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys’ fees
and expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall (subject to applicable laws) not
apply to any suit instituted by the Subordinated Trustee for the Securities of
any series, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities of any particular series or to any suit instituted by any Holder of
any Security for the enforcement of the payment of the principal of (or
premium, if any, on) or interest, if any, or Deferred Interest, if any, on any
Security of such series on or after the respective Stated Maturities, if any,
expressed in such Security or the date the same becomes due and payable as
expressed herein or in such Security (or, in the case of redemption or
conversion or exchange, on or after the Redemption Date or the Event Date, as
the case may be).


 


SECTION 5.15.                             Waiver of
Stay or Extension Laws.


 


The Issuer covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Subordinated Indenture; and the Issuer (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Subordinated Trustee
for any series of Securities, but will suffer and permit the execution of every
such power as though no such law had been enacted.


 


SECTION 5.16.                             Judgment
Currency.


 


If, for the purpose of obtaining a judgment in any court with respect
to any obligation of the Issuer hereunder or under any Security it shall become
necessary to convert into any other currency or currency unit any amount in the
currency or currency unit due hereunder or under such Security then such
conversion shall be made by the Issuer or the Currency Determination Agent at
the Market Exchange Rate as in effect on the date of entry of 


55

















 


the judgment (the “Judgment Date”). 
If pursuant to any such judgment, conversion shall be made on a date
(the “Substitute Date”) other than the Judgment Date and there shall occur a
change between the Market Exchange Rate as in effect on the Judgment Date and
the Market Exchange Rate as in effect on the Substitute Date, the Issuer agrees
to pay such additional amounts (if any) as may be necessary to ensure that the
amount paid is equal to the amount in such other currency or currency unit
which, when converted at the Market Exchange Rate as in effect on the Judgment
Date, is the amount due hereunder or under such Security.  Any amount due from the Issuer under this
Section 5.16 shall be due as a separate debt and is not to be affected by
or merged into any judgment being obtained for any other sum due hereunder or
in respect of any Security as the case may be. 
In no event, however, shall the Issuer be required to pay more in the
currency or currency unit due hereunder or under such Security at the Market
Exchange Rate as in effect on the Judgment Date than the amount of currency or
currency unit stated to be due hereunder or under such Security so that in any
event the obligations of the Issuer hereunder or under such Security will be
effectively maintained as obligations in such currency or currency unit, and
the Issuer shall be entitled to withhold (or be reimbursed for, as the case may
be) any excess of the amount actually realized upon any such conversion on the
Substitute Date over the amount due and payable on the Judgment Date.


 


ARTICLE SIX



THE SUBORDINATED TRUSTEE


 


SECTION 6.01.                             Certain
Duties and Responsibilities.


 


(a)                                  Except
during the continuance of an Event of Default, Payment Default, Capital
Security Default, Payment Event or other default as specified herein with
respect to the Securities of any series for which the Subordinated Trustee is
serving as such:


 


(1)                                  such
Subordinated Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Subordinated Indenture, and no implied
covenants or obligations shall be read into this Subordinated Indenture against
such Subordinated Trustee; and


 


(2)                                  in
the absence of bad faith on its part, such Subordinated Trustee may
conclusively rely, as to the truth of the statements and correctness of the
opinions expressed therein, upon certificates or opinions furnished to such
Subordinated Trustee and conforming to the requirements of this Subordinated
Indenture; but in the case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to such
Subordinated Trustee, such Subordinated Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements
of this Subordinated Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).


 


(b)                                 In
case an Event of Default, Payment Default, Capital Security Default, Payment
Event or other default as specified herein with respect to a series of
Securities has occurred and is continuing, the Subordinated Trustee for the
Securities of such series shall exercise such of the rights and powers vested
in it by this Subordinated Indenture, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.  The Subordinated Trustee will be 


 


56

















 


under no obligation to exercise any of its rights or powers under the
Subordinated Indenture at the request of any Holder of Subordinated Debt
Securities, unless such Holder shall have offered to the Subordinated Trustee
security and indemnity reasonably satisfactory to the Subordinated Trustee
against any other loss, liability or expense, and then only to the extent
required by the terms of the Subordinated Indenture.


 


(c)                                  No
provision of this Subordinated Indenture shall be construed to relieve the
Subordinated Trustee for Securities of any series from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:


 


(1)                                  this
Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;


 


(2)                                  such
Subordinated Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Subordinated
Trustee was negligent in ascertaining the pertinent facts;


 


(3)                                  such
Subordinated Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with a
direction received by it pursuant to Sections 5.02, 5.07, 5.12 or 5.13 or
exercising any trust or power conferred upon such Subordinated Trustee, under
this Subordinated Indenture with respect to the Securities of that series; and


 


(4)                                  no
provision of this Subordinated Indenture shall require the Subordinated Trustee
for any series of Securities to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers.


 


(d)                                 Whether
or not therein expressly so provided, every provision of this Subordinated
Indenture relating in any way to the Subordinated Trustee for any series of
Securities shall be subject to the provisions of this Section.


 


SECTION 6.02.                             Notice of
Default.


 


Within 90 days after the occurrence of any Event of Default, Payment
Default, Capital Security Default, Payment Event or other default hereunder
with respect to Securities of any particular series, the Subordinated Trustee
for the Securities of such series shall give to Holders of Securities of that
series, in the manner set forth in Section 1.06, notice of such default,
if actually known to such Subordinated Trustee, unless such default shall have
been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of (or premium, if any, on)
or interest or Deferred Interest, if any, on any Security of that series, the
Subordinated Trustee shall be protected in withholding such notice if and so
long as it determines in good faith that the withholding of such notice is in
the interests of the Holders of Securities of that series; and provided,
further, that in the case of any default of the character specified
in Section 5.03(h) with respect to Securities of that series no such
notice to Holders shall be given until at least 60 days after the occurrence
thereof.


 


57

















 


SECTION 6.03.                             Certain
Rights of Subordinated Trustee.


 


Except as otherwise provided in Section 6.01:


 


(1)                                  the
Subordinated Trustee for any series of Securities may conclusively rely and
shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
discretion, consent, order, bond, debenture, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;


 


(2)                                  any
request or direction of the Issuer mentioned herein shall be sufficiently
evidenced by an Issuer Request or Issuer Order from the Issuer and any
resolution of the Board of Directors of the Issuer may be sufficiently
evidenced by a Board Resolution;


 


(3)                                  whenever
in the administration of this Subordinated Indenture such Subordinated Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, such Subordinated Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, conclusively rely upon an Officers’ Certificate;


 


(4)                                  such
Subordinated Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;


 


(5)                                  such
Subordinated Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Subordinated Indenture at the request or
direction of any of the Holders of Securities of any series pursuant to this
Subordinated Indenture for which it is acting as Subordinated Trustee, unless
such Holders shall have offered to such Subordinated Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that
might be incurred by it in compliance with such request or direction;


 


(6)                                  such
Subordinated Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
coupon or other paper or document, but such Subordinated Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit,  and, if such
Subordinated Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer personally or by agent or attorney;


 


(7)                                  such
Subordinated Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and such Subordinated Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;


 


(8)                                  such
Subordinated Trustee shall have no duties or responsibilities with respect to
and shall have no liability for the actions taken or the failures to act of any
other Subordinated Trustees appointed hereunder;


 


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(9)                                  such
Subordinated Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture;


 


(10)                            such
Subordinated Trustee shall not be deemed to have notice of any default or Event
of Default unless a Responsible Officer of the Subordinated Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Subordinated Trustee at the Corporate Trust Office
of the Subordinated Trustee, and such notice references the Securities and this
Subordinated Indenture;


 


(11)                            the
rights, privileges, protections, immunities and benefits given to the
Subordinated Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Subordinated
Trustee in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder; and


 


(12)                            before
the Subordinated Trustee acts or refrains from acting, the Subordinated Trustee
may request that the Issuer deliver an Officers’ Certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture, which Officers’ Certificate may
be signed by any person authorized to sign an Officers’ Certificate, including
any person specified as so authorized in any such certificate previously
delivered and not superseded.


 


SECTION 6.04.                             Not
Responsible for Recitals or Issuance of Securities.


 


The recitals and statements contained herein and in the Securities
(except the Subordinated Trustee’s certificate of authentication) shall be
taken as the recitals and statements of the Issuer, and the Subordinated
Trustee for any series of Securities assumes no responsibility for their
correctness.  The Subordinated Trustee
for any series of Securities makes no representations as to the validity or
sufficiency of this Subordinated Indenture or of the Securities of any series
(except for the Subordinated Trustee’s certificates of authentication
thereof).  The Subordinated Trustee for
any series of Securities shall not be accountable for the use or application by
the Issuer of the Securities or the proceeds thereof. The Subordinated Trustee
shall have no duty to ascertain or inquire as to the performance of the
Issuer’s covenants in Article Ten hereof or otherwise established by the
terms of any Security.


 


SECTION 6.05.                             May Hold
Securities.


 


The Subordinated Trustee for any series of Securities, any Paying
Agent, Security Registrar or any other agent of the Issuer or such Subordinated
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise
deal with the Issuer, with the same rights it would have if it were not such
Subordinated Trustee, Paying Agent, Security Registrar or such other agent.


 


SECTION 6.06.                             Money Held
in Trust.


 


Money held by the Subordinated Trustee for any series of Securities in
trust hereunder need not be segregated from other funds except to the extent
required by law.  The Subordinated
Trustee for any series of Securities shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed in writing
with the Issuer.


 


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SECTION 6.07.                             Compensation
and Reimbursement.


 


The Issuer agrees:


 


(1)                                  to
pay to the Subordinated Trustee for any series of Securities from time to time
such compensation for all services rendered by it hereunder as the Issuer and
the Subordinated Trustee shall mutually agree upon in writing (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);


 


(2)                                  except
as otherwise expressly provided herein, to reimburse the Subordinated Trustee
for any series of Securities upon its request for all reasonable expenses,
disbursements and advances incurred or made by such Subordinated Trustee in
accordance with any provision of this Subordinated Indenture (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct; and


 


(3)                                  to
indemnify such Subordinated Trustee for, and to hold it harmless against, any
loss, liability or reasonable expense incurred without negligence or willful
misconduct on its part, arising out of or in connection with the acceptance or
administration of this trust, including the reasonable costs and expenses of
defending itself against any claim (whether assented to by the Issuer, any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.


 


As security for the performance of the obligations of the Issuer under
this Section the Subordinated Trustee for any series of Securities shall
have a lien prior to the Securities upon all property and funds held or
collected by such Subordinated Trustee as such, except funds held in trust for
the payment of principal of (or premium, if any, on) or interest or Deferred
Interest, if any, on particular Securities.


 


When the Subordinated Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01, the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.


 


The rights of the Subordinated Trustee under this Section 6.07
shall survive the resignation or removal of the Subordinated Trustee, the
payment in full of the Securities for which it is the Subordinated Trustee, the
satisfaction and discharge of this Subordinated Indenture, and the termination
hereof.


 


SECTION 6.08.                             Disqualification;
Conflicting Interests.


 


The Subordinated
Trustee for the Securities shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act during the period of time
required thereby.  Nothing herein shall
prevent the Subordinated Trustee from filing with the Commission the
application referred to in the penultimate paragraph of Section 310(b) of
the Trust Indenture Act.  In determining
whether the Subordinated Trustee has a conflicting interest as defined in
Section 310(b) of the Trust Indenture Act with respect to the Securities
of any series, there shall be excluded Securities of any particular series of
Securities other than that series.  If
the Subordinated Trustee has or shall acquire a conflicting interest within the
meaning of the 


 


60

















 


Trust Indenture Act, the Subordinated Trustee shall either eliminate
such interest or resign, to the extent and in the manner provided by, and
subject to the provisions of, the Trust Indenture Act and this Subordinated
Indenture.


 


SECTION 6.09.                             Corporate
Subordinated Trustee Required; Different Subordinated Trustees for Different
Series; Eligibility.


 


There shall at all times be a Subordinated Trustee hereunder which
shall be:


 


(1)                                  a
corporation organized and doing business under the laws of the United States of
America, any state thereof, or the District of Columbia, authorized under such
laws to exercise corporate trust power and subject to supervision or
examination by Federal or State authority; or


 


(2)                                  a
corporation or other Person organized and doing business under the laws of a
foreign government that is permitted to act as Subordinated Trustee pursuant to
a rule, regulation, or other order of the Commission, authorized under such
laws to exercise corporate trust powers,


 


and which shall have at all times a combined capital and surplus of at
least $50,000,000.  If such corporation
or other Person publishes reports of condition at least annually, pursuant to
law or to requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  Neither the Issuer, any other obligor upon the Securities or any
Person directly or indirectly controlling, controlled by, or under common
control with the Issuer or any other obligor upon the Securities shall serve as
Subordinated Trustee for any of the Securities.  A different Subordinated Trustee may be appointed by the Issuer
for any series of Securities prior to the issuance of such Securities.  If the initial Subordinated Trustee for any
series of Securities is to be other than Citibank, N.A., the Issuer and such
Subordinated Trustee shall, prior to the issuance of such Securities, execute
and deliver an indenture supplemental hereto, which shall provide for the
appointment of such Subordinated Trustee as Subordinated Trustee for the
Securities of such series and shall add to or change any of the provisions of
this Subordinated Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Subordinated
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Subordinated Trustees co-trustees of the same
trust and that each such Subordinated Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Subordinated Trustee.  If at any time the Subordinated Trustee for the Securities of any
series shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereunder specified in this Article.


 


SECTION 6.10.                             Resignation
and Removal; Appointment of Successor.


 


(a)                                  No
resignation or removal of the Subordinated Trustee for the Securities of any
series and no appointment of a successor Subordinated Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Subordinated Trustee in accordance with the applicable requirements
of Section 6.11.


 


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(b)                                 The
Subordinated Trustee for the Securities of any series may resign at any time
with respect to the Securities of such series by giving written notice thereof
to the Issuer.  If the instrument of
acceptance by a successor Subordinated Trustee required by Section 6.11
shall not have been delivered to the Subordinated Trustee for the Securities of
such series within 30 days after the giving of such notice of resignation, the
resigning Subordinated Trustee may petition, at the expense of the Issuer, any
court of competent jurisdiction for the appointment of a successor Subordinated
Trustee with respect to the Securities of such series.


 


(c)                                  The
Subordinated Trustee for the Securities of any series may be removed at any
time with respect to the Securities of such series by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of such
series, delivered to such Subordinated Trustee and to the Issuer.  If the instrument of acceptance by a
successor Subordinated Trustee required by Section 6.11 shall not have
been delivered to the Subordinated Trustee for the Securities of such series
within 30 days after the giving of such notice of removal, the Subordinated
Trustee being removed may petition, at the expense of the Issuer, any court of
competent jurisdiction for the appointment of a successor Subordinated Trustee
with respect to the Securities of such series.


 


(d)                                 If
at any time:


 


(1)                                  the
Subordinated Trustee for the Securities of any series shall fail to comply with
Section 310(b) of the Trust Indenture Act pursuant to Section 6.08
hereof after written request therefor by the Issuer or by any Holder who has
been a bona
fide Holder of a Security of such series for at least six months,
unless the Subordinated Trustee’s duty to resign is stayed in accordance with
the provisions of Section 310(b) of the Trust Indenture Act; or


 


(2)                                  such
Subordinated Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Issuer, or by any
such Holder; or


 


(3)                                  such
Subordinated Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of such Subordinated Trustee or of its
property shall be appointed or any public officer shall take charge or control
of such Subordinated Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation; or


 


(4)                                  if
an administrative or other receiver or an administrator or other similar
official is appointed in relation to such Subordinated Trustee or in relation
to the whole or a material part of the assets of such Subordinated Trustee, or
an encumbrancer takes possession of the whole or a material part of the assets
of such Subordinated Trustee, or a distress or execution or other process is
levied or enforced upon or sued out against the whole or a material part of the
assets of such Subordinated Trustee, or if such Subordinated Trustee shall
commence a voluntary case or proceeding under any applicable Bankruptcy Law, or
any other case or proceeding to be adjudicated as bankrupt or insolvent, or
such Subordinated Trustee shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of such Subordinated Trustee or its
property or affairs, or shall make an assignment for the benefit of creditors,
or shall admit in writing its inability to pay its debts generally as they
become due, or shall take corporate action in furtherance of any such action;


 


62

















 


then, in any such
case, (i) the Issuer by a Board Resolution may remove such Subordinated Trustee
or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent jurisdiction
for the removal of such Subordinated Trustee and the appointment of a successor
Subordinated Trustee.


 


(e)                                  If
the Subordinated Trustee for the Securities of any series shall resign, be
removed or become incapable of acting, or if a vacancy shall occur in the
office of Subordinated Trustee for the Securities of any series for any cause,
the Issuer, by a Board Resolution, shall promptly appoint a successor
Subordinated Trustee with respect to the Securities of such series and shall
comply with the applicable requirements of Section 6.11.  If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor
Subordinated Trustee with respect to the Securities of such series shall be
appointed by Act of the Holders of a majority in aggregate principal amount of
the Outstanding Securities of such series delivered to the Issuer and the
retiring Subordinated Trustee, the successor Subordinated Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Subordinated
Trustee for the Securities of such series and supersede the successor
Subordinated Trustee appointed by the Issuer. 
If no successor Subordinated Trustee for the Securities of such series
shall have been so appointed by the Issuer or the Holders and shall have
accepted appointment in the manner required by Section 6.11, and if such
Subordinated Trustee is still incapable of acting, any Holder who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Subordinated Trustee with
respect to the Securities of such series.


 


(f)                                    The
Issuer shall give notice of each resignation and each removal of the
Subordinated Trustee with respect to the Securities of any series and each
appointment of a successor Subordinated Trustee with respect to the Securities
of any series in the manner and to the extent provided in
Section 1.06.  Each notice shall
include the name of the successor Subordinated Trustee with respect to the
Securities of that series and the address of its Corporate Trust Office.


 


SECTION 6.11.                             Acceptance
of Appointment by Successor.


 


(a)                                  Every
successor Subordinated Trustee appointed hereunder with respect to the
Securities of any series shall execute, acknowledge and deliver to the Issuer
and to the retiring Subordinated Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring
Subordinated Trustee shall become effective and such successor Subordinated
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Subordinated Trustee;
but, on the request of the Issuer or the successor Subordinated Trustee, such
retiring Subordinated Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Subordinated Trustee all
the rights, powers and trusts of the retiring Subordinated Trustee and shall
duly assign, transfer and deliver to such successor Subordinated Trustee all
property and money held by such retiring Subordinated Trustee hereunder.


 


(b)                                 In
case of the appointment hereunder of a successor Subordinated Trustee with
respect to the Securities of one or more (but not all) series, the Issuer, the
retiring 


63

















 


Subordinated Trustee and each successor Subordinated Trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor Subordinated Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer to, and to vest in, each successor
Subordinated Trustee all the rights, powers, trusts and duties of the retiring
Subordinated Trustee with respect to the Securities of that or those series to
which the appointment of such successor Subordinated Trustee relates, (ii) if
the retiring Subordinated Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Subordinated Trustee with respect to the Securities of that or those
series as to which the retiring Subordinated Trustee is not retiring shall
continue to be vested in the retiring Subordinated Trustee and (iii) shall add
to or change any of the provisions of this Subordinated Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Subordinated Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such
Subordinated Trustees co-trustees of the same trust and each such Subordinated
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Subordinated
Trustee; and upon the execution and delivery of such supplemental subordinated
indenture the resignation or removal of the retiring Subordinated Trustee shall
become effective to the extent provided therein and each such successor
Subordinated Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring
Subordinated Trustee with respect to the Securities of that or those series to
which the appointment of such successor Subordinated Trustee relates; but, on
request of the Issuer or any successor Subordinated Trustee, such retiring
Subordinated Trustee shall duly assign, transfer and deliver to such successor
Subordinated Trustee all property and money held by such retiring Subordinated
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Subordinated Trustee relates.


 


(c)                                  Upon
request of any such successor Subordinated Trustee, the Issuer shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Subordinated Trustee all such rights, powers and trusts
referred to in Subsections (a) or (b) of this Section, as the case may be.


 


(d)                                 No
successor Subordinated Trustee shall accept its appointment unless at the time
of such acceptance such successor Subordinated Trustee for the Securities of
any series shall be qualified and eligible under this Article.


 


SECTION 6.12.                             Merger,
Conversion, Consolidation or Succession to Business.


 


Any corporation into which the Subordinated Trustee for the Securities
of any series may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which such Subordinated Trustee shall be a party, or any corporation succeeding
to all or substantially all of the corporate trust business of such
Subordinated Trustee, shall be the successor of such Subordinated Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto.


 


64

















 


SECTION 6.13.                             Preferential
Collection of Claims Against Issuer.


 


If and when the Subordinated Trustee for Securities of any series shall
be or become a creditor of the Issuer (or any other obligor upon the Securities
of such series), the Subordinated Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Issuer
(or any such other obligor).


 


ARTICLE SEVEN



HOLDERS’ LISTS AND REPORTS BY
SUBORDINATED TRUSTEE AND ISSUER


 


SECTION 7.01.                             Issuer to
Furnish Subordinated Trustee Names and Addresses of Holders.


 


With respect to each particular series of Securities, the Issuer will
furnish or cause to be furnished to the Subordinated Trustee of such series:


 


(1)                                  at
least semi-annually and, if applicable, not more than 15 days after each
Regular Record Date relating to that series (or, if there is no Regular Record
Date relating to that series, on June 30 and December 31), a list, in
such form as such Subordinated Trustee may reasonably require, containing all
the information in the possession or control of the Issuer or any of its Paying
Agents as to the names and addresses of the Holders of that series as of such
dates, excluding from any such list any information already in the possession
or control of the Subordinated Trustee which was received by such Subordinated
Trustee acting in any capacity with respect to such series of Securities; and


 


(2)                                  at
such other times as the Subordinated Trustee may request in writing, within 30
days after the receipt by the Issuer of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, excluding from any such list all the information already in the
possession or control of the Subordinated Trustee which was received by such Subordinated
Trustee acting in any capacity with respect to such series of Securities.


 


SECTION 7.02.                             Preservation
of Information; Communications to Holders.


 


(a)                                  The
Subordinated Trustee for each series of Securities shall preserve, in as
current a form as is reasonably practicable, the names and addresses of Holders
of the Securities of such series contained in the most recent lists furnished
to the Subordinated Trustee as provided in Section 7.01 and the names and
addresses of Holders of the Securities of such series received by the
Subordinated Trustee in its capacity as Security Registrar for such series, if
so acting.  The Subordinated Trustee for
each series of Securities may destroy any list relating to such series of
Securities furnished to it as provided in Section 7.01 upon receipt of a
new list relating to such series so furnished.


 


(b)                                 If
three or more Holders of Securities of any particular series (hereinafter
referred to as “applicants”) apply in writing to the Subordinated Trustee for
the Securities of any such series, and furnish to such Subordinated Trustee
reasonable proof that each such applicant has owned a Security of that series
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of Securities of that series with respect to their rights under this 


 


65

















 


Subordinated Indenture or under the Securities of that series and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then such Subordinated Trustee shall, within
five Business Days after the receipt of such application, at its election,
either:


 


(1)                                  afford
such applicants access to the information preserved at the time in accordance
with Section 7.02(a); or


 


(2)                                  inform
such applicants as to the approximate number of Holders of Securities of that
series whose names and addresses appear in the information preserved at the time
by such Subordinated Trustee in accordance with Section 7.02(a), and as to
the approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.


 


If any such
Subordinated Trustee shall elect not to afford such applicants access to that
information, such Subordinated Trustee shall, upon the written request of such
applicants, mail to each Holder of Securities of that series whose name and
address appears in the information preserved at the time by the Subordinated
Trustee in accordance with Section 7.02(a), a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to such Subordinated Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, such Subordinated
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of such Subordinated Trustee, such mailing would be
contrary to the best interests of the Holders of Securities of that series or
would be in violation of applicable law. 
Such written statement shall specify the basis of such opinion.  If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed shall
enter an order refusing to sustain any of such objections or if, after the
entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the objections
so sustained have been met and shall enter an order so declaring, such
Subordinated Trustee shall mail copies of such material to all such Holders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise such Subordinated Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.


 


(c)                                  Every
Holder of Securities of each series, by receiving and holding the same, agrees
with the Issuer and the Subordinated Trustee for the Securities of such series
that none of the Issuer such Subordinated Trustee or any of their agents shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders of the Securities of such series in
accordance with Section 7.02(b), regardless of the source from which such
information was derived, and that the Subordinated Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 7.02(b).


 


SECTION 7.03.                             Reports by
Subordinated Trustee.


 


(a)                                  Within
60 days after May 15 of each year commencing with the year following the first
issuance of Securities, the Subordinated Trustee for the Securities of each
series shall transmit by mail to all Holders of the Securities of such series,
in the manner and 


 


66

















 


to the extent provided in the Trust Indenture Act, a brief report dated
as of each such May 15 if required by the Trust Indenture Act.


 


(b)                                 A
copy of each such report shall, at the time of such transmission to Holders of
Securities of any series, be filed by the Subordinated Trustee for the
Securities of such series with each Stock Exchange, with the Commission and
with the Issuer.  The Issuer will notify
such Subordinated Trustee when such series of Securities is listed on any Stock
Exchange.


 


SECTION 7.04.                             Reports by
Issuer.


 


The Issuer will:


 


(1)                                  file
with the Subordinated Trustee for the Securities of such series, within 15 days
after the Issuer is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Issuer may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Issuer is not required to file information,
documents or reports pursuant to either of said Sections, then it will file
with such Subordinated Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;


 


(2)                                  file
with the Subordinated Trustee for the Securities of such series and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such additional information, documents, and reports
with respect to compliance by the Issuer with the conditions and covenants of
this Subordinated Indenture as may be required from time to time by such rules
and regulations; and


 


(3)                                  transmit
by mail to all Holders of Securities of each series, as provided in
Section 313(c) of the Trust Indenture Act, within 30 days after the filing
thereof with the Subordinated Trustee for the Securities of such series, such
summaries of any information, documents and reports required to be filed by the
Issuer pursuant to paragraphs (1) and (2) of this Section as may be
required by rules and regulations prescribed from time to time by the
Commission.


 


Delivery of such
reports, information and documents to the Subordinated Trustee is for
informational purposes only and the Subordinated Trustee’s receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Issuer’s
compliance with any of its covenants hereunder (as to which the Subordinated
Trustee is entitled to rely exclusively on Officers’ Certificates).


 


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ARTICLE EIGHT



CONSOLIDATION, MERGER, CONVEYANCE
OR TRANSFER


 


SECTION 8.01.                             Issuer May
Consolidate, Etc., Only on Certain Terms.


 


So long as any Security remains Outstanding, the Issuer shall not
consolidate or amalgamate with or merge into any other corporation or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person unless:


 


(1)                                  the
corporation formed by such consolidation or amalgamation or into which the
Issuer is merged, or the Person which acquires, leases or is the transferee of
or recipient of the conveyance or transfer, of substantially all of the
properties and assets of the Issuer as an entirety shall:


 


(A)                              be
a corporation or other Person organized and validly existing under the laws of
any country that is a member of the OECD (as the same may be constituted from
time to time); and


 


(B)                                expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Subordinated Trustee for each series of Securities, in form reasonably
satisfactory to each such Subordinated Trustee, with any amendments or
revisions necessary to take account of the jurisdiction in which any such
corporation or Person is organized (if other than England and Wales),


 


(i)                                     the
due and punctual payment of the principal of (and premium, if any, on) and
interest, if any, on, and any sinking fund payment in respect of, all of the Securities,


 


(ii)                                  the
performance of every covenant of this Subordinated Indenture and of all the
Securities on the part of the Issuer to be performed,


 


(iii)                               such
assumption shall provide that such corporation or Person shall pay to the
Holder of any Securities such additional amounts as may be necessary in order
that every net payment of the principal of (and premium, if any, on) and
interest, if any, and Deferred Interest, if any, on such Securities will not be
less than the amounts provided for in the Securities to be then due and
payable, and


 


(iv)                              with
respect to (iii) above such obligation shall extend to any deduction or
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon such payment by the United Kingdom or the
country in which any such corporation or Person is organized or any district,
municipality or other political subdivision or taxing authority thereof
(subject to the limitations set forth in Section 10.07 in respect of the
payment of additional amounts as applied to such country);


 


(2)                                  immediately
after giving effect to such transaction, no Event of Default, Payment Default,
Capital Security Default, or Payment Event with respect to any series of
Securities, and no event which, after notice or lapse of time or both, would
become an Event 


 


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of Default, Payment Default, Capital Security Default or Payment Event
with respect to any series of Securities, shall have occurred and be
continuing; and


 


(3)                                  the
Issuer has delivered to the Subordinated Trustee for each series of Securities
an Officers’ Certificate and an Opinion of Counsel each stating that such
consolidation, amalgamation, merger, conveyance, transfer or lease and such
supplemental indenture evidencing the assumption by such corporation or Person
comply with this Subordinated Indenture and that all conditions precedent
provided for in this Subordinated Indenture relating to such transaction have
been complied with.


 


SECTION 8.02.                             Successor
Corporation Substituted.


 


Upon any consolidation, amalgamation or merger, or any conveyance,
transfer or lease of the properties and assets of the Issuer substantially as
an entirety in accordance with Section 8.01, the successor corporation
formed by such consolidation or amalgamation or into which the Issuer is merged
or the Person to which such conveyance or transfer or with which such lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Issuer under this Subordinated Indenture with the same effect as
if such successor corporation or Person had been named as the Issuer herein,
and thereafter, except in the case of a lease, the predecessor corporation
shall be relieved of all obligations and covenants under this Subordinated
Indenture or the Securities.


 


ARTICLE NINE



SUPPLEMENTAL INDENTURES


 


SECTION 9.01.                             Supplemental
Subordinated Indentures Without Consent of Holders.


 


Without the consent of any Holders of Securities, the Issuer, when
authorized by a Board Resolution, and the Subordinated Trustee or Subordinated
Trustees for the Securities of any or all series, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the relevant Subordinated Trustee or Subordinated Trustees, for
any of the following purposes:


 


(1)                                  to
evidence the succession of another corporation to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and
contained in the Securities; or


 


(2)                                  to
add to the covenants of the Issuer for the benefit of the Holders of all or any
particular series of Securities (and, if such covenants are to be for the
benefit of fewer than all series of Securities, stating that such covenants are
being included solely for the benefit of such series), to convey, transfer,
assign, mortgage or pledge any property to or with the Subordinated Trustee for
the Securities of any such series or otherwise secure any such series of the
Securities or to surrender any right or power herein conferred upon the Issuer;
or


 


(3)                                  to
add any additional Events of Default, Payment Defaults, Capital Security
Defaults or Payment Events with respect to any or all series of Securities
(and, if any such Event of Default, Payment Default, Capital Security Default
or Payment Event applies to fewer than all series of Securities, stating each
series to which such Event of Default, Payment Default, Capital Security
Default or Payment Event applies); provided, that any 


 


69

















 


such additional Event of Default, Payment Default, Capital Security
Default or Payment Event would not cause any such series of Securities to be in
default immediately upon any such addition; or


 


(4)                                  to
change or eliminate any restrictions on the payment of principal of or any
premium or interest on Securities, or to provide (subject to applicable laws)
for the issuance of uncertificated Securities of any series in addition to or
in place of any certificated Securities and to make all appropriate changes for
such purposes; provided, however, that any such action shall not adversely
affect the interests of the Holders of Securities of any series in any material
respect; or


 


(5)                                  to
change or eliminate any of the provisions of this Subordinated Indenture; provided,
however, that any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of such
provision; or


 


(6)                                  to
evidence and provide for the acceptance of appointment hereunder of a
Subordinated Trustee, other than Citibank, N.A., for a series of Securities and
to add to or change any of the provisions of this Subordinated Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Subordinated Trustee, pursuant to the requirements
of Section 6.09; or


 


(7)                                  to
evidence and provide for the acceptance of appointment hereunder by a successor
Subordinated Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Subordinated Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Subordinated Trustee, pursuant to the
requirements of Section 6.11(b); or


 


(8)                                  to
add to the conditions, limitations and restrictions on the authorized amount,
form, terms or purposes of issue, authentication and delivery of Securities, as
herein set forth, with such other conditions, limitations and restrictions
thereafter to be observed; or


 


(9)                                  to
supplement any of the provisions of this Subordinated Indenture to such extent
as shall be necessary to permit or facilitate the defeasance and discharge of
any series of Securities pursuant to Section 4.01; provided, however, that any
such action shall not adversely affect the interests of the Holders of
Securities of such series or any other series of Securities in any material
respect; or


 


(10)                            to
add to or change or eliminate any provisions of this Subordinated Indenture as
shall be necessary or desirable in accordance with any amendments to the Trust
Indenture Act or any rules and regulations of the Commission; or 


 


(11)                            to
cure any ambiguity or defect, to correct or amend or supplement any provision
herein which may be inconsistent with any other provision herein, or to make
any other provisions with respect to matters or questions arising under this
Subordinated Indenture; provided, that any such action shall not adversely
affect the interests of the Holders of Securities of any particular series in
any material respect; or


 


(12)                            to
establish the terms of a series of Securities to be issued hereunder pursuant
to, and in accordance with, Section 3.01 hereof.


 


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SECTION 9.02.                             Supplemental
Subordinated Indentures With Consent of Holders.


 


The Issuer, when authorized by a Board Resolution, and the Subordinated
Trustee or Subordinated Trustees for the Securities of any or all series may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Subordinated Indenture or of modifying in any manner the
rights of the Holders of such Securities under this Subordinated Indenture, but
only with the consent of the Holders of 50% (or any greater requisite amount)
in aggregate principal amount of the Outstanding Securities of each series of
Securities then Outstanding affected thereby, in each case by Act of said
Holders of Securities of each such series delivered to the Issuer and the
Subordinated Trustee for Securities of each such series; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:


 


(1)                                  change
the Stated Maturity, if any, of the principal of, or any installment of
principal of or interest on, any Security, or change the terms of any Perpetual
Subordinated Debt Securities or Perpetual Subordinated Capital Securities to
include a Stated Maturity of the principal amount thereof, or reduce the
principal amount of any Security, the rate of interest thereon, if any, or any
Deferred Interest, or any premium or principal payable upon any redemption or
repurchase of such Securities or change the time at which such Securities may
or must be redeemed to the detriment of any holder, or change any obligation of
the Issuer to pay additional amounts pursuant to Sections 5.16 and 10.07
(except as contemplated by Section 8.01(1) and permitted by
Section 9.01(1)) or reduce the amount of the principal of a Discounted
Security that would be due and payable upon a declaration of acceleration of
the Maturity thereof pursuant to Section 5.02, or change any Place of
Payment where, or change the currency or currency unit in which, any Security
or any interest or Deferred Interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity, if any, thereof or the date any such payment is otherwise due and
payable (or, in the case of redemption, on or after the Redemption Date);


 


(2)                                  reduce
the percentage in aggregate principal amount of the Outstanding Securities of
any particular series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Subordinated Indenture or
certain defaults hereunder and their consequences that is provided for in this
Subordinated Indenture;


 


(3)                                  change
any obligation of the Issuer to maintain an office or agency in the places and
for the purposes specified in Section 10.02;


 


(4)                                  change
the terms and conditions (i) under which the Securities are convertible or
exchangeable or (ii) of the Preference Shares into which such Securities may be
converted or exchanged, in each case, in any manner that has a material adverse
effect on the rights of any holder of such Securities;


 


(5)                                  modify
any of the provisions of this Section or Sections 5.13 or 10.06, except to
increase any specified percentage in aggregate principal amount required for
any actions by Holders or to provide that certain other provisions of this
Subordinated Indenture cannot be modified or waived without the consent of the
Holder of each Security affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder of a Security with respect
to changes in the references to “the Subordinated Trustee” and 


 


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concomitant changes in this Section and Sections 5.12 or 10.06, or
the deletion of this proviso, in accordance with the requirements of Sections
6.09, 6.11(b), 9.01(6) and 9.01(7); or


 


(6)                                  change
in any manner adverse to the interests of the Holders of any Outstanding
Securities the subordination provisions of such Securities.


 


A supplemental indenture which changes or eliminates any covenant or
other provision of this Subordinated Indenture which has expressly been
included solely for the benefit of one or more particular series of Securities,
or which modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Subordinated Indenture of the Holders of Securities of any
other series.


 


It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.


 


SECTION 9.03.                             Execution of
Supplemental Subordinated Indentures.


 


In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Subordinated Indenture, the Subordinated
Trustee for any series of Securities shall be entitled to receive, and (subject
to Section 6.01) shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Subordinated
Indenture.  The Subordinated Trustee for
any series of Securities may, but shall not (except to the extent required in
the case of a supplemental indenture entered into under Section 9.01(6) or
(7)) be obligated to, enter into any such supplemental indenture which affects
such Subordinated Trustee’s own rights, liabilities, duties or immunities under
this Subordinated Indenture or otherwise.


 


SECTION 9.04.                             Effect of
Supplemental Subordinated Indentures.


 


Upon the execution of any supplemental
indenture under this Article, this Subordinated Indenture shall be modified in
accordance therewith and such supplemental indenture shall form a part of this
Subordinated Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.


 


SECTION 9.05.                             Conformity
With Trust Indenture Act.


 


Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act as
then in effect.


 


SECTION 9.06.                             Reference in
Securities to Supplemental Subordinated Indentures.


 


Securities of any particular series authenticated and delivered after
the execution of any supplemental indenture pursuant to this Article may,
and shall if required by the Subordinated Trustee for the Securities of such
series, bear a notation in form approved by such Subordinated Trustee as to any
matter provided for in such supplemental indenture.  If the Issuer shall so determine, new Securities of any series so
modified as to conform, in the 


 


72

















 


opinion of the Subordinated Trustee for the Securities of such series
and the Boards of Directors of the Issuer, to any such supplemental indenture
may be prepared and executed by the Issuer, and such Securities may be
authenticated and delivered by the Subordinated Trustee for the Securities of such
series in exchange for Outstanding Securities of such series.


 


ARTICLE TEN



COVENANTS


 


SECTION 10.01.                      Payment of
Principal (and Premium, if any) and Interest and Deferred Interest, if any.


 


The Issuer agrees, for the benefit of each particular series of
Securities, that it will duly and punctually pay in the currency or currency
unit in which the Securities of such series are payable (except as otherwise
specified pursuant to Section 3.01 for the Securities of such series and
except as provided in Sections 3.11(b), 3.11(d) and 3.11(e)) the principal of
(and premium, if any, on) and interest and Deferred Interest, if any, on that
series of Securities in accordance with the terms of the Securities of such
series and this Subordinated Indenture.


 


SECTION 10.02.                      Maintenance
of Office or Agency.


 


If Securities of a series are issuable as Registered Securities, the
Issuer will maintain in the Borough of Manhattan, The City of New York, and in
each Place of Payment for that series an office or agency where Securities of
that series may be presented or surrendered for payment, and an office or
agency where Securities of that series may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Issuer with
respect to the Securities of that series and this Subordinated Indenture may be
served.  The Issuer will give prompt
written notice to the Subordinated Trustee for the Securities of that series of
the location, and any change in the location, of any such office or
agency.  If at any time the Issuer shall
fail to maintain any such required office or agency in respect of any series of
Securities or shall fail to furnish the Subordinated Trustee for the Securities
of that series with the address thereof, such presentations (to the extent
permitted by law) and surrenders of Securities of that series may be made and
notices and demands may be made or served at the Corporate Trust Office of such
Subordinated Trustee, and the Issuer hereby appoints such Subordinated Trustee
as its agent to receive such respective presentations, surrenders, notices and
demands.


 


The Issuer may
also from time to time designate one or more other offices or agencies (in or
outside a Place of Payment) where the Securities of one or more series may be
presented or surrendered for any or all of the purposes specified above in this
Section and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner
relieve the Issuer of its obligation to maintain an office or agency in each
Place of Payment for such purpose.  The
Issuer will give prompt written notice to the Subordinated Trustee for the
Securities of each series so affected of any such designation or rescission and
of any change in the location of any such office or agency.


 


Unless otherwise specified pursuant to Section 3.01, if and so
long as the Securities of any series (i) are denominated in a currency other
than Dollars or (ii) may be payable in a currency other than Dollars, or so
long as it is required under any other provision of the 


 


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Subordinated Indenture, then the Issuer will maintain with respect to
each such series of Securities, or as so required, a Currency Determination Agent.


 


SECTION 10.03.                      Money for
Securities Payments to Be Held in Trust.


 


If the Issuer shall at any time act as its own Paying Agent with
respect to any particular series of Securities, it will, on or before each due
date of the principal of (or premium, if any, on) or interest, or Deferred
Interest, if any, on any of the Securities of that series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum in the currency
or currency unit in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.01 for the Securities of such
series and except as provided in Sections 3.11(b), 3.11(d) and 3.11(e))
sufficient to pay the principal (and premium, if any) and interest and Deferred
Interest , if any, so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will promptly notify
the Subordinated Trustee for the Securities of such series of its action or
failure so to act.


 


Whenever the Issuer shall have one or more Paying Agents for any
particular series of Securities, the Issuer will, prior to 10:00 a.m. in the
applicable Place of Payment on each due date of the principal of (or premium,
if any, on) or interest or Deferred Interest, if any, on any such Securities,
deposit with a Paying Agent for the Securities of such series a sum (in the
currency or currency unit described in the preceding paragraph) sufficient to
pay the principal (and premium, if any) and interest and, subject to
Section 3.07, Deferred Interest, if any, so becoming due, such sum to be
held in trust for the benefit of the Persons entitled thereto and (unless such
Paying Agent is the Subordinated Trustee for the Securities of such series) the
Issuer will promptly notify such Subordinated Trustee of its action or failure
so to act.


 


The Issuer will cause each Paying Agent (other than the Subordinated
Trustee) for any particular series of Securities to execute and deliver to such
Subordinated Trustee an instrument in which such Paying Agent shall agree with
such Subordinated Trustee, subject to the provisions of this Section, that such
Paying Agent will:


 


(1)                                  hold
all sums held by it for the payment of the principal of (or premium, if any,
on) or interest or Deferred Interest, if any, on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;


 


(2)                                  give
such Subordinated Trustee notice of any default by the Issuer (or any other
obligor upon the Securities) in the making of any payment of principal of (and
premium, if any, on) and interest and Deferred Interest, if any, on Securities
of that series; and


 


(3)                                  at
any time during the continuation of any such default, upon the written request
of such Subordinated Trustee, forthwith pay to such Subordinated Trustee all
sums so held in trust by such Paying Agent.


 


The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Subordinated Indenture or for any other
purpose, pay, or by an Issuer Order direct any Paying Agent to pay, to the
Subordinated Trustee for the Securities of any series all sums held in trust by
the Issuer or such Paying Agent, such sums to be held by such Subordinated 


 


74

















 


Trustee upon the same trusts as those upon which sums were held by the
Issuer or such Paying Agent; and, upon such payment by any Paying Agent to such
Subordinated Trustee, such Paying Agent shall be released from all further
liability with respect to such money.


 


Any money deposited with the Subordinated Trustee or any Paying Agent
for the Securities of any series, or then held by the Issuer in trust for the
payment of the principal of (and premium, if any, on) and interest and Deferred
Interest, if any, on any Securities of any particular series and remaining
unclaimed for two years after such principal (and premium, if any) and interest
and Deferred Interest, if any, has become due and payable shall, unless otherwise
required by mandatory provisions of applicable escheat, or abandoned or
unclaimed property law, be paid to the Issuer on delivery of an Issuer Request,
or (if then held by the Issuer) shall be discharged from such trusts; and the
Holder of such Security shall, thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof, and all liability of such
Subordinated Trustee or such Paying Agent with respect to such trust money, and
all liability of the Issuer as trustee thereof,  shall thereupon cease; provided, however, that such Subordinated
Trustee or such Paying Agent, before being required to make any such repayment
shall give notice to the Holder of such Security in the manner set forth in
Section 1.06 that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notice, any unclaimed balance of such money then remaining will, unless
otherwise required by mandatory provisions of applicable escheat, or abandoned
or unclaimed property law, be repaid to the Issuer; provided, further, that the
Subordinated Trustee or such Paying Agent shall give written notice of any such
unclaimed amounts to the Issuer within 30 days after the end of such two year
period.


 


SECTION 10.04.                      Statements
as to Compliance.


 


The Issuer will deliver to the Subordinated Trustee for each series of
Securities, within four months after the end of each fiscal year ending after
the date hereof, an Officers’ Certificate (one of the signers of which shall be
the chief executive officer, treasurer or finance director of the Issuer)
stating whether or not, to the knowledge of such officers, after due
investigation, the Issuer has complied with all conditions and covenants and
fulfilled all of its obligations under this Subordinated Indenture during such
year and, if such officers have obtained knowledge of any default or Event of
Default, specifying all such defaults or Events of Default and the nature
thereof of which such officers may have knowledge and whether any such default
or Events of Default is continuing or not.


 


For purposes of this Section, such compliance or fulfillment shall be
determined without regard to any period of grace or requirement of notice
provided under this Subordinated Indenture.


 


The Issuer
shall deliver to the Subordinated Trustee, as soon as possible and in any event
within five days after the Issuer becomes aware of the occurrence of any Event
of Default or an event which, with notice or the lapse of time or both, would
constitute an Event of Default, an Officers’ Certificate setting forth the
nature and status of such Event of Default.


 


SECTION 10.05.                      Corporate
Existence.


 


Subject to Article Eight, the Issuer will do or cause to be done
all things necessary to preserve and keep in full force and effect their
respective corporate existences.


 


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SECTION 10.06.                      Waiver of
Certain Covenants.


 


The Issuer may omit in any particular instance to comply with any
covenant or condition set forth in Sections 10.02 and 10.05 and any other
covenant not set forth herein and specified pursuant to Section 3.01 to be
applicable to the Securities of any series, if before or after the time for
such compliance the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of each series of Securities affected by
the omission (which, in the case of a covenant not set forth herein and
specified pursuant to Section 3.01 to be applicable to the Securities of
any series, shall include only those series to which such covenant is so
specified to be applicable) shall, in each case by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Issuer and the duties of
the Subordinated Trustee for the Securities of each series with respect to any
such covenant or condition shall remain in full force and effect.


 


SECTION 10.07.                      Payment of
Additional Amounts.


 


Unless otherwise provided in the Board Resolution or supplemental
indenture pursuant to Section 3.01 establishing the terms of a particular
series of Securities, the Issuer will pay to the Holder of any Security such
additional amounts as may be necessary in order that every net payment of the
principal of (and premium, if any, on) and interest, if any, and Deferred
Interest, if any, on any such Security after deduction or other withholding for
or on account of any present or future tax, assessment, duty or other
governmental charge of any nature whatsoever imposed, levied or collected by or
on behalf of the United Kingdom or any political subdivision or taxing
authority thereof or therein having power to tax, will not be less than the
amount provided for in any such Security to be then due and payable;
provided,  however, that the foregoing
obligation to pay additional amounts will not apply on account of any tax,
assessment, duty or other governmental charge which is payable:


 


(1)                                  otherwise
than by deduction or withholding from payments of principal of (or premium, if
any, on) or interest or Deferred Interest, if any, on any such Security; or


 


(2)                                  by
reason of such Holder having, or having had, some personal or business
connection with the United Kingdom and not merely by reason of the fact that
payments are, or for the purposes of taxation are deemed to be, from sources
in, or secured in the United Kingdom; or


 


(3)                                  except
in the case of the winding up of the Issuer in England, where the relevant
Security is presented for payment in the United Kingdom; or


 


(4)                                  where
the relevant Security is presented for payment more than 30 days after the
Relevant Date (as defined below) except to the extent that the relevant Holder
would have been entitled to such additional amounts on presenting the Security
for payment on such thirtieth day; or


 


(5)                                  with
respect to a payment to an individual, where the deduction or withholding is
required to be made pursuant to any European Union Directive on the taxation of
savings implementing the conclusions of the meeting of the European Council of
Economics and


 


76

















 


Finance Ministers of November 26-27, 2000 (or any supplemental
ECOFIN meeting relating to such directive) or any law implementing or complying
with, or introduced in order to conform to, such Directive; or


 


(6)                                  on
a Security presented for payment by a Holder who would have been able to avoid
such deduction or withholding by presenting the relevant Security to another
paying agent in a Member State of the European Union or elsewhere; or


 


(7)                                  by
reason by any estate, excise, inheritance, gift, sales, transfer, wealth or
personal property tax or any similar assessment or governmental charge; or


 


(8)                                  as
a result of the failure of a Holder to satisfy any statutory requirements or
make a declaration of non-residence or other claim for exemption; or


 


(9)                                  by
reason of a change in law or official practice of any relevant taxing authority
that becomes effective more than 30 days after the Relevant Date (as defined
below) for payment of principal (or premium, if any) or interest or Deferred
Interest, if any, in respect of such Security; or


 


(10)                            owing
to any combination of clauses (1) through (9) above (provided that such
provision is applicable to the relevant series of Securities in accordance with
this Subordinated Indenture).


 


No additional amounts will be paid as provided above with respect to
any payment of principal of (or premium, if any, on) or interest or Deferred
Interest, if any, on any such Security to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of any such payment to the
extent that a beneficiary or settlor with respect to such fiduciary, a member
of such a partnership or the beneficial owner of such payment would not have
been entitled to the additional amounts had such beneficiary, settlor, member
or beneficial owner been the Holder of any such Security.


 


For the purposes hereof the “Relevant Date” means the date on which the
payment of principal of (or premium, if any, on) or interest or Deferred
Interest, if any, on any Security first becomes due and payable but, if the
full amount of the monies payable on such date has not been received by the
relevant Paying Agent or as it shall have directed on or prior to such date,
the “Relevant Date” means the date on which such monies shall have been so received.


 


Whenever in
this Subordinated Indenture there is mentioned, in any context, the payment of
the principal of (or premium, if any, on) or interest or Deferred Interest (or,
with respect to the Perpetual Subordinated Capital Securities, any other payments),
if any, on any Security, such mention shall be deemed to include mention of the
payment of additional amounts provided for in the terms of such Securities and
this Section to the extent that, in such context, additional amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section and express mention of the payment of additional amounts (if
applicable) in any provisions hereof shall not be construed as excluding
additional amounts in those provisions hereof where such express mention is not
made.


 


If the Securities of a series provide for the payment of additional
amounts as contemplated by Section 3.01(21), at least 10 days prior to the
first Interest Payment Date with respect to that series of Securities (or if
the Securities of that series will not bear interest 


 


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prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of principal
(and premium, if any) and interest and Deferred Interest, if any, if there has
been any change with respect to the matters set forth in the below-mentioned
Officers’ Certificate, the Issuer will furnish the Subordinated Trustee for
that series of Securities with an Officers’ Certificate instructing such
Subordinated Trustee whether such payment of principal of (and premium, if any,
on) and interest and Deferred Interest, if any, on the Securities of that
series shall be made to Holders of Securities of that series without
withholding for or on account of any tax, assessment, duty or other
governmental charge as referred to above or described in the Securities of that
series.  If any such withholding shall
be required, then such Officers’ Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders of
Securities and the Issuer will pay to the Subordinated Trustee for such series
of Securities such additional amounts as may be required pursuant to the terms
applicable to such series.  The Issuer
covenants to indemnify the Subordinated Trustee for such series of Securities
and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without gross negligence, willful
default or bad faith on their part arising out of or in connection with actions
taken or omitted by any of them in reliance on any Officers’ Certificate
furnished pursuant to this Section 10.07 or the failure to provide any
such Officers’ Certificate.  The
obligations contained in the immediately preceding sentence of the Issuer shall
survive payment of all of the Securities, the satisfaction and discharge of
this Subordinated Indenture, and the resignation or removal of the Subordinated
Trustee or any Paying Agent for such series of Securities.


 


The Issuer hereby undertakes that, if any withholding or deduction is
imposed on a payment to an individual and is required to be made pursuant to
the proposal agreed by the European Council of the Economic and Finance
Ministers (“ECOFIN”) on January 21, 
2003 or any law implementing or complying with, or introduced in order
to conform to, any such Directive, it will ensure that it maintains a paying
agent with a specific office in a European Union member state that will not be
obliged to withhold or deduct tax pursuant to any European Union Directive on
the taxation of savings income implementing those proposals or any such law; provided,
that under no circumstances shall the Issuer be obliged to maintain a paying
agent with a specified office in such member state unless at least one member
state of the European Union does not require a paying agent making payments
through a specified office in that member state to so withhold or deduct tax.


 


SECTION 10.08.                      Calculation
of Original Issue Discount.


 


The Issuer shall file with the Subordinated
Trustee promptly at the end of each calendar year (i) a written notice
specifying the amount of original issue discount (including daily rates and
accrual periods) accrued on Outstanding Securities as of the end of such year
and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.


 


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ARTICLE ELEVEN



REDEMPTION OF SECURITIES


 


SECTION 11.01.                      Applicability
of This Article.


 


Redemption of Securities of any series (whether by operation of a
sinking fund or otherwise) as permitted or required by the terms of any such
Securities shall be made in accordance with such terms and (except as otherwise
specified pursuant to Section 3.01 with respect to Securities of such
series) this Article; provided, however, that if any of the
terms of any such Securities shall conflict with any provision of this Article,
the terms of such Securities shall govern; and provided, further, that the
option or obligation of the Issuer to redeem any Securities on any Redemption
Date shall be subject to any consent required of the Financial Services
Authority having been obtained and subject also in the case of Perpetual
Subordinated Debt Securities and Perpetual Subordinated Capital Securities to
the Solvency Condition being satisfied by the Issuer on any such Redemption
Date and such other requirements as may be established pursuant to a Board
Resolution or supplemental indenture pursuant to Section 3.01 with respect
to such series.


 


SECTION 11.02.                      Election to
Redeem; Notice to Subordinated Trustee.


 


The election of the Issuer to redeem any Securities of any series shall
be evidenced by or pursuant to a Board Resolution.  In case of any redemption at the election of the Issuer of less
than all of the Securities of any particular series, the Issuer shall, at least
45 days prior to the Redemption Date fixed by the Issuer (unless a shorter
notice shall be satisfactory to the Subordinated Trustee for the Securities of
such series), notify the Subordinated Trustee for Securities of such series by
an Issuer Request of such Redemption Date and of the principal amount of
Securities of that series to be redeemed.


 


In the case of any redemption of Securities of any series prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Subordinated Indenture, the Issuer shall
furnish the Subordinated Trustee for Securities of such series with an
Officers’ Certificate evidencing compliance with such restriction.


 


In the case of any redemption of Securities of any series pursuant to
Sections 11.08 or 11.09 the Issuer shall furnish the Subordinated Trustee for
the Securities of such series with an Officers’ Certificate and an Opinion of
Counsel confirming that the Issuer is entitled to exercise the right of
redemption.


 


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SECTION 11.03.                      Selection of
Securities to Be Redeemed.


 


If less than all the Securities are to be redeemed, the Issuer may
select the series to be redeemed, and if less than all of the Securities of any
series are to be redeemed, the particular Securities of that series to be
redeemed shall be selected not more than 45 days prior to the Redemption Date
by the Subordinated Trustee for the Securities of such series, from the
Outstanding Securities of that series not previously called for redemption, by
such method as the Subordinated Trustee for the Securities of such series shall
approve and which may provide for the selection for redemption of portions
(equal to the minimum authorized denomination for Securities of that series, or
any integral multiple thereof) of the principal amount of Securities of that
series or a denomination larger than the minimum authorized denomination for
Securities of that series pursuant to Section 3.02 in the currency or
currency unit in which the Securities of such series are denominated.


 


The Issuer shall promptly notify in writing the Subordinated Trustee
for the Securities of the series selected for redemption and, in the case of
any Securities of a series selected for partial redemption, the principal
amount thereof to be redeemed.


 


For all purposes of this Subordinated Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities which has been or is
to be redeemed.


 


SECTION 11.04.                      Notice of
Redemption.


 


Unless otherwise specified in the Securities of a series, notice of
redemption shall be given in the manner provided in Section 1.06 not later
than 30 days and not earlier than 60 days (or, in the case of partial
redemptions, 45 days) prior to the Redemption Date, to each Holder of
Securities to be redeemed and, with respect to the Perpetual Subordinated
Capital Securities, the Subordinated Trustee, the Calculation Agent and any
Paying Agent of such series.  A notice
or redemption relating to a series of Perpetual Subordinated Capital Securities
shall be irrevocable.


 


All notices of redemption shall state:


 


(1)                                  the
Redemption Date;


 


(2)                                  the
Redemption Price;


 


(3)                                  if
less than all Outstanding Securities of a particular series are to be redeemed,
the identification (and, in the case of partial redemption, the respective
principal amounts) of the particular Securities to be redeemed;


 


(4)                                  that
on the Redemption Date the Redemption Price will become due and payable upon
each such Security or portion thereof, and that interest thereon, if any, shall
cease to accrue on and after said date;


 


(5)                                  the
place or places where such Securities are to be surrendered for payment of the
Redemption Price;


 


(6)                                  that
the redemption is for a sinking fund, if such is the case; and


 


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(7)                                  the
Common Code(s), CUSIP number(s) and ISIN, if any, with respect to such
Securities.


 


Notice of redemption of Securities to be redeemed at the election of
the Issuer shall be given by the Issuer or, at the Issuer’s written request, by
the Subordinated Trustee for such Securities in the name and at the expense of
the Issuer.


 


SECTION 11.05.                      Deposit of
Redemption Price.


 


Subject in the case of Perpetual Subordinated Debt Securities and
Perpetual Subordinated Capital Securities to the Solvency Condition being
satisfied by the Issuer, on or prior to any Redemption Date, and to any consent
required of the Financial Services Authority having been obtained, the Issuer
shall deposit with the Subordinated Trustee for the Securities to be redeemed
(or, if the Issuer is acting as its own Paying Agent for such Securities, segregate
and hold in trust as provided in Section 10.03) an amount of money in the
currency or currency unit in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 3.01 for the Securities
of such series and except as provided in Sections 3.11(b), 3.11(d) and 3.11(e))
sufficient to pay the principal amount (or, if the context so requires, lesser
amount in the case of Discounted Securities) of (and premium, if any, thereon),
and (except if the Redemption Date shall be an Interest Payment Date) any
accrued interest on and, subject to Section 3.07, Deferred Interest, if
any, on all the Securities which are to be redeemed on that date.


 


SECTION 11.06.                      Securities
Payable on Redemption Date.


 


(a)                                  Subject,
in the case of Perpetual Subordinated Debt Securities and Perpetual
Subordinated Capital Securities, to the Solvency Condition being satisfied by
the Issuer and such other requirements as may be set out in the terms for a
series being satisfied, and to any consent required of the Financial Services
Authority having been obtained, notice of redemption having been given as
aforesaid, the Securities so to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price therein specified in the currency
or currency unit in which the Securities of such series are payable (except as
otherwise provided pursuant to Section 3.01 for the Securities of such
series and except as provided in Sections 3.11(b), 3.11(d) and 3.11(e)) and
from and after such date (unless the Issuer shall default in the payment of the
Redemption Price) such Securities shall cease to bear interest.  Upon surrender of such Security for
redemption in accordance with said notice, such Security or specified portions
thereof shall be paid by the Issuer at the Redemption Price; provided,
however, that unless otherwise specified as contemplated by
Section 3.01, installments of interest on Registered Securities whose
Stated Maturity, if any, is on or prior to the Redemption Date shall be payable
to the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Regular Record
Dates according to their terms and the provisions of Section 3.07.


 


If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (or, if the context shall so
require, lesser amount in the case of Discounted Securities) thereof (and
premium, if any, thereon) shall, until paid, bear interest from the Redemption
Date at a rate per annum equal to the rate borne by the Security (or, in the
case of Discounted Securities, the Security’s Yield to Maturity).


 


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(b)                                 In
the event that it is so provided for in the Board Resolution or supplemental
indenture pursuant to Section 3.01 hereof establishing the terms of a
particular series of Perpetual Subordinated Capital Securities, a Redemption
Date on which any Deferred Interest Payments are due to be satisfied may be postponed
following the occurrence of a Market Disruption Event, or in other
circumstances where the Issuer is otherwise not able to raise sufficient funds
through the Alternative Coupon Satisfaction Mechanism to satisfy all Deferred
Interest Payments payable on such Redemption Date.  In such event, the Perpetual Subordinated Capital Securities of
such series will remain Outstanding and will continue to accrue and pay
interest in accordance with their terms, and such postponement of the
Redemption Date will not constitute a Capital Security Default; provided that
if any Deferred Interest has not been paid, or an amount set aside for payment,
within 14 days after the date on which any such Market Disruption Event is no
longer continuing, such failure will constitute a Capital Security Default,
subject to Section 5.03(b)(2).  In
addition, to the extent set forth in such Board Resolution or supplemental
indenture, following postponement of a Redemption Date as described above,
interest will accrue on outstanding Deferred Interest Payments that would
otherwise have been satisfied on such initially scheduled Redemption Date from
(and including) such initial Redemption Date to (but excluding) the date such
Deferred Interest Payments are paid, at the rate of interest applicable to such
series of Perpetual Subordinated Capital Securities.


 


SECTION 11.07.                      Securities
Redeemed in Part.


 


Any Security which is to be redeemed only in part shall be surrendered
at the Place of Payment (with, if the Issuer, the Subordinated Trustee or the
Security Registrar for such Security so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Issuer, the
Subordinated Trustee and the Security Registrar for such Security duly executed
by, the Holder thereof or his attorney duly authorized in writing), and the
Issuer shall execute and such Subordinated Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, a new Security
or Securities, of any authorized denomination as requested by such Holder, of
the same series and having the same terms and provisions and in an aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered; except that, if a global Security is
so surrendered, the Issuer shall execute, and the Subordinated Trustee shall
authenticate and deliver to the Depositary for such global Security, without
service charge, a new global Security of like tenor in a denomination equal to
and in exchange for the unredeemed portion of the principal amount of the
global Security so surrendered.


 


SECTION 11.08.                      Tax Event
Redemption.


 


(a)                                  The
Securities of any series may be redeemed, subject to any other terms set forth
herein and in the Board Resolution or supplemental indenture pursuant to
Section 3.01 hereof establishing the terms of such Securities, and
subject, in the case of Perpetual Subordinated Debt Securities and Perpetual
Subordinated Capital Securities of any series, to the Solvency Condition being
satisfied by the Issuer, as a whole but not in part, at the option of the
Issuer, upon not more than 60 days’ nor less than 30 days’ prior notice to the
Holders of such Securities, at a Redemption Price equal to 100% of the
principal amount thereof (or, if the context so requires, such lesser amount in
the case of Discounted Securities) (and premium, if any, thereon), together
with accrued interest for the then current interest period and Deferred
Interest, if any, thereon to the Redemption Date, and any Securities
convertible or exchangeable into Preference Shares may, at the option of the
Issuer, be converted or 


 


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exchanged as a whole, upon the occurrence of a Tax Event or Tax Call
Event; provided,
that Securities of any such series may not be so redeemed if an obligation of
the Issuer to pay additional amounts or to account as provided in the
definitions of Tax Event and Tax Call Event arises because of the official
application or interpretation of the laws or regulations affecting taxation of
the country in which the Issuer is organized, or any political subdivision or
taxing authority thereof or therein having power to tax, as a result of the
consolidation, amalgamation or merger of the Issuer with or into, or the
conveyance, transfer or lease by the Issuer of its properties and assets
substantially as an entirety to, any Person.


 


(b)                                 Prior
to the redemption of any series of Securities following the occurrence of a Tax
Event or Tax Call Event, the Issuer shall be required, before it gives a notice
of redemption, to deliver to the Subordinated Trustee an Officers’ Certificate
stating that all conditions precedent to such redemption have been complied
with and an Opinion of Counsel concluding that in the opinion of such counsel a
Tax Event or Tax Call Event has occurred and the Issuer is entitled to exercise
its right of redemption in accordance with the terms of the Securities.


 


(c)                                  If
the Issuer provides an Opinion of Counsel in the appropriate jurisdiction, dated
as of the date of the relevant event referred to above, that no obligation to
pay any additional amount or to account as aforesaid arises, then that Opinion
of Counsel shall be final and binding, solely for purposes of this paragraph,
on the Issuer, the Subordinated Trustee and the Holders of the Securities of
any such series as to the law of the relevant jurisdiction at the date of such
Opinion of Counsel.


 


SECTION 11.09.                      Regulatory
Event Redemption.


 


(a)                                  Subject
to the Issuer satisfying the Solvency Condition on any applicable date set for
redemption, the Dated Subordinated Debt Securities, the Perpetual Subordinated
Debt Securities and the Perpetual Subordinated Capital Securities of any series
may be redeemed, in whole but not in part, at the option of the Issuer, upon
not more than 60 days’ nor less than 30 days’ prior notice to the holders of
such Securities, at a redemption price equal to 100% of the principal amount
thereof (and premium, if any, thereon), together with accrued interest, if any,
and any Deferred Interest, if applicable, thereon to the date fixed for
redemption if a Regulatory Event is deemed to have occurred.


 


(b)                                 The
rights of the Issuer to redeem the Dated Subordinated Debt Securities, the
Perpetual Subordinated Debt Securities and the Perpetual Subordinated Capital
Securities of any series, upon the occurrence of a Regulatory Event, will be
subject to any conditions (including the consent of the Financial Services
Authority) specified in the Board Resolution or supplemental indenture
establishing the terms of such Securities being satisfied.


 


(c)                                  With
respect to the Dated Subordinated Debt Securities, the Perpetual Subordinated
Debt Securities and the Perpetual Subordinated Capital Securities, in the case
of redemption upon the occurrence of a Regulatory Event, the Issuer shall be
required, before it gives a notice of redemption, to deliver to the
Subordinated Trustee an Officers’ Certificate confirming that all conditions
precedent to such redemption have been complied with.


 


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ARTICLE TWELVE



SINKING FUNDS


 


SECTION 12.01.                      Applicability
of This Article.


 


Redemption of Securities of any series through operation of a sinking
fund as permitted or required by the terms of any such Securities shall be made
in accordance with such terms and (except as otherwise specified pursuant to
Section 3.01 with respect to Securities of such series) this Article; provided ,
however, that if any of the terms of any such Securities shall
conflict with any provision of this Article, the terms of such Securities shall
govern; and provided,
further, that the option or obligation of the Issuer to make any
sinking fund payment with respect to any Perpetual Subordinated Debt Securities
or Perpetual Subordinated Capital Securities shall be subject to the Solvency
Condition being satisfied by the Issuer and to any consent required of the
Financial Services Authority having been obtained.


 


The minimum amount of any sinking fund payment provided for by the
terms of Securities of any particular series is herein referred to as a
“mandatory sinking fund payment”, and any payment in excess of such minimum
amount provided for by the terms of Securities of any particular series is
herein referred to as an “optional sinking fund payment”.  If provided for by the terms of Securities
of any particular series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 12.02.  Each sinking fund payment shall be applied
to the redemption of Securities of any particular series as provided for by the
terms of Securities of that series.


 


SECTION 12.02.                      Satisfaction
of Sinking Fund Payments With Securities.


 


The Issuer (i) may deliver Outstanding Securities of a series (other
than any Securities previously called for redemption), and (ii) may apply as a
credit Securities of a series which have been redeemed either at the election
of the Issuer pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms
of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms
of such series; provided, however, that such Securities have not been
previously so credited.  Such Securities
shall be received and credited for such purpose by the Subordinated Trustee for
such Securities at the principal amount thereof (or, if the context so
requires, such lesser amount in the case of Discounted Securities) and the
amount of such sinking fund payment shall be reduced accordingly.


 


SECTION 12.03.                      Redemption
of Securities for Sinking Fund.


 


Not less than 60 days prior to each sinking fund payment date for any
particular series of Securities (or such shorter period as shall be
satisfactory to the Subordinated Trustee for the Securities of such series),
the Issuer will deliver to the Subordinated Trustee for the Securities of such
series, an Officers’ Certificate specifying the amount of the next ensuing
mandatory sinking fund payment for that series pursuant to the terms of that
series, the portion thereof, if any, which is to be satisfied by payment of
cash in the currency or currency unit in which the Securities of that series
are payable (except as otherwise specified pursuant to Section 3.01 for
the Securities of that series and except as provided in Sections 3.11(b), 


 


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3.11(d) and 3.11(e)) and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 12.02 and shall state the basis for such credit and that such
Securities have not previously been so credited and will also deliver to such
Subordinated Trustee any Securities to be so delivered.  The Issuer or the Subordinated Trustee for
the Securities of such series shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 11.03
and cause notice of the redemption thereof to be given in the name of and at
the expense of the Issuer in the manner provided in Section 11.04.  Such notice having been duly given, the redemption
of such Securities shall be made upon the terms and in the manner stated in
Sections 11.06 and 11.07.


 


ARTICLE THIRTEEN



SUBORDINATION OF SECURITIES


 


SECTION 13.01.                      Securities
Subordinate to Certain Creditors; Definition of Relative Rights.


 


(a)                                  General.  The Issuer covenants and agrees, and each Holder
of Securities of each series, by his acceptance thereof, likewise covenants and
agrees, that, to the extent expressly provided in this Subordinated Indenture
or in the Board Resolution or supplemental indenture pursuant to
Section 3.01 establishing the terms of a series of Securities, the
Subordinated Debt Securities of each series shall constitute direct, unsecured
and unconditional obligations of the Issuer, ranking equally and ratably
without any preference among themselves and, in the event of the bankruptcy or
winding up or liquidation of the Issuer, the claims of the holders thereof
shall be subordinate to, and subject in right of payment to, the prior payment
in full of, all claims of the Senior Creditors of the Issuer with respect to
such Securities as described herein (or in the Board Resolution or supplemental
indenture pursuant to Section 3.01 establishing the terms of such series
of Securities), without any preference among themselves.  To the extent and in the manner set forth
herein or in the Board Resolution or supplemental indenture pursuant to
Section 3.01 establishing the terms of such series of Securities, the
indebtedness represented by any of the Securities and the payment of the
principal of (and premium, if any, on) and interest and Deferred Interest, if
any, on any of the Securities and any payment in connection with any applicable
sinking fund or redemption provisions or the payment of any other sums due on
any such Securities are hereby expressly made subordinate and subject in right
of payment to the prior payment in full, in cash or cash equivalents, to all
claims of Senior Creditors with respect to such series and, with respect to any
Perpetual Subordinated Debt Securities and Perpetual Subordinated Capital
Securities, conditional upon the Solvency Condition being satisfied by the
Issuer as described in paragraph (b) of this Section.


 


(b)                                 No
payment of principal, premium, if any, interest, if any, or Deferred Interest,
if any, or in connection with any sinking fund or redemption provision in
respect of any of the Perpetual Subordinated Debt Securities or Perpetual
Subordinated Capital Securities, and no purchase of any of the Perpetual
Subordinated Debt Securities or Perpetual Subordinated Capital Securities,
beneficially by or for the account of the Issuer or any of the Subsidiaries of
the Issuer shall be made unless two members of the Board of Directors of the
Issuer or the Auditors or (if the Issuer is in bankruptcy, winding up or
liquidation in England and Wales) the liquidator of the Issuer shall have
reported to the Subordinated Trustee within 14 days before such payment or
within 6 months before such redemption or purchase that in their or, as the
case may be, his opinion the Solvency Condition would be satisfied by the Issuer
both 


 


85

















 


at the time of and immediately after such payment, redemption or
purchase.  Any such report shall, in the
absence of manifest error, be treated and accepted by the Issuer, the
Subordinated Trustee, and the Holders of any of the Securities as correct and
sufficient evidence of such satisfaction of the Solvency Condition.


 


(c)                                  Subordination
of Dated Subordinated Debt Securities. 
The rights and claims of the holders of any series of Dated Subordinated
Debt Securities are subordinated to Senior Creditors with respect to such
Securities, or any other subordinated debt securities of the Issuer not
expressed to rank equally with or junior to such Securities.


 


The following are “Senior Creditors” with respect to any
series of Dated Subordinated Debt Securities unless otherwise provided in the
Board Resolution or supplemental indenture pursuant to Section 3.01
establishing the terms of such Securities: (i) any creditors who are
unsubordinated creditors with claims admitted in the event of the winding up of
the Issuer; (ii) any creditors having claims in respect of liabilities that
are, or are expressed to be subordinated, whether only in the event of a
winding up or otherwise, to the claims of unsubordinated creditors of the
Issuer but not further or otherwise; (iii) any creditor who is a holder of
Securities other than the Dated Subordinated Debt Securities except those that
rank, or are expressed to rank, equally with or junior to such series of Dated
Subordinated Debt Securities.


 


In the event the Issuer is subject to any bankruptcy, winding up or
liquidation proceedings, if the amounts payable with respect to the Dated
Subordinated Debt Securities and any claims ranking pari passu with any such
Securities are not paid in full, the holders of any such Securities and holders
of other claims ranking pari passu with any such Securities shall share ratably
in any distribution of the assets of the Issuer in proportion to the respective
amounts to which they are entitled.


 


(d)                                 Subordination
of Perpetual Subordinated Debt Securities. 
The rights and claims of the holders of any series of Perpetual
Subordinated Debt Securities are subordinated to Senior Creditors with respect
to such Securities, including claims of any holders of Dated Subordinated Debt
Securities or any other subordinated debt securities of the issuer not
expressed to rank equally with or junior to the Perpetual Subordinated Debt
Securities.


 


The following are “Senior Creditors” with respect to any
series of Perpetual Subordinated Debt Securities unless otherwise provided in
the Board Resolution or supplemental indenture pursuant to Section 3.01
establishing the terms of such Securities: (i) any creditors who are
unsubordinated creditors with claims admitted in the event of the winding up of
the Issuer; (ii) any creditors having claims in respect of liabilities that
are, or are expressed to be subordinated, whether only in the event of a
winding up or otherwise, to the claims of unsubordinated creditors of the
Issuer but not further or otherwise; (iii) any creditor who is a holder of
Securities other than the Perpetual Subordinated Debt Securities except those
that rank, or are expressed to rank, equally with or junior to such series of
Perpetual Subordinated Debt Securities.


 


No principal, premium, if any, and interest and Deferred Interest, if
any, or any sinking fund or redemption payments in respect of any of the
Perpetual Subordinated Debt Securities which under the terms of such Perpetual
Subordinated Debt Securities or the provisions of this Subordinated Indenture
would otherwise be due for payment by the Issuer


 


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when the Solvency Condition is not satisfied shall be due and payable
(without prejudice to the provisions of Section 5.03 with respect to a
Payment Event), and instead such principal, premium, if any, and interest and
Deferred Interest, if any, or any sinking fund or redemption payments will
become due and payable only if and when and to the extent that the Issuer could
make such payment in whole or in part and the Issuer could still satisfy the
Solvency Condition immediately thereafter.


 


In the event of the bankruptcy, winding up or liquidation of the
Issuer, the amount that shall be payable with respect to the Perpetual
Subordinated Debt Securities of each series shall be determined by calculating
the amount, if any, as would have been payable in respect thereof as if, on the
day immediately prior to the commencement of any such bankruptcy, winding up or
liquidation and thereafter, the Holders of such Perpetual Subordinated Debt
Securities were the holders of the most senior class of preference shares of
the Issuer having a preferential right to a return of assets in any such
bankruptcy, winding up or liquidation over the holders of all issued classes of
share capital (including all classes of preference shares of the Issuer) for
the time being, assuming that such preference shares were entitled (to the
exclusion of other rights or privileges) to receive as a return of capital in
such bankruptcy, winding up or liquidation an amount equal to the principal
amount of the Perpetual Subordinated Debt Securities of such series then
Outstanding together with premium, if any, and interest accrued to the date of
repayment, if any.  In the event such
amounts and any claims ranking pari passu are not paid in full, the
holders of such Securities and claims will share ratably in any such
distribution of the assets of the Issuer in proportion to the respective
amounts to which they are entitled


 


(e)                                  Subordination
of Perpetual Subordinated Capital Securities.  The rights and claims of the holders of any series of Perpetual
Subordinated Capital Securities are subordinated to Senior Creditors with
respect to such Securities, including claims of any holders of Dated
Subordinated Debt Securities, Perpetual Subordinated Debt Securities or any
other subordinated debt securities of the issuer not expressed to rank equally
with or junior to the Perpetual Subordinated Capital Securities.


 


The following are “Senior Creditors” with respect to any
series of Perpetual Subordinated Capital Securities unless otherwise provided
in the Board Resolution or supplemental indenture pursuant to Section 3.01
establishing the terms of such Securities: (i) any creditors who are
unsubordinated creditors with claims admitted in the event of the winding up of
the Issuer; (ii) any creditors having claims in respect of liabilities that
are, or are expressed to be subordinated, whether only in the event of a
winding up or otherwise, to the claims of unsubordinated creditors of the
Issuer but not further or otherwise; (iii) any creditor who is a holder of
Securities other than the Perpetual Subordinated Capital Securities except
those that are expressed to rank equally with or junior to such series of
Perpetual Subordinated Capital Securities; and (iv) all other creditors having
claims, including other such creditors holding subordinated debt securities,
except those that rank, or are expressed to rank, equally with (including
holders of Parity Securities) or junior to (including holders of Junior
Securities) the claims of any holder of Perpetual Subordinated Capital
Securities of such series.


 


No principal, premium, if any, and interest and Deferred Interest, if
any, or any sinking fund or redemption payments in respect of any of the
Perpetual Subordinated Capital Securities which under the terms of such
Perpetual Subordinated Capital Securities or the provisions of this
Subordinated Indenture would otherwise be due for payment by the Issuer 


 


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when the Solvency Condition is not satisfied shall be due and payable
(without prejudice to the provisions of Section 5.03 with respect to a
Payment Event), and instead such principal, premium, if any, and interest and
Deferred Interest, if any, or any sinking fund or redemption payments will
become due and payable only if and when and to the extent that the Issuer could
make such payment in whole or in part and the Issuer could still satisfy the
Solvency Condition immediately thereafter.


 


In the event of the bankruptcy, winding up or liquidation of the
Issuer, the amount that shall be payable with respect to the Perpetual
Subordinated Capital Securities of each series shall be determined by
calculating the amount, if any, as would have been payable in respect thereof
as if, on the day immediately prior to the commencement of any such bankruptcy,
winding up or liquidation and thereafter, the Holders of such Perpetual
Subordinated Capital Securities were the holders of preference shares in the
capital of the Issuer having a preferential right to a return of assets in the
winding up over the holders of the ordinary shares of the Issuer (but pari passu
with the most senior ranking class of issued preference shares of the Issuer,
if any, except to the extent such preference shares represent claims of Senior
Creditors), assuming that such preference shares were entitled (to the
exclusion of other rights or privileges) to receive as a return of capital in
such bankruptcy, winding up or liquidation an amount equal to the principal
amount of the Perpetual Subordinated Capital Securities of such series then
Outstanding together with premium, if any, interest accrued to the date of
repayment, if any, and Deferred Interest to the extent provided for pursuant to
Section 3.01.  In the event such
amounts and any claims ranking pari passu are not paid in full, the
holders of such Securities and claims will share ratably in any such
distribution of the assets of the Issuer in proportion to the respective
amounts to which they are entitled.


 


(f)                                    Order of
Payment.  In the event of the
bankruptcy, winding up or liquidation of the Issuer, all amounts in respect of
any of the Securities issued by such Issuer paid to the Subordinated Trustee
for the Securities of any series by the applicable liquidator of the Issuer in
the bankruptcy, winding up or liquidation of the Issuer shall be held by such
Subordinated Trustee upon trust:


 


(1)                                  firstly,
for payment or satisfaction of the costs, charges, expenses (including
reasonable counsel fees) and liabilities incurred by such Subordinated Trustee
in or about the execution of the trusts of these presents (including any unpaid
remuneration for such Subordinated Trustee);


 


(2)                                  secondly,
for payment of claims of all Senior Creditors with respect to Dated
Subordinated Debt Securities in the bankruptcy, winding up or liquidation of
the Issuer to the extent that such claims are admitted to proof in the
bankruptcy, winding up or liquidation (not having been satisfied out of the
other resources of the Issuer) excluding interest accruing after commencement
of the bankruptcy, winding up or liquidation;


 


(3)                                  thirdly,
for payment pari
passu and ratably of the amounts owing on or in respect of all Dated
Subordinated Debt Securities of any such series issued hereunder by such
Issuer;


 


(4)                                  fourthly,
for the payment of claims of all Senior Creditors with respect to Perpetual
Subordinated Debt Securities in the bankruptcy, winding up or liquidation of
the Issuer to the extent that such claims are admitted as proof in the
bankruptcy, winding up or 


 


88

















 


liquidation (not having been satisfied out of the other resources of
the Issuer) excluding interest accruing after commencement of the bankruptcy,
winding up or liquidation;


 


(5)                                  fifthly,
for payment pari
passu and ratably of the amounts owing on or in respect of all
Perpetual Subordinated Debt Securities of any series issued hereunder by such
Issuer; and


 


(6)                                  sixthly,
for the payment of claims of all Senior Creditors with respect to Perpetual
Subordinated Capital Securities in the bankruptcy, winding up or liquidation of
the Issuer to the extent that such claims are admitted as proof in the
bankruptcy, winding up or liquidation (not having been satisfied out of the
other resources of the Issuer) excluding interest accruing after commencement
of the bankruptcy, winding up or liquidation;


 


(7)                                  seventhly,
for payment pari
passu and ratably of the amounts owing on or in respect of all
Perpetual Subordinated Capital Securities of any series issued hereunder by
such Issuer.


 


The trust mentioned above may be performed by the Subordinated Trustee
paying over to the applicable liquidator the amounts received by the
Subordinated Trustee as aforesaid (less any amounts thereof applied in the
implementation of such trust) on terms that such liquidator shall distribute
the same accordingly and the receipt of such liquidator for the same shall be a
good discharge to the Subordinated Trustee for the performance by it of such
trust.  The Subordinated Trustee shall
be entitled and it is hereby authorized to call for and to accept as conclusive
evidence thereof a certificate from the applicable liquidator as to: (i) the
amount of the claims of the Senior Creditors with respect to each series of
Subordinated Debt Securities referred to above; and (ii) the Persons entitled
thereto and their respective entitlements.


 


(g)                                 Amounts
Held in Trust.  The provisions of
this Section shall not be applicable to any amounts of principal, premium,
if any, and interest and Deferred Interest, if any, or any amounts in
connection with any applicable sinking fund or redemption provisions or payment
of any other sums due on any such Securities, in respect of any of the
Securities for the payment of which funds have been deposited in trust with the
Subordinated Trustee or any Paying Agent or have been set aside by the Issuer
in trust in accordance with the provisions of this Subordinated Indenture; provided,
however, that at the time of such deposit or setting aside, and
immediately thereafter, the foregoing provisions of this Section are
complied with.


 


(h)                                 Subrogation.  In a bankruptcy, winding up or liquidation in
England and Wales of the Issuer, subject to the satisfaction in full of all
claims of Senior Creditors of the Issuer admitted in such bankruptcy, winding
up or liquidation, the Holders of the Securities shall be subrogated (pro rata
with the holders (or the trustees for such holders) of other pari passu
claims, including the Holders of all other Securities issued hereunder on the
basis of the respective amounts paid over, directly or through the applicable
liquidator, to or for the benefit of such Senior Creditors) to the rights of
such Senior Creditors to receive payments or distributions of cash, property or
securities of the Issuer applicable to claims of such Senior Creditors until
the principal, premium, if any, and interest, if any, in respect of any such
Securities, shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to such Senior Creditors of cash, property or
securities of the Issuer to which any such Holders or the Subordinated Trustee
would be entitled except for the provisions of 


 


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this Section, and no payment over by any such Holders or the
Subordinated Trustee, directly or through the applicable liquidator, to or for
the benefit of such Senior Creditors pursuant to the provisions of this
Section, shall, as between the Issuer, its creditors other than such Senior
Creditors, and any such Holders and the Subordinated Trustee be deemed to be a
payment by the Issuer to or on account of such Senior Creditors.


 


SECTION 13.02.                      Provisions
Solely to Define Relative Rights.


 


The provisions of this Article Thirteen are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Securities of each series on the one hand and the Senior Creditors of the
Issuer on the other hand.  Other than as
provided for in this Subordinated Indenture, any Board Resolutions or
supplemental indentures pursuant to Section 3.01 with respect to any
series of Securities, nothing contained in this Article or elsewhere in
this Subordinated Indenture or in the Securities is intended to or shall (a)(i)
impair, as among the Issuer, its creditors (other than Senior Creditors) and
the Holders of any Securities issued by such Issuer, the obligation of the
Issuer, which is absolute and unconditional, to pay to the Holders of such
claims the principal of, premium, if any, on and interest and Deferred
Interest, if any, on such Securities as and when the same shall become due and
payable in accordance with their terms and this Subordinated Indenture or (ii)
affect the relative rights against such Issuer of the Holders of any such
Securities and creditors of such Issuer (other than the Senior Creditors) or
(iii) prevent the Subordinated Trustee or such Holders from exercising all
remedies otherwise permitted by applicable law upon default under this
Subordinated Indenture, subject to the rights, if any, under this
Article of the Senior Creditors of the Issuer to receive cash, property or
securities otherwise payable or deliverable to the Subordinated Trustee or such
Holders; or (b) prevent the Subordinated Trustee or such Holders from
exercising all remedies otherwise permitted by applicable law upon default
under this Subordinated Indenture.


 


SECTION 13.03.                      Subordinated
Trustee to Effectuate Subordination.


 


Each Holder of Securities by his acceptance thereof authorizes and
directs the Subordinated Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination of such Securities
provided in this Article Thirteen and appoints the Subordinated Trustee
his attorney-in-fact for any and all such purposes.


 


SECTION 13.04.                      No Waiver of
Subordination Provisions.


 


No right of any present or future Senior Creditors of the Issuer, if
any, to enforce subordination as herein provided shall at any time in any way
be prejudiced or impaired by any act or failure to act on the part of the
Issuer or by any act or failure to act, in good faith, by any such Senior
Creditors of the Issuer, if any, or by any non-compliance by the Issuer with
the terms, provisions and covenants of this Subordinated Indenture, regardless
of any knowledge thereof that any such Senior Creditors of the Issuer, if any,
may have or be otherwise charged with.


 


SECTION 13.05.                      Notice to
Subordinated Trustee.


 


The Issuer
shall give prompt written notice to the Subordinated Trustee of any fact known
to it which would prohibit the making of any payment when due to or by the
Subordinated Trustee in respect of any Securities.  Notwithstanding the provisions of this 


 


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Article or any other provision of this Subordinated Indenture but
subject to the provisions of Section 13.01, the Subordinated Trustee shall
not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment when due to or by the Subordinated Trustee
in respect of any such Securities unless and until the Subordinated Trustee
shall have received written notice thereof from the Issuer or a Senior Creditor
of such Issuer, as the case may be, or from any trustee therefor, as the case
may be; and, prior to the receipt of any such written notice by a Responsible
Officer of the Subordinated Trustee, the Subordinated Trustee, subject to the
provisions of Section 6.01, shall be entitled in all respects to assume
that no such facts exist; provided, however, that if the
Subordinated Trustee shall not have received the notice provided for in this
Section at least three Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any, on) and
interest and Deferred Interest, if any, on any Security), then, subject to the provisions
of Section 13.01, the Subordinated Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it within three Business Days prior to such date.


 


Subject to the provisions of Section 6.01, the Subordinated
Trustee shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a Senior Creditor or a
trustee therefor, to establish that such notice has been given by a Senior
Creditor of such Issuer or a trustee therefor. 
In the event that the Subordinated Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a
Senior Creditor of such Issuer to participate in any payment or distribution
pursuant to this Article, the Subordinated Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Subordinated Trustee as
to the amount of claims held by such Person, and if such evidence is not
furnished, the Subordinated Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.


 


SECTION 13.06.                      Reliance on
Judicial Order or Certificate of Liquidating Agent.


 


Upon any payment or distribution of assets of the Issuer referred to in
this Article, the Subordinated Trustee, subject to the provisions of
Section 6.01, and the Holders of the Securities shall be entitled to
conclusively rely upon (i) any order or decree entered by any court in England
and Wales in which any bankruptcy, winding up or liquidation of the Issuer, if
any, or similar case or proceeding, including a proceeding for the suspension of
payments under English and Welsh law, is pending, or (ii) a certificate of the
applicable liquidator, assignee for the benefit of creditors, agent or other
Person making such payment or distribution, delivered to the Subordinated
Trustee and such Holders, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the Senior Creditors of the
Issuer, if any, as the case may be, and other claims against such Issuer the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.


 


SECTION 13.07.                      Subordinated
Trustee Not Fiduciary for Creditors.


 


The Subordinated Trustee shall not be deemed to owe any fiduciary duty
to the Senior Creditors of the Issuer, if any, as the case may be, and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of the Securities or to the 


 


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Issuer or to any other Person cash, property or securities to which any
such Senior Creditors or depositors and other creditors shall be entitled by
virtue of this Article or otherwise. 
With respect to the Senior Creditors, the Subordinated Trustee
undertakes to perform or to observe only such of its covenants or obligations
as are specifically set forth in this Article and no implied covenants or
obligations with respect to the Senior Creditors shall be read into this
Indenture against the Subordinated Trustee.


 


SECTION 13.08.                      Rights of
Subordinated Trustee as Creditor; Preservation of Subordinated Trustee’s
Rights.


 


The Subordinated Trustee in its individual capacity shall be entitled
to all the rights set forth in this Article with respect to any claims of
Senior Creditors of the Issuer, if any, as the case may be, which may at any
time be held by it, to the same extent as any other Senior Creditors of the
Issuer, if any, as the case may be, and nothing in this Subordinated Indenture
shall deprive the Subordinated Trustee of any of its rights as such holder.


 


Nothing in this Article shall apply to claims of, or payments to,
the Subordinated Trustee under or pursuant to Section 6.07.


 


SECTION 13.09.                      Article Applicable
to Paying Agents.


 


In case at any time any Paying Agent other than the Subordinated
Trustee shall have been appointed by the Issuer and be then acting hereunder,
the term “Subordinated Trustee” as used in this Article shall in such case
(unless the context otherwise requires) be construed as extending to and including
such Paying Agent within its meaning as fully for all intents and purposes as
if such Paying Agent were named in this Article in addition to or in place
of the Subordinated Trustee; provided, however, that Section 13.08 shall
not apply to the Issuer or any Affiliate of the Issuer, if the Issuer or such
Affiliate acts as Paying Agent.


 


SECTION 13.10.                      Conversion
or Exchange Not Deemed Payment.


 


For the purposes of this Article Thirteen only, delivery of
Preference Shares upon conversion or exchange of Securities in accordance with
Article Fourteen, if applicable to a particular series of Securities,
shall not be treated as constituting a payment or distribution on account of
the principal of the Securities or on account of the purchase or other acquisition
of the Securities.  Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Issuer, its creditors and the Holders
of the Securities, the right, which if applicable to a particular series of
Securities is absolute and unconditional, of the Issuer to convert or exchange
the Securities in accordance with Article Fourteen.


 


ARTICLE FOURTEEN


 


CONVERSION OR EXCHANGE OF SECURITIES


 


SECTION 14.01.                      Applicability
of Article.


 


If specified
pursuant to Section 3.01 for the Securities of any series, the Securities
of such series shall be convertible or exchangeable in accordance with their
terms and (except as otherwise specified as contemplated by Section 3.01
for Securities of such series) in 


 


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accordance
with this Article.  Unless otherwise
specified pursuant to Section 3.01 for the Securities of any series, the
Securities of each series shall be convertible or exchangeable, at the Issuer’s
option and in its sole discretion, in whole or in part, into Preference Shares
in each case in accordance with this Article.


 


SECTION 14.02.                      Election to
Convert or Exchange; Notice to Subordinated Trustee.


 


An election of the Issuer
to convert or exchange Securities, as the case may be, shall be evidenced by an
Officers’ Certificate furnished to the Subordinated Trustee stating that the
Issuer is entitled to effect such conversion or exchange and setting forth a
statement of facts demonstrating the same.


 


SECTION 14.03.                      Notice of
Conversion or Exchange


 


Not less than
30 days nor more than 60 days prior to the Event Date, the Issuer
shall notify the Subordinated Trustee in writing of its election to convert or
exchange, as the case may be, the Securities and of the series of Securities to
which such election relates.  The
Subordinated Trustee shall within five Business Days after receipt of such
notice from the Issuer and at the expense of the Issuer, cause notice of such
election to be mailed to each Holder of Securities to be converted or
exchanged, as the case may be.


 


All notices of conversion or exchange shall be prepared by the Issuer
and shall state:


 


(1)                                  the Event Date;


 


(2)                                  if less than all of
the series of the Securities are to be converted or exchanged, the
identification of the particular Securities to be converted or exchanged,
including relevant CUSIP numbers and other securities identification numbers,
which Securities shall be selected by the Subordinated Trustee from the
Outstanding Securities of such series not previously called for conversion, by
such method as the Subordinated Trustee shall deem fair and appropriate provided, that if on the Event Date such
Securities are registered as a global security, the Depositary shall determine,
in accordance with its procedures, the principal amount of such Securities held
by each of the Depositary’s participants to be converted or exchanged;


 


(3)                                  that on the Event
Date, the Security to be converted or exchanged will cease to exist except, if
applicable, to evidence the Preference Shares as described in
Section 14.07 below on and after such Event Date;


 


(4)                                  if such Securities
are not registered as a global security, the place or places where such
Securities are to be surrendered for conversion or exchange;


 


(5)                                  the form in which the
Issuer will issue the Preference Shares.; and


 


(6)           such
information as may be set out in a supplemental indenture or Board Resolution
pursuant to Section 3.01.


 


SECTION 14.04.                      Deposit of
Payments.


 


Prior to 10:00 a.m., New York time, on any Event Date,
the Issuer shall deposit with the Subordinated Trustee or with a Paying Agent
an amount of money sufficient to pay 


 


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accrued interest, if any, to the Event Date on the Securities to be
converted or exchanged on the Event Date.


 


SECTION 14.05.                      Surrender of
Securities.


 


Without prejudice to the Issuer’s right to convert or exchange the
Securities, any  Security which is to be
converted or exchanged shall, unless such Security is registered as a global
security, be surrendered at an office or agency of the Issuer designated for
that purpose pursuant to Section 10.02 not less than 10 days prior to the
Event Date (with due endorsement by, or a written instrument of transfer in form
satisfactory to the Issuer and the Subordinated Trustee duly executed by the
Holder thereof or his attorney-in-fact duly authorized in writing) accompanied
by written notice specifying the name or names with address or addresses in
which the Preference Shares, are to be issued. 
The Subordinated Trustee will inform the Issuer of all such notices and
the Issuer will, if applicable, direct the ADR Depositary accordingly under the
terms of the ADR Deposit Agreement. 
Securities surrendered shall, if surrendered to any Person other than
the Subordinated Trustee, be delivered to the Subordinated Trustee for delivery
by it to the Issuer or, if delivered to the Subordinated Trustee, shall be
delivered by it to the Issuer.


 


SECTION 14.06.                      Issuance of
Preference Shares.


 


On or prior to the Event Date with respect to Securities subject to the
conversion or exchange, the Issuer shall, unless the Issuer shall have notified
the Subordinated Trustee otherwise in writing not less than 30 days nor more
than 60 days prior to the Event Date, deliver or procure the delivery of a
single share warrant to bearer to the ADR Depositary evidencing all of the
Preference Shares in respect of which such Securities are to be converted in
accordance with the provisions of this Article Fourteen.  Such conversion or exchange shall be deemed
to have been made immediately prior to the close of business in New York City
on the Event Date.


 


In the event that the
Issuer shall have notified the Subordinated Trustee that it will not deliver or
procure the delivery of a single share warrant to bearer in exchange for the
Securities of a series subject to the conversion or exchange as provided in
Section 14.05: (i) the Issuer shall, on or prior to the Event Date, with
respect to definitive Securities, deliver or procure the delivery of individual
certificates representing the Preference Shares (or evidencing the rights to
receive such Preference Shares) of such series for which such Securities are to
be converted or exchanged in accordance with the provisions of this
Article Fourteen; or (ii) in the case of Preference Shares in registered
form, such Preference Shares shall be registered in the names of the Holders of
such Securities in definitive form as they appear on the Security Register or,
at the direction of such Holder, in the name of the ADR Custodian for the
account and benefit of the ADR Depositary who will issue ADRs evidencing ADSs
representing the Preference Shares to such Holder; or (iii) in the case of
Preference Shares evidenced by share warrants to bearer, such Preference Shares
shall be delivered to the bearer of the bearer Security in definitive form or,
at the direction of such bearer, to the ADR Custodian for the account and
benefit of the ADR Depositary who will issue ADRs evidencing ADSs representing
Preference Shares to such Holder.


 


Any exchange or
conversion shall be deemed to have been made immediately prior to the close of
business in New York City on the Event Date.


 


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SECTION 14.07.                      Effect of
Conversion or Exchange.


 


Notice of conversion or
exchange having been given as aforesaid, the Securities so to be converted or
exchanged, as the case may be, shall on the Event Date cease to exist for any
purpose, other than to evidence the Preference Shares as described below.  Upon the Event Date accrued interest, if
any, on such Security to the Event Date and all other amounts due and owing
hereunder shall be paid by the Issuer to the Holder of the relevant Security.
Such payment shall be a condition to the conversion or exchange and no
conversion or exchange shall occur unless such payments are made.


 


On and after the Event Date, each Security converted or exchanged,
until surrendered, shall be deemed to evidence the right to receive the
Preference Shares with a liquidation preference equivalent to the principal
amount of such Security upon such surrender. 
On and after the Event Date, until a Holder of a Security has
surrendered such Security, such Holder shall be entitled to receive any
dividends, payments or other distributions in respect of such Preference Shares
and shall have the same rights with respect to, and shall be deemed to be the
Holder of, such Preference Shares as if it had so surrendered such Security on
or prior to the Event Date; provided, however, that no dividends,
payments or other distributions in respect of such Preference Shares shall be
paid or distributed to such Holder any earlier than the date on which such
Security is surrendered.


 


SECTION 14.08.                      Validity of
Preference Shares, Depositary Agreement and ADRs.


 


The Issuer shall take all
corporate and other action which may be necessary in order that it may validly
and legally issue Preference Shares upon each conversion or exchange of the
Outstanding Securities.  The Issuer
covenants that the Preference Shares will when issued upon such conversion or
exchange be duly authorized and validly issued, fully paid, free of all liens
and charges, and not subject to calls for further funds.


 


The Issuer will take all
corporate or other action which may be necessary to ensure (i) the validity and
enforceability of the Depositary Agreement and (ii) that the applicable ADRs
may be validly and legally issued upon each conversion or exchange of the
Outstanding Securities for Preference Shares.


 


SECTION 14.09.                      Legal and
Regulatory Compliance.


 


Notwithstanding any
provision of this Subordinated Indenture to the contrary, the right of the
Issuer to cause any conversion or exchange of the Securities of any series for
Preference Shares on any proposed Event Date shall, unless otherwise provided
in a supplemental indenture or Board Resolution pursuant to Section 3.01, be
subject to the fulfillment of the following conditions with respect to such
Securities of such series, and the Issuer represents and warrants for the
benefit of the holders of Preference Shares that all such conditions shall have
been satisfied prior to any such conversion or exchange on the Event Date:


 


(1)                                  as
of such Event Date, there shall be no accrued but unpaid interest (including
Deferred Interest) outstanding on the Securities of such Series (including
amounts paid on the Event Date) or other unpaid amounts then due and owing
hereunder;


 


 


 


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(2)                                  as
of such Event Date, no Event of Default, Payment Default, Payment Event or
Capital Security Event Default shall have occurred and be continuing with
respect to the particular series of Securities;


 


(3)                                  as
of such Event Date, there has not been, in any one instance or in the
aggregate, an adverse effect on the rights, powers, privileges, validity or
enforceability of the Preference Shares, the ADRs or the Deposit Agreement;


 


(4)                                  the
Preference Shares to be issued on such Event Date shall be duly authorized and
reserved for issuance upon such conversion and when issued upon such exchange,
will be fully paid and not subject to calls for further funds;


 


(5)                                  no
consents, authorizations, approvals or exemptions, except in each case such as
shall have been obtained, will be required prior to such Event Date for the
issuance and delivery of the Preference Shares to be issued upon such
conversion or exchange or the ADRs;


 


(6)                                  the
issuance and delivery of the Preference Shares and the ADRs to be issued on
such Event Date shall not violate (i) the Articles of Association of the Issuer
or (ii) any law, rule or regulation applicable to the Issuer;


 


(7)                                  there
shall have not occurred any change in law in England, or any amendment of the
Articles of Association of the Issuer, prior to such Event Date, materially and
adversely affecting the rights and privileges attached to the Preference Shares
or the ADRs (including, without limitation, the rights of the holders thereof
in the event of a bankruptcy or other similar proceeding with respect to the
Issuer) or such holders’ access to the courts of the United Kingdom and other
applicable governmental authorities to enforce such rights; and


 


(8)                                  such
other condition(s) as may be set out in a supplemental indenture or Board
Resolution pursuant to Section 3.01. 



 


SECTION 14.10.                      Taxes and
Charges.


 


Unless otherwise
specified pursuant to Section 3.01, the issuance and delivery of
Preference Shares upon conversion or exchange of the Securities of any series
pursuant to this Article Fourteen shall be made without charge to the
converting or exchanging Holder of Securities for such Preference Shares, or
for any tax or other governmental charge (other than taxes on income or capital
gains) in respect of the issuance or delivery of such Preference Shares; provided,
however, that the Issuer shall not be required to pay any tax or other
governmental charge which may be payable in respect of (a) issuance or delivery
of Preference Shares by or at the direction or request of a Holder thereof to
any Person who is or is a nominee or agent for a Person whose business is or
includes the provision of clearance services within the meaning of
Section 70 or Section 96 of the Finance Act of 1986 or whose business
is or includes issuing depositary receipts within the meaning of
Section 67 or Section 93 of the Finance Act of 1986, other than the
ADR Depositary or ADR Custodian or any successor thereto, all such Persons
being “Excepted Persons”, or (b) a transfer involved in the issuance and
delivery of any such Preference Shares to any Person other than any Holder (not
being an Excepted Person) of the Security to be converted or exchanged (unless
such other person is the securities depositary selected by the Issuer for the
Securities of such series), and, without prejudice to the Issuer’s right to
convert or exchange the Securities, the 


 


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Issuer shall not be
required to issue or deliver or procure the delivery of such Preference Shares
unless and until the Person requesting the issuance or delivery thereof shall
have paid to the Issuer the amount of such tax or other governmental charge or
shall have established to the satisfaction of the Issuer that such tax or other
governmental charge has been paid.


 


SECTION 14.11.                      Subordinated
Trustee Not Liable.


 


The Subordinated Trustee
shall not be accountable with respect to the validity or value (or the kind or
amount) of any Preference Shares which may be issued or delivered upon the
conversion or exchange of any Security pursuant to this Article Fourteen,
and makes no representation with respect thereto.  The Subordinated Trustee shall not be responsible for any failure
of the Issuer to issue, transfer or deliver or procure the delivery of any
Preference Shares upon the surrender of any Security for the purpose of a
conversion or exchange pursuant to this Article Fourteen or to comply with
any of the covenants of the Issuer contained in this Article Fourteen.


 


*    *    *


 


This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original but all such counterparts
shall together constitute but one and the same instrument.


 


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IN WITNESS WHEREOF, the parties hereto have caused this Subordinated
Indenture to be duly executed as of the date first written above.


 


	
   

  	
  PRUDENTIAL plc,

  
	
   

  	
   

  
	
   

  	
  as Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANDREW CROSSLEY

  	
   

  
	
   

  	
   

  	
  Name: Andrew Crossley

  
	
   

  	
   

  	
  Title: Director, Group Finance

  
	
   

  	
   

  	
  and Risk

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITIBANK, N.A.

  
	
   

  	
   

  
	
   

  	
  as Subordinated
  Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ NANCY FORTE

  	
   

  
	
   

  	
   

  	
  Name: Nancy Forte

  
	
   

  	
   

  	
  Title: Assistant Vice President

  



 


98