Document:

Exhibit 4.9

 

THE ROYAL BANK OF SCOTLAND PLC

 

as Issuer

 

THE ROYAL BANK OF SCOTLAND GROUP PLC

 

as Guarantor

 

TO

 

 

THE BANK OF NEW YORK MELLON

acting through its London Branch

as Trustee

 

 

FORM OF INDENTURE

 

 

 

 

Subordinated Debt Securities

 

  

  

  

 

THE ROYAL BANK OF SCOTLAND GROUP plc

 

Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and the Subordinated Debt Securities Indenture, dated as of [·].

 

	

Trust Indenture

Act Section

	 	 	
Subordinated Debt Securities Indenture Section

	
§310

	
(a)(1)

	 	
6.09

	  	
(a)(2)

	 	
6.09

	  	
(a)(3)

	 	
Not Applicable

	  	
(a)(4)

	 	
Not Applicable

	  	
(b)

	 	
6.08, 6.10

	  	
(c)

	 	
Not Applicable

	
§311

	
(a)

	 	
6.13

	  	
(b)

	 	
6.13

	  	
(b)(2)

	 	
7.03(a), 7.03(b)

	  	
(c)

	 	
Not Applicable

	
§312

	
(a)

	 	
7.01, 7.02(a)

	  	
(b)

	 	
7.02(b)

	  	
(c)

	 	
7.02(c)

	
§313

	
(a)

	 	
7.03(a)

	  	
(b)

	 	
7.03(a)

	  	
(c)

	 	
1.06, 7.03(a)

	  	
(d)

	 	
7.03(b)

	
§ 314

	
(a)

	 	
7.04, 10.06

	  	
(b)

	 	
Not Applicable

	  	
(c)(1)

	 	
1.02

	  	
(c)(2)

	 	
1.02

	  	
(c)(3)

	 	
Not Applicable

	  	
(d)

	 	
Not Applicable

	  	
(e)

	 	
1.02

	  	
(f)

	 	
Not Applicable

	
§315

	
(a)

	 	
6.01

	  	
(b)

	 	
6.02, 7.03(a)

	  	
(c)

	 	
6.01

	  	
(d)

	 	
6.01

	  	
(d)(1)

	 	
6.01

	  	
(d)(2)

	 	
6.01

	  	
(d)(3)

	 	
6.01

	  	
(e)

	 	
5.14

	
§316

	
(a)(1)(A)

	 	
5.02, 5.12

 

  

2

  

 

	  	
(a)(l)(B)

	
5.13

	  	
(a)(2)

	
Not Applicable

	  	
(a)(last sentence)

	
1.01

	  	
(b)

	
5.08

	
§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 the Subordinated Debt Securities Indenture.

 

  

3

  

 

TABLE OF CONTENTS

 

	  	
Page

	
ARTICLE 1

	
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

	
Section 1.01.  Definitions

	
8

	
Section 1.02.  Compliance Certificates and Opinions

	
18

	
Section 1.03.  Form of Documents Delivered to Trustee

	
18

	
Section 1.04.  Acts of Holders

	
19

	
Section 1.05.  Notices, Etc. to Trustee, Company and Guarantor

	
20

	
Section 1.06.  Notice to Holders; Waiver

	
20

	
Section 1.07.  Conflict with Trust Indenture Act

	
21

	
Section 1.08.  Effect of Headings and Table of Contents

	
21

	
Section 1.09.  Successors and Assigns

	
21

	
Section 1.10.  Separability Clause

	
21

	
Section 1.11.  Benefits of Subordinated Debt Securities Indenture

	
21

	
Section 1.12.  Governing Law

	
22

	
Section 1.13.  Saturdays, Sundays and Legal Holidays

	
22

	
Section 1.14.  Appointment of Agent for Service

	
22

	
Section 1.15.  Calculation Agent

	
23

	
Section 1.16.  Waiver of Jury Trial

	
23

	
ARTICLE 2

	
SUBORDINATED DEBT SECURITY FORMS

	
Section 2.01.  Forms Generally

	
23

	
Section 2.02.  Form of Trustee's Certificate of Authentication

	
24

	
ARTICLE 3

	
THE SUBORDINATED DEBT SECURITIES

	
Section 3.01.  Amount Unlimited, Issuable in Series

	
25

	
Section 3.02.  Denominations

	
27

	
Section 3.03.  Execution, Authentication, Delivery and Dating

	
27

	
Section 3.04.  Temporary Subordinated Debt Securities

	
29

	
Section 3.05.  Registration, Registration of Transfer and Exchange

	
29

	
Section 3.06.  Mutilated, Destroyed, Lost and Stolen Subordinated Debt Securities

	
33

	
Section 3.07.  Payment; Interest Rights Preserved

	
34

	
Section 3.08.  Persons Deemed Owners

	
35

	
Section 3.09.  Cancellation

	
36

	
Section 3.10.  Computation of Interest

	
36

	
Section 3.11.  CUSIP Numbers

	
36

	
Section 3.12.  Additional Subordinated Debt Securities

	
36

	
Section 3.13.  Correction of Minor Defects in or Amendment of Subordinated Debt Securities

	
37

 

 

4

 

 

	
ARTICLE 4

	
SATISFACTION AND DISCHARGE

	
Section 4.01.  Satisfaction and Discharge of Subordinated Debt Securities Indenture

	
37

	
Section 4.02.  Application of Trust Money

	
38

	
Section 4.03.  Repayment to Company

	
39

	
Section 4.04.  U.K. Financial Services Authority Consent

	
39

	
ARTICLE 5

	
REMEDIES

	
Section 5.01.  Events of Default

	
39

	
Section 5.02.  Acceleration of Maturity; Rescission and Annulment

	
39

	
Section 5.03.  Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee

	
41

	
Section 5.04.  Trustee May File Proofs of Claim

	
42

	
Section 5.05.  Trustee May Enforce Claims Without Possession of Subordinated Debt Securities

	
43

	
Section 5.06.  Application of Money Collected

	
43

	
Section 5.07.  Limitation on Suits

	
44

	
Section 5.08.  Unconditional Right of Holders to Receive Principal, Premium and Interest, if any

	
45

	
Section 5.09.  Restoration of Rights and Remedies

	
45

	
Section 5.10.  Rights and Remedies Cumulative

	
45

	
Section 5.11.  Delay or Omission Not Waiver

	
45

	
Section 5.12.  Control by Holders

	
46

	
Section 5.13.  Waiver of Past Defaults

	
46

	
Section 5.14.  Undertaking for Costs

	
46

	
ARTICLE 6

	
THE TRUSTEE

	
Section 6.01.  Certain Duties and Responsibilities

	
47

	
Section 6.02.  Notice of Defaults

	
47

	
Section 6.03.  Certain Rights of Trustee

	
47

	
Section 6.04.  Not Responsible for Recitals or Issuance of Subordinated Debt Securities

	
49

	
Section 6.05.  May Hold Subordinated Debt Securities

	
49

	
Section 6.06.  Money Held in Trust

	
49

	
Section 6.07.  Compensation and Reimbursement

	
49

	
Section 6.08.  Disqualification; Conflicting Interests

	
51

	
Section 6.09.  Corporate Trustee Required; Eligibility

	
51

	
Section 6.10.  Resignation and Removal; Appointment of Successor

	
51

	
Section 6.11.  Acceptance of Appointment by Successor

	
53

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

	
54

	
Section 6.13.  Preferential Collection of Claims

	
54

	
Section 6.14.  Appointment of Authenticating Agent

	
55

 

 

5

 

 

 

	
ARTICLE 7

	
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY

	Section 7.01.  The Company or the Guarantor to Furnish Trustee Names and Addresses of Holders 56
	
Section 7.02.  Preservation of Information; Communication to Holders

	
57

	
Section 7.03.  Reports by Trustee

	
57

	
Section 7.04.  Reports by Company and the Guarantor

	
58

	
ARTICLE 8

	
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER

	
Section 8.01.  Company or Guarantor May Consolidate, Etc., Only on Certain Terms

	
59

	
Section 8.02.  Successor Corporation Substituted

	
59

	
Section 8.03.  Assumption of Obligations

	
59

	
Section 8.04.  Notification of Assumption or Substitution To The U.K. Financial Services Authority

	
61

	
ARTICLE 9

	
SUPPLEMENTAL INDENTURES

	
Section 9.01.  Supplemental Indentures without Consent of Holders

	
61

	
Section 9.02.  Supplemental Indentures with Consent of Holders

	
62

	
Section 9.03.  Execution of Supplemental Indentures

	
64

	
Section 9.04.  Effect of Supplemental Indentures

	
64

	
Section 9.05.  Conformity with Trust Indenture Act

	
64

	
Section 9.06.  Reference in Subordinated Debt Securities to Supplemental Indentures

	
64

	
Section 9.07.  Notification of Modification or Supplemental Indenture

	
64

	
ARTICLE 10

	
COVENANTS

	
Section 10.01.  Payment of Principal, Premium, and Interest

	
64

	
Section 10.02.  Maintenance of Office or Agency

	
65

	
Section 10.03.  Money for Payments to be Held in Trust

	
65

	
Section 10.04.  Additional Amounts

	
67

	
Section 10.05.  Corporate Existence

	
69

	
Section 10.06.  Statement as to Compliance

	
69

	
Section 10.07.  Original Issue Document

	
69

	
ARTICLE 11

	
REDEMPTION OF SUBORDINATED DEBT SECURITIES

	
Section 11.01.  Applicability of Article

	
69

	
Section 11.02.  Election to Redeem; Notice to Trustee

	
69

 

 

 

6

 

 

	
Section 11.03.  Selection by Trustee of Subordinated Debt Securities to Be Redeemed

	
69

	
Section 11.04.  Notice of Redemption

	
70

	
Section 11.05.  Deposit of Redemption Price

	
71

	
Section 11.06.  Subordinated Debt Securities Payable on Redemption Date

	
71

	
Section 11.07.  Subordinated Debt Securities Redeemed in Part

	
71

	
Section 11.08.  Optional Redemption Due to Changes in Tax Treatment

	
72

	
Section 11.09.  Optional Redemption For Regulatory Purposes

	
72

	
Section 11.10.  Early Redemption - U.K. Financial Services Authority Consent

	
73

	
ARTICLE 12

	
SUBORDINATION OF SUBORDINATED DEBT SECURITIES

	
Section 12.01.  Subordinated Debt Securities Subordinate to Claims of Senior Creditors

	
73

	
Section 12.02.  Provisions Solely to Define Relative Rights

	
74

	
Section 12.03.  Trustee to Effectuate Subordination

	
74

	
Section 12.04.  No Waiver of Subordination Provisions

	
74

	
Section 12.05.  Notice to Trustee

	
75

	
Section 12.06.  Reliance on Judicial Order or Certificate of Liquidating Agent

	
75

	
Section 12.07.  Trustee Not Fiduciary for Senior Creditors

	
76

	
Section 12.08.  Rights of Trustee as Senior Creditor; Preservation of Trustee's Rights

	
76

	
Section 12.09.  Article Applicable to Paying Agents

	
76

	
ARTICLE 13

	
GUARANTEE AND INDEMNITY

	
Section 13.01.  The Guarantee

	
76

	
Section 13.02.  Net Payments

	
77

	
Section 13.03.  Subordination of the Guarantee

	
77

	
Section 13.04.  Guarantee Unconditional, Etc

	
79

	
Section 13.05.  Reinstatement

	
79

	
Section 13.06.  Subrogation

	
79

	
Section 13.07.  Indemnity

	
80

	
Section 13.08.  Assumption By Guarantor

	
80

 

  

7

  

 

SUBORDINATED DEBT SECURITIES INDENTURE, dated as of [·] between THE ROYAL BANK OF SCOTLAND PLC, a corporation incorporated in Scotland with registered number SC090312 (the “Company”), having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB, United Kingdom, THE ROYAL BANK OF SCOTLAND GROUP PLC, a corporation incorporated in Scotland with registered number SC045551 (the “Guarantor”), having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK OF NEW YORK MELLON, (previously named The Bank of New York), acting through its London Branch, a banking corporation duly organized and existing under the laws of the State of New York as Trustee (the “Trustee”), having its Corporate Trust Office at One Canada Square, London E14 5AL.

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the execution and delivery of this Subordinated Debt Securities Indenture to provide for the issuance from time to time of its Subordinated Debt Securities (the “Subordinated Debt Securities”), to be issued in one or more series, represented by one or more Global Securities in registered form, or represented by definitive Subordinated Debt Securities in registered form, the amount and terms of each such series to be determined as hereinafter provided.

 

All things necessary to make this Subordinated Debt Securities Indenture a valid and binding agreement of the Company, in accordance with its terms, have been done.

 

All things necessary to make the Guarantees, when executed by the Guarantor and endorsed on the Subordinated Debt Securities issued under this Subordinated Debt Securities Indenture, and authenticated and delivered hereunder, the valid obligations of the Guarantor, and to make this Subordinated Debt Securities Indenture a valid agreement of the Guarantor, in accordance with their and its terms, have been done.

 

NOW, THEREFORE, THIS SUBORDINATED DEBT SECURITIES INDENTURE WITNESSETH:

 

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

 

ARTICLE 1                      

 

Definitions and Other Provisions of General Application

 

Section 1.01. Definitions.  For all purposes of this Subordinated Debt Securities Indenture, except as otherwise expressly provided 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;

 

  

8

  

 

(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 and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United Kingdom at the date of such computation and as applied by the Company;

 

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

 

(5)           any reference to an “Article” or a “Section” refers to an Article or Section of this Subordinated Debt Securities Indenture.

 

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

 

“Additional Amounts” has the meaning specified in Section 10.04.

 

“Additional Subordinated Debt Securities” has the meaning set forth in Section 3.12.

 

“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.

 

“Agent Member” means a member of, or participant in, any Depositary.

 

“Auditors” means the Auditors from time to time of the Company or if there shall be joint Auditors of the Company any one or more of such joint Auditors.

 

“Authenticating Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Subordinated Debt Securities. Initially the Trustee shall act as Authenticating Agent.

 

“Authorized Newspaper” means a newspaper in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in the place in connection with which the term is used, which, in the United Kingdom, will be the Financial Times of London, if 

 

  

9

  

 

practicable, and which, in the United States, will be the Wall Street Journal, if practicable, and which, in Luxembourg, will be the Luxemburger Wort, if practicable and for so long as and only with respect to any Subordinated Debt Securities listed on the Luxembourg Stock Exchange, and if it shall be impracticable in the opinion of the Company or the Trustee, as applicable, to make any publication of any notice required hereby in any such newspaper, shall mean any publication or other notice in lieu thereof which is made or given with the approval of the Company or the Trustee, as applicable, and which may include publication or other notice to members through DTC, Euroclear and Clearstream.

 

“Board of Directors” means either the board of directors, or any committee of such board duly authorized to act with respect hereto, of the Company, or the Guarantor, as applicable, which board of directors or committee may, to the extent permitted by applicable law, delegate its authority.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or a Deputy or Assistant Secretary of the Company to have been duly adopted by the Board of Directors of the Company, or an authorized committee thereof, and to be in full force and effect on the date of such certification and delivered to the Trustee.

 

“Business Day” means, with respect to any Place of Payment, except as may otherwise be provided in the form of Subordinated Debt Securities of any particular series, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

 

“Calculation Agent” means the Person, if any, authorized by the Company to calculate the interest rate or other amounts from time to time in relation to any series of Subordinated Debt Securities.

 

“Capital Disqualification Event”, unless otherwise provided as contemplated by Section 3.01, shall be deemed to have occurred if, as a result of any amendment to, or change in, the Capital Regulations which are in effect at the time of issue of any series of Subordinated Debt Securities, such series of Subordinated Debt Securities which comprise a certain class of Eligible Capital at the time of issuance will no longer qualify as such Eligible Capital and such disqualification has been confirmed by the FSA, or its successor.

 

“Capital Regulations” means, at any time, the regulations, requirements, guidelines and policies relating to capital adequacy then in effect of the U.K. Financial Services Authority or its successor.

 

“Capital Resources Requirement” and “Overall Financial Adequacy Rule” have the respective meanings given to such terms in the Capital Regulations and shall include any successor terms from time to time equivalent thereto as agreed between the Company and the Trustee.

 

  

10

  

 

“Clearstream” means, Clearstream Banking, société anonyme, or its nominee or its or their successor.

 

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, 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 at such time.

 

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

 

“Company Request” and “Company Order” mean, respectively, a written request or order signed in the name of the Company by an Executive Officer and delivered to the Trustee.

 

“Corporate Trust Office” means the office of the Trustee in which its corporate trust business is principally administered, which, with respect to The Bank of New York Mellon, acting through its London Branch, is currently located at One Canada Square, London E14 5AL (Attention: Corporate Trust Administration, Facsimile: +44 20 7964 2536).

 

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

 

“Default” has the meaning specified in Section 5.03.

 

“Deferred Amounts” has the meaning specified in Section 3.07.

 

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

 

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

 

“Deferred Record Date”, when used for the interest payable on any Deferred Payment Date on Subordinated Debt Securities of any series, means the date specified for the purpose pursuant to Section 3.01.

 

“Depositary” means, with respect to any series of Subordinated Debt Securities, a clearing agency that is designated to act as Depositary for the Global Securities evidencing all or part of such Subordinated Debt Securities as contemplated by Section 3.05.

 

“Dollar” or “$” or any similar reference means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.

 

  

11

  

 

“DTC” means The Depository Trust Company or its nominee or its or their successor.

 

“Eligible Capital” means that the Subordinated Debt Securities of any series are treated at the time of issue by the U.K. Financial Services Authority, or its successor, as eligible for inclusion in the Upper Tier 2 Capital or Lower Tier 2 Capital (as each such term, or the equivalent thereto from time to time, has the meaning given to it in the Capital Regulations), as the case may be, of the Company or the Guarantor.

 

“euro” or “€” means the currency of the member states of the European Union (“EU”) that have adopted the single currency in accordance with the treaty establishing the European Community, as amended from time to time.

 

“Euroclear” means, the Euroclear Bank S.A./N.V. as operator of the Euroclear System, or its nominee, or its or their successor.

 

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

 

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

 

“Executive Officer” means any Director, or the Group General Counsel, or the Group Secretary, or the Group Treasurer, or the Deputy Group Treasurer, or the Deputy Group Secretary, or any Assistant Secretary of the Company or the Group, as applicable, or the Head of Markets, Group Treasury, or duly authorized Commissioner and Attorney of the Company or the Group, as applicable, in terms of the Commission and Power of Attorney from time to time in effect and registered in the Books of Council and Session, in Edinburgh and, in each case, any other person authorized by a Board Resolution or a Guarantor Board Resolution, or a resolution of the Group Asset and Liability Management Committee or a subcommittee thereof, to carry out the functions such officer performs.

 

“Foreign Currency” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts

 

“Foreign Government Securities” means with respect to Subordinated Debt Securities of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

 

  

12

  

 

“Global Security” means a global certificate evidencing all or part of a series of Subordinated Debt Securities, authenticated and delivered to the Holder and registered in the name of the Holder or its nominee.

 

“Guarantee” means the unconditional guarantee, on a subordinated basis, by the Guarantor of the payment of the principal of, any premium or interest on, and any additional amounts with respect to the Subordinated Debt Securities.

 

“Guarantor” means The Royal Bank of Scotland Group plc, until a successor Person shall have become such pursuant to the applicable provisions of the Subordinated Debt Securities Indenture, and thereafter “Guarantor” shall mean such successor Person.

 

“Guarantor Board Resolution” means a copy of a resolution certified by the Secretary or a Deputy or Assistant Secretary of the Guarantor to have been duly adopted by the Board of Directors of the Guarantor or duly authorized committee thereof and to be in full force and effect on the date of such certification and delivered to the Trustee.

 

“Guarantor’s Officer Certificate” means a certificate signed by an Executive Officer of the Guarantor and delivered to the Trustee.

 

“Guarantor Senior Creditors” means (a) creditors of the Guarantor whose claims are admitted to proof in the winding up or Qualifying Administration of the Guarantor and who are unsubordinated creditors of the Guarantor; and (b) creditors of the Guarantor whose claims are or are expressed to be subordinated to the claims of other creditors of the Guarantor (other than those whose claims constitute, or would but for any applicable limitation on the amount of such capital, constitute, Tier 1 Capital or Tier 2 Capital or whose claims rank or are expressed to rank pari passu with, or junior to, the claims of Holders).

 

“Holder” means a Person in whose name a Subordinated Debt Security in global or definitive form is registered in the Subordinated Debt Security Register.

 

The term “interest”, when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

 

“Interest Payment Date”, when used with respect to any Subordinated Debt Security, means the Stated Maturity of any installment of interest on such Subordinated Debt Security.

 

“Liquidator” has the meaning specified in Section 12.06.

 

“Losses” means any and all claims, losses, liabilities, damages, costs, expenses and judgments (including legal fees and expenses) sustained by the Company or the Trustee.

 

“Maturity”, when used with respect to any Subordinated Debt Security, means the date, if any, on which the principal of such Subordinated Debt Security becomes due 

 

  

13

  

 

and payable as therein or herein provided, whether at the Stated Maturity or otherwise, by call for redemption, winding-up of the Company or otherwise.

 

“Officer’s Certificate” means a certificate delivered to the Trustee and signed by any Executive Officer.

 

“Opinion of Counsel” means a written opinion of legal advisors, who may be an employee of or legal advisors for the Company and the Guarantor or other legal advisors acceptable to the Trustee.

 

“Original Issue Discount Security” means any Subordinated Debt Security which provides for an amount less than the principal amount to be due and payable upon a declaration of the Maturity thereof.

 

“Outstanding”, when used with respect to Subordinated Debt Securities or any series of Subordinated Debt Securities means, as of the date of determination, all Subordinated Debt Securities or all Subordinated Debt Securities of such series, as the case may be, theretofore authenticated and delivered under this Subordinated Debt Securities Indenture, except:

 

(i)           Subordinated Debt Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

 

(ii)          Subordinated Debt Securities, or portions thereof, for whose payment or redemption money, U.S. Government Obligations or Foreign Government Securities in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the Company or the Guarantor) in trust or set aside and segregated in trust by the Company or the Guarantor (if the Company shall act as its own or authorize the Guarantor to act as, Paying Agent) for the Holders of such Subordinated Debt Securities; provided, that, if such Subordinated Debt Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Subordinated Debt Securities Indenture or provision therefor satisfactory to the Trustee has been made; and

 

(iii)         Subordinated Debt Securities which have been paid pursuant to Section 11.06 or in exchange for or in lieu of which other Subordinated Debt Securities have been authenticated and delivered pursuant to this Subordinated Debt Securities Indenture, other than any such Subordinated Debt Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Subordinated Debt Securities are held by a bona fide purchaser in whose hands such Subordinated Debt Securities are valid obligations of the Company;

 

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Subordinated Debt Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of a Subordinated Debt Security denominated in a Foreign Currency 

 

  

14

  

 

shall be the Dollar equivalent, determined on the date of original issuance of such Subordinated Debt Security, of the principal amount of such Subordinated Debt Security; and (ii) Subordinated Debt Securities beneficially owned by the Company, the Guarantor or any other obligor upon the Subordinated Debt Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Subordinated Debt Securities which a Responsible Officer of the Trustee has received an Officer’s Certificate stating that such Subordinated Debt Securities are so beneficially owned shall be so disregarded; provided, further, however, that Subordinated Debt Securities so beneficially owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Subordinated Debt Securities and that the pledgee is not the Company, the Guarantor or any other obligor upon the Subordinated Debt Securities or any Affiliate of the Company, the Guarantor or of such other obligor.

 

“Paying Agent” means any Person (which may include the Company or the Guarantor) authorized by the Company to pay the principal of (and premium, if any) or interest, if any on any Subordinated Debt Securities on behalf of the Company.

 

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

 

“Place of Payment”, when used with respect to the Subordinated Debt Securities of any series, means the place or places where the principal of (and premium, if any) and interest, if any, on the Subordinated Debt Securities of that series are payable as specified pursuant to Section 3.01 or, if not so specified, as specified in Section 10.02.

 

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

 

“Qualifying Administration” means that an administrator has been appointed in respect of the Company or the Guarantor, as the case may be, and notice has been given that it intends to declare and distribute a dividend.

 

“Redemption Date”, when used with respect to any Subordinated Debt Security to be redeemed, means the date fixed for such redemption by or pursuant to this Subordinated Debt Securities Indenture.

 

  

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“Redemption Price”, when used with respect to any Subordinated Debt Security to be redeemed, means the price at which it is to be redeemed pursuant to this Subordinated Debt Securities Indenture.

 

“Regular Record Date” for the interest payable on any Interest Payment Date on Subordinated Debt Securities of any series means the date specified for the purpose pursuant to Section 3.01.

 

“Relevant Supervisory Consent” means any necessary prior consent of, or following the giving of due notice, no objection being received to the relevant redemption, payment, repayment, purchase, modification or substitution, as the case may be, from, the U.K. Financial Services Authority or its successor.

 

“Responsible Officer”, when used with respect to the Trustee, means any officer of the Trustee assigned to or working in the Corporate Trust Department of the Trustee or, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Subordinated Debt Securities Indenture.

 

“Senior Creditors” means (a) creditors of the Company whose claims are admitted to proof in the winding up or Qualifying Administration of the Company and who are unsubordinated creditors of the Company; and (b) creditors of the Company whose claims are or are expressed to be subordinated to the claims of other creditors of the Company (other than those whose claims constitute, or would but for any applicable limitation on the amount of such capital, constitute, Tier 1 Capital or Upper Tier 2 Capital or whose claims rank or are expressed to rank pari passu with, or junior to, the claims of Holders).

 

“Stated Maturity”, when used with respect to any Subordinated Debt Security or any installment of principal thereof or interest thereon, means the date or dates, if any, specified in, or determined in accordance with the terms of, such Subordinated Debt Security as the fixed date or dates on which the principal of such Subordinated Debt Security or such installment of principal or interest is due and payable.

 

“Subordinated Debt Securities”, has the meaning set forth in the recitals of the Company herein and more particularly means any series of Subordinated Debt Securities issued, authenticated and delivered under this Subordinated Debt Securities Indenture.

 

“Subordinated Debt Securities Indenture” means this instrument as originally executed or 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 shall include the terms and forms of particular series of Subordinated Debt Securities established pursuant to Section 3.01.

 

“Subordinated Debt Security” means one of the Subordinated Debt Securities.

 

  

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

 

“Subordinated Indebtedness” means claims in respect of any liability of the Company however arising for the payment of money, the right to payment of which by the Company by the terms thereof that are or are expressed to be, subordinated (whether only in the event of a winding-up of the Company or otherwise) to the claims of all or any of the creditors of the Company.

 

“Subsidiary” means a subsidiary or a subsidiary undertaking as such terms are defined in Sections 1159 and 1162 of the Companies Act 2006 of Great Britain as in force at the date as of which this instrument was executed.

 

“Taxing Jurisdiction” has the meaning specified in Section 10.04.

 

“Tier 1 Capital” has the meaning given to it by the FSA from time to time.

 

“Tier 2 Capital” has the meaning given to it by the FSA from time to time.

 

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor trustee shall have become such pursuant to the applicable provisions of this Subordinated Debt Securities Indenture, and thereafter “Trustee” shall mean the Person who is then the Trustee hereunder, and if at any time there is more than one such Person, “Trustee” shall mean and include each such Person; and “Trustee” as used with respect to the Subordinated Debt Securities of any series shall mean the Trustee with respect to the Subordinated Debt Securities of such series.

 

“Trust Indenture Act” means the 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.

 

“U.K. Financial Services Authority” or “FSA” means the Financial Services Authority or such other governmental authority in the United Kingdom (or if the Company becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory authority with respect to the Company.

 

“United Kingdom” and “U.K.” means the United Kingdom of Great Britain and Northern Ireland.

 

“United States” and “U.S.” mean the United States of America and, except in the case of Sections 6.09 and 6.14, its territories and possessions.

 

 “U.S. Government Obligations” means non-callable (i) direct obligations of the United States for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as 

 

  

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custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.

 

Section 1.02. Compliance Certificates and Opinions.  Except as otherwise expressly provided by this Subordinated Debt Securities Indenture, upon any application or request by the Company or the Guarantor to the Trustee to take any action under any provision of this Subordinated Debt Securities Indenture, the Company or the Guarantor shall furnish to the Trustee an Officer’s Certificate or a Guarantor’s Officer Certificate, as the case may be, stating that all conditions precedent, if any, provided for in this Subordinated Debt Securities Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of the legal advisor rendering such opinion all such conditions precedent, if any, have been complied with, except 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 Debt Securities Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Subordinated Debt Securities Indenture (other than Section 10.06) shall include:

 

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

 

(b) 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;

 

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

 

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

 

Section 1.03. Form of Documents Delivered to Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, 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.

 

  

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Any certificate or opinion of an officer of the Company or the Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, legal advisors, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representations by, legal advisors 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 Company or the Guarantor, as the case may be, stating that the information with respect to such factual matters is in the possession of the Company or the Guarantor, as the case may be, unless such legal advisors know, or in the exercise of reasonable care should know, that the certificate or opinion or representation with respect to such matters is 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 Debt Securities Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 1.04. Acts of Holders.  (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Subordinated Debt Securities 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; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company and the Guarantor. 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 shall be sufficient for any purpose of this Subordinated Debt Securities Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company and the Guarantor, if made in the manner provided in this Section.

 

(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 a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. When such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution 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 Trustee deems sufficient.

 

(c) The ownership of Subordinated Debt Securities shall be proved by the Subordinated Debt Security Register.

 

(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Subordinated Debt Security shall bind every future Holder 

 

  

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of the same Subordinated Debt Security and the Holder of every Subordinated Debt 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 Trustee, the Company or the Guarantor in reliance thereon, whether or not notation of such action is made upon such Subordinated Debt Security or such other Subordinated Debt Security.

 

Section 1.05. Notices, Etc. to Trustee, Company and Guarantor.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Subordinated Debt Securities Indenture to be made upon, given or furnished to, or filed with,

 

(a) the Trustee by any Holder or by the Company or the Guarantor shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile or email delivery of a copy of such document) to the Trustee at its Corporate Trust Office, and the Trustee agrees to accept and act upon facsimile transmission or email delivery of written instructions pursuant to this Subordinated Debt Securities Indenture, provided, however, that (x) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (y) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions; or

 

(b) the Company or the Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, in the case of the Company, first-class air mail postage prepaid, addressed to it at the address of its principal office specified in the first paragraph of this Subordinated Debt Securities Indenture (unless another address has been previously furnished in writing to the Trustee by the Company, in which case at the last such address) marked “Attention: Company Secretary”.

 

Section 1.06. Notice to Holders; Waiver.  When this Subordinated Debt Securities Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if given in writing and mailed, first-class postage prepaid, to each Holder of a Subordinated Debt Security affected by such event in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act with respect to reports pursuant to Section 7.03(a).

 

For so long as the Subordinated Debt Securities of any series are represented by Global Securities, the Company will deliver a copy of all notices with respect to such series to the Holder (if the address of such Holder is known to the Company).

 

When notice to Holders of Subordinated Debt Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Subordinated Debt Securities Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either 

 

  

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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 Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 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 by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

If the Subordinated Debt Securities are listed on the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so require, all notices to Holders, will be published in an Authorized Newspaper in Luxembourg.

 

Section 1.07. Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Subordinated Debt Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. If at any future time any provision required to be included herein by the Trust Indenture Act as in force at the date as of which this Subordinated Debt Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Subordinated Debt Securities Indenture were executed at such future time, the Company, the Guarantor and the Trustee may enter into one or more indentures supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole or in part) such provision or limitation of this Subordinated Debt Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article 9) no provision or limitation required to be included herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Subordinated Debt Securities Indenture was executed may be so changed or eliminated.

 

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 Debt Securities Indenture by the Company or the Guarantor shall bind their respective successors and assigns, whether so expressed or not.

 

Section 1.10. Separability Clause.  In case any provision in this Subordinated Debt Securities Indenture or in the Subordinated Debt 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 Debt Securities Indenture.  Nothing in this Subordinated Debt Securities Indenture or in the Subordinated Debt Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Holders of Subordinated Debt Securities, any benefit or 

 

  

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any legal or equitable right, remedy or claim under this Subordinated Debt Securities Indenture.

 

Section 1.12. Governing Law.  This Subordinated Debt Securities Indenture and the Subordinated Debt 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 Sections 12.01 and 13.03, which shall be governed by and construed in accordance with the laws of Scotland, and except that the authorization and execution of this Subordinated Debt Securities Indenture and the Subordinated Debt Securities shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company, the Guarantor and the Trustee, as the case may be.

 

Section 1.13. Saturdays, Sundays and Legal Holidays.  The terms of the Subordinated Debt Securities shall provide that, in any case where any Interest Payment Date, Redemption Date, Maturity or Stated Maturity, of a Subordinated Debt Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Subordinated Debt Securities Indenture or the Subordinated Debt Securities other than a provision in the Subordinated Debt Securities that specifically states that such provision shall apply in lieu of this Section) payments of interest, if any (and premium, if any) or principal and the exchange of the Subordinated Debt Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment (or such other Business Day as shall be provided in such Subordinated Debt Security) with the same force and effect as if made on such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, provided that no interest shall accrue on such payment for the period from and after such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, as the case may be.

 

Section 1.14. Appointment of Agent for Service.  Each of the Company and the Guarantor has designated and appointed John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Subordinated Debt Securities or this Subordinated Debt Securities Indenture, but for that purpose only, and agrees that service of process upon said John Fawcett 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 the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Subordinated Debt Securities remain Outstanding until the appointment of a successor by the Company or the Guarantor and such successor’s acceptance of such appointment. Upon such acceptance, the Company or the Guarantor shall notify the Trustee of the name and address of such successor. Each of the Company and the Guarantor 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 John Fawcett in full force and effect so long as any of the 

 

  

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Subordinated Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company or the Guarantor to take any such action. Each of the Company and the Guarantor 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 waives, to the extent it may effectively do so and any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

 

Section 1.15. Calculation Agent.  If the Company appoints a Calculation Agent pursuant to Section 3.01 with respect to any series of Subordinated Debt Securities, any determination of the interest rate on, or other amounts in relation to, such series of Subordinated Debt Securities in accordance with the terms of such series of Subordinated Debt Securities by such Calculation Agent shall (in the absence of manifest error, bad faith or willful misconduct) be binding on the Company, the Guarantor, the Trustee and all Holders and (in the absence of manifest error, bad faith or willful misconduct) no liability to the Holders shall attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions.

 

Section 1.16. Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBORDINATED DEBT SECURITIES INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

ARTICLE 2

Subordinated Debt Security Forms

 

Section 2.01. Forms Generally.  The Subordinated Debt Securities of each series shall be issuable as securities in registered form and in such forms as shall be established by or pursuant to action of the Company’s Board of Directors, an Officer’s Certificate, or in one or more indentures supplemental hereto, pursuant to Section 3.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Subordinated Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or Depositary therefor, or as may, consistently herewith, be determined by the Executive Officers executing such Subordinated Debt Securities, all as evidenced by any such execution; provided, however, that such Subordinated Debt Securities shall have endorsed thereon a statement in the following form or in substantially the following form:

 

“The rights of the holder of the Subordinated Debt Security are, to the extent and in the manner set forth in Section 12.01 of the Subordinated Debt Securities Indenture, subordinated to the claims of other creditors of the Company, and this Subordinated Debt Security is issued subject to the provisions of that Section 

 

  

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12.01, and the holder of this Subordinated Debt Security, by accepting the same, agrees to and shall be bound by such provisions. The provisions of Section 12.01 of the Subordinated Debt Securities Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with, the laws of Scotland.”

 

The Trustee’s certificates of authentication shall be in substantially the form set forth in Section 2.02 or Section 6.14.

 

The Guarantee by the Guarantor to be endorsed on the Subordinated Debt Securities of each series shall be substantially in the form set forth in this Article, or as shall be established by or pursuant to a Guarantor Board Resolution, or in one of more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Subordinated Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officer or officers executing such Guarantee, as evidenced by the Executive Officer’s or Executive Officers’ execution (whether by facsimile or otherwise) of the Guarantee.

 

The definitive Subordinated Debt Securities and Guarantees shall be printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Subordinated Debt Securities may be listed, all as determined by the officers executing such Subordinated Debt Securities, as evidenced by their execution thereof.

 

Section 2.02. Form of Trustee’s Certificate of Authentication.  The Trustee’s certificate of authentication shall be in substantially the following form:

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Subordinated Debt Securities of the series designated herein referred to in the within-mentioned Subordinated Debt Securities Indenture.

 

	
Dated:

	  

 

	
THE BANK OF NEW YORK MELLON, LONDON BRANCH

as Trustee

 

 

	
By:

	  
	
Authorized Signatory

	  

 

  

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ARTICLE 3

The Subordinated Debt Securities

 

Section 3.01. Amount Unlimited, Issuable in Series.  The aggregate principal amount of Subordinated Debt Securities which may be authenticated and delivered under this Subordinated Debt Securities Indenture is unlimited. The Subordinated Debt Securities may be issued in one or more series.

 

There shall be established by or pursuant to action of the Board of Directors of the Company, or established by an Officer’s Certificate, or established in one or more indentures supplemental hereto, prior to the initial issuance of Subordinated Debt Securities of any series,

 

(a) the title of the Subordinated Debt Securities of the series (which shall distinguish the Subordinated Debt Securities of the series from all other Subordinated Debt Securities);

 

(b) any limit upon the aggregate principal amount of the Subordinated Debt Securities of the series which may be authenticated and delivered under this Subordinated Debt Securities Indenture (except for Subordinated Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Subordinated Debt Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07 and except for any Subordinated Debt Securities which, pursuant to Section 3.03 are deemed never to have been authenticated and delivered hereunder);

 

(c) the date or dates, if any, on which the principal of (and premium, if any, on) the Subordinated Debt Securities of the series is payable;

 

(d) the rate or rates, if any, at which the Subordinated Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07(a), the terms applicable to deferred payments and the Regular Record Date for the interest payable on any Interest Payment Date, the Deferred Record Date for the interest payable on any Deferred Payment Date and any dates required to be established pursuant to Section 7.01;

 

(e) whether any premium, upon redemption or otherwise, shall be payable by the Company on Subordinated Debt Securities of the series;

 

(f) the place or places where the principal of (and premium, if any) and any interest on Subordinated Debt Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and interest on Subordinated Debt Securities of such series, at least one of such Paying Agents having offices or agencies in the Borough of Manhattan, The City of New York and if the Subordinated Debt Securities are listed on the Luxembourg Stock Exchange, in Luxembourg;

 

  

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(g) other than with respect to any redemption of the Subordinated Debt Securities pursuant to Section 11.08, whether or not such series of Subordinated Debt Securities are to be redeemable, in whole or in part, at the Company’s option and, if so redeemable, the period or periods within which, the price or prices at which and the terms and conditions upon which, Subordinated Debt Securities of the series may be redeemed, including the date referred to in Section 11.08;

 

(h) the obligation, if any, of the Company to redeem or purchase Subordinated Debt Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which Subordinated Debt Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(i) if other than denominations of $1,000 and any multiple thereof, the denominations in which Subordinated Debt Securities of the series in each applicable form shall be issuable;

 

(j) if other than the full principal amount thereof, the portion, or the manner of calculation of such portion, of the principal amount of Subordinated Debt Securities of the series which shall be payable upon a declaration of acceleration or acceleration of the Maturity thereof pursuant to Section 5.02, upon redemption of Subordinated Debt Securities of any series which are redeemable before their Stated Maturity, or which the Trustee shall be entitled to file and prove a claim pursuant to Section 5.04;

 

(k) if Additional Amounts, pursuant to Section 10.04, will not be payable;

 

(l) if other than Dollars, provisions, if any, for the Subordinated Debt Securities of the series to be denominated, and payments thereon to be made, in Foreign Currencies and specifying the Place of Payment and the manner of payment thereon and any other terms with respect thereto;

 

(m) if other than the coin or currency in which the Subordinated Debt Securities of that series are denominated, the coin or currency in which payment of the principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of such series shall be payable;

 

(n) if the principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of such series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Subordinated Debt Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;

 

(o) whether the Subordinated Debt Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and the initial Holder with respect to such Global Security or Subordinated Debt Securities;

 

  

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(p) if the Subordinated Debt Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Subordinated Debt Security of such series or otherwise) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;

 

(q) if the amounts of payments of principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of the series may be determined with reference to an index or are otherwise not fixed on the original issue date thereof, the manner in which such amounts shall be determined and the Calculation Agent, if any, who shall be appointed and authorized to calculate such amounts;

 

(r) any other Events of Default, Defaults or covenants with respect to the Subordinated Debt Securities of such series and if other than as specified in Section 5.03, the terms of any Default;

 

(s) if other than as provided in Article 12, the subordination terms with respect to the Subordinated Debt Securities of the series;

 

(t) the forms of Subordinated Debt Securities of the series; and

 

(u) any other terms of the series (which terms shall not be inconsistent with the provisions of this Subordinated Debt Securities Indenture, except as permitted by Section 9.01(d)).

 

All Subordinated Debt Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such action or in any such indenture supplemental hereto.

 

If the forms of Subordinated Debt Securities of any series, or any of the terms thereof, are established by action taken by the Board of Directors of the Company, copies of the Board Resolutions in respect thereof shall be delivered to the Trustee at or prior to the delivery of the Company Order pursuant to Section 3.03 for the authentication and delivery of such Subordinated Debt Securities.

 

Section 3.02. Denominations.  The Subordinated Debt Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specification with respect to Subordinated Debt Securities of any series, the Subordinated Debt Securities of each series shall be issuable in denominations of $1,000 each and any integral multiple thereof. Unless otherwise specified in accordance with Section 3.01, any Global Security issued and delivered to the Holder shall be issued in the form of units with each $1,000 principal amount of such Global Security constituting one unit.

 

Section 3.03. Execution, Authentication, Delivery and Dating.  The Subordinated Debt Securities shall be executed on behalf of the Company by any Executive Officer to the Company. The signature of any Executive Officer on the Subordinated Debt 

 

  

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Securities may be manual or facsimile. Subordinated Debt Securities bearing the manual or facsimile signatures of individuals who were at any time Executive Officers of the Company shall bind the Company, notwithstanding that such individual has ceased to hold such offices prior to the authentication and delivery of such Subordinated Debt Securities.

 

At any time and from time to time after the execution and delivery of this Subordinated Debt Securities Indenture, the Company may deliver Subordinated Debt Securities of any series executed by the Company having endorsed thereon the Guarantee by the Guarantor to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Subordinated Debt Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Subordinated Debt Securities. In authenticating such Subordinated Debt Securities and accepting the additional responsibilities under this Subordinated Debt Securities Indenture in relation to such Subordinated Debt Securities the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon:

 

(a) the Company Order (x) requesting such authentication and setting forth delivery instructions, and (y) attaching the form of Subordinated Debt Securities setting forth the terms thereof established pursuant to Section 3.01 of this Subordinated Debt Securities Indenture and stating the recitals contained in Section 1.02 of this Subordinated Debt Securities Indenture, including that all conditions precedent for the authentication of such Subordinated Debt Securities have been complied with; and

 

(b) an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Subordinated Debt Securities Indenture.

 

The Trustee shall not be required to authenticate such Subordinated Debt Securities if the issue of such Subordinated Debt Securities pursuant to this Subordinated Debt Securities Indenture will affect the Trustee’s own rights, duties or immunities under the Subordinated Debt Securities and this Subordinated Debt Securities Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

 

Each Subordinated Debt Security shall be dated the date of its authentication.

 

No Subordinated Debt Security appertaining thereto shall be entitled to any benefit under this Subordinated Debt Securities Indenture or be valid or obligatory for any purpose unless there appears on such Subordinated Debt Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual signature, and such certificate upon any Subordinated Debt Security shall be conclusive evidence, and the only evidence, that such Subordinated Debt Security has been duly authenticated and delivered hereunder and that such Subordinated Debt Security is entitled to the benefits of this Subordinated Debt Securities Indenture.  Notwithstanding the foregoing, if any Subordinated Debt Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Subordinated Debt Security to the Trustee for 

 

  

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cancellation as provided in Section 3.09, for all purposes of this Subordinated Debt Securities Indenture, such Subordinated Debt Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefit of this Subordinated Debt Securities Indenture.

 

Section 3.04. Temporary Subordinated Debt Securities.  Pending the preparation of definitive Subordinated Debt Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Subordinated Debt Securities, having endorsed thereon the Guarantee by the Guarantor, substantially of the tenor of the definitive Subordinated Debt Securities in lieu of which they are issued, which Subordinated Debt Securities may be printed, lithographed, typewritten, photocopied or otherwise produced. Temporary Subordinated Debt Securities shall be issuable as Subordinated Debt Securities in registered form in any authorized denomination, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Subordinated Debt Securities may determine, all as evidenced by such execution.

 

If temporary Subordinated Debt Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Subordinated Debt Securities, definitive Subordinated Debt Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Subordinated Debt Securities of such series, the temporary Subordinated Debt Securities of such series shall be exchangeable for definitive Subordinated Debt Securities of such series containing identical terms and provisions upon surrender of the temporary Subordinated Debt Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Subordinated Debt Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate principal amount of definitive Subordinated Debt Securities of the same series of authorized denominations containing identical terms and provisions. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Subordinated Debt Securities of any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Subordinated Debt Securities Indenture as definitive Subordinated Debt Securities of such series.

 

Section 3.05. Registration, Registration of Transfer and Exchange.  (a) Global Securities. This Section 3.05(a) shall apply to Global Securities unless otherwise specified, as contemplated by Section 3.01.

 

Except as otherwise specified as contemplated by Section 3.01 hereof, the Subordinated Debt Securities shall be initially issued and represented by one or more Global Securities in registered form which shall be authenticated as contemplated by this Subordinated Debt Securities Indenture.

 

Each Global Security authenticated under this Subordinated Debt Securities Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global 

 

  

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Security shall constitute a single Subordinated Debt Security for all purposes of this Subordinated Debt Securities Indenture.  Except as otherwise specified as contemplated by Section 3.01 hereof, each Global Security authenticated under this Indentures shall be initially registered in the name of DTC only.

 

Unless the Global Security is presented by an authorized representative of the Holder to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Holder and any payment is made to such nominee, any transfer, pledge or other use of the Global Security for value or otherwise shall be wrongful since the registered owner of such Global Security, the nominee of the Holder, has an interest in such Global Security.

 

Except as otherwise specified as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Subordinated Debt Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary notifies the Trustee that it is unwilling or unable to continue to act as Depositary and a successor depositary is not appointed by the Trustee within 120 days of such notification, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Subordinated Debt Securities when due, or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series should be exchanged for definitive Subordinated Debt Securities of that series. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Subordinated Debt Securities bearing interest (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which such interest shall accrue, the same Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Subordinated Debt Securities shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.

 

Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be exchangeable for Subordinated Debt Securities issuable in authorized denominations of a like aggregate principal amount and tenor.

 

No Global Security may be transferred except as a whole by the Holder to a nominee of the Holder or by the Holder or any such nominee to a successor of the Holder or a nominee of such successor. Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Subordinated Debt Securities in definitive form and will not be considered the holders thereof for any purpose under this Subordinated Debt Securities Indenture.

 

  

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In the event that a Global Security is surrendered for redemption in part pursuant to Section 11.07, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.

 

The Agent Members and any other beneficial owners shall have no rights under this Subordinated Debt Securities Indenture with respect to any Global Security held on their behalf by a Holder, and such Holder may be treated by the Company, the Guarantor, the Trustee, and any agent of the Company, the Guarantor or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall (i) prevent the Company, the Guarantor, the Trustee, or any agent of the Company, the Guarantor or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Holder or (ii) impair, as between any such Holder or other clearance service and its Agent Members and Holders, the operation of customary practices governing the exercise of the rights of a holder of any security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Subordinated Debt Securities Indenture.

 

In connection with any exchange of interests in a Global Security for definitive Subordinated Debt Securities of another authorized form, as provided in this subsection 3.05(a), then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Subordinated Debt Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Subordinated Debt Securities without charge (in which case the Company or Trustee may require payment of any taxes or governmental charges arising) and the Trustee shall authenticate and deliver, in exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Subordinated Debt Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 3.05 shall be exchangeable for Subordinated Debt Securities issuable in the denominations specified as contemplated by Section 3.01 and registered in such names as the Holder of such Global Security shall direct. If a definitive Subordinated Debt Security is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant Interest Payment Date, interest will not be payable on such Interest Payment Date in respect of such definitive Subordinated Debt Security, but will be payable on such Interest Payment Date only to the Person to whom payments of interest in respect of such portion of such Global Security are payable.

 

  

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A Depositary may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities.

 

(b) Except as otherwise specified pursuant to Section 3.01, Subordinated Debt Securities of any series and any Deferred Amounts thereon may only be exchanged for a like aggregate principal amount of Subordinated Debt Securities of such series of other authorized denominations containing identical terms and provisions and right to any Deferred Amounts. Subordinated Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Guarantor shall endorse the Guarantee thereon, and the Trustee shall authenticate and deliver, in exchange therefor the Subordinated Debt Security or Subordinated Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.

 

Except as otherwise specified pursuant to Section 3.01, the Company shall cause to be kept in the principal Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Subordinated Debt Security Register” provided, no such Subordinated Debt Security Register shall be maintained in any office or agency in the United Kingdom other than in Scotland) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Subordinated Debt Securities and of transfers of such Subordinated Debt Securities. The Trustee is hereby appointed “Subordinated Debt Security Registrar” for the purpose of registering Subordinated Debt Securities and transfers of Subordinated Debt Securities as herein provided.

 

Subordinated Debt Securities shall be transferable only on the Subordinated Debt Security Register. Upon surrender for registration of transfer of any Subordinated Debt Security of any series, together with the form of transfer endorsed on it, duly completed and executed at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and the Guarantor shall endorse the Guarantee thereon, and the Trustee shall authenticate and deliver to the address specified in the form of transfer, within three Business Days, the name of the designated transferee or transferees, one or more new Subordinated Debt Securities of the same series of any authorized denominations containing identical terms and provisions, of a like aggregate principal amount. If only part of a Subordinated Debt Security is transferred, a new Subordinated Debt Security of an aggregate principal amount equal to the amount not being transferred shall be executed by the Company (and the Guarantee shall be endorsed thereon by the Guarantor), and authenticated and delivered by the Trustee to the transferor, in the name of the transferor, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the Subordinated Debt Security.  The new Subordinated Debt Security will be delivered to the transferor by uninsured post at the risk of the transferor to the address of the transferor appearing in the Subordinated Debt Security Register.

 

  

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All Subordinated Debt Securities with a Guarantee endorsed thereon issued upon any registration of transfer or exchange of Subordinated Debt Securities shall be the valid obligations of the Company, and the Guarantor, respectively evidencing the same debt, and entitled to the same benefits under this Subordinated Debt Securities Indenture, as the Subordinated Debt Securities surrendered upon such registration of transfer or exchange.

 

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

 

No service charge shall be made for any registration of transfer or exchange of Subordinated Debt Securities, but the Company may require payment 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 Subordinated Debt Securities, other than exchanges pursuant to Section 3.04, Sections 9.06 or 11.07 not involving any transfer.

 

The Company shall not be required (i) to issue, register the transfer of or exchange any Subordinated Debt Security of any series during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Subordinated Debt Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the day of the giving of such notice, or (ii) to register the transfer of or exchange any Subordinated Debt Security so selected for redemption in whole or in part, except the unredeemed portion of any Subordinated Debt Securities being redeemed in part.

 

Section 3.06. Mutilated, Destroyed, Lost and Stolen Subordinated Debt Securities.  If any mutilated Subordinated Debt Security (including any Global Security) is surrendered to the Trustee, the Company may execute (and the Guarantee shall be endorsed thereon by the Guarantor) and the Trustee shall, in the case of a Subordinated Debt Security, authenticate and deliver in exchange therefor a new Subordinated Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

 

If there shall be delivered to the Company, the Guarantor and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Subordinated Debt Security (including any Global Security) and (ii) such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company, the Guarantor or the Trustee that such Subordinated Debt Security has been acquired by a bona fide purchaser, the Company shall execute (and the Guarantee shall be endorsed thereon by the Guarantor) and upon the Company’s request the Trustee shall authenticate and deliver in lieu of any such destroyed, lost or stolen Subordinated Debt Security a new Subordinated Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

 

  

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In case any such mutilated, destroyed, lost or stolen Subordinated Debt Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Subordinated Debt Security, pay such Subordinated Debt Security.

 

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

 

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

 

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 Subordinated Debt Securities.

 

Section 3.07. Payment; Interest Rights Preserved.  (a) Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, if the Company does not make a payment of principal (and premium, if any, on) or interest, if any, with respect to any series of Subordinated Debt Securities on the original due date for payment, the obligation to make such payment shall (subject to Section 5.08, 12.01 and (b) below) be deferred until (i) in the case of a payment of interest, the date upon which a dividend is paid on any class of the Company’s share capital and (ii) in the case of a payment of principal (and premium, if any), the first Business Day after the date that falls six months after the original due date for payment (in each of (i) and (ii) above, such date, a “Deferred Payment Date” and such deferred payment, a “Deferred Amount”).  Failure by the Company to make any such payment prior to such Deferred Payment Date (otherwise than pursuant to (b) below) shall not constitute a Default by the Company or otherwise allow any Holder to sue the Company for such payment or take any other action.  Each payment so deferred will accrue interest at the rate prevailing immediately before the original due date with respect to such payment subject to Section 5.08, 12.01 and (b) below.  Any amount the due date of which is deferred pursuant to the above shall not be treated as due for any purpose (including, without limitation, for the purposes of ascertaining whether or not a Default has occurred) until the Deferred Payment Date.

 

(b) The Company shall satisfy in full any amounts deferred pursuant to this Section 3.07 which have not been satisfied at the relevant time in cash:

 

(i) on the Maturity of the Subordinated Debt Securities;

 

  

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(ii) on any redemption of the Subordinated Debt Securities in accordance with Article 11; and/or

 

(iii) subject to Section 12.01, upon the commencement of a winding-up (except, in any such case, a solvent winding-up solely for the purposes of a reorganization, reconstruction or amalgamation of the Company, the terms of which reorganization, reconstruction, amalgamation do not provide that the Subordinated Debt Securities shall thganizationereby become redeemable or repayable in accordance with these conditions) or a Qualifying Administration of the Company.

 

(c) Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, interest, if any, on any Subordinated Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid to the Holder (including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United Kingdom for collection by the Holder) at the close of business on the Regular Record Date.

 

In the case of Subordinated Debt Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained by the payee with, a bank in The City of New York.

 

In the case of Subordinated Debt Securities where payment is to be made in a Foreign Currency, payment will be made as established pursuant to Section 3.01.

 

Any interest on any Subordinated Debt Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “Deferred Interest”. Deferred Interest on any Subordinated Debt Security of any series shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue then of having been such Holder, and such Deferred Interest may be paid to the Person in whose name that Subordinated Debt Security (or one or more Predecessor Subordinated Debt Securities) is registered at the close of business on the Deferred Record Date for such Deferred Interest or may be paid by the Company, at its election, to the Person who is the Holder on the record date established by the Company for such purpose.

 

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

 

Section 3.08. Persons Deemed Owners.  Prior to due presentment of a Subordinated Debt Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name such Subordinated Debt Security is registered as the owner of such 

 

  

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Subordinated Debt Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Subordinated Debt Security and for all other purposes whatsoever, whether or not such Subordinated Debt Security be overdue, and neither the Company, the Guarantor, the Trustee nor any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary.

 

Section 3.09. Cancellation.  All Subordinated Debt Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company or the Guarantor may at any time deliver to the Trustee for cancellation any Subordinated Debt Securities previously authenticated and delivered hereunder and all Subordinated Debt Securities so delivered shall be promptly cancelled by the Trustee. No Subordinated Debt Securities shall be authenticated in lieu of or in exchange for any Subordinated Debt Securities cancelled as provided in this Section, except as expressly permitted by the provisions of the Subordinated Debt Securities of any series or pursuant to the provisions of this Subordinated Debt Securities Indenture. The Trustee shall deliver to the Company all cancelled Subordinated Debt Securities held by the Trustee.

 

Section 3.10. Computation of Interest.  Except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series, payments of interest on the Subordinated Debt Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 3.11. CUSIP Numbers.  The Company in issuing any series of the Subordinated Debt Securities may use CUSIP, “ISIN” and/or “Common Code” numbers (if then generally in use) or any successor to such numbers and thereafter with respect to such series, the Trustee shall use “CUSIP”, “ISIN” and/or “Common Code” numbers or successor numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Subordinated Debt 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 Subordinated Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP”, “ISIN” and/or “Common Code” numbers or successor numbers.

 

Section 3.12. Additional Subordinated Debt Securities.  The Company may, from time to time, without the consent of the Holders of the Subordinated Debt Securities of any series, issue additional Subordinated Debt Securities (“Additional Subordinated Debt Securities”) of one or more of the series of Subordinated Debt Securities issued under this Subordinated Debt Securities Indenture, guaranteed by the Guarantor, having the same ranking and same interest rate, Maturity, redemption terms and other terms, except for the price to the public and issue date and first Interest Payment Date, as the Subordinated Debt Securities; provided, however, that if the original Subordinated Debt Securities are determined by the Company to be debt for U.S. federal income tax purposes and the Additional Subordinated Debt Securities are not fungible with the 

 

  

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Subordinated Debt Securities for U.S. federal income tax purposes, the Additional Subordinated Debt Securities must have a CUSIP, ISIN and/or other identifying number different from those used for the original Subordinated Debt Securities.  Any such Additional Subordinated Debt Securities, together with the Subordinated Debt Securities of the applicable series, will constitute a single series of Subordinated Debt Securities under this Subordinated Debt Securities Indenture and shall be included in the definition of “Subordinated Debt Securities” in this Subordinated Debt Securities Indenture where the context requires.

 

Section 3.13. Correction of Minor Defects in or Amendment of Subordinated Debt Securities.  If, after issuance of any Subordinated Debt Security (including any Global Security), the Company, the Guarantor or the Trustee shall become aware of any ambiguity, defect or inconsistency in any term of a Subordinated Debt Security or Global Security, as the case may be, or, with respect to any Subordinated Debt Security (including any Global Security) issued on or after the date hereof, the Company, the Guarantor and the Trustee agree to amend such Subordinated Debt Security as contemplated by ‎Section 9.01(m), the parties hereto shall provide for the execution, authentication, delivery and dating of one or more replacement Subordinated Debt Securities or Global Securities, as the case may be, pursuant to ‎Section 3.03 hereto.

 

ARTICLE 4

Satisfaction and Discharge

 

Section 4.01. Satisfaction and Discharge of Subordinated Debt Securities Indenture.  This Subordinated Debt Securities Indenture shall upon Company Request, subject to Section 4.04, cease to be of further effect with respect to Subordinated Debt Securities of any series (except as to any surviving rights of registration of transfer or exchange of Subordinated Debt Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series when:

 

(a) either

 

(i) all Subordinated Debt Securities of such series theretofore authenticated and delivered (other than (A) Subordinated Debt Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Subordinated Debt Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the  Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

 

(ii) all such Subordinated Debt Securities not theretofore delivered to the Trustee for cancellation:

 

  

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(A) have become due and payable or will become due and payable at their Stated Maturity within one year, or

 

(B) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

 

and the Company or the Guarantor has deposited or caused to be deposited with the Trustee, as trust funds in trust for the purpose, an amount in cash, or U.S. Government Obligations (with respect to Subordinated Debt Securities denominated in Dollars) or Foreign Government Securities (with respect to Subordinated Debt Securities denominated in the same Foreign Currency) maturing, in the case of (A) and (B) above, as to principal and interest, if any, and any Deferred Amounts, in such amounts and at such times as will ensure the availability of cash sufficient to pay and discharge all claims with respect to such Subordinated Debt Securities not theretofore delivered to the Trustee for cancellation, in the case of (A) and (B) above, for principal (and premium, if any) and accrued interest, if any, and any Deferred Amounts to the date of such deposit (in the case of Subordinated Debt Securities which have become due and payable) or to the Redemption Date, as the case may be;

 

(b) the Company or the Guarantor has paid or caused to be paid all other sums payable hereunder (including any accrued but unpaid interest and any Deferred Amounts) by the Company with respect to the Subordinated Debt Securities of such series; and

 

(c) the Company or the Guarantor has delivered to the Trustee an Officer’s Certificate, Guarantor’s Officer Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series have been complied with.

 

Notwithstanding any satisfaction and discharge of this Subordinated Debt Securities Indenture, the obligations of the Company and the Guarantor to the Trustee under Section 6.07, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if cash, U.S. Government Obligations and/or Foreign Government Securities shall have been deposited with the Trustee pursuant to subclause 4.01(a)(ii) of clause 4.01(a) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive such satisfaction and discharge, including any termination under any bankruptcy law.

 

Section 4.02. Application of Trust Money.  Subject to the provisions of the last paragraph of Section 10.03, all cash, U.S. Government Obligations and Foreign Government Securities deposited with the Trustee pursuant to Section 4.01 shall be held in trust and such cash and the proceeds from such U.S. Government Obligations and/or Foreign Government Securities shall be applied by it, in accordance with the provisions of the Subordinated Debt Securities of such series, and this Subordinated Debt Securities 

 

  

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Indenture, to the payment, either directly or through any Paying Agent (including the Company or Guarantor acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for the payment of which such cash, U.S. Government Obligations and/or Foreign Government Securities have been deposited with the Trustee.

 

Section 4.03. Repayment to Company.  The Trustee, the Calculation Agent and any Paying Agent promptly shall pay to the Company upon Company Request any excess money, U.S. Government Obligations and/or Foreign Government Securities held by them at any time with respect to any series of Subordinated Debt Securities.

 

Section 4.04. U.K. Financial Services Authority Consent.  The Company may only make a Company Request as provided under Article 4 of this Subordinated Debt Securities Indenture provided that the Company has notified the U.K. Financial Services Authority, or its successor, of its intention to do so at least one month (or such other period, longer or shorter, as the U.K. Financial Services Authority, or its successor, as the case may be, may then require or accept) prior to the Company making such Company Request and a Relevant Supervisory Consent has been received prior to the Company making such Company Request.

 

ARTICLE 5

Remedies

 

Section 5.01. Events of Default.  (a) “Event of Default” of the Company, wherever used herein with respect to Subordinated Debt Securities of a particular series, means (i) the making of an order by a court of competent jurisdiction which is not successfully appealed within 30 days of the making of such order, or valid adoption by the shareholders of the Company of an effective resolution, for the winding-up of the Company (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) or (ii) any other Event of Default provided with respect to Subordinated Debt Securities of such series pursuant to Section 3.01.

 

(b)  “Event of Default” of the Guarantor, wherever used herein with respect to the Guarantee of any Subordinated Debt Securities of a particular series, means (i) the making of an order by a court of competent jurisdiction which is not successfully appealed within 30 days of the making of such order, or valid adoption by the shareholders of the Guarantor of an effective resolution, for the winding-up of the Guarantor (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency), or (ii) any other Event of Default provided with respect to Subordinated Debt Securities of such series pursuant to Section 3.01.

 

Section 5.02. Acceleration of Maturity; Rescission and Annulment.  If an Event of Default referred to in Section 5.01(a) occurs and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series may declare the principal 

 

  

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amount, together with accrued interest (if any), Deferred Amounts (if any) and Additional Amounts (if any), payable on such Subordinated Debt Securities (or, in the case of Original Issue Discount Securities, the accreted face amount together with accrued interest, if any, and Additional Amounts (if any) on such Original Issue Discount Securities), of all the Subordinated Debt Securities of that series to be due and payable immediately, by a notice in writing to the Company and the Guarantor (and to the Trustee if given by the Holder or Holders), and upon any such declaration such amount shall become immediately due and payable.

 

If an Event of Default referred to in Section 5.01(b) occurs and is continuing, notwithstanding the absence of an Event of Default under Section 5.01(a), then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series may deem, for the purposes of the Guarantee only, the principal amount, together with accrued interest (if any), Deferred Amounts (if any) and Additional Amounts (if any), payable on such Subordinated Debt Securities (or, in the case of Original Issue Discount Securities, the accreted face amount together with accrued interest, if any, and Additional Amounts (if any) on such Original Issue Discount Securities), of all the Subordinated Debt Securities of that series to be due and payable immediately, by a notice in writing to the Guarantor (and to the Trustee if given by the Holder or Holders), and upon any such declaration such amount shall become immediately due and payable.

 

At any time after such a declaration of acceleration with respect to Subordinated Debt Securities of any series has been made but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holder or Holders of a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series, by written notice to the Company, the Guarantor and the Trustee, may rescind or annul such declaration of acceleration and its consequences (including any Event of Default under another series of Subordinated Debt Securities arising therefrom) but only if

 

(a) the Company or the Guarantor has paid or deposited with the Trustee a sum sufficient to pay:

 

(i) the principal of (including any deferred principal), and premium, if any, on) any Subordinated Debt Securities of such series which have become due otherwise than by such declaration of acceleration and any due and payable interest, and Deferred Interest, if any, thereon at the rate or rates prescribed therefor in such Subordinated Debt Securities,

 

(ii) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

 

(b) all Events of Default under Section 5.01(a) and Section 5.01(b), as the case may be, have been cured or waived as provided by Section 5.13.

 

  

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

 

Section 5.03. Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee.  Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, “Default” wherever used herein with respect to Subordinated Debt Securities of a particular series, means any one of the following events (subject as provided below, whatever the reason for such Default and whether it shall be voluntary or involuntary or be effected by operation of law pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a) the Company and the Guarantor fails to pay any installment of interest on any Subordinated Debt Security of such series on or before its Deferred Payment Date or other date specified for the payment of Deferred Amounts in Section 3.07(b) and such failure continues for 14 days; or

 

(b) the Company and the Guarantor fails to pay all or any part of the principal of (and premium, if any, on) any Subordinated Debt Security of such series on its Deferred Payment Date, or when such principal shall otherwise become due and payable, whether upon redemption or otherwise, and such failure continues for seven days.

 

If a Default occurs and is continuing, the Trustee may commence a proceeding in Scotland (but not elsewhere) for the winding-up of the Company and the Guarantor, respectively, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding Subordinated Debt Securities to be due and payable.

 

The Trustee and Holders of Subordinated Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off or counterclaim or combination of accounts with respect to the Subordinated Debt Securities or this Subordinated Debt Securities Indenture (or between the obligations under or in respect of any Subordinated Debt Securities and any liability owed by a Holder or the Trustee to the Company or the Guarantor) that they might otherwise have against the Company and the Guarantor, whether before or during a winding up, liquidation of the Company or Guarantor or a Qualifying Administration. Notwithstanding the above, if any of such rights and claims of any such Holder against the Company or the Guarantor are discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the Company, the Guarantor or, in the event of the winding up of the Company, the Guarantor or a Qualifying Administration, the liquidator or administrator (or other relevant insolvency official), as the case may be, and until such time as payment is made will hold a sum equal to such amount in trust for the Company, the Guarantor or the liquidator or administrator (or other relevant insolvency official), as the case may be, and accordingly such discharge shall be deemed not to have taken place.

 

Notwithstanding the foregoing, failure to make any payment in respect of a series of Subordinated Debt Securities, including under the Guarantee thereon,  shall not be a 

 

  

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Default in respect of such Subordinated Debt Securities or Guarantee, as applicable, if such payment is withheld or refused and the Company or the Guarantor, as applicable, deliver an Opinion of Counsel concluding that such sums were not paid in order to comply with any fiscal or other law or regulation or with the order of any court of competent jurisdiction, provided, however, that the Trustee may by notice to the Company or the Guarantor, as applicable, require the Company or the Guarantor, as the case may be, to take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company or the Guarantor, as applicable, shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days (in the case of payments under clause 5.03(a) above) or seven days (in the case of payments under clause 5.03(b) above) after the Trustee gives written notice to the Company or the Guarantor, as applicable, informing it of such resolution.

 

No recourse for the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security, or for any claim based thereon on the Guarantee endorsed thereon or otherwise in respect thereof or of the Guarantee and no recourse under or upon any obligation, covenant or agreement of the Company or the Guarantor in this Subordinated Debt Securities Indenture, or in any Subordinated Debt Security, in the Guarantee endorsed thereon, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder (other than the Guarantor under the terms of the Guarantee), officer or director, past, present or future, of the Company or any Guarantor of any successor corporation of either the Company or the Guarantor, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that to the extent lawful all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Subordinated Debt Securities Indenture and the issue of the Subordinated Debt Securities of a series, and the endorsement of the Guarantee thereon.

 

Section 5.04. Trustee May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, winding-up or other judicial proceeding or any Qualifying Administration relative to the Company or the Guarantor (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency), the Trustee (irrespective of whether the principal of the Subordinated Debt Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company or the Guarantor for the payment of overdue principal (and premium, if any) or interest, if any) shall be entitled and empowered, by intervention in 

 

  

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such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding; provided that the Company or the Guarantor, as the case may be, shall not, as a result of the bringing of such proceedings, be obliged to pay any sum representing or measured by reference to principal, premium or interest on the Subordinated Debt Securities sooner than the same would otherwise have been payable by it.  In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Subordinated Debt Security to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to first pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.07.

 

Subject to Article 8 and Section 9.02, nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of any Subordinated Debt Security any plan of reorganization, arrangement, adjustment, or composition affecting any Subordinated Debt Securities or the rights of any Holder of any Subordinated Debt Security or to authorize the Trustee to vote in respect of the claim of any such Holder or holder in any such proceeding.

 

The provisions of this Section 5.04 are subject to the provisions of Article 12.

 

Section 5.05. Trustee May Enforce Claims Without Possession of Subordinated Debt Securities.  All rights of action and claims under this Subordinated Debt Securities Indenture or the Subordinated Debt Securities may be prosecuted and enforced by the Trustee without the possession of any of the Subordinated Debt Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the 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 the Trustee, its agents and counsel (subject, with regard to the Company, to the provisions of Article 12, and with regard to the Guarantor, to the provisions of Section 13.03) be for the ratable benefit of the Holders of the Subordinated Debt Securities in respect of which such judgment has been recovered.

 

Section 5.06. Application of Money Collected.  Any money collected by the Trustee pursuant to this Article in respect of any series of Subordinated Debt Securities shall, subject to the provisions of Section 5.03 in relation to waiver and set-off, Article 12 in relation to subordination and Section 13.03 in relation to subordination of the Guarantee, be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (and premium, if any) or interest, if any, upon presentation of such Subordinated Debt Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

  

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FIRST: To the payment of all amounts applicable to such series of Subordinated Debt Securities in respect of which or for the benefit of which such money has been collected and due and owing to the Trustee under Section 6.07;

 

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest (including Deferred Amounts), if any, on such series of Subordinated Debt 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 Subordinated Debt Securities for principal (and premium, if any) and interest, if any, respectively; and

 

THIRD: To the payment of the balance, if any, to the Company, the Guarantor or any other Person or Persons legally entitled thereto.

 

Section 5.07. Limitation on Suits.  No Holder of any Subordinated Debt Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Subordinated Debt Securities Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(a) such Holder has previously given written notice to the Trustee of a continuing Event of Default or Default with respect to Subordinated Debt Securities of the same series specifying such Event of Default or Default and stating that such notice is a “Notice of Default” hereunder;

 

(b) the Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series shall have made written request to the Trustee to institute proceedings in accordance with Sections 5.02 to 5.05 hereof in respect of such Event of Default or Default in its own name, as Trustee hereunder;

 

(c) such Holder of a Subordinated Debt Security has offered to the Trustee indemnity and/or security satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

 

(d) the 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 the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series;

 

it being understood and intended that no one or more Holders of Subordinated Debt Securities of a particular series shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Subordinated Debt Securities Indenture to affect, disturb or prejudice the rights of any other such Holders or holders, or to obtain or to seek to obtain priority or preference over any other such Holders or holders or to enforce any right under this Subordinated Debt Securities Indenture, except in the manner herein 

 

  

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provided and for the equal and ratable benefit of all Holders of Subordinated Debt Securities of such series.

 

Section 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any.  Subject to Article 12 in relation to subordination of Subordinated Debt Securities and Section 13.03 in relation to subordination of the Guarantee, and notwithstanding any other provision in this Subordinated Debt Securities Indenture, the Holder of any Subordinated Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and interest, if any, on such Subordinated Debt Security on the respective Stated Maturities as expressed in such Subordinated Debt Security (or, in the case of redemption, on the Redemption Date) or in the case of deferral of such amounts under Section 3.07, on the relevant Deferred Payment Date or date otherwise specified in Section 3.07(b) for payment of Deferred Amounts and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

 

Section 5.09. Restoration of Rights and Remedies.  If the Trustee or any Holder of any Subordinated Debt Security has instituted any proceeding to enforce any right or remedy under this Subordinated Debt Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantor, the Trustee and the Holders of Subordinated Debt Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Subordinated Debt Securities shall continue as though no such proceeding had been instituted.

 

Section 5.10. Rights and Remedies Cumulative.  Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities in the last paragraph of Section 3.06 and without prejudice to Section 5.02, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Subordinated Debt 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, subject as aforesaid, 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 Trustee or of any Holder of any Subordinated Debt Security to exercise any right or remedy accruing upon any Event of Default or Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Subordinated Debt Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Subordinated Debt Securities, as the case may be.

 

  

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Section 5.12. Control by Holders.  The Holders of a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee hereunder, or exercising any trust or power conferred on the Trustee hereunder with respect to the Subordinated Debt Securities of such series, provided that

 

(a) such direction shall not be in conflict with any rule of law or with this Subordinated Debt Securities Indenture;

 

(b) the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders of any Subordinated Debt Securities of any series not taking part in such direction with respect to which the Trustee is acting as the Trustee; and

 

(c) the Trustee may take any other action deemed proper by the 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 Subordinated Debt Securities of any series may on behalf of the Holders of all the Subordinated Debt Securities of such series waive any past Event of Default or Default hereunder with respect to such series and its consequences, except an Event of Default or Default

 

(a) in the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security of such series, or

 

(b) in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Subordinated Debt Security of such series affected.

 

Upon any such waiver, such Event of Default or Default shall cease to exist, and any Event of Default or Default with respect to any series arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Subordinated Debt Securities Indenture, but no such waiver shall extend to any subsequent or other Event of Default or Default or impair any right consequent thereon.

 

Section 5.14. Undertaking for Costs.  All parties to this Subordinated Debt Securities Indenture agree, and each Holder of any Subordinated Debt 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 Debt Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to 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 not apply to any suit instituted 

 

  

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by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Subordinated Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security on or after the respective Stated Maturities expressed in such Subordinated Debt Security (or, in the case of redemption, on or after the Redemption Date.

 

ARTICLE 6

The Trustee

 

Section 6.01. Certain Duties and Responsibilities.  The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Subordinated Debt Securities Indenture shall require the Trustee 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, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Subordinated Debt Securities Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.

 

Section 6.02. Notice of Defaults.  Within 90 days after the occurrence of any Event of Default or Default hereunder with respect to Subordinated Debt Securities of any series of which a Responsible Officer of the Trustee has actual knowledge the Trustee shall transmit in the manner and to the extent provided in Section 1.06 to Holders of Subordinated Debt Securities of such series notice of such Event of Default or Default hereunder known to the Trustee, unless such Event of Default or Default shall have been cured or waived; provided, however, that, the Trustee shall be protected in withholding such notice (except for a payment default) if it determines in good faith that the withholding of such notice is in the interest of the Holders of Subordinated Debt Securities of such series.

 

Section 6.03. Certain Rights of Trustee.  Subject to the provisions of Section 6.01:

 

(a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate, any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b) any request or direction of the Company or the Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or Company Order or a Guarantor’s Officer Certificate, as the case may be and any resolution of the Board of 

 

  

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Directors of the Company or the Guarantor may be sufficiently evidenced by a Board Resolution or a Guarantor Board Resolution, as the case may be;

 

(c) whenever in the administration of this Subordinated Debt Securities Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate, Guarantor’s Officer Certificate and/or an Opinion of Counsel;

 

(d) the Trustee may consult with counsel of its own 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 conclusive reliance thereon;

 

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

 

(f) the 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, note, coupon or other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit at the reasonable expense of the Company and shall incur no liability by reason of such inquiry or investigation; provided that the Trustee shall not be entitled to such information which the Company is prevented from disclosing as a matter of law or contract;

 

(g) the 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 the Trustee shall not be responsible for any misconduct or negligence on the part of any agent (other than an officer or employee of the Trustee) or attorney appointed with due care by it hereunder;

 

(h) the Trustee shall not be liable with respect to any Losses arising from action taken or omitted to be taken by it in good faith in accordance with any instruction or communication received by email from any person reasonably believed by the Trustee to be authorized by the Company or the Guarantor to send such instruction or communication;

 

(i) the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has received written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee;

 

  

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(j) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder;

 

(k) the Trustee shall not be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, even if it has been advised of the likelihood of such loss or damage and regardless of the form of action; and

 

(l) the Trustee shall not be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond its control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, strikes, work stoppages, civil or military disturbances, nuclear or natural catastrophes, fire, riot, embargo, loss or malfunctions of utilities, communications or computer (software and hardware) services, government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the services contemplated by this Subordinated Debt Securities Indenture.

 

Section 6.04. Not Responsible for Recitals or Issuance of Subordinated Debt Securities.  The recitals contained herein and in the Subordinated Debt Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company and the Guarantor, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Subordinated Debt Securities Indenture or of the Subordinated Debt Securities, except that the Trustee represents and warrants that it has duly authorized, executed and delivered this Subordinated Debt Securities Indenture. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Subordinated Debt Securities or the proceeds thereof.

 

Section 6.05. May Hold Subordinated Debt Securities.  The Trustee, any Authenticating Agent, any Paying Agent, any Subordinated Debt Security Registrar and any Calculation Agent or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Subordinated Debt Securities and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company or the Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Subordinated Debt Security Registrar, Calculation Agent or such other agent.

 

Section 6.06. Money Held in Trust.  Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

 

Section 6.07. Compensation and Reimbursement.

 

Each of the Company and the Guarantor agrees

 

  

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(a) to pay to the Trustee from time to time compensation for all services rendered by it hereunder as agreed upon in writing by the Company from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Subordinated Debt Securities Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined by a court of competent jurisdiction to have been caused by its own negligence or bad faith;

 

(c) to indemnify the Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or expense (including legal fees and expenses) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder but excluding any tax liabilities of the Trustee in respect of its net profits; and

 

(d) the fees, costs and expenses of the Trustee and its counsel incurred in connection with services rendered by the Trustee under Section 5.01 hereof shall constitute administration expenses in any bankruptcy proceedings.

 

The Trustee shall notify the Company and the Guarantor in writing of the commencement of any action or claim in respect of which indemnification may be sought promptly after a Responsible Officer of the Trustee becomes aware of such commencement (provided that the failure to make such notification shall not affect the Trustee’s rights hereunder) and the Company shall be entitled to participate in, and to the extent it shall wish, to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Trustee. If the Company and the Trustee are being represented by the same counsel and the Company has assumed the defense of the claim, the Trustee shall not be authorized to settle a claim without the written consent of the Company, which consent shall not be unreasonably withheld.

 

If the Trustee is represented by separate counsel due to a conflict of interest or its need for separate representation due to a need to assert defenses which are different from the Company’s, in the Trustee’s sole discretion, the Trustee shall be entitled to enter into any settlement without the written consent of the Company and any and all fees, costs and expenses of such separate legal representation of the Trustee will be paid by the Company.

 

As security for the performance of the obligations of the Company and the Guarantor under this Section, the Trustee shall have a senior lien to which the Subordinated Debt Securities are hereby made subordinate, upon all property and funds 

 

  

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held or collected by the Trustee as such, except funds held in trust for the payment of principal of (or premium, if any) or interest, if any, on the Subordinated Debt Securities.

 

Section 6.08. Disqualification; Conflicting Interests.  If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the 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 Debt Securities Indenture.

 

Section 6.09. Corporate Trustee Required; Eligibility.  There shall at all times be a Trustee hereunder with respect to each series which shall 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, subject to supervision or examination by Federal or State or District of Columbia authority and, if there be such corporation willing and able to act as trustee on reasonable and customary terms, having its corporate trust office or agency in the Borough of Manhattan, The City of New York, New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said 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 the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 6.

 

Section 6.10. Resignation and Removal; Appointment of Successor.  (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

 

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

 

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

 

  

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(d) If at any time:

 

(i) the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or the Guarantor or by any Holder who has been a bona fide Holder of a Subordinated Debt Security of the series as to which the Trustee has a conflicting interest for at least six months, or

 

(ii) the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or the Guarantor or by any Holder who has been a bona fide Holder of a Subordinated Debt Security for at least six months, or

 

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

 

(iv) the Trustee shall fail to perform its obligations to the Company or the Guarantor under the Subordinated Debt Securities Indenture in any material respect,

 

then, in any such case, (A) the Company or the Guarantor by a Board Resolution or a Guarantor Board Resolution, as the case maybe, may remove the Trustee with respect to any or all series of Subordinated Debt Securities or (B) subject to Section 5.14 (and except in the case of subparagraph 6.10(d)(iv) above), any Holder who has been a bona fide Holder of a Subordinated Debt Security for at least six months (and, in the case of Section 6.10(d)(i) above, who is a Holder of a Subordinated Debt Security of the series as to which the Trustee has a conflicting interest) may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Subordinated Debt Securities and the appointment of a successor Trustee or Trustees.

 

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Subordinated Debt Securities of one or more series, the Company and the Guarantor, by a Board Resolution or a Guarantor Board Resolution, as the case may be, shall promptly appoint a successor Trustee or Trustees with respect to the Subordinated Debt Securities of such series (it being understood that any successor Trustee may be appointed with respect to the Subordinated Debt Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Subordinated Debt Securities of any particular series), and shall comply with the applicable requirements 

 

  

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of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Subordinated Debt Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series delivered to the Company, the Guarantor and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Subordinated Debt Securities of such series and to that extent supersede the successor Trustee appointed by the Company and the Guarantor. If no successor Trustee with respect to the Subordinated Debt Securities of any series shall have been so appointed by the Company or the Holders of Subordinated Debt Securities of such series and accepted appointment in the manner hereinafter required by Section 6.11, any Holder who has been a bona fide Holder of a Subordinated Debt 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 Trustee with respect to the Subordinated Debt Securities of such series.

 

(f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Subordinated Debt Securities of any series and each appointment of a successor Trustee with respect to the Subordinated Debt 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 Trustee with respect to the Subordinated Debt Securities of such series and the address of its Corporate Trust Office.

 

Section 6.11. Acceptance of Appointment by Successor.

 

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

 

(b) In case of the appointment hereunder of a successor Trustee with respect to the Subordinated Debt Securities of one or more (but not all) series, the Company, the Guarantor, the retiring Trustee and each successor Trustee with respect to the Subordinated Debt Securities of such series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Subordinated Debt 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 Trustee with respect to the Subordinated Debt Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Subordinated Debt Securities Indenture as shall be necessary to provide for or facilitate the 

 

  

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administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates; but, on request of the Company, the Guarantor or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates.

 

(c) Upon request of any such successor Trustee, the Company and the Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section 6.11, as the case may be.

 

(d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 6.  Notwithstanding anything to the contrary contained herein all of the rights, immunities and indemnities given to the retiring Trustee hereunder, including without limitation, those in Section 6.07 shall survive the resignation of the retiring Trustee and any other termination of this Subordinated Debt Securities Indenture.

 

Section 6.12. Merger, Conversion, Consolidation or Succession to Business.  Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the 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. In case any Subordinated Debt Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Subordinated Debt Securities.

 

Section 6.13. Preferential Collection of Claims.  If and when the Trustee shall be or become a creditor of the Company or the Guarantor (or any other obligor upon the Subordinated Debt Securities of a series), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company or the Guarantor (or any such other obligor).

 

  

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Section 6.14. Appointment of Authenticating Agent.  The Trustee may at any time appoint an Authenticating Agent or Agents with respect to one or more series of Subordinated Debt Securities which shall be authorized to act on behalf of the Trustee to authenticate Subordinated Debt Securities of such series upon original issue, or issued upon exchange, registration of transfer or partial redemption thereof or in lieu of destroyed, lost or stolen Subordinated Debt Securities, and Subordinated Debt Securities so authenticated shall be entitled to the benefits of this Subordinated Debt Securities Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Subordinated Debt Securities Indenture to the authentication and delivery of Subordinated Debt Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and the Guarantor and shall at all times be a corporation or national banking association organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State or District of Columbia authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent 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 shall cease to be eligible in accordance with the provisions of this Section 6.14, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

Any corporation or national banking association into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or national banking association resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation or national banking association succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation or national banking association shall be otherwise eligible under this Section 6.14, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

 

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee, the Company and the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent, the Company and the Guarantor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and the Guarantor and shall give notice to the Holders of Subordinated Debt Securities in the manner and to the extent provided in Section 1.06. Any successor 

 

  

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Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its 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 6.14.

 

The Company and the Guarantor agree to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.14.

 

If an appointment with respect to one or more series is made pursuant to this Section, the Subordinated Debt Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

 

This is one of the Subordinated Debt Securities referred to in the within-mentioned Subordinated Debt Securities Indenture.

 

 

	
THE BANK OF NEW YORK MELLON LONDON BRANCH

as Trustee

 

 

	
By:

	  
	
as Authenticating Agent

	
  

 

 

	
By:

	  
	
Authorized Signatory

ARTICLE 7

Holders Lists and Reports by Trustee and Company

 

Section 7.01. The Company or the Guarantor to Furnish Trustee Names and Addresses of Holders.  The Company or the Guarantor, with respect to any series of Subordinated Debt Securities, will furnish or cause to be furnished to the Trustee;

 

(a) quarterly, not more than 15 days after each Regular Record Date (or after each of the dates to be specified for such purpose for non-interest bearing Subordinated Debt Securities and Subordinated Debt Securities on which interest is paid less frequently than quarterly as contemplated by Section 3.01), a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Subordinated Debt Securities as of such Regular Record Date or such specified date, and

 

(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company 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.

 

  

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The Company need not furnish or cause to be furnished to the Trustee pursuant to this Section 7.01 the names and addresses of Holders of Subordinated Debt Securities so long as the Trustee acts as Subordinated Debt Security Registrar with respect to such series of Subordinated Debt Securities.

 

Section 7.02. Preservation of Information; Communication to Holders.

 

(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders (i) contained in the most recent list furnished to the Trustee as provided in Section 7.01 and (ii) received by the Trustee in its capacity as Paying Agent or Capital Security Registrar (if so acting). The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.

 

(b) The rights of the Holders of Subordinated Debt Securities of any series to communicate with other Holders with respect to their rights under this Subordinated Debt Securities Indenture or under the Subordinated Debt Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

 

(c) Every Holder, by receiving and holding a Subordinated Debt Security, agrees with the Company, the Guarantor and the Trustee that neither the Company, the Guarantor nor the Trustee nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.02(b) or otherwise made pursuant to the Trust Indenture Act.

 

Section 7.03. Reports by Trustee.

 

(a) On or before May 15 in each year following the date hereof, so long as any Subordinated Debt Securities are Outstanding hereunder, the Trustee shall transmit to Holders as provided in the Trust Indenture Act a brief report dated as of a date required by and in compliance with the Trust Indenture Act.

 

(b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each securities exchange upon which the Trustee has been notified that the Subordinated Debt Securities are listed, with the Commission and with the Company and the Guarantor. The Company will notify the Trustee when Subordinated Debt Securities are listed on any securities exchange.

 

(c) The Company will furnish the Trustee with interim and annual reports and upon receipt thereof, the Trustee will mail such reports to all record holders of Subordinated Debt Securities. In addition, the Company will furnish the Trustee with all notices of meetings at which holders of Subordinated Debt Securities of a particular series are entitled to vote, and all other reports and communications that are made generally available to holders of Subordinated Debt Securities. The Trustee will, at the Company’s expense, make such notices, reports and communications available for inspection by holders of Subordinated Debt Securities in such manner as the Company 

 

  

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may determine and, in the case of any notice received by the Trustee in respect of any meeting at which holders of Subordinated Debt Securities of a particular series are entitled to vote, will mail to all such record holders of Subordinated Debt Securities, at the Company’s expense, a notice containing a summary of the information set forth in such notice of meeting.

 

Section 7.04. Reports by Company and the Guarantor.  The Company or the Guarantor, if applicable,  shall:

 

(a) file with the Trustee, within 15 days after the Company or the Guarantor, as the case may be, 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 Company or the Guarantor may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company or the Guarantor is not required to file information, documents or reports pursuant to either of such Sections, then it shall file with the 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. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s and the Guarantor’s, as applicable, compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate);

 

(b) file with the Trustee 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 Company and the Guarantor, as applicable, with the conditions and covenants of this Subordinated Debt Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s and the Guarantor’s, as applicable, compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate); and

 

(c) transmit to Holders, in the manner and to the extent required by the Trust Indenture Act, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.

 

  

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ARTICLE 8

Consolidation, Merger, Conveyance or Transfer

 

Section 8.01. Company or Guarantor May Consolidate, Etc., Only on Certain Terms.  Subject to Section 8.04 below, the Company or the Guarantor may, without the consent of Holders of any Subordinated Debt Securities of any series Outstanding under this Subordinated Debt Securities Indenture, consolidate or amalgamate with or merge into any other corporation or convey or transfer or lease its properties and assets substantially as an entirety to any Person, provided that:

 

(a) the corporation formed by such consolidation or amalgamation or into which the Company or the Guarantor is merged or the Person which acquires by conveyance or transfer the properties and assets of the Company or the Guarantor substantially as an entirety (i) shall be a company organized and existing under the laws of the United Kingdom or any political subdivision thereof, and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest (including any Deferred Amounts), if any, on all the Subordinated Debt Securities in accordance with the provisions of such Subordinated Debt Securities and this Subordinated Debt Securities Indenture and the performance of every covenant of this Subordinated Debt Securities Indenture on the part of the Company or the Guarantor, as the case may be, to be performed or observed; and

 

(b) the Company or the Guarantor, as the case may be, shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger, conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

Section 8.02. Successor Corporation Substituted.  Upon any consolidation, amalgamation or merger by the Company or the Guarantor with or into any other corporation or any conveyance or transfer of the properties and assets of the Company or the Guarantor substantially as an entirety in accordance with Section 8.01, the successor corporation formed by such consolidation or amalgamation or into which the Company or the Guarantor is merged or to which such conveyance or transfer is made shall succeed to and be substituted for, and may exercise every right and power of, the Company or the Guarantor, as the case may be, under this Subordinated Debt Securities Indenture with the same effect as if such successor corporation had been named as the Company or the Guarantor, herein, and thereafter, the predecessor corporation shall be relieved of all obligations and covenants under the Subordinated Debt Securities Indenture and the Subordinated Debt Securities.

 

Section 8.03. Assumption of Obligations.  With respect to the Subordinated Debt Securities of any series, a wholly-owned Subsidiary of the Company (a “successor entity”) may without the consent of any Holder assume the obligations of the Company (or any corporation which shall have previously assumed the obligations of the 

 

  

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Company) for the due and punctual payment of the principal of (and premium, if any, on) and interest (including any Deferred Amounts), if any, on any series of Subordinated Debt Securities in accordance with the provisions of such Subordinated Debt Securities and this Subordinated Debt Securities Indenture and the performance of every covenant of this Subordinated Debt Security Indenture and such series of Subordinated Debt Securities on the part of the Company to be performed or observed provided, that:

 

(a) the successor entity shall expressly assume such obligations by an amendment to the Subordinated Debt Securities Indenture, executed by the Company and such successor entity, if applicable, and delivered to the Trustee, in form satisfactory to the Trustee;

 

(b) such successor entity shall confirm in such amendment to the Subordinated Debt Securities Indenture that such successor entity will pay all Additional Amounts, if any, payable pursuant to Section 10.04 in respect of all the Subordinated Debt Securities (subject to the exceptions specified therein) provided, however, that for these purposes, in the case of a successor entity that is not both organized under the laws of the United Kingdom and tax resident in the United Kingdom, such successor entity’s country of organization and country of tax residence will be added to the references to the United Kingdom in the definition of “Taxing Jurisdiction”);

 

(c) immediately after giving effect to such assumption of obligations, no Event of Default or Default and no event which, after notice or lapse of time or both, would become an Event of Default or Default, shall have occurred and be continuing; and

 

(d) the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such assumption complies with this Article and that all conditions precedent herein provided for relating to such assumption have been complied with.

 

Upon any such assumption, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Subordinated Debt Securities Indenture with respect to any such Subordinated Debt Securities with the same effect as if such successor entity had been named as the Company in this Subordinated Debt Securities Indenture (provided, however, that the right of the successor to redeem the Subordinated Debt Securities of the relevant series pursuant to Section 11.08 shall also apply with respect to any change or amendment to, or change in the application or official interpretation of, the laws or regulations (including any treaty) of the successor’s jurisdiction of incorporation or tax residence), and the Company or any legal and valid successor corporation which shall theretofore have become such in the manner prescribed herein, shall be released from all liability as obligor upon any such Subordinated Debt Securities except as provided in clause (a) of this Section 8.03.

 

If the Guarantor makes payment under the guarantee, the Guarantor shall be required to pay all Additional Amounts, if any, payable pursuant to Section 10.04 in respect of the Subordinated Debt Securities (subject to the exceptions set forth therein), 

 

  

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provided, however, that for purposes of payment by the Guarantor under the guarantee (and for purposes of Section 11.08), the definition of “Taxing Jurisdiction” shall include the country of organization and country of tax residence of any successor to the Guarantor.

 

Section 8.04. Notification of Assumption or Substitution to the U.K. Financial Services Authority.  No such assumption or substitution as is referred to in either Section 8.02 or 8.03 shall be effected in relation to any series of Subordinated Debt Securities, unless the Company has notified the U.K. Financial Services Authority, or its successor, of its intention to do so at least one month (or such other period, longer or shorter, as the U.K. Financial Services Authority, or its successor, as the case may be, may then require or accept) prior to the date scheduled therefor and a Relevant Supervisory Consent therefor has been received.

 

ARTICLE 9

Supplemental Indentures

 

Section 9.01. Supplemental Indentures without Consent of Holders.  Subject to Section 9.07 below, without the consent of any Holders, the Company and the Guarantor, when authorized by a Board Resolution and a Guarantor Board Resolution, as the case may be, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

(a) to evidence the succession of another corporation to the Company and the Guarantor and the assumption by any such successor of the covenants of the Company and the Guarantor herein and in the Subordinated Debt Securities;

 

(b) to add to the covenants of the Company or the Guarantor for the benefit of the Holders of all or any series of Subordinated Debt Securities (and, if such covenants are to be for the benefit of fewer than all series of Subordinated Debt Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company or the Guarantor;

 

(c) to add any additional Events of Default or Defaults;

 

(d) to add to, change or eliminate any of the other provisions of this Subordinated Debt Securities Indenture, or any supplemental indenture, provided that any such change or elimination shall become effective only when there is no Subordinated Debt Security Outstanding of any series created prior to the execution of such supplemental indenture effecting such change or elimination which is entitled to the benefit of such provision, and adversely affected by such addition, change or elimination;

 

(e) to secure the Subordinated Debt Securities;

 

(f) to establish the form or terms of Subordinated Debt Securities of any series as permitted by Sections 2.01 or 3.01;

 

  

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(g) to change any Place of Payment, so long as the Place of Payment as required by Section 3.01 is maintained;

 

(h) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein or in any supplemental indenture;

 

(i) to make any other provisions with respect to matters or questions arising under this Subordinated Debt Securities Indenture, provided such action shall not adversely affect the interests of the Holders of Subordinated Debt Securities of any series in any material respect;

 

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

 

(k) to change or eliminate any provision of this Subordinated Debt Securities Indenture as permitted by Section 1.07;

 

(l) to name a Trustee for a particular series of Subordinated Debt Securities other than the Trustee named in the first paragraph of this Subordinated Debt Securities Indenture and to provide for the appropriate changes related to such appointment for a particular series of Subordinated Debt Securities; or

 

(m) with respect to any Subordinated Debt Security (including a Global Security) issued on or after the date hereof, to amend any such Subordinated Debt Security to conform to the description of the terms of such Subordinated Debt Security in the prospectus, prospectus supplement, product supplement, pricing supplement or any other similar offering document related to the offering of such Subordinated Debt Security.

 

Section 9.02. Supplemental Indentures with Consent of Holders.  Subject to Section 9.07 below, with the consent of the Holders of not less than 2/3 (two thirds) in aggregate principal amount of the Outstanding Subordinated Debt Securities of each series affected by such supplemental Subordinated Debt Securities Indenture (voting as a class), by Act of said Holders delivered to the Company, the Guarantor and the Trustee, the Company and the Guarantor, when authorized by a Board Resolution or a Guarantor Board Resolution, as the case may be, and the Trustee 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 this Subordinated Debt Securities Indenture or of modifying in any manner the rights of the Holders of Subordinated Debt Securities of such series under this Subordinated Debt Securities Indenture; provided, however, that no such supplemental indenture may, without the consent of the Holder of each Outstanding Subordinated Debt Security affected thereby,

 

  

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(a) change the Stated Maturity, if any, of any principal amount or any interest amounts in respect of any such Subordinated Debt Security, reduce the principal amount thereof or the rate of interest, if any, thereon, or any premium payable upon the redemption thereof, or reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the Maturity thereof pursuant to Section 5.02, or change the obligation of the Company (or its successor) to pay Additional Amounts pursuant to Section 10.04 (except as contemplated by Section 8.01(a) and permitted by Section 9.01(a)) on the Subordinated Debt Securities, or the currency of payment of the principal amount of, premium, if any, or interest on, any such Subordinated Debt Security, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof or the date any such payment is otherwise due and payable (or, in the case of redemption, on or after the Redemption Date); or

 

(b) reduce the percentage in aggregate principal amount of the Outstanding Subordinated Debt Securities of any 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 Debt Securities Indenture or of certain defaults hereunder and their consequences) provided for in this Subordinated Debt Securities Indenture; or

 

(c) modify any of the provisions of this Section or Section 5.13 except to increase any such percentage or to provide that certain other provisions of this Subordinated Debt Securities Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Subordinated Debt Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to the “Trustee” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 6.11(b) and 9.01(j); or

 

(d) change in any manner adverse to the interests of the Holders of any Subordinated Debt Securities, the subordination provisions of the Subordinated Debt Securities or the terms and conditions of the obligations of the Company or the Guarantor in respect of the due and punctual payment of any amounts due and payable on the Subordinated Debt Securities.

 

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.

 

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

 

  

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Section 9.03. Execution of Supplemental 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 Debt Securities Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Subordinated Debt Securities Indenture and constitutes a legal, valid and binding obligation of the Company subject to customary exceptions. The Trustee may, but shall not be obliged to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Subordinated Debt Securities Indenture or otherwise.

 

Section 9.04. Effect of Supplemental Indentures.  Upon the execution of any supplemental indenture under this Article, this Subordinated Debt Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Subordinated Debt Securities Indenture for all purposes; and every Holder of Subordinated Debt Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby, except as otherwise expressed therein.

 

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 Subordinated Debt Securities to Supplemental Indentures.  Subordinated Debt Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Subordinated Debt Securities of any series so modified as to conform, in the opinion of the Trustee, the Company and the Guarantor, to any such supplemental indenture may be prepared and executed by the Company, the Guarantee endorsed thereon may be executed by the Guarantor and such Subordinated Debt Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Subordinated Debt Securities of such series.

 

Section 9.07. Notification of Modification or Supplemental Indenture.  No such modification shall be effected in relation to any series of Subordinated Debt Securities, unless the Company has notified the U.K. Financial Services Authority, or its successor, of its intention to do so at least one month (or such other period, longer or shorter, as the U.K. Financial Services Authority, or its successor, as the case may be, may then require or accept) prior to the date scheduled therefor and a Relevant Supervisory Consent has been received.

 

ARTICLE 10

Covenants

 

Section 10.01. Payment of Principal, Premium, and Interest.  The Company covenants and agrees for the benefit of each series of Subordinated Debt Securities that it 

 

  

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will (subject to Section 3.07) duly and punctually pay the principal of (and premium, if any) and interest, if any, on the Subordinated Debt Securities of that series in accordance with the terms of the Subordinated Debt Securities and this Subordinated Debt Securities Indenture.

 

Section 10.02. Maintenance of Office or Agency.  The Company and the Guarantor will maintain in each Place of Payment for any series of Subordinated Debt Securities an office or agency where Subordinated Debt Securities of that series may be presented or surrendered for payment, where Subordinated Debt Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company or the Guarantor in respect of the Subordinated Debt Securities of that series and this Subordinated Debt Securities Indenture may be served; provided, however, that at the option of the Company in the case of Subordinated Debt Securities of such series, payment of any interest thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Subordinated Debt Security Register. With respect to the Subordinated Debt Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be the Corporate Trust Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the Company and the Guarantor will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Company or the Guarantor in respect of Subordinated Debt Securities of any series and this Subordinated Debt Securities Indenture may be served. The Company and the Guarantor will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company and the Guarantor shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company and the Guarantor hereby appoints the Trustee as its agent to receive all presentations, surrenders, notices and demands.

 

The Company and the Guarantor may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, The City of New York) where the Subordinated Debt Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company and the Guarantor of any obligation to maintain an office or agency in each Place of Payment (except as otherwise indicated in this Section) for Subordinated Debt Securities of any series for such purposes. The Company and the Guarantor will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

Section 10.03. Money for Payments to be Held in Trust.  If the Company or the Guarantor shall at any time act as Paying Agent with respect to the Subordinated Debt Securities of any series, it will, on or before each due date for payment of the principal of (and premium, if any) or interest, if any, if any, on any of the Subordinated Debt 

 

  

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Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or 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 Trustee of its failure so to act.

 

Whenever the Company and the Guarantor shall have one or more Paying Agents for any series of Subordinated Debt Securities, it will, prior to each due date for payment of the principal of (and premium, if any) or interest, if any, on any Subordinated Debt Securities of that series deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company or the Guarantor will promptly notify the Trustee of its action or its failure so to act. Unless otherwise specified as contemplated by Section 3.01, the Trustee shall be the Company’s and the Guarantor’s Paying Agent. The Company and the Guarantor will cause each Paying Agent for any series of Subordinated Debt Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

 

(a) hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Subordinated Debt 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;

 

(b) give the Trustee notice of any default by the Company (or the Guarantor or any other obligor upon the Subordinated Debt Securities of that series) in the making of any payment, when due and payable, or principal of (and premium, if any) or interest, if any, on Subordinated Debt Securities of that series; and

 

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

 

The Company may at the time, for the purpose of obtaining the satisfaction and discharge of this Subordinated Debt Securities Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee such Paying Agent shall be released from all further liability with respect to such money.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Company or the Guarantor, in trust for the payment of the principal of (and premium, if any) or interest, if any, on any Subordinated Debt Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest, if any, have become due and payable shall be paid to the Company or the Guarantor, as the case may be, on Company Request, or (if then held by the Company or the Guarantor) shall be 

 

  

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discharged from such trust; and the Holder of such Subordinated Debt Security shall thereafter, as an unsecured general creditor, look only to the Company or the Guarantor for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company or the Guarantor as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published at least once, in an Authorized Newspaper, notice 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 publication, any unclaimed balance of such money then remaining will be paid to the Company or the Guarantor, as the case may be.

 

Section 10.04. Additional Amounts.  Unless otherwise specified in any Board Resolution, an Officer’s Certificate, or supplemental indenture establishing the terms of Subordinated Debt Securities of a series in accordance with Section 3.01, all amounts of principal, and premium, if any, and interest, if any, on any series of Subordinated Debt Securities will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. Unless otherwise specified in any Board Resolution, an Officer’s Certificate, or supplemental indenture establishing the terms of Subordinated Debt Securities of a series in accordance with Section 3.01, if deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, premium, if any, and interest, if any, on any series of Subordinated Debt Securities (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders of Subordinated Debt Securities of the particular series, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, and interest, if any, which would have been payable in respect of such Subordinated Debt Securities had no such deduction or withholding been required; provided, however, that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

 

(i) the Holder or the beneficial owner of the Subordinated Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the mere holding or ownership of a Subordinated Debt Security, or the collection of any payment of (or in respect of) principal of, premium, if any, or interest, if any, on any Subordinated Debt Security of the relevant series,

 

  

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(ii) except in the case of a winding-up of the Company in the United Kingdom, the relevant Subordinated Debt Security is presented (where presentation is required) for payment in the United Kingdom,

 

(iii) the relevant Subordinated Debt Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting (where presentation is required) the same for payment at the close of such 30 day period,

 

(iv) the Holder or the beneficial owner of the relevant Subordinated Debt Security or the beneficial owner of any payment of (or in respect of) principal of, premium, if any, or interest, if any, on such Subordinated Debt Security failed to comply with a request of the Company or its liquidator or other authorized Person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption or relief from all or part of such deduction or withholding,

 

(v) the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive,

 

(vi) the relevant Subordinated Debt Security is presented (where presentation is required) for payment by or on behalf of a Holder who would have been able to avoid such withholding or deduction by presenting (where presentation is required) the relevant Subordinated Debt Security to another paying agent in a Member State of the European Union, or

 

(vii) any combination of subclauses (i) through (vi) above,

 

nor shall Additional Amounts be paid with respect to a payment of principal of, premium, if any, or interest on, the Subordinated Debt Securities to any Holder who is a fiduciary or partnership or person other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the Holder.

 

Whenever in this Subordinated Debt Securities Indenture there is mentioned, in any context, the payment of the principal (and premium, if any) or interest, if any, on, or in respect of, any Subordinated Debt Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in 

 

  

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respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

 

Section 10.05. Corporate Existence.  Subject to Article 8, each of the Company and the Guarantor will do or cause to be done all things necessary to preserve and keep in full force and effect its respective corporate existence.

 

Section 10.06. Statement as to Compliance.  The Company and the Guarantor will deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate in compliance with Section 314(a)(4) of the Trust Indenture Act.

 

Section 10.07. Original Issue Document.  The Company shall provide to the Trustee on a timely basis such information, if any, as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Subordinated Debt Securities relating to any original issue discount, including, without limitation, Form 1099-OID or any successor form.

 

ARTICLE 11

Redemption Of Subordinated Debt Securities

 

Section 11.01. Applicability of Article.  Subordinated Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series) in accordance with this Article 11.  Subordinated Debt Securities of any series may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the Capital Regulations and Section 11.10 below. The Subordinated Debt Securities of any series may not be redeemed in whole or in part at the option of the Holder thereof.

 

Section 11.02. Election to Redeem; Notice to Trustee.  The election of the Company to redeem any Subordinated Debt Securities shall be evidenced by a Board Resolution. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company shall, not less than 5 Business Days nor more than 60 calendar days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Subordinated Debt Securities of such series to be redeemed and, if applicable, the tenor of the Subordinated Debt Securities to be redeemed. In the case of any redemption of Subordinated Debt Securities of any series prior to the expiration of any provision restricting such redemption provided in the terms of such Subordinated Debt Securities or elsewhere in this Subordinated Debt Securities Indenture, the Company shall furnish the Trustee with respect to such Subordinated Debt Securities with an Officer’s Certificate evidencing compliance with or waiver of such provision.

 

Section 11.03. Selection by Trustee of Subordinated Debt Securities to Be Redeemed.  Unless otherwise provided as contemplated by Section 3.01 with respect to 

 

  

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any series of Subordinated Debt Securities, if fewer than all the Subordinated Debt Securities of any series are to be redeemed, the particular Subordinated Debt Securities to be redeemed shall be selected not less than 5 Business Days nor more than 60 calendar days prior to the Redemption Date by the Trustee, from the Outstanding Subordinated Debt Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Subordinated Debt Securities of that series or any multiple thereof) of the principal amount of Subordinated Debt Securities of such series of a denomination larger than the minimum authorized denomination for Subordinated Debt Securities of that series.

 

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

 

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

 

Section 11.04. Notice of Redemption.  Notice of redemption shall be given not less than 5 Business Days nor more than 60 calendar days prior to the Redemption Date to each Holder of Subordinated Debt Securities to be redeemed in the manner and to the extent provided in Section 1.06.

 

All notices of redemption shall state:

 

(a) the Redemption Date,

 

(b) the Redemption Price,

 

(c) if fewer than all the Outstanding Subordinated Debt Securities of any series are to be redeemed, the principal amount of the Subordinated Debt Securities to be redeemed,

 

(d) that on the Redemption Date the Redemption Price together with any accrued but unpaid interest and any Deferred Amounts will become due and payable upon each such Subordinated Debt Security to be redeemed and, if applicable, that interest thereon will cease to accrue on or after the said date,

 

(e) the place or places where such Subordinated Debt Securities are to be surrendered for payment of the Redemption Price, and

 

(f) the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to such Subordinated Debt Securities.

 

  

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Notice of redemption of Subordinated Debt Securities to be redeemed at the selection of the Company shall be given by the Company or, at the Company’s Request, by the Trustee in the name and at the expense of the Company.

 

Section 11.05. Deposit of Redemption Price.  On or prior to any Redemption Date, the Company or the Guarantor shall deposit with the Trustee or with a Paying Agent (or, if the Company or the Guarantor is acting as Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued but unpaid interest (including any Deferred Amounts) on, all the Subordinated Debt Securities which are to be redeemed on that date.

 

Section 11.06. Subordinated Debt Securities Payable on Redemption Date.  Notice of redemption having been given as aforesaid, the Subordinated Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Subordinated Debt Securities shall cease to accrue interest. Upon surrender of any such Subordinated Debt Security for redemption in accordance with said notice, such Subordinated Debt Security shall be paid by the Company or the Guarantor at the Redemption Price, together with accrued but unpaid interest to the Redemption Date (including any Deferred Amounts); provided, however, that with respect to any Subordinated Debt Securities, unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on an Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Subordinated Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular or Deferred Record Date according to the terms of the Subordinated Debt Securities and the provisions of Section 3.07.  Subordinated Debt Securities in definitive form shall be presented for redemption to the Paying Agent.

 

If any Subordinated Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Subordinated Debt Security shall, until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.

 

Section 11.07. Subordinated Debt Securities Redeemed in Part.  Any Subordinated Debt Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, the Guarantor shall endorse the Guarantee on, and the Trustee shall authenticate and deliver to the Holder of such Subordinated Debt Security without service charge, a new Subordinated Debt Security or Subordinated Debt Securities of the same series of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Subordinated Debt Security so surrendered.

 

  

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Section 11.08. Optional Redemption Due to Changes in Tax Treatment.  Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities and subject to Section 11.10 below, the Subordinated Debt Securities of any series are redeemable, as a whole but not in part, at the option of the Company and, if applicable, the Guarantor, on not less than 5 Business Days nor more than 60 calendar days’ notice, on any Interest Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest (including any Deferred Amounts), if any, in respect of such series of Subordinated Debt Securities to the date fixed for redemption (or, in the case of Original Issue Discount Securities, the accreted face amount thereof, together with accrued interest, if any), if, at any time, the Company (or, if applicable, the Guarantor) shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in an official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective or applicable on or after a date included in the terms of such series of Subordinated Debt Securities pursuant to Section 3.01:

 

(a) in making payment under the Subordinated Debt Securities in respect of principal or premium, if any, or interest, if any, the Company (or, if applicable, the Guarantor) has or will or would on the next Interest Payment Date become obligated to pay Additional Amounts;

 

(b) the payment of interest on the next Interest Payment Date in respect of any of the Subordinated Debt Securities would be treated as a “distribution” within the meaning of Section 1000 of the Corporation Tax Act 2010 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

 

(c) on the next Interest Payment Date the Company (or, if applicable, the Guarantor) would not be entitled to claim a deduction in respect of the payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).

 

In any case where the Company (or, if applicable, the Guarantor) shall determine that as a result of any change in the application or interpretation of any laws or regulations it is entitled to redeem the Subordinated Debt Securities of any series, the Company (or, if applicable, the Guarantor) shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company or, if applicable, the Guarantor), in a form satisfactory to the Trustee confirming that the relevant change in the application or interpretation of such laws or regulations has occurred and that the Company (or, if applicable, the Guarantor) is entitled to exercise its right of redemption.

 

Section 11.09. Optional Redemption For Regulatory Purposes.  Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities and subject to Section 11.10 below, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company (or, if applicable, 

 

  

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the Guarantor), on not less than 5 Business Days nor more than 60 calendar days’ notice, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest (including any Deferred Amounts), if any, in respect of such series of Subordinated Debt Securities to the date fixed for redemption (or, in the case of Original Issue Discount Securities, the accreted face amount thereof, together with accrued interest, if any), if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has occurred and is continuing.

 

Section 11.10. Early Redemption – U.K. Financial Services Authority Consent.  Subordinated Debt Securities may only be redeemed by the Company as provided under Article 11 of this Indenture; provided that the Company (or, if applicable, the Guarantor) (a) has notified the U.K. Financial Services Authority, or its successor, of its intention to do so at least 30 calendar days (or such other period, longer or shorter, as the U.K. Financial Services Authority, or its successor, as the case may be, may then require or accept) prior to the Company (or, if applicable, the Guarantor) becoming committed to the proposed repayment and a Relevant Supervisory Consent has been received prior to the Company (or, if applicable, the Guarantor) becoming committed to the proposed repayment.

 

ARTICLE 12

Subordination of Subordinated Debt Securities

 

Section 12.01. Subordinated Debt Securities Subordinate to Claims of Senior Creditors.

 

(a) Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company covenants and agrees, and each Holder of Subordinated Debt Securities of each series, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article 12 in the event of:

 

(i) an order being made, or an effective resolution being passed, for the winding-up of the Company (except, in any such case, a solvent winding-up solely for the purposes of a reorganization, reconstruction or amalgamation of the Company, the terms of which reorganization, reconstruction, amalgamation do not provide that the Subordinated Debt Securities shall thereby become redeemable or repayable in accordance with these conditions); or

 

(ii) a Qualifying Administration,

 

the Holders will have a right against the Company in respect of or arising under (including any damages awarded for breach of any obligations under) the Subordinated Debt Securities and the Indenture relating to them to claim for all amounts due to them in respect of the Subordinated Debt Securities including the principal amount thereof (plus any premium) and any accrued but unpaid interest and any Deferred Amounts thereon.  Such rights and claims will be subordinated in the manner provided in this Section 12.01 to the claims of all Senior Creditors but shall rank at least pari passu with the claims of 

 

  

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holders of all other subordinated obligations of the Company which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital and shall rank in priority to the claims of holders of all undated or perpetual subordinated obligations of the Company and to the claims of holders of all classes of share capital of the Company.

 

(b) The provisions of this Article 12 shall apply only to rights or claims payable under Section 12.01(a) or to amounts payable pursuant thereto and under any Subordinated Debt Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Section 5.06 hereof, or the rights and remedies of the Trustee in respect thereof.

 

(c) The provisions of this Article 12 shall not be applicable to any amounts in respect of any of the Subordinated Debt Securities of any series for the payment of which funds have been deposited in trust with the Trustee or any Paying Agent or have been set aside by the Company or the Guarantor in trust in accordance with the provisions of this Subordinated Debt Securities Indenture; provided, however, that at the time of such deposit or setting aside, and immediately thereafter, the foregoing provisions of this Section 12.01 are complied with.

 

Section 12.02. Provisions Solely to Define Relative Rights.  The provisions of this Article 12 are and are intended solely for the purpose of defining the relative rights of the Holders of the Subordinated Debt Securities of each series on the one hand and the Senior Creditors on the other hand. Nothing contained in this Article or elsewhere in this Subordinated Debt Securities Indenture or in such Subordinated Debt Securities is intended to or shall (a) impair, as among the Company and the Holders of the Subordinated Debt Securities, the obligation of the Company or the Guarantor, which is absolute and unconditional, to pay to the holders of such claims the principal of, premium, if any, and interest, if any, on such Subordinated Debt Securities as and when the same shall become due and payable in accordance with their terms and this Subordinated Debt Securities Indenture; or (b) affect the relative rights against the Company or the Guarantor of the Holders of such Subordinated Debt Securities; or (c) prevent the Trustee or the Holder of any Subordinated Debt Securities of the series from exercising all remedies otherwise permitted by applicable law upon default under this Subordinated Debt Securities Indenture, subject to the rights, if any, under this Article of the Senior Creditors to receive cash, property or securities otherwise payable or deliverable to the Trustee or such holder.

 

Section 12.03. Trustee to Effectuate Subordination.  Each Holder of a Subordinated Debt Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination of the Subordinated Debt Securities provided in this Article Twelve and appoints the Trustee his attorney-in-fact for any and all such purposes.

 

Section 12.04. No Waiver of Subordination Provisions.  No right of any present or future Senior Creditors to enforce subordination as herein provided shall at any time in 

 

  

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any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such Senior Creditor or by any noncompliance by the Company with the terms, provisions and covenants of this Subordinated Debt Securities Indenture, regardless of any knowledge thereof any such Senior Creditor may have or be otherwise charged with.

 

Section 12.05. Notice to Trustee.  Upon the occurrence of any Event of Default or Default, the Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment when due to or by the Trustee in respect of the Subordinated Debt Securities of a series. Notwithstanding the provisions of this Article or any other provisions of this Subordinated Debt Securities Indenture but subject to the provisions of Section 12.01, the 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 Trustee in respect of such Subordinated Debt Securities unless and until the Trustee shall have received written notice thereof from the Company or a Senior Creditor or from any trustee therefor; and, prior to the receipt of any such written notice by a Responsible Officer of the Trustee, the 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 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 any premium and interest, if any, on any Subordinated Debt Security), then, subject to the provisions of Section 12.01, the 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 Trustee shall be entitled to 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, or a trustee therefor. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a Senior Creditor to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of claims held by such Person, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

 

Section 12.06. Reliance on Judicial Order or Certificate of Liquidating Agent.  Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee, subject to the provisions of Section 6.01, the Holders of the Subordinated Debt Securities of the series shall be entitled to rely upon (a) any order or decree entered by any court in Scotland (but not elsewhere) in which such winding-up of the Company or similar case or proceeding, including a proceeding for the suspension of payments under Scottish law, is pending, or (b) a certificate of the liquidator of the Company (the “Liquidator”), assignee for the benefit of creditors, agent or other Person making such 

 

  

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payment or distribution, delivered to the Trustee or the Holders of such Subordinated Debt Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the Senior Creditors and other claims against the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12.

 

Section 12.07. Trustee Not Fiduciary for Senior Creditors.  The Trustee shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Subordinated Debt Securities of the series or to the Company or to any other Person cash, property or securities to which any Senior Creditors shall be entitled by virtue of this Article or otherwise.

 

Section 12.08. Rights of Trustee as Senior Creditor; Preservation of Trustee’s Rights.  The 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 which may at any time be held by it, to the same extent as any other Senior Creditor, and nothing in this Subordinated Debt Securities Indenture shall deprive the Trustee of any of its rights as such holder.

 

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

 

Section 12.09. Article Applicable to Paying Agents.  At all times when a Paying Agent other than the Trustee shall have been appointed by the Company or the Guarantor and be then acting hereunder, the term “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 Trustee; provided, however, that Section 12.08 shall not apply to the Company, the Guarantor or any Affiliate of the Company or the Guarantor if the Company or the Guarantor or such Affiliate acts as Paying Agent.

 

ARTICLE 13

Guarantee and Indemnity

 

Section 13.01. The Guarantee.  The Guarantor hereby unconditionally guarantees to each Holder of a Subordinated Debt Security the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Subordinated Debt Security and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Subordinated Debt Security and any and all amounts due under this Subordinated Debt Securities Indenture, when and as the same shall become due and payable, whether at maturity, by acceleration, redemption, repayment or otherwise, in accordance with the terms of such Subordinated Debt Security and of this Subordinated Debt Securities Indenture. In case of the failure of the Company to punctually pay any such principal, premium, interest, Additional Amounts or sinking fund payment and any and all amounts due and owing under this Subordinated Debt Securities Indenture (including, but not limited to, the fees, expenses 

 

  

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and indemnities of the Trustee), the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise, and as if such payment were made by the Company.

 

Section 13.02. Net Payments.

 

(a) All payments on, or in respect of, the Subordinated Debt Securities of any series shall be made by the Guarantor without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any Taxing Jurisdiction, unless such deduction or withholding is required by law.  If a withholding or deduction at source is required, the Guarantor shall, subject to the same limitations and exceptions set forth in ‎Section 10.04 of this Subordinated Debt Securities Indenture, pay to the Holder of any such Subordinated Debt Security such additional amounts as may be necessary so that every net payment of principal, premium, if any, interest or any other amount made to such Holder, after such withholding or deduction, shall not be less than the amount provided for in such Subordinated Debt Security and this Subordinated Debt Securities Indenture to be then due and payable.

 

(b) Except as otherwise provided in or pursuant to this Subordinated Debt Securities Indenture or the Subordinated Debt Securities of the applicable series, at least 10 days prior to the first interest payment date on which payment is to be made under ‎Section 13.01 with respect to a series of Subordinated Debt Securities (or if the Subordinated Debt Securities of such series shall not bear interest prior to Maturity, the first day on which a payment of principal is made), and at least 10 days prior to each date on which payment of principal or interest is to be made under ‎Section 13.01 if there has been any change with respect to the matters set forth in the below-mentioned Officer’s Certificate, the Guarantor shall furnish to the Trustee and the Paying Agent, an Officer’s Certificate instructing the Trustee and such Paying Agent whether such payment of principal of and premium, if any, interest or any other amounts on the Subordinated Debt Securities of such series shall be made to Holders of Subordinated Debt Securities of such series without withholding for or on account of any tax, fee, duty, assessment or other governmental charge described in this ‎Section 13.02.  If any such withholding shall be required, then such Officer’s Certificate shall specify by Taxing Jurisdiction the amount, if any, required to be withheld on such payments to such Holders of Subordinated Debt Securities, and the Guarantor agrees to pay to the Trustee or such Paying Agent the additional amounts required by this ‎Section 13.02.  The Guarantor covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence 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 Officer’s Certificate furnished by the Guarantor pursuant to this ‎Section 13.02.

 

Section 13.03. Subordination of the Guarantee.

 

  

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(a) Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Guarantor covenants and agrees, and each Holder of Subordinated Debt Securities of each series, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article 13, in the event of:

 

(i) an order being made, or an effective resolution being passed, for the winding-up of the Guarantor (except, in any such case, a solvent winding-up solely for the purposes of a reorganization, reconstruction or amalgamation of the Guarantor, the terms of which reorganization, reconstruction, amalgamation do not provide that the Subordinated Debt Securities shall thereby become redeemable or repayable in accordance with these conditions); or

 

(ii) a Qualifying Administration,

 

the Holders will have a right against the Guarantor in respect of or arising under (including any damages awarded for breach of any obligations under) the Subordinated Debt Securities and the Subordinated Debt Securities Indenture to claim for all amounts due to them in respect of the Subordinated Debt Securities including the principal amount thereof (plus any premium) and any accrued but unpaid interest and any Deferred Amounts thereon and any and all amounts due under this Subordinated Debt Securities Indenture.  Such rights and claims will be subordinated in the manner provided in this Section 13.03 to the claims of all Guarantor Senior Creditors but shall rank at least pari passu with the claims of holders of all other subordinated obligations of the Guarantor which constitute, or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital and shall rank in priority to the claims of holders of all undated or perpetual subordinated obligations of the Guarantor and to the claims of holders of all classes of share capital of the Guarantor.

 

(b) The provisions of this Article 13 shall apply only to rights or claims payable under Section 13.03(a) or to amounts payable pursuant thereto and under any Subordinated Debt Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Section 5.06 hereof, or the rights and remedies of the Trustee in respect thereof.

 

(c) The provisions of this Article 13 shall not be applicable to any amounts in respect of any of the Subordinated Debt Securities of any series for the payment of which funds have been deposited in trust with the Trustee or any Paying Agent or have been set aside by the Company or the Guarantor in trust in accordance with the provisions of this Subordinated Debt Securities Indenture; provided, however, that at the time of such deposit or setting aside, and immediately thereafter, the foregoing provisions of this Section 13.02 are complied with.

 

(d) Except as set out in this Section 13.03, Sections 12.02 through 12.09 shall govern the rights and obligations under the Guarantee of each Holder, the Trustee and the 

 

  

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Guarantor, on a like basis, as if relating to rights and obligations arising under the Guarantee with respect to the Guarantor and the Guarantor Senior Creditors rather than the Subordinated Debt Securities with respect to the Company and the Company’s Senior Creditors.

 

Section 13.04. Guarantee Unconditional, Etc.  The Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute, irrevocable and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any Subordinated Debt Security or this Subordinated Debt Securities Indenture, any failure to enforce the provisions of any Subordinated Debt Security or this Subordinated Debt Securities Indenture, or any waiver, modification, consent or indulgence granted with respect thereto by the Holder of such Subordinated Debt Security or the Trustee, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor.  The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any such Subordinated Debt Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, any premium and interest on, and any additional amounts and sinking fund payments required with respect to, the Subordinated Debt Securities and the complete performance of all other obligations contained in the Subordinated Debt Securities.  The Guarantor further agrees, to the fullest extent that it lawfully may do so, that, as between the Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in Section 5.02 hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or prohibition extant under any bankruptcy, insolvency, reorganization or other similar law of any jurisdiction preventing such acceleration in respect of the obligations guaranteed hereby.

 

Section 13.05. Reinstatement.  This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time payment on any Subordinated Debt Security, in whole or in part, is rescinded or must otherwise be restored to the Company or the Guarantor upon the bankruptcy, liquidation or reorganization of the Company or otherwise.

 

Section 13.06. Subrogation.  The Guarantor shall be subrogated to all rights of the Holder of any Subordinated Debt Security against the Company in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of, any premium and interest on, and any additional amounts and sinking fund payments required with respect to, all Subordinated Debt Securities shall have been paid in full.

 

  

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Section 13.07. Indemnity.  As a separate and alternative stipulation, the Guarantor unconditionally and irrevocably agrees that any sum expressed to be payable by the Company under this Subordinated Debt Securities Indenture or the Subordinated Debt Securities but which is for any reason (whether or not now known or becoming known to the Company, the Guarantor, the Trustee or any Holder of any Subordinated Debt Security) not recoverable from the Guarantor on the basis of the Guarantee will nevertheless be recoverable from it as if it were the sole principal debtor and will be paid by it to the Trustee on demand.  This indemnity constitutes a separate and independent obligation from the other obligations in this Subordinated Debt Securities Indenture, gives rise to a separate and independent cause of action and will apply irrespective of any indulgence granted by the Trustee or any Holder of any Subordinated Debt Security.

 

Section 13.08. Assumption By Guarantor.  (a) The Guarantor may, without the consent of the Holders, assume all of the rights and obligations of the Company hereunder with respect to a series of Subordinated Debt Securities and under the Subordinated Debt Securities of such series if, after giving effect to such assumption, no Event of Default or event which with the giving of notice or lapse of time, or both, would become an Event of Default, shall have occurred and be continuing.  Upon such an assumption, the Guarantor shall execute a supplemental indenture evidencing its assumption of all such rights and obligations of the Company and the Company shall be released from its liabilities hereunder and under such Subordinated Debt Securities as obligor on the Subordinated Debt Securities of such Series.

 

(b) The Guarantor shall assume all of the rights and obligations of the Company hereunder with respect to a series of Subordinated Debt Securities and under the Subordinated Debt Securities of such series if, upon a default by the Company in the due and punctual payment of the principal, sinking fund payment, if any, premium, if any, or interest on such Subordinated Debt Securities, the Guarantor is prevented by any court order or judicial proceeding from fulfilling its obligations under Section 13.01 with respect to such series of Subordinated Debt Securities.  Such assumption shall result in the Subordinated Debt Securities of such series becoming the direct obligations of the Guarantor and shall be effected without the consent of the Holders of the Subordinated Debt Securities of any series.  Upon such an assumption, the Guarantor shall execute a supplemental indenture evidencing its assumption of all such rights and obligations of the Company, and the Company shall be released from its liabilities hereunder and under such Subordinated Debt Securities as obligor on the Subordinated Debt Securities of such series.

 

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.

 

[SIGNATURE PAGE FOLLOWS]

 

  

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IN WITNESS WHEREOF, the Company and the Trustee have caused this Subordinated Debt Securities Indenture to be duly executed, all as of the day and year first above written.

 

	
THE ROYAL BANK OF SCOTLAND PLC

 

 

	
By:

	  
	
Name:

	
Title:

 

	
THE ROYAL BANK OF SCOTLAND GROUP plc

 

 

 

	
By:

	  
	
Name:

	
Title:

	
  

 

	
By:

	  
	
Name:

	
Title:

	
THE BANK OF NEW YORK MELLON LONDON BRANCH

 

 

	
By:

	  
	
Name:

	
Title:

 

  

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UNITED KINGDOM OF GREAT BRITAIN              )  ss.:

 

CITY OF EDINBURGH, SCOTLAND                         )

 

On the _________ day of ____________ , before me, _____________________________, Notary Public of the City of Edinburgh, Scotland duly admitted and sworn, personally came _________________________, to me known, who, being by me duly sworn, did depose and say that he is ____________________ of  THE ROYAL BANK OF SCOTLAND GROUP plc, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.

 

 

 

____________________________________

A Notary Public of Edinburgh, Scotland.

My Commission expires with life.

 

 

 

82Exhibit 10.1

Exhibit 10.1

    

OPEN TEXT CORPORATION
(the “Company”)

2004 STOCK OPTION PLAN

As amended September 27, 2012

1.    PURPOSE OF THE PLAN

1.1    This 2004 Stock Option Plan has been established by the Company to provide long-term incentives to attract, motivate and retain certain key employees, officers and directors of, and consultants providing services to, the Company.

2.    DEFINITIONS

2.1    In this Plan, the following terms have the following meanings:

"Affiliate" has the meaning ascribed to that term in the Securities Act (Ontario);

"Applicable Law" means any applicable provision of law, domestic or foreign, including, without limitation, applicable securities legislation, together with all regulations, rules, policy statements, rulings, notices, orders or other instruments promulgated thereunder and Stock Exchange Rules;

"Associate" has the meaning ascribed to that term in the Securities Act (Ontario);

"Board" means the board of directors of the Company;

"Business Day" means any day other than a Saturday, a Sunday or a statutory holiday observed in the Province of Ontario;

"Company" means Open Text Corporation, its subsidiaries and their respective successors and assigns, and any reference in the Plan to action by the Company means action by or under the authority of the Board or any person or the Committee that has been designated for that purpose by the Company;

"Committee" means a committee, if any, created by the Board to administer the Plan pursuant to the provisions contained herein;

"Consultant" means a person providing on-going services to the Company excluding, for greater certainty, a Director of the Company;

"Date of Grant" of an Option means the date the Option is granted to a Participant under the Plan;

"Designated Number" has the meaning ascribed to it in Subsection 3.2(a) hereof;

"Designated Percentage" has the meaning ascribed to it in Subsection 3.2(c) hereof;

"Director" means a member of the Board;

"Earliest Exercise Date" has the meaning ascribed to it in Subsection 3.2(d) hereof;

"Effective Date" means the 26th day of October 2004, when this Plan was approved by the Board;

"Eligible Employee" has the meaning ascribed to it in Section 3.1 hereof;

1

"Exercise Notice" has the meaning ascribed to it in Subsection 3.5(a) hereof;

"Expiry Time" means, in relation to an Option, 5:00 p.m. (Toronto time) on the Latest Exercise Date;

"Insider" means:

		
	(i)
	an insider as defined in the Securities Act (Ontario), other than a person who falls within that definition solely by virtue of being a director or senior officer of a subsidiary of the Company; and

(ii)    an Associate of any person who is an insider by virtue of (i), above;

"ISO" has the meaning ascribed to it in Section 9.1 hereof;

"Latest Exercise Date" has the meaning ascribed to it in Subsection 3.2(e) hereof;

"Market Price" on any date means, in respect of the Shares, the closing price of the Shares on the trading day immediately preceding such date on the quotation system or stock exchange on which the greatest volume of trading of Shares has occurred on that trading day;

"Non-Executive Director" means any Director of the Company who is not an employee or officer of the Company or any Affiliate;

"Offeror" or "offeror" has the meaning ascribed to that term in the Securities Act (Ontario);

"Option" means a right granted under the Plan to a Participant to purchase Shares in accordance with the Plan;

"Option Price" has the meaning ascribed to it in Subsection 3.2(b) hereof;

"Option Year" in respect of an Option means the year commencing on the Earliest Exercise Date of the Option or on any anniversary of such date, and ending prior to or on the Latest Exercise Date;

"Original Security" has the meaning ascribed to it in Section 5.5 hereof;

"Outstanding Issue" means the aggregate number of Shares that are outstanding immediately prior to the Share issuance in question, excluding Shares which have been issued pursuant to Share Compensation Arrangements within the preceding one year period;

"Participant" means an Eligible Employee who has agreed to participate in the Plan on such terms as the Company may specify at the time he or she is designated as an Eligible Employee;

"Plan" means this 2004 Stock Option Plan, as amended and restated from time to time;

"Replacement Security" has the meaning ascribed to it in Section 5.5 hereof;

"Shares" means common shares of the Company, and include any shares of the Company into which such shares may be converted, reclassified, subdivided, consolidated, exchanged or otherwise changed, whether pursuant to a reorganization, amalgamation, merger, arrangement or other form of reorganization;

"Share Compensation Arrangement" means a stock option, stock option plan, stock purchase plan where the issuer provides financial assistance or matches the whole or a portion of the purchase price of the securities being purchased, stock appreciation rights involving the issuance of securities from treasury, or any other compensation or incentive mechanism involving the issuance or potential issuance of securities to one or more an employee, Insider or Consultant of the Company or any Affiliate, including a share purchase from treasury which is financially assisted by the Company by way of a loan, guaranty or otherwise;

"Stock Exchange Rules" means the applicable rules of any stock exchange or quotation system upon which shares of the Company are listed or quoted, as applicable;

2

"Take-over Bid" means a take-over bid, as defined in the Securities Act (Ontario), which is a "formal bid" as defined in such Act, and which is made for all of the issued and outstanding Shares in the capital of the Company and may exclude (i) those Shares in the capital of the Company which are then owned by the offeror under such Take-over Bid, and/or (ii) those Shares in the capital of the Company which the offeror under such Take-over Bid then otherwise has, directly or indirectly, the right to acquire.

"Unexercisable Shares" has the meaning ascribed to it in Subsection 3.5(b) hereof;

"US Optionee" has the meaning ascribed to it in Section 9.1 hereof;

"Value" on any date means the amount of the expense associated with the grant of an Option or Share Compensation Arrangement, as applicable, as determined in accordance with United States generally accepted accounting principles (as determined in accordance with the Black-Scholes option pricing model) and reflected in the financial statements of the Company; and

"Vesting Date" has the meaning ascribed to it in Subsection 3.2(c) hereof.

2.2    In this Plan, unless the context requires otherwise, references to the male gender include the female gender, words importing the singular number may be construed to extend to and include the plural number, and words importing the plural number may be construed to extend to and include the singular number.

3.    GRANT OF OPTIONS AND TERMS

3.1    The Company may, from time to time, designate one or more bona fide full-time employees of the Company, Consultants or Directors as "Eligible Employees" for the purposes of the Plan. If such a person agrees to participate in the Plan on such terms as the Company may specify at the time he or she is designated as an Eligible Employee, he or she shall become a Participant in the Plan.

3.2    The Company may, from time to time, grant an Option to a Participant to acquire Shares in accordance with the Plan.  In granting such Option, subject to the provisions hereof, the Company shall designate,

(a)    the maximum number (the "Designated Number") of Shares which the Participant may purchase under the Option;

(b)    the price (the "Option Price") per Share at which the Participant may purchase his or her Shares under the Option, which price shall be determined by the Company in accordance with Section 3.3 hereof;

(c)    a percentage of the Designated Number (the "Designated Percentage"), determined in accordance with Section 3.4 hereof, representing the maximum number of Shares that may be purchased by a Participant pursuant to the exercise of that Option in each year during the term of such Option, and the date after which such Shares may be purchased (the "Vesting Date"); provided that if a Participant exercises an Option and purchases fewer Shares than the Designated Percentage in any year during the term of the Option, any remaining portion of the Designated Percentage of Shares shall be available for purchase at any time subsequent to the Vesting Date for such Option and prior to the Expiry Time, in addition to Shares otherwise becoming available to the Participant for purchase after any subsequent Vesting Date.

(d)    the earliest date (the "Earliest Exercise Date") on which the Option may be exercised, which may be the Date of Grant;

(e)    the latest date (the "Latest Exercise Date") on which the Option may be exercised, which shall be no later than seven (7) years after the Date of Grant, provided that if at any time the Latest Exercise Date should be determined to occur either during a period in which the holder of the Option is restricted from trading in securities of the Company under the insider trading policy or other policy of the Company or within ten Business Days following such a period, the Latest Exercise Date shall be deemed to be the date that is the tenth Business Day following the date of expiry of such period; and

(f)    with respect to Options granted pursuant to Section 9 hereof, whether the Option is intended to constitute an ISO.

3

3.3    The Option Price in respect of an Option shall be determined by the Company, but shall be not less than the Market Price of the Company's Shares on the Date of Grant of the Option provided that if the Shares are not then traded on a stock exchange or on a quotation system, the Option Price shall be the fair market value of the Shares as determined in good faith by the Board.

3.4    The Designated Percentage in respect of an Option shall be determined by the Company in its sole discretion, however, if the Company does not specify otherwise, then the Designated Percentage shall be twenty-five percent (25%).

3.5    If a Participant should die and the circumstances specified in Section 3.6 had not occurred in relation to such Participant and such Participant, at the time of his or her death, held an Option(s) in respect of which the Expiry Time had not then occurred:

(a)    in the case of each Option so held by the deceased Participant which had vested and was exercisable with respect to some or all of the Shares forming the subject matter thereof as at the date of the death of the deceased Participant, the legal representatives of the deceased Participant shall be entitled to send a notice in writing (an "Exercise Notice") to the Company advising that they wish to exercise such Option which notice, to be effective, must be actually received by the Company by no later than the earlier of 5:00 p.m. (Toronto time) on the date which is the 180th day following the date of the death of such deceased Participant and the Expiry Time, and must specify the number of Shares in respect of which such Option is wished to be exercised (provided that such exercise can only be in respect of up to that number of Shares that the deceased Participant could have exercised such Option as at the date of his or her death, subject to Subsection 3.5(b) hereof). In the event that:

(i)    an effective Exercise Notice is actually received by the Company by no later than the earlier of 5:00 p.m. (Toronto time) on the date which is the 180th day following the date of the death of such deceased Participant and the Expiry Time, then the Company shall issue to the estate of the deceased Participant that number of Shares as were specified in the Exercise Notice (provided that the maximum number of Shares which can be issued shall not exceed that number of Shares for which the deceased Participant could have exercised such Option as at the date of his or her death, subject to Subsection 3.5(b) hereof), which issuance shall occur as soon as practicable thereafter. If the Exercise Notice so received is in respect of less than the maximum number of Shares for which the deceased Participant could have exercised such Option as at the date of his or her death, such Option shall, subject to Subsection 3.5(b) hereof, in all respects cease and terminate and be of no further force or effect whatsoever as to such of the Shares in respect of which such Option had not been previously exercised; and

(ii)    an effective Exercise Notice is not actually received by the Company by the earlier of 5:00 p.m. (Toronto time) on the date which is the 180th day following the date of the death of such deceased Participant and the Expiry Time, such Option shall, subject to Subsection 3.5(b) hereof, in all respects cease and terminate and be of no further force or effect whatsoever as to such of the Shares in respect of which such Option had not been previously exercised;

(b)    in the case of each Option so held by the deceased Participant which:

(i)    was not vested and was not exercisable with respect to all of the Shares forming the subject matter thereof as at the date of the death of the deceased Participant; and/or

(ii)    was not exercised on or prior to the earlier of 5:00 p.m. (Toronto time) on the date which is the 180th day following the death of such deceased Participant and the Expiry Time with respect to all of the Shares in respect of which it could have been exercised as at the date of the death of the deceased Participant,

(the Shares in respect of which such Option was then not exercisable or exercised being collectively referred to in this Subsection 3.5(b) as the "Unexercisable Shares") such Option may, with the prior written consent of the Company (which consent may be given or withheld by the Company in its sole and arbitrary discretion), be exercised by the deceased Participant's legal representatives with respect to up to that number of the Unexercisable Shares as the Company may, in its sole and arbitrary discretion, designate and advise such legal representatives of by notice in writing given within one year following the date of the death of the deceased Participant, provided that any such exercise is made by the deceased Participant's legal representatives pursuant to a written notice of exercise given by them to the Company on or prior to the earlier of 5:00 p.m. (Toronto time) on the date which is the 60th day following the giving of such notice by the Company and the Expiry Time and, if such a notice of exercise is given by the legal representatives of the 

4

deceased Participant, the Company shall issue to the estate of the deceased Participant that number of Shares as were specified in the notice of exercise, which issuance shall occur as soon as practicable thereafter.

		
	3.6
	(a)    Except as otherwise provided in subsection 3.6(b) or in a written agreement with the Company, and approved by the Board, if a Participant:

(i)    resigns or is discharged as, or otherwise ceases to be, an employee or officer of the Company; or

(ii)    was engaged as a Consultant and is not an employee or officer of the Company, and such Participant resigns from such engagement, the engagement is terminated or otherwise ceases to be so engaged,

immediately after the earlier of 5:00 p.m. (Toronto time) on the 90th day following the date of the occurrence of any such resignation, discharge, removal or termination other than by reason of death as contemplated in Section 3.5 (and without the requirement for any further act or formality including, without limitation, the giving of any notices) and the Expiry Time each and every Option granted to such Participant under the Plan, which has not been exercised by said time shall in all respects immediately cease and terminate and be of no further force or effect whatsoever as to the Shares in respect of such Option, regardless of whether or not such Option had vested with respect to such Shares.

(b)    Except as otherwise provided in a written agreement with the Company, and approved by the Board, if a Participant:

(i)    is discharged or terminated as an employee or officer of the Company for cause; or

(ii)    was engaged as a Consultant and is not an employee or officer of the Company, and the engagement is terminated by the Company for cause or breach of duty,

immediately upon the occurrence of any such discharge, removal or termination other than by reason of death as contemplated in Section 3.5 (and without the requirement of any further act or formality including, without limitation, the giving of any notices) each and every Option granted to such Participant under the Plan, which had not been exercised prior to such occurrence, shall in all respects immediately cease and terminate and be of no further force or effect whatsoever as to Shares in respect of such Options, regardless of whether or not such Option had vested with respect to such Shares.

For greater certainty, the Company shall in its sole and absolute discretion determine whether "cause" or a "breach of duty" exists with respect to a discharge or termination.

		
	3.7
	Participation in the Plan shall be entirely voluntary and any decision not to participate shall not affect the employment of any Eligible Employee with the Company.

		
	3.8
	The Company shall in its sole discretion, subject only to the terms of this Plan, determine the terms of all Options.

4.    EXERCISE OF PARTICIPANTS' OPTIONS

4.1    Subject to earlier termination as provided for in Sections 3.5, 3.6 and 6.3, a Participant's Option shall terminate and may not be exercised after the Latest Exercise Date.

4.2    Other than as provided for in Sections 3.5, 3.6 and 6.3, the exercise of an Option under the Plan shall be made by notice to the Company in writing specifying and subscribing for the number of Shares in respect of which the Option is being exercised at that time and accompanied by a certified cheque or other means of cash payment satisfactory to the Company in the amount of the aggregate Option Price for such number of Shares. As of the day the Company receives such notice and such payment, the Participant (or the person claiming through him or her, as the case may be) shall be entitled to be entered on the share register of the Company as the holder of the number of Shares in respect of which the Option was exercised and as promptly as possible thereafter shall be delivered a certificate representing that number of Shares.

4.3    Upon the exercise of any Option, the Company shall have the right to require the Participant to remit to the Company an amount sufficient to satisfy all federal, provincial, state and local withholding tax requirements, if any, prior to the delivery of any certificate or certificates for Shares.

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4.4    Upon the disposition of any Shares acquired through the exercise of an Option, the Company shall have the right to require the Participant to remit to the Company an amount sufficient to satisfy all federal, provincial, state and local withholding tax requirements, if any, as a condition to the registration of the transfer of such Shares on its books. Whenever payments are to be made under the Plan to the Company in cash or by certified cheque, such payments shall be net of any amount sufficient to satisfy all federal, provincial, state and local withholding tax requirements.

5.    MAXIMUM NUMBER OF SHARES TO BE ISSUED UNDER THE PLAN

5.1    The maximum number of Shares which may be issued under Options granted and outstanding pursuant to this Plan by the Company to Participants is 6,300,000.

5.2    No Options shall be granted to any Participant if the total number of Shares issuable to such Participant under this Plan, together with any Shares reserved for issuance to such Participant under options for services or any other stock option plans, would exceed 5% of the then issued and outstanding Shares.

5.3    No Options shall be granted to any Participant if such grant could result, at any time, in:

(a)    the aggregate number of Shares issuable to Insiders at any time and issued to Insiders within the one-year period prior to such time pursuant to Options or other Share Compensation Arrangements exceeding 10% of the then issued and outstanding Shares; 

(b)    the aggregate number of Shares reserved for issuance subsequent to December 7, 2006 pursuant to Options granted under this Plan or any other Share Compensation Arrangements in effect as of December 7, 2006 to Non-Executive Directors exceeding 0.49% of the then issued and outstanding Shares;

(c)    the aggregate Value of Options granted under this Plan to, or any other Share Compensation Arrangements entered into with, a Non-Executive Director during any fiscal year of the Company exceeding $100,000; or

(d)    the issuance to any one Insider and such Insider's Associates, within a one-year period, pursuant to Options or any other stock option plan of an aggregate number of Shares exceeding 5% of the then issued and outstanding Shares.

5.4    If any Option is terminated, cancelled or has expired without being fully exercised, any unissued Shares which have been reserved to be issued upon the exercise of the Option shall become available to be issued upon the exercise of Options subsequently granted under the Plan, provided that any such termination or cancellation of Options shall be conducted in accordance with the Stock Exchange Rules.

5.5    If an Option held by a Participant (an “Original Security”) is terminated or cancelled (other than pursuant to Article 6), no new Option (a “Replacement Security”) shall be granted to the Participant prior to the Latest Exercise Date of the Original Security unless the Option Price of the Replacement Security is equal to or greater than the Option Price of the Original Security.

6.    ANTI-DILUTION AND TAKE-OVER BID PROVISIONS

6.1    Notwithstanding any other provision of the Plan, in the event of any change in the Shares by reason of any stock dividend, split, recapitalization, reclassification, amalgamation, arrangement, merger, consolidation, combination or exchange of Shares or distribution of rights to holders of Shares or any other form of corporate reorganization whatsoever, an equitable adjustment shall be made to any Options then outstanding and in the Option Price in respect of such Options. Such adjustment shall be made by the Board and, subject to Applicable Law, shall be conclusive and binding for all purposes of the Plan.

6.2    The Company shall not be required to issue fractional shares in satisfaction of its obligations hereunder.  Any fractional interest in a Share that would, except for the provisions of this Section 6.2, be deliverable upon the exercise of any Option shall be cancelled and not be deliverable by the Company.

6.3    If a Take-over Bid is made, then, notwithstanding Subsections 3.2(c), (d) and (e) hereof, but subject to the other provisions of the Plan, the following shall apply:

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(a)    The Company may, in its sole and arbitrary discretion, give its express consent to the exercise of any Options which are outstanding at the time that such Take-over Bid was made regardless of whether such Options have vested in accordance with Subsection 3.2(c).

(b)    If the Company has so expressly consented to the exercise of any Options outstanding at the time that such Take-over Bid was made, the Company shall, immediately after such consent has been given, give a notice in writing (a "Take-over Bid Notice") to each Participant then holding unexpired Options (whether vested or not) advising of the making of the Take-over Bid and such notice shall provide reasonable particulars of the Take-over Bid and shall specify that the Participant may conditionally exercise all or any portion of any such unexpired Options then held by the Participant in accordance with Subsection 6.3(c) below.

(c)    If a Participant wishes to conditionally exercise any such Option, such exercise shall be made by notice in writing to the Company at any time during the period commencing on the date of the Take-over Bid Notice and ending on the date which is the earlier of the 10th day following the giving of the Take-over Bid Notice and the day immediately preceding the date specified in the Take-over Bid as the last date on which the offer therein provided for may be taken up. Such notice shall specify and conditionally subscribe for the shares (the "Specified Shares") issuable upon conditional exercise of such Option and shall be accompanied by a certified cheque or other means of cash payment satisfactory to the Company in the amount of the aggregate Option Price for such number of Specified Shares. The conditional exercise of the Option and the conditional subscription for the Specified Shares shall be conditional upon: (i) the Participant tendering the Specified Shares into the Take-over Bid, and (ii) the completion of the Take-over Bid on or before the expiry of the Take-over Bid (which shall include the irrevocable obligation of the offeror to take up and pay for all Specified Shares deposited under the Take-over Bid).  Provided that, if necessary in order to permit such Participant to participate in the Take-over Bid, the Options so exercised shall be deemed to have been exercised and the issuance of the Specified Shares issuable upon such exercise shall be deemed to have been issued, effective as of the first Business Day immediately prior to the date on which the Take-over Bid was made.

(d)    If, upon the expiry of the applicable Option exercise period specified in Subsection 6.3(c) above, the Take-over Bid is completed and a Participant did not, prior to the expiration of such exercise period, conditionally exercise the entire or any portion of the Option which such Participant could have exercised in accordance with the provisions of this Section 6.3, then, as of and from the expiry of such exercise period, the Participant shall cease to have any further right to exercise such Option, in whole or in part, and each such Option shall be deemed to have expired and shall be null and void.

(e)    In no event shall the Participant be entitled to sell the Specified Shares otherwise than pursuant to a Take-over Bid.

7.    LOANS OR GUARANTEES FOR LOANS TO PARTICIPANTS

7.1    Subject to Applicable Law, the Company may, at any time, in its sole discretion, arrange for the Company to make loans or provide guarantees for loans by financial institutions to assist Participants to purchase Shares upon the exercise of the Options so granted and to pay any tax exigible upon exercise of the Options. Such loans shall bear interest at such rates, if any, and be on such other terms as may be determined by the Company, provided however, that the repayment of such loans shall in each case be secured by the Shares purchased with the proceeds of such loans and shall not exceed the term of the Option and the Company shall, in its sole discretion, determine the procedures, documents and other steps necessary or desirable to secure the repayment of such loans with such Shares.

8.    ACCOUNTS AND STATEMENTS

8.1    The Company shall maintain records of the details of each Option granted to each Participant under the Plan, including the Date of Grant, Designated Number, the Option Price of each Option, the Vesting Date or Dates, the Latest Exercise Date or Dates, the number of Shares in respect of which the Option has been exercised and the maximum number of Shares which the Participant may still purchase under the Option. Upon request therefore from a Participant and at such other times as the Company shall determine, the Company shall furnish the Participant with a statement setting forth the details of his Options. Such statement shall be deemed to have been accepted by the Participant as correct unless written notice to the contrary is provided to the Company within thirty (30) days after such statement is given to the Participant.

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9.    OPTIONS GRANTED TO US RESIDENTS OR CITIZENS

9.1    Any Option granted under this Plan to a Participant who is a citizen or resident of the United States (including its territories, possessions and all areas subject to the jurisdiction) (a "U.S. Optionee") may be an incentive stock option (an "ISO") within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, of the United States (the "Code"), but only if so designated by the Company in the agreement evidencing such Option. No provision of this Plan, as it may be applied to a US Optionee, shall be construed so as to be inconsistent with any provision of Section 422 of the Code. Grants of Options to US Optionees which are not ISO's may be granted pursuant to Section 3 hereof. Notwithstanding anything in this Plan contained to the contrary, the following provisions shall apply to ISO's granted to each US Optionee:

(a)    ISO's shall only be granted to US Optionees who are, at the time of grant, officers or key employees;

(b)    the aggregate fair market value (determined as of the time an ISO is granted) of the Shares subject to ISO's exercisable for the first time by a US Optionee during any calendar year under this Plan and all other Stock Option Plans, within the meaning of Section 422 of the Code, of the Company shall not exceed One Hundred Thousand Dollars in US funds (US $100,000); provided that options for Shares which exceed such aggregate fair market value shall not be void, but shall instead be options which are granted under Section 3 hereof and are not ISOs;

(c)    the Option Price for Shares under each ISO granted to a US Optionee pursuant to this Plan shall be not less than the fair market value of such Shares at the time the Option is granted, as determined in good faith by the Board at such time;

(d)    if any US Optionee to whom an ISO is to be granted under the Plan at the time of the grant of such ISO is the owner of shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company, then the following special provisions shall be applicable to the ISO granted to such individual:

(i)    the Option Price (per Share) subject to such ISO shall not be less than one hundred ten percent (110%) of the fair market value of one Share at the time of grant; and

(ii)    for the purposes of this Section 9 only, the option exercise period shall not exceed five (5) years from the Date of Grant;

(e)    no Option may be granted hereunder to a US Optionee following the expiration of ten (10) years after the date on which this Plan is adopted by the Company or the date on which the Plan is approved by the shareholders of the Company, whichever is earlier; and

(f)    no Option granted to a US Optionee under the Plan shall become exercisable unless and until the Plan shall have been approved by the shareholders of the Company.

10.    NOTICES

10.1    Any payment, notice, statement, certificate or other instrument required or permitted to be given to a Participant or any person claiming or deriving any rights through him or her shall be given by:

(a)    delivering it personally to the Participant or to the person claiming or deriving rights through him or her, as the case may be; or

(b)    mailing it postage paid (provided that the postal service is then in operation) or delivering it to the address which is maintained for the Participant in the Company's records.

10.2    Any payment, notice, statement, certificate or instrument required or permitted to be given to the Company shall be given by mailing it postage prepaid (provided that the postal service is then in operation) or delivering it to the Company at the following address:

8

Open Text Corporation
185 Columbia Street West
Waterloo, Ontario
N2L 5Z5

Attention:  Chief Financial Officer

10.3    Any payment, notice, statement, certificate or other instrument referred to in Sections 8.1 or 10.2 hereof, if delivered, shall be deemed to have been given or delivered on the date on which it was delivered or, if mailed (provided that the postal service is then in operation), shall be deemed to have been given or delivered on the second Business Day following the date on which it was mailed.

11.    GENERAL

11.1    The Company shall have the power to, without approval by way of resolution of the holders of Shares unless otherwise stated, at any time and from time to time either prospectively or retrospectively, amend, suspend or terminate the Plan or any Option granted under the Plan, provided that:

(a)    any such amendment, suspension or termination is subject to any approvals required under Applicable Law;

(b)    no such amendment, suspension or termination shall be made at any time to the extent such action would materially adversely affect the existing rights of a Participant with respect to any then outstanding Option, as determined by the Company acting in good faith, without his or her consent in writing, except to the extent required by Applicable Law; and

(c)    any such amendment in respect of the following shall become effective only upon approval by way of resolution of the holders of Shares:

(i)    any amendment to the maximum number of Shares specified in Section 5.1 in respect of which Options may be granted under the Plan (other than pursuant to Article 6);

(ii)    any amendment that would reduce the Option Price at which Options may be granted below the price provided for in Section 3.3 (other than pursuant to Article 6);

(iii)    any amendment that would allow a Replacement Security to be granted in a manner not currently permitted under Section 5.5;

(iv)    any amendment that would increase any of the percentage limits in Sections 5.2 or 5.3;

(v)    any amendment that would increase the maximum term of an Option beyond seven years;

(vi)    any amendment that would extend the term of any outstanding Option to a date beyond the Latest Exercise Date;

(vii)    any amendment that would reduce the Option Price of an outstanding Option (other than pursuant to Article 6);

(viii)    any amendment that would permit assignments to persons not currently permitted under the Plan;

(ix)    any amendment to the definition of “Eligible Employee” or any defined term used therein that would expand the scope of the term “Eligible Employee”; and

(x)    any amendment to this Section 11.1.

11.2    Notwithstanding section 11.1, the Company is prohibited from repricing any Option granted under the Plan.

9

11.3    The Company shall have the power to make such rules and regulations for the administration of this Plan, and to interpret the provisions hereof and of such rules and regulations, as it shall in its sole discretion determine to be appropriate;

11.4    The determination by the Company of any question which may arise as to the interpretation or implementation of the Plan or any of the Options granted hereunder shall be final and binding on all Participants and other persons claiming or deriving rights through any of them.

11.5    The Plan shall enure to the benefit of and be binding upon the Company, its successors and assigns. The interest of any Participant under the Plan or in any Option shall not be transferable or alienable by him or her either by pledge, assignment or in any other manner whatsoever and, during his lifetime, shall be vested only in him or her, but shall thereafter enure to the benefit of and be binding upon the legal personal representatives of the Participant in accordance with the terms hereof.

11.6    The Company's obligation to issue Shares in accordance with the terms of this Plan and any Options granted hereunder is subject to compliance with Applicable Law. As a condition of participating in the Plan, each Participant agrees to comply with all such laws, rules and regulations and agrees to furnish to the Company all information and undertakings as may be required to permit compliance with such laws, rules and regulations.

11.7    No Participant shall have any rights as a shareholder in respect of Shares subject to an Option until such Shares have been paid for in full and issued.

11.8    No Participant or other person shall have any claim or right to be granted Options under the Plan. Neither the Plan nor any action taken thereunder shall interfere with the right of the employer of a Participant to terminate that Participant's employment at any time. Neither any period of notice nor any payment in lieu thereof upon termination of employment shall be considered as extending the period of employment for the purposes of the Plan.

11.9    The Board shall be entitled to make such rules, regulations and determinations as it deems appropriate under the Plan in respect of any leave of absence or disability of any Participant. Without limiting the generality of the foregoing, the Board shall be entitled to determine (i) whether or not any such leave of absence shall constitute a termination of employment within the meaning of the Plan, and (ii) the impact, if any, of any such leave of absence on awards under the Plan theretofore made to any Participant who takes such leave of absence (including, without limitation, whether or not such leave of absence shall cause any Options to expire and the impact upon the time or times such Options shall become exercisable).

11.10    This Plan and any Options granted hereunder shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

11.11    This Plan is hereby instituted and in effect as of the Effective Date, provided that (i) any Options granted prior to the approval of the Plan by the shareholders of the Corporation shall not be exercisable until such shareholder approval has been obtained, and (ii) the Plan and any Options granted under the Plan shall terminate the day after the next annual meeting of shareholders of the Corporation unless the Plan has been approved by shareholders at such meeting.

* * *

10

[LETTERHEAD OF OPEN TEXT CORPORATION]

TO:    [Name of Eligible Employee]

You have been designated as an Eligible Employee under the 2004 Stock Option Plan of Open Text Corporation (the "Plan"), and assuming that you become a Participant in the Plan by signing this letter, the details of the non-assignable Option which has been granted to you under the Plan are as follows:

(a)    Date of Grant:        

(b)    Designated Number (maximum
number of shares which you
may purchase under this Option):        

(c)    Option Price (price per share):        

(d)    Earliest Exercise Date:        

(e)    Latest Exercise Date:        

(f)    Vesting Date and Designated Percentage (% of Designated Number you may purchase each year after the applicable Vesting Date):

Vesting Date    Designated Percentage

If you agree to participate in the Plan and comply with its terms and conditions, please sign one copy of this letter and return it to                    by             .

OPEN TEXT CORPORATION

By:      

I have read the Open Text Corporation 2004 Stock Option Plan and agree to comply with, and agree that my participation is subject in all respects to, its terms and conditions:

        
(Signature)

(Date)    

 

11

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