Document:

ex10-2_1432660.htm

Exhibit 10.2

 

SALES NOVATION AGREEMENT

THIS SALES NOVATION AGREEMENT is entered into as of this 31st day of August, 2010 (the “Agreement”), by and between Revelation Networks Incorporated, a Florida corporation (“Revelation” or the “Agent”), and Global Telecom & Technology Americas, Inc., a Virginia corporation (“GTT”).

 

R E C I T A L S:

A.           Revelation has entered into the respective contracts with the respective customers set forth on Exhibit A to provide services pursuant to service level agreements.  Each such service level agreement is hereinafter referred to as a “Customer Contract” with the customer of the Agent subject to the Customer Contract being a “Customer.”

 

B.           In order to provide the services for each Customer Contract, the Agent has entered into a master service agreement with each of the providers of telecommunications connectivity with respect to such services (each such entity being a “Supplier”).  The contractual obligation of the Agent is hereinafter referred to as a “Supplier Contract”, a list of which is set forth on Exhibit B. 

 

C.           The Agent desires to assign and otherwise transfer to GTT, and GTT desires to receive from the Agent, each Customer Contract, subject to the corresponding Supplier Consent (as defined below), in each case on the terms and subject to the conditions set forth herein, with each such assignment being referred to hereafter as an “Assignment” and which Assignment will be conditioned upon: (a) receipt from the applicable Customer of its consent to the Assignment of its Customer Contract from the Agent to GTT, in a form reasonably acceptable to GTT (each, a “Customer Consent”), if required under the terms and conditions of such Customer Contract (if no consent is required for the Assignment of a Customer Contract under the terms and conditions thereof, then the applicable Customer shall be provided with prior notice of the Assignment in accordance with the terms and conditions of such Customer Contract and applicable law, in a written notice in a form reasonably satisfactory to GTT, but Customer Consent shall not be required with respect to such Customer Contract); (b) receipt from the Supplier(s) of connectivity related to the applicable Customer Contract(s) of an agreement, to be effective as of the date of the Assignment of that Customer Contract and in a form reasonably satisfactory to GTT, providing that: (i) there are no outstanding costs, fees, taxes or other obligations under the Supplier Contract covering the services provided under such Customer Contract or if there are outstanding obligations, a statement of the amount thereof (which shall be applied as a credit against the Commission Payment for the assignment of the Customer Contract corresponding to such obligation pursuant to the terms of Section 2.1(a) below; and (ii) the applicable Supplier will provide the services covered by such Supplier Contract to GTT under GTT’s existing contract with such Supplier (or a new contract to be entered into between the Supplier and GTT if no Supplier Contract presently exists with GTT) for at least the remaining term thereof on terms no more costly per month than prior to the Assignment, unless GTT accepts other terms in its sole discretion (each, a “Supplier Consent”) (each Customer Consent and Supplier Consent with respect to a Customer Contract or Supplier Contract is referred to collectively as “Contractual Consents” for such Customer Contract or Supplier Contract).

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, GTT and the Agent hereby agree as follows:

 

 

  

  

  

 

ARTICLE I

 

ASSIGNMENT AND ASSUMPTION

 

1.1   Assignment of Novated Assets.  Upon the terms and subject to the conditions set forth herein, at Closing (as defined herein), the Agent shall assign and deliver to GTT, and GTT shall assume, free and clear of all liens, mortgages, pledges, easements, conditional sale or other title retention agreements, defects in title, covenants or other restrictions of any kind (collectively, “Encumbrances”), only the following assets of the Agent (collectively, the “Purchased Assets”):

 

(b)           each of the Customer Contracts and all rights thereunder related to services rendered following the Closing at which such Customer Contract is assigned to GTT hereunder, including all of the Agent’s rights, claims or causes of action against third parties relating to each such Customer Contract;

 

(b)           copies of all books and records in the Agent’s possession relating to the Customer Contracts, including a tab-delimited Microsoft Excel spreadsheet, in form reasonably satisfactory to GTT for use in its CMD system, with the billing and other information concerning the Customers (collectively, the “Books and Records”); and

 

(b)           any deposit(s) previously provided by the applicable Customer(s) to the Agent with respect to the Customer Contracts (the “Customer Deposits”).

 

1.2   Assumed Liabilities.  GTT hereby agrees to assume only the Liabilities of the Agent under each Customer Contract assigned to GTT hereunder, in each case solely to the extent relating to circumstances or events first occurring or existing after the Closing at which such Customer Contract is assigned to GTT hereunder (and specifically excluding: (a) any Liabilities for any breach of or default under any such Customer Contract by the Agent that occurred prior to such Closing; or (b) any violation of law by the Agent that occurred prior to the Closing) (collectively, the “Assumed Liabilities”).  For purposes of this Agreement, “Liability” or “Liabilities” means any direct or indirect liability, indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost, expense, obligation or responsibility, either accrued, absolute, contingent, mature, unmature or otherwise and whether known or unknown, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured.

 

1.3   Excluded Liabilities.  Except for the Assumed Liabilities, GTT shall not assume or otherwise be obligated to pay, perform or otherwise discharge any Liability of the Agent (all such Liabilities being herein called the “Excluded Liabilities”).  Without limiting the generality of the foregoing, the Excluded Liabilities include: (a) any Liabilities of the Agent under any Customer Contract relating to circumstances or events occurring or existing on or prior to the Closing at which such Customer Contract is assigned to GTT hereunder; and (b) any outstanding costs, fees, taxes or other obligations under any Supplier Contract covering the services provided under any Customer Contract assigned to GTT hereunder as of the Closing at which such Customer Contract is assigned to GTT hereunder.

 

1.4   Revenue.  If the Agent receives any revenue (other than any revenue for which GTT has received a credit pursuant to Section 2.1(a)) that is attributable to any services provided by GTT under any of the Customer Contracts on or after the Closing with respect to such Customer Contract  (“GTT Revenue”), it shall hold such GTT Revenue in trust for GTT and, as soon as reasonably practicable after receipt thereof, pay all of such GTT Revenue over to GTT, by check or wire transfer of immediately available funds.  If GTT receives any revenue that is attributable to any services provided by the Agent under any of the Customer Contracts prior to the Closing with respect to such Customer Contract (“Agent Revenue”), it shall hold the Agent Revenue in trust for the Agent and, as soon as reasonably practicable after receipt thereof, pay all of the Agent Revenue over to the Agent, by check or wire transfer of immediately available funds.  If either the Agent or GTT receives any revenue that is not designated by the applicable Customer as either GTT Revenue or Agent 

 

 

 

  

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Revenue and is not otherwise reasonably identifiable as either GTT Revenue or Agent Revenue, the receiving party shall provide written notice thereof to the other party, contact the applicable Customer and otherwise use commercially reasonable efforts to determine whether such payment is GTT Revenue or Agent Revenue, provide written notice to the other party of the determination and, if applicable, make payment to the other party as described above.

 

ARTICLE II

 

NOVATION OF CONTRACTS – AGENTS’ PAYMENTS

 

2.1           Payments.

 

(a)           In consideration for assignment and delivery of the Purchased Assets, in addition to GTT’s assumption of the Assumed Liabilities, GTT shall pay to the Agent (i) the amount of Eight Hundred Fifty Thousand ($850,000) Dollars at Closing (“Upfront Payment”), and (ii) twenty percent (20%) of the gross revenue received by GTT during each calendar month (or portion thereof) following the Closing for a period of five (5) years (“Monthly Revenue Payments”), with each Monthly Revenue Payment due by the 15th day following the end of each month during such period, in each case subject to the following deductions:

 

(i)           Deducted from the Upfront Payment, the amount of any prepayments received by the Agent on or prior to the Closing with respect to the Customer Contract(s) being assigned to GTT hereunder for services to be rendered under such Customer Contract(s) following the Closing with respect to such Customer Contract;

 

(ii)           Deducted from the Upfront Payment, the amount of any outstanding Supplier obligations under the Supplier Contract(s) covering the services provided under the Customer Contract(s) being assigned to GTT hereunder as of the Closing with respect to each such Customer Contract (which deducted amount shall be paid by GTT to the applicable Supplier(s) at such Closing by wire transfer of funds as payment against the Supplier Contract(s) in question).

 

(iii)           Commencing on the thirteenth (13th) month following the Closing, deducted from the Monthly Revenue Payments, at GTT’s option, up to fifty percent (50%) of each such Monthly Revenue Payments until (A) the Upfront Payment less the deductions described in provisions (i) and (ii) above, minus (B) the aggregate amount of deductions under this provision (iii) and provision (v) below (the “Recovery Balance”) equals zero.

 

(iv)           Agent and GTT may mutually agree in writing to additional offsets or deductions from future Monthly Revenue Payments.

 

(v)           If gross revenue from the Customers falls below $300,000 in any month, deducted from the Monthly Revenue Payments, at GTT’s option, up to one hundred percent (100%) of each such Monthly Revenue Payments, until the Recovery Balance equals zero.

 

(vi)           Deducted from the Monthly Revenue Payments otherwise payable for the third, sixth, and ninth months following the Closing, for each month an amount equal to one-third (1/3) of the balance payable on the Closing Date under the promissory note made by Revelation in favor of Savvis, Inc., which promissory note shall be among the Assumed Liabilities.

 

(b)           GTT shall pay to the owners of Agent twenty percent (20%) of the monthly revenue from all new orders that the owners of Agent submit to GTT and GTT accepts during the five (5) year period following the Closing.

 

(c)           This Section 2.1(a) shall survive the Closing.

 

  

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2.2   Closing

 

(a) Closing of the contract novation by GTT and the Agent of Customer Contracts under this Agreement shall occur on August 31, 2010 referred to herein as its “Closing Date.”

 

2.3   Agent Closing Deliverables.  At the Closing, the Agent shall deliver to GTT:

 

(a) such bills of sale, assignments and other instruments of transfer or conveyance as GTT may reasonably request or as may be otherwise necessary to evidence and effect the sale, assignment, transfer, conveyance and delivery to GTT of the Customer Contract(s) being assigned to GTT at the Closing;

 

(b) the Books and Records; and

 

(c) any Customer Deposit(s) with respect to the Closing Customer Contract(s); provided, however, that: (i) the Agent shall be entitled, in lieu of delivering such Customer Deposits to GTT, to instead provide a credit for such amount against the Prepayment to be paid at such Closing, in which event GTT shall assume the liability to the applicable Customers for such Customer Deposits.

 

2.4   GTT Closing Deliverables.  At the Closing, GTT shall deliver to the Agent:

 

(a) the Prepayment by wire transfer of immediately available funds to the account of the Agent as set forth in Section  2.1 (a);

 

(b) the Assignment of the Savvis and Revelation Note pursuant to Section 2.1 (vi), duly executed by GTT.

 

2.5   Audit.  GTT shall maintain or cause to be maintained a true and correct set of records pertaining to the gross revenue received by GTT from the Customers during the five (5) year period following the Closing Date, During such period and for a period of two (2) years thereafter, GTT agrees to permit an one or more accountants or other agents selected by the Agent to have access during ordinary business hours to such records as are maintained by GTT as may be necessary, in the opinion of such accountant, to determine the correctness of any calculation and/or payment made under this Agreement. In the event that the audit reveals an underpayment to the Agent by more than five percent (5%), the cost of the audit shall be paid by GTT. If the underpayment is less than five percent (5%) but more than two percent (2%), GTT and the Agent shall each pay fifty percent (50%) of the cost of the independent audit.  In all other cases, the cost of the audit shall be paid by the Agent.  This Section 2.5 shall survive the Closing.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE AGENTS

 

The Agent hereby jointly and severally represents and warrants to GTT as follows:

 

3.1   Existence; Good Standing, Authority; Enforceability.

 

(a) The Agent is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all required power and authority to own or lease its properties and assets and to conduct its business as presently conducted.  The Agent is duly qualified to do business and in good standing as a foreign entity in all jurisdictions in which the failure to be so qualified would be reasonably likely to have a material adverse effect on the Agent.

 

(b) The Agent has full authority and capacity to execute, deliver and perform this Agreement and all of the other documents contemplated hereby to be executed by the Agent.  The execution, delivery and performance by the Agent of this Agreement and all of the other documents contemplated hereby 

 

 

  

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to be executed by the Agent have been duly authorized by all required action on the part of the Agent (including approval by its board of directors, board of managers, stockholders or equity holders, as applicable).

 

(c) This Agreement and all of the other documents contemplated hereby to be executed by the Agent have been duly executed and delivered by the Agent and this Agreement is, and each of such other documents upon execution and delivery will be, legal, valid and binding obligations of the Agent, enforceable against the Agent in accordance with its terms.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF GTT

 

GTT hereby represents and warrants to the Agent as follows:

 

4.1   Existence; Good Standing; Authority; Enforceability.  GTT is a corporation, duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia.  GTT has full corporate power and authority to execute, deliver and perform this Agreement.  The execution, delivery and performance of this Agreement by GTT has been duly authorized and approved by GTT and does not require any further authorization or consent of GTT.  This Agreement has been duly authorized, executed and delivered by GTT and is the legal, valid and binding obligation of GTT enforceable against GTT in accordance with its terms.

 

4.2   Non-Contravention.  Neither the execution and delivery of this Agreement nor the consummation of any of the transactions contemplated hereby nor compliance with or fulfillment of the terms, conditions and provisions hereof will conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, or result in the creation or imposition of any Encumbrance upon any of its assets under: (a) the Organizational Documents of GTT, (b) any agreement, instrument, right, restriction, license or obligation to which GTT is a party or to which any of its assets is subject, (c) any judgment, order or decree of any state, federal or local court or tribunal to which GTT is a party or to which any of its assets is subject, or (d) any federal or state law applicable to GTT or its assets.

 

4.3   Brokers.  GTT is not obligated to pay any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement for which the Agent is or could become liable

 

4.4   No Other Representations.  GTT HAS NOT MADE AND IS NOT MAKING ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE IV.

 

 

ARTICLE V

 

ADDITIONAL AGREEMENTS

 

5.1           Conduct Prior to Closing.  Except as directed by GTT pursuant to this Agreement, from the date of this Agreement until the Closing (the “Pre-Closing Period”), each of the Agent shall, solely to the extent that it would reasonably be expected to affect any of the Customer Contracts or the Supplier Contracts, conduct its business only in the ordinary course of business consistent with past practice, preserve intact its business organization and relationships with customers, suppliers and others having business dealings with it and keep available the services of each of its present officers and employees.  Without limiting the generality of the foregoing, except as directed by GTT pursuant to this Agreement, during the Pre-Closing Period, the Agent shall each:

 

 

  

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(a)           not amend, waive, terminate, or take any action that would constitute a breach under, any Customer Contract or Supplier Contract, or enter into any new Customer Contract or Supplier Contract without the prior written consent of GTT, which consent shall not be unreasonably withheld;

 

(b)           not permit any Encumbrance to encumber any of the Purchased Assets, or otherwise subject any of the Purchased Assets to any Encumbrance, except for Encumbrances incurred in connection with the refinancing of existing debt or an additional financing, in each case where a condition to such refinancing or additional financing is the waiver, in form and substance reasonably acceptable to GTT, of all Encumbrances thereunder with respect to the sale of the Purchased Assets to GTT;

 

(c)           solely to the extent relating to or affecting the Customer Contracts or the Supplier Contracts: (i) pay accounts payable and other obligations and liabilities only in the ordinary course of business consistent with past practices; and (ii) not modify the terms of, discount, setoff or accelerate the collection of any accounts receivable or any other debts owed to or claims held by the Agent; and

 

(d)           not take any action or fail to take any action that would result in any of the representations and warranties of the Agent set forth in Article III to not continue to be true and correct as of each Closing;

 

5.2           Non-Competition.  In consideration of the Commission Payment to be paid by GTT to the Agent (which the Agent agrees and acknowledges constitutes adequate and sufficient consideration) and the other promises of GTT contained herein, each of the Agent covenants and agrees that the Agent will not:

 

(a)           at any time during the this Agreement and while the Agent continue to receive the Monthly Revenue Payments after the Closing, Agent shall not sell services on behalf of anyone outside of GTT to the Customers that are the subject of the Customer Contracts.

 

(b)           The Agent agrees and acknowledges that its covenants set forth above in this Section: (i) are reasonable in geographic and temporal scope and in all other respects; (ii) are fair to the Agent; and (iii) have been made in order to induce GTT to enter into this Agreement and consummate the transactions contemplated hereby and GTT would not have entered into this Agreement or consummated the transactions contemplated hereby, but for the covenants of the Agent contained in this Section.

 

                5.3           Settlement of Billing Dispute.  GTT and Revelation acknowledge and agree that they have a dispute over certain billings based upon transactions relating to the Revelation Networks-GTT MSA preceding the date of this Agreement (the “Billing Dispute”).  As part of this Agreement, GTT and Revelation have agreed to resolve the Billing Dispute under the following terms:  Within five (5) days of the Closing, Revelation shall pay to GTT the amount of One Hundred Sixty-four Thousand Eighty-eight ($164,088) Dollars and GTT and Revelation shall execute and deliver a mutual release regarding the Billing Dispute in the form attached hereto as Exhibit C.

 

5.5           Working Capital Adjustments.

 

	
  

	
(a)

	
Net Working Capital Adjustment at Closing.   For purposes of calculating the deductions from the Upfront Payment to be made pursuant to Section 2.1(a)(i) and (ii), the Agent shall prepare in consultation with GTT, and deliver to GTT a net working capital statement (the “Preliminary NWC Statement”) setting forth their good faith estimated calculation of Supplier payments and Customer revenue as of the Closing.

 

	
  

	
(b)

	
Post-Closing NWC Statement.  Within ninety (90) days after the Closing Date, GTT shall prepare and deliver to the Agent a statement (the “Post-Closing NWC

 

 

 

  

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Statement”) setting forth the calculation of Supplier payments and Customer revenue and GTT and the Agent will work in good faith to adjust the Monthly Revenue Payments to reflect any needed true up.

 

ARTICLE VI 

 

INDEMNIFICATION

 

6.1   Indemnification.

 

(a)           Indemnification by the Agent.  The Agent shall indemnify GTT, each of its Affiliates, and its and their respective directors, officers, employees, stockholders, partners, members, managers, agents and representatives (each, a “GTT Indemnified Party”) for any Losses of such GTT Indemnified Party resulting from, arising out of, or relating to: (i) any breach of, or inaccuracy in, any representation and warranty of the Agent; or (ii) any breach of any covenant or agreement of the Agent contained in this Agreement.

 

(b)           Indemnification by GTT.  Except with respect to breaches of this Agreement by the Agent, GTT will indemnify and hold the Agent harmless, to the fullest extent allowed by applicable law, for any and all claims  brought by a third party which result from Agent’s employment with GTT or actions related to this Agreement, including GTT payment of legal costs and reasonable attorneys' fees for the Agent.

 

 

ARTICLE VII 

 

MISCELLANEOUS

 

7.1   Expenses.  Except as otherwise expressly set forth herein, each of the parties shall pay all of their respective costs and expenses incurred or to be incurred by it in negotiating and preparing this Agreement and related documents and in Closing and carrying out the transactions contemplated by this Agreement.

 

7.2   Recitals.  The Recitals set forth at the beginning of this Agreement are incorporated into this Agreement by reference and made a part hereof.

 

7.3   Headings.  The subject headings of the sections and subsections of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

 

7.4   Entire Agreement; Amendment; Waiver.  This Agreement, and the Exhibits attached hereto, constitute the entire agreement between the parties pertaining to the subject matter contained in it and supersedes all prior and contemporaneous agreements, representations, and understandings of the parties (whether oral or written) with respect to the subject matter hereof, including any letter of intent, exclusivity agreement, term sheet or memorandum of terms entered into or exchanged by the parties.  No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by all the parties which states that it constitutes a supplement, modification or amendment to this Agreement.  No waiver of any of the provisions of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver.  No waiver shall be binding unless executed in writing by the party making the waiver and delivered to the other parties which states that it constitutes a waiver under this Agreement and specifies the provision hereof being waived.

 

7.5   Counterparts.  This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Counterparts to this Agreement may be exchanged by facsimile or other electronic transmission method.

 

7.6   No Third Party Beneficiaries.  Nothing in this Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any Person other than the

 

 

 

  

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parties to it and their respective successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third person to any party to this Agreement, nor shall any provision give any third person any right of subrogation or action over against any party to this Agreement.

 

7.7   Notices.  All notices or other communications required or permitted hereunder shall be in writing and shall be deemed given, delivered and received: (a) when delivered, if delivered personally by a commercial messenger delivery service with verification of delivery, (b) four (4) days after mailing, when sent by registered or certified mail, return receipt requested and postage prepaid, or (c) one (1) Business Day after delivery to a private courier service, when delivered to a private courier service providing documented overnight service, in each case addressed as follows:

 

	 	
To the Agent at:

	  	
[NEED NOTICE NAMES AND ADDRESSES]

 

	 	
with a copy (which shall not constitute notice) to:

	  	
Corley D. Silverstein, Esq.

Law Offices of Corey D. Silverstein, P.C.

Farmington Hills, MI 48334

 

	 	  	  	  
	 	
To GTT at:

	  	
Global Telecom & Technology Americas, Inc.

8484 Westpark Dr., Suite 720

McLean, Virginia 22102

Attention: Christopher McKee, General Counsel

 

	 	
with a copy (which shall not constitute notice) to:

	  	
Scott Livingston, Esq.

Marcus & Shapira, LLP

35th Floor

One Oxford Centre

301 Grant Street

Pittsburgh, PA 15219

 

Any party may change its address for purposes of this Section by giving the other parties written notice of the new address in the manner set forth above. Each communication transmitted in the manner described in this Section shall be deemed to have been provided, received and become effective for all purposes at the time it shall have been: (x) delivered to the addressee as indicated by the return receipt (if transmitted by mail) or the affidavit or receipt of the messenger (if transmitted by personal delivery or courier service); or (y) presented for delivery to the addressee as so addressed during normal business hours, if such delivery shall have been rejected, denied or refused for any reason or, in each case, at such other address as may be specified in writing to the other parties hereto.

7.8   GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF VIRGINIA.  ANY ACTION TO ENFORCE THE TERMS OF THIS AGREEMENT SHALL BE LITIGATED IN THE STATE OR FEDERAL COURTS SITUATED IN FAIRFAX COUNTY, VIRGINIA, TO WHICH JURISDICTION AND VENUE EACH OF THE PARTIES CONSENTS.

 

7.9   Successors and Assigns.  The rights and obligations of the Agent and GTT under this Agreement shall not be assignable or delegable, without the written consent of the other parties; provided, however, that GTT shall have the right, without the consent of the Agent but with prior notice to the Agent, to: (a) assign its rights and obligations hereunder to any Affiliate thereof or to any successor of all or substantially all of its businesses or assets, in each case that assumes this Agreement provided that GTT agrees to remain liable to Agent for any obligations of any assignee of GTT (or its assigns) pursuant to this Agreement; or (b)

 

 

 

  

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collaterally assign its rights hereunder to any lender.  Any purported assignment or delegation in violation of this Section 10.10 will be void.  Subject to the preceding sentences of this Section 10.10, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns.

 

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IN WITNESS WHEREOF, the parties to this Agreement have duly executed it on the day and year first above written.

 

	  	
AGENT:

 

REVELATION NETWORKS INCORPORATED

 

	  	
By:

	/s/ Josh Noll
	  	
Name:

	Josh Noll
	  	
Title:

	CEO
	  	  
	  	
 

GTT:

 

GLOBAL TELECOM & TECHNOLOGY AMERICAS, INC.

 

	  	
By:

	 /s/ Chris McKee
	  	
Name:

	 Chris McKee
	  	
Title:

	 General Counsel

 

  

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Exhibit A:

Customer Contracts

[attached]

  

  

  

Exhibit B:

Supplier Contracts

[attached]

  

 

  

Exhibit C:

Mutual Release of Billing Dispute

[attached]Exhibit 4.2

 

FORM OF GLOBAL NOTE

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

CUSIP No. 78010XAF8

ISIN No. US78010XAF87

 

THE ROYAL BANK OF SCOTLAND plc

 

SENIOR FLOATING RATE NOTE DUE AUGUST 23, 2013

 

Guaranteed by

THE ROYAL BANK OF SCOTLAND GROUP plc

 

 

	
No. [ ]

	
$250,000,000

 

THE ROYAL BANK OF SCOTLAND plc (herein called the “Company,” which term includes any successor person under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $250,000,000 (two hundred and fifty million dollars) on AUGUST 23, 2013 or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon quarterly in arrears on the 23rd day of each November, February, May and August of each year, commencing November 23, 2010, and ending on AUGUST 23, 2013 (each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to the holder in whose name this Note is registered on the 9th day of each November, February, May and August of each year (each a “Regular Record Date”),  commencing November 9, 2010.  Any interest which is payable, but is not punctually paid 

 

(Face of Security continued on next page)

  

  

  

 

 

or duly provided for, on any Interest Payment Date is herein called “Default Interest”. Default Interest shall cease to be payable to the registered holder on the relevant Regular Record Date by virtue then of having been such holder, and such Default Interest may be paid by the Company, at its election in each case, as provided in clause (x) or (y) below: (x) the Company may elect to make payment of any Default Interest to registered holders at the close of business on a Special Record Date (a “Special Record Date”) for the payment of such Default Interest, such Special Record Date to be fixed in accordance with Section 3.07(a) of the Indenture or, (y) the Company may make payment of any Default Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment, such manner of payment shall be deemed practicable by the Trustee.

 

Payment of the principal amount of, and any interest on, this Senior Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Such payment shall be made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder.  If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment and without any interest or other payment in respect of such delay.

 

Prior to due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior Note is registered as the owner of such Senior Note for the purpose of receiving payment of principal and interest, if any, on such Senior Note and for all other purposes whatsoever, whether or not such Senior Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

Reference is hereby made to the further provisions of this Senior Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

(Face of Security continued on next page)

  

2

  

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Senior Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this Senior Note to be duly executed.

 

 

Dated: August 24, 2010

 

 

	
Executed by THE ROYAL BANK OF

	 
	
SCOTLAND PLC at

	 
	  	  	 
	  	  	 
	
By:

	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 
	  	  	 
	 	 	 
	  	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 
	  	  	 

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GUARANTEE OF THE ROYAL BANK OF SCOTLAND GROUP plc

 

THE ROYAL BANK OF SCOTLAND GROUP plc (herein called the “Guarantor,” which term includes any successor person under the Indenture (as defined on the reverse hereof)) hereby unconditionally guarantees (the “Guarantee”) to each holder of this Senior Debt Security the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Senior Debt Security and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Senior Debt Security and any and all amounts under the Indenture (including but not limited to, the fees, expenses and indemnities of the Trustee), 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 Senior Debt Security and of the Indenture.  In case of the failure of the Company punctually to pay any such principal, premium, interest, Additional Amounts or sinking fund payment and any and all amounts under the Indenture, (including but not limited to, the fees, expenses and indemnities of the Trustee) the Guarantor hereby agrees to pay, or 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 in accordance with the terms of such Senior Debt Security and of the Indenture.

 

Unless otherwise defined herein, all terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

IN WITNESS WHEREOF, the Guarantor has caused this guarantee to be duly executed.

 

Dated: August 24, 2010

 

	
Executed by THE ROYAL BANK OF

	 
	
SCOTLAND PLC at

	 
	  	  	 
	  	  	 
	
By:

	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 
	  	  	 
	 	 	 
	  	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 
	  	  	 

 

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CERTIFICATE OF AUTHENTICATION

 

This is one of the Senior Notes of the series designated herein referred to in the within-mentioned Indenture.

 

Dated: August 24, 2010

 

	
THE BANK OF NEW YORK

	 
	
MELLON, LONDON BRANCH

	 
	
as Trustee

	 
	  	  	 
	  	  	 
	
By:

	
 

	 
	  	
Authorized Signatory

	 

 

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This Senior Note is one of a duly authorized issue of securities of the Company (herein called the “Senior Notes”) issued and to be issued in one or more series under an Indenture, dated as of  August 13, 2010 (herein called the “Indenture”), among the Company, as issuer, the Guarantor, as guarantor, and The Bank of New York Mellon, London Branch as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Senior Notes and of the terms upon which the Senior Notes are, and are to be, authenticated and delivered.

 

This Senior Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $750,000,000.  The Company may, without the consent of the holders of the Senior Notes, issue additional Senior Notes having the same ranking and interest rate, maturity date, redemption terms and other terms as the Senior Notes except for the price to the public and issue date, provided that such further notes must be issued with no more than a de minimis original issue discount for U.S. federal income tax purposes or constitute a “qualified reopening” for U.S. federal income tax purposes.  Any such Senior Notes, together with this Note, will constitute a single series of securities under the Indenture.  The Senior Notes will initially be issued in the form of one or more global Senior Notes (each, a “Global Senior Note”).  Except as provided in the Indenture, a Global Senior Note shall not be exchangeable for one or more definitive Senior Notes.

 

The Senior Notes of this series will constitute unsecured and unsubordinated obligations of the Company and the Guarantor, as described herein, and will rank pari passu without any preference among themselves.

 

The interest rate for the Senior Notes for the first Floating Rate Interest Period (as defined below) will be LIBOR (as defined below) as determined on August 19, 2010  plus the Spread. Thereafter, the interest rate for any Floating Rate Interest Period will be LIBOR as determined on the applicable Interest Determination Date (as defined below) plus the Spread, in each case calculated on the basis of a 360-day year and the actual number of days elapsed. The Spread is 242 basis points.

 

Interest on the Senior Notes will be paid quarterly in arrears on November 23, February 23, May 23, and August 23, of each year, commencing November 23, 2010 (each a “Floating Rate Interest Payment Date”). However, if a Floating Rate Interest Payment Date would fall on a day that is not a business day, the Floating Rate Interest Payment Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Floating Rate Interest Payment Date will be the immediately preceding business day. In each such case, except for the Floating Rate Interest Payment Date falling on the maturity date, the Floating Rate Interest Periods (as defined 

 

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1

  

 

below) and the Interest Reset Dates (as defined below) will be adjusted accordingly to calculate the amount of interest payable on the notes.

 

The interest rate will be reset on November 23, February 23, May 23 and August 23 of each year, commencing August 23, 2010 (each, an “Interest Reset Date”). However, if any Interest Reset Date would otherwise be a day that is not a business day, that Interest Reset Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Interest Reset Date will be the immediately preceding business day.

 

The first interest period will be the period from and including the original issue date to but excluding the immediately succeeding Interest Reset Date. Thereafter, the interest periods will be the periods from and including an Interest Reset Date to but excluding the immediately succeeding Interest Reset Date (together with the first interest period, each a “Floating Rate Interest Period”). However, the final Interest Period will be the period from and including the Interest Reset Date immediately preceding the maturity date to the maturity date.

 

The calculation agent in respect of the Senior Notes will determine LIBOR (as defined below) for each Floating Rate Interest Period at approximately 11:00 a.m., London time on the second London business day prior to the first day of such Floating Rate Interest Period (an “Interest Determination Date”). LIBOR for the first Floating Rate Interest Period will be determined at approximately 11:00 a.m., London time on August 19, 2010.

 

“LIBOR” means, with respect to any Interest Determination Date, the offered rate for deposits of US dollars having a maturity of three months that appears on the Reuters Screen LIBOR01 display page, or any successor page, on Reuters or any successor service (or any such other service(s) as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for US dollar deposits) (the “Designated LIBOR Page”).

 

If no rate appears on the Designated LIBOR Page, LIBOR will be determined for such Interest Determination Date on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in US dollars are offered to prime banks in the London inter-bank market by four major banks in such market selected by the calculation agent, after consultation with us, for a term of three months and in a principal amount equal to an amount that in the judgment of the calculation agent is representative for a single transaction in US dollars in such market at such time (a “Representative Amount”). The calculation agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such Interest Period will be the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with five-millionths of a percentage point rounded upwards) of such quotations. If fewer than two such quotations are provided, LIBOR for such Interest Period will be the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with five millionths of a percentage 

 

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point rounded upwards) of the rates quoted at approximately 11:00 a.m. in the City of New York on such Interest Determination Date by three major banks in New York City, selected by the calculation agent, after consultation with us, for loans in US dollars to leading European banks, for a term of three months and in a Representative Amount; provided, however, that if the banks so selected are not quoting as mentioned above, the then-existing LIBOR rate will remain in effect for such Interest Period.

 

The interest rate on the Senior Notes will in no event be higher than the maximum rate permitted by law.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Notes of this series may declare the principal amount of, and any accrued interest on, all the Senior Notes to be due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

If a Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of Holders of Senior Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Indenture or in aid of the exercise of any power granted thereon, or to enforce any other proper remedy, including the institution of proceedings in Scotland (but not elsewhere) for the winding up of the Company or the Guarantor.

 

By acceptance of the Senior Notes of this series, the Holder will be deemed to have waived any right of set-off or counterclaim with respect to such Senior Notes that they might otherwise have against the Company or the Guarantor, whether before or during a winding-up of the Company or the Guarantor.

 

Subject to the provisions of this paragraph, all amounts of principal and interest on any Senior Notes of this Series 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 withholding 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.  If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the 

 

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Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, and interest on, the Senior Notes of this series (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders after such deduction or withholding shall equal the respective amounts of principal and interest which would have been payable in respect of such Senior Notes 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 Senior Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Note, or the collection of any payment of (or in respect of) principal of, or interest on, any Senior Note,

 

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

 

(iii) the relevant Senior Note 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 the same for payment at the close of such 30 day period,

 

(iv) the Holder or the beneficial owner of the relevant Senior Note or the beneficial owner of any payment of (or in respect of) principal of, premium, if any, or interest, on such Senior Note 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 from all or part of such tax, assessment or other governmental charge,

 

(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 or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directive,

 

(vi) the Senior Note is presented (where presentation is required) for payment by or on behalf of a Holder who would have been able to avoid such 

 

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withholding or deduction by presenting the Senior Note to another paying agent in a Member State of the European Union, or

 

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

 

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Senior Note to any Holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership 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 partner 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.

 

References herein to the payment of the principal of or interest on any Senior Note shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable under the foregoing provisions.

 

The Senior Notes of this series are redeemable, as a whole but not in part, at the option of the Company or the Guarantor, on not less than 30 nor more than 60 days’ notice, on any Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, in respect of the Senior Notes to the date fixed for redemption, if, at any time, the Company 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 the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after August 24, 2010:

 

(a) in making payment under the Senior Notes in respect of principal or interest it 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 Payment Date in respect of any of the Senior Notes would be treated as a “distribution” within the meaning of Chapter 2 of Part 23 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 Payment Date the Company (or, if applicable, the Guarantor)would not be entitled to claim a deduction in respect of such 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 the Guarantor shall determine that as a result of any change in the official application or interpretation of any 

 

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laws or regulations it is entitled to redeem the Senior Notes of this series, the Company or 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) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.

 

If the Company or the Guarantor elects to redeem the Senior Notes of this series, the Senior Notes will cease to accrue interest from the date of redemption, provided the redemption price has been paid in accordance with the Indenture.

 

Upon payment of (i) the amount of principal so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s (or, if applicable, the Guarantor’s) obligations in respect of the payment of the principal of, and accrued and unpaid interest on, the Senior Notes of this series shall terminate.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Senior Debt Securities of each series to be affected thereby by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Senior Debt Securities at the time outstanding of each such series.  The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the outstanding Senior Debt Securities of each series, on behalf of the Holders of all Senior Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Senior Note shall be conclusive and binding upon such Holder and upon all future Holders of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay, if and when due and payable, the principal of, and interest on, this Senior Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Senior Note of this series will have the right to institute any proceeding with respect to the Indenture, this Senior Note or any remedy thereunder; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal 

 

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or interest as and when the same shall have become due and payable in accordance with the terms hereof and the Indenture.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the right of the Holder of this Senior Note, which is absolute and unconditional, to receive payment of the principal of, and interest on, this Senior Note when due and payable in accordance with the provisions of this Senior Note and the Indenture.

 

This Senior Note will be governed by the laws of the State of New York.

 

Unless otherwise defined herein, all terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

 

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FORM OF GLOBAL NOTE

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

 

CUSIP No. 78010XAD3

ISIN No. US78010XAD30

 

THE ROYAL BANK OF SCOTLAND plc

 

3.400% SENIOR NOTE DUE AUGUST 23, 2013

 

Guaranteed by

THE ROYAL BANK OF SCOTLAND GROUP plc

 

	
No. [ ]

	
$500,000,000

 

THE ROYAL BANK OF SCOTLAND plc (herein called the “Company,” which term includes any successor person under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $500,000,000 (five hundred million dollars) on AUGUST 23, 2013 or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrears on February 23 and August 23 of each year, commencing February 23, 2011, and ending on August 23, 2013 (each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to the holder in whose name this Note is registered on the ninth day of each February and August (each a “Regular Record Date”),  commencing February 9, 2011.  Any interest which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “Default Interest”. Default Interest shall cease to be payable to the registered holder on the relevant Regular Record Date by virtue then of having been such holder, 

 

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and such Default Interest may be paid by the Company, at its election in each case, as provided in clause (x) or (y) below: (x) the Company may elect to make payment of any Default Interest to registered holders at the close of business on a Special Record Date (a “Special Record Date”) for the payment of such Default Interest, such Special Record Date to be fixed in accordance with Section 3.07(a) of the Indenture or, (y) the Company may make payment of any Default Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment, such manner of payment shall be deemed practicable by the Trustee.

 

Interest shall accrue on this Senior Note from day to day from the date of issuance hereof or from the most recent Payment Date at the rate of 3.400% per annum, until the principal amount hereof is paid or made available for payment.

 

Payments of interest on this Senior Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such period.

 

Payment of the principal amount of, and any interest on, this Senior Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Such payment shall be made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder.  If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment and without any interest or other payment in respect of such delay.

 

Prior to due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior Note is registered as the owner of such Senior Note for the purpose of receiving payment of principal and interest, if any, on such Senior Note and for all other purposes whatsoever, whether or not such Senior Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

Reference is hereby made to the further provisions of this Senior Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

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Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Senior Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this Senior Note to be duly executed.

 

 

Dated: August 24, 2010

 

	
Executed by THE ROYAL BANK OF

	 
	
SCOTLAND GROUP PLC at

	 
	  	  	 
	  	  	 
	
By:

	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 
	  	  	 
	 	 	 
	  	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 

 

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GUARANTEE OF THE ROYAL BANK OF SCOTLAND GROUP plc

 

THE ROYAL BANK OF SCOTLAND GROUP plc (herein called the “Guarantor,” which term includes any successor person under the Indenture (as defined on the reverse hereof)) hereby unconditionally guarantees (the “Guarantee”) to each holder of this Senior Debt Security the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Senior Debt Security and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Senior Debt Security and any and all amounts under the Indenture (including but not limited to, the fees, expenses and indemnities of the Trustee), 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 Senior Debt Security and of the Indenture.  In case of the failure of the Company punctually to pay any such principal, premium, interest, Additional Amounts or sinking fund payment and any and all amounts under the Indenture, (including but not limited to, the fees, expenses and indemnities of the Trustee) the Guarantor hereby agrees to pay, or 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 in accordance with the terms of such Senior Debt Security and of the Indenture.

 

Unless otherwise defined herein, all terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

IN WITNESS WHEREOF, the Guarantor has caused this guarantee to be duly executed.

 

Dated: August 24, 2010

 

	
Executed by THE ROYAL BANK OF

	 
	
SCOTLAND GROUP PLC at

	 
	  	  	 
	  	  	 
	
By:

	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 
	  	  	 
	 	 	 
	  	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 

 

 

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CERTIFICATE OF AUTHENTICATION

 

This is one of the Senior Notes of the series designated herein referred to in the within-mentioned Indenture.

 

Dated: August 24, 2010

 

	
THE BANK OF NEW YORK

	 
	
MELLON, LONDON BRANCH

	 
	
as Trustee

	 
	  	  	 
	  	  	 
	
By:

	
 

	 
	  	
Authorized Signatory

	 

 

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This Senior Note is one of a duly authorized issue of securities of the Company (herein called the “Senior Notes”) issued and to be issued in one or more series under an Indenture, dated as of  August 13, 2010 (herein called the “Indenture”), among the Company, as issuer, the Guarantor, as guarantor, and The Bank of New York Mellon, London Branch as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Senior Notes and of the terms upon which the Senior Notes are, and are to be, authenticated and delivered.

 

This Senior Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $1,500,000,000.  The Company may, without the consent of the holders of the Senior Notes, issue additional Senior Notes having the same ranking and interest rate, maturity date, redemption terms and other terms as the Senior Notes except for the price to the public and issue date, provided that such further notes must be issued with no more than a de minimis original issue discount for U.S. federal income tax purposes or constitute a “qualified reopening” for U.S. federal income tax purposes.  Any such Senior Notes, together with this Note, will constitute a single series of securities under the Indenture.  The Senior Notes will initially be issued in the form of one or more global Senior Notes (each, a “Global Senior Note”).  Except as provided in the Indenture, a Global Senior Note shall not be exchangeable for one or more definitive Senior Notes.

 

The Senior Notes of this series will constitute unsecured and unsubordinated obligations of the Company and the Guarantor, as described herein, and will rank pari passu without any preference among themselves.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Notes of this series may declare the principal amount of, and any accrued interest on, all the Senior Notes to be due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

If a Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of Holders of Senior Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Indenture or in aid of the exercise of any power granted thereon, or to enforce any other proper remedy, including the institution of proceedings in Scotland (but not elsewhere) for the winding up of the Company or the Guarantor.

 

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By acceptance of the Senior Notes of this series, the Holder will be deemed to have waived any right of set-off or counterclaim with respect to such Senior Notes that they might otherwise have against the Company or the Guarantor, whether before or during a winding-up of the Company or the Guarantor.

 

Subject to the provisions of this paragraph, all amounts of principal and interest on any Senior Notes of this Series 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 withholding 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.  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, and interest on, the Senior Notes of this series (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders after such deduction or withholding shall equal the respective amounts of principal and interest which would have been payable in respect of such Senior Notes 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 Senior Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Note, or the collection of any payment of (or in respect of) principal of, or interest on, any Senior Note,

 

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

 

(iii) the relevant Senior Note 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 the same for payment at the close of such 30 day period,

 

(iv) the Holder or the beneficial owner of the relevant Senior Note or the beneficial owner of any payment of (or in respect of) principal of, premium, if any, or interest, on such Senior Note 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 

 

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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 from all or part of such tax, assessment or other governmental charge,

 

(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 or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directive,

 

(vi) the Senior Note 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 the Senior Note to another paying agent in a Member State of the European Union, or

 

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

 

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Senior Note to any Holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership 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 partner 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.

 

References herein to the payment of the principal of or interest on any Senior Note shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable under the foregoing provisions.

 

The Senior Notes of this series are redeemable, as a whole but not in part, at the option of the Company or the Guarantor, on not less than 30 nor more than 60 days’ notice, on any Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, in respect of the Senior Notes to the date fixed for redemption, if, at any time, the Company 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 the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after August 24, 2010:

 

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(a) in making payment under the Senior Notes in respect of principal or interest it 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 Payment Date in respect of any of the Senior Notes would be treated as a “distribution” within the meaning of Chapter 2 of Part 23 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 Payment Date the Company (or, if applicable, the Guarantor)would not be entitled to claim a deduction in respect of such 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 the Guarantor shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Notes of this series, the Company or 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) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.

 

If the Company or the Guarantor elects to redeem the Senior Notes of this series, the Senior Notes will cease to accrue interest from the date of redemption, provided the redemption price has been paid in accordance with the Indenture.

 

Upon payment of (i) the amount of principal so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s (or, if applicable, the Guarantor’s) obligations in respect of the payment of the principal of, and accrued and unpaid interest on, the Senior Notes of this series shall terminate.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Senior Debt Securities of each series to be affected thereby by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Senior Debt Securities at the time outstanding of each such series.  The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the outstanding Senior Debt Securities of each series, on behalf of the Holders of all Senior Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Senior Note shall be conclusive and binding upon such Holder and upon all future Holders 

 

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of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay, if and when due and payable, the principal of, and interest on, this Senior Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Senior Note of this series will have the right to institute any proceeding with respect to the Indenture, this Senior Note or any remedy thereunder; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal or interest as and when the same shall have become due and payable in accordance with the terms hereof and the Indenture.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the right of the Holder of this Senior Note, which is absolute and unconditional, to receive payment of the principal of, and interest on, this Senior Note when due and payable in accordance with the provisions of this Senior Note and the Indenture.

 

This Senior Note will be governed by the laws of the State of New York.

 

Unless otherwise defined herein, all terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

 

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FORM OF GLOBAL NOTE

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

 

CUSIP No. 78010XAE1

ISIN No. US78010XAE13

 

THE ROYAL BANK OF SCOTLAND plc

 

5.625% SENIOR NOTE DUE AUGUST 24, 2020

 

Guaranteed by

THE ROYAL BANK OF SCOTLAND GROUP plc

 

	
No. [ ]

	
$500,000,000

 

THE ROYAL BANK OF SCOTLAND plc (herein called the “Company,” which term includes any successor person under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $500,000,000 (five hundred million dollars) on AUGUST 24, 2020 or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrears on February 24 and August 24 of each year, commencing February 24, 2011, and ending on AUGUST 24, 2020 (each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to the holder in whose name this Note is registered on the tenth day of each February and August  (each a “Regular Record Date”),  commencing February 10, 2011.  Any interest which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “Default Interest”. Default Interest shall cease to be payable to the registered holder on the relevant Regular Record Date by virtue then of having been such holder, 

 

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and such Default Interest may be paid by the Company, at its election in each case, as provided in clause (x) or (y) below: (x) the Company may elect to make payment of any Default Interest to registered holders at the close of business on a Special Record Date (a “Special Record Date”) for the payment of such Default Interest, such Special Record Date to be fixed in accordance with Section 3.07(a) of the Indenture or, (y) the Company may make payment of any Default Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment, such manner of payment shall be deemed practicable by the Trustee.

 

Interest shall accrue on this Senior Note from day to day from the date of issuance hereof or from the most recent Payment Date at the rate of 5.625% per annum, until the principal amount hereof is paid or made available for payment.

 

Payments of interest on this Senior Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such period.

 

Payment of the principal amount of, and any interest on, this Senior Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Such payment shall be made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder.  If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment and without any interest or other payment in respect of such delay.

 

Prior to due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior Note is registered as the owner of such Senior Note for the purpose of receiving payment of principal and interest, if any, on such Senior Note and for all other purposes whatsoever, whether or not such Senior Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

Reference is hereby made to the further provisions of this Senior Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

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Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Senior Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this Senior Note to be duly executed.

 

 

Dated: August 24, 2010

 

	
Executed by THE ROYAL BANK OF

	 
	
SCOTLAND GROUP PLC at

	 
	  	  	 
	  	  	 
	
By:

	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 
	  	  	 
	 	 	 
	  	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 

 

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GUARANTEE OF THE ROYAL BANK OF SCOTLAND GROUP plc

 

THE ROYAL BANK OF SCOTLAND GROUP plc (herein called the “Guarantor,” which term includes any successor person under the Indenture (as defined on the reverse hereof)) hereby unconditionally guarantees (the “Guarantee”) to each holder of this Senior Debt Security the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Senior Debt Security and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Senior Debt Security and any and all amounts under the Indenture (including but not limited to, the fees, expenses and indemnities of the Trustee), 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 Senior Debt Security and of the Indenture.  In case of the failure of the Company punctually to pay any such principal, premium, interest, Additional Amounts or sinking fund payment and any and all amounts under the Indenture, (including but not limited to, the fees, expenses and indemnities of the Trustee) the Guarantor hereby agrees to pay, or 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 in accordance with the terms of such Senior Debt Security and of the Indenture.

 

Unless otherwise defined herein, all terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

IN WITNESS WHEREOF, the Guarantor has caused this guarantee to be duly executed.

 

Dated: August 24, 2010

 

	
Executed by THE ROYAL BANK OF

	 
	
SCOTLAND GROUP PLC at

	 
	  	  	 
	  	  	 
	
By:

	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 
	  	  	 
	 	 	 
	  	  	 
	  	
Name:

	 
	  	
Title:  Authorized Signatory

	 

 

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CERTIFICATE OF AUTHENTICATION

 

This is one of the Senior Notes of the series designated herein referred to in the within-mentioned Indenture.

 

Dated: August 24, 2010

 

	
THE BANK OF NEW YORK

	 
	
MELLON, LONDON BRANCH

	 
	
as Trustee

	 
	  	  	 
	  	  	 
	
By:

	
 

	 
	  	
Authorized Signatory

	 

 

 

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This Senior Note is one of a duly authorized issue of securities of the Company (herein called the “Senior Notes”) issued and to be issued in one or more series under an Indenture, dated as of  August 13, 2010 (herein called the “Indenture”), among the Company, as issuer, the Guarantor, as guarantor, and The Bank of New York Mellon, London Branch as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Senior Notes and of the terms upon which the Senior Notes are, and are to be, authenticated and delivered.

 

This Senior Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $1,500,000,000.  The Company may, without the consent of the holders of the Senior Notes, issue additional Senior Notes having the same ranking and interest rate, maturity date, redemption terms and other terms as the Senior Notes except for the price to the public and issue date, provided that such further notes must be issued with no more than a de minimis original issue discount for U.S. federal income tax purposes or constitute a “qualified reopening” for U.S. federal income tax purposes.  Any such Senior Notes, together with this Note, will constitute a single series of securities under the Indenture.  The Senior Notes will initially be issued in the form of one or more global Senior Notes (each, a “Global Senior Note”).  Except as provided in the Indenture, a Global Senior Note shall not be exchangeable for one or more definitive Senior Notes.

 

The Senior Notes of this series will constitute unsecured and unsubordinated obligations of the Company and the Guarantor, as described herein, and will rank pari passu without any preference among themselves.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Notes of this series may declare the principal amount of, and any accrued interest on, all the Senior Notes to be due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

If a Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of Holders of Senior Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Indenture or in aid of the exercise of any power granted thereon, or to enforce any other proper remedy, including the institution of proceedings in Scotland (but not elsewhere) for the winding up of the Company or the Guarantor.

 

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By acceptance of the Senior Notes of this series, the Holder will be deemed to have waived any right of set-off or counterclaim with respect to such Senior Notes that they might otherwise have against the Company or the Guarantor, whether before or during a winding-up of the Company or the Guarantor.

 

Subject to the provisions of this paragraph, all amounts of principal and interest on any Senior Notes of this Series 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 withholding 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.  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, and interest on, the Senior Notes of this series (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders after such deduction or withholding shall equal the respective amounts of principal and interest which would have been payable in respect of such Senior Notes 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 Senior Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Note, or the collection of any payment of (or in respect of) principal of, or interest on, any Senior Note,

 

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

 

(iii) the relevant Senior Note 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 the same for payment at the close of such 30 day period,

 

(iv) the Holder or the beneficial owner of the relevant Senior Note or the beneficial owner of any payment of (or in respect of) principal of, premium, if any, or interest, on such Senior Note 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 

 

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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 from all or part of such tax, assessment or other governmental charge,

 

(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 or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directive,

 

(vi) the Senior Note 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 the Senior Note to another paying agent in a Member State of the European Union, or

 

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

 

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Senior Note to any Holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership 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 partner 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.

 

References herein to the payment of the principal of or interest on any Senior Note shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable under the foregoing provisions.

 

The Senior Notes of this series are redeemable, as a whole but not in part, at the option of the Company or the Guarantor, on not less than 30 nor more than 60 days’ notice, on any Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, in respect of the Senior Notes to the date fixed for redemption, if, at any time, the Company 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 the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after August 24, 2010:

 

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(a) in making payment under the Senior Notes in respect of principal or interest it 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 Payment Date in respect of any of the Senior Notes would be treated as a “distribution” within the meaning of Chapter 2 of Part 23 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 Payment Date the Company (or, if applicable, the Guarantor)would not be entitled to claim a deduction in respect of such 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 the Guarantor shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Notes of this series, the Company or 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) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.

 

If the Company or the Guarantor elects to redeem the Senior Notes of this series, the Senior Notes will cease to accrue interest from the date of redemption, provided the redemption price has been paid in accordance with the Indenture.

 

Upon payment of (i) the amount of principal so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s (or, if applicable, the Guarantor’s) obligations in respect of the payment of the principal of, and accrued and unpaid interest on, the Senior Notes of this series shall terminate.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Senior Debt Securities of each series to be affected thereby by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Senior Debt Securities at the time outstanding of each such series.  The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the outstanding Senior Debt Securities of each series, on behalf of the Holders of all Senior Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Senior Note shall be conclusive and binding upon such Holder and upon all future Holders 

 

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of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay, if and when due and payable, the principal of, and interest on, this Senior Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Senior Note of this series will have the right to institute any proceeding with respect to the Indenture, this Senior Note or any remedy thereunder; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal or interest as and when the same shall have become due and payable in accordance with the terms hereof and the Indenture.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the right of the Holder of this Senior Note, which is absolute and unconditional, to receive payment of the principal of, and interest on, this Senior Note when due and payable in accordance with the provisions of this Senior Note and the Indenture.

 

This Senior Note will be governed by the laws of the State of New York.

 

Unless otherwise defined herein, all terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

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