Document:

Exhibit 10.3

 

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT
(as amended or otherwise modified from time to time, this “Agreement”) dated as of November 22, 2013 is among
XL GROUP PLC, an Irish public limited company (“XL Group”), XLIT LTD., an exempted company incorporated in the
Cayman Islands with limited liability (“XLIT”), X.L. AMERICA, INC., a Delaware corporation (“XL America”),
XL INSURANCE (BERMUDA) LTD, a Bermuda limited liability company (“XL Insurance (Bermuda)”), XL RE LTD, a Bermuda
limited liability company (“XL Re”), XL RE EUROPE PLC, an Irish public limited company (“XL Re Europe”),
XL INSURANCE COMPANY PLC, a public limited company domiciled in the United Kingdom (“XL Insurance”), XL INSURANCE
SWITZERLAND LTD, a company limited by shares organized under the laws of Switzerland (“XL Switzerland”) and
XL LIFE LTD, a Bermuda company (“XL Life” and together with XL Group, XLIT, XL America, XL Insurance (Bermuda),
XL Re, XL Re Europe, XL Insurance and XL Switzerland, each an “Pledgor” and collectively, the “Pledgors”)
and The Bank of New York Mellon, not in its individual capacity but solely as Collateral Agent (in such capacity, the “Collateral
Agent”), for the benefit of the Secured Parties (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, the Pledgors,
various financial institutions, the Collateral Agent and JPMorgan Chase Bank, N.A., as Administrative Agent, have entered into
a Secured Credit Agreement dated as of November 22, 2013 (as amended or otherwise modified from time to time, the “Credit
Agreement”); and

 

WHEREAS, under the
Credit Agreement, each of the Pledgors has agreed to grant to the Collateral Agent security interests in each of their respective
Accounts (as defined below), and each of the Pledgors has agreed to deliver cash and Eligible Assets to its Accounts from time
to time in order to secure its obligations under the Credit Agreement.

 

NOW, THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Definitions.
In addition to terms defined in the preamble and recitals, (a) capitalized terms used but not defined herein have the respective
meanings set forth in the Credit Agreement, and (b) the following terms have the following meanings (such definitions to be applicable
to both the singular and plural forms of such terms):

 

“Account”
means, with respect to any Pledgor, the segregated securities account (and includes any sub-accounts thereof and deposit accounts
related thereto) established and maintained in accordance with the Control Agreement and bearing the account number specified on
Schedule II thereto with respect to such Pledgor (as the same may be redesignated, renumbered or otherwise modified from
time to time, and including any account opened in replacement of or in substitution for such account).

 

“Cash Collateral
Account” has the meaning given to it in Section 6(f).

    	 

    	

    

“Collateral”
has the meaning given to it in Section 2.

 

“Control Agreement”
means the Collateral Account Control Agreement, dated as of November 22, 2013, among the Pledgors,
the Collateral Agent, as pledgee, the Custodian, the Administrative Agent and The Bank of New York Mellon, as service provider.

 

“Custodian”
means The Bank of New York Mellon (or any successor thereto permitted under the Control Agreement).

 

“Enforcement
Event” means the occurrence and continuation of any Event of Default under the Credit Agreement, which has not been waived
by the Administrative Agent; provided that no Enforcement Event shall be deemed to have occurred with respect to XL Insurance
Switzerland Ltd., XL Re Europe plc or XL Insurance Company plc (collectively, the “European Entities”), unless
such European Entity is the defaulting party.

 

“Enforcement
Event Notice” means a notice delivered from the Administrative Agent to the Collateral Agent (with a copy to XL Group)
stating (i) that an Enforcement Event has occurred and is continuing and (ii) which Pledgors are subject to such Enforcement Event.

 

“Investment
Property” shall have the meaning provided in Article 8 or Article 9, as applicable, of the UCC.

 

“L/C Report”
shall have the meaning provided in the Control Agreement.

 

“Liabilities”
means, with respect to any Pledgor and to the extent owing to one or more Secured Parties, (i) all Obligations of such Pledgor,
(ii) all obligations of such Pledgor under this Agreement and the Control Agreement, and (iii) all other obligations of such Pledgor
directly related to any Letter of Credit issued for the account of such Pledgor, in each case, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.

 

“Notice of
Exclusive Control” has the meaning given to it in Section 6(d).

 

“Obligations”
means, with respect to any Pledgor, the Reimbursement Obligations (and interest thereon) and the LC Disbursements (and interest
thereon) made by the Lenders on behalf of such Pledgor and all other amounts from time to time owing to the Lenders, the Collateral
Agent or the Administrative Agent by such Pledgor under any of the Credit Documents.

 

“Proceeds”
means all “proceeds” as such term is defined in Section 9-102(a)(64) of the UCC.

 

“Secured Parties”
means the Lenders, the Issuing Lenders, the Administrative Agent and the Collateral Agent.

 

“UCC”
means the Uniform Commercial Code as in effect from time to time in the State of New York.

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2. Grant
of Security Interest. As security for the payment of all of its Liabilities (and not the Liabilities of any other Pledgor),
each Pledgor hereby assigns to the Collateral Agent, and grants to the Collateral Agent a continuing security interest in, as agent
for the benefit of the Secured Parties, all right, title and interest of such Pledgor in the following property of such Pledgor,
whether now or hereafter existing or acquired, regardless of where located (the “Collateral”):

 

(a) its
Account and all cash, Eligible Assets and all other property (including Investment Property) held therein or credited thereto from
time to time;

 

(b) to
the extent related to any property described in this Section 2, all books, correspondence, credit files, records and other papers;
and

 

(c) all
Proceeds of any of the foregoing.

 

3. Warranties.
Each Pledgor warrants that:

 

(a) such
Pledgor is the sole entitlement holder of its Account and no other Person (other than the Collateral Agent pursuant to this Agreement
and the Custodian pursuant to the Control Agreement) has control or possession of, or any other interest in, such Account or any
cash, Eligible Assets or other property held in or credited to such Account and, without limiting the foregoing, no control agreements
exist with respect to its Collateral other than the Control Agreement;

 

(b) such
Pledgor is and will be the lawful owner of all of its Collateral, free of all Liens, other than the security interest created hereunder
and Liens in favor of the Custodian, as securities intermediary, with respect to its Account; and

 

(c) under
the laws of the State of New York, (i) this Agreement creates a security interest that is enforceable against the Collateral in
which such Pledgor has rights as of the date hereof and will create a security interest that is enforceable against the Collateral
in which such Pledgor hereafter acquires rights at the time such Pledgor acquires any such rights and (ii) the Collateral Agent
has a perfected and first priority security interest in the Collateral in which such Pledgor has rights as of the date hereof,
and will have a perfected and first priority security interest in the Collateral in which such Pledgor hereafter acquires rights
at the time such Pledgor acquires any such rights, in each case securing the payment and performance of the Liabilities of such
Pledgor.

 

4. Agreements
of the Pledgors; Control; Withdrawals.

 

(a) Each
Pledgor will, at the Administrative Agent’s reasonable request, at any time and from time to time, promptly execute and deliver
to the Collateral Agent such financing statements, amendments and other documents (including recording a charge or filing (i) in
the case of a Pledgor organized under the laws of a state of the United States, in such state, (ii) in the case of a Pledgor not
incorporated or organized under the laws of a state of the United States, in the District of Columbia and, if applicable, in the
state of the United States in which such Pledgor maintains its chief executive office as such office is identified to the Collateral
Agent by such Pledgor), and do such other related acts as the Collateral Agent (acting at the written

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direction of the Administrative Agent)
may reasonably request, in order to establish and maintain valid, attached and perfected first-priority security interests under
the laws of the State of New York in the Collateral in favor of the Collateral Agent, free and clear of all Liens except Liens
in favor of the Custodian.

 

(b) Each
Pledgor irrevocably authorizes the Collateral Agent (at the request of the Administrative Agent) at any time, and from time to
time, to file and/or record in any United States jurisdiction any initial financing statement and/or charge and amendments thereto
that (i) reasonably describes the Collateral and (ii) contains any other information required by Section 5 of Article 9 of the
UCC of the jurisdiction wherein such financing statement or amendment is filed regarding the sufficiency or filing office acceptance
of any financing statement or amendment, the applicable laws of the jurisdiction of organization of such Pledgor with respect to
recording a security interest. Each Pledgor acknowledges that pursuant to the Control Agreement, the Collateral Agent has “control”
(as that term is used in Section 9-106 of the UCC) of any securities account comprising such Pledgor’s Account pursuant to
Sections 9-106(a), 9-106(c) and 8-106(d)(2) of the UCC and also “control” (as that term is used in Section 9-104 of
the UCC) of any deposit account comprising such Pledgor’s Account pursuant to Section 9-104 of the UCC.

 

(c) Subject
to the terms of the Control Agreement, the parties agree that unless and until such time as the Collateral Agent (acting at the
written direction of the Administrative Agent) shall deliver a Notice of Exclusive Control to the Custodian in respect of the Account
of a Pledgor (and at any time after the written rescission by the Collateral Agent (acting at the written direction of the Administrative
Agent) of such Notice of Exclusive Control), and upon three (3) Business Days’ notice to the Administrative Agent and the
Collateral Agent, each Pledgor shall have the right to instruct the Custodian to:

 

(i) substitute
any cash or Eligible Assets held in the Account of such Pledgor with other cash or Eligible Assets, provided that, (i) immediately
after giving effect to such substitution, the Borrowing Base of such Pledgor is at least equal to the aggregate face value (or
its Dollar Equivalent) of all Letters of Credit issued on behalf of such Pledgor and (ii) such substitution shall precede the related
release; and

 

(ii) to
the extent that the Borrowing Base of such Pledgor exceeds the aggregate face value (or its Dollar Equivalent) of all Letters of
Credit issued on behalf of such Pledgor, transfer cash or Eligible Assets from such Account to any account specified by such Pledgor
in an amount equal to such excess, in each case, in accordance with the terms of the Credit Agreement.

 

For the avoidance of doubt, any substituted
(in the case of the foregoing clause (i)) or withdrawn (in the case of the foregoing clause (ii)) cash or Eligible Assets shall
cease to secure the Liabilities and shall be released without further action from the Liens granted to the Secured Parties hereunder.

 

(d) Each
Pledgor agrees that, immediately upon the delivery of a Notice of Exclusive Control with respect to its Account (but only for so
long as such Notice of Exclusive Control has

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not been rescinded), (i) it will not have
the right to make or request any withdrawal from such Account (including any sub-account or related account thereof) or otherwise
to direct the Custodian’s disposition of any Collateral of such Pledgor, and (ii) the Collateral Agent has the exclusive
right (acting at the written direction of the Administrative Agent) to direct the Custodian’s disposition of the Collateral
of such Pledgor without further consent of or notice to such Pledgor. No Pledgor shall give any consent or waiver, authorize any
assumption, make any modification or supplement, or take any other action with respect to any Collateral in any manner inconsistent
with the manner in which such Pledgor acts with respect to investments of the same type held by such Pledgor for its own account.

 

5. Voting
Rights; Rights to Income.

 

(a) Each
Pledgor agrees, immediately upon the delivery of a Notice of Exclusive Control with respect to its Account (but for so long as
such Notice of Exclusive Control has not been rescinded), (a) that the Collateral Agent (acting at the written direction of the
Administrative Agent) may exercise (to the exclusion of such Pledgor) the voting power and all other incidental rights of ownership
with respect to any Investment Property constituting such Pledgor’s Collateral, and such Pledgor hereby grants the Collateral
Agent an irrevocable proxy, exercisable under such circumstances, to vote such Investment Property, and (b) to promptly deliver
to the Collateral Agent such additional proxies and other documents as may be necessary to allow the Collateral Agent (acting at
the written direction of the Administrative Agent) to exercise such voting power. The Collateral Agent agrees that unless and until
a Notice of Exclusive Control with respect to the Account of a Pledgor shall have been delivered by the Administrative Agent to
the Collateral Agent (and at any time after the rescission of such Notice of Exclusive Control), such Pledgor will have the exclusive
voting power with respect to any Investment Property constituting Collateral of such Pledgor and the Collateral Agent will, upon
the written request of such Pledgor and upon the written direction of the Administrative Agent, promptly deliver such proxies and
other documents, if any, as shall be reasonably requested by such Pledgor and completed and provided for execution to the Collateral
Agent which are necessary to allow such Pledgor to exercise that voting power.

 

(b) Unless
and until such time as the Collateral Agent (acting at the written direction of the Administrative Agent) shall deliver a Notice
of Exclusive Control to the Custodian in respect of the Account of a Pledgor (and at any time after the rescission of such Notice
of Exclusive Control), such Pledgor shall be entitled to receive (by delivery of the Custodian to such Pledgor in accordance with
the Control Agreement) all cash dividend payments, interest payments and other distributions of cash received by the Custodian
in respect of any assets of such Pledgor credited to the Account of such Pledgor free and clear of any Lien granted under this
Agreement; provided, that after receipt of any such Notice of Exclusive Control (but only for so long as such Notice of Exclusive
Control has not been rescinded), the Collateral Agent (acting at the written direction of the Administrative Agent) shall instruct
the Custodian to deposit and retain in the Account of such Pledgor all such cash dividend payments, interest payments and other
distributions of cash received by the Custodian in respect of any assets of such Pledgor credited to such Account. At all times,
any distributions other than cash received by the Custodian in respect of any Collateral of such Pledgor shall be delivered by
the Custodian to the Account related to such Collateral, and the security interest granted under this Agreement with

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respect to Collateral credited to such
Account shall automatically attach to such distributions other than cash for the benefit of the Secured Parties.

 

6. Default
and Remedies upon an Enforcement Event. (a) If the Collateral Agent has received an Enforcement Event Notice with respect to
one or more Pledgors (which notice(s) have not been rescinded), then the Collateral Agent may (and shall if so directed by the
Administrative Agent in writing) apply all or any portion of the credit balance of the Account of each such Pledgors to the payment
of the respective Liabilities of each such Pledgor (and not the Liabilities of any other Pledgor).

 

(b) Without
limiting the foregoing, if the Collateral Agent has received an Enforcement Event Notice with respect to one or more Pledgors (which
notice(s) have not been rescinded), the Collateral Agent (acting at the written direction of the Administrative Agent) may exercise
all the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised)
with respect to the Collateral of such Pledgors.

 

(c) Without
limiting clause (a) above, each Pledgor agrees that, if the Collateral Agent has received an Enforcement Event Notice with
respect to it (which notice has not been rescinded), then any item of its Collateral may be sold for cash or on credit or for future
delivery without assumption of any credit risk, in any number of lots at the same or different times, at any exchange, brokers’
board or elsewhere, by public or private sale, and at such times and on such terms, as the Collateral Agent, acting at the written
direction of the Administrative Agent, shall elect. The Collateral Agent shall give the applicable Pledgor such notice of any private
or public sales as may be required by the UCC or other applicable law. Each Pledgor recognizes that the Collateral Agent may be
unable to make a public sale of any or all of the Collateral of such Pledgor, by reason of prohibitions contained in applicable
securities laws or otherwise, and expressly agrees that a private sale to a restricted group of purchasers for investment and not
with a view to any distribution thereof shall be considered a commercially reasonable sale. The Collateral Agent shall have the
right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any
part of the Collateral of such Pledgor so sold, free of any right or equity of redemption, which right or equity of redemption
the applicable Pledgor hereby releases to the extent permitted by law.

 

(d) Without
limiting clause (a) above, if the Collateral Agent has received an Enforcement Event Notice with respect to one or more
Pledgors (which notice(s) have not been rescinded), the Collateral Agent (acting at the written direction of the Administrative
Agent) shall have the right to deliver to the Custodian, in accordance with the Control Agreement, a “Notice of Exclusive
Control” in respect of the respective Account of each such Pledgor (a “Notice of Exclusive Control”) pursuant
to which the Collateral Agent shall have the right (acting at the written direction of the Administrative Agent), so long as the
Enforcement Event Notice in respect of any particular Pledgor has not been rescinded, to execute and deliver to the Custodian any
entitlement order, to execute and deliver other instructions directing the disposition of the Collateral of any such particular
Pledgor, to vote and to give consents, ratifications and waivers with respect to the Collateral of any such particular Pledgor
and exercise all rights, privileges or options pertaining to the Collateral of any such particular Pledgor, as if the Collateral
Agent were the absolute owner thereof; provided, that the Collateral Agent hereby covenants that it will not deliver to the Custodian
a Notice of Exclusive Control

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with respect to the Account of any Pledgor
or otherwise instruct the Custodian to liquidate, transfer, restrict transfer of or otherwise act on the Collateral of any Pledgor
until it has received an Enforcement Event Notice in respect of such Pledgor (which notice has not been rescinded).

 

(e) For
the purpose of enabling the Collateral Agent to exercise its rights under this Section 6 or otherwise in connection
with this Agreement, each Pledgor hereby constitutes and appoints the Collateral Agent (and any of the Collateral Agent’s
officers, employees or agents designated by the Collateral Agent) its true and lawful attorney-in-fact, with full power and authority
to (i) sign and file any financing statements or other documents, papers or instruments which must be executed or filed to perfect
or continue perfection, maintain the priority of or provide notice of the pledge of and security interest in the Collateral of
such Pledgor under the laws of the state of New York, in each case at the written direction of the Administrative Agent and (ii)
if the Collateral Agent has received an Enforcement Event Notice in respect of a Pledgor (which has not been rescinded), do any
and all acts that the Administrative Agent requests in writing (including deliver a Notice of Exclusive Control pursuant to Section
6(f)) and things for and on behalf of the Pledgors that are necessary or desirable to protect, collect, realize upon and preserve
the Collateral of such Pledgor, to enforce the Collateral Agent’s rights with respect to the Collateral of such Pledgor and
to accomplish the purposes hereof. Such appointment by the Pledgors is coupled with an interest and is irrevocable so long as all
Liabilities of the Pledgors have not been paid and performed in full. Each Pledgor ratifies, to the extent permitted by law, all
that the Collateral Agent shall lawfully and in good faith do or cause to be done by virtue of and in compliance with this Section 6(e).

 

(f) To
the extent that any of the Liabilities of a Pledgor may be contingent, unmatured or unliquidated (including with respect to undrawn
amounts under any Letter of Credit) after such time as an Enforcement Event Notice with respect to such Pledgor shall have been
delivered to the Collateral Agent (and which has not been rescinded), the Collateral Agent (acting at the written direction of
the Administrative Agent) (i) shall instruct the Custodian to retain the proceeds of any sale, collection, disposition or other
realization upon the Collateral of such Pledgors (or any portion thereof) in a separate cash collateral account related to the
Account of such Pledgor (a “Cash Collateral Account”) until such time as the Administrative Agent directs the
Collateral Agent to apply such proceeds to the Liabilities of such Pledgor (and not to the Liabilities of any other Pledgor), and
such Pledgor agrees that such retention of such proceeds by the Collateral Agent shall not be deemed strict foreclosure with respect
thereto; (ii) may conclusively rely on any estimate made by the Administrative Agent of the liquidated amount of any such
contingent, unmatured or unliquidated claims against or in respect of a Pledgor and apply the proceeds of the Collateral of such
Pledgor against such amount as directed by the Administrative Agent; and (iii) otherwise may proceed in any other manner permitted
by applicable law. Each Pledgor agrees that any Cash Collateral Account shall be a blocked account and that upon the irrevocable
deposit of funds into such account, such Pledgor shall not have any right of withdrawal with respect to such funds and any funds
deposited into a Cash Collateral Account shall not be withdrawn. Each Pledgor hereby grants to the Collateral Agent a continuing
security interest in all right, title and interest of such Pledgor in and to any Cash Collateral Account and the deposits and funds
held therein, and the Collateral Agent shall have all rights of a secured creditor under the UCC with respect thereto. Each Pledgor
irrevocably waives the right to make any withdrawal from any Cash Collateral Account until payment in full

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in cash of all Liabilities of such Pledgor
and the termination or expiration of each Letter of Credit issued for the account of such Pledgor pursuant to the Credit Agreement.

 

(g) Except
as otherwise provided in this Agreement, EACH PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL
HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF
THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Pledgor
hereby further waives, to the extent permitted by law: (i) all damages occasioned by such taking of possession or any such disposition
except any damages which are the direct result of the Collateral Agent’s gross negligence, bad faith or willful misconduct
(as determined by a court of competent jurisdiction in a final and non-appealable decision), and (ii) all rights of redemption,
appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or
delay the enforcement of this Agreement or the absolute sale of the Collateral of such Pledgor or any portion thereof, and each
Pledgor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit
of all such laws. To the extent permitted by applicable law, any sale of, or the grant of options to purchase, or any other realization
upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant
Pledgor therein and thereto, and shall be a perpetual bar both at law and in equity against such Pledgor and against any Persons
claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under
such Pledgor.

 

7. Application
of Proceeds; Releases; Etc. (a) The Collateral Agent shall apply the proceeds of any sale or other disposition or collection
of any Collateral of any Pledgor to the Liabilities of such Pledgor in the order directed by the Administrative Agent in accordance
with the terms of the Credit Agreement.

 

(b) Upon
release of the Collateral of each Pledgor pursuant to Section 10.15(b) of the Credit Agreement, the Collateral Agent (acting
at the written direction of the Administrative Agent) shall (i) deliver or pay, or cause the Custodian to deliver or pay in accordance
with the Control Agreement, to the account specified by each Pledgor (or its designee) any surplus Collateral held in the Account
of such Pledgor (or any proceeds thereof held by the Collateral Agent elsewhere), and (ii) execute and deliver any financing statement
amendments or termination statements or such other documents, instruments, notices, supplements or other agreements as may be provided
to it by the Pledgors to terminate any financing statements or evidence the termination thereof or any other documents filed with
respect to, or otherwise relating to, the Collateral. The obligations of the Collateral Agent under this Section 7(b) shall
survive the termination of this Agreement.

 

8. General.
(a) All notices and other communications provided for hereunder shall be in accordance with Section 10.01 of the Credit Agreement.

 

(b) Each
Pledgor agrees to pay all expenses, including reasonable attorney’s fees and charges (including time charges of attorneys
who are employees of the Collateral Agent), paid or incurred by the Collateral Agent in endeavoring to collect the Liabilities
of such Pledgor, or any

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part thereof, and in enforcing this Agreement
against such Pledgor, and such obligations will themselves be Liabilities.

 

(c) No
delay on the part of the Collateral Agent in the exercise of any right or remedy shall operate as a waiver thereof, and no single
or partial exercise by the Collateral Agent of any right or remedy shall preclude other or further exercise thereof or the exercise
of any other right or remedy.

 

(d) This
Agreement shall remain in full force and effect until the Commitments have terminated, all Liabilities have been paid in full and
each Letter of Credit has terminated or expired pursuant to the Credit Agreement. At such time, the Administrative Agent in writing
will instruct the Collateral Agent to provide the Custodian with written instructions in the form required to terminate the Control
Agreement. If at any time all or any part of any payment theretofore applied by the Collateral Agent to any of the Liabilities
is or must be rescinded or returned by the Collateral Agent for any reason whatsoever (including the insolvency, bankruptcy or
reorganization of any Pledgor), such Liabilities shall, for the purposes of this Agreement, to the extent that such payment is
or must be rescinded or returned, be deemed to have continued in existence, notwithstanding such application by the Collateral
Agent, and this Agreement shall continue to be effective or be reinstated, as the case may be, as to such Liabilities, all as though
such application by the Collateral Agent had not been made.

 

(e) Whenever
possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions
of this Agreement.

 

(f) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.

 

(g) The
rights and privileges of the Collateral Agent hereunder shall inure to the benefit of its successors and assigns. No Person other
than the parties hereto is an intended or third-party beneficiary of any of the provisions of this Agreement.

 

(h) This
Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

 

(i) Each
party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the
Supreme Court of the State of New York sitting in the Borough of Manhattan in the City of New York and of the United States District
Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be

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enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative
Agent, the Collateral Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against
any Pledgor or its properties in the courts of any jurisdiction.

 

(j) Neither
the Collateral Agent nor the Administrative Agent shall be responsible or liable for any failure or delay in the performance of
its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control,
including acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions,
loss or malfunctions of utilities, computers (hardware or software) or communications service; accidents; labor disputes; acts
of civil or military authority; governmental actions; or inability to obtain labor, material, equipment or transportation.

 

(k) XL
Group agrees to indemnify the Collateral Agent against and to hold the Collateral Agent harmless from all costs, expenses, damages,
liabilities or claims, including reasonable fees of counsel, including any claim by any Pledgor or the Administrative Agent, that
are sustained by the Collateral Agent as a result of the Collateral Agent’s action or inaction in connection with this Agreement,
except to the extent arising out of the Collateral Agent’s gross negligence, bad faith or willful misconduct. The foregoing
indemnity shall be a continuing obligation of the Pledgors and their respective successors and assigns, notwithstanding the termination
of this Agreement.

 

(l) The
Collateral Agent may conclusively rely on an Enforcement Event Notice received from the Administrative Agent, without any further
inquiry or investigation of any kind, for so long as it has not received written notice of the rescission of such Enforcement Event
Notice by and from the Administrative Agent. Subject to the terms of the Credit Agreement, at any such time after its initial delivery
of an Enforcement Event Notice in respect of a Pledgor to the extent no Event of Default remains continuing with respect to such
Pledgor, the Administrative Agent shall deliver a notice of rescission to the Collateral Agent informing it that the Enforcement
Event Notice has been rescinded.

 

(m) Each
party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection
which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this
Agreement in any court referred to in paragraph (i) of this Section. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in
any such court.

 

(n) To
the extent that any Pledgor has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process
(whether through service of notice, attachment prior to judgment, attachment in aid of execution or execution, on the ground of
sovereignty or otherwise) with respect to itself or its property, it hereby irrevocably waives, to the fullest extent permitted
by applicable law, such immunity in respect of its obligations under this Agreement.

 

(o) EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR

    	10

    	

    

RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

(p) The
obligations of each Pledgor hereunder shall remain in full force and effect without regard to, and shall not be impaired by any
exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any
other Credit Document.

 

(q) Any
Person that is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of the Credit
Agreement or any other Credit Document shall become a Pledgor hereunder by (x) executing a counterpart hereof and delivering same
to the Collateral Agent, or by executing an assumption agreement in form and substance reasonably satisfactory to the Collateral
Agent (acting at the written direction of the Administrative Agent), (y) delivering supplements to Schedule I and II to the Control
Agreement as are necessary to cause such schedules to be complete and accurate with respect to such additional Pledgor on such
date and complying with Section 10.14 of the Credit Agreement and (z) taking all actions as specified in this Agreement as would
have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above
to be delivered to the Collateral Agent and with all documents and actions required above to be taken to the reasonable satisfaction
of the Collateral Agent (acting at the written direction of the Administrative Agent).

 

(r) By
the execution and delivery of this Agreement, each Pledgor acknowledges that it has by a separate written instrument, designated
and appointed CT Corporation System, 111 Eighth Avenue, 13th floor, New York, New York 10011 (or any successor entity thereto),
as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Agreement
that may be instituted in any federal or state court in the State of New York. Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in Section 10.01 of the Credit Agreement. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

(s) The
parties hereto acknowledge and agree that any Guarantor may, but is not required to, deliver any cash or Eligible Assets to the
Account of any Pledgor for the purpose of securing the Liabilities of such Pledgor and that upon any such cash or Eligible Assets
being credited to the Account of any Pledgor, such cash and Eligible Assets shall be deemed to be Collateral of such Pledgor.

 

(t) Notwithstanding
anything herein to the contrary, each party hereto agrees that the Administrative Agent may provide multiple directions and/or
instructions to the Collateral Agent

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in a single writing; provided that
no such instructions or directions shall relate to contingent events in the future.

 

[Signature pages follow]

    	12

    	

    

IN WITNESS WHEREOF,
this Agreement has been duly executed as of the day and year first above written.

 

	 	PLEDGORS:	 
	 	 	 
	 	Signed and Delivered as a Deed	 
	 	for and on behalf of	 
	 	XL GROUP PLC,	 
	 	by its duly authorized attorney	 
	 	in the presence of:	 
	 	 	 
	 	XL GROUP PLC	 
	 	 	 	 
	 	By	/s/ Simon Rich	 
	 	 	Name: Simon Rich	 
	 	 	Title:   Global Treasurer	 
	 	 	 	 
	 	/s/ Candida Medeiros	 
	 	Witness	 
	 	Name: Candida Medeiros	 
	 	Title:   Executive Assistant	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	XLIT LTD.	 
	 	 	 	 
	 	By	/s/ Simon Rich	 
	 	 	Name: Simon Rich	 
	 	 	Title:   Director	 
	 	 	 	 
	 	By	/s/ Robert Hawley	 
	 	 	Name: Robert Hawley	 
	 	 	Title:   Authorized Officer	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	X.L. AMERICA, INC.	 
	 	 	 	 
	 	By	/s/ Richard G. McCarty	 
	 	 	Name: Richard G. McCarty	 
	 	 	Title:   Senior Vice President	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	XL INSURANCE (BERMUDA) LTD	 
	 	 	 	 
	 	By	/s/ Simon Rich	 
	 	 	Name: Simon Rich	 
	 	 	Title:   Director	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	XL RE LTD	 
	 	 	 	 
	 	By	/s/ Mark Twite	 
	 	 	Name: Mark Twite	 
	 	 	Title:   Senior Vice President and 

            Chief Financial Officer	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	Signed and Delivered as a Deed	 
	 	for and on behalf of	 
	 	XL RE EUROPE PLC,	 
	 	by its duly authorized attorney	 
	 	in the presence of:	 
	 	 	 	 
	 	By	/s/ David Watson	 
	 	 	Name: David Watson	 
	 	 	Title:   Attorney	 
	 	 	 	 
	 	By	/s/ Michele Mulready	 
	 	Witness	 
	 	 	Name: Michele Mulready	 
	 	 	Title:   Company Secretary	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	XL INSURANCE COMPANY PLC	 
	 	 	 	 
	 	By	/s/ Paul Bradbrook	 
	 	 	Name: Paul Bradbrook	 
	 	 	Title:   Director	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	XL INSURANCE SWITZERLAND LTD	 
	 	 	 	 
	 	By	/s/ Daniel Maurer	 
	 	 	Name: Daniel Maurer	 
	 	 	Title:   Chairman	 
	 	 	 	 
	 	By	/s/ Bruno Länzlinger	 
	 	 	Name: Bruno Länzlinger	 
	 	 	Title:   Chief Executive Officer	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	XL LIFE LTD	 
	 	 	 	 
	 	By	/s/ Seamus MacLoughlin	 
	 	 	Name: Seamus MacLoughlin	 
	 	 	Title:   President	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

	 	COLLATERAL AGENT:	 
	 	 	 
	 	THE BANK OF NEW YORK MELLON	 
	 	 	 	 
	 	By	/s/ Jose Alcantara	 
	 	 	Name: Jose Alcantara	 
	 	 	Title:   Vice President	 

 

	 	Address: 	The Bank of New York Mellon	 
	 	 	101 Barclay Street	 
	 	 	New York, New York 10286	 
	 	 	Attn: Insurance Trust Group	 
	 	 	 	 
	 	Facsimile Number: (732) 667-9536	 

 

[Signature Page to Pledge Agreement]

    	 

    	

    

Acknowledged and, with respect to Section 8(l), agreed to by:

 

	JPMorgan Chase Bank, N.A.,	 
	as Administrative Agent	 
	 	 	 
	By:	/s/ Kristen M. Murphy	 
	 	Name: Kristen M. Murphy	 
	 	Title:   Vice President	 

 

[Signature Page to Pledge Agreement]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.  53944VAA7

ISIN No.  US53944VAA70

 

 

LLOYDS BANK plc

 

2.3% SENIOR NOTE DUE NOVEMBER 27, 2018

 

Guaranteed by

LLOYDS BANKING GROUP plc

 

 

	No. 1	$500,000,000

 

LLOYDS BANK 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 November 27, 2018 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 May 27 and November  27 of each year, commencing on May 27, 2014, and ending on November 27, 2018 (each, an “Payment Date”). Interest so payable on any Payment Date shall be paid to the holder in whose name this Senior Note is registered on the 15th calendar day immediately preceding the relevant Payment Date, whether or not such day is a Business Day, as defined in the Indenture (each a “Regular Record Date”). 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, 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

 

  

1

  

 

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 2.3% 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 premium, if any) 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 (and premium, if any) 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: November 27, 2013

 

 

	 	 
LLOYDS BANK PLC

	 
	 	 	 
	 	 	 
	 	By:	 	 	 
	 	 	 
Name:

	 	 
	 	 	 
Title:

	 	 

 

[Global Note No.1  Signature Page]

 

  

3

  

 

 

GUARANTEE OF LLOYDS BANKING GROUP plc

LLOYDS BANKING 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 Note the due and punctual payment of the principal of, any premium and interest on, and any Additional Amounts with respect to such Senior Note and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Senior Note 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 Note 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 Note 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.

  

4

  

IN WITNESS WHEREOF, the Guarantor has caused this guarantee to

be duly executed.

Dated: November 27, 2013

 

 

	 	 
 
Executed by LLOYDS BANKING GROUP PLC

	 
	 	 	 
	 	 	 
	 	By:	 	 	 
	 	 	 
Name:

	 	 
	 	 	 
Title:

	 	 

 

 

	 	 	 
	 	 	 
	 	By:	 	 	 
	 	 	 
Name:

	 	 
	 	 	 
Title:

	 	 

[Global Note No.1  Signature Page]

 

  

5

  

 

 

 

CERTIFICATE OF AUTHENTICATION

 

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

 

Dated: November 27, 2013

 

 

	 	 
 
THE BANK OF NEW YORK MELLON, 
as Trustee

	 
	 	 	 
	 	 	 
	 	By:	 	 
	 	 	 
Authorized Signatory

	 
	 	 	 	 

 

  

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[Global Note No. 1 Signature Page]

 

 

[REVERSE OF SECURITY]

 

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 January 21, 2011 (herein called the “Indenture”), among the Company, as issuer, the Guarantor, as guarantor, and The Bank of New York Mellon, 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 $1,000,000,000. The Company may, without the consent of the holders of the Senior Notes, issue additional 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 fungbile with the Senior Notes for U.S. federal income tax purposes. Any such Senior Notes, together with this Senior 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 an Event of 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

 

  

7

  

 

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 England or Scotland (but not elsewhere) for the winding up of the Company or the Guarantor, respectively.

 

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 withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law.  If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, premium, if any, and interest 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, premium, if any, 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, premium, if any, 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,

 

  

8

  

 

(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 withholding or deduction by presenting (where presentation is required) the Senior Note to another paying agent in a Member State of the European Union,

 

(vii) the deduction or withholding is imposed by reason of any agreement with the US Internal Revenue Service in connection with Sections 1471-1474 of the US Internal Revenue Code and the US Treasury regulations thereunder (“FATCA”), any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or any law, regulation or other official guidance enacted in any jurisdiction implementing, or relating to, FATCA or any intergovernmental agreement; or

 

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

 

nor shall Additional Amounts be paid with respect to the principal of, premium on, 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

 

  

9

  

 

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 or the Guarantor shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in 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 November 27, 2013:

 

(a) in making payment under the Senior Notes the Company or the Guarantor has or will or would on the next Interest Payment Date become obligated to pay Additional Amounts;

 

(b) the payment of interest on the next 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 or, if applicable, the Guarantor) in a form satisfactory to the Trustee confirming that the relevant

 

  

10

  

 

change in the official application or interpretation of such laws or regulations has occurred and that the Company or, if applicable, the Guarantor is entitled to exercise its right of redemption.

 

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 (and premium, if any) 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 premium, if any), 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 Notes 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 Notes 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 Notes of each series, on behalf of the Holders of all Senior Notes 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 premium, if any) 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.

 

  

11

  

 

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 premium, if any) 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.

 

 

12

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