Document:

exv10w1

Exhibit 10.1

May 4, 2011

JPMorgan Chase Bank, N.A.

2200 Ross Avenue, Third Floor

Dallas, Texas 75201

Attention: Kimberly A. Bourgeois

	 	Re:	 	Tenth Amendment to Credit Agreement dated as of January 18, 2008 among Approach
Resources Inc. (“Borrower”), JPMorgan Chase Bank, N.A. and the institutions named
therein (“Lenders”) and JPMorgan Chase Bank, N.A., as Agent (“Agent”)

Ladies and Gentlemen:

     Reference is hereby made to that certain Credit Agreement dated as of January 18, 2008 among
Approach Resources Inc., a Delaware corporation (“Borrower”), JPMorgan Chase Bank, N.A., as Agent
(“Agent”), and the Lenders that are signatory parties hereto (the “Lenders”), as amended by
amendments dated February 19, 2008, May 6, 2008, August 26, 2008, April 8, 2009, July 8, 2009,
October 30, 2009, February 1, 2010, May 3, 2010, October 21, 2010 and as of the date hereof (as
amended, the “Loan Agreement”). All capitalized terms herein shall have the meanings ascribed to
them in the Loan Agreement.

     Pursuant to this Tenth Amendment (the “Amendment”), Agent, Lenders and Borrower agree,
effective as of the date hereof, to amend the Loan Agreement according to the terms and provisions
set forth below.

     1. Increase to Borrowing Base and Commitment. As of the date hereof, the Borrowing
Base and Commitment under the Loan Agreement are increased to $200,000,000.

     2. Amendment to Section 1. Definitions.

     (a) Effective as of the date hereof, the definition of “Accounting Principles” is
deleted in its entirety and the following is substituted therefor:

“Accounting Principles means generally accepted accounting principles
(“GAAP”) in effect from time to time, applied in a manner consistent with prior
periods; provided that, if Borrower notifies Agent that Borrower requests an
amendment to any provision hereof to eliminate the effect of any change occurring
after the date hereof in GAAP or in the application thereof on the operation of such
provision (or if Agent notifies Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall

 

 

have become effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.”

     (b) Effective as of the date hereof, the definition of “Applicable Rate” is deleted in its
entirety and the following is substituted therefor:

“Applicable Rate means, for any day, with respect to any Base Rate Loan or
Eurodollar Loan, or with respect to the Unused Commitment Fees payable hereunder, as
the case may be, the applicable rate per annum set forth below under the caption
“Base Rate Margin”, “Eurodollar Margin” or “Unused Commitment Fee Rate”, as the case
may be, based upon the Borrowing Base Usage applicable on such date:

	 	 	 	 	 	 	 
	Borrowing Base	 	 	 	Base Rate	 	Unused Commitment
	Usage	 	Eurodollar Margin	 	Margin	 	Fee Rate
	≥ 90%

	 	275.0 b.p.
	 	175.0 b.p.
	 	50.0 b.p.
	≥ 75% < 90%

	 	250.0 b.p.
	 	150.0 b.p.
	 	50.0 b.p.
	≥ 50% < 75%

	 	225.0 b.p.
	 	125.0 b.p.
	 	50.0 b.p.
	≥25% < 50%

	 	200.0 b.p.
	 	100.0 b.p.
	 	50.0 b.p.
	<25%

	 	175.0 b.p.
	 	75.0 b.p.
	 	50.0 b.p.
	 

Each change in the Applicable Rate shall apply during the period commencing on the
effective date of such change and ending on the date immediately preceding the effective date of
the next change.”

     (c) Effective as of the date hereof, the definition of “Commitment” is deleted in its
entirety and the following is substituted therefor:

“Commitment means (A) for all Lenders, the lesser of (i) the Facility Amount, or
(ii) the Borrowing Base, as reduced or increased from time to time pursuant to Sections 2
and 7 hereof, and (B) as to any Lender, its obligation to make Advances hereunder in amounts
not exceeding, in the aggregate, an amount equal to such Lender’s Commitment Percentage
times the total Commitment as of any date. The Commitment of each Lender hereunder shall be
adjusted from time to time to reflect assignments made by such Lender pursuant to Section 29
hereof. Each reduction in the Commitment shall result in a Pro Rata reduction in each
Lender’s Commitment.”

     (d) Effective as of the date hereof, the definition of “Guarantors” is amended by
deleting therefrom the reference to Approach Oil & Gas (Canada) Inc. as a Guarantor.

     (e) Effective as of the date hereof, the definition of “Maturity Date” is deleted in
its entirety and the following is substituted therefor:

2

 

     “Maturity Date means July 31, 2014.”

     (f) Effective as of the date hereof, the following definitions are added to Section 1:

               “Facility Amount shall mean $300,000,000.

               Sole Bookrunner shall mean JPMorgan Securities LLC.

               Sole Lead Arranger shall mean JPMorgan Securities LLC.”

     3. Mandatory Borrowing Base Reductions. Section 2(g) of the Loan Agreement is hereby
deleted in its entirety and the following is substituted therefor:

     “(g) Mandatory Borrowing Base Reductions. The Borrowing Base shall be reduced from
time to time as follows:

     (i) by an amount of any prepayment required by Section 12(r) upon the
sale of assets; and

     (ii) by twenty-five percent (25%) of the principal amount of each
issuance of senior unsecured indebtedness permitted under Section
13(d)(viii).

If, as a result of any such reduction in the Borrowing Base, the Total Outstandings ever
exceed the Borrowing Base then in effect, Borrower shall make the mandatory prepayment of principal
required pursuant to Section 9(b) hereof.”

     4. Amendment to Section 3, “Notes Evidencing Loans.” Effective the date hereof, the first
sentence of Section 3(a) and the first sentence of Section 3(b) are deleted in their entirety and
the following are substituted therefor:

     “(a) Form of Notes. The Loans shall be evidenced by a Note or Notes in the
aggregate face amount of the Facility Amount and shall be in the form of Exhibit “B” hereto
with appropriate insertions.

     (b) Issuance of Additional Notes. At the Effective Date there shall be
outstanding Notes in the aggregate face amount of the Facility Amount and shall be in the
form of Exhibit “B” hereto with appropriate insertions.”

     5. Amendment to Section 13(b)(ii), “Financial Covenants”. Effective as of the date
hereof, Subsection 13(b)(ii) of the Loan Agreement is hereby amended to provide as follows:

     “(ii) Consolidated Funded Debt to Consolidated EBITDAX Ratio.
Commencing with the fiscal quarter ending June 30, 2011, Borrower and
Guarantors will not permit, as of the last day of any fiscal

3

 

quarter, the ratio of the sum of (A) the Consolidated Funded Debt to
(B) the Consolidated EBITDAX (in each case annualized for the fiscal quarter
ending on such date by multiplying such sum by 4), to be greater than 4.0 to
1.0.”

     6. Replacement of Exhibit “C,” “Certificate of Compliance”. Exhibit “C” to the Loan
Agreement is hereby deleted in its entirety and the Exhibit “C” attached hereto is substituted
therefor.

     7. Amendment to Section 13(d), “Limitation on Additional Indebtedness”. Section 13(d)
of the Loan Agreement is hereby amended by adding the following Subsection (viii) thereto:

     “(viii) the issuance of one or more issues of senior unsecured
indebtedness, provided however, that the aggregate principal amount of all
of such issues of such senior unsecured indebtedness shall not exceed
$200,000,000, and provided further that each such issuance shall result in a
reduction in the Borrowing Base then in effect equal to twenty-five percent
(25%) of the principal amount of such issuance.”

     8. Amendment to Section 24, “Amendments”. Section 24 of the Loan Agreement is hereby
deleted in its entirety and the following is substituted therefor:

“24. Amendments. This Agreement may be amended only by an instrument in writing executed by
an authorized officer of the party against whom such amendment is sought to be enforced. No
modification or waiver of any provision of the Loan Documents, including this Agreement, or
the Notes nor consent to departure therefrom, shall be effective unless in writing signed by
Borrower and Required Lenders; provided, however, that no amendment, waiver, or other action
shall be effected pursuant to this Section 24 without the consent of all Lenders which: (a)
would increase the Borrowing Base (but excluding any waiver of (i) the Borrowing Base
reduction according to Section 2(g)(ii) hereof or (ii) the decrease in the amount of the
Borrowing Base reduction otherwise provided by Section 2(g)(ii), either of which will
require the consent of Required Lenders), (b) would reduce any fees hereunder, or the
principal of, or the interest on, any Lender’s Note or Notes, (c) would postpone any date
fixed for any payment of any fees hereunder, or any principal or interest of any Lender’s
Note or Notes, (d) would increase the aggregate Commitments or any Lender’s individual
Commitment hereunder or would materially alter Agent’s obligations to any Lender hereunder
(but excluding any waiver of (i) the Borrowing Base reduction according to Section 2(g)(ii)
hereof or (ii) the decrease in the amount of the Borrowing Base reduction otherwise provided
for by Section 2(g)(ii), either of which will require the consent of Required Lenders), (e)
would release Borrower from its obligation to pay any Lender’s Note or Notes or release any
Guarantor from any of its obligations, (f) would release any Collateral (other than the
Collateral that is sold or transferred with the prior consent of Required Lenders pursuant
to Section 13(a)(ii)), (g) would change the definition of Required Lenders (or
without the

4

 

prior consent of Required Lenders if such consent is not required), or (h) would amend this
sentence. No such consent or waiver shall extend beyond the particular case and purpose
involved. No notice or demand given in any case shall constitute a waiver of the right to
take other action in the same, similar or other circumstances without such notice or demand.
No amendment of any provision of this Agreement relating to Agent shall be effective
without the written consent of Agent.”

     9. Fees. Borrower shall pay to Agent and to Sole Lead Arranger and Sole Bookrunner
the fees set out in the fee agreement dated the date hereof (the “Fee Agreement”).

     10. Assignments of Commitment. Prior to giving effect to this Amendment, JPMorgan
Chase Bank, N.A., BNP Paribas, KeyBank National Association and The Frost National Bank (the
“Existing Lenders”) each has a Commitment Percentage as set out below under the heading “Existing
Lender Commitments.” The Existing Lenders desire to assign to Royal Bank of Canada (the “New
Lender”), a percentage of each Existing Lender’s Commitment Percentage of its obligations as a
Lender under the Loan Agreement, such that after giving effect to such assignments and as of the
date hereof, the respective Commitment Percentages of the Existing Lenders and the New Lender will
be as set forth below under the heading “Revised Lender Commitments” and on Schedule I attached
hereto and made a part hereof and of the Loan Agreement, as amended hereby. Agent and Borrower
hereby consent to the assignments by Existing Lenders of such portion of each of their rights and
obligations as a Lender under the Loan Agreement to the New Lender. Effective as of the date
hereof such acquisition of a portion of the Existing Lenders’ Commitments by the New Lender shall
be deemed to have been consummated pursuant to the terms of the Assignment and Acceptance Agreement
attached as Exhibit D to the Loan Agreement (which is incorporated herein by reference as if fully
set forth herein) as if the Existing Lenders and the New Lender had executed Assignment and
Acceptance Agreements with respect to such assignments.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Existing Lender Commitments	 	 	Revised Lender Commitments	 
	Lenders	 	Percentage	 	 	Amount	 	 	Percentage	 	 	Amount	 
	JPMorgan Chase Bank, N.A.
	 	 	30	%	 	$	45,000,000	 	 	 	22.50	%	 	$	45,000,000	 
	BNP Paribas
	 	 	23.33	%	 	$	35,000,000	 	 	 	20.00	%	 	$	40,000,000	 
	KeyBank National Association
	 	 	23.33	%	 	$	35,000,000	 	 	 	20.00	%	 	$	40,000,000	 
	Royal Bank of Canada
	 	 	N/A	 	 	 	N/A	 	 	 	20.00	%	 	$	40,000,000	 
	The Frost National Bank
	 	 	23.33	%	 	$	35,000,000	 	 	 	17.50	%	 	$	35,000,000	 
	TOTAL
	 	 	 	 	 	 	 	 	 	 	100.00	%	 	$	200,000,000	 

     11. Schedule I. Effective as of the date hereof, Schedule I to the Loan Agreement is
deleted in its entirety and Schedule I attached hereto is substituted therefor.

     12. Notes. Notwithstanding Sections 3(a) and 3(b) of the Loan Agreement referencing
that the Loans shall be evidenced by Notes payable to each Lender in the aggregate face amount of
the Facility Amount, the delivery of such a Note to the Lenders shall be at each

5

 

Lender’s discretion. Any Lender may request that Loans made by it be evidenced by a Note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a Note payable to the order of such Lender in the form of Exhibit “B” to the Loan Agreement. Thereafter, the Loans evidenced by such
Note and interest thereon shall at all times (including after assignment pursuant to Section 29 of the Loan Agreement) be represented by one or more Notes in such form payable to
the order of the payee named therein. Irrespective of the Facility Amount, no Lender shall ever be obligated to advance on the Commitment any amount in excess of its Commitment then in effect.

     13. Release of Guaranty. By executing this Amendment, Agent, on behalf of Lenders,
Borrower and Approach Oil & Gas (Canada) Inc. (“Approach Canada”) hereby agree to terminate the
Restated Guaranty (the “Guaranty”) of Approach Canada. Agent, on behalf of Lenders, does hereby
release Approach Canada from any and all obligations, covenants, representations and warranties
contained in the Guaranty.

     14. Conditions Precedent. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent, unless specifically waived in writing by
Lenders:

     (a) The Amendment. Borrower, each Guarantor and each Lender shall have duly and
validly executed and delivered this Amendment to Agent.

     (b) Replacement Notes. If requested by any Lender, and upon the delivery to
Borrower of the terminated existing Notes, Borrower shall have duly and validly executed the
Notes payable to each of the Lender signatories hereto in termination and replacement of the
existing Notes.

     (c) Payment of Fees. Borrower shall have paid to Agent and to JPMorgan Securities LLC
the Fees described in the Fee Agreement.

     (d) Representations and Warranties. The representations and warranties contained in
the Loan Agreement and in the other Loan Documents shall be true and correct in all material
respects as of the date hereof, as if made on the date hereof.

     (e) No Default. No Default or Event of Default shall have occurred and be continuing.

     (f) Corporate/Partnership Proceedings. All corporate and/or partnership proceedings,
taken in connection with the transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be satisfactory to Agent, and its legal
counsel.

     15. Ratification by Guarantors. Each Guarantor (with the exception of Approach
Canada) hereby ratifies and reaffirms all of its obligations under its Guaranty Agreement (the
“Guaranty”) of Borrower’s obligations under the Loan Agreement, as amended hereby. Each

6

 

Guarantor also hereby agrees that nothing in this Amendment shall adversely affect any right or
remedy of Lenders under the Guaranty and that the execution and delivery of this Amendment
shall in no way change or modify its obligations as guarantor under the Guaranty. Although
each Guarantor has been informed by Borrower of the matters set forth in this Amendment and
such Guarantor has acknowledged and agreed to the same, such Guarantor understands that
Agent has no duty to notify such Guarantor or to seek such Guarantor’s acknowledgment or
agreement, and nothing contained herein shall create such a duty as to any transaction hereafter.

     16. Representations and Warranties. By executing this Amendment, Borrower hereby
represents, warrants and certifies to Lenders that, as of the date hereof, (a) there exists no
Event of Default or events which, with notice or lapse of time, would constitute an Event of
Default; (b) Borrower has performed and complied with all agreements and conditions contained in
the Loan Agreement or the other Loan Documents which are required to be performed or complied with
by Borrower; and (c) the representations and warranties contained in the Loan Agreement and the
other Loan Documents are true in all material respects, with the same force and effect as though
made on and as of the date hereof.

     17. Confirmation and Ratification. Except as affected by the provisions set forth
herein, the Loan Agreement shall remain in full force and effect and is hereby ratified and
confirmed by all parties. The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or remedy of Lenders
under the Loan Agreement or the other Loan Documents.

     18. Reference to Loan Agreement. Each of the Loan Agreement and the Loan Documents,
and any and all other agreements, documents or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Loan Agreement, as amended hereby, are
hereby amended so that any reference in the Loan Agreement, the Loan Documents and such other
documents to the Loan Agreement shall mean a reference to the Loan Agreement as amended hereby.

     19. Multiple Counterparts. This Amendment may be executed in a number of identical
separate counterparts, each of which for all purposes is to be deemed an original, but all of which
shall constitute, collectively, one agreement. No party to this Amendment shall be bound hereby
until a counterpart of this Amendment has been executed by all parties hereto. Delivery of an
executed counterpart of a signature page of this Amendment by telecopy shall be effective as
delivery of a manually executed counterpart of this Amendment.

     20. Final Agreement. THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL
PROMISSORY NOTES AND OTHER LOAN DOCUMENTS EXECUTED PURSUANT THERETO OR HERETO, REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG
ANY OF THE PARTIES.

7

 

     Please signify your acceptance to the foregoing terms and provisions by executing a copy of
this Amendment at the space provided below.

SIGNATURES TO FOLLOW

8

 

	 	 	 	 	 
	 	Very truly yours,

BORROWER:

APPROACH RESOURCES INC.,

a Delaware corporation

 	 
	 	By:  	/s/ J. Ross Craft
 	 
	 	 	J. Ross Craft, President and Chief Executive Officer 	 
	 	 	 	 
	 
	 	GUARANTORS:

APPROACH OIL & GAS INC.,

a Delaware corporation

 	 
	 	By:  	/s/ J. Ross Craft
 	 
	 	 	J. Ross Craft, President and Chief Executive Officer 	 
	 	 	 	 
	 
	 	APPROACH RESOURCES I, LP,

a Texas limited partnership

 	 
	 	By:  	Approach Operating, LLC,
a Delaware limited liability company,
its general partner
 	 
	 	 	 
	 	By:  	                 Approach Resources Inc.,
a Delaware corporation,
its sole member
 	 
	 	 	 
	 	By:  	                 /s/ J. Ross Craft
 	 
	 	 	J. Ross Craft, President and Chief Executive Officer 	 
	 	 	 	 
	 
	 	RELEASED GUARANTOR:

APPROACH OIL & GAS (CANADA) INC.,

an Alberta, Canada corporation

 	 
	 	By:  	/s/ J. Ross Craft
 	 
	 	 	J. Ross Craft, President and Chief Executive Officer 	 
	 	 	 	 

9

 

	 	 	 	 	 
	 	ACCEPTED AND AGREED TO

effective as of the date and year

first above written:

AGENT:

JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	/s/ Michael A. Kamauf
 	 
	 	 	Michael A. Kamauf, Authorized Officer 	 
	 	 	 	 
	 
	 	LENDERS:

JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	/s/ Michael A. Kamauf
 	 
	 	 	Michael A. Kamauf, Authorized Officer 	 
	 	 	 	 

10

 

	 	 	 	 	 
	 	BNP PARIBAS, Lender and Syndication Agent

 	 
	 	By:  	/s/ John A. Clark
 	 
	 	 	Name:  	John A. Clark 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	/s/ Betsy Jocher
 	 
	 	 	Name:  	Betsy Jocher 	 
	 	 	Title:  	Director 	 

11

 

	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION,

Lender and Documentation Agent

 	 
	 	By:  	/s/ David Morris
 	 
	 	 	Name:  	David Morris 	 
	 	 	Title:  	Vice President 	 

12

 

	 	 	 	 	 
	 	THE FROST NATIONAL BANK

 	 
	 	By:  	/s/ John S. Warren
 	 
	 	 	John S. Warren, Senior Vice President 	 
	 	 	 	 

13

 

	 	 	 	 	 
	 	ROYAL BANK OF CANADA

 	 
	 	By:  	/s/ Don J. McKinnerney
 	 
	 	 	Name:  	Don J. McKinnerney 	 
	 	 	Title:  	Authorized Signatory 	 

14

 

	 	 	 	 	 

EXHIBIT “C”

CERTIFICATE OF COMPLIANCE

     The undersigned APPROACH RESOURCES INC., a Delaware corporation (“Borrower”), hereby certifies
that J. Ross Craft is authorized to execute this Certificate of Compliance (in the capacity stated
in his signature below). With reference to that certain Credit Agreement, dated as of January 18,
2008 (as same may be amended, modified, increased, supplemented and/or restated from time to time,
the “Agreement”) entered into between the Borrower and JPMORGAN CHASE BANK, N.A. as “Agent” and
Lender, for itself and the Lenders signatory thereto (the “Lenders”), the undersigned further
certifies, represents and warrants on behalf of Borrower that all of the following statements are
true and correct (each capitalized term used herein having the same meaning given to it in the
Agreement unless otherwise specified):

     (a) Borrower has fulfilled in all material respects its obligations under the Notes and
Loan Documents, including the Agreement, and all representations and warranties made herein
and therein continue (except to the extent they relate solely to an earlier date) to be true
and correct in all material respects.

     (b) No Default or Event of Default has occurred under the Loan Documents, including the
Agreement.

     (c) To the extent requested from time to time by the Agent, the certifying party shall
specifically affirm compliance of Borrower in all material respects with any of its
representations and warranties (except to the extent they relate solely to an earlier date)
or obligations under said instruments.

     (d) Financial Computations for the period ending _______________ :

     (i) Current Ratio:

     (ii) Consolidated Funded Debt to Consolidated
EBITDAX Ratio:

          EXECUTED,
DELIVERED AND CERTIFIED TO this __ day of ____, 200___.

15

 

	 	 	 	 	 
	 	

APPROACH RESOURCES INC.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	J. Ross Craft, President and Chief 	 
	 	 	Executive Officer 	 

16

 

	 	 	 	 	 

SCHEDULE I

	 	 	 	 	 	 	 	 	 
	 	 	Commitment Amount	 	Percentage Commitment
	JPMorgan Chase Bank, NA

	 	$	45,000,000.00	 	 	 	22.50	%
	BNP Paribas

	 	$	40,000,000.00	 	 	 	20.00	%
	Key Bank National Association

	 	$	40,000,000.00	 	 	 	20.00	%
	Royal Bank of Canada

	 	$	40,000,000.00	 	 	 	20.00	%
	The Frost National Bank

	 	$	35,000,000.00	 	 	 	17.50	%
	TOTAL

	 	$	200,000,000.00	 	 	 	100.00	%

17exv4w1

Exhibit 4.1

 

 

BANK OF MONTREAL

TO

WELLS FARGO BANK, NATIONAL ASSOCIATION

Trustee

 

Senior Indenture

Dated as of January 25, 2010

 

Senior Debt Securities

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	PARTIES
	 	 	1	 
	 	 	 	 	 
	 
	RECITALS OF THE BANK
	 	 	1	 
	 	 	 	 	 
	 
	ARTICLE ONE	 	 	 	 
	 	 	 	 	 

	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	 	 	 	 
	 	 	 	 	 

	Section 101. Definitions
	 	 	1	 
	Section 102. Compliance Certificates and Opinions
	 	 	7	 
	Section 103. Form of Documents Delivered to Trustee
	 	 	7	 
	Section 104. Acts of Holders; Record Dates
	 	 	8	 
	Section 105. Notices, Etc., to Trustee and Bank
	 	 	9	 
	Section 106. Notice to Holders; Waiver
	 	 	10	 
	Section 107. Conflict with Trust Indenture Act
	 	 	10	 
	Section 108. Effect of Headings and Table of Contents
	 	 	10	 
	Section 109. Successors and Assigns
	 	 	10	 
	Section 110. Separability Clause
	 	 	11	 
	Section 111. Benefits of Indenture
	 	 	11	 
	Section 112. Governing Law
	 	 	11	 
	Section 113. Legal Holidays
	 	 	11	 
	 	 	 	 	 
	 
	ARTICLE TWO	 	 	 	 
	 	 	 	 	 

	SECURITY FORMS	 	 	 	 
	 	 	 	 	 

	Section 201. Forms Generally
	 	 	11	 
	Section 202. Form of Face of Security
	 	 	12	 
	Section 203. Form of Reverse of Security
	 	 	13	 
	Section 204. Form of Legend for Global Securities
	 	 	17	 
	Section 205. Form of Trustee’s Certificate of Authentication
	 	 	17	 
	 	 	 	 	 
	 
	ARTICLE THREE	 	 	 	 
	 	 	 	 	 

	THE SECURITIES	 	 	 	 
	 	 	 	 	 

	Section 301. Amount Unlimited; Issuable in Series
	 	 	18	 
	Section 302. Denominations
	 	 	21	 
	Section 303. Execution, Authentication, Delivery and Dating
	 	 	21	 
	Section 304. Temporary Securities
	 	 	22	 
	Section 305. Registration, Registration of Transfer and Exchange
	 	 	23	 
	Section 306. Mutilated, Destroyed, Lost and Stolen Securities
	 	 	24	 
	Section 307. Payment of Interest; Interest Rights Preserved
	 	 	25	 

Note: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture.

i

 

	 	 	 	 	 
	 	 	Page	 
	Section 308. Persons Deemed Owners
	 	 	26	 
	Section 309. Cancellation
	 	 	26	 
	Section 310. Computation of Interest
	 	 	26	 
	Section 311. CUSIP Numbers
	 	 	27	 
	Section 312. Original Issue Discount
	 	 	27	 
	 	 	 	 	 
	 
	ARTICLE FOUR	 	 	 	 
	 	 	 	 	 
	SATISFACTION AND DISCHARGE	 	 	 	 
	 	 	 	 	 
	Section 401. Satisfaction and Discharge of Indenture
	 	 	27	 
	Section 402. Application of Trust Money
	 	 	28	 
	 	 	 	 	 
	 
	ARTICLE FIVE	 	 	 	 
	 	 	 	 	 
	REMEDIES	 	 	 	 
	 	 	 	 	 
	Section 501. Events of Default
	 	 	28	 
	Section 502. Acceleration of Maturity; Rescission and Annulment
	 	 	29	 
	Section 503. Suits for Enforcement by Trustee
	 	 	30	 
	Section 504. Trustee May File Proofs of Claim
	 	 	30	 
	Section 505. Trustee May Enforce Claims Without Possession of Securities
	 	 	31	 
	Section 506. Application of Money Collected
	 	 	31	 
	Section 507. Limitation on Suits
	 	 	31	 
	Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest
	 	 	32	 
	Section 509. Restoration of Rights and Remedies
	 	 	32	 
	Section 510. Rights and Remedies Cumulative
	 	 	32	 
	Section 511. Delay or Omission Not Waiver
	 	 	32	 
	Section 512. Control by Holders
	 	 	32	 
	Section 513. Waiver of Past Defaults
	 	 	33	 
	Section 514. Undertaking for Costs
	 	 	33	 
	Section 515. Waiver of Usury, Stay or Extension Laws
	 	 	33	 
	 	 	 	 	 
	 
	ARTICLE SIX	 	 	 	 
	 	 	 	 	 
	THE TRUSTEE	 	 	 	 
	 	 	 	 	 
	Section 601. Certain Duties and Responsibilities
	 	 	34	 
	Section 602. Notice of Defaults
	 	 	34	 
	Section 603. Certain Rights of Trustee
	 	 	34	 
	Section 604. Not Responsible for Recitals or Issuance of Securities
	 	 	35	 
	Section 605. May Hold Securities
	 	 	35	 
	Section 606. Money Held in Trust
	 	 	36	 
	Section 607. Compensation and Reimbursement
	 	 	36	 
	Section 608. Conflicting Interests
	 	 	37	 
	Section 609. Corporate Trustee Required; Eligibility
	 	 	37	 
	Section 610. Resignation and Removal; Appointment of Successor
	 	 	37	 
	Section 611. Acceptance of Appointment by Successor
	 	 	39	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	Section 612. Merger, Conversion, Consolidation or Succession to Business
	 	 	40	 
	Section 613. Preferential Collection of Claims Against Bank
	 	 	40	 
	Section 614. Appointment of Authenticating Agent
	 	 	40	 
	 	 	 	 	 
	 
	ARTICLE SEVEN	 	 	 	 
	 	 	 	 	 
	HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND BANK	 	 	 	 
	 	 	 	 	 
	Section 701. Bank to Furnish Trustee Names and Addresses of Holders
	 	 	41	 
	Section 702. Preservation of Information; Communications to Holders
	 	 	42	 
	Section 703. Reports by Trustee
	 	 	42	 
	Section 704. Reports by Bank
	 	 	42	 
	 	 	 	 	 
	 
	ARTICLE EIGHT	 	 	 	 
	 	 	 	 	 
	CONSOLIDATION, AMALGAMATION, MERGER, CONVEYANCE, TRANSFER OR LEASE	 	 	 	 
	 	 	 	 	 
	Section 801. Bank May Consolidate, Etc., Only on Certain Terms
	 	 	43	 
	Section 802. Successor Substituted
	 	 	43	 
	 	 	 	 	 
	 
	ARTICLE NINE	 	 	 	 
	 	 	 	 	 
	SUPPLEMENTAL INDENTURES	 	 	 	 
	 	 	 	 	 
	Section 901. Supplemental Indentures Without Consent of Holders
	 	 	44	 
	Section 902. Supplemental Indentures With Consent of Holders
	 	 	45	 
	Section 903. Execution of Supplemental Indentures
	 	 	46	 
	Section 904. Effect of Supplemental Indentures
	 	 	46	 
	Section 905. Conformity with Trust Indenture Act
	 	 	46	 
	Section 906. Reference in Securities to Supplemental Indentures
	 	 	46	 
	 	 	 	 	 
	 
	ARTICLE TEN	 	 	 	 
	 	 	 	 	 
	COVENANTS	 	 	 	 
	 	 	 	 	 
	Section 1001. Payment of Principal, Premium and Interest
	 	 	47	 
	Section 1002. Maintenance of Office or Agency
	 	 	47	 
	Section 1003. Money for Securities Payments to Be Held in Trust
	 	 	47	 
	Section 1004. Statement by Officers as to Default
	 	 	48	 
	Section 1005. Existence
	 	 	48	 
	Section 1006. Waiver of Certain Covenants
	 	 	49	 
	 	 	 	 	 
	 
	ARTICLE ELEVEN	 	 	 	 
	 	 	 	 	 
	REDEMPTION OF SECURITIES	 	 	 	 
	 	 	 	 	 
	Section 1101. Applicability of Article
	 	 	49	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	Section 1102. Election to Redeem; Notice to Trustee
	 	 	49	 
	Section 1103. Selection by Trustee of Securities to Be Redeemed
	 	 	49	 
	Section 1104. Notice of Redemption
	 	 	50	 
	Section 1105. Deposit of Redemption Price
	 	 	51	 
	Section 1106. Securities Payable on Redemption Date
	 	 	51	 
	Section 1107. Securities Redeemed in Part
	 	 	51	 
	 	 	 	 	 
	 
	ARTICLE TWELVE	 	 	 	 
	 	 	 	 	 
	PURCHASE OR REPAYMENT OF SECURITIES BY THE BANK AT THE OPTION OF THE HOLDER	 	 	 	 
	 	 	 	 	 
	Section 1201. Applicability of Article
	 	 	52	 
	Section 1202. Notice of Repayment Date
	 	 	52	 
	Section 1203. Deposit of Repayment Price
	 	 	52	 
	Section 1204. Securities Payable on Repayment Date
	 	 	53	 
	Section 1205. Securities Repaid in Part
	 	 	53	 
	 	 	 	 	 
	 
	ARTICLE THIRTEEN	 	 	 	 
	 	 	 	 	 
	SINKING FUNDS	 	 	 	 
	 	 	 	 	 
	Section 1301. Applicability of Article
	 	 	53	 
	Section 1302. Satisfaction of Sinking Fund Payments with Securities
	 	 	54	 
	Section 1303. Redemption of Securities for Sinking Fund
	 	 	54	 
	 	 	 	 	 
	 
	ARTICLE FOURTEEN	 	 	 	 
	 	 	 	 	 
	DEFEASANCE AND COVENANT DEFEASANCE	 	 	 	 
	 	 	 	 	 
	Section 1401. Bank’s Option to Effect Defeasance or Covenant Defeasance
	 	 	54	 
	Section 1402. Defeasance and Discharge
	 	 	55	 
	Section 1403. Covenant Defeasance
	 	 	55	 
	Section 1404. Conditions to Defeasance or Covenant Defeasance
	 	 	55	 
	Section 1405. Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions
	 	 	57	 
	Section 1406. Reinstatement
	 	 	58	 
	 	 	 	 	 
	 
	ARTICLE FIFTEEN	 	 	 	 
	 	 	 	 	 
	MISCELLANEOUS PROVISIONS	 	 	 	 
	 	 	 	 	 
	Section 1501. Consent to Jurisdiction and Service of Process
	 	 	58	 
	Section 1502. Indenture and Securities Solely Corporate Obligations
	 	 	59	 
	Section 1503. Execution in Counterparts
	 	 	59	 
	Section 1504. Waiver of Jury Trial
	 	 	59	 

iv

 

Certain Sections of this Indenture relating to Sections 310 through 318,

inclusive, of the Trust Indenture Act of 1939:

	 	 	 	 	 
	 	 	 
	Trust Indenture Act Section	 	Indenture Section
	§ 310(a)(1)

	 	609	 
	(a)(2)

	 	609
	(a)(3)

	 	Not Applicable

	(a)(4)

	 	Not Applicable

	(b) 
	 	608 	 
	 

	 	610	 
	§ 311(a)

	 	613	 
	(b)

	 	613	 
	§ 312(a)

	 	701	 
	 

	 	702	 
	(b)

	 	702	 
	(c)

	 	702	 
	§ 313(a)

	 	703	 
	(b)

	 	703	 
	(c)

	 	703	 
	(d)

	 	703	 
	§ 314(a)

	 	704	 
	(a)(4)

	 	101	 
	 

	 	1004	 
	(b)

	 	Not Applicable

	(c)(1)

	 	102	 
	(c)(2)

	 	102	 
	(c)(3)

	 	Not Applicable

	(d)

	 	Not Applicable

	(e)

	 	102	 
	§ 315(a)

	 	601	 
	(b)

	 	602	 
	(c)

	 	601	 
	(d)

	 	601	 
	(e)

	 	514	 
	§ 316(a)

	 	101	 
	(a)(1)(A)

	 	502	 
	 

	 	512	 
	(a)(1)(B)

	 	513	 
	(a)(2)

	 	Not Applicable

	(b)

	 	508	 
	(c)

	 	104	 
	§ 317(a)(1)

	 	503	 
	(a)(2)

	 	504	 
	(b)

	 	1003	 
	§ 318(a)

	 	107	 

 

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.

 

     SENIOR INDENTURE, dated as of January 25, 2010, between Bank of Montreal, a Canadian chartered
bank (herein called the “Bank”), having its principal executive offices located at 100 King Street
West, 1 First Canadian Place, Toronto, Ontario, Canada M5X 1A1 and its head office located at 129
rue Saint Jacques, Montreal, Quebec, Canada H2Y 1L6, and Wells Fargo Bank, National Association, as
Trustee (herein called the “Trustee”).

RECITALS OF THE BANK

     The Bank has duly authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness
(herein called the “Securities”), to be issued in one or more series as provided in this Indenture.

     All things necessary to make this Indenture a valid agreement of the Bank, in accordance with
its terms, have been done.

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

Section 101. Definitions.

     For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:

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

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

     (3) all accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles in Canada, including the
accounting requirements of the Superintendent of Financial Institutions Canada, and, except
as otherwise herein expressly provided, the term “generally accepted accounting principles”
with respect to any computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such computation;

     (4) unless the context otherwise requires, any reference to an “Article” or a
“Section” refers to an Article or a Section, as the case may be, of this Indenture;

 

 

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

     (6) all references to dollars and $ shall mean U.S. dollars unless otherwise
indicated.

     “Act”, when used with respect to any Holder, has the meaning specified in Section 104.

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

     “Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to
act on behalf of the Trustee to authenticate Securities of one or more series.

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

     “Bank Request” or “Bank Order” means a written request or order signed in the name of the Bank
by any one of its President and Chief Executive Officer, the Chief Financial Officer, the Executive
Vice-President and Chief Risk Officer, the Executive Vice-President Finance and Treasurer, the
Executive Vice-President Finance, Vice-President Corporate Treasury, the Senior Vice-President
Financial Strategy, the Vice-President Financial Performance Management or any other Vice-President
of the Bank designated in writing by any one of the President and Chief Executive Officer, the
Chief Financial Officer, the Executive Vice-President and Chief Risk Officer or the Executive
Vice-President Finance and Treasurer and delivered to the Trustee.

     “Board of Directors” means either the board of directors of the Bank or any duly authorized
committee of that board.

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

     “Business Day”, when used with respect to any Place of Payment, means, unless otherwise
specified as contemplated by Section 301, each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in that Place of Payment are authorized or obligated by
law or executive order to close.

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

2

 

     “Corporate Trust Office” means the principal corporate trust office of the Trustee in New
York, New York at which at any particular time its corporate trust business shall be administered,
or such other address as the Trustee may designate from time to time by notice to the Holders and
the Bank.

     “corporation” means a corporation, association, company, limited liability company,
joint-stock company, business trust or other entity.

     “Covenant Defeasance” has the meaning specified in Section 1403.

     “Defaulted Interest” has the meaning specified in Section 307.

     “Defeasance” has the meaning specified in Section 1402.

     “Depositary” means, with respect to Securities of any series issuable in whole or in part in
the form of one or more Global Securities, any Person that is designated to act as Depositary for
such Securities as contemplated by Section 301.

     “Event of Default” has the meaning specified in Section 501.

     “Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in
each case as amended from time to time.

     “Expiration Date” has the meaning specified in Section 104.

     “Global Security” means a Security that evidences all or part of the Securities of any series
and bears the legend set forth in Section 204 (or such legend as may be specified as contemplated
by Section 301 for such Securities).

     “Holder” means a Person in whose name a Security is registered in the Security Register.

     “Indenture” means this instrument as originally executed and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of
and govern this instrument and any such supplemental indenture, respectively. The term “Indenture”
shall also include the terms of particular series of Securities established as contemplated by
Section 301.

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

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

     “Investment Company Act” means the Investment Company Act of 1940 and any statute successor
thereto, in each case as amended from time to time.

     “Maturity”, when used with respect to any Security, means the date on which the principal of
such Security or an installment of principal becomes due and payable as therein or

3

 

herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for redemption, exercise of
a Holder’s option to require the Bank to purchase or repay the Security or otherwise.

     “Notice of Default” means a written notice of the kind specified in Section 501(4).

     “Officer’s Certificate” means a certificate signed by any one of the Bank’s President and
Chief Executive Officer, the Chief Financial Officer, the Executive Vice-President and Chief Risk
Officer, the Executive Vice-President Finance and Treasurer, the Executive Vice-President Finance,
Vice-President Corporate Treasury, the Senior Vice-President Financial Strategy, the Vice-President
Financial Performance Management or any other Vice-President of the Bank designated in writing by
any one of the President and Chief Executive Officer, the Chief Financial Officer, the Executive
Vice-President and Chief Risk Officer or the Executive Vice-President Finance and Treasurer and
delivered to the Trustee. One of the officers signing an Officer’s Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer of the Bank.

     “Opinion of Counsel” means a written opinion of counsel, who may be internal or external
counsel for the Bank, and who shall be acceptable to the Trustee.

     “Original Issue Discount Security” means any Security which provides for an amount less than
the principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502.

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

     (1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;

     (2) Securities for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the Bank) in trust
or set aside and segregated in trust by the Bank (if the Bank shall act as
its own Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been made;

     (3) Securities as to which Defeasance has been effected pursuant to Section 1402; and

     (4) Securities that have been paid pursuant to Section 306 or in exchange for or in
lieu of which other Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are held by a
protected purchaser in whose hands such Securities are valid obligations of the Bank;

provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given, made or taken any request, demand, authorization, direction,
notice, consent, waiver or other action hereunder as of any date, (A) the principal

4

 

amount of an
Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the
principal thereof that would be due and payable as of such date upon acceleration of the Maturity
thereof to such date pursuant to Section 502, (B) if, as of such date, the principal amount payable
at the Stated Maturity of a Security is not determinable, the principal amount of such Security
which shall be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S.
dollar equivalent, determined as of such date in the manner provided as contemplated by Section
301, of the principal amount of such Security (or, in the case of a Security described in Clause
(A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by
the Bank or any other obligor upon the Securities or any Affiliate of the Bank or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether
the Trustee shall be protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities that a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee
the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Bank
or any other obligor upon the Securities or any Affiliate of the Bank or of such other obligor.

     “Paying Agent” means any Person authorized by the Bank to pay the principal of or any premium
or interest on any Securities on behalf of the Bank and may be the Bank in such capacity.

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

     “Place of Payment”, when used with respect to the Securities of any series, means the place or
places where the principal of and any premium and interest on the Securities of that series are
payable as specified as contemplated by Section 301, and as determined by the Trustee and the Bank.

     “Predecessor Security” of any particular Security means every previous Security evidencing all
or a portion of the same debt evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu
of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.

     “Record Date” means any Regular Record Date or Special Record Date.

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

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

     “Regular Record Date” for the interest payable on any Interest Payment Date on the Securities
of any series means the date specified for that purpose as contemplated by Section 301.

5

 

     “Repayment Date”, when used with respect to Securities of any series the terms of which
provide each Holder an option to require the Bank to purchase or repay the Securities held by such
Holder, means the date, if any, fixed for such purchase or repayment pursuant to this Indenture.

     “Repayment Price”, when used with respect to Securities of any series the terms of which
provide each Holder an option to require the Bank to purchase or repay the Securities held by such
Holder, means the price, if any, at which such purchase or repayment is to occur pursuant to this
Indenture.

     “Responsible Officer” when used with respect to the Trustee, means any officer of the Trustee
with direct responsibility for administration of this Indenture and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is referred because of
such person’s knowledge of and familiarity with the particular subject.

     “Securities” has the meaning stated in the first recital of this Indenture and more
particularly means Securities authenticated and delivered under this Indenture.

     “Securities Act” means the Securities Act of 1933 and any successor statute thereto, in each
case as amended from time to time.

     “Security Register” and “Security Registrar” have the respective meanings specified in Section
305.

     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.

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

     “Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of
which this instrument was executed; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.

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

     “U.S. Government Obligation” has the meaning specified in Section 1404.

     “Vice-President”, when used with respect to the Bank or the Trustee, means any vice-president,
whether or not designated by a number or a word or words added before or after the title
“vice-president.”

6

 

Section 102. Compliance Certificates and Opinions.

     Upon any application or request by the Bank to the Trustee to take any action under any
provision of this Indenture, the Bank shall furnish to the Trustee such certificates and opinions
as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given
in the form of an Officer’s Certificate, if to be given by an officer of the Bank, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture
Act and any other requirements set forth in this Indenture.

     Every certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (except for certificates provided for in Section 1004) shall include,

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

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

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

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

Section 103. Form of Documents Delivered to Trustee.

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

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

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

7

 

Section 104. Acts of Holders; Record Dates.

     Any request, demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments are delivered to
the Trustee and, where it is hereby expressly required, to the Bank. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred
to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Bank, if
made in the manner provided in this Section.

     The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same, may also
be proved in any other manner which the Trustee deems sufficient.

     For the purposes of this Indenture, the ownership of Securities shall be proved by the
Security Register.

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

     The Bank may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give, make or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be given, made or taken by Holders of Securities of such series, provided that the
Bank may not set a record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities
of such series on such record date. Nothing in this paragraph shall be construed to prevent the
Bank from setting a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is taken. Promptly after any
record date is

8

 

set pursuant to this paragraph, the Bank, at its own expense, shall cause notice of
such record date, the proposed action by Holders and the applicable Expiration Date to be given to
the Trustee in writing and to each Holder of Securities of the relevant series in the manner set
forth in Section 106.

     The Trustee may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of
Default, (ii) any declaration of acceleration referred to in Section 502, (ii) any request to
institute proceedings referred to in Section 507(2) or (iii) any direction referred to in Section
512, in each case with respect to Securities of such series. If any record date is set pursuant to
this paragraph, the Holders of Outstanding Securities of such series on such record date, and no
other Holders, shall be entitled to join in such notice, declaration, request or direction, whether
or not such Holders remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the
requisite principal amount of Outstanding Securities of such series on such record date. Nothing
in this paragraph shall be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person be cancelled and of
no effect), and nothing in this paragraph shall be construed to render ineffective any action taken
by Holders of the requisite principal amount of Outstanding Securities of the relevant series on
the date such action is taken. Promptly after any record date is set pursuant to this paragraph,
the Trustee, at the Bank’s expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Bank in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.

     With respect to any record date set pursuant to this Section, the party hereto that sets such
record dates may designate any day as the “Expiration Date” and from time to time may change the
Expiration Date to any earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in writing, and to
each Holder of Securities of the relevant series in the manner set forth in Section 106, on or
prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto that set such record date shall be
deemed to have initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as provided in this
paragraph; provided that the Expiration Date shall not be later than the 180th day after
such record date.

     Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with
regard to any particular Security may do so with regard to all or any part of the principal amount
of such Security or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.

Section 105. Notices, Etc., to Trustee and Bank.

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

9

 

     (1) the Trustee by any Holder or by the Bank shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office in the manner and as specified in an indenture supplemental hereto,
or

     (2) the Bank by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, or by overnight courier or facsimile, to the Bank addressed to
it at the address of its principal executive offices specified in an indenture supplemental
hereto, or at any other address previously furnished in writing to the Trustee by the Bank.

Section 106. Notice to Holders; Waiver.

     Where this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his or her address as it
appears in the Security Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

     In case by reason of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice by mail, then such notification as shall be made with
the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Section 107. Conflict with Trust Indenture Act.

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

Section 108. Effect of Headings and Table of Contents.

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

Section 109. Successors and Assigns.

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

10

 

Section 110. Separability Clause.

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

Section 111. Benefits of Indenture.

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

Section 112. Governing Law.

     This Indenture and the Securities shall be governed by and construed in accordance with the
law of the State of New York, except for Section 301(b), which shall be governed by and construed
in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

Section 113. Legal Holidays.

     In any case where any Interest Payment Date, Redemption Date, Repayment Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding
any other provision of this Indenture or of the Securities (other than a provision of any Security
which specifically states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date, Redemption Date, Repayment Date, or at the
Stated Maturity; provided, however, that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date, Repayment Date, or Stated Maturity, as the case may
be, to the date of such payment.

ARTICLE TWO

SECURITY FORMS

Section 201. Forms Generally.

     The Securities of each series shall be in substantially the form set forth in this Article, or
in such other form as shall be established by or pursuant to a Board Resolution, other appropriate
Bank authorization or in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are required or permitted
by this Indenture, and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution thereof. If the form of
Securities of any series is established by action taken pursuant to a Board Resolution or other
appropriate Bank authorization, a copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Bank and delivered to the Trustee at or prior to

11

 

the delivery of the Bank Order contemplated by Section 303 for the authentication and delivery of
such Securities. If all of the Securities of any series established by action taken pursuant to a
Board Resolution or other appropriate Bank authorization are not to be issued at one time, it shall
not be necessary to deliver a record of such action at the time of issuance of each Security of
such series, but an appropriate record of such action shall be delivered at or before the time of
issuance of the first Security of such series.

     The definitive Securities shall be printed, lithographed or engraved on steel engraved borders
or may be produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.

Section 202. Form of Face of Security.

     [Insert any legend required by Section 204]

     [Insert any legend required by the Internal Revenue Code and the Income Tax Act (Canada) and
the regulations thereunder.]

BANK OF MONTREAL

[Insert title of Securities]

This security will not constitute a deposit that is insured under

the Canada Deposit Insurance Corporation Act or by the

United States Federal Deposit Insurance Corporation.

	 	 	 

	No.                     

	 	   CUSIP No.                     
	Issue Date.                     

	 	Stated Maturity:                     

     Bank of Montreal, a Schedule I bank under the Bank Act (Canada) (herein called the “Bank”,
which term includes any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to                                         , or registered assigns, the principal sum of                                          Dollars on                                          [if the Security is to bear interest prior to Maturity, insert — , and to pay interest thereon
from                      or from the most recent Interest Payment Date to which interest has been paid or duly
provided for, [semi-annually] on                      and                      in each year, commencing                      , at the rate of % per annum,
until the principal hereof is paid or made available for payment, [if applicable, insert— ;
provided that any principal and premium, and any such installment of interest, which is overdue
shall bear interest at the rate of                     % per annum (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest,
which shall be the                      or                      (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Security (or one or more Predecessor Securities) is

12

 

registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than
10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.]

     [If the Security is not to bear interest prior to Maturity, insert — The principal of this
Security shall not bear interest except in the case of a default in payment of principal upon
acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any
overdue premium shall bear interest at the rate of % per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due until they are
paid or made available for payment. Interest on any overdue principal or premium shall be payable
on demand.]

     Payment of the principal of (and premium, if any) and [if applicable, insert — any such]
interest on this Security will be made at the office or agency of the Bank maintained for that
purpose, 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 [if applicable, insert — ; provided,
however, that at the option of the Bank payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the Security Register].

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

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

     IN WITNESS WHEREOF, the Bank has caused this instrument to be duly executed.

Dated:

	 	 	 	 	 
	 	Bank of Montreal

 	 
	 	By  	 	 
	 
	 	 	 
	 	By  	
 	 
	 	 	 	 
	 	 	 	 
	 

Section 203. Form of Reverse of Security.

     This Security is one of a duly authorized issue of securities of the Bank (herein called the
“Securities”), issued and to be issued in one or more series under a Senior Indenture, dated as of                     , 2010 (herein called the “Indenture,” which term shall have the meaning assigned to it in such
instrument), between the Bank and Wells Fargo Bank, National Association, as Trustee (herein called
the “Trustee”, which term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights, limitations of

13

 

rights,
duties and immunities thereunder of the Bank, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and delivered. This Security
is one of the series designated on the face hereof [if applicable, insert — , [initially] limited
in aggregate principal amount to $                    , provided that the Bank may, without the consent of any
Holder, at any time and from time to time, increase the initial principal amount.]

     [If applicable, insert — The Securities of this series are subject to redemption upon not
less than 30 days’ notice by mail, [if applicable, insert — (1) on                      in any year commencing with
the year                      and ending with the year                      through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if applicable, insert
— on or after                     ,                    ], as a whole or in part, at the election of the Bank, at the following
Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable,
insert — on or before                     ,                    %, and if redeemed] during the 12-month period beginning                      of the
years indicated,

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Redemption	 	 	 	 	 	Redemption
	Year	 	Price	 	Year	 	Price

and thereafter at a Redemption Price equal to                     % of the principal amount, together in the case
of any such redemption [if applicable, insert — (whether through operation of the sinking fund or
otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the relevant Record
Dates referred to on the face hereof, all as provided in the Indenture.] [(if applicable, insert
— the securities of this series are also redeemable as set forth hereinafter.]

     [If applicable, insert — The Securities of this series are subject to redemption upon not
less than 30 days’ notice by mail, (1) on                      in any year commencing with the year                      and ending with
the year                      through operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below, and (2) at any time [if applicable, insert — on or after                     ], as a
whole or in part, at the election of the Bank, at the Redemption Prices for redemption otherwise
than through operation of the sinking fund (expressed as percentages of the principal amount) set
forth in the table below: If redeemed during the 12-month period beginning                      of the years indicated,

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Redemption Price	 	 
	 	 	 	 	For Redemption	 	Redemption Price For
	 	 	 	 	Through Operation	 	Redemption Otherwise
	 	 	 	 	of the	 	Than Through Operation
	Year	 	Sinking Fund	 	of the Sinking Fund
	 
	 

14

 

and thereafter at a Redemption Price equal to                     % of the principal amount, together in the case
of any such redemption (whether through operation of the sinking fund or otherwise) with accrued
interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to
such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]

     [If applicable, insert — The sinking fund for this series provides for the redemption on                      in
each year beginning with the year                      and ending with the year                      of [if applicable, insert — not
less than $                     (“mandatory sinking fund”) and not more than] $                     aggregate principal amount of
Securities of this series. Securities of this series acquired or redeemed by the Bank otherwise
than through [if applicable, insert — mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert — mandatory] sinking fund payments otherwise required to be made
[if applicable, insert — , in the inverse order in which they become due].]

     [If the Security is subject to redemption of any kind, insert — In the event of redemption of
this Security in part only, a new Security or Securities of this series and of like tenor for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]

     [If applicable, insert reference to any other right of the Bank to redeem a Security of this
series.]

     [If applicable, insert — The Indenture contains provisions for defeasance at any time of [the
entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default
with respect to this Security] [, in each case] upon compliance with certain conditions set forth
in the Indenture.]

     [If applicable, insert provisions with respect to the option of Holders to require purchase or
repayment of Securities of this series by the Bank at the option of the Holder and the issuance of
Securities in lieu of Securities purchased or repaid by the Bank at the option of the Holder.]

     [If applicable, insert provisions requiring an adjustment to the interest rate in certain
circumstances.]

     [If the Security is not an Original Issue Discount Security, insert — If an Event of Default
with respect to Securities of this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with the effect
provided in the Indenture.]

     [If the Security is an Original Issue Discount Security, insert — If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to — insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal, premium and interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Bank’s obligations in respect of

15

 

the payment of the principal of and premium and interest, if any, on the Securities 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 Bank and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Bank and the
Trustee with the consent of the Holders of a majority in principal amount of the Securities at the
time Outstanding of each series to be affected, or in certain cases the unanimous consent of each
of such Holders. The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time Outstanding, on behalf
of the Holders of all Securities of such series, to waive compliance by the Bank 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 Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Security.

     As provided in and subject to the provisions of the Indenture, the Holder of this Security
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder
shall have previously given the Trustee written notice of a continuing Event of Default with
respect to the Securities of this series, the Holders of not less than 25% in principal amount of
the Securities of this series at the time Outstanding shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time Outstanding a direction
inconsistent with such request, and shall have failed to institute any such proceeding, for 90 days
after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the respective due dates expressed herein.

     No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Bank, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.

     For disclosure purposes under the Interest Act (Canada), whenever in the Securities of this
series or the Indenture interest at a specified rate is to be calculated on the basis of a period
less than a calendar year, the yearly rate of interest to which such rate is equivalent is such
rate multiplied by the actual number of days in the relevant calendar year and divided by the
number of days in such period.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Bank in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Bank and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or

16

 

more new Securities of this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or transferees.

     The Securities of this series are issuable only in registered form without coupons in
denominations of $                     and any integral multiple thereof. As provided in the Indenture and subject
to certain limitations therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Bank or the Trustee may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer, the Bank, the Trustee
and any agent of the Bank or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be overdue, and
neither the Bank, the Trustee nor any such agent shall be affected by notice to the contrary.

     All terms used in this Security that are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

Section 204. Form of Legend for Global Securities.

     Unless otherwise specified as contemplated by Section 301 for the Securities evidenced
thereby, every Global Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:

     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE 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.

Section 205. Form of Trustee’s Certificate of Authentication.

     Subject to Section 614, each of the Trustee’s certificates of authentication shall be in
substantially the following form:

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

			
	 
	Dated:
	 	Wells Fargo Bank,

National Association,

As Trustee

17

 

	 	 	 	 	 
	 	 	 
	 	By  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

ARTICLE THREE

THE SECURITIES

Section 301. Amount Unlimited; Issuable in Series.

     (a) The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited.

     (b) The Securities are unsubordinated and unsecured deposit liability obligations of the Bank.

     (c) The Securities may be issued in one or more series. There shall be established in or
pursuant to a Board Resolution or other appropriate Bank authorization and, subject to Section 303,
set forth, or determined in the manner provided, in an Officer’s Certificate, or established in one
or more indentures supplemental hereto, prior to the issuance of Securities of any series,

     (1) the title of the Securities of the series (which shall distinguish the Securities
of the series from Securities of any other series);

     (2) any limit upon the aggregate principal amount of the Securities of the series
which may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906, 1107 or
1303 and except for any Securities which, pursuant to Section 303, are deemed never to have
been authenticated and delivered hereunder);

     (3) the Person to whom any interest on a Security of the series shall be payable, if
other than the Person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such interest;

     (4) the date or dates on which the principal of any Securities of the series is
payable;

     (5) the rate or rates at which any Securities of the series shall bear interest, if
any, the date or dates from which any such interest shall accrue, the Interest Payment
Dates on which any such interest shall be payable and the Regular Record Date for any such
interest payable on any Interest Payment Date;

     (6) the place or places where the principal of and any premium and interest on any
Securities of the series shall be payable, the place or places where the Securities of such
series may be presented for registration of transfer or exchange, any restrictions that may
be applicable to any such transfer or exchange in addition to or in lieu of those set forth
herein, and the place or places where notices and demands to or upon the Bank in respect of
the Securities of such series may be made;

18

 

     (7) the period or periods within which, the price or prices at which and the terms and
conditions upon which any Securities of the series may be redeemed, in whole or in part, at
the option of the Bank and the manner in which any election by the Bank to redeem the
Securities shall be evidenced;

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

     (9) if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Securities of the series shall be issuable;

     (10) if the amount of principal of or any premium or interest on any Securities of the
series may be determined with reference to an index, a financial or economic measure or
pursuant to a formula, the manner in which such amounts shall be determined;

     (11) if other than the currency of the United States of America, the currency,
currencies or currency units in which the principal of or any premium or interest on any
Securities of the series shall be payable and the manner of determining the equivalent
thereof in the currency of the United States of America for any purpose, including for
purposes of the definition of “Outstanding” in Section 101;

     (12) if the principal of or any premium or interest on any Securities of the series is
to be payable, at the election of the Bank or the Holder thereof, in one or more currencies
or currency units other than that or those in which such Securities are stated to be
payable, the currency, currencies or currency units in which the principal of or any
premium or interest on such Securities as to which such election is made shall be payable,
the periods within which and the terms and conditions upon which such election is to be
made and the amount so payable (or the manner in which such amount shall be determined);

     (13) if other than the entire principal amount thereof, the portion of the principal
amount of any Securities of the series which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502;

     (14) if the principal amount payable at the Stated Maturity of any Securities of the
series will not be determinable as of any one or more dates prior to the Stated Maturity,
the amount which shall be deemed to be the principal amount of such Securities as of any
such date for any purpose thereunder or hereunder, including the principal amount thereof
which shall be due and payable upon any Maturity other than the Stated Maturity or which
shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any
such case, the manner in which such amount deemed to be the principal amount shall be
determined);

     (15) the manner in which any election by the Company to defease any Securities of the
series pursuant to Section 1402 or Section 1403 shall be evidenced;

19

 

whether any Securities
of the series other than Securities denominated in U.S. dollars and bearing interest at a
fixed rate are to be subject to Section 1402 or Section 1403; or, in the case of Securities
denominated in U.S. dollars and bearing interest at a fixed rate, if applicable, that the
Securities of the series, in whole or any specified part, shall not be defeasible pursuant
to Section 1402 or Section 1403 or both such Sections;

     (16) if applicable, that any Securities of the series shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the respective
Depositaries for such Global Securities, the form of any legend or legends which shall be
borne by any such Global Security in addition to or in lieu of that set forth in Section
204 and any circumstances in addition to or in lieu of those set forth in Clause (2) of the
last paragraph of Section 305 in which any such Global Security may be exchanged in whole
or in part for registered Securities, and any transfer of such Global Security in whole or
in part may be registered, in the name or names of Persons other than the Depositary for
such Global Security or a nominee thereof and any other provisions governing exchanges or
transfers of any such Global Security;

     (17) any addition to or change in the Events of Default which applies to any
Securities of the series and any change in the right of the Trustee or the requisite
Holders of such Securities to declare the principal amount thereof due and payable pursuant to
Section 502;

     (18) any addition to, deletion from or change in the covenants set forth in Article
Ten which applies to Securities of the series;

     (19) if applicable, any conversion, exercise or exchange provisions, including the
terms on which and the period during which such conversion, exercise or exchange may occur;

     (20) CUSIP or other identifying numbers of the Securities; and

     (21) any other terms of the series (which terms shall not be inconsistent with the
provisions of this Indenture, except as permitted by Section 901(5)).

     All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution or other appropriate
Bank authorization referred to above and (subject to Section 303) set forth, or determined in the
manner provided, in the Officer’s Certificate referred to above or in any such indenture
supplemental hereto. All Securities of any one series need not be issued at one time and, unless
otherwise provided in or pursuant to the Board Resolution or other appropriate Bank authorization
referred to above and (subject to Section 303) set forth, or determined in the manner provided, in
the Officer’s Certificate referred to above or in any such indenture supplemental hereto with
respect to a series of Securities, additional Securities of a series may be issued, at the option
of the Bank, without the consent of any Holder, at any time and from time to time.

     If any of the terms of the series are established by action taken pursuant to a Board
Resolution or other appropriate Bank authorization, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Bank and delivered to

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the
Trustee at or prior to the delivery of the Officer’s Certificate setting forth the terms of the
series.

Section 302. Denominations.

     The Securities of each series shall be issuable only in registered form without coupons and
only in such denominations as shall be specified as contemplated by Section 301. In the absence of
any such specified denomination with respect to the Securities of any series, the Securities of
such series shall be issuable in denominations of $1,000 and any integral multiple thereof.

Section 303. Execution, Authentication, Delivery and Dating.

     The Securities shall be executed on behalf of the Bank by any one of the Bank’s President and
Chief Executive Officer, the Chief Financial Officer, the Executive Vice-President and Chief Risk
Officer, the Executive Vice-President Finance and Treasurer, the Executive Vice-President Finance,
Vice-President Corporate Treasury, the Senior Vice-President Financial Strategy, the Vice-President
Financial Performance Management or any other Vice-President of the Bank designated in writing by
any one of the President and Chief Executive Officer, the Chief Financial Officer, the Executive
Vice-President and Chief Risk Officer or the Executive Vice-President Finance and Treasurer, and delivered to the Trustee (or any Person designated by one
of them in writing as authorized to execute and deliver Securities or any Person designated by the
Board of Directors as authorized to execute and deliver Securities). The signature of any of these
officers on the Securities may be manual or facsimile.

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

     At any time and from time to time after the execution and delivery of this Indenture, the Bank
may deliver Securities of any series executed by the Bank to the Trustee for authentication,
together with a Bank Order for the authentication and delivery of such Securities, and the Trustee
in accordance with the Bank Order shall authenticate and deliver such Securities. If the form or
terms of the Securities of the series have been established by or pursuant to one or more Board
Resolutions or other appropriate Bank authorization as permitted by Sections 201 and 301, in
authenticating such Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating,

     (1) if the form of such Securities has been established by or pursuant to Board
Resolution or other appropriate Bank authorization as permitted by Section 201, that such
form has been established in conformity with the provisions of this Indenture;

     (2) if the terms of such Securities have been established by or pursuant to Board
Resolution or other appropriate Bank authorization as permitted by Section 301, that such
terms have been established in conformity with the provisions of this Indenture; and

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     (3) that such Securities, when authenticated and delivered by the Trustee and issued
by the Bank in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations of the Bank enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or
affecting creditors’ rights and to general equity principles.

     If such form or terms have been so established, the Trustee shall not be required to
authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect
the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.

     Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, including in the event that the
size of a series of Outstanding Securities is increased as contemplated by Section 301, it shall
not be necessary to deliver the Officer’s Certificate otherwise required pursuant to Section 301 or
the Bank Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the authentication of each Security of such series if such documents are delivered at or
prior to the authentication upon original issuance of the first Security of such series to be
issued.

     Each Security shall be dated the date of its authentication.

     No Security shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of authentication substantially
in the form provided for herein executed by the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such Security has been
duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by the Bank, and the Bank
shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this Indenture.

Section 304. Temporary Securities.

     Pending the preparation of definitive Securities of any series, the Bank may execute, and upon
Bank Order the Trustee shall authenticate and deliver, temporary Securities that are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such Securities.

     If temporary Securities of any series are issued, the Bank will cause definitive Securities of
that series to be prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities of such series at
the office or agency of the Bank in a Place of Payment for that series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the
Bank shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of like tenor and

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aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive Securities of such
series and tenor.

Section 305. Registration, Registration of Transfer and Exchange.

     The Bank shall cause to be kept at the Corporate Trust Office of the Trustee a register (the
register maintained in such office and in any other office or agency of the Bank in a Place of
Payment being herein sometimes collectively referred to as the “Security Register”) in which,
subject to such reasonable regulations as it may prescribe, the Bank shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby appointed
“Security Registrar” for the purpose of registering Securities and transfers of Securities as
herein provided.

     Upon surrender for registration of transfer of any Security of a series at the office or
agency of the Bank in a Place of Payment for that series, the Bank shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or transferees, one or
more new Securities of the same series, of any authorized denominations and of like tenor and
aggregate principal amount.

     At the option of the Holder, Securities of any series may be exchanged for other Securities of
the same series, of any authorized denominations and of like tenor and aggregate principal amount,
upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Bank shall execute, and the Trustee shall authenticate and
deliver, the Securities that the Holder making the exchange is entitled to receive.

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

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

     No service charge shall be made for any registration of transfer or exchange of Securities,
but the Bank or the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of transfer or exchange
of Securities, other than exchanges pursuant to Section 304, 906, 1107 or 1303 not involving any
transfer.

     If the Securities of any series (or of any series and specified tenor) are to be redeemed in
part, the Bank shall not be required (A) to issue, register the transfer of or exchange any
Securities of that series (or of that series and specified tenor, as the case may be) during a
period beginning at the opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part.

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     The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:

     (1) Each Global Security authenticated under this Indenture shall be registered in the
name of the Depositary designated for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and each such
Global Security shall constitute a single Security for all purposes of this Indenture.

     (2) Notwithstanding any other provision in this Indenture, no Global Security may be
exchanged in whole or in part for registered Securities, and no transfer of a Global
Security in whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or a nominee thereof unless (A) such Depositary has
notified the Bank that it is unwilling or unable or no longer permitted under applicable
law to continue as Depositary for such Global Security and the Bank does not appoint
another institution to act as Depositary within 60 days, (B) there shall have occurred and
be continuing an Event of Default with respect to such Global Security, (C) the Bank so
directs the Trustee by a Bank Order or (D) there shall exist such
circumstances, if any, in addition to or in lieu of the foregoing as have been
specified for this purpose as contemplated by Section 301.

     (3) Subject to Clause (2) above, any exchange of a Global Security for other
Securities may be made in whole or in part, and all Securities issued in exchange for a
Global Security or any portion thereof shall be registered in such names as the Depositary
for such Global Security shall direct.

     (4) Every Security authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to
this Section, Section 304, 306, 906, 1107 or 1303 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Security, unless such Security is
registered in the name of a Person other than the Depositary for such Global Security or a
nominee thereof.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

     If any mutilated Security is surrendered to the Trustee, the Bank shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and
of like tenor and principal amount and bearing a number not contemporaneously outstanding.

     If there shall be delivered to the Bank and the Trustee (i) evidence to their satisfaction of
the destruction, loss or theft of any Security and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Bank or the Trustee that such Security has been acquired by a protected
purchaser in good faith, the Bank shall execute and the Trustee shall authenticate and deliver, in
lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously outstanding.

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

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

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

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

Section 307. Payment of Interest; Interest Rights Preserved.

     Except as otherwise provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the Regular Record Date for
such interest.

     Any interest on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Bank, at its election in each
case, as provided in Clause (1) or (2) below:

     (1) The Bank may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The Bank shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment, and at the same time the Bank
shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Bank of such Special Record Date and, in the name and at the expense of
the Bank, shall cause notice of the proposed payment of

25

 

such Defaulted Interest and the
Special Record Date therefor to be given to each Holder of Securities of such series in the
manner set forth in Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).

     (2) The Bank may make payment of any Defaulted Interest on the Securities of any
series in any other lawful manner not inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Bank to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

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

Section 308. Persons Deemed Owners.

     Prior to due presentment of a Security for registration of transfer, the Bank, the Trustee and
any agent of the Bank or the Trustee may treat the Person in whose name such Security is registered
as the owner of such Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other purposes whatsoever,
except as required by law, whether or not such Security be overdue, and neither the Bank, the
Trustee nor any agent of the Bank or the Trustee shall be affected by notice to the contrary.

Section 309. Cancellation.

     All Securities surrendered for payment, redemption, registration of transfer or exchange or
for credit against any sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Bank may at any
time deliver to the Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Bank may have acquired in any manner whatsoever, and may deliver to the Trustee
(or to any other Person for delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Bank has not issued and sold, and all Securities so delivered
shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as expressly permitted by
this Indenture. All cancelled Securities held by the Trustee shall be disposed of in accordance
with its customary procedures.

Section 310. Computation of Interest.

     Except as otherwise specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months. For disclosure purposes under the Interest Act (Canada), whenever in this

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Indenture or any Securities issued hereunder interest at a specified rate is to be calculated on
the basis of a period less than a calendar year, the yearly rate of interest to which such rate is
equivalent is such rate multiplied by the actual number of days in the relevant calendar year and
divided by the number of days in such period.

Section 311. CUSIP Numbers.

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

Section 312. Original Issue Discount.

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

ARTICLE FOUR

SATISFACTION AND DISCHARGE

Section 401. Satisfaction and Discharge of Indenture.

     This Indenture shall upon Bank Request cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, at the expense of the Bank, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

     (1) either

     (A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been mutilated, destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Bank and thereafter repaid to the Bank or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for cancellation;
or

     (B) all such Securities not theretofore delivered to the Trustee for
cancellation

     (i) have become due and payable, or

27

 

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

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

and the Bank, in the case of (i), (ii) or (iii) above, has deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose money in an amount
sufficient to pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and any premium and interest to
the date of such deposit (in the case of Securities which have become due and payable) or
to the Stated Maturity or Redemption Date, as the case may be;

     (2) the Bank has paid or caused to be paid all other sums payable hereunder by the
Bank; and

     (3) the Bank has delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.

     Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Bank
to the Trustee under Section 607, and, if money shall have been deposited with the Trustee pursuant
to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive.

Section 402. Application of Trust Money.

     Subject to the provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Bank acting as its own Paying Agent) as the Trustee may determine, to
the Persons entitled thereto, of the principal and any premium and interest for whose payment such
money has been deposited with the Trustee.

ARTICLE FIVE

REMEDIES

Section 501. Events of Default.

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

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     (1) default in the payment of any interest upon any Security of that series when it
becomes due and payable, and such default continues for a period of more than 30 days; or

     (2) default in the payment of the principal of or any premium on any Security of that
series when it becomes due and payable, and such default continues for a period of five
days; or

     (3) if the Bank shall become insolvent or bankrupt or subject to the provisions of the
Winding-Up and Restructuring Act of Canada, or go into liquidation either voluntarily or
under an order of a court of competent jurisdiction, or otherwise acknowledge its
insolvency (provided that a resolution or order for winding-up the Bank, with a view to its
consolidation, amalgamation or merger with another bank or the transfer of its assets as an
entirety to such other bank, as provided in Article Eight, shall not constitute an event of
default under this Section 501 if such last-mentioned bank shall, as a part of such
consolidation, amalgamation, merger or transfer, and, within 90 days from the passing of
the resolution or the date of the order for the winding-up or liquidation of the Bank or
within such further period of time as may be allowed by the Trustee, comply with the
conditions to that end stated in Article Eight); or

     (4) any other Event of Default provided with respect to Securities of that series.

Section 502. Acceleration of Maturity; Rescission and Annulment.

     If an Event of Default with respect to Securities of any series at the time Outstanding occurs
and is continuing, then in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series may declare the principal amount of
all the Securities of that series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be specified by the
terms thereof) to be due and payable immediately, by a notice in writing to the Bank (and to the
Trustee if given by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.

     At any time after such a declaration of acceleration with respect to Securities of any series
has been made and before a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of
the Outstanding Securities of that series, by written notice to the Bank and the Trustee, may
rescind and annul such declaration and its consequences if:

     (1) the Bank has paid or deposited with the Trustee a sum sufficient to pay

     (A) all overdue interest on all Securities of that series,

     (B) the principal of (and premium, if any, on) any Securities of
that series that have become due otherwise than by such declaration of acceleration
and any interest thereon at the rate or rates prescribed therefor in such
Securities,

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     (C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in such Securities,
and

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

     and

     (2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series that have become due solely by
such declaration of acceleration, have been cured or waived as provided in Section 513.

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

Section 503. Suits for Enforcement by Trustee.

     If an Event of Default with respect to Securities of any series occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such series 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 this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

Section 504. Trustee May File Proofs of Claim.

     In case of any judicial proceeding relative to the Bank (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions authorized under the
Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.

     No provision of this Indenture shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors’ or other similar
committee.

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Section 505. Trustee May Enforce Claims Without Possession of Securities.

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

Section 506. Application of Money Collected.

     Any money collected by the Trustee pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or any premium or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

     FIRST: To the payment of all amounts due the Trustee under Section 607; and

     SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal and any
premium and interest, respectively.

Section 507. Limitation on Suits.

     No Holder of any Security of any series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless:

     (1) such Holder has previously given written notice to the Trustee of a continuing
Event of Default with respect to the Securities of that series;

     (2) the Holders of not less than 25% in principal amount of the Outstanding Securities
of that series shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee hereunder;

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

     (4) the Trustee for 90 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

     (5) no direction inconsistent with such written request has been given to the Trustee
during such 90-day period by the Holders of a majority in principal amount of the
Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb

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or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such Holders.

Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.

     Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of and any
premium and (subject to Section 307) interest on such Security on the respective Stated Maturities
expressed in such Security (or, in the case of redemption or repayment, on the Redemption Date or
date for repayment, as the case may be) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such Holder.

Section 509. Restoration of Rights and Remedies.

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

Section 510. Rights and Remedies Cumulative.

     Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

Section 511. Delay or Omission Not Waiver.

     No delay or omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

Section 512. Control by Holders.

     The Holders of a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any proceeding for any

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remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that:

     (1) such direction shall not be in conflict with any rule of law or with this
Indenture,

     (2) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and

     (3) the Holders have provided the Trustee with reasonable indemnification against
liability and expenses arising from such action.

Section 513. Waiver of Past Defaults.

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

     (1) in the payment of the principal of or any premium or interest on any Security of
such series, or

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

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

Section 514. Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such suit, and may
assess reasonable costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an assessment in any
suit instituted by the Bank.

Section 515. Waiver of Usury, Stay or Extension Laws.

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

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ARTICLE SIX

THE TRUSTEE

Section 601. Certain Duties and Responsibilities.

     The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it. Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this Section.

Section 602. Notice of Defaults.

     If a default occurs hereunder with respect to Securities of any series, the Trustee shall give
the Holders of Securities of such series notice of such default as and to the extent provided by
the Trust Indenture Act. For the purpose of this Section, the term “default” means any event
which is, or after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.

Section 603. Certain Rights of Trustee.

     Subject to the provisions of Section 601:

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

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

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

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

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

     (6) the Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Bank, personally or by agent or attorney
during the Bank’s normal business hours; provided, however, that the Trustee shall cause
its agents and attorneys to agree in writing to hold in confidence all such information
except to the extent disclosure may be required by law and except to the extent that the
Trustee, in its sole judgment, may determine that such disclosure is consistent with its
obligations hereunder;

     (7) the Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder, and the Trustee may also employ advisors
and experts to assist in the performance of the Trustee’s powers and duties under this
Indenture;

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

     (9) the Trustee shall not be deemed to have notice of any Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of
any event which is in fact such a default is delivered to the Trustee in accordance with an
appropriate manner of delivery as set forth elsewhere in this Indenture, and such notice
references the Securities or this Indenture.

Section 604. Not Responsible for Recitals or Issuance of Securities.

     The recitals contained herein and in the Securities, except the Trustee’s certificates of
authentication, shall be taken as the statements of the Bank, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Bank of Securities or the proceeds thereof.

Section 605. May Hold Securities.

     The Trustee, any Paying Agent, any Security Registrar or any other agent of the Bank, in its
individual or any other capacity, may become the owner or pledgee of Securities and, subject

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to
Sections 608 and 613, may otherwise deal with the Bank with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar or such other agent.

Section 606. Money Held in Trust.

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

Section 607. Compensation and Reimbursement.

     The Bank agrees:

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

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

     (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability
or expense incurred without negligence, willful misconduct or bad faith on its part,
arising out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the reasonable costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of its powers
or duties hereunder;

     (4) when the Trustee incurs any expenses or renders any services in connection
with an Event of Default specified in Section 501(3), such expenses (including the
reasonable charges and expenses of its counsel) and the compensation for such services are
intended to constitute expenses of administration under the Winding-Up and Restructuring
Act of Canada or any similar Canadian or United States federal or state law for the relief
of debtors;

     (5) in connection with the payment obligations of the Bank in this Section 607, the
parties hereto hereby recognize that the Trustee shall have a claim prior to the Notes on
all money or property held by the Trustee in connection with this Indenture, except sums
that are held in trust to pay principal and interest on particular Securities; and

     (6) the provisions of this Section shall survive the termination of this Indenture and
the resignation or removal of the Trustee.

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Section 608. Conflicting Interests.

     If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.
To the extent permitted by such Act, the Trustee shall not be deemed to have a conflicting interest
by virtue of being a trustee under this Indenture with respect to Securities of more than one
series or the Subordinated Debt Indenture, dated the date hereof, between the Bank and the Trustee
as amended or supplemented.

Section 609. Corporate Trustee Required; Eligibility.

     There shall at all times be one Trustee hereunder with respect to the Securities of each
series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee
shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, has a
combined capital and surplus of at least $50,000,000 and has its Corporate Trust Office in the
Borough of Manhattan, The City of New York. If any such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of its supervising or examining authority,
then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any time the Trustee with
respect to the Securities of any series shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

Section 610. Resignation and Removal; Appointment of Successor.

     No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.

     The Trustee may resign at any time with respect to the Securities of one or more series by
giving written notice thereof to the Bank. If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.

     The Trustee may be removed at any time with respect to the Securities of any series by Act of
the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Bank. If the instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30 days after the
giving of such notice of removal, the Trustee being removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.

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     If at any time:

     (1) the Trustee shall fail to comply with Section 608 after written request therefor
by the Bank or by any Holder who has been a bona fide Holder of a Security for at least six
months, or

     (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign
after written request therefor by the Bank or by any such Holder, or

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

then, in any such case, (A) the Bank by a Board Resolution or other appropriate Bank authorization
may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder
who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

     If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause, with respect to the Securities of one or more series,
the Bank shall promptly appoint a successor Trustee or Trustees with respect to the Securities of
that or those series (it being understood that any such successor Trustee may be
appointed with respect to the Securities of one or more or all of such series and that at any
time there shall be only one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the Bank and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent supersede the successor
Trustee appointed by the Bank. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Bank or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

     The Bank shall give notice of each resignation and each removal of the Trustee with respect to
the Securities of any series and each appointment of a successor Trustee with respect to the
Securities of any series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

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Section 611. Acceptance of Appointment by Successor.

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

     In case of the appointment hereunder of a successor Trustee with respect to the Securities of
one or more (but not all) series, the Bank, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and that (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such Trustee; and upon the
execution and delivery of such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates; but, on request of the Bank or any
successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor Trustee relates.

     Upon request of any such successor Trustee, the Bank shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in the first or second preceding paragraph, as the case may be.

     No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.

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Section 612. Merger, Conversion, Consolidation or Succession to Business.

     Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the parties hereto. In
case any Securities shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion, consolidation or sale to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with the same effect as
if such successor Trustee had itself authenticated such Securities.

Section 613. Preferential Collection of Claims Against Bank.

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

Section 614. Appointment of Authenticating Agent.

     The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series issued upon original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee’s certificate of
authentication, such reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Bank and shall at all times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to the requirements of
said supervising or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the effect specified in
this Section.

     Any corporation into which an Authenticating Agent may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate
agency or corporate trust business of an Authenticating Agent (including the authenticating agency
contemplated by this Indenture), shall continue to be an Authenticating Agent, provided such
corporation shall be otherwise eligible under this Section, without the

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execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee
and to the Bank. The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Bank. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent that shall be acceptable to the Bank and shall give notice
of such appointment in the manner provided in Section 106 to all Holders of Securities of the
series with respect to which such Authenticating Agent will serve. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under
the provisions of this Section.

     The Bank agrees to pay to each Authenticating Agent from time to time reasonable compensation
for its services under this Section.

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

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

Dated:

	 	 	 	 	 
	 	Wells Fargo Bank, National Association,

As Trustee

 	 
	 	By  	 	 
	 	 	As Authenticating Agent 	 
	 	 	 	 
	 
	 	 	 
	 	By  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

ARTICLE SEVEN

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND BANK

Section 701. Bank to Furnish Trustee Names and Addresses of Holders.

     The Bank will furnish or cause to be furnished to the Trustee

     (1) semi-annually either (i) not later than January 15 and July 15 in each year in the
case of any series of Securities consisting solely of Original Issue Discount

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Securities
which by their terms do not bear interest prior to Maturity, or (ii) not more than 15 days
after each Regular Record Date in the case of Securities of any other series, a list, in
such form as the Trustee may reasonably require, of the names and addresses of the Holders
of Securities of each series as of the preceding January 1 or July 1 or as of such Regular
Record Date, as the case may be; and

     (2) at such other times as the Trustee may request in writing, within 30 days after
the receipt by the Bank of any such request, a list of similar form and content as of a
date not more than 15 days prior to the time such list is furnished;

     excluding from any such list names and addresses received by the Trustee in its capacity as
Security Registrar.

Section 702. Preservation of Information; Communications to Holders.

     The Trustee shall preserve, in as current a form as is reasonably practicable, the names and
addresses of Holders contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701
upon receipt of a new list so furnished.

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

     Every Holder of Securities, by receiving and holding the same, agrees with the Bank and the
Trustee that neither the Bank nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.

Section 703. Reports by Trustee.

     The Trustee shall transmit to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.

     A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the Commission and with
the Bank. The Bank will notify the Trustee when any Securities are listed on any stock exchange.

Section 704. Reports by Bank.

     The Bank shall file with the Trustee and the Commission, and transmit to Holders, such
information, documents and other reports as may be required by the Trust Indenture Act; provided
that any such information, documents or reports filed electronically with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act shall be deemed filed with, and delivered to, the
Trustee at the same time as filed with the Commission.

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     Delivery of such reports, information and documents to the Trustee is for informational
purposes only and shall not constitute a representation or warranty as to the accuracy or
completeness of the reports, information or documents. The Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or determinable from
information contained therein, including the Bank’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to conclusively rely exclusively on Officer’s Certificates).

ARTICLE EIGHT

CONSOLIDATION, AMALGAMATION, MERGER,

CONVEYANCE, TRANSFER OR LEASE

Section 801. Bank May Consolidate, Etc., Only on Certain Terms.

     The Bank shall not merge, amalgamate, consolidate or otherwise combine with another entity or
sell or lease substantially all of the Bank’s assets to another entity, unless:

     (1) in case the Bank shall merge, amalgamate, consolidate or otherwise combine with
another entity or sell or lease substantially all of the Bank’s assets to another entity,
the surviving, resulting or acquiring entity shall be a duly organized entity and shall be
legally responsible for and assume, whether by agreement, operation of law or otherwise,
the Securities and the Bank’s obligations under this Indenture;

     (2) any such merger, amalgamation, consolidation or other combination, or sale or
lease of assets, would not result in an Event of Default, nor any event which, after any
requirements for giving the Bank default notice and any requirements for lapse of time for
the event to become a default were both disregarded, would become an Event of Default; and

     (3) the Bank has delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that such merger, amalgamation, consolidation or other combination,
or sale or lease of assets and, if a supplemental indenture is required in connection with
such transaction, such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have been complied
with.

Section 802. Successor Substituted.

     Upon any consolidation or amalgamation of the Bank with, or merger of the Bank into, any other
Person or any conveyance, transfer or lease of the properties and assets of the Bank substantially
as an entirety in accordance with Section 801, the successor Person formed by or resulting from
such consolidation or amalgamation or into which the Bank is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Bank under this Indenture with the same effect as if such successor Person had
been named as the Bank herein, and thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

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ARTICLE NINE

SUPPLEMENTAL INDENTURES

Section 901. Supplemental Indentures Without Consent of Holders.

     Without the consent of any Holders, the Bank and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

     (1) to evidence the succession of another Person to the Bank and the assumption by any
such successor of the covenants of the Bank herein and in the Securities; or

     (2) to add to the covenants of the Bank for the benefit of some or all of the Holders
of all or any series of Securities or of particular Securities within a series (and if such
covenants are to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such series or such
particular Securities) or to surrender any right or power herein conferred upon the Bank;
or

     (3) to add any additional Events of Default for the benefit of some or all of the
Holders of all or any series of Securities or of particular Securities within a series (and
if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being
included solely for the benefit of such series or such particular Securities); or

     (4) to add to or change any of the provisions of this Indenture to such extent as
shall be necessary to permit or facilitate the issuance of Securities in bearer form,
registrable or not registrable as to principal, and with or without interest coupons, or to
permit or facilitate the issuance of Securities in uncertificated form; or

     (5) to add to, change or eliminate any of the provisions of this Indenture in respect
of one or more series of Securities, provided that any such addition, change or elimination
(A) shall neither (i) apply to any Security of any series created prior to the execution of
such supplemental indenture and entitled to the benefit of such provision nor (ii) modify
the rights of the Holder of any such Security with respect to such provision or (B) shall
become effective only when there is no Security described in clause (i) Outstanding; or

     (6) to secure the Securities; or

     (7) to establish the form or terms of Securities of any series as permitted by
Sections 201 and 301; or

     (8) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or change any of
the provisions of this Indenture as shall be necessary to provide for or

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facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 611; or

     (9) to cure any ambiguity, to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Indenture, provided that such
action pursuant to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.

Section 902. Supplemental Indentures With Consent of Holders.

     With the consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture, by Act of said
Holders delivered to the Bank and the Trustee, the Bank and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of modifying in any manner the
rights of the Holders of Securities of such series under this Indenture; provided, however, that if
the supplemental indenture shall expressly provide that any provision to be changed or eliminated
shall apply to fewer than all the Outstanding Securities hereunder or under a particular series
under this Indenture, then, to the extent not inconsistent with the Trust Indenture Act, any such
consent may be given by Holders of not less than a majority in principal amount of the Outstanding
Securities hereunder or under such series to which such change or elimination shall apply;
provided, further, that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby (whether or not such affected Securities comprise all
Securities under this Indenture or under a particular series),

     (1) change the Stated Maturity of the principal of, or any installment of principal of
or interest on, any Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or reduce the amount
of the principal of an Original Issue Discount Security or any other Security which would
be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502, or change any Place of Payment where, or the coin or currency in which, any
Security or any premium or interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity thereof (or,
in the case of redemption, on or after the Redemption Date), or

     (2) if any Security provides that the Holder may require the Bank to repurchase such
Security, impair such Holder’s right to require repurchase of such Security on the terms
provided therein, or

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

     (4) modify any of the provisions of this Section, Section 513 or Section 1006, except
to increase any such percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each

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Outstanding Security affected thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in the references to
“the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of
this proviso, in accordance with the requirements of Sections 611 and 901(8).

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

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

Section 903. Execution of Supplemental Indentures.

     In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, in addition to the documents required by Section 102, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel and an
Officer’s Certificate stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.

Section 904. Effect of Supplemental Indentures.

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

Section 905. Conformity with Trust Indenture Act.

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

Section 906. Reference in Securities to Supplemental Indentures.

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

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and executed by the
Bank and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such
series.

ARTICLE TEN

COVENANTS

Section 1001. Payment of Principal, Premium and Interest.

     The Bank covenants and agrees for the benefit of each series of Securities that it will duly
and punctually pay the principal of and any premium and interest on the Securities of that series
in accordance with the terms of the Securities and this Indenture.

Section 1002. Maintenance of Office or Agency.

     The Bank will maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Bank in respect of the Securities of that series and this
Indenture may be served. The Bank will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the Bank shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or served at such location
as determined by the Bank and the Trustee.

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

     If the Bank issues Securities of any series through a branch, agency or office other than its
head or home office, the Bank represents that, notwithstanding the place of booking office or
jurisdiction of incorporation or organization of the Bank, the obligations of the Bank in respect
of such Securities are the same as if it had issued such Securities through its head or home
office.

Section 1003. Money for Securities Payments to Be Held in Trust.

     If the Bank shall at any time act as its own Paying Agent with respect to any series of
Securities, it will, on or before each due date of the principal of or any premium or interest on
any of the Securities of that series, deposit in an account established for the purpose of
providing the Persons entitled thereto a sum sufficient to pay the principal and any premium and
interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so to act.

     Whenever the Bank shall have one or more Paying Agents for any series of Securities, it will,
prior to each due date of the principal of or any premium or interest on any Securities of that

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series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Bank will
promptly notify the Trustee of its action or failure so to act.

     The Bank will cause each Paying Agent for any series of Securities other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Bank (or any other obligor upon the Securities of that series) in
the making of any payment in respect of the Securities of that series, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment
in respect of the Securities of that series.

     The Bank may at any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or by Bank Order direct any Paying Agent to pay, to the
Trustee all sums held by the Bank or such Paying Agent, such sums to be held by the Trustee in
trust for the benefit of the Persons entitled thereto; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further liability with respect to such
money.

     Any money deposited with the Trustee or any Paying Agent in trust for the payment of the
principal of or any premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable shall be paid to the
Bank on Bank Request; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Bank for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment, may at the
expense of the Bank cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Bank.

Section 1004. Statement by Officers as to Default.

     The Bank will deliver to the Trustee, within 120 days after the end of each fiscal year of the
Bank ending after the date hereof, an Officer’s Certificate, stating whether or not to the best
knowledge of the signers thereof the Bank is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Bank shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.

Section 1005. Existence.

     Subject to Article Eight, the Bank will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence.

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Section 1006. Waiver of Certain Covenants.

     Subject to Section 502 and Section 902, and except as otherwise specified as contemplated by
Section 301 for Securities of such series, the Bank may, with respect to the Securities of any
series, omit in any particular instance to comply with any term, provision or condition set forth
in any covenant provided pursuant to Section 301(c)(18), 901(2) or 901(7) for the benefit of the
Holders of such series or in Section 1005 if before the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Bank and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

Section 1101. Applicability of Article.

     Subject to any law restricting the redemption of the Securities, Securities of any series that
are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and
(except as otherwise specified as contemplated by Section 301 for such Securities) in accordance
with this Article.

Section 1102. Election to Redeem; Notice to Trustee.

     The election of the Bank to redeem any Securities shall be evidenced by a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities. In
case of any redemption at the election of the Bank of the Securities of any series (including
any such redemption affecting only a single Security), the Bank shall, at least 45 days prior to
the Redemption Date fixed by the Bank (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such
series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the
case of any redemption of Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the Bank shall furnish the
Trustee with an Officer’s Certificate evidencing compliance with such restriction.

Section 1103. Selection by Trustee of Securities to Be Redeemed.

     If less than all the Securities of any series are to be redeemed (unless all the Securities of
such series and of a specified tenor are to be redeemed or unless such redemption affects only a
single Security), the particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not
previously called for redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of a portion of the principal amount of any
Security of such series, provided that the unredeemed portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of such series and of
a

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specified tenor are to be redeemed (unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 45 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.

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

     The provisions of the two preceding paragraphs shall not apply with respect to any redemption
affecting only a single Security, whether such Security is to be redeemed in whole or in part. In
the case of any such redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.

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

Section 1104. Notice of Redemption.

     Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than
30 nor more than 45 days prior to the Redemption Date, to each Holder of Securities to be redeemed,
at his address appearing in the Security Register.

     All notices of redemption shall state:

     (1) the Redemption Date,

     (2) the Redemption Price,

     (3) if less than all the Outstanding Securities of any series consisting of more than
a single Security are to be redeemed, the identification (and, in the case of partial
redemption of any such Securities, the principal amounts) of the particular Securities to
be redeemed and, if less than all the Outstanding Securities of any series consisting of a
single Security are to be redeemed, the principal amount of the particular Security to be
redeemed,

     (4) that on the Redemption Date the Redemption Price will become due and payable upon
each such Security to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date,

     (5) the place or places where each such Security is to be surrendered for payment of
the Redemption Price,

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

     (7) if applicable, the CUSIP or other identifying numbers of the Securities of that
series.

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     Notice of redemption of Securities to be redeemed at the election of the Bank shall be given
by the Bank or, at the Bank’s request, by the Trustee in the name and at the expense of the Bank
and, unless otherwise specified or contemplated by Section 301, shall be irrevocable.

Section 1105. Deposit of Redemption Price.

     Prior to any Redemption Date, the Bank shall deposit with the Trustee or with a Paying Agent
(or, if the Bank is acting as its own Paying Agent, deposit in an account established for the
purpose as provided in Section 1003 an amount of money sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date or the Securities of the
series provide otherwise) accrued interest on, all the Securities which are to be redeemed on that
date.

Section 1106. Securities Payable on Redemption Date.

     Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Bank shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be paid by the Bank at
the Redemption Price, together, if applicable, with accrued interest to the Redemption Date;
provided, however, that, unless otherwise specified as contemplated by Section 301, installments of
interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the provisions of Section 307.

     If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date
at the rate prescribed therefor in the Security.

Section 1107. Securities Redeemed in Part.

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

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ARTICLE TWELVE

PURCHASE OR REPAYMENT OF SECURITIES BY THE BANK

AT THE OPTION OF THE HOLDER

Section 1201. Applicability of Article.

     Subject to any applicable law restricting the purchase or repayment of the Securities by the
Bank at the option of the Holder, Securities of any series the terms of which provide to each
Holder the option to require the Bank to purchase or repay such Securities in certain circumstances
shall, upon exercise of such option, be repayable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with
this Article.

Section 1202. Notice of Repayment Date.

     Notice of any Repayment Date with respect to Securities of any series shall, unless otherwise
specified by the terms of the Securities of such series, be given by the Bank not less than 30 nor
more than 90 days prior to such Repayment Date to each Holder of Securities of such series in
accordance with Section 106.

     Such notice shall state:

     (a) the Repayment Date;

     (b) the Repayment Price;

     (c) the place or places where, and the date by which, such Securities are to be surrendered
for payment of the Repayment Price;

     (d) a description of the procedure which a Holder must follow to exercise the purchase or
repayment option;

     (e) that exercise of the purchase or repayment option to elect repayment is irrevocable; and

     (f) such other information as the Bank may consider appropriate for inclusion.

     No failure of the Bank to give the foregoing notice shall limit any Holder’s right to exercise
a repayment right.

Section 1203. Deposit of Repayment Price.

     Prior to the Repayment Date, the Bank shall deposit with the Trustee or with a Paying Agent
(or, if the Bank is acting as its own Paying Agent, deposit in an account established for the
purpose provided in Section 1103) an amount of money sufficient to pay the Repayment Price of and
(unless the Repayment Date shall be an Interest Payment Date) accrued and unpaid interest, if any,
on all of the Securities of such series that are to be repaid on that date.

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Section 1204. Securities Payable on Repayment Date.

     Holders having duly exercised the option to require purchase or repayment by the Bank on any
Repayment Date as specified in the form of Security for such series as provided in Section 203, the
Securities of such series so to be purchased or repaid shall, on the Repayment Date, become due and
payable at the Repayment Price applicable thereto and from and after such date (unless the Bank
shall default in the payment of the Repayment Price and accrued interest (including any Additional
Interest)) such Securities shall cease to bear interest. Upon surrender of any such Security for
purchase or repayment in accordance with the terms of such Security, provided the option has been
duly exercised and the Security duly surrendered as specified in the form of such Security, such
Security shall be paid by the Bank at the Repayment Price together with accrued interest to the
Repayment Date; provided, however, that installments of interest whose Stated Maturity is on or
prior to such Repayment Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.

     If any Security shall not be paid upon due exercise of the option and surrender thereof for
purchase or repayment, the Repayment Price shall, until paid, bear interest from the Repayment Date
at the rate prescribed therefor in such Security.

Section 1205. Securities Repaid in Part.

     Any Security that by its terms may be purchased or repaid by the Bank in part at the option of
the Holder and that is to be purchased or repaid only in part by the Bank shall be surrendered at
any office or agency of the Bank designated for that purpose pursuant to Section 1102 (with, if the
Bank or the Trustee so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Bank and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Bank shall execute, and the Trustee shall authenticate and deliver
to the Holder of such Security without service charge, a new Security or Securities of the same
series, of any authorized denomination as requested by such Holder, in aggregate principal amount
equal to and in exchange for the unpurchased or unrepaid portion of the principal of the Security
so surrendered.

ARTICLE THIRTEEN

SINKING FUNDS

Section 1301. Applicability of Article.

     The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of any series except as otherwise specified as contemplated by Section 301 for such
Securities.

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

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1302. Each sinking fund payment shall be applied to the redemption of Securities of the series as
provided for by the terms of such Securities.

Section 1302. Satisfaction of Sinking Fund Payments with Securities.

     The Bank (1) may deliver Outstanding Securities of a series (other than any previously called
for redemption) and (2) may apply as a credit Securities of a series which have been redeemed
either at the election of the Bank (a) pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms of such Securities,
in each case in satisfaction of all or any part of any sinking fund payment with respect to any
Securities of such series required to be made pursuant to the terms of such Securities as and to
the extent provided for by the terms of such series or (b) have been purchased or repaid by the
Bank through the exercise of an option by the Holder as provided for in the terms of such
Securities; provided that the Securities to be so credited have not been previously so credited.
The Securities to be so credited shall be received and credited for such purpose by the Trustee at
the Redemption Price, as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

Section 1303. Redemption of Securities for Sinking Fund.

     Not less than 60 days prior to each sinking fund payment date for any Securities, the Bank
will deliver to the Trustee an Officer’s Certificate specifying the amount of the next ensuing
sinking fund payment for such Securities pursuant to the terms of such Securities, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which
is to be satisfied by delivering and crediting Securities pursuant to Section 1302 and will also
deliver to the Trustee any Securities to be so delivered. Not less than 30 days prior to each such
sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Bank in the manner provided in Section
1104. Such notice having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 1106 and 1107.

ARTICLE FOURTEEN

DEFEASANCE AND COVENANT DEFEASANCE

Section 1401. Bank’s Option to Effect Defeasance or Covenant Defeasance.

     Unless otherwise provided as contemplated by Section 301, Sections 1402 and 1403 shall apply
to any Securities or any series of Securities, as the case may be, in either case, denominated in
U.S. dollars and bearing interest at a fixed rate, in accordance with any applicable requirements
provided pursuant to Section 301 and upon compliance with the conditions set forth below in this
Article; and the Bank may elect, at its option at any time, to have Sections 1402 and 1403 applied
to any Securities or any series of Securities, as the case may be, designated pursuant to Section
301 as being defeasible pursuant to such Section 1402 or 1403, in accordance with any applicable
requirements provided pursuant to Section 301 and upon compliance with the conditions set forth
below in this Article. Any such election to have or not to have Sections 1402 and 1403 apply, as

54

 

the case may be, shall be evidenced by a Board Resolution or in another manner specified as
contemplated by Section 301 for such Securities.

Section 1402. Defeasance and Discharge.

     Upon the Bank’s exercise of its option (if any) to have this Section applied to any Securities
or any series of Securities, as the case may be, or if this Section shall otherwise apply to any
Securities or any series of Securities, as the case may be, the Bank shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1404 are satisfied (hereinafter called
“Defeasance”). For this purpose, such Defeasance means that the Bank shall be deemed to have paid
and discharged the entire indebtedness represented by such Securities and to have satisfied all its
other obligations under such Securities and this Indenture insofar as such Securities are concerned
(and the Trustee, at the expense of the Bank, shall execute proper instruments acknowledging the
same), subject to the following, which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Securities to receive, solely from the trust fund
described in Section 1404 and as more fully set forth in such Section, payments in respect of the
principal of and any premium and interest on such Securities when payments are due, (2) the Bank’s
obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (3) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article.
Subject to compliance with this Article, the Bank may exercise its option (if any) to have this
Section applied to the Securities of any series notwithstanding the prior exercise of its option
(if any) to have Section 1403 applied to such Securities.

Section 1403. Covenant Defeasance.

     Upon the Bank’s exercise of its option (if any) to have this Section applied to any Securities
or any series of Securities, as the case may be, or if this Section shall otherwise apply to any
Securities or any series of Securities, as the case may be, (1) the Bank shall be released from its
obligations under Section 1005 and any covenants provided pursuant to Section 301(c)(18), Section
901(2) or Section 901(7) for the benefit of the Holders of such Securities and (2) the occurrence
of any event specified in Section 501(4) shall be deemed not to be or result in an Event of
Default, in each case with respect to such Securities as provided in this Section on and after the
date the conditions set forth in Section 1404 are satisfied (hereinafter called
“Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect
to such Securities, the Bank may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such specified Section, whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or by reason of any
reference in any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.

Section 1404. Conditions to Defeasance or Covenant Defeasance.

     The following shall be the conditions to the application of Section 1402 or 1403 to any
Securities or any series of Securities, as the case may be:

     (1) The Bank shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee that satisfies the requirements contemplated by Section 609 and
agrees to comply with the provisions of this Article applicable to it) as

55

 

trust funds in
trust for the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefits of the Holders of such Securities, (A) money in
an amount, or (B) U.S. Government Obligations that through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee
(or any such other qualifying trustee) to pay and discharge, the principal of and any
premium and interest on such Securities on the respective Stated Maturities, in accordance
with the terms of this Indenture and such Securities. As used herein, “U.S. Government
Obligation” means (x) any security that is (i) a direct obligation of the United States of
America for the payment of which the full faith and credit of the United States of America
is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United States of
America, which, in either case (i) or (ii), is not callable or redeemable at the option of
the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in clause (x) above and held by such bank for the account of the holder
of such depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held, provided that
(except as required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment of principal
or interest evidenced by such depositary receipt.

     (2) In the event of an election to have Section 1402 apply to any Securities or any
series of Securities, as the case may be, the Bank shall have delivered to the Trustee an
Opinion of Counsel stating that (A) the Bank has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there
has been a change in the applicable Federal income tax law, in either case (A) or (B) to
the effect that, and based thereon such opinion shall confirm that, the
Holders of such Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be effected with respect
to such Securities and will be subject to Federal income tax on the same amount, in the
same manner and at the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.

     (3) In the event of an election to have Section 1403 apply to any Securities or any
series of Securities, as the case may be, the Bank shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Holders of such Securities will not recognize
gain or loss for Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as would be the
case if such deposit and Covenant Defeasance were not to occur.

56

 

     (4) No event that is, or after notice or lapse of time or both would become, an Event
of Default with respect to such Securities or any other Securities shall have occurred and
be continuing at the time of the deposit referred to in clause Error! Reference source not
found. or, with regard to any such event specified in Section 501(3), at any time on or
prior to the 90th day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 90th day).

     (5) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities
are in default within the meaning of such Act).

     (6) Such Defeasance or Covenant Defeasance shall not result in a breach or violation
of, or constitute a default under, any other agreement or instrument to which the Bank is a
party or by which it is bound.

     (7) Such Defeasance or Covenant Defeasance shall not result in the trust arising from
such deposit constituting an investment company within the meaning of the Investment
Company Act unless such trust shall be registered under such Act or exempt from
registration thereunder.

     (8) The Bank shall have delivered to the Trustee an Officer’s Certificate and an
Opinion of Counsel, each stating that all conditions precedent with respect to such
Defeasance or Covenant Defeasance have been complied with (in each case, subject to the
satisfaction of the condition in clause (4)).

			
	Section 1405.	 	Deposited Money and U.S. Government Obligations to Be Held in Trust;
Miscellaneous Provisions.

     Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 1406, the Trustee and any such other trustee are
referred to collectively as the “Trustee”) pursuant to Section 1404 in respect of any Securities
shall be held in trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any such Paying Agent
(including the Bank acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated from other funds
except to the extent required by law.

     The Bank shall pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the U.S. Government Obligations deposited pursuant to Section 1404 or the
principal and interest received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of Outstanding Securities.

     Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to
the Bank from time to time upon Bank Request any money or U.S. Government Obligations held by it as
provided in Section 1404 with respect to any Securities which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then be required

57

 

to be
deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.

Section 1406. Reinstatement.

     If the Trustee or the Paying Agent is unable to apply any money in accordance with this
Article with respect to any Securities by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture and such Securities from which the Bank has been discharged or
released pursuant to Section 1402 or 1403 shall be revived and reinstated as though no deposit had
occurred pursuant to this Article with respect to such Securities, until such time as the Trustee
or Paying Agent is permitted to apply all money held in trust pursuant to Section 1405 with respect
to such Securities in accordance with this Article; provided, however, that if the Bank makes any
payment of principal of or any premium or interest on any such Security following such
reinstatement of its obligations, the Bank shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in trust.

ARTICLE FIFTEEN

MISCELLANEOUS PROVISIONS

Section 1501. Consent to Jurisdiction and Service of Process.

     The Bank irrevocably submits to the jurisdiction of any New York State or Federal court
sitting in The City of New York over any suit, action or proceeding arising out of or relating to
this Indenture or any Security. The Bank irrevocably waives, to the fullest extent permitted by
law, any objection that it may have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit, action or proceeding brought
in such a court has been brought in any inconvenient forum. The Bank agrees that final judgment in
any such suit, action or proceeding brought in such a court shall be conclusive and binding upon
the Bank and may be enforced in the courts of Canada (or any other courts to the jurisdiction of
which the Bank is subject) by a suit upon such judgment, provided that service of process is
effected upon the Bank in the manner specified in the following paragraph or as otherwise permitted
by law; provided, however, that the Bank does not waive, and the foregoing provisions of this
sentence shall not constitute or be deemed to constitute a waiver of, (i) any right
to appeal any such judgment, to seek any stay or otherwise to seek reconsideration or review
of any such judgment or (ii) any stay of execution or levy pending an appeal from, or a suit,
action or proceeding for reconsideration or review of, any such judgment.

     As long as any of the Securities remain outstanding, the Bank will at all times have an
authorized agent in the Borough of Manhattan, The City of New York upon whom process may be served
in any legal action or proceeding arising out of or relating to the Indenture or any Security.
Service of process upon such agent and written notice of such service mailed or delivered to the
Bank shall to the extent permitted by law be deemed in every respect effective service of process
upon the Bank in any such legal action or proceeding. The Bank hereby appoints BMO Capital Markets
Corp., as its agent for such purpose, and covenants and agrees that service of process in any such
legal action or proceeding may be made upon it at the office of such agent at BMO Capital Markets
Corp., 3 Times Square, 28th Floor, New York, New York

58

 

10036 (Attention: Secretary) (or
at such other address in the Borough of Manhattan, The City of New York, as the Bank may designate
by written notice to the Trustee).

     The Bank hereby consents to process being served in any suit, action or proceeding of the
nature referred to in the preceding paragraphs by service upon such agent together with the mailing
of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to
the address of the Bank in Toronto set forth in the first paragraph of this instrument or to any
other address of which the Bank shall have given written notice to the Trustee. The Bank
irrevocably waives, to the fullest extent permitted by law, all claim of error by reason of any
such service (but does not waive any right to assert lack of subject matter jurisdiction) and
agrees that such service (i) shall be deemed in every respect effective service of process upon the
Bank in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by law,
be taken and held to be valid personal service upon and personal delivery to the Bank.

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

Section 1502. Indenture and Securities Solely Corporate Obligations.

     No recourse under or upon any obligation, covenant or agreement of this Indenture, any
supplemental indenture, or of any Security, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Bank or of any successor corporation, either directly or through the
Bank, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators, shareholders, officers
or directors, as such, of the Bank or of any successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants
or agreements contained in this Indenture or any of the Securities or implied therefrom; and that
any and all such personal liability, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such incorporator, shareholder,
officer or director, as such, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this Indenture or in
any of the Securities or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and the issue of
such Securities.

Section 1503. Execution in Counterparts.

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

Section 1504. Waiver of Jury Trial.

     EACH OF THE BANK AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT

59

 

TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THE INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

60

 

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, all as of the day and year first above written.

	 	 	 	 	 
	 	BANK OF MONTREAL

 	 
	 	By:  	/s/ Cathryn E. Cranston	 
	 	 	Name:  	Cathryn E. Cranston 	 
	 	 	Title:  	Senior Vice President, Financial Strategy	 
	 
	 	 	 	 	 
	 	BANK OF MONTREAL

 	 
	 	By:  	/s/ Patrick Cronin	 
	 	 	Name:  	Patrick Cronin  	 
	 	 	Title:  	Executive Managing Director & Head

Financial Products & Debt Products

BMO Capital  Markets	 
	 
	 	WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Trustee

 	 
	 	By:  	/s/ Martin Reed	 
	 	 	Name:  	Martin Reed	 
	 	 	Title:  	Vice President	 
	 

61

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