EXHIBIT 4.2
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THE ROYAL BANK OF SCOTLAND GROUP plc,
as Issuer
TO
THE BANK OF NEW YORK,
as Trustee
-----------------
INDENTURE
Dated as of November __, 2001
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Capital Securities
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
THE ROYAL BANK OF SCOTLAND GROUP plc
Reconciliation and tie between Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, and Capital Securities Indenture, dated
as of November __, 2001
Trust Indenture Capital Securities
Act Section Indenture Section
--------------- -----------------
ss.310 (a)(1)................................................ 6.09
(a)(2)................................................ 6.09
(a)(3)................................................ Not Applicable
(a)(4)................................................ Not Applicable
(b)................................................... 6.08, 6.10
(c)................................................... Not Applicable
ss.311 (a)................................................... 6.13
(b)................................................... 6.13
(b)(2)................................................ 7.03(a)
7.03(b)
(c)................................................... Not Applicable
ss.312 (a)................................................... 7.01
7.02(a)
(b)................................................... 7.02(b)
(c)................................................... 7.02(c)
ss.313 (a)................................................... 7.03(a)
(b)................................................... 7.03(a)
(c)................................................... 1.06, 7.03(a)
(d)................................................... 7.03(b)
ss.314 (a)................................................... 7.04, 10.06
(b)................................................... Not Applicable
(c)(1)................................................ 1.02
(c)(2)................................................ 1.02
(c)(3)................................................ Not Applicable
(d)................................................... Not Applicable
(e)................................................... 1.02
(f)................................................... Not Applicable
ss.315 (a)................................................... 6.01
(b)................................................... 6.02
7.03(a)
(c)................................................... 6.01
(d)................................................... 6.01
(d)(1)................................................ 6.01
(d)(2)................................................ 6.01
(d)(3)................................................ 6.01
(e)................................................... 5.14
ss.316 (a)(1)(A)............................................. 5.02 , 5.12
(a)(l)(B)............................................. 5.13
(a)(2)................................................ Not Applicable
(a)(last sentence).................................... 1.01
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(b).............................................................. 5.08
ss.317 (a)(1)........................................................... 5.03
(a)(2)........................................................... 5.04
(b).............................................................. 10.03
ss.318 (a).............................................................. 1.07
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Capital Securities Indenture.
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.....................................................1
Section 1.02. Compliance Certificates and Opinions............................9
Section 1.03. Form of Documents Delivered to Trustee..........................9
Section 1.04. Acts of Holders................................................10
Section 1.05. Notices, Etc. to Trustee and Company...........................11
Section 1.06. Notice to Holders; Waiver......................................11
Section 1.07. Conflict with Trust Indenture Act..............................12
Section 1.08. Effect of Headings and Table of Contents.......................12
Section 1.09. Successors and Assigns.........................................12
Section 1.10. Separability Clause............................................12
Section 1.11. Benefits of Capital Securities Indenture.......................12
Section 1.12. Governing Law..................................................12
Section 1.13. Saturdays, Sundays and Legal Holidays..........................12
Section 1.14. Appointment of Agent for Service...............................13
Section 1.15. Calculation Agent..............................................13
ARTICLE 2
CAPITAL SECURITY FORMS
Section 2.01. Forms Generally................................................13
Section 2.02. Form of Trustee's Certificate of Authentication................14
ARTICLE 3
THE CAPITAL SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series...........................15
Section 3.02. Denominations..................................................17
Section 3.03. Execution, Authentication, Delivery and Dating.................17
Section 3.04. Temporary Capital Securities...................................18
Section 3.05. Registration, Registration of Transfer and Exchange............19
Section 3.06. Mutilated, Destroyed, Lost and Stolen Capital Securities.......22
Section 3.07. Payments; Rights Preserved.....................................23
Section 3.08. Persons Deemed Owners..........................................24
Section 3.09. Cancellation...................................................24
Section 3.10. Computation of Payments........................................24
Section 3.11. CUSIP Numbers..................................................24
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ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Capital Securities Indenture.....25
Section 4.02. Application of Trust Money.....................................26
Section 4.03. Repayment to Company...........................................26
ARTICLE 5
REMEDIES
Section 5.01. Events of Default..............................................26
Section 5.02. Acceleration of Maturity; Rescission and Annulment.............27
Section 5.03. Defaults; Collection of Indebtedness and Suits for
Enforcement by Trustee.......................................27
Section 5.04. Trustee May File Proofs of Claim...............................29
Section 5.05. Trustee May Enforce Claims Without Possession of Capital
Securities...................................................29
Section 5.06. Application of Money Collected.................................30
Section 5.07. Limitation on Suits............................................30
Section 5.08. Unconditional Right of Holders to Receive Principal, Premium
and Payments, If Any.........................................31
Section 5.09. Restoration of Rights and Remedies.............................31
Section 5.10. Rights and Remedies Cumulative.................................31
Section 5.11. Delay or Omission Not Waiver...................................31
Section 5.12. Control by Holders.............................................31
Section 5.13. Waiver of past Defaults........................................32
Section 5.14. Undertaking for Costs..........................................32
ARTICLE 6
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities............................33
Section 6.02. Notice of Defaults.............................................33
Section 6.03. Certain Rights of Trustee......................................33
Section 6.04. Not Responsible for Recitals or Issuance of Capital
Securities...................................................34
Section 6.05. May Hold Capital Securities....................................35
Section 6.06. Money Held in Trust............................................35
Section 6.07. Compensation and Reimbursement.................................35
Section 6.08. Disqualification; Conflicting Interests........................36
Section 6.09. Corporate Trustee Required; Eligibility........................36
Section 6.10. Resignation and Removal; Appointment of Successor..............36
Section 6.11. Acceptance of Appointment by Successor.........................38
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business ....................................................39
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Section 6.13. Preferential Collection of Claims.............................39
Section 6.14. Appointment of Authenticating Agent...........................39
ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses of Holders
....................................................................41
Section 7.02. Preservation of Information; Communication to Holders..........41
Section 7.03. Reports by Trustee.............................................42
Section 7.04. Reports by Company.............................................42
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
Section 8.01. Company May Consolidate, Etc., Only on Certain Terms...........43
Section 8.02. Successor Corporation Substituted..............................44
Section 8.03. Assumption of Obligations......................................44
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indenture Without Consent of Holders..............46
Section 9.02. Supplemental Indentures with Consent of Holders................47
Section 9.03. Execution of Supplemental Indentures...........................48
Section 9.04. Effect of Supplemental Indentures..............................48
Section 9.05. Conformity with Trust Indenture Act............................48
Section 9.06. Reference in Capital Securities to Supplemental Indentures.....48
ARTICLE 10
COVENANTS
Section 10.01. Payment of Principal, Premium, Payments and Missed
Payments ...................................................49
Section 10.02. Maintenance of Office or Agency...............................49
Section 10.03. Money for Payments to Be Held in Trust........................49
Section 10.04. Additional Amounts............................................51
Section 10.05. Corporate Existence...........................................52
Section 10.06. Statement as to Compliance....................................52
ARTICLE 11
REDEMPTION OF CAPITAL SECURITIES
Section 11.01. Applicability of Article......................................53
Section 11.02. Election to Redeem; Notice to Trustee.........................53
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Section 11.03. Selection by Trustee of Capital Securities to Be Redeemed.....53
Section 11.04. Notice of Redemption..........................................53
Section 11.05. Deposit of Redemption Price...................................54
Section 11.06. Capital Securities Payable on Redemption Date.................54
Section 11.07. Capital Securities Redeemed in Part...........................55
Section 11.08. Optional Redemption Due to Changes in Tax Treatment...........55
ARTICLE 12
SUBORDINATION OF CAPITAL SECURITIES
Section 12.01. Capital Securities Subordinate to Senior Claims...............56
Section 12.02. Provisions Solely to Define Relative Rights...................57
Section 12.03. Trustee to Effectuate Subordination...........................57
Section 12.04. No Waiver of Subordination Provisions.........................58
Section 12.05. Notice to Trustee.............................................58
Section 12.06. Reliance on Judicial Order or Certificate of Liquidating
Agent ......................................................58
Section 12.07. Trustee Not Fiduciary for Senior Creditors....................59
Section 12.08. Rights of Trustee as Senior Creditor; Preservation of
Trustee's Rights............................................59
Section 12.09. Article Applicable to Paying Agents...........................59
Section 12.10. Exchanges Not Deemed Payment..................................59
ARTICLE 13
EXCHANGE OF CAPITAL SECURITIES
Section 13.01. Applicability of Article......................................60
Section 13.02. Election to Exchange; Notice to Trustee.......................60
Section 13.03. Notice of Exchange............................................60
Section 13.04. Deposit of Payments...........................................61
Section 13.05. Surrender of Capital Securities...............................61
Section 13.06. Issuance of Dollar Preference Shares or Exchange
Securities .................................................61
Section 13.07. Effect of Exchange............................................62
Section 13.08. Validity of Dollar Preference Shares or Exchange
Securities ................................................62
Section 13.09. Legal and Regulatory Compliance...............................62
Section 13.10. Taxes and Charges.............................................63
Section 13.11. Trustee Not Liable............................................64
SIGNATURES....................................................................65
TESTIMONIUM...................................................................66
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CAPITAL SECURITIES INDENTURE, dated as of November __, 2001 between THE
ROYAL BANK OF SCOTLAND GROUP plc, a company incorporated in Great Britain and
registered in Scotland (the "Company"), having its registered office at ▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and THE BANK OF NEW YORK, a
New York banking corporation, as Trustee (the "Trustee"), having its Corporate
Trust Office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Capital
Securities Indenture to provide for the issuance from time to time of its
Capital Securities (the "Capital Securities"), to be issued in one or more
series, represented by one or more Global Securities in registered form without
coupons for payments attached, or represented by definitive Capital Securities
in registered form without coupons for payments attached, the amount and terms
of each such series to be determined as hereinafter provided.
All things necessary to make this Capital Securities Indenture a valid and
binding agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS CAPITAL SECURITIES INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Capital
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of Capital Securities as
follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions. For all purposes of this Capital Securities
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(b) 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;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with accounting principles generally accepted in
the United Kingdom;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Capital Securities Indenture as a whole and not to
any particular Article, Section or other subdivision; and
(e) any reference to an "Article" or a "Section" refers to an Article or
Section of this Capital Securities Indenture.
Certain terms, used principally in Articles 6 and 13, are defined in those
Articles.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.04.
"Additional Amounts" shall have the meaning set forth in Section 10.04, of
this Agreement.
"ADR Custodian" means the custodian under the ADR Deposit Agreement.
"ADR Deposit Agreement" means the Deposit Agreement dated as of August 17,
1992, and amended and restated as of February 8, 1999, and as further amended
and restated as of November 2, 2001 as may be further amended from time to time
between the Company and The Bank of New York and the holders from time to time
of American Depositary Receipts issued thereunder.
"ADR Depositary" means the depositary under the ADR Deposit Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means a member of, or participant in, any Depositary.
2
"Auditors" means the Auditors from time to time of the Company or if there
shall be joint Auditors of the Company any one or more of such joint Auditors.
"Authenticating Agent" means any Person authorized by the Trustee to act
on behalf of the Trustee to authenticate Capital Securities.
"Authorized Newspaper" means a newspaper in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in the place in
connection with which the term is used, which, in the United Kingdom, will be
the Financial Times of London, if practicable, and which, in the United States,
will be the Wall Street Journal, if practicable and which, in Luxembourg, will
be the Luxemburger Wort, if practicable and for so long as and only with
respect to any Capital Securities listed on the Luxembourg Stock Exchange, and
if it shall be impracticable in the opinion of the Trustee to make any
publication of any notice required hereby in any such newspaper, shall mean any
publication or other notice in lieu thereof which is made or given with the
approval of the Trustee.
"Board of Directors" means either the board of directors, or any committee
of such board duly authorized to act with respect hereto, of the Company, which
board of directors or committee may, to the extent permitted by applicable law,
delegate its authority.
"Board Resolution" means a copy of a resolution certified by the Secretary
or a Deputy or Assistant Secretary of the Company to have been duly adopted by
the Board of Directors or an authorized committee thereof and to be in full
force and effect on the date of such certification and delivered to the
Trustee.
"Business Day" means, with respect to any Place of Payment, except as may
otherwise be provided in the form of Capital Securities of any particular
series, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
"Calculation Agent" means the Person, if any, authorized by the Company to
calculate the interest rate or other amounts from time to time in relation to
any series of Capital Securities.
"Capital Securities" has the meaning set forth in the recitals of the
Company herein and more particularly means any series of Capital Securities
issued, authenticated and delivered under this Capital Securities Indenture.
"Capital Securities Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
3
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms and forms of particular series of
Capital Securities established pursuant to Section 3.01.
"Capital Security" means one of the Capital Securities.
"Capital Security Register" and "Capital Security Registrar" have the
respective meanings specified in Section 3.05.
"Clearstream" means, Clearstream Banking, societe anonyme, or its nominee
or its or their successor.
"Commission" means the United States Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this Capital Securities Indenture until a successor corporation shall have
become such pursuant to the applicable provisions of this Capital Securities
Indenture, and thereafter "Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by an Executive Director or
Director or the Secretary or a Deputy or Assistant Secretary, and delivered to
the Trustee.
"Corporate Trust Office" means the office of the Trustee in which its
corporate trust business is principally administered, located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
The term "corporation" includes corporations, associations, companies and
business trusts.
"Default" has the meaning specified in Section 5.03.
"Depositary" means, with respect to any series of Capital Securities, a
clearing agency that is designated to act as Depositary for the Global
Securities evidencing all or part of such Capital Securities as contemplated by
Section 3.01.
"Dollar" or "$" or any similar reference means the coin or currency of the
United States of America which as at the time of payment is legal tender for
the payment of public and private debts.
4
"Dollar Preference Shares" means a designated series of non-cumulative
dollar preference shares, nominal value of $.01 each, of the Company for which,
if applicable to a particular series of Capital Securities, the Company may
exchange or convert any series of Capital Securities.
"DTC" means the Depository Trust & Clearing Company or its nominee or its
or their successor.
"euro"or "(U)" means the single currency of the participating member
states in the Third Stage of European economic and monetary union pursuant to
the Treaty establishing the European Community (as amended from time to time).
"Euroclear" means, the Euroclear Bank S.A./N.V., or its nominee, or its or
their successor.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"Exchange Date", when used with respect to any applicable series of
Capital Securities, has the meaning specified in Section 13.03.
"Exchange Securities" has the meaning specified in Section 3.01(l).
"Foreign Currency" means the euro or any currency issued by the government
of any country (or a group of countries or participating member states) other
than the United States of America which as at the time of payment is legal
tender for the payment of public and private debts.
"Foreign Government Securities" means with respect to Capital Securities
of any series that are denominated in a Foreign Currency, non-callable (i)
direct obligations of the participating member state or government that issued
such Foreign Currency for the payment of which obligations its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of such participating member state
or government, the payment of which obligations is unconditionally guaranteed
as a full faith and credit obligation of such participating member state or
government. For the avoidance of doubt, for all purposes hereof, euro shall be
deemed to have been issued by each participating member state from time to
time.
"Global Security" means a global certificate evidencing all or part of a
series of Capital Securities, authenticated and delivered to the Holder and
registered in the name of the Holder or its nominee.
5
"Holder" means a Person in whose name a Capital Security in global or
definitive form is registered in the Capital Security Register.
"Liquidator" has the meaning specified in Section 12.06.
"Maturity", when used with respect to any Capital Security, means the
date, if any, on which the principal of such Capital Security becomes due and
payable as therein or herein provided, whether by call for redemption,
winding-up of the Company or otherwise.
"Missed Payment" has the meaning specified in Section 3.07(d).
"Officer's Certificate" means a certificate delivered to the Trustee and
signed by an Executive Director or an Assistant Director or the Secretary or a
Deputy or Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion of legal advisors, who may be
an employee of or legal advisors for the Company or other legal advisors.
"Outstanding", when used with respect to Capital Securities or any series
of Capital Securities means, as of the date of determination, all Capital
Securities or all Capital Securities of such series, as the case may be,
theretofore authenticated and delivered under this Capital Securities
Indenture, except:
(i) Capital Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Capital Securities, or portions thereof, for whose payment or
redemption money, U.S. Government Obligations or Foreign Government
Securities in the necessary amount have been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Capital Securities;
provided, that, if such Capital Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Capital Securities
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) Capital Securities which have been paid pursuant to Section
11.06 or in exchange for or in lieu of which other Capital Securities have
been authenticated and delivered pursuant to this Capital Securities
Indenture, other than any such Capital Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Capital Securities are held by a bona fide purchaser in whose
hands such Capital Securities are valid obligations of the Company;
6
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Capital Securities of any series have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, (i) the principal amount of a Capital Security denominated in a
Foreign Currency shall be the Dollar equivalent, determined on the date of
original issuance of such Capital Security, of the principal amount of such
Capital Security; and (ii) Capital Securities beneficially owned by the Company
or any other obligor upon the Capital Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Capital Securities which a Responsible Officer of the
Trustee actually knows to be so beneficially owned shall be so disregarded;
provided, further, however, that Capital Securities so beneficially owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Capital Securities and that the pledgee is not the Company
or any other obligor upon the Capital Securities or any Affiliate of the
Company or of such other obligor.
"participating member states" means those member states of the European
Union from time to time which adopt a single, shared currency in the Third
Stage, as defined and identified in the EMU legislation.
"Paying Agent" means any Person (which may include the Company) authorized
by the Company to pay the principal of (and premium, if any) and Payments
(including Missed Payments, if any) on any Capital Securities on behalf of the
Company.
"Payment" means a payment made to Holders at a rate per annum of the
principal amount of the Capital Securities of a series as determined pursuant
to Section 3.01 and set forth in such Capital Securities or determinable
pursuant to the terms of such Capital Securities.
"Payment Date", when used with respect to any Capital Security, means the
date for payment of any Payment on such Capital Security, as determined by the
Company and set forth in such Capital Security.
"Payment Event" has the meaning specified in Section 5.03.
"Payment Period", when used with respect to any series of Capital
Securities, means the period beginning on the date of issue of the series of
Capital Securities up to (but excluding) the first Payment Date and each
successive period from (and including) a Payment Date up to (but excluding) the
next succeeding Payment Date.
7
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Capital Securities of
any series, means the place or places where the principal of (and premium, if
any) Payments and Missed Payments, if any, on the Capital Securities of that
series are payable as specified pursuant to Section 3.01 or, if not so
specified, as specified in Section 10.02.
"Predecessor Security" of any particular Capital Security means every
previous Capital Security evidencing all or a portion of the same debt as that
evidenced by such particular Capital Security; and, for the purposes of this
definition, any Capital Security authenticated and delivered under Section 3.06
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Capital
Security shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Capital Security.
"Redemption Date", when used with respect to any Capital Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Capital Securities Indenture.
"Redemption Price", when used with respect to any Capital Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Capital Securities Indenture.
"Regular Record Date" for the Payment payable on any Payment Date on
registered Capital Securities of any series means the date specified for the
purpose pursuant to Section 3.01.
"Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee assigned to or working in the corporate trust department
of the Trustee or, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his or her knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Capital Securities Indenture.
"Senior Claims" in respect of any series of capital securities means (i)
all claims of unsubordinated creditors of the Company admitted in the
winding-up, (ii) all claims of creditors of the Company in respect of
liabilities of the Company that are, or are expressed to be, subordinated
(whether only in the event of the winding-up of the Company or otherwise) to
the claims of unsubordinated creditors of the Company but not further or
otherwise, (iii) all other claims except those which rank, or are expressed to
rank, equally with or junior to the claims of
8
Holders of any series of Capital Securities and (iv) any other Senior Claims
provided with respect to Capital Securities of such series pursuant to Section
3.01.
"Senior Creditors" means the creditors of the Company holding the Senior
Claims.
"Solvency Condition" means that, at the relevant time, the Company is
solvent by virtue of (a) it being able to pay its debts as they fall due, and
(b) the total non-consolidated assets of the Company exceed the Company's total
non-consolidated liabilities other than, except in the case of the optional
redemption by the Company or repurchase of any Capital Securities by the
Company or any of its subsidiaries, liabilities that do not constitute Senior
Claims. The determination of whether the Solvency Condition has been satisfied
shall be made in accordance with Section 12.01(b).
"Subsidiary" has the meaning attributed thereto by Section 7.36 of the
Companies ▇▇▇ ▇▇▇▇ of Great Britain as in force at the date as of which this
instrument was executed.
"successor entity" has the meaning specified in Section 8.03.
"Taxing Jurisdiction" has the meaning specified in Section 10.04.
"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 Capital Securities Indenture, and thereafter
"Trustee" shall mean the Person who is then the Trustee hereunder, and if at
any time there is more than one such Person, "Trustee" shall mean and include
each such Person; and "Trustee" as used with respect to the Capital Securities
of any series shall mean the Trustee with respect to the Capital Securities of
such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990, as in force at the date as of which
this instrument was executed, except as provided in Section 9.05.
"United Kingdom" means the United Kingdom of Great Britain and Northern
Ireland.
"United States" and "U.S."mean the United States of America and, except in
the case of Sections 6.09 and 6.14, its territories and possessions.
"U.S. Government Obligations" means noncallable (i) direct obligations of
the United States of America for which its full faith and credit are pledged
and/or (ii) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States, the payment of which is
unconditionally guaranteed as a full faith and credit obligation of the United
9
States, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as
custodian with respect to any such U.S. Government Obligation or a specific
payment of principal of or interest on any such U.S. Government Obligation held
by such custodian for the account of the holder of such depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on
the U.S. Government Obligation evidenced by such depository receipt.
"U.S. Person" means a person who, for U.S. tax purposes, is a citizen or
resident of the United States, any corporation, partnership or other entity
organized under the laws of the United States of America or any political
subdivision thereof or an estate or trust the income of which is subject to
United States income taxation, regardless of its source.
"Vice President", when used with respect to 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".
"Voting Stock" means stock or other interests of any class or classes,
however designated, having ordinary voting power for the election of a majority
of the board of directors of a corporation, other than stock or other interests
having such power only by reason of the happening of a contingency.
Section 1.02. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Capital Securities Indenture, the Company shall furnish to the Trustee
an Officer's Certificate stating that all conditions precedent, if any,
provided for in this Capital Securities Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of the legal advisor rendering such opinion all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Capital Securities Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Capital Securities Indenture shall include:
(a) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
10
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, legal advisors, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of, or
representations by, legal advisors may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company, unless such legal
advisors know, or in the exercise of reasonable care should know, that the
certificate or opinion or representation with respect to such matters is
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Capital Securities Indenture, they may, but need not, be
consolidated and form one instrument.
Section 1.04. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Capital Securities Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly
11
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, when it is hereby expressly required, to the Company. 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
Capital Securities Indenture and (subject to Section 6.01) conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. When such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of registered Capital Securities shall be proved by the
Capital Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Capital Security shall bind every future
Holder of the same Capital Security and the Holder of every Capital Security
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of any thing done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Capital Security or such other Capital Security.
Section 1.05. Notices, Etc. to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Capital Securities Indenture to be made
upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing (which may be via facsimile)
to the Trustee at its Corporate Trust Office, or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, in the case of the Company, first-class
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postage prepaid, addressed to it at the address of its principal office
specified in the first paragraph of this Capital Securities Indenture
(unless another address has been previously furnished in writing to the
Trustee by the Company, in which case at the last such address) marked
"Attention: Company Secretary".
Section 1.06. Notice to Holders; Waiver. When this Capital Securities
Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if given in
writing and mailed, first-class postage prepaid, to each Holder affected by
such event in the manner and to the extent provided in Section 313(c) of the
Trust Indenture Act with respect to reports pursuant to Section 7.03(a).
For so long as the Capital Securities of any series are represented by
Global Securities, the Company will deliver a copy of all notices with respect
to such series to the Holder (if the address of such Holder is known to the
Company).
When notice to Holders of registered Capital Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Capital Securities 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 1.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Capital Securities Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control. If at any
future time any provision required to be included herein by the Trust Indenture
Act as in force at the date as of which this Capital Securities Indenture was
executed or any limitation imposed by the Trust Indenture Act at such date on
any provision otherwise included herein would not be so required or imposed (in
whole or in part) if this Capital Securities Indenture were executed at such
future time, the Company and the Trustee may enter into one or more indentures
supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole
or in part) such provision or limitation of this Capital Securities Indenture
in conformity with the requirements of the Trust Indenture Act as then in
force, except that (subject to
13
Article 9) no provision or limitation required to be included herein by
Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e),
316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust
Indenture Act as in force at the date as of which this Capital Securities
Indenture was executed may be so changed or eliminated.
Section 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.09. Successors and Assigns. All covenants and agreements in this
Capital Securities Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
Section 1.10. Separability Clause. In case any provision in this Capital
Securities Indenture or in the Capital Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 1.11. Benefits of Capital Securities Indenture. Nothing in this
Capital Securities Indenture or in the Capital Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Holders of Capital Securities, any benefit or any legal or
equitable right, remedy or claim under this Capital Securities Indenture.
Section 1.12. Governing Law. This Capital Securities Indenture and the
Capital Securities shall be governed by and construed in accordance with the
laws of the State of New York, except as stated in Section 2.01 and except for
Section 12.01 which shall be governed by and construed in accordance with the
laws of England, and except that the authorization and execution of this
Capital Securities Indenture and the Capital Securities shall be governed by
the respective jurisdictions of organization of the Company and the Trustee, as
the case may be.
Section 1.13. Saturdays, Sundays and Legal Holidays. The terms of the
Capital Securities shall provide that, in any case where any Payment Date,
Redemption Date or Exchange Date of a Capital Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of this
Capital Securities Indenture or the Capital Securities other than a provision
in the Capital Securities that specifically states that such provision shall
apply in lieu of this Section) Payments and Missed Payments, if any (and
premium, if any) or principal and the exchange of the Capital Security need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment (or such other Business Day as
shall be provided in such Capital Security) with the same force and effect as
if made on such Payment Date, Redemption Date or Exchange Date, provided that
no Payment shall accrue for
14
the period from and after such Payment Date, Redemption Date or Exchange Date,
as the case may be.
Section 1.14. Appointment of Agent for Service. The Company has designated
and appointed CT Corporation System, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as its authorized agent upon which process may be served in any
suit or proceeding in any Federal or State court in the Borough of Manhattan,
The City of New York arising out of or relating to the Capital Securities or
this Capital Securities Indenture, but for that purpose only, and agrees that
service of process upon said CT Corporation System shall be deemed in every
respect effective service of process upon it in any such suit or proceeding in
any Federal or State court in the Borough of Manhattan, The City of New York,
New York. Such appointment shall be irrevocable so long as any of the Capital
Securities remain Outstanding until the appointment of a successor by the
Company and such successor's acceptance of such appointment. Upon such
acceptance, the Company shall notify the Trustee of the name and address of
such successor. The Company further agrees to take any and all action,
including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment
of said CT Corporation System in full force and effect so long as any of the
Capital Securities shall be Outstanding. The Trustee shall not be obligated and
shall have no responsibility with respect to any failure by the Company to take
any such action. The Company hereby submits (for the purposes of any such suit
or proceeding) to the jurisdiction of any such court in which any such suit or
proceeding is so instituted, and waives, to the extent it may effectively do
so, any objection it may have now or hereafter to the laying of the venue of
any such suit or proceeding.
Section 1.15. Calculation Agent. If the Company appoints a Calculation
Agent pursuant to Section 3.01 with respect to any series of Capital
Securities, any determination of the interest rate on, or other amounts in
relation to, such series of Capital Securities in accordance with the terms of
such series of Capital Securities by such Calculation Agent shall (in the
absence of manifest error, bad faith or willful misconduct) be binding on the
Company, the Trustee and all Holders and (in the absence of manifest error, bad
faith or willful misconduct) no liability to the Holders shall attach to the
Calculation Agent in connection with the exercise or non-exercise by it of its
powers, duties and discretions.
15
ARTICLE 2
CAPITAL SECURITY FORMS
Section 2.01. Forms Generally. The Capital Securities of each series shall
be issuable as registered securities without coupons attached and in such forms
as shall be established by or pursuant to action of the Company's Board of
Directors, or in one or more indentures supplemental hereto, pursuant to
Section 9.01, in each case with such insertions, omissions, substitutions and
other variations as are required or permitted by this Capital Securities
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with any applicable law or rule or regulation made pursuant thereto or with the
rules of any securities exchange or Depositary therefor, or as may,
consistently herewith, be determined by the officers executing such Capital
Securities, all as evidenced by any such execution; provided however, that such
Capital Securities shall have endorsed thereon a statement in the following
form or in substantially the following form:
"The rights of the holder of the Capital Security are, to the extent and
in the manner set forth in Section 12.01 of the Capital Securities
Indenture, subordinated to the claims of other creditors of the Company,
and this Capital Security is issued subject to the provisions of that
Section 12.01, and the holder of this Capital Security, by accepting the
same, agrees to and shall be bound by such provisions. The provisions of
Section 12.01 of the Capital Securities Indenture and the terms of this
paragraph are governed by, and shall be construed in accordance with, the
laws of England."
The Trustee's certificates of authentication shall be in substantially the
form set forth in Section 2.02 or Section 6.14.
The definitive Capital Securities shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Capital Securities may be listed, all as determined by the officers executing
such Capital Securities, as evidenced by their execution thereof.
Section 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication shall be in substantially the following
form:
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CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities of the series designated herein
referred to in the within-mentioned Capital Securities Indenture.
Dated: ______________________
THE BANK OF NEW YORK
as Trustee
By:
---------------------------------
Authorized Signatory
ARTICLE 3
THE CAPITAL SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Capital Securities which may be authenticated and delivered
under this Capital Securities Indenture is unlimited. The Capital Securities
may be issued in one or more series.
There shall be established by or pursuant to action of the Board of
Directors of the Company or established in one or more indentures supplemental
hereto, prior to the initial issuance of Capital Securities of any series,
(a) the title of the Capital Securities of the series (which shall
distinguish the Capital Securities of the series from all other Capital
Securities);
(b) any limit upon the aggregate principal amount of the Capital
Securities of the series which may be authenticated and delivered under
this Capital Securities Indenture (except for Capital Securities
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Capital Securities of the series
pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07);
(c) the date or dates, if any, on which the principal of (and
premium, if any, on) the Capital Securities of the series is payable;
(d) the rate or rates, if any, at which Payments on the Capital
Securities of the series shall accrue or the manner of calculation of such
17
rate or rates, if any, the date or dates from which such Payments shall
accrue, the Payment Dates on which such Payments shall be payable or the
manner of determination of such Payment Dates and the Regular Record Date
for the interest payable on any Payment Date and any dates required to be
established pursuant to Section 7.01;
(e) whether any premium, upon redemption or otherwise, shall be
payable by the Company on Capital Securities of the series;
(f) the place or places where the principal of (and premium, if any)
and any Payments or Missed Payments on Capital Securities of the series
shall be payable, and the Paying Agent or Paying Agents who shall be
authorized to pay principal of (and premium, if any) and any Payments or
Missed Payments on Capital Securities of such series, at least one of such
Paying Agents having an office or agency in the Borough of Manhattan, The
City of New York;
(g) other than with respect to any redemption of the Capital
Securities pursuant to Section 11.08, whether or not such series of
Capital Securities are to be redeemable, in whole or in part, at the
Company's option and, if so redeemable, the period or periods within
which, the price or prices at which and the terms and conditions upon
which, Capital Securities of the series may be redeemed, including the
date referred to in Section 11.08;
(h) the obligation, if any, of the Company to redeem or purchase
Capital Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which, and the terms and conditions
upon which Capital Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(i) if other than denominations of $25 and any multiple thereof, the
denominations in which Capital Securities of the series in each applicable
form shall be issuable and any provisions relating to redenomination of
any Capital Securities;
(j) if other than the principal amount thereof, the portion, or the
manner of calculation of such portion, of the principal amount of Capital
Securities of the series which shall be payable upon a declaration of
acceleration or acceleration of the Maturity thereof pursuant to Section
5.02, upon redemption of Capital Securities of any series which are
redeemable before their stated Maturity, or which the Trustee shall be
entitled to file and prove a claim pursuant to Section 5.04;
18
(k) if Additional Amounts, pursuant to Section 10.04, will not be
payable;
(l) whether the Capital Securities of any series shall be
exchangeable at the option of the Company into Dollar Preference Shares or
other securities of the Company ("Exchange Securities") pursuant to
Article 13 and if so the terms of the Dollar Preference Shares or the
nature and terms of the Exchange Securities into which such Capital
Securities are exchangeable and any additional or other provisions
relating to such exchange;
(m) if other than Dollars, provisions, if any, for the Capital
Securities of the series to be denominated, and payments thereon to be
made, in Foreign Currencies and specifying the manner and place of payment
thereon and any other terms with respect thereto;
(n) if other than the coin or currency in which the Capital
Securities of that series are denominated, the coin or currency in which
payment of the principal of and premium and Payments and Missed Payments,
if any, on the Capital Securities of such series shall be payable;
(o) if the principal of and premium and Payments and Missed Payments,
if any, on the Capital Securities of such series are to be payable, at the
election of the Company or a Holder thereof, in a coin or currency other
than that in which the Capital Securities are denominated, the period or
periods within which, and the terms and conditions upon which, such
election may be made;
(p) whether the Capital Securities of the series shall be issued in
whole or in part in the form of one or more Global Securities and the
initial Holder with respect to such Global Security or Capital Securities;
(q) if the Capital Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Capital Security of such series or otherwise) only upon receipt
of certain certificates or other documents or satisfaction of other
conditions, then the form and terms of such certificates, documents or
conditions;
(r) if the amounts of payments of principal of (and premium, if any)
or Payments or Missed Payments, if any, on the Capital Securities of the
series may be determined with reference to an index or are otherwise not
fixed on the original issue date thereof, the manner in which such amounts
shall be determined and the Calculation Agent, if any, who shall be
appointed and authorized to calculate such amounts;
19
(s) any other Events of Default, Defaults or covenants with respect
to the Capital Securities of such series;
(t) if other than as provided in Section 12.01, the subordination
terms with respect to the Capital Securities of the series;
(u) the forms of Capital Securities of the series; and
(v) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Capital Securities Indenture).
All Capital Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to such action or in any such indenture supplemental hereto.
If the forms of Capital Securities of any series, or any of the terms
thereof, are established by action taken by the Board of Directors of the
Company, copies of the Board Resolutions in respect thereof shall be delivered
to the Trustee at or prior to the delivery of the Company Order pursuant to
Section 3.03 for the authentication and delivery of such Capital Securities.
Section 3.02. Denominations. The Capital Securities of each series shall
be issuable in such denominations as shall be specified as contemplated by
Section 3.01. In the absence of any such specification with respect to Capital
Securities of any series, the Capital Securities of each series shall be
issuable in denominations of $25 each and any integral multiple thereof. Unless
otherwise specified in accordance with Section 3.01, any Global Security issued
and delivered to the Holder shall be issued in the form of units with each $25
principal amount of such Global Security constituting one unit.
Section 3.03. Execution, Authentication, Delivery and Dating. The Capital
Securities shall be executed on behalf of the Company by any two Directors or
by one Director and Secretary to the Company. The signature of any of these
officers on the Capital Securities may be manual or facsimile. Capital
Securities bearing the manual or facsimile signatures of individuals who were
at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Capital Securities.
At any time and from time to time after the execution and delivery of this
Capital Securities Indenture, the Company may deliver Capital Securities of any
series executed by the Company to the Trustee for authentication, together with
a Company Order for the authentication and delivery of such Capital Securities,
and the Trustee in accordance with the Company Order shall authenticate and
deliver
20
such Capital Securities. In authenticating such Capital Securities and
accepting the additional responsibilities under this Capital Securities
Indenture in relation to such Capital Securities the Trustee shall be entitled
to receive, and (subject to Section 6.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the form and terms thereof have been
established in conformity with the provisions of this Capital Securities
Indenture.
The Trustee shall not be required to authenticate such Capital Securities
if the issue of such Capital Securities pursuant to this Capital Securities
Indenture will affect the Trustee's own rights, duties or immunities under the
Capital Securities and this Capital Securities Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Each registered Capital Security shall be dated the date of its
authentication.
No Capital Security shall be entitled to any benefit under this Capital
Securities Indenture or be valid or obligatory for any purpose unless there
appears on such Capital Security a certificate of authentication substantially
in the form provided for herein executed by or on behalf of the Trustee by
manual signature, and such certificate upon any Capital Security shall be
conclusive evidence, and the only evidence, that such Capital Security has been
duly authenticated and delivered hereunder and that such Capital Security is
entitled to the benefits of this Capital Securities Indenture.
Section 3.04. Temporary Capital Securities. Pending the preparation of
definitive Capital Securities of any series, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary Capital
Securities substantially of the tenor of the definitive Capital Securities in
lieu of which they are issued, which Capital Securities may be printed,
lithographed, typewritten, photocopied or otherwise produced. Temporary Capital
Securities shall be issuable as registered Capital Securities without coupons
attached in any authorized denomination, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Capital Securities may determine, all as evidenced by such execution.
If temporary Capital Securities of any series are issued, the Company will
cause, if so required by the terms of such temporary Capital Securities,
definitive Capital Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Capital Securities of
such series, the temporary Capital Securities of such series shall be
exchangeable for definitive Capital Securities of such series containing
identical terms and provisions upon surrender of the temporary Capital
Securities of such series at the office or agency of the Company in a Place of
Payment for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Capital Securities
21
of any series the Company shall execute, and the Trustee shall authenticate and
deliver in exchange therefor, a like aggregate principal amount of definitive
Capital Securities of the same series of authorized denominations containing
identical terms and provisions. Until so exchanged, unless otherwise provided
therein or in a supplemental indenture relating thereto, the temporary Capital
Securities of any series shall in all respects be entitled to the same benefits
(but shall be subject to all the limitations of rights) under this Capital
Securities Indenture as definitive Capital Securities of such series.
Section 3.05. Registration, Registration of Transfer and Exchange.
(a) Global Securities. This Section 3.05(a) shall apply to Global
Securities unless otherwise specified, as contemplated by Section 3.01.
Each Global Security in registered form authenticated under this Capital
Securities Indenture shall be registered in the name of the Depositary
designated for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global
Security shall constitute a single Capital Security for all purposes of this
Capital Securities Indenture.
With respect to Global Securities in registered form, unless the Global
Security is presented by an authorized representative of the Holder to the
Company or its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of a nominee of the Holder and any
payment is made to such nominee, any transfer, pledge or other use of the
Global Security in registered form for value or otherwise shall be wrongful
since the registered owner of such Global Security, the nominee of the Holder,
has an interest in such Global Security.
Except as otherwise specified as contemplated by Section 3.01 hereof, any
Global Security shall be exchangeable for definitive Capital Securities only as
provided in this paragraph. A Global Security shall be exchangeable pursuant to
this Section only (i) if the relevant Depositary notifies the Trustee that it
is unwilling or unable to continue to act as Depositary and a successor
depositary is not appointed by the Trustee within 120 days of such
notification, (ii) if, in the event of a winding-up of the Company, the Company
fails to make a payment on the Capital Securities when due or (iii) at any time
if the Company at its option and in its sole discretion determines that the
Global Securities of a particular series should be exchanged for definitive
Capital Securities of that series in registered form. Any Global Security that
is exchangeable pursuant to the preceding sentence shall be exchangeable for,
unless otherwise specified or contemplated by Section 3.01, definitive Capital
Securities in registered form only bearing Payments (if any) at the same rate
or pursuant to the same formula, having the same date of issuance, the same
date or dates from which interest shall accrue,
22
the same Payment Dates or manner of determination of such Payment Dates,
redemption provisions, if any, specified currency and other terms and of
differing denominations aggregating a like amount as the Global Security so
exchangeable. Definitive Capital Securities in registered form shall be
registered in the names of the owners of the beneficial interests in such
Global Securities as such names are from time to time provided by the Holder to
the Trustee.
Any Global Security that is exchangeable pursuant to the preceding
paragraph, unless otherwise specified as contemplated by Section 3.01, shall be
exchangeable for Capital Securities issuable in authorized denominations of a
like aggregate principal amount and tenor.
No Global Security in registered form may be transferred except as a whole
by the Holder to a nominee of the Holder or by the Holder or any such nominee
to a successor of the Holder or a nominee of such successor. Except as provided
above, owners solely of beneficial interests in a Global Security shall not be
entitled to receive physical delivery of Capital Securities in definitive form
and will not be considered the holders thereof for any purpose under this
Capital Securities Indenture.
In the event that a Global Security is surrendered for redemption or
exchange for Dollar Preference Shares or Exchange Securities in part pursuant
to Section 11.07 or Section 13.05, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Global Security, without
service charge, a new Global Security in a denomination equal to and in
exchange for the unredeemed or unexchanged portion of the principal of the
Global Security so surrendered.
The Agent Members and any beneficial owners shall have no rights under
this Capital Securities Indenture with respect to any Global Security held on
their behalf by a Holder, and such Holder may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by a Holder or impair, as between any such
Holder or other clearance service and its Agent Members and Holders the
operation of customary practices governing the exercise of the rights of a
holder of any security, including without limitation the granting of proxies or
other authorization of participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a
Holder is entitled to give or take under this Capital Securities Indenture.
In connection with any exchange of interests in a Global Security for
definitive Capital Securities of another authorized form, as provided in this
23
subsection 3.05(a), then without unnecessary delay but in any event not later
than the earliest date on which such interests may be so exchanged, the Company
shall deliver to the Trustee definitive Capital Securities in aggregate
principal amount equal to the principal amount of such Global Security or the
portion to be exchanged, executed by the Company. On or after the earliest date
on which such interests may be so exchanged, such Global Security shall be
surrendered by the Holder to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Capital Securities without charge (unless the definitive Capital Securities in
registered form are to be issued to an Excepted Person (as defined in Section
13.10) in which case the Company or Trustee may require payment of any taxes or
governmental charges arising) and the Trustee shall authenticate and deliver,
in exchange for each portion of such Global Security, an equal aggregate
principal amount of definitive Capital Securities of authorized denominations
as the portion of such Global Security to be exchanged. Any Global Security
that is exchangeable pursuant to this Section 3.05 shall be exchangeable for
Capital Securities issuable in the denominations specified as contemplated by
Section 3.01 and registered in such names as the Holder of such Global Security
shall direct. If a definitive Capital Security in registered form is issued in
exchange for any portion of a Global Security after the close of business at
the office or agency where such exchange occurs on any record date and before
the opening of business at such office or agency on the relevant Payment Date,
Payments will not be payable on such Payment Date in respect of such definitive
Capital Security, but will be payable on such Payment Date only to the person
to whom Payments in respect of such portion of such Global Security are
payable.
A Depositary may grant proxies and otherwise authorize any person,
including Agent Members and persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under this
Capital Securities Indenture with respect to the Capital Securities.
(b) Except as otherwise specified pursuant to Section 3.01, registered
Capital Securities of any series may only be exchanged for a like aggregate
principal amount of registered Capital Securities of such series of other
authorized denominations containing identical terms and provisions. Capital
Securities to be exchanged shall be surrendered at an office or agency of the
Company designated pursuant to Section 10.02 for such purpose, and the Company
shall execute, and the Trustee shall authenticate and deliver, in exchange
therefor the Capital Security or Capital Securities of the same series which
the Holder making the exchange shall be entitled to receive.
Except as otherwise specified pursuant to Section 3.01, the Company shall
cause to be kept in the principal corporate trust office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as
24
the "Capital Security Register" provided, no such Capital Security Register
shall be maintained in any office or agency in the United Kingdom other than in
Scotland) in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of registered Capital Securities
and of transfers of such Capital Securities. The Trustee is hereby appointed
"Capital Security Registrar" for the purpose of registering Capital Securities
in registered form and transfers of Capital Securities in registered form as
herein provided.
Registered Capital Securities shall be transferable only on the Capital
Security Register. Upon surrender for registration of transfer of any
registered Capital Security of any series at an office or agency of the Company
designated pursuant to Section 10.02 for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new registered Capital
Securities of the same series of any authorized denominations containing
identical terms and provisions, of a like aggregate principal amount.
All Capital Securities issued upon any registration of transfer or
exchange of Capital Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this Capital
Securities Indenture, as the Capital Securities surrendered upon such
registration of transfer or exchange.
Every registered Capital Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Capital Security Registrar
duly executed, by the registered Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Capital Securities,
other than exchanges pursuant to Section 3.04, 9.06 or 11.07 not involving any
transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange any Capital Security of any series during a period beginning at the
opening of business 15 days before the day of the giving of a notice of
redemption of Capital Securities of such series selected for redemption under
Section 11.03 and ending at the close of business on the day of the giving of
such notice, or (ii) to register the transfer of or exchange any Capital
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Capital Securities being redeemed in part.
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Section 3.06. Mutilated, Destroyed, Lost and Stolen Capital Securities. If
any mutilated Capital Security (including any Global Security) is surrendered
to the Trustee, the Company may execute and the Trustee shall, in the case of a
Capital Security, authenticate and deliver in exchange therefor a new Capital
Security of the same series containing identical terms and provisions and of
like amount, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Capital Security
(including any Global Security) and (ii) such security or indemnity as may be
required by them to save each of them and any agent of any of them harmless,
then, in the absence of notice to the Company or the Trustee that such Capital
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and deliver in lieu of any
such destroyed, lost or stolen Capital Security a new Capital Security of the
same series containing identical terms and provisions and of like amount, and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Capital Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Capital Security pay such Capital Security.
Upon the issuance of any new Capital Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Capital Security of any series issued pursuant to this Section
in lieu of any destroyed, lost or stolen Capital Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Capital Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Capital Securities
Indenture equally and proportionately with any and all other Capital 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 Capital Securities.
Section 3.07. Payments; Rights Preserved.
Except as otherwise provided in a supplemental indenture:
(a) The Company has no obligation to make any Payments with respect to any
series of Capital Securities except in the case of an Event of Default and
26
then to the extent (but only to the extent) provided in Section 5.02 and in the
case of a Default and then to the extent (but only to the extent) provided in
Section 5.03.
(b) Except as otherwise provided as contemplated by Section 3.01 with
respect to any series of Capital Securities, Payments or Missed Payments, if
any, on any Capital Securities which are payable, and are paid or duly provided
for, on any Payment Date shall be paid, in the case of registered Capital
Securities, to the Person in whose name that Capital Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such Payments or, in the case of Global Securities held by any
Holder, to the Holder including through a Paying Agent of the Company
designated pursuant to Section 3.01 outside the United Kingdom for collection
by the Holder. Any payment of Missed Payments on a registered Capital Security
which is not made on a Payment Date or at Maturity shall be made to the person
who is the Holder on the record date established by the Company for such
purpose.
In the case of registered Capital Securities where payment is to be made
in Dollars, payment at any Paying Agent's office outside The City of New York
will be made in Dollars by check drawn on, or, at the request of the Holder, by
transfer to a Dollar account maintained by the payee with, a bank in The City
of New York.
In the case of registered Capital Securities where payment is to be made
in a Foreign Currency, payment will be made as established pursuant to Section
3.01.
(c) Subject to the foregoing provisions of this Section 3.07, each Capital
Security delivered under this Capital Securities Indenture upon registration of
transfer of or in exchange for or in lieu of any other Capital Security shall
carry the rights to accrued and unpaid Payments and Missed Payments, if any,
and to accrue Payments, which were carried by such other Capital Security.
(d) "Missed Payments" means any Payments in respect of the Capital
Securities of a series not paid on any applicable Payment Date, together with
any other Payments in respect of the Capital Securities of such series not paid
on any other Payment Date, so long as the same remain unpaid. Missed Payments
shall accumulate until paid. Missed Payments shall not accrue interest.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a
registered Capital Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Capital Security is registered as the owner of such Capital
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 3.05 and Section 3.07) any Payment and Missed
Payments, if any, on such
27
Capital Security and for all other purposes whatsoever, whether or not such
Capital Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.
Section 3.09. Cancellation. All Capital Securities surrendered for
payment, redemption, registration of transfer or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee
for cancellation any Capital Securities previously authenticated and delivered
hereunder, and all Capital Securities so delivered shall be promptly cancelled
by the Trustee. No Capital Securities shall be authenticated in lieu of or in
exchange for any Capital Securities cancelled as provided in this Section,
except as expressly permitted by the provisions of the Capital Securities of
any series or pursuant to the provisions of this Capital Securities Indenture.
The Trustee shall deliver to the Company all cancelled Capital Securities held
by the Trustee.
Section 3.10. Computation of Payments. Except as otherwise specified
pursuant to Section 3.01 for Capital Securities of any series, Payments on the
Capital Securities of each series shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 3.11. CUSIP Numbers. The Company in issuing Capital Securities may
use "CUSIP", "ISIN" and/or "Common Code" numbers (if then generally in use) or
any successor to such numbers, and, if so, the Trustee shall use "CUSIP",
"ISIN" and/or "Common Code" or successor numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Capital Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Capital Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP", "ISIN" and/or "Common Code" or successor
numbers.
ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Capital Securities Indenture.
This Capital Securities Indenture shall upon Company Request cease to be of
further effect with respect to Capital Securities of any series (except as to
any surviving rights of registration of transfer or exchange of Capital
Securities of
28
such series herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Capital Securities Indenture with respect to the Capital
Securities of such series when
(a) either
(i) all Capital Securities of such series theretofore
authenticated and delivered (other than (i) Capital Securities which
have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.06 and (ii) Capital Securities for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section
10.03) have been delivered to the Trustee for cancellation; or
(ii) all such Capital Securities not theretofore delivered to
the Trustee for cancellation
(A) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company, or
(B) are to be exchanged for Dollar Preference Shares or
Exchange Securities and notice of exchange of such Capital
Securities for Dollar Preference Shares or Exchange Securities
pursuant to Article 13 shall have been given,
and the Company has deposited or caused to be deposited with the Trustee, as
trust funds in trust for the purpose, an amount in cash, or U.S. Government
Obligations (with respect to Capital Securities denominated in Dollars) or
Foreign Government Securities (with respect to Capital Securities denominated
in the same Foreign Currency) maturing, in the case of (i) above, as to
principal and any accrued Payments and Missed Payments, if any, and, in the
case of (ii) above, as to any accrued Payments and Missed Payments, if any, in
such amounts and at such times as will ensure the availability of cash
sufficient to pay and discharge all claims with respect to such Capital
Securities not theretofore delivered to the Trustee for cancellation, in the
case of (i) above, for principal (and premium, if any) and any accrued Payments
and Missed Payments, if any, and, in the case of (ii) above, as to any accrued
Payments and Missed Payments, if any, to the date of such deposit (in the case
of Capital Securities which have become due and payable) or to the Redemption
Date or the Exchange Date, as the case may be;
29
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Capital Securities of such series;
and
(c) the Company 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 Capital
Securities Indenture with respect to the Capital Securities of such series have
been complied with.
Notwithstanding any satisfaction and discharge of this Capital Securities
Indenture, the obligations of the Company to the Trustee under Section 6.07,
the obligations of the Trustee to any Authenticating Agent under Section 6.14
and, if cash, U.S. Government Obligations and/or Foreign Government Securities
shall have been deposited with the Trustee pursuant to subclause 4.01(a)(ii) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive such satisfaction and discharge.
Section 4.02. Application of Trust Money. Subject to the provisions of the
last paragraph of Section 10.03, all cash, U.S. Government Obligations and
Foreign Government Securities deposited with the Trustee pursuant to Section
4.01 shall be held in trust and such cash and the proceeds from such U.S.
Government Obligations and/or Foreign Government Securities shall be applied by
it, in accordance with the provisions of the Capital Securities of such series,
and this Capital Securities Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and accrued but unpaid Payments, if any, and Missed Payments,
if any, for the payment of which such cash, U.S. Government Obligations and/or
Foreign Government Securities have been deposited with the Trustee.
Section 4.03. Repayment to Company. The Trustee, the Calculation Agent and
any Paying Agent promptly shall pay to the Company upon Company Request any
excess money, U.S. Government Obligations and/or Foreign Government Securities
held by them at any time with respect to any series of Capital Securities.
ARTICLE 5
REMEDIES
Section 5.01. Events of Default. "Event of Default", wherever used herein
with respect to Capital Securities of a particular series, means (i) the making
of an order by a court of competent jurisdiction which is not successfully
30
appealed within 30 days of the making of such order, or valid adoption by the
shareholders of the Company of an effective resolution, for the winding-up of
the Company (other than under or in connection with a scheme of amalgamation or
reconstruction not involving bankruptcy or insolvency) or (ii) any other Event
of Default provided with respect to Capital Securities of such series pursuant
to Section 3.01.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default occurs with respect to Capital Securities of any series and is
continuing, then in every such case the Trustee or the Holder or Holders of not
less than 25% in aggregate principal amount of the Outstanding Capital
Securities of such series may declare the principal amount of, any accrued but
unpaid Payments and any Missed Payments on, the Capital Securities of that
series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by the Holder or 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
Capital Securities of any series has been made but before a judgment or decree
for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holder or Holders of a majority in aggregate
principal amount of the Outstanding Capital Securities of such series, by
written notice to the Company and the Trustee, may rescind or annul such
declaration of acceleration and its consequences (including any Event of
Default under another series of Capital Securities arising therefrom) but only
if
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(i) the principal of (and premium, if any, on) any Capital Securities
of such series which have become due otherwise than by such declaration of
acceleration and any Payments or Missed Payments, if any, thereon at the
rate or rates prescribed therefor in such Capital Securities,
(ii) to the extent that payment of such interest is lawful, interest
upon overdue Payments at the rate or rates prescribed therefor in such
Capital Securities, and
(iii) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default with respect to Capital Securities of such
series have been remedied.
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No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.
Section 5.03. Defaults; Collection of Indebtedness and Suits for
Enforcement by Trustee.
Except as otherwise provided in a supplemental indenture, pursuant to
Section 3.01, "Default" wherever used herein with respect to Capital Securities
of a particular series, means any one of the following events (whatever the
reason for such Default and whether it shall be voluntary or involuntary or be
effected by operation of law pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) the Company fails to pay or to set aside a sum to provide for
payment of any Missed Payments on or prior to the date upon which (a) a
dividend is paid on any class of ordinary shares or other capital stock of
the Company, or (b) any other Capital Securities of the particular series
are redeemed or repurchased (other than a repurchase in connection with
the dealing in securities), and such failure continues for 30 days; or
(b) the Company fails to pay or to set aside a sum to provide for
payment of the principal amount (and premium, if any), any accrued but
unpaid Payments and any Missed Payments on the date fixed for redemption
of Capital Securities of such series and such failure continues for seven
days; or
(c) any other Default or Payment Event (as defined below) provided
with respect to Capital Securities of such series pursuant to Section
3.01;
provided that it shall not be a Default if the Company fails to make payment as
described in (a), (b) or (c) above and the Solvency Condition is not satisfied
on the thirtieth day following such failure, in the case of (a) above or on the
seventh day following such failure, in the case of (b) above and on the
relevant day following such failure, in the case of (c) above. The failure of
the Company to make a payment specified in clause (a), (b) or (c) above because
of a failure to satisfy the Solvency Condition is referred to herein as a
"Payment Event".
If a Default occurs and is continuing, the Trustee may pursue all legal
remedies available to it, including commencing a judicial proceeding for the
collection of the sums so due and unpaid or a proceeding for the winding-up in
England or Scotland (but not elsewhere) of the Company, provided that the
Trustee may not, upon the occurrence of a Default, declare the principal amount
of any of the Outstanding Capital Securities to be due and payable. If a
Payment
32
Event occurs, the Trustee may institute proceedings in England or Scotland (but
not elsewhere) for the winding-up of the Company but may not pursue any other
legal remedy including a judicial proceeding for the collection of the sums so
due and unpaid.
The Trustee and Holders of Capital Securities by their acceptance of such
Capital Securities will be deemed to have waived any right of set-off,
counterclaim or combination of accounts with respect to such Capital Securities
or this Capital Securities Indenture (or between the obligations under or in
respect of any Capital Securities and any liability owed by a Holder or the
Trustee to the Company) that they might otherwise have against the Company.
No recourse for the payment of the principal of (or premium, if any) or
Payments or Missed Payments, if any, on any Capital Security, or for any claim
based thereon and no recourse under or upon any obligation, covenant or
agreement of the Company in this Capital Securities Indenture, or in any
Capital Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, past, present or future, of the Company or of any successor
corporation of the Company, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly understood that to the extent lawful all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Capital Securities Indenture and the issue of the
Capital Securities.
Section 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition, winding-up or other judicial proceeding
relative to the Company or any other obligor upon the Capital Securities of any
series or to the property of the Company or such other obligor or their
creditors (other than under or in connection with a scheme of amalgamation or
reconstruction not involving bankruptcy or insolvency), the Trustee
(irrespective of whether the principal of the Capital Securities of such series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal (and premium, if any) or
Payments and Missed Payments, if any) 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 and other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder of a Capital Security to make such payments to
33
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to such Holders or holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due to
the Trustee under Section 6.07.
Subject to Article 8 and Section 9.02, nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder of any Capital Security any plan of reorganization,
arrangement, adjustment, or composition affecting any Capital Securities or the
rights of any Holder of any Capital Security or to authorize the Trustee to
vote in respect of the claim of any such Holder or holder in any such
proceeding.
The provisions of this Section 5.04 are subject to the provisions of
Section 12.01.
Section 5.05. Trustee May Enforce Claims Without Possession of Capital
Securities. All rights of action and claims under this Capital Securities
Indenture or the Capital Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Capital Securities or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel (subject, with regard to the Company, to
the provisions of Section 12.01) be for the ratable benefit of the Holders of
the Capital Securities in respect of which such judgment has been recovered.
Section 5.06. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article in respect of any series of Capital Securities
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
(and premium, if any) or Payments or Missed Payments, if any, upon presentation
of such Capital 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 applicable to such series
of Capital Securities in respect of which or for the benefit of which
such money has been collected due the Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and Payments or Missed Payments,
if any, on such series of Capital 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
34
payable on such Capital Securities for principal (and premium, if
any) and Payments and Missed Payments, if any, respectively; and
THIRD: To the payment of the balance, if any, to the Company.
Section 5.07. Limitation on Suits. No Holder of any Capital Security of
any series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Capital Securities Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default or Default with respect to Capital
Securities of the same series specifying such Event of Default or Default
and stating that such notice is a "Notice of Default" hereunder;
(b) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Capital Securities of such series shall have made written
request to the Trustee to institute proceedings in respect of such Event
of Default or Default in its own name, as Trustee hereunder;
(c) such Holder of a Capital Security has offered to the Trustee
reasonable indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Capital Securities of such
series;
it being understood and intended that no one or more Holders of Capital
Securities of a particular series shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this Capital Securities
Indenture to affect, disturb or prejudice the rights of any other such Holders
or holders, or to obtain or to seek to obtain priority or preference over any
other such Holders or holders or to enforce any right under this Capital
Securities Indenture, except in the manner herein provided and for the equal
and ratable benefit of all Holders of Capital Securities of such series.
Section 5.08. Unconditional Right of Holders to Receive Principal, Premium
and Payments, If Any. Notwithstanding any other provision in this Capital
Securities Indenture, the Holder of any Capital Security shall have the right,
which is absolute and unconditional, to receive payment of the principal of
35
(and premium, if any) and (subject to Section 3.07) any Payment or Missed
Payments, if any, on such Capital Security when due and payable in accordance
with the provisions of the Capital Securities Indenture and as expressed in
such Capital Security (or, in the case of redemption or exchange, on the
Redemption Date or Exchange Date, 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 or holder.
Section 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder of any Capital Security has instituted any proceeding to enforce any
right or remedy under this Capital Securities Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Capital Securities shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders of Capital Securities shall continue as though no such proceeding
had been instituted.
Section 5.10. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Capital Securities in the last paragraph of Section 3.06, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Capital Securities is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
Section 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Capital Security to exercise any right or
remedy accruing upon any Event of Default or Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or Default
or an acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders of Capital Securities may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by the Holders of Capital Securities, as the case may be.
Section 5.12. Control by Holders. The Holders of a majority in aggregate
principal amount of the Outstanding Capital Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to the Capital Securities of such series, provided
that
36
(a) such direction shall not be in conflict with any rule of law or
with this Capital Securities Indenture;
(b) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders of any Capital Securities of any
series not taking part in such direction with respect to which the Trustee
is acting as the Trustee; and
(c) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 5.13. Waiver of past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Capital Securities of
any series may on behalf of the Holders of all the Capital Securities of such
series waive any past Event of Default or Default or Payment Event hereunder
with respect to such series and its consequences, except an Event of Default or
Default
(a) in the payment of the principal of (or premium, if any) or
Payments (including Missed Payments, if any) on any Capital Security of
such series, or
(b) in respect of a covenant or provision hereof which under Article
9 cannot be modified or amended without the consent of the Holder of each
Outstanding Capital Security of such series affected.
Upon any such waiver, such Event of Default, Default or Payment Event
shall cease to exist, and any Event of Default or Default or Payment Event with
respect to any series arising therefrom shall be deemed to have been cured and
not to have occurred for every purpose of this Capital Securities Indenture,
but no such waiver shall extend to any subsequent or other Event of Default or
Default or Payment Event or impair any right consequent thereon.
Section 5.14. Undertaking for Costs. All parties to this Capital
Securities Indenture agree, and each Holder of any Capital Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Capital Securities Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant to such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder or group of
Holders holding in the aggregate more than 10% in principal amount of the
Outstanding Capital Securities of any
37
series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or Payments or Missed
Payments, if any, on any Capital Security on or after the dates upon which such
Payments or Missed Payments become due and payable pursuant to the terms hereof
or the terms expressed in such Capital Security (or, in the case of redemption
or exchange, on or after the Redemption Date or the Exchange Date, as the case
may be).
ARTICLE 6
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, no provision of this Capital Securities
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Capital
Securities Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 6.02. Notice of Defaults. Within 90 days after the occurrence of
any Event of Default, Default or Payment Event hereunder with respect to
Capital Securities of any series of which a Responsible Officer of the Trustee
has actual knowledge the Trustee shall transmit in the manner and to the extent
provided in Section 1.06 to Holders of Capital Securities of such series notice
of such Event of Default, Default or Payment Event hereunder known to the
Trustee, unless such Event of Default, Default or Payment Event shall have been
cured or waived; provided, however, that, the Trustee shall be protected in
withholding such notice if it determines in good faith that the withholding of
such notice is in the interest of the Holders of Capital Securities of such
series.
Section 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon or other evidence of
indebtedness or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or
presented by the proper party or parties;
38
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Capital Securities
Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
Certificate;
(d) the Trustee may consult with counsel of its own selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Capital Securities Indenture at the
request or direction of any of the Holders pursuant to this Capital
Securities Indenture, unless such Holders shall have offered to the
Trustee reasonable security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit at the expense of the Company and shall incur no liability by reason
of such inquiry or investigation;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent (other than an officer or employee of
the Trustee) or attorney appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Capital Securities Indenture;
39
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of
the Trustee; and
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other
Person employed by the Trustee to act hereunder.
Section 6.04. Not Responsible for Recitals or Issuance of Capital
Securities. The recitals contained herein and in the Capital Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent assumes
any responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Capital Securities Indenture or of
the Capital Securities, except that the Trustee represents and warrants that it
has duly authorized, executed and delivered this Capital Securities Indenture.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Capital Securities or the proceeds
thereof.
Section 6.05. May Hold Capital Securities. The Trustee, any Authenticating
Agent, any Paying Agent, any Capital Security Registrar and any Calculation
Agent or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Capital Securities and, subject to
Sections 6.08 and 6.13, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Capital Security Registrar, Calculation Agent or such other agent.
Section 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
Section 6.07. Compensation and Reimbursement. The Company agrees
(a) to pay to the Trustee from time to time compensation for all
services rendered by it hereunder as agreed upon in writing by the Company
from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
40
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Capital Securities Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as shall be determined by a court of
competent jurisdiction to have been caused by its own negligence or bad
faith; and
(c) to fully indemnify the Trustee for, and to hold it harmless
against, any and all loss, liability, claim, damage or expense (including
legal fees and expenses) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder
but excluding any tax liabilities of the Trustee in respect of its net
profits.
The Trustee shall notify the Company in writing of the commencement of any
action or claim in respect of which indemnification may be sought promptly
after a Responsible Officer of the Trustee becomes aware of such commencement
(provided that the failure to make such notification shall not affect the
Trustee's rights hereunder) and the Company shall be entitled to participate
in, and to the extent it shall wish, to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Trustee. The Trustee
shall not compromise or settle any such action or claim without the written
consent of the Company, which consent shall not be unreasonably withheld.
The provisions of this Section 6.07 shall survive termination of this
Capital Securities Indenture or the resignation or removal of the Trustee.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a senior claim to which the Capital
Securities are hereby made subordinate, upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of
principal of (or premium, if any) or Payments or Missed Payments, if any, on
the Capital Securities.
Section 6.08. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Capital Securities Indenture.
41
Section 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder with respect to each series which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by Federal or
State or District of Columbia authority and, if there be such corporation
willing and able to act as trustee on reasonable and customary terms, having
its corporate trust office or agency in the Borough of Manhattan, The City of
New York, New York. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article 6.
Section 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Capital
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition at
the expense of the Company any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Capital Securities of
such series.
(c) The Trustee may be removed at any time with respect to the Capital
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Capital Securities of such series delivered to the
Trustee and to the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.11 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of removal, the Trustee may
petition at the expense of the Company any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Capital Securities
of such series.
(d) If at any time:
42
(i) the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Capital Security of the series as to which
the Trustee has a conflicting interest for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Capital
Security for at least six months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge, or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, or
(iv) the Trustee shall fail to perform its obligations to the
Company under the Capital Securities Indenture in any material respect,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to any or all series of Capital Securities or (ii) subject
to Section 5.14 (and except in the case of subparagraph 6.10(d)(iv) above), any
Holder who has been a bona fide Holder of a Capital Security for at least six
months (and, in the case of Section 6.10(d)(i) above, who is a Holder of a
Capital Security of the series as to which the Trustee has a conflicting
interest) may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Capital Securities and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Capital Securities of one or more series, the Company, by a
Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Capital Securities of such series (it being understood that any
successor Trustee may be appointed with respect to the Capital Securities of
one or more or all of such series and at any time there shall be only one
Trustee with respect to the Capital Securities of any particular series), and
shall comply with the applicable requirements of Section 6.11. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Capital Securities of any
series shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Capital Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.11, become the successor Trustee with
respect to the Capital Securities of such series and to that
43
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Capital Securities of any series shall
have been so appointed by the Company or the Holders of Capital Securities of
such series and accepted appointment in the manner hereinafter required by
Section 6.11, any Holder who has been a bona fide Holder of a Capital 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 Capital Securities of
such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Capital Securities of any series and each
appointment of a successor Trustee with respect to the Capital Securities of
any series in the manner and to the extent provided in Section 1.06. Each
notice shall include the name of the successor Trustee with respect to the
Capital Securities of such series and the address of its Corporate Trust
Office.
Section 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Capital Securities, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee, all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Capital Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Capital Securities of such series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (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 Capital Securities of such series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Capital 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 Capital Securities of
such 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
44
of this Capital Securities 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 Capital Securities of such series
to which the appointment of such successor Trustee relates; but, on request of
the Company 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 Capital Securities of such
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article 6.
Section 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Capital Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Capital
Securities.
Section 6.13. Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Capital Securities of a series), the Trustee shall be subject to the provisions
of the Trust Indenture Act regarding the collection of claims against the
Company (or any such other obligor).
45
Section 6.14. Appointment of Authenticating Agent. The Trustee may at any
time appoint an Authenticating Agent or Agents with respect to one or more
series of Capital Securities which shall be authorized to act on behalf of the
Trustee to authenticate Capital Securities of such series upon original issue,
or issued upon exchange, registration of transfer or partial redemption thereof
or in lieu of destroyed, lost or stolen Capital Securities, and Capital
Securities so authenticated shall be entitled to the benefits of this Capital
Securities Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Capital Securities Indenture to the authentication and delivery of Capital
Securities by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation or national banking association organized and doing business
under the laws of the United States, any State thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State or District of Columbia
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation or national banking association into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation or national banking association succeeding
to the corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be an Authenticating Agent, provided such corporation or
national banking association shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. 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 Company. 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,
46
the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company and shall give notice to the Holders of Capital
Securities in the manner and to the extent provided in Section 1.06. 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 Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section 6.14.
If an appointment with respect to one or more series is made pursuant to
this Section, the Capital Securities of such series may have endorsed thereon,
in lieu of the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Capital Securities referred to in the within-mentioned
Capital Securities Indenture.
THE BANK OF NEW YORK
as Trustee
By: ,
---------------------------------
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses of Holders.
The Company, with respect to any series of Capital Securities in registered
form, will furnish or cause to be furnished to the Trustee
(a) not more than 15 days after each Regular Record Date (or after
each of the dates to be specified for such purpose for non-Payment bearing
Capital Securities and Capital Securities on which Payment Dates occur
less frequently than quarterly as contemplated by Section 3.01), a list,
in such form as the Trustee may reasonably require, of the names and
47
addresses of the Holders of registered Capital Securities as of such
Regular Record Date or such specified date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished.
The Company need not furnish or cause to be furnished to the Trustee
pursuant to this Section 7.01 the names and addresses of Holders of registered
Capital Securities so long as the Trustee acts as Capital Security Registrar
with respect to such series of Capital Securities.
Section 7.02. Preservation of Information; Communication to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders (i) contained in the most
recent list furnished to the Trustee as provided in Section 7.01 and (ii)
received by the Trustee in its capacity as Paying Agent or Capital Security
Registrar (if so acting). The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.
(b) The rights of the Holders of Capital Securities of any series to
communicate with other Holders with respect to their rights under this Capital
Securities Indenture or under the Capital Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
(c) Every Holder, by receiving and holding a Capital Security, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of any of them shall be held accountable by reason of the disclosure of
any such information as to the names and addresses of the Holders in accordance
with Section 7.02(b) or otherwise made pursuant to the Trust Indenture Act.
Section 7.03. Reports by Trustee.
(a) On or before May 15 in each year following the date hereof, so long as
any Capital Securities are Outstanding hereunder, the Trustee shall transmit to
Holders as provided in the Trust Indenture Act a brief report dated as of a
date required by and in compliance with the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each securities exchange upon which the
Trustee has been notified that the Capital Securities are listed, with the
Commission and with the Company. The Company will notify the Trustee when
Capital Securities are listed on any securities exchange.
48
(c) The Company will furnish the Trustee with interim and annual reports
and upon receipt thereof, the Trustee will mail such reports to all record
holders of Capital Securities. In addition, the Company will furnish the
Trustee with all notices of meetings at which holders of Capital Securities of
a particular series are entitled to vote, and all other reports and
communications that are made generally available to holders of Capital
Securities. The Trustee will, at the Company's expense, make such notices,
reports and communications available for inspection by holders of Capital
Securities in such manner as the Company may determine and, in the case of any
notice received by the Trustee in respect of any meeting at which holders of
Capital Securities of a particular series are entitled to vote, will mail to
all such record holders of Capital Securities, at the Company's expense, a
notice containing a summary of the information set forth in such notice of
meeting.
Section 7.04. Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such Sections, then it shall
file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations. Delivery of
such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officer's Certificate);
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants of this Capital
Securities Indenture as may be required from time to time by such
49
rules and regulations. Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on an
Officer's Certificate); and
(c) transmit to Holders, in the manner and to the extent required by
the Trust Indenture Act, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs 7.04(a) and 7.04(b) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission.
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
Section 8.01. Company May Consolidate, Etc., Only on Certain Terms.
The Company may, without the consent of Holders of any Capital Securities
of any series Outstanding under this Capital Securities Indenture, consolidate
or amalgamate with or merge into any other corporation or convey or transfer or
lease its properties and assets substantially as an entirety to any Person,
provided that:
(a) the corporation formed by such consolidation or amalgamation or
into which the Company is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Company
substantially as an entirety (i) shall be a company organized and existing
under the laws of the United Kingdom or any political subdivision thereof,
and (ii) shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium, if
any) and Payments and Missed Payments, if any, on all the Capital
Securities in accordance with the provisions of such Capital Securities
and this Capital Securities Indenture and the performance of every
covenant of this Capital Securities Indenture on the part of the Company
to be performed or observed; and
(b) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, amalgamation, merger, conveyance or transfer and such
50
supplemental indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have been
complied with.
Section 8.02. Successor Corporation Substituted. Upon any consolidation,
amalgamation or merger or any conveyance or transfer of the properties and
assets of the Company substantially as an entirety in accordance with Section
8.01, the successor corporation formed by such consolidation or amalgamation or
into which the Company is merged or to which such conveyance or transfer is
made shall succeed to and be substituted for, and may exercise every right and
power of, the Company under this Capital Securities Indenture with the same
effect as if such successor corporation had been named as the Company, herein,
and thereafter, the predecessor corporation shall be relieved of all
obligations and covenants under the Capital Securities Indenture and the
Capital Securities.
Section 8.03. Assumption of Obligations. With respect to the Capital
Securities of any series, a wholly-owned subsidiary of the Company (a
"successor entity") may without the consent of any Holder assume the
obligations of the Company (or any corporation which shall have previously
assumed the obligations of the Company) for the due and punctual payment of the
principal of (and premium, if any, on) and Payments and Missed Payments, if
any, on any series of Capital Securities in accordance with the provisions of
such Capital Securities and this Capital Securities Indenture and the
performance of every covenant of this Capital Security Indenture and such
series of Capital Securities on the part of the Company to be performed or
observed provided, that:
(a) the successor entity shall expressly assume such obligations by
an amendment to the Capital Securities Indenture, executed by the Company
and such successor entity, if applicable, and delivered to the Trustee, in
form satisfactory to the Trustee, and the Company shall, by amendment to
the Capital Securities Indenture, unconditionally guarantee (such
guarantee shall be given on a subordinated basis consistent with Article
12 hereof) all of the obligations of such successor entity under the
Capital Securities of such series and the Capital Securities Indenture as
so modified by such amendment (provided, however, that, for the purposes
of the Company's obligation to pay Additional Amounts, if any, payable
pursuant to Section 10.04 in respect of the Capital Securities, references
to such successor entity's country of organization will be added to
references to the United Kingdom);
(b) such successor entity shall confirm in such amendment to the
Capital Securities Indenture that such successor entity will pay all
Additional Amounts, if any, payable pursuant to Section 10.04 in respect
of all the Capital Securities (provided, however, that for these purposes
51
such successor entity's country of organization will be substituted for
the references to the United Kingdom);
(c) immediately after giving effect to such assumption of
obligations, no Event of Default, Default or Payment Event and no event
which, after notice or lapse of time or both, would become an Event of
Default, Default or Payment Event, shall have occurred and be continuing;
and
(d) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such assumption
complies with this Article and that all conditions precedent herein
provided for relating to such assumption have been complied with.
Upon any such assumption, the successor entity shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Capital Securities Indenture with respect to any such Capital Securities
with the same effect as if such successor entity had been named as the Company
in this Capital Securities Indenture, and the Company or any legal and valid
successor corporation which shall theretofore have become such in the manner
prescribed herein, shall be released from all liability as obligor upon any
such Capital Securities except as provided in clause 8.03(a) of this Section.
In the event of any such assumption, any Additional Amounts, if any,
payable pursuant to Section 10.04 will be payable in respect of taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Taxes") imposed by
the jurisdiction in which the assuming corporation is incorporated (subject to
exceptions equivalent to those that apply to any obligation to pay Additional
Amounts in respect of Taxes imposed by any Taxing Jurisdiction) rather than
Taxes imposed by any Taxing Jurisdiction; provided however, that if the Company
makes payment under the guarantee, the Company shall be required to pay
Additional Amounts related to Taxes (subject to the exceptions set forth in
Section 10.04) imposed by any Taxing Jurisdiction by reason of such payments.
Notwithstanding the foregoing, the determination of whether the Solvency
Condition has been satisfied in accordance with Section 12.01(b) shall,
notwithstanding such assumption, continue to be made with reference to the
Company, unless otherwise required by applicable law or regulation.
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ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indenture Without Consent of Holders. Without
the consent of any Holders, the Company, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Capital Securities;
(b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Capital Securities (and, if such covenants
are to be for the benefit of less than all series of Capital Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company;
(c) to add any additional Events of Default, Defaults or Payment
Events;
(d) to add to, change or eliminate any of the provisions of this
Capital Securities Indenture, or any supplemental indenture, provided that
any such change or elimination shall become effective only when there is
no Capital Security Outstanding of any series created prior to the
execution of such supplemental indenture effecting such change or
elimination which is entitled to the benefit of such provision and
adversely affected by such addition, change or elimination;
(e) to secure the Capital Securities;
(f) to establish the form or terms of Capital Securities of any
series as permitted by Sections 2.01 or 3.01;
(g) to change any Place of Payment, so long as the Place of Payment
as required by Section 3.01 is maintained;
(h) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein or in any supplemental indenture;
(i) to make any other provisions with respect to matters or questions
arising under this Capital Securities Indenture, provided such
53
action shall not adversely affect the interests of the Holders of Capital
Securities of any series in any material respect;
(j) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Capital Securities of
one or more series and to add to or change any of the provisions of this
Capital Securities Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11(b); or
(k) to change or eliminate any provision of this Capital Securities
Indenture as permitted by Section 1.07.
Section 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than 66 2/3% in aggregate principal amount of
the Outstanding Capital Securities of each series affected by such supplemental
Capital Securities Indenture (voting as a class), by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, 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 Capital Securities
Indenture or of modifying in any manner the rights of the Holders of Capital
Securities of such series under this Capital Securities Indenture; provided,
however, that no such supplemental indenture may, without the consent of the
Holder of each Outstanding Capital Security affected thereby,
(a) change the terms of any Capital Security to include a stated
maturity date of the principal amount of any such Capital Security, reduce
the principal amount of, or any premium payable upon the redemption of, or
the Payments or any Missed Payments payable on, any Capital Security, or
change the obligation of the Company (or its successor) to pay Additional
Amounts pursuant to Section 10.04 (except as contemplated by Section
8.01(a) and permitted by Section 9.01(a)) on the Capital Securities, or
the currency of payment of the principal amount of, premium, if any, or
Payments or Missed Payments on, any such Capital Security or impair the
right to institute suit for the enforcement of any such payment when due
and payable on or with respect to any Capital Security, or
(b) reduce the percentage in aggregate principal amount of the
Outstanding Capital 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 Capital Securities Indenture or of certain defaults hereunder and
their consequences) provided for in this Capital Securities Indenture, or
54
(c) modify any of the provisions of this Section 9.02 or Section 5.13
except to increase any such percentage or to provide that certain other
provisions of this Capital Securities Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Capital
Security affected thereby; provided, however, that this clause shall not
be deemed to require the consent of any Holder with respect to changes in
the references to "the Trustee" and concomitant changes in this Section,
or the deletion of this proviso, in accordance with the requirements of
Sections 6.11(b) and 9.01(j), or
(d) change in any manner adverse to the interests of the Holders of
any Capital Securities, the subordination provisions of the Capital
Securities or the terms and conditions of the obligations of the Company
in respect of the due and punctual payment of any amounts due and payable
on the Capital Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Capital Securities Indenture which has expressly been
included solely for the benefit of one or more particular series of Capital
Securities, or which modifies the rights of the Holders of Capital Securities
of such series with respect to such covenant or other provision, shall be
deemed not to affect the rights under this Capital Securities Indenture of the
Holders of Capital Securities of any other series.
Section 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Capital Securities Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Capital Securities Indenture. The Trustee may,
but shall not be obliged to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Capital
Securities Indenture or otherwise.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Capital Securities Indenture
shall be modified in accordance therewith, and such supplemental indenture
shall form a part of this Capital Securities Indenture for all purposes; and
every Holder
55
of Capital Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby, except as otherwise expressed therein.
Section 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Capital Securities to Supplemental Indentures.
Capital Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Capital Securities of any series so modified as to conform,
in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and such Capital
Securities may be authenticated and delivered by the Trustee in exchange for
Outstanding Capital Securities of such series.
ARTICLE 10
COVENANTS
Section 10.01. Payment of Principal, Premium, Payments and Missed
Payments. The Company covenants and agrees for the benefit of each series of
Capital Securities that it will duly and punctually pay the principal of (and
premium, if any) and (subject to Section 3.07) Payments and Missed Payments, if
any, on the Capital Securities of that series when due and payable in
accordance with the terms of the Capital Securities and this Capital Securities
Indenture.
Section 10.02. Maintenance of Office or Agency. The Company will maintain
in each Place of Payment for any series of Capital Securities an office or
agency where Capital Securities of that series may be presented or surrendered
for payment, where Capital Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Capital Securities of that series and this
Capital Securities Indenture may be served; provided, however, that at the
option of the Company in the case of registered Capital Securities of such
series, payment of any Payments or Missed Payments thereon may be made by check
mailed to the address of the Person entitled herein as such address shall
appear in the Capital Security Register. With respect to the Capital Securities
of any series, such office or agency in each Place of Payment shall be
specified as contemplated by Section 3.01, and if not so specified, initially
shall be the Corporate Trust Office of the Trustee. Unless otherwise specified
pursuant to Section 3.01, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency
56
where notices and demands to or upon the Company in respect of Capital
Securities of any series and this Capital Securities Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee. The Company hereby appoints the Trustee as its agent to
receive all presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside the Borough of Manhattan, The City of New York)
where the Capital Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of any obligation to maintain an office or
agency in each Place of Payment (except as otherwise indicated in this Section)
for Capital Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
Section 10.03. Money for Payments to Be Held in Trust. If the Company
shall at any time act as Paying Agent with respect to the Capital Securities of
any series, it will, on or before each due date for payment of the principal of
(and premium, if any) or Payments or Missed Payments, if any, on any of the
Capital Securities of that series, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or Payments or Missed Payments so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Capital Securities, it will, prior to each due date for payment of the
principal of (and premium, if any) or Payments or Missed Payments on any
Capital Securities of that series deposit with a Paying Agent a sum sufficient
to pay the principal (and premium, if any) or Payments or Missed Payments so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or Payments or Missed Payments, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or its failure so to act. The Company will cause each Paying
Agent for any series of Capital 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:
57
(a) hold all sums held by it for the payment of the principal of (and
premium, if any) or Payments or Missed Payments on Capital Securities of
that series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Capital Securities of that series) in the making of
any payment, when due and payable, or principal of (and premium, if any)
or Payments or Missed Payments on Capital Securities of that series; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at the time, for the purpose of obtaining the satisfaction
and discharge of this Capital Securities Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or Payments or Missed Payments on any Capital Security of any series and
remaining unclaimed for two years after such principal (and premium, if any) or
Payments or Missed Payments have become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Capital Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published at least once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be paid to
the Company.
Section 10.04. Additional Amounts. Unless otherwise specified in any Board
Resolution establishing the terms of Capital Securities of a series in
accordance with Section 3.01, all amounts of principal, and premium, if any,
and Payments, including Missed Payments, if any, on any series of Capital
Securities
58
will be paid by the Company without deduction or withholding for, or on account
of, any and all present and future income, stamp and other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings now or hereafter
imposed, levied, collected, withheld or assessed by or on behalf of the United
Kingdom or any political subdivision or authority thereof or therein having the
power to tax (the "Taxing Jurisdiction"), unless such deduction or withholding
is required by law. If deduction or withholding of any such taxes, levies,
imposts, duties, charges, fees, deductions or withholdings shall at any time be
required by the Taxing Jurisdiction, the Company will pay such additional
amounts with respect to the principal amount of, premium, if any, Payments and
Missed Payments, on any series of Capital Securities ("Additional Amounts") as
may be necessary in order that the net amounts paid to the Holders of Capital
Securities of the particular series, after such deduction or withholding, shall
equal the respective amounts of principal, premium, if any, and Payments and
Missed Payments, if any, which would have been payable in respect of such
Capital Securities had no such deduction or withholding been required;
provided, however, that the foregoing will not apply to any such tax, levy,
impost, duty, charge, fee, deduction or withholding which would not have been
payable or due but for the fact that:
(i) the Holder or the beneficial owner of the Capital Security
is a domiciliary, national or resident of, or engaging in business or
maintaining a permanent establishment or physically present in, the
Taxing Jurisdiction or otherwise has some connection with the Taxing
Jurisdiction other than the holding or ownership of a Capital
Security, or the collection of any payment of (or in respect of)
principal of, premium, if any, or any Payments or Missed Payments on
any Capital Security of the relevant series;
(ii) except in the case of a winding-up of the Company in the
United Kingdom, the relevant Capital Security is presented (where
presentation is required) for payment in the United Kingdom;
(iii) the relevant Capital Security is presented (where
presentation is required) for payment more than 30 days after the
date payment became due or was provided for, whichever is later,
except to the extent that the Holder would have been entitled to such
Additional Amount on presenting (where presentation is required) the
same for payment at the close of such 30 day period; or
(iv) the Holder or the beneficial owner of the relevant Capital
Security or the beneficial owner of any payment of (or in respect of)
principal of, or any Payments or Missed Payments on such Capital
Security failed to comply with a request of the Company or its
liquidator or other authorized person addressed to the Holder (x) to
provide information concerning the nationality, residence or identity
of the Holder
59
or such beneficial owner or (y) to make any declaration or other
similar claim to satisfy any information requirement, which in the
case of (x) or (y), is required or imposed by a statute, treaty,
regulation or administrative practice of the Taxing Jurisdiction as a
precondition to exemption from all or part of such tax, assessment or
other governmental charge;
(v) the withholding or deduction is imposed on a payment to or
for the benefit of an individual and is required to be made pursuant
to any European Union Directive on the taxation of savings
implementing the proposal for a European Union Directive presented by
the European Union Commission on July 18, 2001 or any law
implementing or complying with, or introduced in order to conform to,
such directive;
(vi) the relevant Capital Security is presented (where
presentation is required) for payment by or on behalf of a holder who
would have been able to avoid such withholding or deduction by
presenting (where presentation is required) the relevant Capital
Security to another paying agent in a Member State of the European
Union; or
(vii) any combination of subclauses (i) through (vi) above;
nor shall Additional Amounts be paid with respect to the principal of, and
payments and Missed Payments on, the Capital Securities to any holder who is a
fiduciary or partnership or settlor with respect to such fiduciary or a member
of such partnership other than the sole beneficial owner of such payment to the
extent such payment would be required by the laws of any Taxing Jurisdiction to
be included in the income for tax purposes of a beneficiary or partner or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to such Additional Amounts,
had it been the holder.
Whenever in this Capital Securities Indenture there is mentioned, in any
context, the payment of the principal of (and premium, if any) or any Payments,
or Missed Payments, if any, on, or in respect of, any Capital Security of any
series such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and as if express mention of the
payment of Additional Amounts (if applicable) were made in any provisions
hereof where such express mention is not made.
Section 10.05. Corporate Existence. Subject to Article 8, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.
60
Section 10.06. Statement as to Compliance. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year, a certificate in
compliance with Section 314(a)(4) of the Trust Indenture Act.
ARTICLE 11
REDEMPTION OF CAPITAL SECURITIES
Section 11.01. Applicability of Article. Capital Securities of any series
shall be redeemable in accordance with their terms and (except as otherwise
specified pursuant to Section 3.01 for Capital Securities of any series) in
accordance with this Article.
Section 11.02. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Capital Securities shall be evidenced by a Board
Resolution. The Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal amount
of Capital Securities of such series to be redeemed and, if applicable, the
tenor of the Capital Securities to be redeemed. In the case of any redemption
of Capital Securities of any series prior to the expiration of any provision
restricting such redemption provided in the terms of such Capital Securities or
elsewhere in this Capital Securities Indenture, the Company shall furnish the
Trustee with respect to such Capital Securities with an Officer's Certificate
evidencing compliance with or waiver of such provision.
Section 11.03. Selection by Trustee of Capital Securities to Be Redeemed.
If less than all the Capital Securities of any series are to be redeemed, the
particular Capital Securities to be redeemed shall be selected not more than 60
days nor less than 30 days prior to the Redemption Date by the Trustee, from
the Outstanding Capital Securities of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for registered Capital Securities of that
series or any multiple thereof) of the principal amount of Capital Securities
of such series of a denomination larger than the minimum authorized
denomination for Capital Securities of that series.
The Trustee shall promptly notify the Company in writing of the Capital
Securities selected for redemption and, in the case of any Capital Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Capital Securities Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Capital
Securities
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shall relate in the case of any Capital Securities redeemed or to be redeemed
only in part, to the portion of the principal amount of such registered Capital
Security which has been or is to be redeemed.
Section 11.04. Notice of Redemption. Notice of redemption shall be given
not less than 30 nor more than 60 days prior to the Redemption Date to each
Holder of Capital Securities to be redeemed in the manner and to the extent
provided in Section 1.06.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Capital Securities of any series
are to be redeemed, the principal amount of the Capital Securities to be
redeemed,
(d) that on the Redemption Date the Redemption Price will, subject to
the Solvency Condition, become due and payable upon each such Capital
Security to be redeemed and, if applicable, that Payments thereon will
cease to accrue on or after the said date,
(e) the place or places where such Capital Securities are to be
surrendered for payment of the Redemption Price, and
(f) the CUSIP, Common Code, ISIN and/or successor number or numbers,
if any, with respect to such Capital Securities.
Notice of redemption of Capital Securities to be redeemed at the selection
of the Company shall be given by the Company or, at the Company's Request, by
the Trustee in the name and at the expense of the Company.
Section 11.05. Deposit of Redemption Price. On or prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as Paying Agent, segregate and hold in trust as provided
in Section 10.03) an amount of money sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be a Payment Date) accrued but unpaid
Payments (and any Missed Payments accumulated to such Redemption Date) on, all
the Capital Securities which are to be redeemed on that date.
Section 11.06. Capital Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Capital Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the
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Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and Payments and
Missed Payments, if any) such Capital Securities shall cease to accrue Payments
for the period following the Redemption Date. Upon surrender of any such
Capital Security for redemption in accordance with said notice, such Capital
Security shall be paid by the Company at the Redemption Price, together with
accrued but unpaid Payments to the Redemption Date and Missed Payments, if any,
accumulated to the Redemption Date; provided, however, that with respect to any
Capital Securities in registered form, unless otherwise specified as
contemplated by Section 3.01, a Payment which is payable on a Payment Date
which is the Redemption Date, shall be payable to the Holders of such Capital
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Dates according to the terms
of the Capital Securities and the provisions of Section 3.07. The obligation of
the Company to redeem Capital Securities of a series on a Redemption Date shall
be subject to the Solvency Condition.
If any Capital Security called for redemption shall not be so paid upon
surrender thereof for redemption, the Capital Security shall, until paid,
continue to accrue Payments from and after the Redemption Date in accordance
with its terms and the provisions of Section 3.07.
Section 11.07. Capital Securities Redeemed in Part. Any Capital Security
which is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (with, only in the case of Capital Securities in registered form, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and deliver
to the Holder of such Capital Security without service charge, a new Capital
Security or Capital Securities of the same series of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Capital
Security so surrendered.
Section 11.08. Optional Redemption Due to Changes in Tax Treatment.
Unless otherwise provided as contemplated by Section 3.01 with respect to any
series of Capital Securities and subject to satisfaction of the Solvency
Condition, the Capital Securities are redeemable, as a whole but not in part,
at the option of the Company, on not less than 30 nor more than 60 days'
notice, on any Payment Date, at a redemption price equal to 100% of the
principal amount, together with accrued but unpaid Payments and all Missed
Payments, if any, in respect of such series of Capital Securities to the date
fixed for redemption, if, at any time, the Company shall determine that, as a
result of a change in or amendment to the laws or regulations of the Taxing
Jurisdiction (including any treaty to which such Taxing Jurisdiction is a
party), or any change in the official application or
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interpretation of such laws or regulations (including a decision of any court
or tribunal) which change or amendment becomes effective on or after a date
included in the terms of such series of Capital Securities pursuant to Section
3.01:
(a) in making payment under the Capital Securities in respect of
principal or premium, if any, or Payments (including Missed Payments) it
has or will or would on the next Payment Date become obligated to pay
Additional Amounts;
(b) Payments (including Missed Payments) on the next Payment Date in
respect of any of the Capital Securities would be treated as
"distributions" within the meaning of Section 209 of the Income and
Corporation Taxes ▇▇▇ ▇▇▇▇ of the United Kingdom (or any statutory
modification or re-enactment thereof for the time being); or
(c) on the next Payment Date the Company would not be entitled to
claim a deduction in respect of such Payments in computing its United
Kingdom taxation liabilities (or the value of such deduction to the
Company would be materially reduced).
In any case where the Company shall determine that as a result of any
change in the official application or interpretation of any laws or regulations
it is entitled to redeem the Capital Securities of any series the Company shall
be required to deliver to the Trustee prior to the giving of any notice of
redemption a written legal opinion of independent United Kingdom counsel of
recognized standing (selected by the Company) in a form satisfactory to the
Trustee confirming that the relevant change in the official application or
interpretation of such laws or regulations has occurred and that the Company is
entitled to exercise its right of redemption.
ARTICLE 12
SUBORDINATION OF CAPITAL SECURITIES
Section 12.01. Capital Securities Subordinate to Senior Claims.
(a) Unless otherwise provided as contemplated by section 3.01 with respect
to any series of Capital Securities, the Company covenants and agrees, and each
Holder of Capital Securities of each series, by his acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article 12, the Capital Securities of such series
and the payment of the principal of, premium, if any, and Payments, and Missed
Payments, if any, on each and all of the Capital Securities of such series are
hereby expressly made in the event of a winding-up of the Company subordinate
and subject in right of
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payment to the prior payment in full of all Senior Claims and, except in a
winding-up, conditional upon the Solvency Condition being satisfied at the time
of payment by the Company, and no principal, premium, if any, Payments or
Missed Payments, if any, in respect of the Capital Securities of such series
which under the terms of such series or the provisions of this Capital
Securities Indenture would otherwise be due for payment when the Solvency
Condition is not satisfied shall be due and payable (without prejudice to the
provision of Section 5.03 with respect to a Payment Event), and instead such
principal, premium, if any, Payments or Missed Payments, if any, will become
due and payable only if and when and to the extent that the Company could make
such payment in whole or in part and still satisfy the Solvency Condition
immediately thereafter. In a winding-up, the amount payable in respect of the
Capital Securities is determined in accordance with the provisions of Section
12.01(c).
(b) No payment of principal, premium, if any, Payments or Missed Payments,
if any, in respect of the Capital Securities of any series and no purchase of
any Capital Securities of any series beneficially by or for the account of the
Company or any of its Subsidiaries (other than a purchase in connection with
dealing in securities) shall be made unless a director of the Company or (in
the case of the optional redemption by the Company of all or some of the
Capital Securities of the series or a purchase of any Capital Securities of the
series as aforesaid or if a director of the Company has not reported as
mentioned below) the Auditors shall have reported to the Trustee within 14 days
before such payment or within 6 months before such purchase that in their
opinion or, as the case may be, his opinion, the Solvency Condition would be
satisfied both at the time of and immediately after such payment or purchase.
Any such report shall, in the absence of manifest error, be treated and
accepted by the Company, the Trustee and the Holders as correct and sufficient
evidence of such satisfaction of the Solvency Condition.
(c) If at any time an order is made or a shareholders' resolution is
passed for the winding-up of the Company, there shall be payable with respect
to the Capital Securities of any series, such amounts, if any, as would have
been payable in respect thereof as if, on the day immediately prior to the
commencement of the winding-up and thereafter, the Holders of the Capital
Securities were the holders of preference shares in the capital of the Company
having a preferential right to a return of assets in a winding-up over the
holders of all other issued shares (including all classes of preference shares
of the Company) for the time being in the share capital of the Company, on the
assumption that such preference shares were entitled (to the exclusion of all
other rights or privileges) to receive as a return of capital in such
winding-up an amount equal to the principal amount of the Capital Securities of
such series then Outstanding together with any premium, all Payments accrued to
the date of repayment at the rate provided for in the Capital Securities of
that series and any Missed Payments and subject in right of payment to the
prior payment in full to all Senior Claims of the Company.
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(d) The provisions of this Section shall apply only to the payment of
principal, premium, if any, Payments and Missed Payments, if any, in respect of
the Capital Securities of any series and nothing herein shall affect or
prejudice the payment of the costs, charges, expenses, liabilities or
remuneration of the Trustee or the rights and remedies of the Trustee in
respect thereof.
(e) The provisions of this Section shall not be applicable to any amounts
of principal, premium, if any, or Payments or Missed Payments, if any, in
respect of the Capital Securities of any series for the payment of which funds
have been deposited in trust with the Trustee or any Paying Agent or have been
set aside by the Company in trust in accordance with the provisions of this
Capital Securities Indenture; provided, however, that at the time of such
deposit or setting aside, and immediately thereafter, the foregoing provisions
of this Section are complied with.
Section 12.02. Provisions Solely to Define Relative Rights. The provisions
of this Article 12 are and are intended solely for the purpose of defining the
relative rights of the Holders of the Capital Securities of each series on the
one hand and the Senior Creditors on the other hand. Nothing contained in this
Article or elsewhere in this Capital Securities Indenture or in such Capital
Securities is intended to or shall (a) impair, as among the Company and the
Holders of the Capital Securities, the obligation of the Company, which is
absolute and unconditional, to pay to the holders of such claims the principal
of, premium, if any, and Payments, or Missed Payments, if any, on such Capital
Securities as and when the same shall become due and payable in accordance with
their terms and this Capital Securities Indenture; or (b) affect the relative
rights against the Company of the Holders of such Capital Securities; or (c)
prevent the Trustee or the Holder of any Capital Securities of the series from
exercising all remedies otherwise permitted by applicable law upon default
under this Capital Securities Indenture, subject to the rights, if any, under
this Article of the Senior Creditors to receive cash, property or securities
otherwise payable or deliverable to the Trustee or such holder.
Section 12.03. Trustee to Effectuate Subordination. Each Holder of a
Capital Security by his acceptance thereof authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination of the Capital Securities provided in this Article
12 and appoints the Trustee his attorney-in-fact for any and all such purposes.
Section 12.04. No Waiver of Subordination Provisions. No right of any
present or future Senior Creditors to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such Senior Creditor or by any noncompliance by the Company with the
terms,
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provisions and covenants of this Capital Securities Indenture, regardless of
any knowledge thereof any such Senior Creditor may have or be otherwise charged
with.
Section 12.05. Notice to Trustee. Upon the occurrence of any Event of
Default, Default or Payment Event, the Company shall give prompt written notice
to the Trustee of any fact known to the Company which would prohibit the making
of any payment when due to or by the Trustee in respect of the Capital
Securities of a series. Notwithstanding the provisions of this Article or any
other provisions of this Capital Securities Indenture but subject to the
provisions of Section 12.01, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment when
due to or by the Trustee in respect of such Capital Securities unless and until
the Trustee shall have received written notice thereof from the Company or a
Senior Creditor or from any trustee therefor; and, prior to the receipt of any
such written notice by a Responsible Officer of the Trustee, the Trustee,
subject to the provisions of Section 6.01, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section at least three
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of and any premium and Payments, or Missed Payments, if any, on
any Capital Security), then, subject to the provisions of Section 12.01, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within three
Business Days prior to such date.
Subject to the provisions of Section 6.01, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a Senior Creditor or a trustee therefor, to establish that such
notice has been given by a Senior Creditor, or a trustee therefor. In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any Person as a Senior Creditor to participate in
any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of claims held by such Person, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 12.06. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 6.01, and the
Holders of the Capital Securities of the series shall be entitled to rely upon
(i) any order or decree entered by any court in England or Scotland (but not
elsewhere) in which such winding-up of the Company or similar case or
proceeding, including a
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proceeding for the suspension of payments under English or Scottish law, is
pending, or (ii) a certificate of the liquidator of the Company (the
"Liquidator"), assignee for the benefit of creditors, agent or other person
making such payment or distribution, delivered to the Trustee or the Holders of
such Capital Securities for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the Senior Creditors and other
claims against the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 12.
Section 12.07. Trustee Not Fiduciary for Senior Creditors. The Trustee
shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Capital Securities of the series or to the Company
or to any other Person cash, property or securities to which any Senior
Creditors shall be entitled by virtue of this Article or otherwise.
Section 12.08. Rights of Trustee as Senior Creditor; Preservation of
Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any claims of Senior
Creditors which may at any time be held by it, to the same extent as any other
Senior Creditor, and nothing in this Capital Securities Indenture shall deprive
the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07.
Section 12.09. Article Applicable to Paying Agents. At all times when a
Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 12.08 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
Section 12.10. Exchanges Not Deemed Payment. For the purposes of this
Article 12 only, delivery of Dollar Preference Shares or Exchange Securities
upon exchange of Capital Securities in accordance with Article 13, if
applicable to a particular series of Capital Securities, shall not be deemed to
constitute a payment or distribution on account of the principal of Capital
Securities or on account of the purchase or other acquisition of Capital
Securities. Nothing contained in this Article or elsewhere in this Capital
Securities Indenture or in the Capital Securities is intended to or shall
impair, as among the Company, its creditors and the Holders of the Capital
Securities, the right, which if applicable to
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a particular series of Capital Securities is absolute and unconditional, of the
Company to exchange the Capital Securities in accordance with Article 13.
ARTICLE 13
EXCHANGE OF CAPITAL SECURITIES
Section 13.01. Applicability of Article. If specified pursuant to Section
3.01 for Capital Securities of any series, the Capital Securities of any series
shall be convertible (conversion being referred to herein as "exchange") on any
Payment Date as a whole or in part, at the option of the Company, on the basis
of the principal amount of each Capital Security, into an equivalent amount in
liquidation preference of the series of Dollar Preference Shares or the
principal amount of the series of Exchange Securities specified pursuant to
Section 3.01 and (except as otherwise specified as contemplated by Section 3.01
for Capital Securities of any series) in accordance with this Article 13.
Section 13.02. Election to Exchange; Notice to Trustee. An election of the
Company to exchange Capital Securities shall be evidenced by an Officer's
Certificate furnished to the Trustee stating that the Company is entitled to
effect such exchange and setting forth a statement of facts demonstrating the
same.
Section 13.03. Notice of Exchange. Not less than 45 days nor more than 60
days prior to any date fixed for exchange of Capital Securities of a series
(the "Exchange Date"), the Company shall notify the Trustee in writing of its
election to exchange the Capital Securities of such series. The Trustee shall
within 15 days after receipt of notice from the Company, but in no event less
than 30 days nor more than 60 days prior to the Exchange Date, cause notice of
such election to be (i) mailed to the Holder (if the address of such Holder is
known to the Trustee) if the affected Capital Securities are in global form, or
(ii) mailed to each Holder of registered Capital Securities of such series to
be exchanged in accordance with Section 1.06.
All notices of exchange shall state:
(a) the Exchange Date;
(b) that on the Exchange Date, the Capital Securities to be exchanged
will cease to exist for any purpose on or after such Exchange Date;
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(c) if less than all the Outstanding Capital Securities of any series
are to be exchanged, the identification of the particular Capital
Securities to be exchanged, which Capital Securities shall be selected by
the Trustee, from the Outstanding Capital Securities of such series not
previously called for exchange, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for exchange
of portions (equal to the minimum authorized denomination for Capital
Securities of that series or any multiple thereof) of the principal amount
of Capital Securities of such series of a denomination larger than the
minimum authorized denomination for Capital Securities of that series; and
(d) the place or places where such Capital Securities are to be
surrendered for exchange; and
(e) the form in which the Company will issue the Dollar Preference
Shares (if not as a single share warrant to bearer delivered to the ADR
Depositary) or Exchange Securities.
Notice of any exchange of Capital Securities at the election of the
Company shall be given by the Company or, pursuant to a Company Request by the
Trustee, in the name of and at the expense of the Company.
Section 13.04. Deposit of Payments. Prior to any Exchange Date, the
Company shall deposit with the Trustee an amount of money sufficient to pay
accrued Payments to the Exchange Date plus Missed Payments, if any, accumulated
to the Exchange Date on all Capital Securities of such series.
Section 13.05. Surrender of Capital Securities. Any Capital Security which
is to be exchanged shall be surrendered at an office or agency of the Company
designated for that purpose pursuant to Section 10.02 not less than 10 days
prior to the Exchange Date (with, only in the case of registered Capital
Securities and if the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing) accompanied by written notice specifying the Persons (i) in the case
of Dollar Preference Shares, to whom ADRs should be issued by the ADR
Depositary or, if the Company has notified the Trustee in accordance with
Section 13.03 that it will issue Dollar Preference Shares in definitive form,
any direction the Holder may wish to make as referred to in Section 13.06 or
(ii) in the case of Exchange Securities, to whom such Exchange Securities are
to be issued. The Trustee will inform the Company of all such notices and the
Company will, if applicable, direct the ADR Depositary accordingly under the
terms of the ADR Deposit Agreement. Capital Securities surrendered for exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee for delivery by it to
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the Company or, if delivered to the Trustee, shall be delivered by it to the
Company.
Section 13.06. Issuance of Dollar Preference Shares or Exchange
Securities. On the Exchange Date with respect to Global Securities of a series,
and on or prior to the Exchange Date with respect to definitive Capital
Securities of a series, in each case surrendered for exchange as provided in
Section 13.05, the Company shall (i) in the case of Dollar Preference Shares,
unless the Company shall have notified the Trustee otherwise in accordance with
Section 13.03, deliver or procure the delivery of a single share warrant to
bearer to the ADR Depositary representing all of the Dollar Preference Shares
in respect of which such Capital Securities are to be exchanged in accordance
with the provisions of this Article 13 or (ii) in the case of Exchange
Securities, deliver or procure the delivery of the Exchange Securities to the
Trustee or to such other Person as may be specified pursuant to Section 3.01.
In the event that the Company shall have notified the Trustee in
accordance with Section 13.03 that it will not deliver a single share warrant
to bearer in exchange for the Capital Securities of a series surrendered for
exchange as provided in Section 13.05, the Company shall, on or prior to the
Exchange Date, with respect to definitive Capital Securities, deliver or
procure the delivery of individual certificates representing the Dollar
Preference Shares (or the rights to receive such Dollar Preference Shares) of
such series for which such Capital Securities are to be exchanged in accordance
with the provisions of this Article 13, in the case of Dollar Preference Shares
in registered form, to and registered in the names of the Holders of such
Capital Securities in definitive form as they appear on the Capital Security
Register or, at the direction of such Holder, in the name of the ADR Custodian
for the account and benefit of the ADR Depositary who will issue ADRs
evidencing ADSs representing the Dollar Preference Shares to such Holder and,
in the case of Dollar Preference Shares in bearer form, to the bearer of the
bearer Capital Security in definitive form or, at the direction of such bearer,
to the ADR Custodian for the account and benefit of the ADR Depositary who will
issue ADRs evidencing ADSs representing Dollar Preference Shares to such
Holder.
Any exchange pursuant to this Section 13.06 shall be deemed to have been
made immediately prior to the close of business in New York on the Exchange
Date.
Section 13.07. Effect of Exchange. Notice of exchange having been given as
aforesaid, the Capital Securities so to be exchanged shall on the Exchange Date
cease to exist for any purpose. Upon surrender of any such Capital Security for
exchange in accordance with the said notice and this Article 13, accrued
Payments on such Capital Security to the Exchange Date plus Missed Payments, if
any, accumulated to the Exchange Date shall be paid by the
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Company to the Holder surrendering such Capital Security. Such payment shall be
a condition to the exchange and no exchange shall occur unless such payments
are made.
On and after the Exchange Date for Capital Securities of a particular
series, each Capital Security of the series to be exchanged, until surrendered
shall be deemed to evidence rights to receive Dollar Preference Shares or
Exchange Securities of the relevant series with a liquidation preference
equivalent to the principal amount of such Capital Security. Until a Holder has
surrendered such Capital Security upon such exchange, such Holder shall be
entitled to receive dividends, payments or other distributions in respect of
such Dollar Preference Shares or Exchange Securities and shall have the same
rights with respect to, and shall be deemed to be the Holder of, such Dollar
Preference Shares or Exchange Securities into which such Capital Security was
exchanged as if it had so surrendered such Capital Security.
Section 13.08. Validity of Dollar Preference Shares or Exchange
Securities. The Company will take all corporate and other action which may be
necessary in order that it may validly and legally issue Dollar Preference
Shares or Exchange Securities upon each exchange of the Outstanding Capital
Securities. The Company covenants that the Dollar Preference Shares or Exchange
Securities will when issued upon such exchange be duly authorized and validly
issued, fully paid and not subject to calls for further funds.
Section 13.09. Legal and Regulatory Compliance. Notwithstanding any
provision of this Capital Securities Indenture to the contrary, the right of
the Company to cause any exchange of Capital Securities of a series for Dollar
Preference Shares or Exchange Securities on any proposed Exchange Date shall be
subject to the fulfillment of the following conditions with respect to such
Capital Securities:
(a) as of such Exchange Date, there are no accrued but unpaid
Payments and there are no Missed Payments (including amounts paid on the
Exchange Date);
(b) as of such Exchange Date, no Default or Event of Default or
Payment Event shall have occurred and be continuing with respect to the
particular series of Capital Securities;
(c) as of such Exchange Date, there has not been, in any one instance
or in the aggregate, an adverse effect on the rights, powers, privileges,
validity or enforceability of the Dollar Preference Shares or Exchange
Securities;
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(d) the Dollar Preference Shares to be issued on such Exchange Date
shall be duly authorized and reserved for issuance upon such exchange and,
when issued upon such exchange, will be fully paid and not subject to
calls for further funds;
(e) no consents, authorizations, approvals or exemptions, except in
each case such as shall have been obtained, will be required prior to such
Exchange Date for the issuance and delivery of the Dollar Preference
Shares or Exchange Securities to be issued upon such exchange;
(f) the issuance and delivery of the Dollar Preference Shares or
Exchange Securities to be issued on such Exchange Date shall not violate
(x) the Articles of Association of the Company or (y) any law, rule or
regulation applicable to the Company; and
(g) there shall not have occurred any change in law in Scotland or in
the jurisdiction of the governing law of any Exchange Securities, or any
amendment of the Articles of Association of the Company, prior to such
Exchange Date, materially and adversely affecting the rights and
privileges attached to the Dollar Preference Shares or Exchange Securities
(including, without limitation, the rights of the holders thereof in the
event of a bankruptcy or other similar proceeding with respect to the
Company) or such holders' access to the courts of the United Kingdom and
other applicable governmental authorities to enforce such rights.
Section 13.10. Taxes and Charges. The issuance or delivery of Dollar
Preference Shares or Exchange Securities upon exchange of Capital Securities
pursuant to this Article 13 shall be made without charge to the exchanging
Holder of Capital Securities for such Dollar Preference Shares or Exchange
Securities or for any tax or other governmental charge (other than income or
capital gains taxes) in respect of the issuance or delivery of such Dollar
Preference Shares or Exchange Securities; provided, however, that the Company
shall not be required to pay any tax or other governmental charge which may be
payable in respect of (i) issuance or delivery of Dollar Preference Shares or
Exchange Securities to any Person who is or is a nominee or agent for a Person
whose business is or includes the provision of clearance services within the
meaning of Section 96 or Section 70 of the Finance ▇▇▇ ▇▇▇▇ or whose business
is or includes issuing depositary receipts within the meaning of Section 93 or
Section 67 of the Finance ▇▇▇ ▇▇▇▇, other than the ADR Depositary or ADR
Custodian, all such Persons (other than the ADR Depositary and the ADR
Custodian) being "Excepted Persons" or (ii) a transfer involved in the issuance
and delivery of any such Dollar Preference Share or Exchange Securities to any
Person other than any Holder (not being an Excepted Person) of the Capital
Security to be exchanged, or in the case of Global Securities, the ADR
Depositary or the ADR Custodian, and the Company shall not be required to issue
or deliver or procure the delivery of such Dollar
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Preference Shares or Exchange Securities unless and until the Person requesting
the issuance or delivery thereof shall have paid to the Company the amount of
such tax or other governmental charge or shall have established to the
satisfaction of the Company that such tax or other governmental charge has been
paid.
Section 13.11. Trustee Not Liable. The Trustee shall not be accountable
with respect to the validity or value (or the kind or amount) of any Dollar
Preference Shares or Exchange Securities which may be issued or delivered upon
the exchange of any Capital Security pursuant to this Article 13, and makes no
representation with respect thereto. The Trustee shall not be responsible for
any failure of the Company to issue, transfer or deliver or procure the
delivery of any Dollar Preference Shares or Exchange Securities upon the
surrender of any Capital Security for the purpose of exchange pursuant to this
Article 13 or to comply with any of the covenants of the Company or conditions
contained in this Article 13.
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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.
IN WITNESS WHEREOF, the Company and the Trustee have caused this Capital
Securities Indenture to be duly executed, all as of the day and year first
above written.
THE ROYAL BANK OF SCOTLAND
GROUP plc
By:
---------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------
Name:
Title:
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