Banco Santander, S.A 6-K, filed Aug 8, 2023
Banco Santander, S.A. (SAN)
About this 6-K
Banco Santander, S.A filed this 6-K on August 8, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2023
Commission File Number: 001-12518
BANCO SANTANDER, S.A.
Ciudad Grupo Santander
28660 Boadilla del Monte
Madrid
Spain
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
EXPLANATORY NOTE
In connection with the issuance by Banco Santander, S.A. of $1,500,000,000 aggregate principal amount of 5.588% Senior Preferred Fixed Rate Notes due 2028 and of $2,000,000,000 aggregate principal amount of 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033, Banco Santander, S.A. is filing the following documents solely for incorporation into the Registration Statement on Form F-3 (File No. 333-271955):
Exhibit List
| Exhibit |
Description | |
| 1.1 | Underwriting Agreement dated as of July 31, 2023 | |
| 4.1 | Senior Preferred Debt Securities Indenture, dated as of August 8, 2023, among Banco Santander, S.A., as Issuer, and The Bank of New York Mellon, London Branch, as Trustee | |
| 4.2 | Subordinated Debt Securities Indenture, dated as of August 8, 2023, among Banco Santander, S.A., as Issuer, and The Bank of New York Mellon, London Branch, as Trustee | |
| 4.3 | First Supplemental Indenture, dated as of August 8, 2023, to the Senior Preferred Debt Securities Indenture, dated as of August 8, 2023, among Banco Santander, S.A., as Issuer, The Bank of New York Mellon, London Branch, as Trustee and Principal Paying Agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Registrar | |
| 4.4 | First Supplemental Indenture, dated as of August 8, 2023, to the Subordinated Debt Securities Indenture, dated as of August 8, 2023, among Banco Santander, S.A., as Issuer, The Bank of New York Mellon, London Branch, as Trustee and Principal Paying Agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Registrar | |
| 4.5 | Form of Global Note for the 5.588% Senior Preferred Fixed Rate Notes due 2028 (included in Exhibit A of the First Supplemental Indenture to the Senior Preferred Debt Securities Indenture (Exhibit 4.3 to this filing)) | |
| 4.6 | Form of Global Note for the 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033 (included in Exhibit A of the First Supplemental Indenture to the Subordinated Debt Securities Indenture (Exhibit 4.4 to this filing)) | |
| 5.1 | Opinion of Uría Menéndez | |
| 5.2 | Opinion of Davis Polk & Wardwell LLP | |
| 23.1 | Consent of Uría Menéndez (included in Exhibit 5.1 to this filing) | |
| 23.2 | Consent of Davis Polk & Wardwell LLP (included in Exhibit 5.2 to this filing) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BANCO SANTANDER, S.A. | ||||||
| Date: August 8, 2023 | By: | /s/ José Antonio Soler | ||||
| Name: José Antonio Soler | ||||||
| Title: Authorized Representative | ||||||
Exhibit 1.1
EXECUTION VERSION
BANCO SANTANDER, S.A.
(a company with limited liability organized under
the laws of The Kingdom of Spain)
U.S.$1,500,000,000 5.588% Senior Preferred Fixed Rate Notes due 2028
U.S.$2,000,000,000 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033
UNDERWRITING AGREEMENT
July 31, 2023
BofA Securities, Inc.
One Bryant Park
New York, NY 10036
Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
Goldman Sachs Bank Europe SE
Marienturm, Taunusanlage 9-10, 60329
Frankfurt am Main
Germany
HSBC Securities (USA) Inc.
452 Fifth Avenue
New York, NY 10018
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Jefferies LLC
520 Madison Avenue
New York, NY 10022
Morgan Stanley & Co. LLC
1585 Broadway, 29th Floor
New York, NY 10036
RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th Floor
New York, NY 10281
Santander US Capital Markets LLC
437 Madison Avenue
New York, NY 10022
TD Securities (USA) LLC
1 Vanderbilt Avenue, 11th Floor
New York, NY 10017
Wells Fargo Securities, LLC
550 S Tyron Street, 5th Floor
Charlotte, NC 28202
As Representatives of the Several Underwriters
named on Schedule I hereto
Ladies and Gentlemen:
Banco Santander, S.A., a sociedad anónima incorporated under the laws of The Kingdom of Spain (the “Bank”), proposes to:
| (i) | issue and sell to the several underwriters named in Schedule I hereto (the “Underwriters”), acting severally and not jointly, the respective amounts set forth in Schedule I hereto of the senior preferred securities specified in Exhibit D hereto (the “Senior Preferred Securities”) to be issued pursuant to the resolutions of the Bank’s Executive Committee approving the issuance of the Senior Preferred Securities and the indenture to be dated on or about August 8, 2023 (the “Senior Preferred Base Indenture”) between the Bank and The Bank of New York Mellon, London Branch, as trustee (the “Trustee”) as supplemented, with respect to the Senior Preferred Securities, by a supplemental indenture to be dated on or about August 8, 2023, which together with the Senior Preferred Base Indenture sets out the terms and rights of this particular issue of Senior Preferred Securities (the “Senior Preferred First Supplemental Indenture” and the Senior Preferred Base Indenture as supplemented, with respect to the Senior Preferred Securities, by the Senior Preferred First Supplemental Indenture, and as further supplemented from time to time, the “Senior Preferred Indenture”); and |
| (ii) | issue and sell to the Underwriters, acting severally and not jointly, the respective amounts set forth in Schedule I hereto of the tier 2 subordinated securities specified in Exhibit D hereto (the “Tier 2 Subordinated Securities” and together with the Senior Preferred Securities, the “Securities”) to be issued pursuant to the resolutions of the Bank’s Executive Committee approving the issuance of the Tier 2 Subordinated Securities and the indenture to be dated on or about August 8, 2023 (the “Tier 2 Subordinated Base Indenture”) between the Bank and the Trustee as supplemented, with respect to the Tier 2 Subordinated Securities, by a supplemental indenture to be dated on or about August 8, 2023, which together with the Tier 2 Subordinated Base Indenture sets out the terms and rights of this particular issue of Tier 2 Subordinated Securities (the “Tier 2 Subordinated First Supplemental Indenture” and the Tier 2 Subordinated Base Indenture as supplemented, with respect to the Tier 2 Subordinated Securities, by the Tier 2 Subordinated First Supplemental Indenture, and as further supplemented from time to time, the “Tier 2 Subordinated Indenture” and together with the Senior Preferred Indenture, the ”Indentures” and each of the Senior Preferred Indenture and the Tier 2 Subordinated Indenture, an “Indenture”). |
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BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs Bank Europe SE, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Jefferies LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Santander US Capital Markets LLC, TD Securities (USA) LLC and Wells Fargo Securities, LLC have agreed to act as representatives of the several Underwriters (in such capacity, the “Representatives”) in connection with the offering and sale of the Securities.
The Bank has filed with the Securities and Exchange Commission (the “Commission”) a registration statement, including a prospectus (file number 333-271955), on Form F-3 relating to securities (the “Shelf Securities”), including the Securities, to be issued from time to time by the Bank. The registration statement as amended to the date of this agreement (the “Agreement”), including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A or Rule 430B under the Securities Act of 1933, as amended (the “Securities Act”), is hereinafter referred to as the “Registration Statement,” and the related prospectus covering the Shelf Securities dated May 16, 2023, in the form first used to confirm sales of the Securities (or in the form first made available to the Underwriters by the Bank to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Base Prospectus.” The Base Prospectus, as supplemented by the prospectus supplement specifically relating to the Senior Preferred Securities and the prospectus supplement specifically relating to the Tier 2 Subordinated Securities, each in the form first used to confirm sales of the applicable Securities (or in the form first made available to the Underwriters by the Bank to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “Prospectus,” and the term “preliminary prospectus” means any preliminary form of the Prospectus. For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act, “Time of Sale Prospectus” means the Base Prospectus as supplemented by the preliminary prospectuses, together with the free writing prospectuses, if any, each identified in Exhibit E hereto, and intended for general distribution to prospective investors, and “road show” means any road show as defined in Rule 433(h) under the Securities Act. As used herein, the terms “Registration Statement,” “Base Prospectus,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents, if any, incorporated by reference therein. The terms “supplement,” “amendment,” and “amend” as used herein with respect to the Registration Statement, the Base Prospectus, the Time of Sale Prospectus, any preliminary prospectus or free writing prospectus shall include all documents subsequently filed by the Bank with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are deemed to be incorporated by reference therein.
| 1. | Representations and Warranties. The Bank represents and warrants to, and agrees with, each of the Underwriters that as of the date hereof: |
| (a) | The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. The Bank is a well-known seasoned issuer (as defined in Rule 405 under the Securities Act) eligible to use the Registration Statement as an “automatic shelf registration statement” (as defined in Rule 405 under the Securities Act) and the Bank has not received notice that the Commission objects to the use of the Registration Statement as an automatic shelf registration statement. |
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| (b) | Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Time of Sale Prospectus or the Prospectus complied or will comply when so filed in all material respects with the Securities Act, the Exchange Act and the applicable rules and regulations of the Commission thereunder, (i) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Registration Statement as of the date hereof does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement and the Prospectus comply, and as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (iv) the Time of Sale Prospectus does not, and at the time of each sale of the Securities in connection with the offering when the Prospectus is not yet available to prospective purchasers and at the Closing Date (as defined in Section 3 below), the Time of Sale Prospectus, as then amended or supplemented by the Bank, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (v) each road show, if any, when considered together with the Time of Sale Prospectus, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (vi) the Prospectus does not contain and, as amended or supplemented, if applicable, at the Closing Date, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to (A) statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to any Underwriter furnished to the Bank in writing by such Underwriter expressly for use therein (it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 16 hereof) or (B) that part of the Registration Statement that constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), of the Trustee. |
| (c) | The Bank is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Bank is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Bank has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Bank complies or will comply in all material respects with the requirements of the |
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| Securities Act and the applicable rules and regulations of the Commission thereunder and did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except for the free writing prospectuses, if any, identified in Exhibit E hereto, and electronic road shows, if any, each furnished to the Representatives before first use, the Bank has not prepared, used or referred to, and will not, without the Representatives’ prior consent, prepare, use or refer to, any free writing prospectus. |
| (d) | The Bank has been duly incorporated and is validly existing as a limited liability corporation (sociedad anónima) in good standing under the laws of The Kingdom of Spain. |
| (e) | On or prior to the Closing Date, the Securities will be duly authorized and, when executed and authenticated in accordance with the provisions of the relevant Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be entitled to the benefits of the relevant Indenture, and will constitute valid and legally binding obligations of the Bank, enforceable against the Bank in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally or by general equity principles; the Securities will be consistent with the descriptions thereof contained in the Time of Sale Prospectus and the Prospectus, and such descriptions will conform to the rights set forth in the instruments defining the same. |
| (f) | This Agreement has been duly authorized, executed and delivered by the Bank. |
| (g) | On or prior to the Closing Date, the Indentures will have been duly qualified under the Trust Indenture Act, will have been duly authorized by the Bank and will constitute a valid and legally binding agreement of the Bank, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally or by general equity principles. |
| (h) | The execution and delivery of this Agreement and the Indentures, the issuance, delivery and sale of the Securities, the performance of this Agreement and compliance by the Bank, as applicable, with the terms of this Agreement, the Indentures and the terms of the Securities have been duly authorized by all necessary corporate action on the part of the Bank, as applicable, and, upon their execution and delivery, did not or, if applicable, will not result in any violation of the memorandum and articles of association (or similar constitutive documents) of the Bank and do not and will not conflict with, or breach, any of the terms or provisions of, or constitute a default under, (i) any indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Bank is a party or by which it may be bound or to which any of its properties may be subject or (ii) any existing applicable law, rule, regulation, judgment, order or decree of any governmental instrumentality or court having jurisdiction over the Bank or any of the properties of either of them (except, in either case, for such conflicts, breaches or defaults that would not have a material adverse effect on the financial condition of the Bank and its subsidiaries considered as one enterprise, or on the earnings or business affairs of the Bank and its subsidiaries, considered as one enterprise). |
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| (i) | No consent, approval, authorization or order of any governmental instrumentality or court is required for the consummation by the Bank of the transactions contemplated hereby, except (i) such as may be required by the securities or Blue Sky laws of the various states of the United States in connection with the offer and sale of the Securities, and (ii) such approvals as have been obtained. Notwithstanding the foregoing, on or after the Closing Date, the public deed of issuance (escritura de emisión) shall be registered with the Mercantile Registry of Cantabria. |
| (j) | Neither the Bank, nor any of its affiliates (as defined in Rule 405 under the Securities Act), nor any person acting on its or their behalf has taken or will take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected to cause or result in, the stabilization in violation of applicable laws or manipulation of the price of any security of the Bank to facilitate the sale or resale of the Securities. |
| (k) | The preliminary prospectuses filed with the Commission pursuant to Rule 424 under the Securities Act on July 31, 2023 complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder. |
| (l) | The Bank maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act). |
| (m) | The Bank is not, and after giving effect to the offer and sale of the Securities, will not be, required to register as an “investment company,” as such term is defined in the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”). |
| (n) | The financial statements of the Bank and its consolidated subsidiaries, together with the related schedules, if any, (the “Financial Statements”) that have been included or incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the Prospectus present fairly the financial position of the Bank and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders’ equity and cash flows of the Bank and its consolidated subsidiaries for the periods specified; and said Financial Statements have been prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (the “IFRS-IASB”). The supporting schedules, if any, included or incorporated by reference in the Time of Sale Prospectus and the Prospectus present fairly, in accordance with IFRS-IASB, the information required to be stated therein. The selected financial data and the summary financial information included or incorporated by reference in the Time of Sale Prospectus and the Prospectus present fairly, in accordance with IFRS-IASB, the information shown therein and have been compiled on a basis consistent with that of the Financial Statements incorporated by reference in the Time of Sale Prospectus and the Prospectus. |
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| (o) | The Bank acknowledges and agrees that each of the Underwriters is acting solely in the capacity of an arm’s length contractual counterparty to the Bank with respect to the offering of the Securities (including in connection with determining the terms of the offering contemplated by this Agreement) and not as an agent or fiduciary to the Bank or any other person. Additionally, the Underwriters are not advising the Bank or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Bank shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of such matters, and the Underwriters shall have no responsibility or liability to the Bank or any other person with respect to such matters. Any review by the Underwriters of the Bank, the transactions contemplated by this Agreement or any other due diligence review by the Underwriters in connection with such transactions will be performed solely for the benefit of the Underwriters and shall not be on or behalf of the Bank or any other person. |
| (p) | So long as certain conditions set forth in Law 10/2014, of June 26, on organization, supervision and solvency of credit institutions (“Law 10/2014”) are met, any payments in respect of the Securities made by the Bank to a beneficial owner, who is not tax resident in Spain and does not operate with respect to the Securities through a permanent establishment in Spain, shall not be subject to taxation in Spain pursuant to Royal Legislative Decree 5/2004 of March 5, promulgating the consolidated text of the non-resident income tax law (Real Decreto Legislativo 5/2004, de 5 de Marzo, por el que se aprueba el texto refundido de la Ley del Impuesto sobre la Renta de no Residentes), and no withholding tax on account of Spanish taxes shall be required on such payments, except that payments made to beneficial owners, who are not tax resident in Spain, where the Bank has not received from the paying agent certain information about the Securities will be subject to Spanish withholding tax at the applicable rate (currently 19%). |
| (q) | The payment obligations of the Bank in respect of principal under the Senior Preferred Securities constitute direct, unconditional, unsubordinated and unsecured obligations (créditos ordinarios) of the Bank and, in accordance with Additional Provision 14.2 of Law 11/2015, but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise), upon the insolvency of the Bank, such payment obligations rank (i) pari passu among themselves and with any other unsecured and unsubordinated obligations (créditos ordinarios) of the Bank, other than any unsubordinated and unsecured senior non preferred obligations (créditos ordinarios no preferentes) of the Bank under Additional Provision 14.2 of Law 11/2015, and any other obligations which, by law and/or by their terms, and to the extent permitted by Spanish law, rank pari passu with such obligations and (ii) senior to (x) any Senior Non Preferred Liabilities (as defined in the Prospectus) and (y) any present and future subordinated obligations (créditos subordinados) of the Bank in accordance with Article 281 of Royal Legislative Decree 1/2020, of 5 May, on insolvency (Real Decreto Legislativo 1/2020, de 5 de mayo, por el que se aprueba el texto refundido de la Ley Concursal), as amended from time to time (the “Spanish Insolvency Law”). |
The payment obligations of the Bank under the Tier 2 Subordinated Securities constitute direct, unconditional, unsecured and subordinated obligations (créditos subordinados) of the Bank according to Article 281.1 of the Spanish Insolvency Law and, in accordance with Additional Provision 14.3 of Law 11/2015 (but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise)), upon the insolvency
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of the Bank and for so long as the Tier 2 Subordinated Securities constitute Tier 2 Instruments (as defined in the Prospectus), such payment obligations rank: (i) pari passu among themselves and with (a) all other claims in respect of Tier 2 Instruments and (b) any other subordinated obligations (créditos subordinados) of the Bank which by law and/or by their terms, to the extent permitted by Spanish law, rank pari passu with the Bank’s obligations under Tier 2 Instruments; (ii) junior to (a) any unsubordinated obligations (créditos ordinarios) of the Bank (including any claim of the Bank in respect of Senior Non Preferred Liabilities) and (b) any other subordinated obligations (créditos subordinados) which by law and/or by their terms, to the extent permitted by Spanish law, rank senior to the Bank’s obligations under the Tier 2 Instruments; and (iii) senior to (a) any claims in respect of Additional Tier 1 Instruments (as defined in the Prospectus) of the Bank and (b) any other subordinated obligations (créditos subordinados) of the Bank which by law and/or by their terms, to the extent permitted by Spanish law, rank junior to the obligations of the Bank under the Tier 2 Instruments.
| (r) | As of the date hereof, the Bank has not made, and will not make (without prior consent of the Representatives) any public offer of the Securities by means of Supplemental Offering Materials. For purposes of this Agreement, “Supplemental Offering Materials” means any “written communication” (within the meaning of the rules and regulations promulgated under the Securities Act) prepared by or on behalf of the Bank, or used or referred to by the Bank, that constitutes an offer to sell or a solicitation of an offer to buy the Securities (other than the free writing prospectuses identified in Exhibit E hereto, the Time of Sale Prospectus and the Prospectus), including, without limitation, any road show materials relating to the Securities that constitute such a written communication. |
| (s) | Under the laws of The Kingdom of Spain, neither the Bank, nor any of its revenues, assets or properties have any right of immunity from service of process or from the jurisdiction of competent courts of The Kingdom of Spain or the United States or the State of New York in connection with any suit, action or proceeding, attachment prior to judgment, attached in aid of execution of a judgment or execution of a judgment or from any other legal process with respect to its obligations under this Agreement, the Indentures and the Securities (together, the “Transaction Documents”). |
| (t) | The choice of the law of the State of New York as the governing law of the Transaction Documents, except for those sections or provisions which are subject to Spanish law as set forth in the Prospectus, is a valid, effective and irrevocable choice of law under the laws of The Kingdom of Spain. The Bank has the power to submit and, pursuant to the Transaction Documents to which it is a party, has legally, validly, effectively and irrevocably submitted to the non-exclusive personal jurisdiction of the United States District Court for the Southern District of New York and the Supreme Court of New York, New York County (including, in each case, any appellate courts therefrom) in any suit, action or proceeding against it arising out of or related to any of the Transaction Documents, including with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement, and has validly and irrevocably waived any objection to the venue of a proceeding in any such court and has the power to designate, appoint and empower and pursuant to Section 13 of this Agreement has legally, validly, effectively and irrevocably designated, appointed and empowered an agent for service of process in any suit or proceeding based on or arising under this Agreement in any federal or state court in the State of New York. |
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| (u) | None of the Bank or any of its Significant Subsidiaries (as such term is defined in Rule 1.02(w) of Regulation S-X under the Securities Act (“Significant Subsidiaries”)), nor, to the knowledge of the Bank, any director, officer, agent, employee, affiliate or person acting on behalf of the Bank is currently the subject of any U.S. sanctions administered by the U.S. Department of State or the Office of Foreign Assets Control of the U.S. Treasury Department or any similar European, Spanish, U.K. or Brazilian sanctions administered by the European Union, Spain, the United Kingdom or Brazil (together, “Sanctions”), and the Bank is not located, organized or resident in a country or a territory that is the subject of such sanctions; and the Bank will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person known by the Bank to be currently the subject of any Sanctions or is in Iran, North Korea, Syria, Cuba, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the non-government controlled areas of Zaporizhzhia and Kherson, or in any other country or territory that, at the time of such funding is the subject of such sanctions, except to the extent permissible for a person required to comply with such Sanctions; nor will the Bank directly or indirectly use the transaction proceeds to contravene any Sanctions provided that this Section 1(u) shall only apply, and shall only be sought by the Underwriters, to the extent that it does not result in a breach and/or violation of any provision of (A) Council Regulation (EC) No 2271/96 of 22 November 1996 (or any law or regulation implementing such Regulation in any member state of the European Union) or (B) section 7 of the German Foreign Trade Ordinance (AWV) (Außenwirtschaftsverordnung) or any other applicable blocking or anti-boycott statute as it applies to German Underwriters only or (C) Council Regulation (EC) No 2271/96 as it forms part of domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act of 2018 or any other similar blocking or antiboycott law of the United Kingdom. |
| (v) | The operations of the Bank and its Significant Subsidiaries are and have been conducted at all times in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the European Union, The Kingdom of Spain, the United Kingdom, Brazil, the United States and each State thereof and the money laundering statutes and the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any European, Spanish, U.K., Brazilian or U.S., as applicable, governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Bank or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Bank, threatened (except for actions, suits or proceedings that are being or expected to be contested or appealed in good faith and which would not be material in the context of the issuance and sale of the Securities). |
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| (w) | None of the Bank or any of its Significant Subsidiaries or, to the knowledge of the Bank, any director, officer, agent, employee of the Bank or any of the Bank’s Significant Subsidiaries (i) is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), the U.K. Bribery Act or any other anti-corruption law, rule or regulation of any locality that is applicable to the Bank (“applicable anti-corruption laws”) or (ii) has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “foreign official” (as such term is defined in the FCPA) (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage. Each of the Bank and its Significant Subsidiaries has conducted its businesses in compliance with the FCPA, the U.K. Bribery Act and applicable anti-corruption laws and, to the knowledge of the Bank, its respective affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure continued compliance therewith. |
| (x) | PricewaterhouseCoopers Auditores, S.L. is an independent registered public accounting firm as required by the Securities Act and the applicable rules and regulations of the Commission. |
| (y) | The waiver of certain requirements under Rule 3-05 of Regulation S-X issued to the Bank by the Commission on June 14, 2017, a true copy of which has been provided to the Representatives, remains in effect as of the date of this Agreement and has not been rescinded or amended. |
| 2. | Purchase and Sale. |
| (a) | Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Bank agrees to issue and sell to each of the Underwriters and each of the Underwriters agrees, severally and not jointly, to purchase from the Bank, the aggregate principal amount of Securities set forth opposite such Underwriter’s name on Schedule I hereto at a purchase price of 100.000% of the principal amount of the U.S.$1,500,000,000 5.588% Senior Preferred Fixed Rate Notes due 2028 and 100.000% of the principal amount of the U.S.$2,000,000,000 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033. The Bank hereby agrees to pay a commission of (i) 0.30% of the aggregate principal amount of the U.S.$1,500,000,000 5.588% Senior Preferred Fixed Rate Notes due 2028 (the “Senior Preferred Underwriting Commission”) and (ii) 0.45% of the aggregate principal amount of the U.S.$2,000,000,000 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033 (the “Tier 2 Subordinated Underwriting Commission” and together with the Senior Preferred Underwriting Commission, the “Underwriting Commissions”) to the Underwriters, in consideration of the Underwriters agreeing severally, and not jointly, to purchase the Securities from the Bank subject to, and in accordance with, the terms and conditions set forth in this Agreement. The Bank agrees that (i) 30.07% of such Senior Preferred Underwriting Commission will be paid to Santander US Capital Markets LLC; (ii) 64.93% of such Senior Preferred Underwriting Commission will be divided equally among the |
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Representatives, excluding Santander US Capital Markets LLC, and (iii) 5.00% of such Senior Preferred Underwriting Commission will be divided equally among the Co-Leads (as defined herein).The Bank further agrees that: (i) 30.00% of such Tier 2 Subordinated Underwriting Commission will be paid to Santander US Capital Markets LLC; (ii) 65.00% of such Tier 2 Subordinated Underwriting Commission will be divided equally among the Representatives, excluding Santander US Capital Markets LLC, and (iii) 5.00% of such Tier 2 Subordinated Underwriting Commission will be divided equally among the Co-Leads (as defined herein). The total proceeds to the Bank in an amount of U.S.$3,486,695,000 (which is equal to U.S.$3,486,500,000 of proceeds, net of fees and commissions, plus U.S.$195,000 in expenses) will be payable on the Closing Date concurrently with the settlement of the Securities or such other date as may be agreed by the Bank and the Representatives, by wire transfer of immediately available funds to an account identified in writing by August 8, 2023. For purposes of this Section 2(a), “Co-Leads” shall mean Bankinter, S.A., BMO Capital Markets Corp., Independence Point Securities LLC, Penserra Securities LLC and Scotia Capital (USA) Inc.
| (b) | Payment of the Underwriting Commissions by the Bank to the Underwriters may be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied, collected, withheld or assessed by The Kingdom of Spain or any political subdivision or authority thereof or therein having power to tax, provided that the Underwriters are resident for tax purposes in a State with which The Kingdom of Spain has concluded a Tax Treaty for the Avoidance of Double Taxation which provides for a full exemption from Spanish taxes on business profits and are fully entitled to the benefits of said Tax Treaty and provided that (i) the Underwriters do not operate through a permanent establishment in Spain or through a non-cooperative jurisdiction for Spanish tax purposes (in the terms of the First Additional Provision of Law 36/2006, of 29 November, on prevention measures and actions against tax fraud, as amended through Law 11/2021, of 9 July, and as amended and restated from time to time) and (ii) they provide the Bank, before the relevant payment is due or paid (whichever occurs first), with a valid certificate of tax residence which expressly states that each such Underwriter is resident for tax purposes in the relevant jurisdiction within the meaning of the applicable Tax Treaty for the Avoidance of Double Taxation (or, as the case may be, the equivalent document regulated under the order which further develops the applicable Tax Treaty for the Avoidance of Double Taxation) which is generally valid for one year from its date of issue. For the avoidance of doubt, if any of these conditions is not met by an Underwriter, the Bank will be entitled to deduct any withholding on account of income taxes applicable pursuant to law on the Underwriting Commissions payable to that Underwriter, and no additional amounts will be paid by the Bank in such a case to that Underwriter. |
| (c) | The Underwriters are not authorized to give any information or to make any representation in connection with the offering or sale of the Securities other than such information or representations consistent with the Time of Sale Prospectus and the Prospectus or otherwise approved in writing by the Bank. |
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| (d) | Solely for the purposes of the requirements of Article 9(8) of the MIFID Product Governance rules under the EU Delegated Directive 2017/593 (the “EU Product Governance Rules”) regarding the mutual responsibilities of manufacturers under the EU Product Governance Rules: (a) each of Goldman Sachs Bank Europe SE and the Bank (each, a “EU Manufacturer” and together the “EU Manufacturers”) acknowledges to the other EU Manufacturer that it understands the responsibilities conferred upon it under the Product Governance Rules relating to each of the product approval process, the target market and the proposed distribution channels as applying to the Securities and the related information set out in the Prospectus in connection with the Securities, and (b) the other parties to this Agreement note the application of the EU Product Governance Rules and acknowledge the target and distribution channels identified as applying to the Securities by the EU Manufacturers and the related information set out in the Prospectus in connection with the Securities. |
| (e) | Solely for the purposes of the requirements of 3.2.7R of the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK MiFIR Product Governance Rules”) regarding the mutual responsibilities of manufacturers under the UK MiFIR Product Governance Rules: (a) each of the Bank and Goldman Sachs Bank Europe SE (each a “UK Manufacturer” and together the “UK Manufacturers”) acknowledges to each other UK Manufacturer that it understands the responsibilities conferred upon it under the UK MiFIR Product Governance Rules relating to each of the product approval process, the target market and the proposed distribution channels as applying to the Securities and the related information set out in the Prospectus in connection with the Securities; and (b) the other parties to this Agreement note the application of the UK MiFIR Product Governance Rules and acknowledge the target market and distribution channels identified as applying to the Securities by the UK Manufacturers and the related information set out in the Prospectus in connection with the Securities. |
| 3. | Delivery and Payment. The global certificates for the Securities to be purchased by the Underwriters hereunder shall be delivered by or on behalf of (and at the expense of) the Bank to or upon the order of Santander US Capital Markets LLC for the accounts of the several Underwriters against payment by the Underwriters of the purchase price therefor by wire transfer of immediately available funds, payable to or upon the order of the Bank, at the offices of Linklaters LLP at 1290 Avenue of the Americas, New York, NY 10104, at 10:00 a.m. New York time, on August 8, 2023 or such later date (not later than ten New York business days thereafter) as the Representatives shall designate, which date and time may be postponed by agreement among the Representatives and the Bank (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). Payment for the Securities shall be made against delivery to the Representatives for the respective accounts of the several Underwriters of the Securities registered in such names and in such denominations as the Representatives shall request in writing not later than two full New York business days prior to the date of delivery, with any transfer taxes payable in connection with the transfer of the Securities to the Representatives duly paid by the Bank. The Bank agrees that delivery of the Securities will be made on the Closing Date through the book-entry facilities of The Depository Trust Company (the “Depositary”). Upon issuance, all Securities will be represented by one or more global certificates registered in the name of a nominee of the Depositary. |
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| 4. | Covenants and Agreements. The Bank agrees with each Underwriter that: |
| (a) | The Bank shall prepare and furnish to each Underwriter, without charge, a conformed copy of the Registration Statement (including exhibits thereto and documents incorporated by reference therein) in a form approved by the Representatives, and will promptly furnish the Underwriters during the period mentioned in Section 4(d) or 4(e) below with copies of the Time of Sale Prospectus, the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement, in such quantities as the Underwriters may from time to time reasonably request, and will not publish any amendment or supplement to the Registration Statement, the Time of Sale Prospectus or the Prospectus unless they have furnished a copy to the Representatives for review and, except as required by law, will not publish any such proposed amendment or supplement to which the Representatives reasonably object. If at any time prior to completion of the distribution of the Securities (as determined by the Representatives) any event occurs as a result of which the Registration Statement, the Time of Sale Prospectus or the Prospectus as then amended or supplemented would contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Bank will promptly so notify the Representatives and will prepare and furnish to the Representatives, subject to prior review as provided above, a reasonable number of copies of an amendment or supplement to the Registration Statement, the Time of Sale Prospectus or the Prospectus which will correct such statement or omission. |
| (b) | The Bank shall furnish to each Underwriter a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Bank and not to use or refer to any proposed free writing prospectus to which an Underwriter reasonably objects. |
| (c) | Except as otherwise contemplated pursuant to this Agreement, the Bank shall not take any action that would result in an Underwriter or the Bank being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder. |
| (d) | If the Time of Sale Prospectus is being used to solicit offers to buy the Securities at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law. |
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| (e) | If, during such period after the first date of the public offering of the Securities as in the opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Bank) to which Securities may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law. |
| (f) | The Bank shall endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Underwriters shall reasonably request. |
| (g) | The Bank shall make generally available to the Bank’s security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months after the effective date of the Registration Statement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. |
| (h) | If the third anniversary of the initial effective date of the Registration Statement occurs before all the Securities have been sold by the Underwriters, prior to the third anniversary, the Bank shall file a new shelf registration statement and take any other action necessary to permit the public offering of the Securities to continue without interruption; references herein to the Registration Statement shall include the new registration statement declared effective by the Commission. |
| (i) | The Bank shall prepare final term sheets relating to the offering of the Securities, containing only information that describes the final terms of the Securities or the offering in a form consented to by the Representatives and included herein as Exhibit D, and to file such final term sheets within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date the final terms have been established for the offering of the Securities. |
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| (j) | The Bank will use its reasonable efforts to effect, on or as soon as practicable after the Closing Date, and in no event more than 45 days following the Closing Date, the authorization of the Securities for listing on the New York Stock Exchange, Inc. (the “NYSE”), subject only to official notice of issuance. For so long as any of the Securities are outstanding, the Bank will use its commercially reasonable efforts to maintain the listing of the Securities, and will prepare, submit, furnish and publish (as appropriate) all such documents, instruments, information, advertisements and undertakings as may be necessary or advisable for such purposes. |
| (k) | The Bank will use its best efforts to ensure that the Securities qualify as debt instruments (instrumentos de deuda) under the First Additional Provision of Law 10/2014. |
| (l) | The Bank will use its best efforts to ensure that the public deed in respect of the Securities and disbursement minutes in respect of the Securities, if required, are registered in the Mercantile Registry of Cantabria within one month of the Closing Date. |
| (m) | The Bank will use its best efforts to comply at all times with the applicable requirements set out under Law 10/2014 in order to benefit from the tax treatment described in the First Additional Provision of Law 10/2014. |
| (n) | From the date hereof and continuing to and including the Closing Date, the Bank will not, without the Representatives’ prior written consent (which consent shall not be unreasonably withheld), offer, sell, contract to sell or otherwise dispose of in the United States any material amount of dollar-denominated debt securities issued or guaranteed by the Bank which both mature more than one year after such Closing Date and which are substantially similar to the Securities, except for the Bank’s customary deposit-raising activities. |
| (o) | The Bank confirms that this Agreement has been executed and delivered in the name of the Bank by a signatory authorized by the Executive Committee of the Bank and agrees that the Securities will be executed and delivered in the name of the Bank, manually or via facsimile, by a signatory authorized by the Executive Committee of the Bank. |
| 5. | Conditions to the Obligations of the Underwriters. The obligation of the several Underwriters to purchase and pay for the Securities they have agreed to purchase hereunder on the Closing Date is subject to the accuracy of the representations and warranties of the Bank contained herein as of the date of this Agreement, at 7:10 p.m., New York City time, on July 31, 2023 or such other time as agreed by the Bank and the Representatives (the “Time of Sale”) and the Closing Date, to the accuracy of the statements of the Bank made in any certificates pursuant to the provisions hereof delivered prior to or concurrently with such purchase, to the performance by the Bank of their obligations hereunder, and to the following further conditions: |
| (a) | Each of the Underwriters, Davis Polk & Wardwell LLP, U.S. counsel for the Bank, and Linklaters LLP, U.S. counsel for the Underwriters, shall have completed their respective due diligence investigations in accordance with procedures customary for a transaction such as the offering of the Securities pursuant to the terms and conditions of this Agreement. |
| (b) | At the Closing Date, (i) since the date of the latest balance sheet included or incorporated by reference in the Time of Sale Prospectus and the Prospectus, there shall not have been any material adverse change (other than as set forth in or contemplated in the Time of Sale Prospectus or the Prospectus) in the financial condition or in the earnings, affairs or business prospects of the Bank and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business; (ii) the Bank shall have |
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| complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; and (iii) the representations and warranties of the Bank set forth in Section 1 shall be accurate in all material respects as though expressly made at and as of the Closing Date. At the Closing Date, the Representatives shall have received a certificate, dated as of the Closing Date, from the Bank signed by the principal financial or accounting officer of the Bank, certifying, the matters set forth in clauses (i), (ii) and (iii) of this Section 5(b). |
| (c) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of the internal counsel to the Bank, substantially in the form set forth in Exhibit A. |
| (d) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of Uría Menéndez Abogados, S.L.P., Spanish counsel to the Bank, substantially in the form set forth in Exhibit B. |
| (e) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of Davis Polk & Wardwell LLP, U.S. counsel to the Bank, substantially in the form set forth in Exhibit C. |
| (f) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of Linklaters, S.L.P., Spanish counsel to the Underwriters, as to such matters as the Representatives may reasonably request. |
| (g) | At the Closing Date, the Representatives shall have received a signed opinion, dated as of the Closing Date, of Linklaters LLP, U.S. counsel to the Underwriters, as to such matters as the Representatives may reasonably request. |
| (h) | On the date hereof, the Representatives shall have received from PricewaterhouseCoopers Auditores, S.L. letters dated such date, to the effect that (i) it is an independent accountant with respect to the Bank and its subsidiaries within the meaning of the Securities Act; (ii) it is its opinion that the Financial Statements included or incorporated by reference in the Time of Sale Prospectus and the Prospectus and covered by its opinion therein comply as to form in all material respects, except as stated in such report, with the applicable accounting requirements of the Securities Act for foreign private issuers; (iii) nothing has come to its attention that any Financial Statements included or incorporated by reference in the Time of Sale Prospectus and the Prospectus and not covered by its opinion do not comply as to form in all material respects with the accounting requirements of the Securities Act for foreign private issuers; (iv) based upon limited procedures set forth in detail in such letters, nothing has come to its attention which causes it to believe that at a specified date not more than three New York business days prior to the date of such letters, there was any decrease in the capital stock, as compared with the amounts shown in the most recent consolidated balance sheet included or incorporated by reference in the Time of Sale Prospectus and the Prospectus; and (v) in addition to the examination referred to in its opinion and the limited procedures referred to in clause (iv) above, it has carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information which are included in the Time of Sale Prospectus and the Prospectus and which are specified by the Representatives, and has found such |
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| amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the Bank and its subsidiaries identified in such letters. At the Closing Date, the Representatives shall have received letters from PricewaterhouseCoopers Auditores, S.L., dated as of the Closing Date, confirming the information given in its letters dated the date of the Time of Sale Prospectus and the Prospectus. |
| (i) | The Securities shall be eligible for clearance and settlement through the Depositary. |
| (j) | If any of the conditions specified in this Section 5 shall not have been fulfilled when and as required by this Agreement to be fulfilled, this Agreement may be terminated by the Representatives on notice to the Bank at any time at or prior to the Closing Date, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 6 herein. Notwithstanding any such termination, the provisions of Sections 7, 8, 9, 13 and 14 herein shall remain in effect. |
| 6. | Payment of Expenses. |
| (a) | The Bank will, except as set forth in subsection (b) below, pay and bear all costs and expenses incident to the performance of the Bank’s obligations under this Agreement, including (i) the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, or used by or referred to by the Bank, and any amendments or supplements to any of the foregoing, including the filing fees payable to the Commission relating to the Securities (within the time required by Rule 456(b)(1), if applicable), (ii) the preparation and distribution of this Agreement and the Indentures, (iii) the preparation and delivery of the Securities, (iv) the fees and disbursements of the counsel and accountants for the Bank (other than the cost of the comfort letters provided by PricewaterhouseCoopers Auditores, S.L., dated as of the Time of Sale and the Closing Date), (v) the costs and charges of the Trustee incurred in connection with the transactions contemplated in this Agreement, (vi) all costs and expenses incurred by the Bank in connection with any road show conducted in connection with the transaction contemplated by this Agreement, and (vii) all initial and on-going expenses and listing fees in connection with the listing of the Securities on the NYSE. |
| (b) | Notwithstanding subsection (a) above, each Underwriter, individually and not jointly, agrees to pay severally on a pro rata basis (i) the fees and disbursements of U.S. and Spanish counsels to the Underwriters, (ii) the cost of the comfort letters provided by PricewaterhouseCoopers Auditores, S.L., dated as of the Time of Sale and the Closing Date, and (iii) all costs and expenses incurred by the Underwriters in connection with any road show conducted in connection with the transaction contemplated by this Agreement. For the avoidance of doubt, no Underwriter will be liable for any initial or on-going expenses after payment has been made in accordance with this Section 6 and each amount identified in this Section 6(b) (i), (ii) and (iii) above will be divided pro rata among each Underwriter. |
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| 7. | Indemnification. |
| (a) | The Bank agrees to indemnify and hold harmless each Underwriter and its directors, officers, employees and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereto, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus (or any amendment or supplement to the Time of Sale Prospectus or the Prospectus), any free writing prospectus, any road show slides used in a road show conducted in connection with the transaction contemplated by this Agreement or any Supplemental Offering Materials, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever, based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Bank, which consent shall not be unreasonably withheld; and (iii) against any and all expense whatsoever, as incurred (including fees and disbursements of counsel chosen by the Underwriters), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above; provided, however, that this indemnity does not apply to any loss, liability, claim, damage or expense to the extent arising out of an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished in writing to the Bank by the Underwriters expressly for use in the Time of Sale Prospectus or the Prospectus (or any amendment or supplement to the Time of Sale Prospectus or the Prospectus), any free writing prospectus, any road show slides used in a road show conducted in connection with the transaction contemplated by this Agreement or any Supplemental Offering Materials (it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 16 hereof). |
| (b) | Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Bank, and its directors, officers and each person, if any, who controls the Bank, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 7(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Time of Sale Prospectus and the Prospectus (or any amendment or supplement to the Time of Sale Prospectus and the Prospectus), any free writing prospectus, any road show slides used in a road show conducted in connection with the transaction contemplated by this |
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| Agreement or any Supplemental Offering Materials, in each case in reliance upon and in conformity with information furnished in writing to the Bank by such Underwriter expressly for use in the Time of Sale Prospectus and the Prospectus (or any amendment or supplement to the Time of Sale Prospectus and the Prospectus), any free writing prospectus, any road show slides used in a road show conducted in connection with the transaction contemplated by this Agreement or any Supplemental Offering Materials (it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 16 hereof). |
| (c) | Each indemnified party shall give prompt notice to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying party or parties be liable for the fees and expenses of more than one counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. |
| 8. | Contribution. In order to provide for just and equitable contribution in circumstances under which the indemnity provided for in Section 7 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Bank, on the one hand, and the Underwriters, on the other hand, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity incurred by the Bank and the Underwriters, as incurred, in such proportions that (a) the Underwriters are responsible for that portion represented by the percentage that the total discounts and commissions received by the Underwriters bears to the aggregate offering price of the Securities and (b) the Bank is responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as an Underwriter, and each director of the Bank and each person, if any, who controls the Bank within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Bank. The Underwriters’ respective obligations to contribute pursuant to this Section 8 are several in proportion to the aggregate principal amount of the Securities set forth opposite their respective names in Schedule I hereto and not joint. |
| 9. | Representations and Indemnities to Survive. The representations, warranties, indemnities, agreements and other statements of the Underwriters and the Bank and their officers set forth in or made pursuant to this Agreement will remain operative and in full force and effect regardless of any investigation made by or on behalf of the Bank or the Underwriters or controlling persons and will survive delivery of and payment for the Securities. |
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| 10. | Termination of Agreement. |
| (a) | The Representatives may terminate this Agreement, by notice to the Bank, at any time at or prior to the Closing Date (i) if there has been, since the date hereof, any material adverse change (otherwise than as set forth in or contemplated by the Time of Sale Prospectus or the Prospectus) in the financial condition or in the earnings, business affairs or business prospects of the Bank and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if, since the execution and delivery of this Agreement (A) there has occurred any outbreak or escalation of hostilities or other calamity or crisis, including, without limitation, an act of terrorism, the effect of which on the financial markets of the United States are such as to make it, in the judgment of the Representatives, impracticable or inadvisable to market the Securities or (B) trading in any securities of the Bank has been suspended by the Commission, the Spanish Securities Market Commission (Comisión Nacional del Mercado de Valores) or the NYSE, or if trading generally on the NYSE or in the over-the-counter market has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required by such exchange or by order of the Commission, or any other governmental authority, or (C) a banking moratorium has been declared by Spanish, U.S. or New York authorities, or (D) there has occurred any change or any development involving a prospective change in national or international political, financial or economic conditions or exchange controls which, in the judgment of the Representatives, is likely to have a material adverse effect on the market for the Securities, or (E) any rating of the Bank’s debt securities shall have been lowered by Moody’s Investors Service Inc., Fitch Ratings Ltd. or Standard & Poor’s Ratings Services, a division of The McGraw-Hill Company, Inc., or any of such rating agencies have publicly announced it has under surveillance or review with possible negative implications any rating of the Bank’s debt securities (provided, however, that this clause (E) shall not apply if a lowering of any such rating or any such public announcement occurs as a result of the lowering of any rating by any such rating agency of obligations of The Kingdom of Spain or as a result of a public announcement by any such rating agency that it has under surveillance or review with possible negative implications obligations of The Kingdom of Spain), or (F) there has occurred a material disruption in commercial banking or securities settlement or clearance services in the United States or with respect to the Depositary. The Representatives agree that they will notify the Bank of the occurrence of any event described in clauses (A) through (F) as soon as they shall become aware of such occurrence. |
| (b) | If this Agreement is terminated pursuant to this Section 10, such termination shall be without liability of any party to any other party, except to the extent provided in Section 6. Notwithstanding any such termination, the provisions of Sections 6, 7, 8, 9, 13 and 14 shall remain in effect. |
| 11. | Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if delivered, mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to the Representatives at the following addresses: |
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BofA Securities, Inc.
114 W 47th St., NY8-114-07-01
New York, NY 10036
Fax: +1 (646) 855-5958
Attention: High Grade Transaction Management/Legal
Citigroup Global Markets Inc.
388 Greenwich Street
New York, NY 10013
Fax: (646) 291-1469
Attention: General Counsel
Goldman Sachs Bank Europe SE
Marienturm, Taunusanlage 9-10,
D-60329 Frankfurt am Main
Germany
Telephone: +49 69 7532 1000
Attn: Syndicate Desk
Email: gs-ldnigsynd@internal.email.gs.com
HSBC Securities (USA) Inc.
452 Fifth Avenue
New York, NY 10018
Email: tmg.americas@us.hsbc.com
Attention: Transaction Management Group
J.P. Morgan Securities LLC
383 Madison Avenue
New York, NY 10179
Attention: High Grade Syndicate Desk
Fax: +1 (212) 834-6081
Jefferies LLC
520 Madison Avenue
New York, NY 10022
Attention: General Counsel
Morgan Stanley & Co. LLC
1585 Broadway, 29th Floor
New York, NY 10036
Attention: Investment Banking
RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th Floor
New York, NY 10281
Attention: DCM Transaction Management/Scott Primrose
Telephone: +1 (212) 618-7706
Email: TMGUS@rbccm.com
21
Santander US Capital Markets LLC
437 Madison Avenue
New York, NY 10022
Attention: Debt Capital Markets
Facsimile: +1 (212) 407-0930
TD Securities (USA) LLC
1 Vanderbilt Avenue, 11th Floor
New York, NY 10017
Attention: Transaction Advisory
Email: ustransactionadvisory@tdsecurities.com
Wells Fargo Securities, LLC
550 S Tyron Street, 5th Floor
Charlotte, NC 28202
Attention: Transaction Management
Facsimile: 704-410-0326
Email: tmgcapitalmarkets@wellsfargo.com
Notices to the Bank shall be directed to them at:
Grupo Santander, S.A.
Ciudad Grupo Santander
Avda. Cantabria s/n
Edificio Encinar, planta 1
28660 Boadilla del Monte
Madrid
Spain
Attention: División Financiera
Fax: +34 91 257 2059
| 12. | Parties. This Agreement is made solely for the benefit of the Underwriters and the Bank and, to the extent expressed, any person controlling the Bank or the Underwriters, and their respective executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” shall not include any purchaser, as such purchaser, from the Underwriters of the Securities. |
| 13. | Submission to Jurisdiction. The Bank irrevocably agrees that any suit, action or proceeding against the Bank brought by the Underwriters or by any person who controls the Underwriters, arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in any state or federal court in the Borough of Manhattan, The City of New York, New York, and, to the extent permitted by law, irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and irrevocably submits to the nonexclusive jurisdiction of such courts in any such suit, action or proceeding. |
22
| The Bank has irrevocably appointed Banco Santander, S.A., New York Branch as its Authorized Agent (the “Authorized Agent”) upon whom process may be served in any such suit, action or proceeding arising out of or based on this Agreement or the transactions contemplated hereby which may be instituted in any state or federal court in the Borough of Manhattan, The City of New York, New York, by the Underwriters or by any person who controls the Underwriters and the Bank each expressly consents to the jurisdiction of any such court in respect of any such suit, action or proceeding, and waives any other requirements of or objections to personal jurisdiction with respect thereto. The Bank represents and warrants that the Authorized Agent has agreed to act as said agent for service of process, and the Bank agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Bank, as the case may be, shall be deemed, in every respect, effective service of process upon the Bank. Notwithstanding the foregoing, any suit, action or proceeding based on this Agreement may be instituted by an Underwriter in any competent court in The Kingdom of Spain. |
| 14. | Judgment Currency. The Bank agrees to indemnify each of the Underwriters against any loss incurred by the Underwriters as a result of any judgment or order being given or made for any amount due hereunder and such judgment or order being expressed and paid in a currency (the “Judgment Currency”) other than U.S. dollars and as a result of any variation as between (i) the rate of exchange at which the U.S. dollar amount is converted into the Judgment Currency for the purpose of such judgment or order and (ii) the rate of exchange at which each Underwriter is able to purchase U.S. dollars with the amount of the Judgment Currency actually received by each Underwriter. The foregoing indemnity shall constitute a separate and independent obligation of each Underwriter and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The parties hereto agree that, to the fullest extent permitted by law, the “rate of exchange” used shall be the rate at which, in accordance with normal banking procedures, each Underwriter could purchase such Judgment Currency in The City of New York on the business day preceding that on which final judgment is given. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, the relevant currency. |
| 15. | Default by One of the Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Securities hereunder on the Closing Date and the aggregate number of Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total number of Securities that the Underwriters are obligated to purchase on the Closing Date, the Underwriters may make arrangements satisfactory to the Bank for the purchase of such Securities by other persons, including any of the Underwriters, but if no such arrangements are made by the Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Securities that such defaulting Underwriters agreed but failed to purchase on the Closing Date. If any Underwriter or Underwriters so default and the aggregate number of Securities with respect to which such default or defaults occur exceeds 10% of the total number of Securities that the Underwriters are obligated to purchase on the Closing Date and arrangements satisfactory to the Underwriters and the Bank for the purchase of such Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Bank, except as provided in Sections 7 and 8. As used in this Agreement, the term “Underwriter” includes any person substituted for an Underwriter under this Section 15. Nothing herein will relieve a defaulting Underwriter from liability for its default. |
23
| 16. | Underwriters’ Information. Each of the Bank and the Underwriters acknowledge and agree, for the purposes of this Agreement, that the only information that the Underwriters have furnished to the Bank expressly for use in the Registration Statement, the Time of Sale Prospectus and the Prospectus (or any amendment or supplement to the Time of Sale Prospectus or the Prospectus), free writing prospectuses or any Supplemental Offering Materials are the respective names of the Underwriters and the information set forth under the heading “Underwriting (Conflicts of Interest) — Stabilization Transactions and Short Sales” in the Time of Sale Prospectus and the Prospectus. |
| 17. | Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. |
| 18. | Recognition of bail-in. Notwithstanding any other term of this Agreement or any other agreements, arrangements, or understanding between the Bank and the Underwriters, each Underwriter acknowledges, accepts, and agrees to be bound by, to the extent that the relevant exercise of the Bail-in Power by the Relevant Resolution Authority is permitted by the law and regulation applicable in Spain: |
| (a) | the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority in relation to any BRRD Liability of the Bank to such Underwriter under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof: (1) the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon; (2) the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the Bank or another person, and the issue to or conferral on such Underwriter of such shares, securities or obligations; (3) the cancellation of the BRRD Liability; and (4) the amendment or alteration of any interest, if applicable, thereon, the maturity, or the dates on which any payments are due, including by suspending payment for a temporary period; and |
| (b) | the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of the Bail-in Power by the Relevant Resolution Authority. |
As used in this Section 18:
“BRRD” means Directive 2014/59/EU of the European Parliament and of the Council of May 15, 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms, as amended or replaced from time to time.
“BRRD Liability” means any liability, commitment, duty, responsibility or other obligation arising from, or related to, the Agreement which may be subject to the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Law 11/2015” means Law 11/2015, of June 18, for the recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión), as amended from time to time.
24
“Regulated Entity” means any entity to which Law 11/2015 applies as provided under article 1.2 of Law 11/2015, as amended from time to time, which includes certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power from time to time.
“Bail-in Power” means any write-down, conversion, transfer, modification, or suspension power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in The Kingdom of Spain, relating to (i) the transposition of BRRD, including articles 48 and 59 thereof (including but not limited to Law 11/2015 and Royal Decree 1012/2015 dated November 6, by virtue of which Law 11/2015 is developed and Royal Decree 2606/1996, dated December 20, on credit entities’ deposit guarantee fund is amended, and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules and standards created thereunder, pursuant to which any obligation of a Regulated Entity (as defined above) (or other affiliate of such Regulated Entity) can be reduced, cancelled, modified, or converted into shares, other securities, or other obligations of such Regulated Entity or any other person (or suspended for a temporary period).
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of July 15, 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of the Single Resolution Mechanism and the Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
| 19. | Recognition of the U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Underwriting Agreement, and any interest and obligation in or under this Underwriting Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Underwriting Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Underwriting Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. |
As used in this Section 19:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
25
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
| 20. | Compliance with USA PATRIOT Act. In accordance with the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law on October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Bank, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients. |
| 21. | Counterparts. This Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement. Delivery of an executed Agreement by one party to any other party may be made by facsimile, electronic mail (including any electronic signature complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law) or other transmission method, and the parties hereto agree that any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes |
| 22. | Entire Agreement; Amendment. This Agreement supersedes all prior agreements and undertakings, both written and oral, of the parties hereto, or any of them, with respect to the subject matter hereof and constitute the entire understanding of the parties hereto with respect to the subject matter hereof. This Agreement may not be waived, amended or modified except in writing signed by each party to be bound hereby. |
26
If the foregoing is in accordance with the Underwriters’ understanding of our agreement, please sign and return to us a counterpart hereof, whereupon this instrument will become a binding agreement between the Bank and the Underwriters in accordance with its terms.
Very truly yours,
| BANCO SANTANDER, S.A. | ||
| By | /s/ Juan Urigoen Irusta | |
| Name: Juan Urigoen Irusta | ||
| Title: Authorized Signatory | ||
[The rest of this page is intentionally left blank]
The foregoing Agreement is hereby confirmed and accepted as of the date first written above.
| BOFA SECURITIES, INC. | ||
| By | /s/ Sandeep Chawla | |
| Name: Sandeep Chawla | ||
| Title: Managing Director | ||
UA Signature Page for BofA Securities, Inc.
| CITIGROUP GLOBAL MARKETS INC. | ||
| By | /s/ Adam D. Bordner | |
| Name: Adam D. Bordner | ||
| Title: Director | ||
UA Signature Page for Citigroup Global Markets Inc.
| GOLDMAN SACHS BANK EUROPE SE | ||
| By | /s/ Macario Prieto | |
| Name: Macario Prieto | ||
| Title: Managing Director | ||
| By | /s/ Jan-Niclas Baars | |
| Name: Jan-Niclas Baars | ||
| Title: Authorized Signatory | ||
UA Signature Page for Goldman Sachs Bank Europe SE
| HSBC SECURITIES (USA) INC. | ||
| By | /s/ Patrice Altongy | |
| Name: Patrice Altongy | ||
| Title: Managing Director | ||
UA Signature Page for HSBC Securities (USA) Inc.
| J.P MORGAN SECURITIES LLC | ||
| By | /s/ Stephen L. Sheiner | |
| Name: Stephen L. Sheiner | ||
| Title: Executive Director | ||
UA Signature Page for J.P. Morgan Securities LLC
| JEFFERIES LLC | ||
| By | /s/ David R DiNanno | |
| Name: David R DiNanno | ||
| Title: Managing Director | ||
UA Signature Page for Jefferies LLC
| MORGAN STANLEY & CO. LLC | ||
| By | /s/ Howard Brocklehurst | |
| Name: Howard Brocklehurst | ||
| Title: Managing Director | ||
UA Signature Page for Morgan Stanley & Co. LLC
| RBC CAPITAL MARKETS, LLC | ||
| By | /s/ Scott G. Primrose | |
| Name: Scott G. Primrose | ||
| Title: Authorized Signatory | ||
UA Signature Page for RBC Capital Markets, LLC
| SANTANDER US CAPITAL MARKETS LLC | ||
| By | /s/ Richard Zobkiw | |
| Name: Richard Zobkiw | ||
| Title: Executive Director | ||
UA Signature Page for Santander US Capital Markets LLC
| TD SECURITIES (USA) LLC | ||
| By | /s/ Luiz Lanfredi | |
| Name: Luiz Lanfredi | ||
| Title: Director | ||
UA Signature Page for TD Securities (USA) LLC
| WELLS FARGO SECURITIES, LLC | ||
| By | /s/ Christopher Serven | |
| Name: Christopher Serven | ||
| Title: Director | ||
UA Signature Page for Wells Fargo Securities, LLC
SCHEDULE I
| Name of Underwriter |
Principal Amount of U.S.$1,500,000,000 5.588% Senior Preferred Fixed Rate Notes due 2028 |
|||
| Santander US Capital Markets LLC |
$ | 451,000,000 | ||
| BofA Securities, Inc. |
$ | 97,400,000 | ||
| Citigroup Global Markets Inc. |
$ | 97,400,000 | ||
| Goldman Sachs Bank Europe SE |
$ | 97,400,000 | ||
| HSBC Securities (USA) Inc. |
$ | 97,400,000 | ||
| J.P. Morgan Securities LLC |
$ | 97,400,000 | ||
| Jefferies LLC |
$ | 97,400,000 | ||
| Morgan Stanley & Co. LLC |
$ | 97,400,000 | ||
| RBC Capital Markets, LLC |
$ | 97,400,000 | ||
| TD Securities (USA) LLC |
$ | 97,400,000 | ||
| Wells Fargo Securities, LLC |
$ | 97,400,000 | ||
| Bankinter, S.A. |
$ | 15,000,000 | ||
| BMO Capital Markets Corp. |
$ | 15,000,000 | ||
| Independence Point Securities LLC |
$ | 15,000,000 | ||
| Penserra Securities LLC |
$ | 15,000,000 | ||
| Scotia Capital (USA) Inc. |
$ | 15,000,000 | ||
|
|
|
|||
| Total |
$ | 1,500,000,000 | ||
Schedule I-1
| Name of Underwriter |
Principal Amount of U.S.$2,000,000,000 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033 |
|||
| Santander US Capital Markets LLC |
$ | 600,000,000 | ||
| BofA Securities, Inc. |
$ | 130,000,000 | ||
| Citigroup Global Markets Inc. |
$ | 130,000,000 | ||
| Goldman Sachs Bank Europe SE |
$ | 130,000,000 | ||
| HSBC Securities (USA) Inc. |
$ | 130,000,000 | ||
| J.P. Morgan Securities LLC |
$ | 130,000,000 | ||
| Jefferies LLC |
$ | 130,000,000 | ||
| Morgan Stanley & Co. LLC |
$ | 130,000,000 | ||
| RBC Capital Markets, LLC |
$ | 130,000,000 | ||
| TD Securities (USA) LLC |
$ | 130,000,000 | ||
| Wells Fargo Securities, LLC |
$ | 130,000,000 | ||
| Bankinter, S.A. |
$ | 20,000,000 | ||
| BMO Capital Markets Corp. |
$ | 20,000,000 | ||
| Independence Point Securities LLC |
$ | 20,000,000 | ||
| Penserra Securities LLC |
$ | 20,000,000 | ||
| Scotia Capital (USA) Inc. |
$ | 20,000,000 | ||
|
|
|
|||
| Total |
$ | 2,000,000,000 | ||
Schedule I-2
EXHIBIT A
FORM OF OPINION OF INTERNAL COUNSEL
[Attached]
A-1
EXHIBIT B
FORM OF OPINION OF URÍA MENÉNDEZ ABOGADOS, S.L.P.
[Attached]
B-1
EXHIBIT C
FORM OF OPINION OF DAVIS POLK & WARDWELL LLP
[Attached]
C-1
EXHIBIT D
PRICING TERM SHEET
U.S.$1,500,000,000 5.588% SENIOR PREFERRED FIXED RATE NOTES DUE 2028 (THE “SENIOR PREFERRED NOTES”)
| Issuer: | Banco Santander, S.A. | |
| Series Number: | SP-179 | |
| Issuer Ratings*: | [***] | |
| Expected Notes Ratings*: | [***] | |
| Status: | Senior Preferred | |
| Principal Amount: | U.S.$1,500,000,000 | |
| Form of Issuance: | SEC Registered | |
| Pricing Date: | July 31, 2023 | |
| Settlement Date**: | August 8, 2023 (T+6) | |
| Maturity Date: | August 8, 2028 | |
| Benchmark Treasury: | 4.125% UST due July 31, 2028 | |
| Benchmark Treasury Yield: | 4.188% | |
| Spread to Benchmark Treasury: | T+140 bps | |
| Re-offer Yield: | 5.588% | |
| Coupon: | 5.588% per annum, payable semi-annually in arrears | |
| Price to Public: | 100.000% of the Principal Amount | |
| Underwriting Discount / Commission: | 0.30% | |
| Proceeds to Issuer (before Expenses): | 99.70% (U.S.$1,495,500,000) | |
| Expenses (excluding the Underwriting Discount / Commission): | U.S.$195,000 | |
| Net Proceeds (after Underwriting Discount / Commission and including Expenses): | U.S.$1,495,695,000 | |
D-1
| Interest Payment Dates: | February 8 and August 8 of each year, commencing on February 8, 2024 up to and including the Maturity Date or any date of earlier redemption. | |
| Day Count Fraction: | 30/360 (following, unadjusted) | |
| Optional Early Redemption (Call): | Not Applicable | |
| Early Redemption for TLAC/MREL Disqualification Event: | Not Applicable | |
| Early Redemption for Taxation Reasons: | Applicable as specified in the prospectus supplement | |
| Substitution and Variation: | Applicable as specified in the prospectus supplement | |
| Business Days: | New York City, London, and TARGET 2 | |
| Minimum Denominations / Multiples: | Minimum denominations of U.S.$200,000 and multiples of U.S.$200,000 in excess thereof | |
| Listing: | New York Stock Exchange | |
| Trustee and Principal Paying Agent and Calculation Agent: | The Bank of New York Mellon, London Branch | |
| Governing Law: | New York law, except that the authorization and execution by Banco Santander, S.A. of the Indenture and the Senior Preferred Notes and certain provisions of the Senior Preferred Notes and the Indenture related to the status of the Senior Preferred Notes shall be governed and construed in accordance with Spanish Law. | |
| Agreement to and Acknowledgement of Statutory Bail-in: | By its acquisition of any Senior Preferred Notes, each holder (including each holder of a beneficial interest in the Senior Preferred Notes) acknowledges, accepts, consents and agrees to be bound by the terms of the Senior Preferred Notes related to the exercise of the Spanish Bail-In Power. | |
| Waiver of set-off: | Applicable as specified in the prospectus supplement. | |
| Risk Factors: | Investors should read the Risk Factors in the preliminary prospectus supplement dated July 31, 2023. | |
| U.S. Federal Income Tax Considerations: | For a discussion of the material U.S. federal income tax considerations for the ownership and disposition of the Senior Preferred Notes by U.S. investors, see “Taxation—U.S. Federal Income Tax Considerations” in the base prospectus. That discussion does not describe all of the tax consequences that may be relevant in the light of a U.S. investor’s particular circumstances. | |
D-2
| Selling Restrictions: | Canada, United Kingdom, Hong Kong, Italy, Japan, People’s Republic of China (excluding Hong Kong, Macau and Taiwan), Republic of Korea, Taiwan, Singapore, Switzerland and Australia. No publicity or marketing nor public offering which requires the registration of a prospectus in Spain. The Senior Preferred Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA and in the United Kingdom, as per the preliminary prospectus supplement. | |
| Conflict of Interest: | Santander US Capital Markets LLC is a subsidiary of Banco Santander, S.A. Therefore, Santander US Capital Markets LLC is deemed to have a “conflict of interest” under FINRA Rule 5121 and, accordingly, the offering of the Senior Preferred Notes will comply with the applicable requirements of FINRA Rule 5121. | |
| CUSIP / ISIN: | 05964H AU9 / US05964HAU95 | |
| Sole Global Coordinator: | Santander US Capital Markets LLC | |
| Joint Bookrunners: | BofA Securities, Inc. Citigroup Global Markets Inc. Goldman Sachs Bank Europe SE HSBC Securities (USA) Inc. J.P. Morgan Securities LLC Jefferies LLC Morgan Stanley & Co. LLC RBC Capital Markets, LLC Santander US Capital Markets LLC TD Securities (USA) LLC Wells Fargo Securities, LLC | |
| Co-Leads: | Bankinter, S.A. BMO Capital Markets Corp. Independence Point Securities LLC Penserra Securities LLC Scotia Capital (USA) Inc. | |
*Any ratings obtained will reflect only the views of the respective rating agency and should not be considered a recommendation to buy, sell or hold the Senior Preferred Notes. The ratings assigned by the rating agencies are subject to revision or withdrawal at any time by such rating agencies in their sole discretion. Each rating should be evaluated independently of any other rating.
**It is expected that delivery of the Senior Preferred Notes will be made against payment therefore on or about August 8, 2023, which is the sixth day following the date hereof (such settlement cycle being referred to as “T+6”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market are generally required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Senior Preferred Notes prior to the second business day prior to the settlement date will be required, by virtue of the fact that the Senior Preferred Notes initially settle in T+6, to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement and should consult their own advisors.
D-3
The issuer has filed a registration statement (including a base prospectus and a related preliminary prospectus supplement) with the U.S. Securities and Exchange Commission (SEC) for this offering. Before you invest, you should read the preliminary prospectus supplement, the base prospectus in that registration statement, and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by searching the SEC online database (EDGAR®) at www.sec.gov.
Alternatively, you may obtain a copy of the base prospectus and the preliminary prospectus supplement from BofA Securities, Inc. by calling toll free 1-800-294-1322, Citigroup Global Markets Inc. by calling toll free 1-800-831-9146, Goldman Sachs Bank Europe SE by calling toll free 1-866-471-2526, HSBC Securities (USA) Inc. by calling toll free 1-866-811-8049, J.P. Morgan Securities LLC by calling toll free 1-866-803-9204, Jefferies LLC by calling toll free 1-877-877-0696, Morgan Stanley & Co. LLC by calling toll free 1-212-761-6691, RBC Capital Markets, LLC by calling toll free 1-866-375-6829, Santander US Capital Markets LLC by calling toll free 1-855-403-3636, TD Securities (USA) LLC by calling toll free 1-855-495-9846 and Wells Fargo Securities, LLC by calling toll free 1-800-645-3751.
Capitalized terms used but not defined in this term sheet have the meanings set forth in the base prospectus as supplemented by the preliminary prospectus supplement.
The distribution of this term sheet and the offering of the securities to which this term sheet relates (the “Senior Preferred Notes”) may be restricted by law in certain jurisdictions and therefore persons into whose possession this term sheet comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions could result in a violation of the laws of any such jurisdiction.
EU PRIIPs Regulation / PROHIBITION OF SALES TO EEA RETAIL INVESTORS: The Senior Preferred Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (11) of Article 4(1) of MiFID II; (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, (the “IDD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II ; or (iii) not a qualified investor as defined in the Prospectus Regulation. Consequently, no key information document required by Regulation (EU) No. 1286/2014 (the “EU PRIIPs Regulation”) for offering or selling the Senior Preferred Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Senior Preferred Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the EU PRIIPs Regulation.
UK PRIIPs Regulation / PROHIBITION OF SALES TO UK RETAIL INVESTORS: The Senior Preferred Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom (“UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No. 2017/565 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement IDD, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No. 600/2014 as it forms part of UK domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No. 1286/2014 as it forms part of UK domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the Senior Preferred Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the Senior Preferred Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Senior Preferred Notes has led to the conclusion that: (i) the target market for the Senior Preferred Notes is eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Senior Preferred Notes to eligible counterparties and professional clients are appropriate. The target market assessment indicates that the Senior Preferred Notes are incompatible with the needs, characteristic and objectives of clients which are retail clients (as defined in MiFID II). Any person subsequently offering, selling, or recommending the Senior Preferred Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Senior Preferred Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
UK MIFIR PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Senior Preferred Notes has led to the conclusion that: (i) the target market for the Senior Preferred Notes is eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook (“COBS”), and professional clients only, as defined in Regulation (EU) No. 600/2014 as it forms part of UK
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domestic law by virtue of the EUWA (“UK MiFIR”); and (ii) all channels for distribution of the Senior Preferred Notes to eligible counterparties and professional clients are appropriate. The target market assessment indicates that the Senior Preferred Notes are incompatible with the needs, characteristic and objectives of clients which are retail clients (as defined in Regulation (EU) No 2017/565 as it forms part of the domestic law of the UK by virtue of the EUWA). Any person subsequently offering, selling or recommending the Senior Preferred Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK MiFIR Product Governance Rules”) is responsible for undertaking its own target market assessment in respect of the Senior Preferred Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
This term sheet is not an offer of securities or investments for sale nor a solicitation of an offer to buy securities or investments in any jurisdiction where such offer or solicitation would be unlawful. No action has been taken that would permit an offering of the Senior Preferred Notes or possession or distribution of this term sheet in any jurisdiction where action for that purpose is required. Persons into whose possession this term sheet comes are required to inform themselves about and to observe any such restrictions.
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PRICING TERM SHEET
U.S.$2,000,000,000 6.921% TIER 2 SUBORDINATED FIXED RATE NOTES DUE 2033 (THE “TIER 2 NOTES”)
| Issuer: | Banco Santander, S.A. | |
| Series Number: | SUBSAN-189 | |
| Issuer Ratings:* | [***] | |
| Expected Notes Ratings:* | [***] | |
| Status: | Tier 2, Subordinated Instruments | |
| Principal Amount: | U.S.$2,000,000,000 | |
| Form of Issuance: | SEC Registered | |
| Pricing Date: | July 31, 2023 | |
| Settlement Date:** | August 8, 2023 (T+6) | |
| Maturity Date: | August 8, 2033 | |
| Benchmark Treasury: | 3.375% UST due May 15, 2033 | |
| Benchmark Treasury Yield: | 3.971% | |
| Spread to Benchmark Treasury: | T+295 bps | |
| Re-offer Yield: | 6.921% | |
| Coupon: | 6.921% per annum, payable semi-annually in arrears | |
| Price to Public: | 100.000% of the Principal Amount | |
| Underwriting Discount / Commission: | 0.45% | |
| Proceeds to Issuer (before Expenses): | 99.55% (U.S.$1,991,000,000) | |
| Expenses (excluding the Underwriting Discount / Commission): | U.S.$0 | |
| Net Proceeds (after Underwriting Discount / Commission and including Expenses): | U.S.$1,991,000,000 | |
| Interest Payment Dates: | February 8 and August 8 of each year, commencing on February 8, 2024 up to and including the Maturity Date or any date of earlier redemption. | |
| Day Count Fraction: | 30 / 360 (following, unadjusted) | |
| Business Days: | New York City, London and TARGET 2 | |
| Minimum Denominations / Multiples: | Minimum denominations of U.S.$200,000 and multiples of U.S.$200,000 in excess thereof | |
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| Issuer Redemption Provisions: | Banco Santander, S.A. may, at its option, redeem in whole but not in part, the Tier 2 Notes, at their early redemption amount, together with accrued but unpaid interest up to (but excluding) the date of redemption, upon or following the occurrence of a Capital Disqualification Event or for taxation reasons, in accordance with Applicable Banking Regulations in force at the relevant time and subject to Banco Santander, S.A. obtaining the prior consent of the Regulator therefor, if and as required. | |
| Early Redemption for Capital Disqualification Event: | “Capital Disqualification Event” means a change in Spanish law, Applicable Banking Regulations or any change in the application or official interpretation thereof that results or is likely to result in the entire outstanding aggregate principal amount of the Tier 2 Notes ceasing to be included in, or counting towards, Banco Santander S.A.’s and/or the Group’s Tier 2 Capital. | |
| Early Redemption for TLAC/MREL Disqualification Event: | Not Applicable | |
| Early Redemption for Taxation Reasons: | If as a result of any change in, or amendment to, the laws or regulations of Spain or of any political subdivision thereof or any authority or agency therein or thereof having power to tax or in the interpretation or administration of any such laws or regulations which becomes effective on or after the issue date of the Tier 2 Notes, Banco Santander, S.A. shall determine that (a) Banco Santander, S.A. would be required to pay Additional Amounts as described in the base prospectus or (b) Banco Santander, S.A. would not be entitled to claim a deduction in computing tax liabilities in Spain in respect of any interest to be paid on the next interest payment date on the Tier 2 Notes or the value of such deduction to Banco Santander, S.A. would be materially reduced or (c) the applicable tax treatment of the Tier 2 Notes changes in a material way that was not reasonably foreseeable at the issue date of the Tier 2 Notes. | |
| Substitution and Variation: | Applicable as specified in the prospectus supplement | |
| Agreement to and Acknowledgement of Statutory Bail-In: | By its acquisition of any Tier 2 Notes, each holder (including each holder of a beneficial interest in the Tier 2 Notes) acknowledges, accepts, consents and agrees to be bound by the terms of the Tier 2 Notes related to the exercise of the Spanish Bail-In Power. | |
| Agreement and Acknowledgment of Subordination Provisions: | Banco Santander, S.A. agrees with respect to the Tier 2 Notes and each holder of Tier 2 Notes, by his or her acquisition of a Tier 2 Note, will be deemed to have agreed to the subordination provisions described in the preliminary prospectus supplement. Each such holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the subordination provisions of the Tier 2 Notes. In addition, each holder of Tier 2 Notes by his or her acquisition of the Tier 2 Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination of the Tier 2 Notes as provided in the Base Indenture and the First Supplemental Indenture and as summarized in the base prospectus as supplemented by the preliminary prospectus supplement and appoints the Trustee his or her attorney-in-fact for any and all such purposes. | |
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| Waiver of set-off: | Applicable as specified in the prospectus supplement | |
| Risk Factors: | Investors should read the Risk Factors in the preliminary prospectus supplement dated July 31, 2023. | |
| U.S. Federal Income Tax Considerations: | For a discussion of the material U.S. federal income tax considerations for the ownership and disposition of the Tier 2 Notes by U.S. investors, see “Taxation—U.S. Federal Income Tax Considerations” in the base prospectus. That discussion does not describe all of the tax consequences that may be relevant in the light of a U.S. investor’s particular circumstances. | |
| Listing: | New York Stock Exchange | |
| Governing Law: | New York law, except that the authorization and execution by Banco Santander, S.A. of the Indenture and the Tier 2 Notes and certain provisions of the Tier 2 Notes and the Indenture related to the status of the Tier 2 Notes shall be governed and construed in accordance with Spanish Law. | |
| Trustee and Principal Paying Agent and Calculation Agent: | The Bank of New York Mellon, London Branch | |
| Selling Restrictions: | Canada, United Kingdom, Hong Kong, Italy, Japan, People’s Republic of China (excluding Hong Kong, Macau and Taiwan), Republic of Korea, Taiwan, Singapore, Switzerland and Australia. No publicity or marketing nor public offering which requires the registration of a prospectus in Spain. The Tier 2 Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA and in the United Kingdom, as per the preliminary prospectus supplement. | |
| Conflict of Interest: | Santander US Capital Markets LLC is a subsidiary of Banco Santander, S.A. Therefore, Santander US Capital Markets LLC is deemed to have a “conflict of interest” under FINRA Rule 5121 and, accordingly, the offering of the Tier 2 Notes will comply with the applicable requirements of FINRA Rule 5121. | |
| CUSIP / ISIN: | 05964H AV7 / US05964HAV78 | |
| Sole Global Coordinator: | Santander US Capital Markets LLC | |
| Joint Bookrunners: | BofA Securities, Inc. Citigroup Global Markets Inc. Goldman Sachs Bank Europe SE HSBC Securities (USA) Inc. J.P. Morgan Securities LLC Jefferies LLC Morgan Stanley & Co. LLC RBC Capital Markets, LLC Santander US Capital Markets LLC TD Securities (USA) LLC Wells Fargo Securities, LLC | |
D-8
| Co-Leads: | Bankinter, S.A. BMO Capital Markets Corp. Independence Point Securities LLC Penserra Securities LLC Scotia Capital (USA) Inc. |
*Any ratings obtained will reflect only the views of the respective rating agency and should not be considered a recommendation to buy, sell or hold the Tier 2 Notes. The ratings assigned by the rating agencies are subject to revision or withdrawal at any time by such rating agencies in their sole discretion. Each rating should be evaluated independently of any other rating.
**It is expected that delivery of the Tier 2 Notes will be made against payment therefore on or about August 8, 2023, which is the sixth day following the date hereof (such settlement cycle being referred to as “T+6”). Under Rule 15c6-1 under the Securities Exchange Act of 1934, as amended, trades in the secondary market are generally required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Tier 2 Notes prior to the second business day prior to the settlement date will be required, by virtue of the fact that the Tier 2 Notes initially settle in T+6, to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement and should consult their own advisors.
The issuer has filed a registration statement (including a base prospectus and a related preliminary prospectus supplement) with the U.S. Securities and Exchange Commission (SEC) for this offering. Before you invest, you should read the preliminary prospectus supplement, the base prospectus in that registration statement, and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by searching the SEC online database (EDGAR®) at www.sec.gov.
Alternatively, you may obtain a copy of the base prospectus and the preliminary prospectus supplement from BofA Securities, Inc. by calling toll free 1-800-294-1322, Citigroup Global Markets Inc. by calling toll free 1-800-831-9146, Goldman Sachs Bank Europe SE by calling toll free 1-866-471-2526, HSBC Securities (USA) Inc. by calling toll free 1-866-811-8049, J.P. Morgan Securities LLC by calling toll free 1-866-803-9204, Jefferies LLC by calling toll free 1-877-877-0696, Morgan Stanley & Co. LLC by calling toll free 1-212-761-6691, RBC Capital Markets, LLC by calling toll free 1-866-375-6829, Santander US Capital Markets LLC by calling toll free 1-855-403-3636, TD Securities (USA) LLC by calling toll free 1-855-495-9846 and Wells Fargo Securities, LLC by calling toll free 1-800-645-3751.
Capitalized terms used but not defined in this term sheet have the meanings set forth in the base prospectus as supplemented by the preliminary prospectus supplement.
The distribution of this term sheet and the offering of the securities to which this term sheet relates (the “Tier 2 Notes”) may be restricted by law in certain jurisdictions and therefore persons into whose possession this term sheet comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions could result in a violation of the laws of any such jurisdiction.
EU PRIIPs Regulation / PROHIBITION OF SALES TO EEA RETAIL INVESTORS: The Tier 2 Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (11) of Article 4(1) of MiFID II; (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, (the “IDD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II ; or (iii) not a qualified investor as defined in the Prospectus Regulation. Consequently, no key information document required by Regulation (EU) No. 1286/2014 (the “EU PRIIPs Regulation”) for offering or selling the Tier 2 Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Tier 2 Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the EU PRIIPs Regulation.
UK PRIIPs Regulation / PROHIBITION OF SALES TO UK RETAIL INVESTORS: The Tier 2 Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom (“UK”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No. 2017/565 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement IDD, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No. 600/2014 as it
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forms part of UK domestic law by virtue of the EUWA. Consequently, no key information document required by Regulation (EU) No. 1286/2014 as it forms part of UK domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the Tier 2 Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the Tier 2 Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
MIFID II PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Tier 2 Notes has led to the conclusion that: (i) the target market for the Tier 2 Notes is eligible counterparties and professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Tier 2 Notes to eligible counterparties and professional clients are appropriate. The target market assessment indicates that the Tier 2 Notes are incompatible with the needs, characteristic and objectives of clients which are retail clients (as defined in MiFID II). Any person subsequently offering, selling, or recommending the Tier 2 Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Tier 2 Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
UK MIFIR PRODUCT GOVERNANCE/PROFESSIONAL INVESTORS AND ECPS ONLY TARGET MARKET – Solely for the purposes of each manufacturer’s product approval process, the target market assessment in respect of the Tier 2 Notes has led to the conclusion that: (i) the target market for the Tier 2 Notes is eligible counterparties, as defined in the FCA Handbook Conduct of Business Sourcebook (“COBS”), and professional clients only, as defined in Regulation (EU) No. 600/2014 as it forms part of UK domestic law by virtue of the EUWA (“UK MiFIR”); and (ii) all channels for distribution of the Tier 2 Notes to eligible counterparties and professional clients are appropriate. The target market assessment indicates that the Tier 2 Notes are incompatible with the needs, characteristic and objectives of clients which are retail clients (as defined in Regulation (EU) No 2017/565 as it forms part of the domestic law of the UK by virtue of the EUWA). Any person subsequently offering, selling or recommending the Tier 2 Notes (a “distributor”) should take into consideration the manufacturers’ target market assessment; however, a distributor subject to the FCA Handbook Product Intervention and Product Governance Sourcebook (the “UK MiFIR Product Governance Rules”) is responsible for undertaking its own target market assessment in respect of the Tier 2 Notes (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.
This term sheet is not an offer of securities or investments for sale nor a solicitation of an offer to buy securities or investments in any jurisdiction where such offer or solicitation would be unlawful. No action has been taken that would permit an offering of the Tier 2 Notes or possession or distribution of this term sheet in any jurisdiction where action for that purpose is required. Persons into whose possession this term sheet comes are required to inform themselves about and to observe any such restrictions.
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EXHIBIT E
| 1. | The Final Term Sheets included in Exhibit D. |
E-1
Exhibit 4.1
BANCO SANTANDER, S.A.
as Issuer
TO
THE BANK OF NEW YORK MELLON,
London Branch
as Trustee
INDENTURE
Senior Preferred Debt Securities
dated as of August 8, 2023
BANCO SANTANDER, S.A.
Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and this Senior Preferred Debt Securities Indenture, dated as of August 8, 2023.
| Trust Indenture Act Section |
Senior Preferred Debt Securities Indenture Section | |||
| §310 | (a)(1) | 6.10 | ||
| (a)(2) | 6.10 | |||
| (a)(3) | Not Applicable | |||
| (a)(4) | Not Applicable | |||
| (b) | 6.09, 6.11 | |||
| §311 | (a) | 6.14 | ||
| (b) | 6.14 | |||
| §312 | (a) | 7.01, 7.02(a) | ||
| (b) | 7.02(b) | |||
| (c) | 7.02(c) | |||
| §313 | (a) | 7.03(a) | ||
| (b) | 7.03(a) | |||
| (c) | 1.06, 7.03(a) | |||
| (d) | 7.03(b) | |||
| §314 | (a) | 7.04, 10.06 | ||
| (b) | Not Applicable | |||
| (c)(1) | 1.02 | |||
| (c)(2) | 1.02 | |||
| (c)(3) | Not Applicable | |||
| (d) | Not Applicable | |||
| (e) | 1.02 | |||
| (f) | Not Applicable | |||
| §315 | (a) | 6.01 | ||
| (b) | 6.03, 7.03(a) | |||
| (c) | 6.01 | |||
| (d) | 6.01 | |||
| (d)(1) | 6.01 | |||
| (d)(2) | 6.01 | |||
| (d)(3) | 6.01 | |||
| (e) | 5.14 | |||
| §316 | (a)(1)(A) | 5.12 | ||
| (a)(l)(B) | 5.13 | |||
| (a)(2) | Not Applicable | |||
| (a)(last sentence) | 1.01 | |||
| (b) | 5.08 | |||
| §317 | (a)(1) | 5.03 | ||
| (a)(2) | 5.04 | |||
| (b) | 10.03 | |||
| §318 | (a) | 1.08 |
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Senior Preferred Debt Securities Indenture.
TABLE OF CONTENTS
| PAGE | ||||||
| ARTICLE 1 |
| |||||
| DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION |
| |||||
| Section 1.01. |
Definitions | 1 | ||||
| Section 1.02. |
Compliance Certificates and Opinions | 14 | ||||
| Section 1.03. |
Form of Documents Delivered to Trustee | 15 | ||||
| Section 1.04. |
Acts of Holders | 15 | ||||
| Section 1.05. |
Notices, Etc. to Trustee or Company | 16 | ||||
| Section 1.06. |
Notice to Holders; Waiver | 17 | ||||
| Section 1.07. |
Language of Notices, Etc | 18 | ||||
| Section 1.08. |
Conflict with Trust Indenture Act | 18 | ||||
| Section 1.09. |
Effect of Headings and Table of Contents | 18 | ||||
| Section 1.10. |
Successors and Assigns | 18 | ||||
| Section 1.11. |
Separability Clause | 18 | ||||
| Section 1.12. |
Benefits of Senior Preferred Debt Securities Indenture | 19 | ||||
| Section 1.13. |
Governing Law | 19 | ||||
| Section 1.14. |
Business Days and Legal Holidays | 19 | ||||
| Section 1.15. |
Appointment of Agent for Service | 19 | ||||
| Section 1.16. |
Calculation Agent | 20 | ||||
| Section 1.17. |
Waiver of Jury Trial | 20 | ||||
| Section 1.18. |
Judgment Currency | 20 | ||||
| ARTICLE 2 |
| |||||
| SENIOR PREFERRED DEBT SECURITY FORMS |
| |||||
| Section 2.01. |
Forms Generally | 22 | ||||
| Section 2.02. |
Status of the Senior Preferred Debt Securities | 22 | ||||
| Section 2.03. |
Form of Trustee’s Certificate of Authentication | 22 | ||||
| ARTICLE 3 |
| |||||
| THE SENIOR PREFERRED DEBT SECURITIES |
| |||||
| Section 3.01. |
Amount Unlimited; Issuable in Series | 23 | ||||
| Section 3.02. |
Denominations | 26 | ||||
| Section 3.03. |
Execution, Authentication, Delivery and Dating | 26 | ||||
| Section 3.04. |
Temporary Senior Preferred Debt Securities | 27 | ||||
| Section 3.05. |
Registration, Registration of Transfer and Exchange | 28 | ||||
| Section 3.06. |
Mutilated, Destroyed, Lost and Stolen Senior Preferred Debt Securities | 32 | ||||
| Section 3.07. |
Payment; Interest Rights and Rights to Additional Amounts Preserved | 33 | ||||
| Section 3.08. |
Persons Deemed Owners | 34 | ||||
| Section 3.09. |
Cancellation | 36 | ||||
| Section 3.10. |
Computation of Interest | 36 | ||||
| Section 3.11. |
CUSIP Numbers | 36 | ||||
i
| Section 3.12. |
Additional Senior Preferred Debt Securities | 36 | ||||
| Section 3.13. |
Correction of Minor Defects in or Amendment of Senior Preferred Debt Securities | 37 | ||||
| Section 3.14. |
Payments Subject to Fiscal Laws | 37 | ||||
| ARTICLE 4 |
| |||||
| SATISFACTION AND DISCHARGE |
| |||||
| Section 4.01. |
Satisfaction and Discharge of Senior Preferred Debt Securities Indenture | 37 | ||||
| Section 4.02. |
Defeasance and Covenant Defeasance | 39 | ||||
| Section 4.03. |
Application of Trust Money | 43 | ||||
| Section 4.04. |
Repayment to Company | 43 | ||||
| Section 4.05. |
Reinstatement | 43 | ||||
| ARTICLE 5 |
| |||||
| REMEDIES |
| |||||
| Section 5.01. |
Events of Default | 44 | ||||
| Section 5.02. |
Acceleration of Maturity; Rescission and Annulment | 45 | ||||
| Section 5.03. |
Collection of Indebtedness and Suits for Enforcement by the Trustee | 46 | ||||
| Section 5.04. |
Trustee May File Proofs of Claim | 47 | ||||
| Section 5.05. |
Trustee May Enforce Claims Without Possession of Senior Preferred Debt Securities | 48 | ||||
| Section 5.06. |
Application of Money Collected | 48 | ||||
| Section 5.07. |
Limitation on Suits | 49 | ||||
| Section 5.08. |
Unconditional Right of Holders to Receive Principal, Premium and Interest, if Any and Additional Amounts | 50 | ||||
| Section 5.09. |
Restoration of Rights and Remedies | 50 | ||||
| Section 5.10. |
Rights and Remedies Cumulative | 50 | ||||
| Section 5.11. |
Delay or Omission Not Waiver | 50 | ||||
| Section 5.12. |
Control by Holders | 50 | ||||
| Section 5.13. |
Waiver of Past Defaults | 51 | ||||
| Section 5.14. |
Undertaking for Costs | 51 | ||||
| Section 5.15. |
Waiver of Right of Set-off | 52 | ||||
| Section 5.16. |
No Additional Remedies | 52 | ||||
| ARTICLE 6 |
| |||||
| THE TRUSTEE |
| |||||
| Section 6.01. |
Certain Duties and Responsibilities | 53 | ||||
| Section 6.02. |
Spanish Tax Procedures and Obligations of the Trustee | 54 | ||||
| Section 6.03. |
Notice of Defaults | 54 | ||||
| Section 6.04. |
Certain Rights of Trustee | 55 | ||||
| Section 6.05. |
Not Responsible for Recitals or Issuance of Senior Preferred Debt Securities | 56 | ||||
ii
| Section 6.06. |
May Hold Senior Preferred Debt Securities | 57 | ||||
| Section 6.07. |
Money Held in Trust | 57 | ||||
| Section 6.08. |
Compensation and Reimbursement | 57 | ||||
| Section 6.09. |
Disqualification; Conflicting Interests | 59 | ||||
| Section 6.10. |
Corporate Trustee Required; Eligibility | 59 | ||||
| Section 6.11. |
Resignation and Removal; Appointment of Successor | 59 | ||||
| Section 6.12. |
Acceptance of Appointment by Successor | 61 | ||||
| Section 6.13. |
Merger, Conversion, Consolidation or Succession to Business | 62 | ||||
| Section 6.14. |
Preferential Collection of Claims | 62 | ||||
| Section 6.15. |
Appointment of Authenticating Agent | 62 | ||||
| Section 6.16. |
Appointment of Additional Trustees | 64 | ||||
| Section 6.17. |
Tax Withholding | 64 | ||||
| ARTICLE 7 |
| |||||
| HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY |
| |||||
| Section 7.01. |
Company to Furnish Trustee Names and Addresses of Holders | 65 | ||||
| Section 7.02. |
Preservation of Information; Communication to Holders | 65 | ||||
| Section 7.03. |
Reports by Trustee | 66 | ||||
| Section 7.04. |
Reports by the Company | 66 | ||||
| ARTICLE 8 |
| |||||
| CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER |
| |||||
| Section 8.01. |
Company May Consolidate, Etc. Only on Certain Terms | 67 | ||||
| Section 8.02. |
Successor Corporation Substituted | 68 | ||||
| Section 8.03. |
Assumption of Obligations | 68 | ||||
| Section 8.04. |
Substitution and Variation | 69 | ||||
| ARTICLE 9 |
| |||||
| SUPPLEMENTAL INDENTURES |
| |||||
| Section 9.01. |
Supplemental Indentures without Consent of Holders | 70 | ||||
| Section 9.02. |
Supplemental Indentures with Consent of Holders | 71 | ||||
| Section 9.03. |
Execution of Supplemental Indentures | 72 | ||||
| Section 9.04. |
Effect of Supplemental Indentures | 73 | ||||
| Section 9.05. |
Conformity with Trust Indenture Act | 73 | ||||
| Section 9.06. |
Reference in Senior Preferred Debt Securities to Supplemental Indentures | 73 | ||||
| ARTICLE 10 |
| |||||
| COVENANTS |
| |||||
| Section 10.01. |
Payment of Principal, Premium, and Interest | 73 | ||||
| Section 10.02. |
Maintenance of Office or Agency | 73 | ||||
| Section 10.03. |
Money for Payments to be Held in Trust | 74 | ||||
| Section 10.04. |
Additional Amounts | 75 | ||||
| Section 10.05. |
Corporate Existence | 78 | ||||
| Section 10.06. |
Statement as to Compliance | 78 | ||||
| Section 10.07. |
Original Issue Document | 78 | ||||
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| ARTICLE 11 |
| |||||
| REDEMPTION OF SENIOR PREFERRED DEBT SECURITIES |
| |||||
| Section 11.01. |
Applicability of Article | 79 | ||||
| Section 11.02. |
Election to Redeem; Notice to Trustee | 79 | ||||
| Section 11.03. |
Selection by Trustee of Senior Preferred Debt Securities to be Redeemed | 79 | ||||
| Section 11.04. |
Notice of Redemption | 79 | ||||
| Section 11.05. |
Deposit of Redemption Price | 80 | ||||
| Section 11.06. |
Senior Preferred Debt Securities Payable on Redemption Date | 81 | ||||
| Section 11.07. |
Senior Preferred Debt Securities Redeemed in Part | 81 | ||||
| Section 11.08. |
Early Redemption for Taxation Reasons | 81 | ||||
| Section 11.09. |
Repurchase of Senior Preferred Debt Securities | 82 | ||||
| Section 11.10. |
Optional Early Redemption (Call) | 82 | ||||
| Section 11.11. |
Optional Early Redemption (Put) | 83 | ||||
| Section 11.12. |
Early Redemption For TLAC/MREL Disqualification Event | 84 | ||||
| Section 11.13. |
Early Redemption at the option of the Company | 84 | ||||
| ARTICLE 12 |
| |||||
| BAIL-IN AND RESOLUTION ACTIONS |
| |||||
| Section 12.01. |
Agreement and Acknowledgement with Respect to the Exercise of the Bail-in Power | 85 | ||||
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SENIOR PREFERRED DEBT SECURITIES INDENTURE dated as of August 8, 2023, between BANCO SANTANDER, S.A., a sociedad anónima incorporated under the laws of the Kingdom of Spain (the “Company”), having its principal executive office located at Ciudad Grupo Santander, Avenida de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain, as Issuer, and THE BANK OF NEW YORK MELLON, London Branch, a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the “Trustee”), having its Corporate Trust Office at 160 Queen Victoria Street, London, EC4V 4LA, United Kingdom.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Senior Preferred Debt Securities Indenture to provide for the issuance from time to time of its senior preferred debt securities (the “Senior Preferred Debt Securities”), to be issued in one or more series, represented by one or more Global Securities in registered form, or represented by definitive Senior Preferred Debt Securities in registered form, the amount and terms of each such series to be determined as hereinafter provided.
All things necessary to make this Senior Preferred Debt Securities Indenture a valid and binding agreement of the Company, in accordance with its terms, have been done.
This Senior Preferred Debt Securities Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder that are required to be part of this Senior Preferred Debt Securities Indenture and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS SENIOR PREFERRED DEBT SECURITIES INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Senior Preferred Debt Securities by the Holders (as herein defined) thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of Senior Preferred Debt Securities of any series as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions. For all purposes of this Senior Preferred Debt Securities Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the Kingdom of Spain at the date of such computation and as applied by the Company;
(4) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Senior Preferred Debt Securities Indenture as a whole and not to any particular Article, Section or other subdivision;
(5) any reference to an “Article” or a “Section” refers to an Article or Section of this Senior Preferred Debt Securities Indenture; and
(6) the word “or” is always used inclusively (for example, the phrase “A or B” means “A or B or both”, not “either A or B but not both”).
Certain terms used principally in certain Articles hereof are defined in those Articles.
“Act”, when used with respect to any Holder, has the meaning set forth in Section 1.04.
“Additional Amounts” has the meaning set forth in Section 10.04.
“Additional Senior Preferred Debt Securities” has the meaning set forth in Section 3.12.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Agents” means the agents appointed in accordance with this Senior Preferred Debt Securities Indenture or applicable supplemental indenture.
“Agent Member” means a member of, or participant in, any Depositary.
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Senior Preferred Debt Securities of any series. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
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“Applicable Banking Regulations” means at any time the laws, regulations, requirements, guidelines and policies relating to capital adequacy, resolution and/or solvency including, among others, those giving effect to the MREL and the TLAC or any equivalent or successor principles, then applicable to the Company and/or the Group including, without limitation to the generality of the foregoing, the CRD IV, the BRRD, the SRM Regulation and those regulations, requirements, guidelines and policies relating to capital adequacy, resolution and/or solvency of the Regulator then applicable to the Company and/or the Group including, among others, those giving effect to the MREL and the TLAC or any equivalent or successor principles, in each case to the extent then in effect in the Kingdom of Spain (whether or not such regulations, requirements, guidelines or policies have the force of law and whether or not they are applied generally or specifically to the Company and/or the Group).
“Authenticating Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Senior Preferred Debt Securities.
“Authorized Newspaper” means a newspaper, in an official language of the place of publication or in the English language, customarily published on each day that is a Business Day in the place of publication, whether or not published on days that are Legal Holidays in the place of publication, and of general circulation in each place in connection with which the term is used or in the financial community of each such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any day that is a Business Day in the place of publication.
“Authorized Officers” shall have the meaning as determined pursuant to Section 1.19.
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, including its articles 48 and 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“Board of Directors” means either the board of directors of the Company or any committee or Person duly authorized to act generally or in any particular respect for the Company hereunder.
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“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary or any Person duly authorized by the Company to have been duly adopted by the relevant 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.
“BRRD” means Directive 2014/59/EU of 15 May establishing the framework for the recovery and resolution of credit institutions and investment firms or such other directive as may come into effect in place thereof, as amended from time to time.
“Business Day” means, unless otherwise provided in the form of Senior Preferred Debt Securities for any particular series pursuant to the provisions of this Senior Preferred Debt Securities Indenture, any day, other than Saturday or Sunday, that is not a Legal Holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in the City of New York or London nor a day when the Trans-European Automated Real-time Gross Settlement Express Transfer system (the “TARGET2 System”), or any successor thereto, is closed for business.
“Calculation Agent” means the Trustee or such other person authorized by the Company as the party responsible for calculating the rate(s) of interest and interest amount(s) and/or such other amount(s) from time to time in relation to any series of Senior Preferred Debt Securities and that accepts such appointment.
“CET1 Capital” means at any time, the common equity tier 1 capital of the Company or the Group, respectively, as calculated in accordance with Chapter 2 (Common Equity Tier 1 Capital) of Title I (Elements of own funds) of Part Two (Own Funds and Eligible Liabilities) of the CRR and/or Applicable Banking Regulations at such time, including any applicable transitional, phasing in or similar provisions.
“Clean-up Redemption” has the meaning set forth in Section 11.13.
“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
“Common Equity Tier 1 Instruments” means instruments qualifying as CET1 Capital.
“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Senior Preferred Debt Securities Indenture, and thereafter “Company” shall mean such successor Person.
“Company Request” and “Company Order” mean, respectively, a written request or order, as the case may be, signed in the name of the Company by any member of the Board of Directors or any officer or representative of the Company empowered to do so by Board Resolution, and delivered to the Trustee.
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“Conversion Event” means the cessation of use of (i) a Foreign Currency both by the government of the country which issued such currency and for the settlement of transactions by a central bank or other public institutions of or within the international banking community, or (ii) the euro both within the European monetary system and for the settlement of transactions by public institutions of or within the European Union.
“Corporate Trust Office” means the office of the Trustee at which its corporate trust business in London, England, is principally administered, which office as of the date hereof is located at 160 Queen Victoria Street, London, EC4V 4LA (Attention: Corporate Trust Administration) or, if a different Trustee is appointed for a particular series of Senior Preferred Debt Securities, the address set forth in the supplemental indenture naming the Trustee for that particular series of Senior Preferred Debt Securities.
The term “corporation” includes corporations, associations, companies, partnerships and business trusts.
“CRD IV” means any or any combination of the CRD IV Directive, the CRR, and any CRD IV Implementing Measures.
“CRD IV Directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC or such other directive as may come into effect in place thereof, as amended or replaced from time to time.
“CRD IV Implementing Measures” means any regulatory capital rules implementing the CRD IV Directive or the CRR which may from time to time be introduced, including, but not limited to, delegated or implementing acts (regulatory technical standards) adopted by the European Commission, national laws and regulations, and regulations and guidelines issued by the Regulator, the European Banking Authority or any other relevant authority, which are applicable to the Company (on a standalone basis) or the Group (on a consolidated basis) and which prescribe the requirements to be fulfilled by financial instruments for inclusion in the regulatory capital or the minimum requirement for own funds and eligible liabilities, as the case may be, of the Company (on a standalone basis) or the Group (on a consolidated basis).
“CRR” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on the prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 or such other regulation as may come into effect in place thereof, as amended from time to time.
“Default Interest” has the meaning set forth in Section 3.07.
“Depositary” means, with respect to any series of Senior Preferred Debt Securities, a clearing agency that is designated to act as Depositary for the Global Securities evidencing all or part of such Senior Preferred Debt Securities as contemplated by Section 3.05.
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“dollar” or “$” or any similar reference means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
“DTC” means The Depository Trust Company or its nominee or its or their successor.
“Early Redemption Amount (Call)” has the meaning set forth in Section 11.10.
“Early Redemption Amount (Clean-up Call)” has the meaning set forth in Section 11.13.
“Early Redemption Amount (Put)” has the meaning set forth in Section 11.11.
“Early Redemption Amount (Tax)” has the meaning set forth in Section 11.08.
“Early Redemption Amount (TLAC/MREL Disqualification Event)” has the meaning set forth in Section 11.12.
“Early Termination Amount” means the amount immediately due and payable if any Event of Default has occurred in relation to any series of Senior Preferred Debt Securities and the Trustee or the Holders of at least 25% in outstanding principal amount of the Senior Preferred Debt Securities of such series has, at their discretion, declared that the Senior Preferred Debt Securities of such series and all interest then accrued thereon is forthwith due and payable.
“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder.
“EUR”, “euro” or “€” means the currency of the member states of the European Union (“EU”) that, from time to time, have adopted the single currency in accordance with the treaty establishing the European Community, as amended from time to time.
“Event of Default” has the meaning set forth in Section 5.01.
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.
“Foreign Currency” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts.
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“Foreign Government Securities” means, with respect to Senior Preferred Debt Securities of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.
“Global Security” means one or more global certificates evidencing all or part of a series of Senior Preferred Debt Securities, authenticated and delivered to or on behalf of the Holder and registered in the name of the Holder or its nominee.
“Group” means Banco Santander, S.A. and its consolidated subsidiaries.
“Holder” means a Person in whose name a Senior Preferred Debt Security in global or definitive form is registered in the Senior Preferred Debt Security Register.
“Independent Public Accountants” means accountants or a firm of accountants that, with respect to the Company and any other obligor under the Senior Preferred Debt Securities, are independent public accountants within the meaning of the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder, who may be the independent public accountants regularly retained by the Company or who may be other independent public accountants.
“Instructions” shall have the meaning as determined pursuant to Section 1.19.
“Interest Payment Date”, when used with respect to any Senior Preferred Debt Security, means the Stated Maturity of any installment of interest on such Senior Preferred Debt Security.
“Law 10/2014” means Law 10/2014 on the regulation, supervision and solvency of credit institutions (Ley 10/2014, de 26 de junio, de ordenación, supervisión y solvencia de entidades de crédito) as amended or replaced from time to time.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“Legal Holiday”, with respect to any Place of Payment or other location, means a Saturday, a Sunday or a day on which banking institutions in such Place of Payment or other location are not authorized or obligated to be open.
“Losses” means any and all claims, losses, liabilities, damages, costs, expenses and judgments (including legal fees and expenses) sustained by the Company or the Trustee.
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“Maturity”, when used with respect to any Senior Preferred Debt Security, means the date, if any, on which the principal or any installment of principal of such Senior Preferred Debt Security becomes due and payable as therein or herein provided, whether by call for redemption, repurchase, declaration of acceleration or otherwise.
“MREL” means the “minimum requirement for own funds and eligible liabilities” for credit institutions under the BRRD, set in accordance with Article 45 of the BRRD (as transposed in the Kingdom of Spain), Commission Delegated Regulation (EU) 2016/1450 of 23 May 2016, supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities and any other Applicable Banking Regulations.
“Officer’s Certificate” means a certificate signed by any member of the Board of Directors, the Secretary or the Deputy Secretary of the Board of Directors, a Vice President or any officer or any other Person duly authorized by the Company that complies with the requirements of Section 314(e) of the Trust Indenture Act and is delivered to the Trustee.
“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 who shall be reasonably acceptable to the Trustee and that, if required by the Trust Indenture Act, complies therewith.
“Early Redemption for TLAC/MREL Disqualification Event” means a redemption as set forth in Section 11.12.
“Original Issue Discount Security” means any Senior Preferred Debt Security which provides for an amount less than the principal amount, to be due and payable upon maturity thereof.
“Outstanding”, when used with respect to Senior Preferred Debt Securities or any series of Senior Preferred Debt Securities means (except as otherwise specified pursuant to Section 3.01), as of the date of determination, all Senior Preferred Debt Securities or all Senior Preferred Debt Securities of such series, as the case may be, theretofore authenticated and delivered under this Senior Preferred Debt Securities Indenture, except:
(i) Senior Preferred Debt Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
(ii) Senior Preferred Debt Securities, or portions thereof, for whose payment or redemption money, U.S. Government Obligations or Foreign Government Securities in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the Company) 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 Senior Preferred Debt Securities; provided, that, if such Senior Preferred Debt Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Senior Preferred Debt Securities Indenture or provision therefor satisfactory to the Trustee has been made;
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(iii) any such Senior Preferred Debt Security with respect to which the Company has effected defeasance pursuant to the terms hereof, except to the extent provided in Section 4.02; and
(iv) Senior Preferred Debt Securities which have been paid pursuant to Section 11.06 or in exchange for or in lieu of which other Senior Preferred Debt Securities have been authenticated and delivered pursuant to this Senior Preferred Debt Securities Indenture, other than any such Senior Preferred Debt Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Senior Preferred Debt Securities are held by a bona fide purchaser in whose hands such Senior Preferred Debt Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Senior Preferred Debt Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of a Senior Preferred Debt Security denominated in a Foreign Currency shall be the dollar equivalent, determined on the date of original issuance of such Senior Preferred Debt Security, of the principal amount of such Senior Preferred Debt Security; and (ii) Senior Preferred Debt Securities beneficially owned by the Company or any other obligor upon the Senior Preferred Debt Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Senior Preferred Debt Securities for which a Responsible Officer of the Trustee has received an Officer’s Certificate stating that such Senior Preferred Debt Securities are so beneficially owned shall be so disregarded; provided, further, however, that Senior Preferred Debt Securities so beneficially owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Senior Preferred Debt Securities and that the pledgee is not the Company or any other obligor upon the Senior Preferred Debt Securities or any Affiliate of the Company or of such other obligor.
“Paying Agent” means any Person (which may include the Company) authorized by the Company to pay the principal of, or any premium or interest on, or any Additional Amounts with respect to, any Senior Preferred Debt Securities on behalf of the Company. Except as otherwise specified as contemplated by Section 3.01 hereof, The Bank of New York Mellon, London Branch will act as Paying Agent in respect of the Senior Preferred Debt Securities of any series.
“Payment Statement” means the statement to be delivered to the Company by the Trustee, substantially in the form set forth in Exhibit I to Appendix I, pursuant to Section 6.02.
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“Person” means any individual, company, corporation, firm, partnership, joint venture, association, organization, state or agency of a state or other entity, whether or not having separate legal personality.
“Place of Payment”, when used with respect to the Senior Preferred Debt Securities of any series, means the place or places where the principal of, or any premium or interest on, or any Additional Amounts with respect to the Senior Preferred Debt Securities of that series are payable as specified pursuant to Section 3.01 or, if not so specified, as specified in Section 10.02.
“Predecessor Security” of any particular Senior Preferred Debt Security means every previous Senior Preferred Debt Security evidencing all or a portion of the same debt as that evidenced by such particular Senior Preferred Debt Security; and, for the purposes of this definition, any Senior Preferred Debt Security authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Senior Preferred Debt Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Senior Preferred Debt Security.
“Qualifying Notes” means, with respect to each applicable series of Senior Preferred Debt Securities, at any time, any securities issued directly by the Company that have terms not otherwise materially less favorable to the Holders of the Senior Preferred Debt Securities of such series than the terms of the Senior Preferred Debt Securities of such series, provided that such securities shall:
(i) contain terms which comply with the then current requirements for TLAC/MREL Eligible Instruments as embodied in the Applicable Banking Regulations; and
(ii) carry the same rate of interest as the Senior Preferred Debt Securities of such series prior to the relevant substitution or variation pursuant to Section 8.04; and
(iii) have the same denomination and aggregate outstanding principal amount as the Senior Preferred Debt Securities of such series prior to the relevant substitution or variation pursuant to Section 8.04; and
(iv) have the same date of maturity and the same dates for payment of interest as the Senior Preferred Debt Securities of such series prior to the relevant substitution or variation pursuant to Section 8.04; and
(v) have at least the same ranking as the Senior Preferred Debt Securities of such series; and
(vi) not, immediately following such substitution or variation, be subject to a TLAC/MREL Disqualification Event and/or a tax event that would entitle the Company to redeem the Senior Preferred Debt Securities as set forth under Section 11.08 and Section 11.12; and
10
(vii) be listed or admitted to trading on any stock exchange as selected by the Company, if the Senior Preferred Debt Securities of such series were listed or admitted to trading on a stock exchange immediately prior to the relevant substitution or variation pursuant to Section 8.04.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time
“Redemption Date”, when used with respect to any Senior Preferred Debt Security to be redeemed, means the date fixed for such redemption by or pursuant to this Senior Preferred Debt Securities Indenture.
“Redemption Price”, when used with respect to any Senior Preferred Debt Security to be redeemed, means the price at which it is to be redeemed pursuant to this Senior Preferred Debt Securities Indenture, which shall include the Early Redemption Amount (Tax), Early Redemption Amount (Call), Early Redemption Amount (Put), Early Redemption Amount (Clean-up Call) or Early Redemption Amount (TLAC/MREL Disqualification Event), as applicable.
“Regular Record Date” for the interest payable on any Interest Payment Date on Senior Preferred Debt Securities of any series means the date specified for the purpose pursuant to Section 3.01.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Regulator” means the European Central Bank, the Bank of Spain, the Relevant Resolution Authority or such other or successor authority exercising primary bank supervisory authority or the role of primary bank resolution authority, in each case with respect to prudential or resolution matters in relation to the Company and/or the Group.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
“Responsible Officer”, when used with respect to the Trustee, means any officer of the Trustee assigned to or working in the Corporate Trust Administration unit (or any successor unit) of the Trustee located at the Corporate Trust Office of the Trustee, who shall have direct responsibility for the administration of this Senior Preferred Debt Securities Indenture and, for the purposes of Section 6.01(c)(ii), shall also include any other officer of the Trustee to whom any corporate trust matter is referred because of such officer’s knowledge of and familiarity with the particular subject.
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“Senior Higher Priority Liabilities” means the unsubordinated and unsecured obligations (créditos ordinarios) of the Company, other than the Senior Non Preferred Liabilities.
“Senior Non Preferred Liabilities” means any unsubordinated and unsecured senior non preferred obligations (créditos ordinarios no preferentes) of the Company under Additional Provision 14.2 of Law 11/2015 and any other obligations which, by law and/or by their terms, and to the extent permitted by Spanish law, rank pari passu with the Senior Non Preferred Liabilities of any series.
“Senior Preferred Debt Securities” has the meaning set forth in the recitals herein and more particularly means any series of Senior Preferred Debt Securities issued, authenticated and delivered under this Senior Preferred Debt Securities Indenture.
“Senior Preferred Debt Securities Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Senior Preferred Debt Securities established pursuant to Section 3.01.
“Senior Preferred Debt Security” means one of the Senior Preferred Debt Securities.
“Senior Preferred Debt Security Register” and “Senior Preferred Debt Security Registrar” have the respective meanings specified in Section 3.05.
“Senior Securities” means Senior Preferred Debt Securities or any other unsecured and unsubordinated debt securities (créditos ordinarios) issued by the Company.
“Spanish Insolvency Law” means the restated text of the Spanish Insolvency Law (Ley Concursal) approved by the Royal Decree-Legislative 1/2020, of 5 May, as amended from time to time.
“Special Record Date”, when used for the payment of any Default Interest on Senior Preferred Debt Securities of any series, means the date specified by the Company for the purpose pursuant to Section 3.07.
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
“Stated Maturity”, when used with respect to any Senior Preferred Debt Security or any installment of principal thereof or interest thereon, means the date or dates, if any, specified in, or determined in accordance with the terms of, such Senior Preferred Debt Security, including as the same may be modified pursuant to the Bail-in Power set forth in Article 12, as the fixed date or dates on which the principal of such Senior Preferred Debt Security or such installment of principal or interest (and Additional Amounts, if any) is due and payable.
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“Subsidiary” means any entity over which the Company may have, directly or indirectly, control in accordance with Applicable Banking Regulations;
“Supervisory Permission” means, in relation to any action, such supervisory permission (or, as appropriate, waiver) from the Regulator as is required therefor under Applicable Banking Regulations.
“TLAC” means the “total loss-absorbing capacity” requirement for global systemically important institutions under the CRR, set in accordance with Article 92a of the CRR and/or any other Applicable Banking Regulations.
A “TLAC/MREL Disqualification Event” shall have occurred at any time that all or part of the outstanding nominal amount of a series of Senior Preferred Debt Securities, does not fully qualify as TLAC/MREL Eligible Instruments of the Company and/or the Group, except where such non-qualification (i) is due solely to the remaining maturity of the Senior Preferred Debt Securities of such series being less than any period prescribed for TLAC/MREL Eligible Instruments by the Applicable Banking Regulations as at the issue date of the relevant series of Senior Preferred Debt Securities or (ii) is as a result of the Senior Preferred Debt Securities of such series being bought back by or on behalf of the Company or a buy back of the Senior Preferred Debt Securities of such series which is funded by or on behalf of the Company.
“TLAC/MREL Eligible Instrument” means an instrument that is eligible to be counted towards the TLAC and/or MREL and, for the avoidance of doubt, irrespective of the quantum limitation that may be applicable to certain types of instruments by the Applicable Banking Regulations.
“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 Senior Preferred Debt Securities Indenture, and thereafter “Trustee” shall mean the Person who is then the Trustee hereunder, or, if a different Trustee is appointed for a particular series of Senior Preferred Debt Securities, the Trustee named in the relevant indenture supplemental hereto as the Trustee for that particular series of Senior Preferred Debt Securities 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 Senior Preferred Debt Securities of any series shall mean the Trustee with respect to the Senior Preferred Debt Securities of such series.
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as in effect at the date as of which this instrument was executed, except as provided in Section 9.05.
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“United States” and “U.S.” mean the United States of America and, except in the case of Section 6.10 and Section 6.15, its territories and possessions.
“U.S. Government Obligations” means securities that are non-callable and nonredeemable at the option of the issuer and that are (i) direct obligations of the United States for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) , which may include the Trustee, 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 or other amount with respect to the U.S. Government Obligation evidenced by such depository receipt.
Section 1.02. Compliance Certificates and Opinions. Unless otherwise expressly provided for in this Senior Preferred Debt Securities Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Senior Preferred Debt Securities Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Senior Preferred Debt Securities Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of the legal advisor rendering such opinion all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Senior Preferred Debt Securities Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Senior Preferred Debt Securities Indenture (other than Section 10.06) shall include:
(a) a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.
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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 or her certificate or opinion or representations are 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, as the case may be, 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 Senior Preferred Debt Securities Indenture, they may, but need not, be consolidated and form one instrument.
Section 1.04. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Senior Preferred Debt Securities Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company. 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 Senior Preferred Debt 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 or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her 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.
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(c) The ownership of Senior Preferred Debt Securities shall be proved by the Senior Preferred Debt Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Senior Preferred Debt Security shall bind every future Holder of the same Senior Preferred Debt Security and the Holder of every Senior Preferred Debt Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, any Senior Preferred Debt Security Registrar, any Paying Agent, any Authenticating Agent, the Company in reliance thereon, whether or not notation of such action is made upon such Senior Preferred Debt Security or such other Senior Preferred Debt Security.
(e) If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a Board Resolution or an Officer’s Certificate, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding Senior Preferred Debt Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Senior Preferred Debt Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Senior Preferred Debt Securities Indenture not later than six months after the record date.
Section 1.05. Notices, Etc. to Trustee or Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Senior Preferred Debt 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 or e-mail delivery of a copy of such a document) to the Trustee at its Corporate Trust Office and the Trustee agrees to accept and act upon facsimile transmission or e-mail delivery of written instructions pursuant to this Senior Preferred Debt Securities Indenture; provided, however, that (x) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (y) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions; or
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(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, first-class air mail postage prepaid, to the Company, to the address of its principal office specified in the first paragraph of this Senior Preferred Debt Securities Indenture or at any other address previously furnished in writing to the Trustee by the Company.
The Trustee agrees to accept and act upon instructions or directions pursuant to this Senior Preferred Debt Securities Indenture sent by unsecured e-mail, portable document format (“PDF”), facsimile transmission or other similar unsecured electronic methods (including, without limitation, DocuSign and AdobeSign), provided, however, that the Trustee shall have received from the Company an incumbency certificate listing persons designated to give such instructions or directions and containing the titles and specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing, and provided further that the Trustee shall have no obligation or responsibility to confirm or verify that the instruction or direction was in fact sent by, or on behalf of, a person so designated to give instructions or directions. If the Company elects to give the Trustee e-mail, PDF or facsimile instructions (or instructions by a similar electronic method, including, without limitation, DocuSign and AdobeSign) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding a conflict or inconsistency between such instructions and a subsequent written instruction. The Company agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.
Section 1.06. Notice to Holders; Waiver. When this Senior Preferred Debt Securities Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if given in writing and mailed, first-class postage prepaid, to each Holder of a Senior Preferred Debt Security affected by such event in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act with respect to reports pursuant to Section 7.03(a).
For so long as the Senior Preferred Debt Securities of any series are represented by Global Securities, the Company will deliver a copy of all notices with respect to such series to the Holder (if the address of such Holder is known to the Company).
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When notice to Holders of Senior Preferred Debt Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Senior Preferred Debt Securities Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either 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. Language of Notices, Etc. Any notice under this Senior Preferred Debt Securities Indenture shall be in the English language, except that, if the Company so elects, any published notice may be in an official language of the country of publication.
Section 1.08. 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 Senior Preferred Debt Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision of the Trust Indenture Act 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 Senior Preferred Debt Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Senior Preferred Debt 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 Senior Preferred Debt Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article 9) no provision or limitation required to be included herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Senior Preferred Debt Securities Indenture was executed may be so changed or eliminated.
Section 1.09. 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 1.10. Successors and Assigns. All covenants and agreements in this Senior Preferred Debt Securities Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause. In case any provision in this Senior Preferred Debt Securities Indenture or in the Senior Preferred Debt Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
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Section 1.12. Benefits of Senior Preferred Debt Securities Indenture. Nothing in this Senior Preferred Debt Securities Indenture or in the Senior Preferred Debt Securities, express or implied, shall give to any Person, other than the parties hereto and any Senior Preferred Debt Securities Registrars or any Paying Agent or Calculation Agent with respect to any Senior Preferred Debt Securities and their successors hereunder, and the Holders of Senior Preferred Debt Securities, any benefit or any legal or equitable right, remedy or claim under this Senior Preferred Debt Securities Indenture.
Section 1.13. Governing Law. This Senior Preferred Debt Securities Indenture and the Senior Preferred Debt Securities shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the choice of law provisions, except for Section 2.02 which shall be governed by and construed in accordance with the laws of Spain and except that the authorization and execution of this Senior Preferred Debt Securities Indenture and the Senior Preferred Debt Securities shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
Section 1.14. Business Days and Legal Holidays. The terms of the Senior Preferred Debt Securities shall provide that, in any case where any Interest Payment Date, Redemption Date, Maturity or Stated Maturity, of a Senior Preferred Debt Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Senior Preferred Debt Securities Indenture or the Senior Preferred Debt Securities other than a provision in the Senior Preferred Debt Securities that specifically states that such provision shall apply in lieu of this Section) payments of interest, if any (and premium, if any) or principal and the exchange of the Senior Preferred Debt Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment (or such other Business Day as shall be provided in such Senior Preferred Debt Security) with the same force and effect as if made on such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, provided that no interest shall accrue on such payment for the period from and after such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, as the case may be.
Section 1.15. Appointment of Agent for Service. The Company has designated and appointed Banco Santander, S.A., New York Branch, 437 Madison Ave., New York, New York 10022, as its authorized agent (the “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 Senior Preferred Debt Securities or this Senior Preferred Debt Securities Indenture, but for that purpose only, and agrees that service of process upon said Authorized Agent 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 Senior Preferred Debt 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
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appointment of said Authorized Agent in full force and effect so long as any of the Senior Preferred Debt 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 irrevocably submits (for the purposes of any such suit or proceeding) to the non-exclusive 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. To the extent that the Company may be entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to or arising out of this Senior Preferred Debt Securities Indenture to claim for itself or its revenues, assets or properties immunity (whether by reason of sovereign immunity or otherwise) from suit, from the jurisdiction of any court (including, but not limited to, any court of the United States of America or the State of New York) or from any legal process with respect to itself or its property, from attachment prior to judgment, from set-off, from execution of a judgment, from the grant of injunctive relief, whether prior to or after judgment, or from any other legal process (including, without limitation, in relation to enforcement of any arbitration award), and to the extent that in any such jurisdiction there may be attributed such an immunity (whether or not claimed), the Company hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity and consents to the grant of any such relief.
Section 1.16. Calculation Agent. If the Company appoints a Calculation Agent pursuant to Section 3.01 with respect to any series of Senior Preferred Debt Securities, any determination of the interest rate on, or other amounts in relation to, such series of Senior Preferred Debt Securities in accordance with the terms of such series of Senior Preferred Debt 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.
Section 1.17. Waiver of Jury Trial. EACH OF THE PARTIES HERETO, AND EACH HOLDER OF A SENIOR PREFERRED DEBT SECURITY BY ITS ACCEPTANCE THEREOF, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SENIOR PREFERRED DEBT SECURITIES INDENTURE, THE SENIOR PREFERRED DEBT SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 1.18. Judgment Currency. Any payment on account of an amount that is payable in U.S. dollars (the “Required Currency”) which is made to or for the account of any Holder or the Trustee in lawful currency of any other jurisdiction (the “Judgment Currency”), whether as a result of any judgment or order or the enforcement thereof or the liquidation of the Company shall constitute a discharge of the Company obligation under this Senior Preferred Debt Securities Indenture and the Senior Preferred Debt Securities only to the extent of the amount of the Required Currency such Holder or the
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Trustee, as the case may be, could purchase in the London foreign exchange markets with the amount of the Judgment Currency in accordance with normal banking procedures at the rate of exchange prevailing on the first Business Day following receipt of the payment in the Judgment Currency. If the amount of the Required Currency that could be so purchased is less than the amount of the Required Currency originally due to such Holder or the Trustee, as the case may be, the Company shall indemnify and hold harmless the Holder or the Trustee, as the case may be, from and against all loss or damage arising out of, or as a result of, such deficiency. This indemnity shall constitute an obligation separate and independent from the other obligations contained in this Senior Preferred Debt Securities Indenture or the Senior Preferred Debt Securities, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Holder or the Trustee from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due hereunder or under any judgment or order.
Section 1.19. Electronic Means. The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Senior Preferred Debt Securities Indenture and delivered using Electronic Means; provided, however, that the Company shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Company whenever a person is to be added or deleted from the listing. If the Company elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Company understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Company shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Company and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
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ARTICLE 2
SENIOR PREFERRED DEBT SECURITY FORMS
Section 2.01. Forms Generally. The Senior Preferred Debt Securities of each series shall be issuable in registered form and in such forms as shall be established by or pursuant to a Board Resolution of the Company, or an Officer’s Certificate, or in one or more indentures supplemental hereto, pursuant to Section 3.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Senior Preferred Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or Depositary therefor, or as may, consistently herewith, be determined by the officers executing such Senior Preferred Debt Securities, all as evidenced by any such execution.
Any definitive Senior Preferred Debt 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 Senior Preferred Debt Securities may be listed, all as determined by the officers executing such Senior Preferred Debt Securities, as evidenced by their execution thereof.
Section 2.02. Status of the Senior Preferred Debt Securities. The payment obligations of the Company in respect of principal under the Senior Preferred Debt Securities of any series constitute direct, unconditional, unsubordinated and unsecured obligations (créditos ordinarios) of the Company and, in accordance with Additional Provision 14.2 of Law 11/2015, but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise), upon the insolvency of the Company, such payment obligations rank (i) pari passu among themselves and with any other Senior Higher Priority Liabilities of the Company and (ii) senior to (x) any Senior Non Preferred Liabilities and (y) any present and future subordinated obligations (créditos subordinados) of the Company in accordance with Article 281 of the Spanish Insolvency Law.
Claims of Holders of Senior Preferred Debt Securities of any series in respect of interest accrued but unpaid as of the commencement of any insolvency procedure in respect of the Company shall constitute subordinated claims (créditos subordinados) against the Company ranking in accordance with the provisions of Article 281.1.3º of the Spanish Insolvency Law and no further interest shall accrue from the date of the declaration of insolvency of the Company.
The obligations of the Company under the Senior Preferred Debt Securities are subject to the Bail-in Power.
Section 2.03. 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 Senior Preferred Debt Securities of the series designated herein referred to in the within-mentioned Senior Preferred Debt Securities Indenture.
| Dated: |
||
| THE BANK OF NEW YORK MELLON, as Trustee | ||
| By: | ||
| Authorized Signatory | ||
ARTICLE 3
THE SENIOR PREFERRED DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series. The aggregate principal amount of Senior Preferred Debt Securities which may be authenticated and delivered under this Senior Preferred Debt Securities Indenture is unlimited. The Senior Preferred Debt Securities may be issued in one or more series.
There shall be established by or pursuant to a Board Resolution of the Company or established by an Officer’s Certificate or established in one or more indentures supplemental hereto, prior to the initial issuance of Senior Preferred Debt Securities of any series:
(a) the title of the Senior Preferred Debt Securities of the series (which shall distinguish the Senior Preferred Debt Securities of the series from all other Senior Preferred Debt Securities);
(b) the price or prices (expressed as a percentage of the principal amount thereof) at which the Senior Preferred Debt Securities of the series shall be issued;
(c) any limit upon the aggregate principal amount of the Senior Preferred Debt Securities of the series which may be authenticated and delivered under this Senior Preferred Debt Securities Indenture (except for Senior Preferred Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Senior Preferred Debt Securities of the series pursuant to Section 3.04, Section 3.05, Section 3.06, Section 9.06 or Section 11.07 and except for any Senior Preferred Debt Securities which, pursuant to Section 3.03 are deemed never to have been authenticated and delivered hereunder);
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(d) the date or dates, if any, on which the principal of (and premium, if any, on) the Senior Preferred Debt Securities of the series is payable;
(e) the rate or rates, if any, at which the Senior Preferred Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07 and the Regular Record Date for the interest payable on any Interest Payment Date and any dates required to be established pursuant to Section 7.01;
(f) whether any premium, upon redemption or otherwise, shall be payable by the Company on Senior Preferred Debt Securities of the series, and whether such premium shall be redeemable at the option of the Company or the Holder;
(g) the place or places where the principal of (and premium, if any) and any interest on Senior Preferred Debt Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and interest on Senior Preferred Debt Securities of such series, at least one of such Paying Agents having an office or agency in the City of London;
(h) whether or not such series of Senior Preferred Debt Securities are to be redeemable, in whole or in part, at the Company’s option and, if so redeemable, the period or periods within which, the price or prices at which and the terms and conditions upon which, Senior Preferred Debt Securities of the series may be redeemed;
(i) the obligation, if any, of the Company to redeem or purchase Senior Preferred Debt Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which Senior Preferred Debt Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(j) if other than denominations of $1,000 and any multiple thereof, the denominations in which Senior Preferred Debt Securities of the series in each applicable form shall be issuable;
(k) if other than the full principal amount thereof, the portion, or the manner of calculation of such portion, of the principal amount of Senior Preferred Debt Securities of the series which shall be payable upon a declaration of acceleration or acceleration of the Maturity thereof pursuant to Section 5.02, upon redemption of Senior Preferred Debt Securities of any series which are redeemable before their Stated Maturity, or which the Trustee shall be entitled to file and prove a claim pursuant to Section 5.04;
(l) if Additional Amounts, pursuant to Section 10.04, will not be payable;
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(m) the terms, if any, on which such Senior Preferred Debt Securities may or shall be converted into or exchanged at the option of the Company or otherwise for stock or other securities of the Company or another entity or other entities, into a basket or baskets of such securities, into an index or indices of such securities, into the cash value therefor or into any combination of the foregoing, any specific terms relating to the adjustment thereof and the period during which such Senior Preferred Debt Securities may or shall be so converted or exchanged;
(n) if other than dollars, provisions, if any, for the Senior Preferred Debt 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;
(o) if other than the coin or currency in which the Senior Preferred Debt Securities of that series are denominated, the coin or currency in which payment of the principal of (and premium, if any) or interest, if any, on the Senior Preferred Debt Securities of such series shall be payable;
(p) if the principal of (and premium, if any) or interest, if any, on the Senior Preferred Debt Securities of such series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Senior Preferred Debt Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;
(q) whether the Senior Preferred Debt Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and the initial Holder with respect to such Global Security or Senior Preferred Debt Securities;
(r) if the Senior Preferred Debt Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Senior Preferred Debt Security of such series or otherwise) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;
(s) if the amounts of payments of principal of (and premium, if any) or interest, if any, on the Senior Preferred Debt Securities of the series may be determined with reference to an index or are otherwise not fixed on the original issue date thereof, the manner in which such amounts shall be determined and the Calculation Agent, if any, who shall be appointed and authorized to calculate such amounts;
(t) any Events of Default or consequences thereof or any covenants with respect to the Senior Preferred Debt Securities of such series;
(u) the forms of Senior Preferred Debt Securities of the series;
(v) any other terms of the series (which terms shall not be inconsistent with the provisions of this Senior Preferred Debt Securities Indenture, except as permitted by Section 9.01(d)); and
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(w) the Trustee and/or the Senior Preferred Debt Security Registrar for such series of Senior Preferred Debt Securities who shall also be named in an indenture supplemental hereto for a particular series of Senior Preferred Debt Securities if the Trustee and/or the Senior Preferred Debt Security Registrar for such series is not the Trustee named in the first paragraph of this Senior Preferred Debt Securities Indenture.
All Senior Preferred Debt Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such action or in any such Officer’s Certificate or indenture supplemental hereto.
If the forms of Senior Preferred Debt Securities of any series, or any of the terms thereof, are established by action taken pursuant to a Board Resolution, a copy of the Board Resolution 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 Senior Preferred Debt Securities.
Section 3.02. Denominations. The Senior Preferred Debt Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specification with respect to Senior Preferred Debt Securities of any series, the Senior Preferred Debt Securities of each series shall be issuable in denominations of $1,000 each and any integral multiple thereof. Unless otherwise specified in accordance with Section 3.01, any Global Security issued and delivered to the Holder shall be issued in the form of units with each $1,000 principal amount of such Global Security constituting one unit.
Section 3.03. Execution, Authentication, Delivery and Dating. The Senior Preferred Debt Securities shall be executed on behalf of the Company by any one of the representatives of the Company authorized to do so by Board Resolution or by any member of the Board of Directors. The signature of any of these authorized representatives on the Senior Preferred Debt Securities may be manual, facsimile, PDF or electronically imaged (including, without limitation, DocuSign and AdobeSign). Senior Preferred Debt Securities bearing the manual, facsimile, PDF or other electronically imaged signatures (including, without limitation, DocuSign and AdobeSign) of individuals who were at any time the proper officer of the Company shall bind the Company, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Senior Preferred Debt Securities.
At any time and from time to time after the execution and delivery of this Senior Preferred Debt Securities Indenture, the Company may deliver Senior Preferred Debt 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 Senior Preferred Debt Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Senior Preferred Debt Securities. In authenticating such Senior Preferred Debt Securities and accepting the additional responsibilities under this Senior Preferred Debt Securities Indenture in relation to such Senior Preferred Debt 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 Senior Preferred Debt Securities Indenture.
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If all the Senior Preferred Debt Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Opinion of Counsel and an Officer’s Certificate at the time of issuance of each Senior Preferred Debt Security, but such opinion and certificate, with appropriate modifications, shall be delivered at or before the time of issuance of the first Senior Preferred Debt Security of such series. After any such first delivery, any separate request by the Company that the Trustee authenticate Senior Preferred Debt Securities of such series for original issue will be deemed to be a certification by the Company that all conditions precedent provided for in this Senior Preferred Debt Securities Indenture relating to authentication and delivery of such Senior Preferred Debt Securities continue to have been complied with.
The Trustee shall not be required to authenticate such Senior Preferred Debt Securities if the issue of such Senior Preferred Debt Securities pursuant to this Senior Preferred Debt Securities Indenture will affect the Trustee’s own rights, duties or immunities under the Senior Preferred Debt Securities and this Senior Preferred Debt Securities Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.
Each Senior Preferred Debt Security shall be dated the date of its authentication.
No Senior Preferred Debt Security appertaining thereto shall be entitled to any benefit under this Senior Preferred Debt Securities Indenture or be valid or obligatory for any purpose unless there appears on such Senior Preferred Debt Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual, PDF or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign), and such certificate upon any Senior Preferred Debt Security shall be conclusive evidence, and the only evidence, that such Senior Preferred Debt Security has been duly authenticated and delivered hereunder and that such Senior Preferred Debt Security is entitled to the benefits of this Senior Preferred Debt Securities Indenture. Notwithstanding the foregoing, if any Senior Preferred Debt Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Senior Preferred Debt Security to the Trustee for cancellation as provided in Section 3.09, for all purposes of this Senior Preferred Debt Securities Indenture, such Senior Preferred Debt Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefit of this Senior Preferred Debt Securities Indenture.
Section 3.04. Temporary Senior Preferred Debt Securities. Pending the preparation of definitive Senior Preferred Debt Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Senior Preferred Debt Securities substantially of the tenor of the definitive Senior Preferred Debt Securities in lieu of which they are issued, and, if applicable, which Senior Preferred Debt Securities may be printed, lithographed, typewritten, photocopied or otherwise produced. Temporary Senior Preferred Debt Securities shall be issuable as Senior Preferred Debt Securities in registered form in any authorized denomination, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Senior Preferred Debt Securities may determine, all as evidenced by such execution.
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If temporary Senior Preferred Debt Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Senior Preferred Debt Securities, definitive Senior Preferred Debt Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Senior Preferred Debt Securities of such series, the temporary Senior Preferred Debt Securities of such series shall be exchangeable for definitive Senior Preferred Debt Securities of such series containing identical terms and provisions upon surrender of the temporary Senior Preferred Debt Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Senior Preferred Debt Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate principal amount of definitive Senior Preferred Debt Securities of the same series of authorized denominations containing identical terms and provisions. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Senior Preferred Debt Securities of any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Senior Preferred Debt Securities Indenture as definitive Senior Preferred Debt Securities of such series.
Section 3.05. Registration, Registration of Transfer and Exchange. (a) Global Securities. This Section 3.05(a) shall apply to Global Securities unless otherwise specified, as contemplated by Section 3.01.
Except as otherwise specified, as contemplated by Section 3.01 hereof, the Senior Preferred Debt Securities shall be initially issued and represented by one or more Global Securities in registered form, which shall be authenticated as contemplated by this Senior Preferred Debt Securities Indenture.
Each Global Security authenticated under this Senior Preferred Debt Securities Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Senior Preferred Debt Security for all purposes of this Senior Preferred Debt Securities Indenture. Except as otherwise specified, as contemplated by Section 3.01 hereof, each Global Security authenticated under this Senior Preferred Debt Securities Indenture shall be initially registered in the name of DTC or its nominee only.
Unless the Global Security is presented by an authorized representative of the Holder to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Holder and any payment is made to such nominee, any transfer, pledge or other use of the Global Security for value or otherwise shall be wrongful since the registered owner of such Global Security, the nominee of the Holder, has an interest in such Global Security.
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Except as otherwise specified, as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Senior Preferred Debt Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary notifies the Trustee that it is unwilling or unable to continue to act as Depositary and a successor depositary is not appointed by the Trustee within 120 days of such notification, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Senior Preferred Debt Securities when due, or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series should be exchanged for definitive Senior Preferred Debt Securities of that series. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Senior Preferred Debt Securities bearing interest (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which such interest shall accrue, the same Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Senior Preferred Debt Securities shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.
Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be exchangeable for Senior Preferred Debt Securities issuable in authorized denominations of a like aggregate principal amount and tenor.
No Global Security may be transferred except as a whole by the Holder to a nominee of the Holder or by the Holder or any such nominee to a successor of the Holder or a nominee of such successor. Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Senior Preferred Debt Securities in definitive form and will not be considered the Holders thereof for any purpose under this Senior Preferred Debt Securities Indenture.
In the event that a Global Security is surrendered for redemption in part pursuant to Section 11.07, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.
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The Agent Members and any other beneficial owners shall have no rights under this Senior Preferred Debt Securities Indenture with respect to any Global Security held on their behalf by a Holder, and such Holder may be treated by the Company, the 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 (i) 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 (ii) impair, as between any such Holder or other clearance service and its Agent Members and Holders, the operation of customary practices governing the exercise of the rights of a holder of any security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Senior Preferred Debt Securities Indenture.
In connection with any exchange of interests in a Global Security for definitive Senior Preferred Debt Securities of another authorized form, as provided in this Section 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 Senior Preferred Debt Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Senior Preferred Debt Securities without charge (in which case the Company or Trustee may require payment of any taxes or governmental charges arising) and the Trustee shall authenticate and deliver, in exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Senior Preferred Debt Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 3.05 shall be exchangeable for Senior Preferred Debt Securities issuable in the denominations specified as contemplated by Section 3.01 and registered in such names as the Holder of such Global Security shall direct. If a definitive Senior Preferred Debt Security is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant Interest Payment Date, interest will not be payable on such Interest Payment Date in respect of such definitive Senior Preferred Debt Security, but will be payable on such Interest Payment Date only to the Person to whom payments of interest in respect of such portion of such Global Security are payable.
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 Senior Preferred Debt Securities Indenture with respect to the Senior Preferred Debt Securities.
(b) Except as otherwise specified pursuant to Section 3.01, Senior Preferred Debt Securities of any series may only be exchanged for a like aggregate principal amount of Senior Preferred Debt Securities of such series of other authorized denominations containing identical terms and provisions. Senior Preferred Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Senior Preferred Debt Security or Senior Preferred Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.
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Except as otherwise specified pursuant to Section 3.01, the Company shall cause to be kept in the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Senior Preferred Debt Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Senior Preferred Debt Securities and of transfers of such Senior Preferred Debt Securities. Except as otherwise specified pursuant to Section 3.01, the Trustee is hereby appointed “Senior Preferred Debt Security Registrar” for the purpose of registering Senior Preferred Debt Securities and transfers of Senior Preferred Debt Securities as herein provided.
Senior Preferred Debt Securities shall be transferable only on the Senior Preferred Debt Security Register. Upon surrender for registration of transfer of any Senior Preferred Debt Security of any series, together with the form of transfer endorsed on it, duly completed and executed at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver to the address specified in the form of transfer, within three Business Days, in the name of the designated transferee or transferees, one or more new Senior Preferred Debt Securities of the same series of any authorized denominations containing identical terms and provisions, of a like aggregate principal amount.
If only part of a Senior Preferred Debt Security is transferred, a new Senior Preferred Debt Security of an aggregate principal amount equal to the amount not being transferred shall be executed by the Company, and authenticated and delivered by the Trustee to the transferor, in the name of the transferor, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the Senior Preferred Debt Security. The new Senior Preferred Debt Security will be delivered to the transferor by uninsured post at the risk of the transferor to the address of the transferor appearing in the Senior Preferred Debt Security Register. A new Senior Preferred Debt Security of an aggregate principal amount equal to the amount being transferred shall be delivered by the Trustee to the transferee, in the name of the transferee, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the Senior Preferred Debt Security. The new Senior Preferred Debt Security will be delivered to the transferee by uninsured post at the risk of the transferee to the address of the transferee specified in the form of transfer.
All Senior Preferred Debt Securities issued upon any registration of transfer or exchange of Senior Preferred Debt Securities shall be the valid obligations of the Company evidencing the same debt, and entitled to the same benefits under this Senior Preferred Debt Securities Indenture, as the Senior Preferred Debt Securities surrendered upon such registration of transfer or exchange.
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Every Senior Preferred Debt Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Preferred Debt Security Registrar duly executed, by the Holder thereof or his or her attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Senior Preferred Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Senior Preferred Debt Securities, other than exchanges pursuant to Section 3.04, Section 9.06 or Section 11.07 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or exchange any Senior Preferred Debt Security of any series during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Senior Preferred Debt Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the day of the giving of such notice, or (ii) to register the transfer of or exchange any Senior Preferred Debt Security so selected for redemption in whole or in part, except the unredeemed portion of any Senior Preferred Debt Securities being redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Senior Preferred Debt Securities. If any mutilated Senior Preferred Debt Security (including any Global Security) is surrendered to the Trustee, the Company may execute and the Trustee shall, in the case of a Senior Preferred Debt Security, authenticate and deliver in exchange therefor a new Senior Preferred Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Senior Preferred Debt Security (including any Global Security) and (ii) such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Trustee that such Senior Preferred Debt Security has been acquired by a bona fide purchaser, the Company shall execute and upon the Company’s request the Trustee shall authenticate and deliver in lieu of any such destroyed, lost or stolen Senior Preferred Debt Security a new Senior Preferred Debt 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 Senior Preferred Debt Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Senior Preferred Debt Security, pay such Senior Preferred Debt Security.
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Upon the issuance of any new Senior Preferred Debt Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Senior Preferred Debt Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Senior Preferred Debt Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Senior Preferred Debt Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Senior Preferred Debt Securities Indenture equally and proportionately with any and all other Senior Preferred Debt Securities of that series duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to this Senior Preferred Debt Securities Indenture, 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 Senior Preferred Debt Securities.
Section 3.07. Payment; Interest Rights and Rights to Additional Amounts Preserved. Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, interest, if any, and any Additional Amounts on any Senior Preferred Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid, to the Holder (including through a Paying Agent of the Company designated pursuant to Section 3.01 for collection by the Holder) at the close of business on the Regular Record Date.
In the case of Senior Preferred Debt Securities where payment is to be made in dollars, payment at any Paying Agent’s office outside The City of New York will be made in dollars by check drawn on, or, at the request of the Holder, by transfer to a dollar account maintained by the payee with, a bank in The City of New York.
In the case of Senior Preferred Debt Securities where payment is to be made in a Foreign Currency, payment will be made as established pursuant to Section 3.01.
Any interest on and any Additional Amounts with respect to any Senior Preferred Debt Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “Default Interest”. Default Interest on any Senior Preferred Debt Security of any series shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue then of having been such Holder, and such Default Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Default Interest to the Persons in whose names the Senior Preferred Debt Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Default Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of
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Default Interest proposed to be paid on each Senior Preferred Debt Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Default Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Default Interest as in this clause provided. Thereupon the Company shall fix a Special Record Date for the payment of such Default Interest in respect of such Senior Preferred Debt Securities of such series which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after it delivers to the Trustee notice of the proposed payment. The Company shall promptly notify the Trustee of such Special Record Date and, in the name and at the expense of the Company, the Trustee shall cause notice of the proposed payment of such Default Interest and the Special Record Date therefor to be given in the manner and to the extent provided in Section 1.06, not less than 10 days prior to such Special Record Date. The Trustee shall, at the instruction of the Company, in the name and at the expense of the Company, cause a similar notice to be published in an Authorized Newspaper of general circulation in the Borough of Manhattan, The City of New York, but such publication shall be not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Default Interest on the Senior Preferred Debt Securities of such series and the Special Record Date therefor having been so given, such Default Interest on the Senior Preferred Debt Securities of such series shall be paid in the case of Senior Preferred Debt Securities to the Persons in whose names such Senior Preferred Debt Securities (or their respective Predecessor Securities) are registered in the Senior Preferred Debt Security Register at the close of business on the Special Record Date, and such Default Interest shall no longer be payable pursuant to the following clause (b); or
(b) The Company may make payment of any Default Interest on the Senior Preferred Debt Securities of any series to the Persons in whose names the Senior Preferred Debt Securities are registered in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Senior Preferred Debt Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Senior Preferred Debt Security delivered under this Senior Preferred Debt Securities Indenture upon registration of transfer of or in exchange for or in lieu of any other Senior Preferred Debt Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Senior Preferred Debt Security.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a Senior Preferred Debt 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 Senior Preferred Debt Security is registered as the owner of such Senior Preferred Debt Security for the purpose of receiving payment of principal of (and premium, if any) and interest, if any, on and any Additional Amounts with respect to such Senior Preferred Debt Security
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and for all other purposes whatsoever, whether or not such Senior Preferred Debt 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. The aggregate principal amount of the Senior Preferred Debt Securities of any series shall be reflected on the books and records of the Senior Preferred Debt Security Registrar.
None of the Company, the Trustee, the Paying Agent or the Senior Preferred Debt Security Registrar shall have any responsibility or obligation to any beneficial owner in a Global Security, an Agent Member or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any Agent Member, with respect to any ownership interest in the Senior Preferred Debt Securities or with respect to the delivery to any Agent Member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Senior Preferred Debt Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Senior Preferred Debt Securities and this Senior Preferred Debt Securities Indenture shall be given or made only to or upon the order of the registered holders (which shall be the Depositary or its nominee in the case of the Global Security). The rights of beneficial owners in the Global Security shall be exercised only through the Depositary subject to the applicable procedures. The Company, the Trustee, the Paying Agent and the Senior Preferred Debt Security Registrar shall be entitled to rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners. The Company, the Trustee, the Paying Agent and the Senior Preferred Debt Security Registrar shall be entitled to deal with the Depositary, and any nominee thereof, that is the registered holder of any Global Security for all purposes of this Senior Preferred Debt Securities Indenture relating to such Global Security (including the payment of principal, premium, if any, and interest and additional amounts, if any, and the giving of instructions or directions by or to the owner or holder of a beneficial ownership interest in such Global Security) as the sole holder of such Global Security and shall have no obligations to the beneficial owners thereof. None of the Company, the Trustee, the Paying Agent or the Senior Preferred Debt Security Registrar shall have any responsibility or liability for any acts or omissions of the Depositary with respect to such Global Security, for the records of any such Depositary, including records in respect of beneficial ownership interests in respect of any such Global Security, for any transactions between the Depositary and any Agent Member or between or among the Depositary, any such Agent Member and/or any holder or owner of a beneficial interest in such Global Security, or for any transfers of beneficial interests in any such Global Security.
Notwithstanding the foregoing, with respect to any Global Security, 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 any Depositary (or its nominee), as a Holder, with respect to such Global Security or shall impair, as between such Depositary and owners of beneficial interests in such Global Security, the operation of customary practices governing the exercise of the rights of such Depositary (or its nominee) as Holder of such Global Security.
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Each Holder and beneficial owner that acquires its Senior Preferred Debt Security in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in this Senior Preferred Debt Securities Indenture and the Senior Preferred Debt Securities to the same extent as the Holders and beneficial owners of the Senior Preferred Debt Securities that acquire the Senior Preferred Debt Securities upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Senior Preferred Debt Securities, including in relation to the Bail-in Power.
Section 3.09. Cancellation. All Senior Preferred Debt Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Senior Preferred Debt Securities previously authenticated and delivered hereunder and all Senior Preferred Debt Securities so delivered shall be promptly cancelled by the Trustee. No Senior Preferred Debt Securities shall be authenticated in lieu of or in exchange for any Senior Preferred Debt Securities cancelled as provided in this Section, except as expressly permitted by the provisions of the Senior Preferred Debt Securities of any series or pursuant to the provisions of this Senior Preferred Debt Securities Indenture. The Trustee shall deliver to the Company all cancelled Senior Preferred Debt Securities held by the Trustee.
Section 3.10. Computation of Interest. Except as otherwise specified pursuant to Section 3.01 for Senior Preferred Debt Securities of any series, payments of interest on the Senior Preferred Debt Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.
Section 3.11. CUSIP Numbers. The Company in issuing any series of the Senior Preferred Debt Securities may use “CUSIP”, “ISIN” and/or “Common Code” and/or other similar numbers (if then generally in use) or any successor to such numbers and thereafter with respect to such series, the Trustee shall use “CUSIP”, “ISIN” and/or “Common Code” and/or other similar numbers or successor numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Senior Preferred Debt Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Senior Preferred Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP”, “ISIN” and/or “Common Code” and/or other similar numbers or successor numbers.
Section 3.12. Additional Senior Preferred Debt Securities. The Company may, from time to time, without the consent of the Holders of the Senior Preferred Debt Securities of any series, issue additional Senior Preferred Debt Securities (“Additional Senior Preferred Debt Securities”) of one or more of the series of Senior Preferred Debt Securities issued under this Senior Preferred Debt Securities Indenture, having the same ranking and same interest rate, Maturity, redemption terms and other terms, except
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for the price to the public, original interest accrual date, issue date and first Interest Payment Date, as the Senior Preferred Debt Securities; provided, however, that such Additional Senior Preferred Debt Securities will not have the same CUSIP, ISIN or other identifying number as the Outstanding Senior Preferred Debt Securities of such series unless the Additional Senior Preferred Debt Securities are fungible with the Outstanding Senior Preferred Debt Securities for U.S. federal income tax purposes. Any such Additional Senior Preferred Debt Securities, together with the Senior Preferred Debt Securities of the applicable series, will constitute a single series of Senior Preferred Debt Securities under this Senior Preferred Debt Securities Indenture and shall be included in the definition of “Senior Preferred Debt Securities” in this Senior Preferred Debt Securities Indenture where the context requires.
Section 3.13. Correction of Minor Defects in or Amendment of Senior Preferred Debt Securities. If, after issuance of any Senior Preferred Debt Security (including any Global Security), the Company or the Trustee shall become aware of any ambiguity, defect or inconsistency in any term of a Senior Preferred Debt Security or Global Security, as the case may be, or, with respect to any Senior Preferred Debt Security (including any Global Security) issued on or after the date hereof, the Company and the Trustee agree to amend such Senior Preferred Debt Security as contemplated by Section 9.01(l), the parties hereto shall provide for the execution, authentication, delivery and dating of one or more replacement Senior Preferred Debt Securities or Global Securities, as the case may be, pursuant to Section 3.03 hereto.
Section 3.14. Payments Subject to Fiscal Laws. All payments in respect of the Senior Preferred Debt Securities will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the Place of Payment (including FATCA, any regulations or agreements thereunder, any official interpretation thereof, any intergovernmental agreements with respect thereto, or any law implementing an intergovernmental agreement or any regulations or official interpretations relating thereto), but subject to the provisions of Section 10.04.
ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Senior Preferred Debt Securities Indenture. This Senior Preferred Debt Securities Indenture shall upon Company Request cease to be of further effect with respect to Senior Preferred Debt Securities of any series (except as to any surviving rights of registration of transfer or exchange of Senior Preferred Debt Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Senior Preferred Debt Securities Indenture with respect to the Senior Preferred Debt Securities of such series when
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(a) either
(i) all Senior Preferred Debt Securities of such series theretofore authenticated and delivered (other than (A) Senior Preferred Debt Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Senior Preferred Debt Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or
(ii) all such Senior Preferred Debt Securities not theretofore delivered to the Trustee for cancellation
(A) have become due and payable or will become due and payable at their Stated Maturity within one year, or
(B) are called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company.
and the Company 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 Senior Preferred Debt Securities denominated in dollars) or Foreign Government Securities with respect to Senior Preferred Debt Securities denominated in the same Foreign Currency) maturing, in the case of (A) and (B) above, as to principal and interest, if any, in such amounts and at such times as will ensure the availability of cash sufficient without reinvestment, as confirmed by a letter from an internationally recognized firm of independent public accountants (which shall not be subject to the requirements of Section 1.02) in the form of an agreed-upon procedures letter in its then customary form, to pay, satisfy and discharge all claims with respect to such Senior Preferred Debt Securities not theretofore delivered to the Trustee for cancellation, in the case of (A) and (B) above, for principal (and premium, if any) and accrued interest, if any to the date of such deposit (in the case of Senior Preferred Debt Securities which have become due and payable) or to the Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Senior Preferred Debt 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 Senior Preferred Debt Securities Indenture with respect to the Senior Preferred Debt Securities of such series have been complied with.
In addition, upon the exercise of a Bail-in Power with respect to a series of Senior Preferred Debt Securities which results in the cancellation, or the conversion into other securities, of all the principal amount of, and interest on such Senior Preferred Debt Securities or such Senior Preferred Debt Securities otherwise ceasing to be Outstanding, this Senior Preferred Debt Securities Indenture shall be satisfied and discharged as to such series.
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Notwithstanding any satisfaction and discharge of this Senior Preferred Debt Securities Indenture, the obligations of the Company to the Trustee under Section 6.08, the obligations of the Trustee to any Authenticating Agent under Section 6.15 and, if cash, U.S. Government Obligations and/or Foreign Government Securities shall have been deposited with the Trustee pursuant to clause (a)(ii) of subsection (a) of this Section, the obligations of the Trustee under Section 4.03 and the last paragraph of Section 10.03 shall survive such satisfaction and discharge, including any termination under any bankruptcy law.
Section 4.02. Defeasance and Covenant Defeasance. (a) If, pursuant to Section 3.01, provision is made for either or both of (i) defeasance of the Senior Preferred Debt Securities of or within a series under subsection (b) of this Section 4.02 or (ii) covenant defeasance of the Senior Preferred Debt Securities of or within a series under subsection (c) of this Section 4.02, then such provisions, together with the other provisions of this Section 4.02 (with such modifications thereto as may be specified pursuant to Section 3.01 with respect to any Senior Preferred Debt Securities), shall be applicable to such Senior Preferred Debt Securities, and the Company may at its option by Company Order, at any time, with respect to such Senior Preferred Debt Securities, elect to have (b) (if applicable) or (c) (if applicable) be applied to such Outstanding Senior Preferred Debt Securities upon compliance with the conditions set forth below in this Section 4.02.
(b) Upon the Company’s exercise of the above option applicable to this subsection (b) with respect to any Senior Preferred Debt Securities of or within a series, the Company shall be deemed to have been discharged from its obligations with respect to such Outstanding Senior Preferred Debt Securities on the date the conditions set forth in subsection (d) of this Section 4.02 are satisfied (hereinafter, “defeasance”). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Outstanding Senior Preferred Debt Securities, and such Senior Preferred Debt Securities shall thereafter be deemed to be “Outstanding” only for the purposes of subsection (e) of this Section 4.02 and the other Sections of this Senior Preferred Debt Securities Indenture referred to in clauses (i) and (ii) below, the Company shall be deemed to have satisfied all of its other obligations under such Senior Preferred Debt Securities and this Senior Preferred Debt Securities Indenture insofar as such Senior Preferred Debt Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of such Outstanding Securities to receive, solely from the trust fund described in subsection (d) of this Section 4.02 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) and interest and Additional Amounts, if any, on such Senior Preferred Debt Securities when such payments are due, (ii) the Company’s obligations with respect to such Senior Preferred Debt Securities under Section 3.05, Section 3.06, 10.02 and Section 10.03 and with respect to the payment of Additional Amounts, if any, on such Securities as contemplated by Section 10.04, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) this Section 4.02. The Company may exercise its option under this subsection (b) notwithstanding the prior exercise of its option under subsection (c) of this Section 4.02 with respect to such Senior Preferred Debt Securities.
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(c) Upon the Company’s exercise of the above option applicable to this subsection (c) with respect to any Senior Preferred Debt Securities of or within a series, the Company shall be released from, if specified pursuant to Section 3.01, their obligations under any other covenant, with respect to such Outstanding Senior Preferred Debt Securities on and after the date the conditions set forth in subsection (d) of this Section 4.02 are satisfied (hereinafter, “covenant defeasance”), and such Senior Preferred Debt Securities shall thereafter be deemed to be not “Outstanding” for the purposes of any direction, waiver, consent or declaration (and the consequences of any thereof) in connection with such other covenant, but shall continue to be deemed “Outstanding” for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to such Outstanding Senior Preferred Debt Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section or such other covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such Section or such other covenant or by reason of reference in any such Section or such other covenant to any other provision herein or in any other document and such omission to comply shall not constitute a default or an Event of Default, as the case may be, but, except as specified above, the remainder of this Senior Preferred Debt Securities Indenture and such Senior Preferred Debt Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of subsection (b) or (c) of this Section 4.02 to any Outstanding Senior Securities of or within a series:
(i) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 6.11 who shall agree to comply with the provisions of this Section 4.02 applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Senior Preferred Debt Securities, (A) an amount in dollars or in such Foreign Currency in which such Senior Preferred Debt Securities are then specified as payable at Stated Maturity, or (B) U.S. Government Obligations applicable to such Senior Preferred Debt Securities (determined on the basis of the Currency in which such Senior Preferred Debt Securities are then specified as payable at Stated Maturity) which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment of principal of (and premium, if any) and interest, if any, on such Senior Preferred Debt Securities, money in an amount, or (C) a combination thereof, in any case, in an amount, sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of an internationally recognized firm of Independent Public Accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other
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qualifying trustee) to pay and discharge, (y) the principal of (and premium, if any) and interest, if any, on such Outstanding Senior Preferred Debt Securities on the Stated Maturity of such principal or installment of principal or interest and Additional Amounts and (z) any mandatory sinking fund payments or analogous payments applicable to such Outstanding Senior Preferred Debt Securities on the day on which such payments are due and payable in accordance with the terms of this Senior Preferred Debt Securities Indenture and of such Senior Preferred Debt Securities.
(ii) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Senior Preferred Debt Securities Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound.
(iii) No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to such Senior Preferred Debt Securities shall have occurred and be continuing on the date of the establishment of such trust and, with respect to legal defeasance only, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).
(iv) In the case of an election under subsection (b) of this Section 4.02, the Company shall have delivered to the Trustee an opinion of counsel of recognized standing stating that (A) the Company has received from the Internal Revenue Service a letter ruling, or there has been published by the Internal Revenue Service a Revenue Ruling, or (B) since the date of execution of this Senior Preferred Debt Securities Indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the beneficial owners of such Outstanding Senior Preferred Debt Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred.
(v) In the case of an election under subsection (c) of this Section 4.02, the Company shall have delivered to the Trustee an opinion of counsel of recognized standing to the effect that the beneficial owners of such Outstanding Senior Preferred Debt Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
(vi) Such defeasance or covenant defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all relevant Securities are in default within the meaning of such Act).
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(vii) Such defeasance or covenant defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act of 1940, as amended, and rules and regulations adopted by the Commission thereunder, unless such trust shall be registered under such Act or exempt from registration thereunder.
(viii) The Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance or covenant defeasance under subsection (b) or (c) of this Section 4.02 (as the case may be) have been complied with.
(ix) Notwithstanding any other provisions of this subsection (d), such defeasance or covenant defeasance shall be effected in compliance with any additional or substitute terms, conditions or limitations which may be imposed on the Company in connection therewith pursuant to Section 3.01.
(e) Subject to the provisions of the last paragraph of Section 10.03, all money and U.S. Government Obligations (or other property as may be provided pursuant to Section 3.01) (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this subsection (e), the “Trustee”) pursuant to subsection (d) of Section 4.02 in respect of any Outstanding Senior Preferred Debt Securities of any series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Senior Preferred Debt Securities and this Senior Preferred Debt Securities Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Senior Preferred Debt Securities of all sums due and to become due thereon in respect of principal (and premium, if any) and interest and Additional Amounts, if any, but such money need not be segregated from other funds except to the extent required by law.
(f) Unless otherwise specified with respect to any Senior Preferred Debt Security pursuant to Section 3.01, if, after a deposit referred to in subsection (d)(i) has been made, (i) the Holder of a Senior Preferred Debt Security in respect of which such deposit was made is entitled to, and does, elect pursuant to Section 3.01 or the terms of such Senior Preferred Debt Security to receive payment in a Currency other than that in which the deposit pursuant to subsection (d)(i) has been made in respect of such Senior Preferred Debt Security, or (ii) a Conversion Event occurs in respect of the Foreign Currency in which the deposit pursuant to (d)(i) has been made, the indebtedness represented by such Senior Preferred Debt Security shall be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium, if any), and interest, if any, and Additional Amounts, if any, on such Senior Preferred Debt Security as the same becomes due out of the proceeds yielded by converting (from time to time as specified below in the case of any such election) the amount or other property deposited in respect of such Senior Preferred Debt Security into the Currency in which such Senior Preferred Debt Security becomes payable as a result of such election or Conversion Event based on the applicable market exchange rate for such Currency in effect on the second Business Day prior to each payment date, except, with respect to a Conversion Event, for such Foreign Currency in effect at the time of the Conversion Event.
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(g) Anything in this Section 4.02 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations (or other property and any proceeds therefrom) held by it as provided in subsection (d) of this Section 4.02 which, in the opinion of an internationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect a defeasance or covenant defeasance, as applicable, in accordance with this Section 4.02.
Section 4.03. 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 Senior Preferred Debt Securities of such series, and this Senior Preferred Debt 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 interest for the payment of which such cash, U.S. Government Obligations and/or Foreign Government Securities have been deposited with the Trustee.
Section 4.04. 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 Senior Preferred Debt Securities.
Section 4.05. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 4 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Senior Preferred Debt Securities Indenture and the Senior Preferred Debt Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article 4 until such time as the Trustee or such Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 4; provided, however, that, if the Company has made any payment of principal of or interest on any Senior Preferred Debt Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Senior Preferred Debt Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or such Paying Agent.
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ARTICLE 5
REMEDIES
Section 5.01. Events of Default. (a) Except as otherwise specified, as contemplated by Section 3.01, an Event of Default with respect to any series of Senior Preferred Debt Securities shall result if:
(i) Non-payment: default is made in the payment of any interest or principal due in respect of the Senior Preferred Debt Securities of that series or any of them and such default continues for a period of seven days (or such other period as may be specified pursuant to Section 3.01); or
(ii) Breach of other obligations: the Company fails to perform or observe any of its other obligations under or in respect of the Senior Preferred Debt Securities of such series or this Senior Preferred Debt Securities Indenture and (except in any case where such failure is incapable of remedy when no such continuation as is hereinafter mentioned will be required) the failure continues for a period of 30 days next following the service by the Trustee on the Company of a notice requiring the same to be remedied; or
(iii) Winding up: any order is made by any competent court or resolution passed for the winding up or liquidation of the Company (except in any such case for the purpose of reconstruction or amalgamation or a merger or spin-off or any other structural modification (modificación estructural) subject to the provisions of Article 8); or
(iv) Cessation of business: the Company ceases or threatens to cease to carry on the whole or a substantial part of its business, save for the purposes of a reorganization (except in any such case for the purpose of reconstruction or amalgamation or a merger or spin-off or any other structural modification (modificación estructural) subject to the provisions of Article 8), or the Company stops or threatens to stop payment of, or is unable to, or admits in writing inability to, pay, its debts (or any class thereof) as they fall due, or is deemed unable to pay its debts pursuant to or for the purposes of any applicable law, or is adjudicated or found bankrupt or insolvent; or
(v) Insolvency proceedings: (a) proceedings are initiated against the Company under any applicable liquidation, insolvency, composition, reorganization or other similar laws, or an application made for the appointment of an administrative or other receiver, manager, administrator or other similar official, or an administrative or other receiver, manager, administrator or other similar official is appointed, in relation to the Company or in relation to the whole or a part of the undertaking or assets of either of them, or an encumbrancer takes possession of the whole or a part of the undertaking or assets of either of them, or a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued or put in force against the whole or a part of the undertaking or assets or any of them and (b) in any case is not discharged within 14 days; or
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(vi) Arrangements with creditors: the Company initiates or consents to judicial proceedings relating to itself under any applicable liquidation, insolvency, composition, reorganization or other similar laws or makes a conveyance or assignment for the benefit of, or enters into any composition or other arrangement with, its creditors generally (or any class of its creditors).
(b) Neither a cancellation of the Senior Preferred Debt Securities of any series, a reduction, in part or in full, of the Amounts Due of the Senior Preferred Debt Securities of any series, the conversion thereof into another security or obligation of the Company or another person, in each case, as a result of the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Company, nor the exercise of any Bail-in Power or any other resolution power by the Relevant Resolution Authority with respect to such Senior Preferred Debt Securities, will be an Event of Default or otherwise constitute non-performance of a contractual obligation, or entitle the Holders of the Senior Preferred Debt Securities of such series to any remedies, which are hereby expressly waived.
(c) No exercise of a resolution tool or resolution power by the Relevant Resolution Authority or any action in compliance therewith shall constitute an Event of Default.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If any Event of Default shall occur in relation to any series of Senior Preferred Debt Securities, the Trustee or the Holders of at least 25% in outstanding principal amount of the Senior Preferred Debt Securities of that series may at their discretion declare that the Senior Preferred Debt Securities of such series and all interest then accrued thereon shall be forthwith due and payable, whereupon the same shall become immediately due and payable at its Early Termination Amount (which shall be its principal amount, unless otherwise specified pursuant to Section 3.01), together with all interest (if any) accrued thereon, without presentment, demand, protest or other notice of any kind, all of which the Company will expressly waive, anything contained in the Senior Preferred Debt Securities of such series to the contrary notwithstanding, unless, prior thereto, all Events of Default in respect of the Senior Preferred Debt Securities of such series shall have been cured.
At any time after such a declaration of acceleration with respect to Senior Preferred Debt Securities of any series has been made but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holder or Holders of a majority in aggregate principal amount of the Outstanding Senior Preferred Debt 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 Senior Preferred Debt Securities arising therefrom) but only if
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(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 Senior Preferred Debt Securities of such series which have become due otherwise than by such declaration of acceleration and any due and payable interest, and overdue interest and Additional Amounts, if any, thereon at the rate or rates prescribed therefor in such Senior Preferred Debt Securities,
(ii) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and
(b) all Events of Default with respect to Senior Preferred Debt Securities of such series, other than the non-payment of the principal of and any premium and interest on, and any Additional Amounts with respect to Senior Preferred Debt Securities of such series which shall have become due solely by such declaration of acceleration, have been cured or waived as provided by Section 5.13.
No such rescission or annulment shall affect any subsequent default or impair any right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by the Trustee. If an Event of Default with respect to Senior Preferred Debt Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Senior Preferred Debt Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Senior Preferred Debt Securities Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy, including the institution of proceedings in Spain (but not elsewhere) for the winding-up of the Company.
The Holders of Senior Preferred Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off or counterclaim or combination of accounts with respect to the Senior Preferred Debt Securities or this Senior Preferred Debt Securities Indenture (or between the obligations under or in respect of any Senior Preferred Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company, whether before or during a winding up of the Company.
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Notwithstanding the foregoing, failure to make any payment in respect of a series of Senior Preferred Debt Securities shall not be an Event of Default in respect of such Senior Preferred Debt Securities if such payment is withheld or refused (i) in order to comply with any fiscal or other law or regulation or with the order of any court of competent jurisdiction, in each case applicable to such payment, or (ii) in case of doubt as to the validity or applicability of any such law, regulation or order, in accordance with advice given as to such validity or applicability at any time before the expiry of such period of 14 days by independent legal advisers acceptable to the Trustee, provided, however, that the Trustee may by notice to the Company require the Company to take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days or seven days after the Trustee gives written notice to the Company informing it of such resolution.
No recourse for the payment of the principal of (or premium, if any) or interest, if any, on any Senior Preferred Debt Security, or for any claim based thereon and no recourse under or upon any obligation, covenant or agreement of the Company in this Senior Preferred Debt Securities Indenture, or in any Senior Preferred Debt 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 of any successor corporation of either the Company, either directly or through the Company or any successor corporation of either, 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 Senior Preferred Debt Securities Indenture and the issue of the Senior Preferred Debt Securities of a series.
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 Senior Preferred Debt 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 Senior Preferred Debt Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or interest, if any) and Additional Amounts 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
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Trustee allowed in any such proceeding; provided that the Company shall not, as a result of the bringing of such proceedings, be obliged to pay any sum representing or measured by reference to principal, premium or interest on the Senior Preferred Debt Securities sooner than the same would otherwise have been payable by it. In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Senior Preferred Debt Security to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to first pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.08.
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 Senior Preferred Debt Security any plan of reorganization, arrangement, adjustment, or composition affecting any Senior Preferred Debt Securities or the rights of any Holder of any Senior Preferred Debt Security or to authorize the Trustee to vote in respect of the claim of any such Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of Senior Preferred Debt Securities. All rights of action and claims under this Senior Preferred Debt Securities Indenture or the Senior Preferred Debt Securities may be prosecuted and enforced by the Trustee without the possession of any of the Senior Preferred Debt Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel be for the ratable benefit of the Holders of the Senior Preferred Debt Securities in respect of which such judgment has been recovered.
Section 5.06. Application of Money Collected. Any money collected by the Trustee pursuant to this Article or, after an Event of Default, any money or other property distributable in respect of the Company’s obligations under this Senior Preferred Debt Securities Indenture, in respect of any series of Senior Preferred Debt 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 interest, if any, and Additional Amounts upon presentation of such Senior Preferred Debt 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 Senior Preferred Debt Securities due and owing to the Trustee (including any predecessor Trustee) under Section 6.08;
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SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest, if any, and Additional Amounts on such series of Senior Preferred Debt Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Senior Preferred Debt Securities for principal (and premium, if any) and interest, if any, respectively; and
THIRD: To the payment of the balance, if any, to the Company or any other Person or Persons legally entitled thereto.
Section 5.07. Limitation on Suits. No Holder of any Senior Preferred Debt Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Senior Preferred Debt Securities Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to Senior Preferred Debt Securities of the same series specifying such Event of 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 Senior Preferred Debt Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name, as Trustee hereunder;
(c) such Holder of a Senior Preferred Debt Security has offered to the Trustee reasonable indemnity and/or security satisfactory to it (as determined by the Trustee in its sole discretion) 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 Senior Preferred Debt Securities of such series;
it being understood and intended that no one or more Holders of Senior Preferred Debt Securities of a particular series shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Senior Preferred Debt Securities Indenture to affect, disturb or prejudice the rights of any other such Holders or holders, or to obtain or to seek to obtain priority or preference over any other such Holders or holders or to enforce any right under this Senior Preferred Debt Securities Indenture, except in the manner herein provided and for the equal and ratable benefit of all Holders of Senior Preferred Debt Securities of such series.
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Section 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any and Additional Amounts. Notwithstanding any other provision in this Senior Preferred Debt Securities Indenture, the Holder of any Senior Preferred Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) interest, if any, and Additional Amounts on such Senior Preferred Debt Security on the respective Stated Maturities as expressed in such Senior Preferred Debt Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies. If the Trustee or any Holder of any Senior Preferred Debt Security has instituted any proceeding to enforce any right or remedy under this Senior Preferred Debt Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders of Senior Preferred Debt Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Senior Preferred Debt Securities shall continue as though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Senior Preferred Debt 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 Senior Preferred Debt Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not 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 Senior Preferred Debt Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Senior Preferred Debt Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Senior Preferred Debt Securities, as the case may be.
Section 5.12. Control by Holders. The Holders of a majority in aggregate principal amount of the Outstanding Senior Preferred Debt Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee hereunder, or exercising any trust or power conferred on the Trustee hereunder with respect to the Senior Preferred Debt Securities of such series, provided that
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(a) such direction shall not be in conflict with any rule of law or with this Senior Preferred Debt Securities Indenture or with the Senior Preferred Debt Securities of any series;
(b) the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders of any Senior Preferred Debt Securities of any series not taking part in such direction with respect to which the Trustee is acting as the Trustee; and
(c) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults. The Trustee may without prejudice to its rights in respect of any subsequent Event of Default from time to time and at any time waive any Event of Default or authorize any proposed Event of Default by the Company, provided that in its opinion the interests of the Holders shall not be materially prejudiced thereby and, provided, further, that the Trustee shall not exercise any powers conferred on it by this clause in contravention of any notice in writing to the Trustee made pursuant to Section 5.07 hereof but no such notice shall affect any waiver or authorization previously given or made. The Holders of not less than a majority in aggregate principal amount of the Outstanding Senior Preferred Debt Securities of any series may on behalf of the Holders of all the Senior Preferred Debt Securities of such series waive any past Event of Default hereunder with respect to such series and its consequences, except an Event of Default:
(a) in the payment of the principal of (or premium, if any) or interest, if any, and Additional Amounts on any Senior Preferred Debt Security of such series, or
(b) in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Senior Preferred Debt Security of such series affected.
Upon any such waiver, such Event of Default shall cease to exist, and any Event of Default with respect to any series arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Senior Preferred Debt Securities Indenture, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs. All parties to this Senior Preferred Debt Securities Indenture agree, and each Holder of any Senior Preferred Debt Security by his or her 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 Senior Preferred Debt Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall
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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 Senior Preferred Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Senior Preferred Debt Security on or after the respective Stated Maturities expressed in such Senior Preferred Debt Security (or, in the case of redemption, on or after the Redemption Date).
Section 5.15. Waiver of Right of Set-off. If an Early Redemption for TLAC/MREL Disqualification Event is specifically provided for in respect of a series of Senior Preferred Debt Securities, as contemplated by Section 3.01, subject to applicable law, neither any Holder or beneficial owner of the Senior Preferred Debt Securities, nor the Trustee acting on behalf of the Holders of the Senior Preferred Debt Securities of such series may exercise, claim or plead any right of set-off, compensation, netting or retention in respect of any amount owed to it by the Company in respect of, or arising under, or in connection with, the Senior Preferred Debt Securities of such series or this Senior Preferred Debt Securities Indenture and each Holder and beneficial owner of the Senior Preferred Debt Securities of such series, by virtue of its holding of any Senior Preferred Debt Securities of such series or any interest therein, and the Trustee acting on behalf of the Holders of the Senior Preferred Debt Securities of such series, shall be deemed to have waived all such rights of set-off, compensation, netting, retention or counterclaim. If, notwithstanding the above, any amounts due and payable to any Holder or beneficial owner of a Senior Preferred Debt Security where the TLAC/MREL Disqualification Event has been specified, as contemplated by Section 3.01, or any interest therein by the Company in respect of, or arising under, the Senior Preferred Debt Securities of such series are discharged by set-off, such Holder or beneficial owner shall, subject to applicable law, immediately pay an amount equal to the amount of such discharge to the Company (or, if the event of any voluntary or involuntary liquidation of the Company shall have occurred, the liquidator or administrator of the Company, as the case may be) and, until such time as payment is made, shall hold an amount equal to such amount in trust (where possible) or otherwise for the Company (or the liquidator or administrator of the Company, as the case may be) and, accordingly, any such discharge shall be deemed not to have taken place.
Section 5.16. No Additional Remedies. Section 5.17. No remedy against the Company other than as referred to in this Article 5 shall be available to the Holders, whether for the recovery of amounts owing to the Holders in respect of the Senior Preferred Debt Securities of any series or under this Senior Preferred Debt Securities Indenture or in respect of any breach by the Company of any of its other obligations under or in respect of the Senior Preferred Debt Securities of any series or under this Senior Preferred Debt Securities Indenture, except that the Holders shall have such rights and powers as they are required to have under the Trust Indenture Act.
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ARTICLE 6
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Senior Preferred Debt Securities Indenture, and no implied covenants or obligations shall be read into this Senior Preferred Debt Securities Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Senior Preferred Debt Securities Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Senior Preferred Debt Securities Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts, statements, opinions or conclusions stated therein).
(b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Senior Preferred Debt Securities Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Senior Preferred Debt Securities Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that
(i) this subsection (c) shall not be construed to limit the effect of subsections (a) or (d) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Senior Preferred Debt Securities of any series, determined as provided herein, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Senior Preferred Debt Securities Indenture with respect to the Senior Preferred Debt Securities of such series.
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(d) No provision of this Senior Preferred Debt Securities Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this Senior Preferred Debt Securities Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.
Section 6.02. Spanish Tax Procedures and Obligations of the Trustee. In connection with each payment made on any Payment Date (as defined in Appendix 1 attached hereto) in respect of the issued Senior Preferred Debt Securities hereunder, the Trustee or Paying Agent shall comply with the tax procedures set forth in Appendix 1 hereto. The Trustee or Paying Agent shall have no duty or responsibility to comply with other Spanish tax obligations arising out of this Senior Preferred Debt Securities Indenture. The Company shall be responsible for the payment of any and all amounts due under the Senior Preferred Debt Securities. Therefore, the Trustee or Paying Agent shall not be liable for any amounts owed to any person due to its failure to properly comply with the tax procedures referred to in this Section 6.02 and Appendix 1 hereto, except such as may result from the negligence, willful misconduct or fraud of the Trustee or Paying Agent or any of its agents or employees. The Trustee or Paying Agent may request and rely conclusively upon any instructions from the Company in respect of any action necessary or required to be taken by the Trustee or Paying Agent pursuant to this Section 6.02 and Appendix 1 hereto; provided, however, in no event shall the Trustee or Paying Agent be required to expend or risk its own funds in the performance of any of its duties pursuant to this Section 6.02 and Appendix 1 hereto, or be obligated to take any legal or other action which might in its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with acceptable indemnification and security.
Section 6.03. Notice of Defaults. Within 90 days after the occurrence of any Event of Default hereunder with respect to Senior Preferred Debt Securities of any series of which a Responsible Officer of the Trustee has received written notice of such Event of Default the Trustee shall transmit in the manner and to the extent provided in Section 1.06 to Holders of Senior Preferred Debt Securities of such series notice of such Event of Default hereunder of which the Trustee has received written notice, unless such Event of Default 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 Senior Preferred Debt Securities of such series.
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Section 6.04. 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, Officer’s Certificate, or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company 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 Senior Preferred Debt Securities Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate and/or an Opinion of Counsel;
(d) the Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Senior Preferred Debt Securities Indenture at the request or direction of any of the Holders pursuant to this Senior Preferred Debt Securities Indenture, unless such Holders shall have offered to the Trustee reasonable security and/or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; at the sole reasonable cost and expense of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; provided that the Trustee shall not be entitled to such information which the Company is prevented from disclosing as a matter of law or contract;
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, without the consent of any other parties, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;
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(h) the Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Senior Preferred Debt Securities Indenture, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(i) anything in this Senior Preferred Debt Securities Indenture notwithstanding, in no event shall the Trustee be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss or profit), even if the Trustee has been advised as to the likelihood of such loss or damage and regardless of whether the claim for loss or damage is made in negligence or otherwise;
(j) the Trustee shall not be liable with respect to any Losses arising from action taken or omitted to be taken by it in good faith in accordance with any instruction or communication received by e-mail from any person reasonably believed by the Trustee to be authorized by the Company to send such instruction or communication, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(k) the Trustee shall not be deemed to have notice of any Event of Default unless a Responsible Officer of the Trustee has received written notice of such an Event of Default at the Corporate Trust Office of the Trustee, and such notice references the Senior Preferred Debt Securities and/or this Senior Preferred Debt Securities Indenture;
(l) the Trustee shall not be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond its control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, strikes, work stoppages, civil or military disturbances, nuclear or natural catastrophes, fire, riot, embargo, loss or malfunctions of utilities, communications or computer (software and hardware) services, government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the services contemplated by this Senior Preferred Debt Securities Indenture;
(m) 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 to act hereunder; and
(n) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Senior Preferred Debt Securities Indenture, which certificate may be signed by any person authorized to sign an Officer’s Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.
Section 6.05. Not Responsible for Recitals or Issuance of Senior Preferred Debt Securities. The recitals contained herein and in the Senior Preferred Debt 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
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validity or sufficiency of this Senior Preferred Debt Securities Indenture or of the Senior Preferred Debt Securities, except that the Trustee represents and warrants that it has duly authorized, executed and delivered this Senior Preferred Debt Securities Indenture. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Senior Preferred Debt Securities or the proceeds thereof. The Trustee shall not be responsible to make any calculation with respect to any matter under this Senior Preferred Debt Securities Indenture other than as specifically provided for herein. The Trustee shall have no duty to monitor or investigate the Company’s compliance with or the breach of, or cause to be performed or observed, any representation, warranty, or covenant, or agreement of any Person, other than the Trustee, made in this Senior Preferred Debt Securities Indenture.
No provision of this Senior Preferred Debt Securities Indenture shall be deemed to impose any duty or obligation on the Trustee to perform any act or acts, receive or obtain any interest in property or exercise any interest in property, or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or would subject the Trustee to taxation or other consequences that, in the sole determination of the Trustee, are adverse to the Trustee, or in which the Trustee shall be unqualified or incompetent in accordance with applicable law to perform any such act or acts, to receive or obtain any such interest in property or to exercise any such right, power, duty or obligation.
Section 6.06. May Hold Senior Preferred Debt Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Senior Preferred Debt 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 Senior Preferred Debt Securities and, subject to Section 6.09 and Section 6.14, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Senior Preferred Debt Security Registrar, Calculation Agent or such other agent.
Section 6.07. 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 or to invest any money received by it hereunder except as otherwise agreed with the Company.
Section 6.08. 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);
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(b) except as otherwise expressly provided herein, to reimburse the Trustee for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Senior Preferred Debt Securities Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and
(c) to indemnify the Trustee (which for purposes of this subparagraph Section 6.08(c) shall be deemed to include its directors, officers, employees and agents) or any predecessor Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or expense (including legal fees and expenses) and taxes (other than taxes based upon, measured by or determined by the income of the Trustee) 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 (whether asserted by the Company, or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, or in connection with enforcing the provisions of this Section, but excluding any tax liabilities of the Trustee in respect of its net profits.
In addition to, but without prejudice to its other rights under this Senior Preferred Debt Securities Indenture, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.01, the fees, costs and expenses (including the charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.
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. If the Company and the Trustee are being represented by the same counsel and the Company has assumed the defense of the claim, the Trustee shall not be authorized to settle a claim without the written consent of the Company, which consent shall not be unreasonably withheld.
As security for the performance of the obligations of the Company under this Section, the Trustee shall have a senior lien to which the Senior Preferred Debt 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 interest, if any, on the Senior Preferred Debt Securities.
“Trustee” for purposes of this Section shall include any predecessor Trustee; provided, however, that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.
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The Trustee’s rights to payment of its fees, reimbursement and indemnity under, and its lien provided for in, this Section 6.08 shall survive the payment in full of the Senior Preferred Debt Securities, the satisfaction and discharge of this Senior Preferred Debt Securities Indenture, the resignation or removal of the Trustee, the termination for any reason of this Senior Preferred Debt Securities Indenture and the exercise of the Bail-in Power and the other relevant resolution tools by the Relevant Resolution Authority.
Section 6.09. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of Section 310(b) 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, Section 310(b) of the Trust Indenture Act and this Senior Preferred Debt Securities Indenture.
Section 6.10. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder with respect to each series which shall be a Person organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State or District of Columbia authority and having a corporate trust office or agency in the Borough of Manhattan, The City of New York, New York. If such Person 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 Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee 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 6.11. 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 6.12.
(b) The Trustee may resign at any time with respect to the Senior Preferred Debt 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 6.12 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Senior Preferred Debt Securities of such series.
(c) The Trustee may be removed at any time with respect to the Senior Preferred Debt Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Senior Preferred Debt Securities of such series delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.12 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 Senior Preferred Debt Securities of such series.
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(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.09 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Senior Preferred Debt Security of the series as to which the Trustee has a conflicting interest for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.10 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 Senior Preferred Debt Security for at least six months, or
(iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge, or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or
(iv) the Trustee shall fail to perform its obligations to the Company under this Senior Preferred Debt Securities Indenture in any material respect,
then, in any such case, (A) the Company, by a Board Resolution, may remove the Trustee with respect to any or all series of Senior Preferred Debt Securities or (B) subject to Section 5.14 (and except in the case of subparagraph 6.11(d)(iv) above), any Holder who has been a bona fide Holder of a Senior Preferred Debt Security for at least six months (and, in the case of clause (d)(i) above, who is a Holder of a Senior Preferred Debt Security of the series as to which the Trustee has a conflicting interest) may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Senior Preferred Debt Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Senior Preferred Debt Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Senior Preferred Debt Securities of such series (it being understood that any successor Trustee may be appointed with respect to the Senior Preferred Debt Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Senior Preferred Debt Securities of any particular series), and shall comply with the applicable requirements of Section 6.12. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Senior Preferred Debt Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Senior Preferred Debt 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 6.12, become the successor Trustee with respect to the Senior Preferred Debt Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor
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Trustee with respect to the Senior Preferred Debt Securities of any series shall have been so appointed by the Company or the Holders of Senior Preferred Debt Securities of such series and accepted appointment in the manner hereinafter required by Section 6.12, any Holder who has been a bona fide Holder of a Senior Preferred Debt Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Senior Preferred Debt Securities of such series.
(f) The Company shall give notice to Holders of each resignation and each removal of the Trustee with respect to the Senior Preferred Debt Securities of any series and each appointment of a successor Trustee with respect to the Senior Preferred Debt Securities of any series to the Holders 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 Senior Preferred Debt Securities of such series and the address of its Corporate Trust Office.
Section 6.12. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Senior Preferred Debt 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 and subject to its lien provided for in Section 6.08, 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 Senior Preferred Debt Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Senior Preferred Debt Securities of such series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Preferred Debt Securities of such series to which the appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Senior Preferred Debt Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Preferred Debt Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Senior Preferred Debt 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
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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 Senior Preferred Debt 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 Senior Preferred Debt Securities of such series to which the appointment of such successor Trustee relates, subject to the lien provided for in Section 6.08.
(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 subsection (a) or (b) of this Section 6.12, 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 6.13. Merger, Conversion, Consolidation or Succession to Business. Any Person into which the Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such Person 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 Senior Preferred Debt Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Senior Preferred Debt Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Senior Preferred Debt Securities.
Section 6.14. Preferential Collection of Claims. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Senior Preferred Debt Securities of a series), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).
Section 6.15. Appointment of Authenticating Agent. The Trustee may at any time appoint an Authenticating Agent or Agents with respect to one or more series of Senior Preferred Debt Securities which shall be authorized to act on behalf of the Trustee to authenticate Senior Preferred Debt Securities of such series upon original issue, or issued upon exchange, registration of transfer or partial redemption thereof or in lieu of destroyed, lost or stolen Senior Preferred Debt Securities, and Senior Preferred Debt Securities so authenticated shall be entitled to the benefits of this Senior Preferred Debt
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Securities Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Senior Preferred Debt Securities Indenture to the authentication and delivery of Senior Preferred Debt Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation or national banking association organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State or District of Columbia authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.15, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any Person succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such Person shall be otherwise eligible under this Section 6.15, 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 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 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 6.15, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice to the Holders of Senior Preferred Debt 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 6.15.
The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.15.
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If an appointment with respect to one or more series is made pursuant to this Section, the Senior Preferred Debt Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in substantively the following form:
This is one of the Senior Preferred Debt Securities referred to in the within-mentioned Senior Preferred Debt Securities Indenture.
| THE BANK OF NEW YORK MELLON, as Trustee | ||
| By: |
||
| as Authenticating Agent | ||
Section 6.16. Appointment of Additional Trustees. The Company may appoint a Trustee for a particular series of Senior Preferred Debt Securities other than the Trustee named in the first paragraph of this Senior Preferred Debt Securities Indenture by executing and delivering an indenture supplemental hereto where such Trustee accepts such appointment as contemplated by Section 3.01(w) and Section 9.01(k) (it being understood that at any time there shall be only one Trustee with respect to the Senior Preferred Debt Securities of any particular series); provided that, at the time of such acceptance, such Trustee shall be qualified and eligible under this Article 6. Upon such acceptance, such Trustee shall be vested with all the rights, powers, trusts and duties of a Trustee under this Senior Preferred Debt Securities Indenture with respect to the Senior Preferred Debt Securities of such series.
Section 6.17. Tax Withholding. Any amounts to be paid by the Company on the Senior Preferred Debt Securities shall be paid net of any deduction or withholding imposed or required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (or any law implementing such an intergovernmental agreement) (a “FATCA Withholding Tax”), and the Company shall not be required to pay Additional Amounts on account of any FATCA Withholding Tax.
Any Paying Agent shall be entitled to make a deduction or withholding from any payment which it makes under the Senior Preferred Debt Securities and this Senior Preferred Debt Securities Indenture for or on account of (i) any present or future taxes, duties or charges if and to the extent so required by any applicable law and (ii) any FATCA Withholding Tax (together, “Applicable Law”). In either case, the Paying Agent shall make any payment after a deduction or withholding has been made pursuant to Applicable Law and shall report to the relevant authorities the amount so deducted or withheld. In all cases, the Paying Agent shall have no obligation to gross up any payment made subject to any deduction or withholding pursuant to Applicable Law. In addition, amounts deducted or withheld by the Paying Agent as described in this paragraph will be treated as paid to the Holder of the Senior Preferred Debt Securities, and the Company will not pay Additional Amounts in respect of such deduction or withholding, except to the extent required under Section 10.04.
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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 Senior Preferred Debt Securities, 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-interest bearing Senior Preferred Debt Securities and Senior Preferred Debt Securities on which interest is paid less frequently than quarterly as contemplated by Section 3.01), a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Senior Preferred Debt Securities as of such Regular Record Date or such specified date, and
(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.
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 Senior Preferred Debt Securities so long as the Trustee acts as Senior Preferred Debt Security Registrar with respect to such series of Senior Preferred Debt Securities.
Section 7.02. Preservation of Information; Communication to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders (i) contained in the most recent list furnished to the Trustee as provided in Section 7.01 and (ii) received by the Trustee in its capacity as Paying Agent or Senior Preferred Debt Security Registrar (if so acting). The Trustee may dispose of 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 Senior Preferred Debt Securities of any series to communicate with other Holders with respect to their rights under this Senior Preferred Debt Securities Indenture or under the Senior Preferred Debt Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
(c) Every Holder, by receiving and holding a Senior Preferred Debt 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 subsection (b) or otherwise made pursuant to the Trust Indenture Act.
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Section 7.03. Reports by Trustee. (a) On or before May 15 in each year following the date hereof, so long as any Senior Preferred Debt Securities are Outstanding hereunder, the Trustee shall transmit to Holders as provided in the Trust Indenture Act a brief report dated as of a date required by and in compliance with the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each securities exchange upon which the Trustee has been notified that the Senior Preferred Debt Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when Senior Preferred Debt Securities are listed on any securities exchange.
Section 7.04. Reports by the 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 or actual 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 Senior Preferred Debt Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive or actual 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 subsections (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.
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(d) The Trustee may conclusively presume that the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise is complying with such reporting requirements unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office of the Trustee a written notification from the Company stating otherwise. The Trustee shall have no duty to examine any information, reports or other documents filed by the Company pursuant to Section 13 or 15(d) of the Exchange Act, and need make no determination as to whether they comply with the requirements of this Section 7.04, its sole duty in respect thereof being to place them in its files and make them available for inspection by any Holder upon reasonable request during normal business hours.
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 Senior Preferred Debt Securities of any series Outstanding under this Senior Preferred Debt Securities Indenture, consolidate or amalgamate with or merge into any other corporation or convey or transfer or lease its properties and assets substantially as an entirety to any Person, provided that:
(a) the corporation formed by or into which the Company is consolidated, amalgamated or 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 any part of the European Union, and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, in the case of the Company, the due and punctual payment of the principal of (and premium, if any), interest and Additional Amounts, if any, on all the Senior Preferred Debt Securities in accordance with the provisions of such Senior Preferred Debt Securities and this Senior Preferred Debt Securities Indenture, and the performance of every covenant of this Senior Preferred Debt Securities Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such consolidation, amalgamation, merger, conveyance or transfer, no Event of Default and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and
(c) 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 supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
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Section 8.02. Successor Corporation Substituted. In the event of any merger, consolidation, sale, conveyance permitted by Section 8.01 above, Additional Amounts under the Senior Preferred Debt Securities will thereafter be payable in respect of taxes imposed by the acquiring corporation’s, or the resulting corporation’s, jurisdiction of incorporation or tax residence (subject to exceptions equivalent to those that apply to the obligation to pay Additional Amounts pursuant to Section 10.04 in respect of taxes imposed by the laws of the Kingdom of Spain) rather than taxes imposed by the Kingdom of Spain. Additional Amounts with respect to payments of interest or principal due prior to the date of such merger, consolidation, sale, conveyance or lease will be payable only in respect of taxes imposed by the Kingdom of Spain. The acquiring or resulting corporation, as the case may be, will also be entitled to redeem the Senior Preferred Debt Securities in the circumstances described in Section 11.08 with respect to any change or amendment to, or change in the application or official interpretation of the laws or regulations of such jurisdiction, which change or amendment must occur subsequent to the date of any merger, consolidation, sale, conveyance or lease permitted by Section 8.01 if the successor entity is not incorporated or tax resident in the Kingdom of Spain. In the event of assumption of the Company’s obligations in connection with a merger, consolidation, sale or conveyance of substantially all of its assets, the Company shall be released from all obligations and covenants under this Senior Preferred Debt Securities Indenture or the Senior Preferred Debt Securities, as the case may be, and 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 Senior Preferred Debt Securities Indenture with the same effect as if such successor corporation had been named as the Company.
Section 8.03. Assumption of Obligations. Subject to the prior consent of the Regulator, if required, any direct or indirect subsidiary of the Company may assume the obligations of the Company (a “successor entity”) under the Senior Preferred Debt Securities of any series without the consent of the Holders of such series, provided that:
(a) the successor entity shall expressly assume such obligations by an amendment to this Senior Preferred Debt 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 this Senior Preferred Debt Securities Indenture, unconditionally guarantee all of the obligations of such successor entity under the Senior Preferred Debt Securities of such series and this Senior Preferred Debt Securities Indenture as so modified by such amendment;
(b) immediately after giving effect to such assumption of obligations, no Event of Default and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and
(c) 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 Senior Preferred Debt Securities Indenture with respect to any such Senior Preferred Debt
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Securities with the same effect as if such successor entity had been named as the Company in this Senior Preferred Debt 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 Senior Preferred Debt Securities except as described in the following paragraph.
In the event of any assumption, Additional Amounts under the Senior Preferred Debt Securities will be payable in respect of taxes imposed by the assuming corporation’s jurisdiction of incorporation or tax residence (subject to exceptions equivalent to those that apply to the obligation to pay Additional Amounts pursuant to Section 10.04 in respect of taxes imposed by the laws of the Kingdom of Spain) on payments of interest or principal made on or subsequent to the date of such assumption. Additional Amounts with respect to payments of interest or principal due prior to the date of such assumption will be payable only in respect of taxes imposed by the Kingdom of Spain. The direct or indirect subsidiary thereof that assumes the obligations of the Company in such cases will also be entitled to redeem the Securities in the circumstances described in Section 11.08 with respect to any change or amendment to, or change in the application or official interpretation of the laws or regulations of such jurisdiction, which change or amendment must occur subsequent to the date of any such assumption if the assuming entity is not incorporated or tax resident in the Kingdom of Spain. In the event of any such assumption, all obligations of the Company under the Securities shall immediately be discharged.
Section 8.04. Substitution and Variation. If (i) a TLAC/MREL Disqualification Event occurs and is continuing or (ii) an event that would entitle the Company to redeem the Senior Preferred Debt Securities of such series as set forth in Section 11.08 occurs and is continuing, the Company may substitute all (but not some) of the Senior Preferred Debt Securities of such series or modify the terms of all (but not some) of the Senior Preferred Debt Securities of such series, without any requirement for the consent or approval of the holders of the Senior Preferred Debt Securities of such series, so that they are substituted for, or varied to, become, or remain, Qualifying Notes, subject to having given not less than five (5) nor more than 30 days’ notice to the Holders of such series in accordance with Section 1.06 and to the Trustee (which notice shall be irrevocable and shall specify the date for substitution or, as applicable, variation), and subject to obtaining Supervisory Permission therefor, if and as required under Applicable Banking Regulations.
Any such notice shall specify the relevant details of the manner in which such substitution or variation shall take effect and where the Holders of such series can inspect or obtain copies of the new terms and conditions of the Senior Preferred Debt Securities of such series. Such substitution or variation will be effected without any cost or charge to such Holders.
The Senior Preferred Debt Securities of such series shall cease to bear interest from (and including) the date of substitution thereof.
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Any Holder or beneficial owner of the Senior Preferred Debt Securities of such series shall, by virtue of its acquisition of the Senior Preferred Debt Securities of such series or any beneficial interest therein, be deemed to accept the substitution or variation of the terms of the Senior Preferred Debt Securities of such series as set forth in this Section 8.04 and to grant to the Company full power and authority to take any action and/or to execute and deliver any document in the name and/or on behalf of such Holder which is necessary or convenient to complete the substitution or variation of the terms of the Senior Preferred Debt Securities of such series, as applicable.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures without Consent of Holders. Without the consent of any Holders and 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 Senior Preferred Debt Securities;
(b) to add to the covenants of the Company for the benefit of the Holders of all or any series of Senior Preferred Debt Securities (and, if such covenants are to be for the benefit of fewer than all series of Senior Preferred Debt Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company;
(c) to add any additional Events of Default;
(d) to change or eliminate any of the provisions of this Senior Preferred Debt Securities Indenture, or any supplemental indenture, provided that any such change or elimination shall become effective only when there is no Outstanding Senior Preferred Debt Security of any series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision or as to which such supplemental indenture would apply;
(e) to secure the Senior Preferred Debt Securities;
(f) to establish the form or terms of Senior Preferred Debt Securities of any series as permitted by Section 2.01 or Section 3.01;
(g) to change any Place of Payment, so long as the Place of Payment as required by Section 3.01 is maintained in The City of New York;
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(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 evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Senior Preferred Debt Securities of one or more series and to add to or change any of the provisions of this Senior Preferred Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.12(b);
(j) to change or eliminate any provision of this Senior Preferred Debt Securities Indenture as permitted by Section 1.08;
(k) to name a Trustee for a particular series of Senior Preferred Debt Securities other than the Trustee named in the first paragraph of this Senior Preferred Debt Securities Indenture and to provide for the appropriate changes related to such appointment for a particular series of Senior Preferred Debt Securities; or
(l) with respect to any Senior Preferred Debt Security (including a Global Security) issued on or after the date hereof, to amend any such Senior Preferred Debt Security to conform to the description of the terms of such Senior Preferred Debt Security in the prospectus, prospectus supplement, product supplement, pricing supplement or any other similar offering document related to the offering of such Senior Preferred Debt Security.
Section 9.02. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Senior Preferred Debt Securities of each series affected by such supplemental Senior Preferred Debt 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 Senior Preferred Debt Securities Indenture or of modifying in any manner the rights of the Holders of Senior Preferred Debt Securities of such series under this Senior Preferred Debt Securities Indenture; provided, however, that no such supplemental indenture may, without the consent of the Holder of each Outstanding Senior Preferred Debt Security affected thereby,
(a) change the Stated Maturity, if any, of any principal amount or any interest amounts in respect of any such Senior Preferred Debt Security, reduce the principal amount thereof or the rate of interest and Additional Amounts, if any, thereon, or any premium payable upon the redemption thereof, or reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the Maturity thereof pursuant to Section 5.02, or change the obligation of the Company (or its successor) to pay Additional Amounts pursuant to Section 10.04 (except as
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contemplated by Section 8.01(a) and permitted by Section 9.01(a)) on the Senior Preferred Debt Securities, or the currency of payment of the principal amount of, premium, if any, or interest on, any such Senior Preferred Debt Security, or change the Place of Payment (except as contemplated by Section 9.01(g)), or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof or the date any such payment is otherwise due and payable (or, in the case of redemption, on or after the Redemption Date); or
(b) reduce the percentage in aggregate principal amount of the Outstanding Senior Preferred Debt Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Senior Preferred Debt Securities Indenture or of certain defaults hereunder and their consequences) provided for in this Senior Preferred Debt Securities Indenture, or
(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 Senior Preferred Debt Securities Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Senior Preferred Debt Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to the “Trustee” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Section 6.12(b) and Section 9.01(j), or
(d) change in any manner adverse to the interests of the Holders of any Senior Preferred Debt Securities 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 Senior Preferred Debt Securities.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other provision of this Senior Preferred Debt Securities Indenture which has expressly been included solely for the benefit of one or more particular series of Senior Preferred Debt Securities, or which modifies the rights of the Holders of Senior Preferred Debt Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Senior Preferred Debt Securities Indenture of the Holders of Senior Preferred Debt 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 Senior Preferred Debt Securities Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Senior Preferred Debt
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Securities Indenture and that such supplemental indenture constitutes a valid and binding obligation of the Company subject to customary exceptions. The Trustee may, but shall not be obliged to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Senior Preferred Debt Securities Indenture or otherwise.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Senior Preferred Debt Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Senior Preferred Debt Securities Indenture for all purposes; and every Holder of Senior Preferred Debt Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby, except as otherwise expressed therein.
Section 9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Senior Preferred Debt Securities to Supplemental Indentures. Senior Preferred Debt Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Senior Preferred Debt 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 Senior Preferred Debt Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Senior Preferred Debt Securities of such series.
ARTICLE 10
COVENANTS
Section 10.01. Payment of Principal, Premium, and Interest. The Company covenants and agrees for the benefit of each series of Senior Preferred Debt Securities that it will duly and punctually pay to the Holders the principal of (and premium, if any) and (subject to Sections 2.02, 3.07 and 12.01) interest, if any, and Additional Amounts on the Senior Preferred Debt Securities of that series in accordance with the terms of the Senior Preferred Debt Securities and this Senior Preferred Debt Securities Indenture. Except as otherwise specified, as contemplated by Section 3.01 hereof, the Trustee shall act as Paying Agent with respect to any series of Senior Preferred Debt Securities.
Section 10.02. Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Senior Preferred Debt Securities an office or agency where Senior Preferred Debt Securities of that series may be presented or surrendered for payment, where Senior Preferred Debt 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 Senior Preferred Debt Securities of that series and this Senior Preferred Debt Securities Indenture may be served; provided, however, that at
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the option of the Company in the case of definitive Senior Preferred Debt Securities of such series, payment of any interest thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Senior Preferred Debt Security Register. With respect to the Senior Preferred Debt Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be 160 Queen Victoria Street London EC4V 4LA. Unless otherwise specified pursuant to Section 3.01, the Company will maintain in the City of London, an office or agency where notices and demands to or upon the Company in respect of Senior Preferred Debt Securities of any series and this Senior Preferred Debt 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 City of London) where the Senior Preferred Debt Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of any obligation to maintain an office or agency in each Place of Payment (except as otherwise indicated in this Section) for Senior Preferred Debt 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 Senior Preferred Debt Securities of any series, it will, on or before each due date for payment of the principal of (and premium, if any) or interest, if any, if any, on any of the Senior Preferred Debt Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of Senior Preferred Debt Securities, it will, prior to each due date for payment of the principal of (and premium, if any) or interest, if any, on any Senior Preferred Debt Securities of that series deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or its failure so to act. Unless otherwise specified as contemplated by Section 3.01, the Trustee shall be the Company’s Paying Agent. The Company will cause each Paying Agent for any series of Senior Preferred Debt Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:
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(a) hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Senior Preferred Debt Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other obligor upon the Senior Preferred Debt Securities of that series) in the making of any payment, when due and payable, or principal of (and premium, if any) or interest, if any, on Senior Preferred Debt Securities of that series; and
(c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at the time, for the purpose of obtaining the satisfaction and discharge of this Senior Preferred Debt Securities Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee such Paying Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest, if any, on any Senior Preferred Debt Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest, if any, have become due and payable shall be paid to the Company, as the case may be, on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Senior Preferred Debt 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 pursuant to Section 3.01, all amounts payable (whether in respect of principal, redemption amount, interest or otherwise) in respect of any series of Senior Preferred Debt Securities will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges (collectively, the “Taxes”) of whatever nature imposed or levied by or on behalf of the Kingdom of Spain
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or any political subdivision thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such Taxes is required by law. In that event, the Company shall pay such additional amounts (“Additional Amounts”) as will result in receipt by the Holders of the Senior Preferred Debt Securities of the particular series of such amounts as would have been received by them had no such withholding or deduction been required.
The Company shall not be required to pay any Additional Amounts in respect of any series of Senior Preferred Debt Securities:
(i) to, or to a third party on behalf of, a Holder if the Holder or the beneficial owner of Senior Preferred Debt Securities is liable for such Taxes in respect of such Senior Preferred Debt Securities by reason of his or her having some connection with Spain other than (i) the mere holding of such Senior Preferred Debt Security or (ii) the receipt of any payment in respect of such Senior Preferred Debt Security; or
(ii) to, or to a third party on behalf of, a Holder or a beneficial owner in respect of whose series of Senior Preferred Debt Securities the Company does not receive such information as may be required in order to comply with the applicable Spanish tax reporting obligations, including but not limited to the receipt in a timely manner of a duly executed and completed certificate in accordance with Law 10/2014 and Royal Decree 1065/2007, as amended, and any implementing legislation or regulation; or
(iii) to, or to a third party on behalf of, a Holder or a beneficial owner of Senior Preferred Debt Securities in respect of whom the Company does not receive such information concerning such Holder’s or beneficial owner’s identity and tax residence as may be required in order to comply with the procedures that may be implemented to comply with the interpretation of Royal Decree 1065/2007 eventually made by the Spanish tax authorities; or
(iv) presented for payment (where presentation is required) more than 30 days after the Relevant Date, except to the extent that the relevant Holder would have been entitled to such Additional Amounts on presenting the same for payment on the expiry of such period of 30 days; or
(v) in relation to any estate, inheritance, gift, sales, transfer or similar taxes; or
(vi) to, or to a third party on behalf of, individuals resident for tax purposes in the Kingdom of Spain if the Spanish tax authorities determine that payments made to such individuals are not exempt from withholding tax and require a withholding to be made; or
(vii) to, or to a third party on behalf of, a Spanish-resident legal entity subject to Spanish corporation tax if the Spanish tax authorities determine that the Senior Preferred Debt Securities of such series do not comply with exemption requirements specified in the Reply to a Consultation of the Directorate General for Taxation (Dirección General de Tributos) dated 27 July 2004 and require a withholding to be made; or
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(viii) where the withholding or deduction is required pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code (“FATCA”), any regulations or agreements thereunder, any official interpretations thereof, any intergovernmental agreements with respect thereto (including the intergovernmental agreement between the United States and Spain on the implementation of FATCA), or any law implementing an intergovernmental agreement or any regulations or official interpretations relating thereto; or
(ix) in the case of any combination of items listed in (i) through (viii) above.
Additional Amounts will also not be paid with respect to any payment to a Holder who is a fiduciary, a partnership, a limited liability company or person other than the sole beneficial owner of that payment, to the extent that payment would be required by the laws of Spain (or any political subdivision thereof) to be included in the income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership, an interest holder in that limited liability company or a beneficial owner who would not have been entitled to the Additional Amounts had it been the Holder.
For the purposes of (iv) above, the “Relevant Date” means, in respect of any payment, the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been received by the Trustee on or prior to such due date, it means the first date on which, the full amount of such moneys having been so received and being available for payment to Holders of Senior Preferred Debt Securities, notice to that effect shall have been duly given to the Holders of the relevant series of Senior Preferred Debt Securities in accordance with Section 1.06.
Unless the context otherwise requires, any reference in this Section 10.04 to “principal” shall include any premium payable, or Redemption Amount and any other amounts in the nature of principal payable pursuant to this Senior Preferred Debt Securities Indenture and “interest” shall include all amounts payable pursuant to Section 3.07 and any other amounts in the nature of interest payable under this Senior Preferred Debt Securities Indenture.
As used in this Section 10.04, the term “Redemption Amount” means, as appropriate, the Maturity Redemption Amount, Early Redemption Amount (Tax), Early Redemption Amount (Call), Early Redemption Amount (Put), Early Redemption Amount (Clean-up Call), Early Termination Amount and Early Redemption Amount (TLAC/MREL Disqualification Event) (if applicable) or such other amount in the nature of a redemption amount as may be specified in, or determined in accordance with the provisions of, Section 3.01.
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Unless the context requires otherwise, any references in this Senior Preferred Debt Securities Indenture to payment of principal of or interest on a Senior Preferred Debt Security shall be deemed to include any Additional Amounts payable with respect thereto.
In the event that any withholding or deduction for or on account of any taxes is required, at least 10 days prior to each date of payment of principal of or interest on the relevant series of Senior Preferred Debt Securities, or, if later, promptly after the obligation to withhold or deduct becomes known to the Company, the Company will furnish to the Trustee and the Paying Agent, if other than the Trustee, an Officer’s Certificate specifying the amount required to be withheld or deducted on such payments to such Holders, certifying that the Company shall pay such amounts required to be withheld to the appropriate taxing jurisdiction and certifying to the fact that the Additional Amounts will be payable and the amounts so payable to each Holder, and that the Company will pay to the Trustee or the Paying Agent the Additional Amounts required to be paid; provided that no such Officer’s Certificate will be required prior to any date of payment of principal of or interest on such Senior Preferred Debt Securities if there has been no change with respect to the matters set forth in a prior Officer’s Certificate. The Trustee and Paying Agent may rely on the fact that any Officer’s Certificate contemplated by this paragraph has not been furnished as evidence of the fact that no withholding or deduction for or on account of any taxes is required. The Company covenants to indemnify the Trustee and Paying Agent for and to hold them harmless against any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any such Officer’s Certificate furnished pursuant to this paragraph or on the fact that any Officer’s Certificate contemplated by this paragraph has not been furnished.
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 respective corporate existence, provided, however, that the foregoing shall not obligate the Company to preserve any such right or franchise if the Company shall determine that the preservation thereof is no longer desirable in the conduct of its business and that the loss thereof is not disadvantageous in any material respect to any Holder.
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.
Section 10.07. Original Issue Document. The Company shall provide to the Trustee on a timely basis such information, if any, as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Senior Preferred Debt Securities relating to any original issue discount, including, without limitation, Form 8281, Form 1099-OID or any successor forms.
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ARTICLE 11
REDEMPTION OF SENIOR PREFERRED DEBT SECURITIES
Section 11.01. Applicability of Article. Senior Preferred Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Senior Preferred Debt Securities of any series) in accordance with this Article 11. The Senior Preferred Debt Securities of any series may not be redeemed in whole or in part at the option of the Holder thereof.
Section 11.02. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Senior Preferred Debt Securities shall be evidenced by a Board Resolution. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, the Company shall, at least five (5) days prior, but not more than 30 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 Senior Preferred Debt Securities of such series to be redeemed and, if applicable, the tenor of the Senior Preferred Debt Securities to be redeemed.
Section 11.03. Selection by Trustee of Senior Preferred Debt Securities to be Redeemed. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, if less than all the Senior Preferred Debt Securities of any series are to be redeemed, the particular Senior Preferred Debt Securities to be redeemed shall be selected not more than 30 days nor less than five (5) days prior to the Redemption Date by the Trustee, from the Outstanding Senior Preferred Debt Securities of such series not previously called for redemption, pro rata, by lot or 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 Senior Preferred Debt Securities of that series or any multiple thereof) of the principal amount of Senior Preferred Debt Securities of such series of a denomination larger than the minimum authorized denomination for Senior Preferred Debt Securities of that series.
The Trustee shall promptly notify the Company in writing of the Senior Preferred Debt Securities selected for redemption and, in the case of any Senior Preferred Debt Securities selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Senior Preferred Debt Securities Indenture, unless the context otherwise requires, all provisions relating to the redemption of Senior Preferred Debt Securities shall relate in the case of any Senior Preferred Debt Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Senior Preferred Debt Security which has been or is to be redeemed.
Section 11.04. Notice of Redemption. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, notice of redemption shall be given not less than five (5) nor more than 30 days prior to the Redemption Date to each Holder of Senior Preferred Debt Securities to be redeemed in the manner and to the extent provided in Section 1.06.
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All notices of redemption shall state:
(a) the series of Senior Preferred Debt Securities subject to redemption,
(b) the Redemption Date,
(c) the Redemption Price,
(d) if less than all the Outstanding Senior Preferred Debt Securities of any series are to be redeemed, the principal amount of the Senior Preferred Debt Securities to be redeemed (except in the case of a redemption pursuant to Section 11.08 and Section 11.12, which must be a redemption in full),
(e) that on the Redemption Date the Redemption Price together with any accrued but unpaid interest will become due and payable upon each such Senior Preferred Debt Security to be redeemed and, if applicable, that interest thereon will cease to accrue on or after the said date,
(f) the place or places where such Senior Preferred Debt Securities are to be surrendered for payment of the Redemption Price, and
(g) the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to such Senior Preferred Debt Securities.
Any such notice provided pursuant to this Section 11.04 shall be irrevocable, and the delivery thereof shall oblige the Company to make the redemption therein specified (unless the Bail-in Power is exercised by the Relevant Resolution Authority before the occurrence of such redemption).
Notice of redemption of Senior Preferred Debt Securities to be redeemed at the selection of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company, and the Company shall deliver an Officer’s Certificate requesting that the Trustee give such and setting forth the information to be stated in such notice no less than 10 Business Days prior to the date of the notice to Holders of Senior Preferred Debt Securities (unless a shorter notice shall be satisfactory to the Trustee).
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 an Interest Payment Date) accrued but unpaid interest on, all the Senior Preferred Debt Securities which are to be redeemed on that date.
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Section 11.06. Senior Preferred Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Senior Preferred Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Senior Preferred Debt Securities shall cease to accrue interest. Upon surrender of any such Senior Preferred Debt Security for redemption in accordance with said notice, such Senior Preferred Debt Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid interest to the Redemption Date; provided, however, that with respect to any Senior Preferred Debt Securities, unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on an Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Senior Preferred Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular or Special Record Date according to the terms of the Senior Preferred Debt Securities and the provisions of Section 3.07. Senior Preferred Debt Securities in definitive form shall be presented for redemption to the Paying Agent.
If any Senior Preferred Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Senior Preferred Debt Security shall, until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.
Section 11.07. Senior Preferred Debt Securities Redeemed in Part. Any Senior Preferred Debt Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his or her attorney duly authorized in writing), and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Senior Preferred Debt Security without service charge, a new Senior Preferred Debt Security or Senior Preferred Debt Securities of the same series of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Senior Preferred Debt Security so surrendered. If a Global Security is surrendered, the new Senior Preferred Debt Security will also be a Global Security.
Section 11.08. Early Redemption for Taxation Reasons. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, the following shall apply if, in relation to the Senior Preferred Debt Securities of any series, as a result of any change in, or amendment to, the laws or regulations of Spain or of any political subdivision thereof or any authority or agency therein or thereof having power to tax or in the interpretation or administration of any such laws or regulations which becomes effective on or after the date of issue of the first issued Senior Preferred Debt Securities of such series or any earlier date specified pursuant to Section 3.01 the Company shall determine that (a) the Company would be required to pay Additional Amounts pursuant to Section 10.04 or (b) the Company would not be entitled to claim a deduction in computing tax liabilities in Spain in respect
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of any interest to be paid on the next interest payment date on such series of Senior Preferred Debt Securities or the value of such deduction to the Company would be materially reduced or (c) the applicable tax treatment of the Senior Preferred Debt Securities of such series changes in a material way that was not reasonably foreseeable at the issue date. In any such case the Company may, at its option and having given no less than five (5) nor more than 30 days’ notice (or such lesser period as may be specified pursuant to Section 3.01) (ending, in the case of Senior Preferred Debt Securities which bear interest at a floating rate, on a day upon which interest is payable) to the Holders of the Senior Preferred Debt Securities of such series in accordance with Section 11.04 (which notice shall be irrevocable) and a concurrent copy thereof to the Trustee, redeem in whole, but not in part, the relevant Senior Preferred Debt Securities in accordance with the requirements of Applicable Banking Regulations in force at the relevant time, at their early tax redemption amount (the “Early Redemption Amount (Tax)”) (which shall be their principal amount or at such other Early Redemption Amount (Tax) as may be specified in or determined in accordance with Section 3.01), together with any accrued interest thereon to (but excluding) the date fixed for redemption; provided, however, that (i) in the case of (a) above, no such notice of redemption may be given earlier than 90 days (or, in the case of Senior Preferred Debt Securities which bear interest at a floating rate a number of days which is equal to the aggregate of the number of days falling within the then current interest period applicable to the Senior Preferred Debt Securities of such series plus 60 days) prior to the earliest date on which the Company would be obliged to pay such Additional Amounts were a payment in respect of the Senior Preferred Debt Securities of such series then due and (ii) in the case of Senior Preferred Debt Securities where an Early Redemption for TLAC/MREL Disqualification Event is specifically provided for in respect of such series of Senior Preferred Debt Securities, redemption due to changes in tax treatment pursuant to this Section 11.08 may only take place in accordance with Applicable Banking Regulations in force at the relevant time and is subject to the Company obtaining prior Supervisory Permission therefor, if and as required under Applicable Banking Regulations.
Section 11.09. Repurchase of Senior Preferred Debt Securities. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, the Company and any of its subsidiaries or any third party designated by any of them, may at any time repurchase Senior Preferred Debt Securities of any series in the open market or otherwise and at any price. In the case of Senior Preferred Debt Securities where an Early Redemption for TLAC/MREL Disqualification Event is specifically provided for in respect of such series of Senior Preferred Debt Securities, as contemplated by Section 3.01, the repurchase of the Senior Preferred Debt Securities of such series by the Company or any of its subsidiaries shall take place in accordance with Applicable Banking Regulations in force at the relevant time, including the applicable limits referred to in CRR, and will be subject to the prior consent of the Regulator, if and as required.
Section 11.10. Optional Early Redemption (Call). Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, the Company may, at the date or dates specified as contemplated by Section 3.01 with respect to such series, upon the expiration of the appropriate notice pursuant to
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Section 11.04, redeem in whole (but not, except as otherwise specified pursuant to Section 3.01, in part) the Senior Preferred Debt Securities of such series at their call early redemption amount (the “Early Redemption Amount (Call)”) (which shall be their principal amount or such other Early Redemption Amount (Call) as may be specified in or determined pursuant to Section 3.01), together with any accrued interest thereon to (but excluding) the date fixed for redemption.
In the case of Senior Preferred Debt Securities constituting TLAC/MREL Eligible Instruments, redemption at the option of the Company pursuant to this Section 11.10 will be subject to the prior consent of the Regulator if and as required under Applicable Banking Regulations and may only take place in accordance with Applicable Banking Regulations in force at the relevant time.
If the Senior Preferred Debt Securities of any series are to be redeemed in part only on any date in accordance with this Section 11.10, the Senior Preferred Debt Securities of such series shall be redeemed (so far as may be practicable) pro rata to their principal amounts, or by lot or such other method as the Trustee deems fair and appropriate, subject always as aforesaid and provided always that the amount redeemed in respect of the Senior Preferred Debt Securities of such series shall be equal to the minimum authorized denomination thereof or an integral multiple thereof, subject always to compliance with all applicable laws and the requirements of any clearing system on which the Senior Preferred Debt Securities of any such series may be cleared and of any listing authority, stock exchange and/or quotation system on which the Senior Preferred Debt Securities of such series may be listed and/or quoted.
Section 11.11. Optional Early Redemption (Put). Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, the Company shall, upon the exercise of the relevant option by a Holder of Senior Preferred Debt Securities of any series, redeem the Senior Preferred Debt Securities of such series as may be specified pursuant to Section 3.01 at the put early redemption amount (the “Early Redemption Amount (Put)”) (which shall be the principal amount or such other Early Redemption Amount (Put) as may be specified in or determined pursuant to Section 3.01), together with accrued interest (if any) thereon. In order to exercise such option, the Holder of the Senior Preferred Debt Securities of such series must, not less than sixty days before the date so specified (or such other period as may be specified pursuant to Section 3.01), deposit a duly completed redemption notice in the form which is available from the specified office of the Trustee specifying the aggregate principal amount in respect of which such option is exercised (which must be the minimum denomination specified in the relevant prospectus supplement or an integral multiple thereof). Such notice must also be delivered in accordance with the requirements of the applicable clearing system. No option exercised may be withdrawn (except as provided in the relevant indenture).
A Holder of any series of Senior Preferred Debt Securities may not exercise its optional early redemption (put) pursuant to this Section 11.11 in respect of any series of Senior Preferred Debt Securities which is the subject of an exercise by the Company of its option to redeem such series of Senior Preferred Debt Securities pursuant to Section 11.08 or Section 11.10.
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Section 11.12. Early Redemption for TLAC/MREL Disqualification Event. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Preferred Debt Securities, if an Early Redemption for TLAC/MREL Disqualification Event is specifically provided for in respect of a series of Senior Preferred Debt Securities, as contemplated by Section 3.01, and if a TLAC/MREL Disqualification Event has occurred and is continuing, then the Company may, at its option and having given not less than five (5) nor more than 30 days’ notice (or such lesser period as may be specified pursuant to Section 3.01) (ending, in the case of Senior Preferred Debt Securities which bear interest at a floating rate, on a day upon which interest is payable) to the Holders of the Senior Preferred Debt Securities of such series in accordance with Section 11.04 (which notice shall be irrevocable and shall specify the date for redemption) and a concurrent copy thereof to the Trustee, elect to redeem in whole but not in part the Outstanding Senior Preferred Debt Securities of such series at their principal amount, together with any accrued and unpaid interest thereon to (but excluding) the date fixed for redemption (“Early Redemption Amount (TLAC/MREL Disqualification Event)”).
Redemption on the basis of a TLAC/MREL Disqualification Event is subject to the Company obtaining prior Supervisory Permission if and as required under Applicable Banking Regulations and may only take place in accordance with Applicable Banking Regulations in force at the relevant time.
Section 11.13. Early Redemption at the option of the Company (“Clean-up Redemption”). If a Clean-up Redemption at the option of the Company is specifically provided for in respect of a series of Senior Preferred Debt Securities, as contemplated by Section 3.01, and if 75% or any higher percentage specifically provided for (the “Clean-up Percentage”) of the initial aggregate nominal amount of a series of Senior Preferred Debt Securities (which, for the avoidance of doubt, includes any additional issuances issued subsequently and constituting a single series of Senior Preferred Debt Securities under this Senior Preferred Debt Securities Indenture) have been redeemed or purchased by, or on behalf of, the Company, the Company may, on any date that is an interest payment date, as its option and having given not less than five (5) nor more than 30 days’ notice (or such lesser period as may be specified pursuant to Section 3.01) (ending, in the case of Senior Preferred Debt Securities which bear interest at a floating rate, on a day upon which interest is payable) to the Holders of the Senior Preferred Debt Securities of such series in accordance with Section 11.04 (which notice shall be irrevocable and shall specify the date for redemption) and a concurrent copy thereof to the Trustee, elect to redeem in whole but not in part the Outstanding Senior Preferred Debt Securities of such series at their principal amount or such other amount as may be specified in, or determined pursuant to Section 3.01, together with any accrued and unpaid interest thereon to (but excluding) the date fixed for redemption (the “Early Redemption Amount (Clean-up Call)”).
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Redemption on the basis of a Clean-up Redemption is subject to the Company obtaining prior Supervisory Permission if and as required under Applicable Banking Regulations and may only take place in accordance with Applicable Banking Regulations in force at the relevant time.
ARTICLE 12
BAIL-IN AND RESOLUTION ACTIONS
Section 12.01. Agreement and Acknowledgement with Respect to the Exercise of the Bail-in Power. (a) Notwithstanding any other term of the Senior Preferred Debt Securities of any series or any other agreements, arrangements, or understandings between the Company and any Holder of the Senior Preferred Debt Securities of any series, by its acquisition of the Senior Preferred Debt Securities of any series, each Holder (which, for the purposes of this clause, includes each holder of a beneficial interest in the Senior Preferred Debt Securities of any series) acknowledges, accepts, consents to and agrees:
(i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof:
| • | the reduction of all, or a portion, of the Amounts Due on a permanent basis; |
| • | the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 Instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 Instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Senior Preferred Debt Securities, in which case the Holder agrees to accept in lieu of its rights under such Senior Preferred Debt Securities any such Common Equity Tier 1 Instruments, other securities or other obligations of the Company or another person; |
| • | the cancellation of the Senior Preferred Debt Securities or Amounts Due; |
| • | the amendment or alteration of the maturity of the Senior Preferred Debt Securities or amendment of the interest payable on the Senior Preferred Debt Securities, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and |
(ii) that the terms of the Senior Preferred Debt Securities are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority.
85
(b) The exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Senior Preferred Debt Securities shall not constitute an Event of Default and the terms and conditions of the Senior Preferred Debt Securities shall continue to apply in relation to the residual principal amount of, or outstanding amount payable with respect to, the Senior Preferred Debt Securities subject to any modification of the amount of distributions payable to reflect the reduction of the principal amount, and any further modification of the terms that the Relevant Resolution Authority may decide in accordance with applicable laws and regulations relating to the resolution of credit institutions, investment firms and/or Group entities incorporated in the relevant member state.
(c) No repayment or payment of the Amounts Due, if any, on the Senior Preferred Debt Securities of any series, will become due and payable or be paid after the exercise of any Bail-in Power by the Relevant Resolution Authority if and to the extent such amounts have been reduced, converted, cancelled, amended or altered as a result of such exercise.
(d) By its acquisition of the Senior Preferred Debt Securities of any series, each Holder of the Senior Preferred Debt Securities of such series, (which, for the purposes of this clause, includes each holder of a beneficial interest in the Senior Preferred Debt Securities of such series), to the extent permitted by the Trust Indenture Act, will waive any and all claims, in law and/or in equity, against the Trustee for, agree not to initiate a suit against the Trustee in respect of, and agree that the Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Senior Preferred Debt Securities of such series.
(e) Additionally, by its acquisition of the Senior Preferred Debt Securities of any series, each Holder of the Senior Preferred Debt Securities of such series acknowledges and agrees that, upon the exercise of the Bail-in Power by the Relevant Resolution Authority:
(i) the Trustee will not be required to take any further directions from the Holders of the Senior Preferred Debt Securities of such series with respect to any portion of the Senior Preferred Debt Securities of such series that are written-down, converted to equity and/or cancelled under this Senior Preferred Debt Securities Indenture, which authorizes holders of a majority in aggregate outstanding principal amount of the Outstanding Senior Preferred Debt Securities of such series to direct certain actions relating to the Senior Preferred Debt Securities of such series; and
(ii) this Senior Preferred Debt Securities Indenture will not impose any duties upon the Trustee whatsoever with respect to the exercise of the Bail-in Power by the Relevant Resolution Authority;
86
provided, however, that notwithstanding the exercise of the Bail-in Power by the Relevant Resolution Authority, so long as the Senior Preferred Debt Securities of any series remain Outstanding, there will at all times be a Trustee for the Senior Preferred Debt Securities of such series in accordance with this Senior Preferred Debt Securities Indenture, and the resignation and/or removal of the Trustee and the appointment of a successor Trustee will continue to be governed by this Senior Preferred Debt Securities Indenture, including to the extent no additional supplemental indenture or amendment is agreed upon in the event the Senior Preferred Debt Securities of such series remain Outstanding following the completion of the exercise of the Bail-in Power.
(f) By its acquisition of the Senior Preferred Debt Securities of any series, each Holder of the Senior Preferred Debt Securities of such series acknowledges and agrees that neither a cancellation or deemed cancellation of the principal or interest (in each case, in whole or in part), nor the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Senior Preferred Debt Securities of such series will give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act.
(g) By purchasing the Senior Preferred Debt Securities of any series, each Holder (including each beneficial owner) of the Senior Preferred Debt Securities of such series shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds the Senior Preferred Debt Securities of such series to take any and all necessary action, if required, to implement the exercise of the Bail-in Power with respect to the Senior Preferred Debt Securities of such series as it may be imposed, without any further action or direction on the part of such Holder.
(h) Each Holder of the Senior Preferred Debt Securities of any series also acknowledges and agrees that the foregoing description of the Bail-in Power and its exercise is exhaustive on the matters described herein to the exclusion of any other agreements, arrangements or understandings relating to the application of any Bail-in Power to the Senior Preferred Debt Securities of any series.
(i) Each Holder of the Senior Preferred Debt Securities of any series that acquires such Senior Preferred Debt Securities in the secondary market (including each beneficial owner) shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the Holders of the Senior Preferred Debt Securities that acquire the Senior Preferred Debt Securities upon their initial issuance, including, without limitation, with respect to the acknowledgment and agreement to be bound by and consent to the terms of the Senior Preferred Debt Securities, including in relation to the Bail-in-Power.
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. The exchange of copies of this Senior Preferred Debt Securities Indenture and of signature pages by facsimile, e-mail or electronic format (e.g., PDF, “tif” or “jpg”) transmission and other electronically imaged signatures (including, without limitation, DocuSign and AdobeSign) shall constitute effective execution and delivery of this Senior Preferred Debt Securities Indenture as to
87
the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, e-mail or electronic format (e.g., PDF, “tif” or “jpg”) shall be deemed to be their original signatures for all purposes. This Senior Preferred Debt Securities Indenture, any indenture supplemental hereto and any other document, certificate or opinion delivered in connection with this Senior Preferred Debt Securities Indenture, such supplemental indenture or the issuance and delivery of the Senior Preferred Debt Securities Indenture may be signed by or on behalf of the Company and the Trustee by manual, facsimile, PDF or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign).
88
IN WITNESS WHEREOF, the parties hereto have caused this Senior Preferred Debt Securities Indenture to be duly executed, all as of the day and year first above written.
| BANCO SANTANDER, S.A. | ||
| By: | /s/ Juan Urigoen Irusta | |
| Name: Juan Urigoen Irusta | ||
| Title: Authorized Signatory | ||
| THE BANK OF NEW YORK MELLON, LONDON BRANCH, as Trustee | ||
| By: | /s/ Ricardo Da Rocha | |
| Name: Ricardo Da Rocha | ||
| Title: Authorized Signatory | ||
APPENDIX 1: PROCEDURES FOR COMPLIANCE WITH SPANISH TAX LEGISLATION
Information Procedures and Certification Obligations of the Trustee or Paying Agent in respect of payments under the Senior Preferred Debt Securities
| 1. | Delivery of the Payment Information Certificate: In connection with each payment of income under the Senior Preferred Debt Securities, the Trustee or Paying Agent shall deliver to the Company by the close of business on the business day immediately preceding the day on which such payment is made a duly completed and executed Payment Information Certificate substantially in the form set forth in Exhibit I hereto (Form of Payment Information Certificate). Such form may be delivered initially by e-mail, in PDF form, by fax, or by other electronic format transmission (including, without limitation, DocuSign and AdobeSign), provided that the original is delivered by the end of the following month. |
If the Payment Information Certificate is delivered by the Trustee or Paying Agent in a timely and completed manner to the Company, the relevant income payment will be made free and clear of Spanish withholding tax.
The Trustee or Paying Agent shall have no duty or responsibility to comply with Spanish tax laws arising out of this Senior Preferred Debt Securities Indenture, and may request and rely conclusively upon any instructions from the Company in respect of any action necessary or required to be taken by the Trustee or Paying Agent pursuant to this Appendix 1; provided, however, that in no event shall the Trustee or Paying Agent be required to expend or risk its own funds in the performance of any of its duties pursuant to this Appendix 1, or be obligated to take any legal or other action which might in its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with acceptable indemnification.
The Company agrees to instruct the Trustee or Paying Agent in writing with respect to any certifications that may be required under Spanish law, and the Trustee or Paying Agent acknowledges that this Appendix 1 shall constitute an instruction in this regard, unless otherwise instructed in writing by the Company.
| 2. | Failure to deliver the Payment Information Certificate: In the event that the Trustee or Paying Agent fails or for any reason is unable to deliver a timely, duly completed Payment Information Certificate as described above to the Company in respect of a payment of income under the Senior Preferred Debt Securities, the Trustee or Paying Agent shall withhold Spanish income tax on behalf of the Company from the relevant payment at the then-applicable rate (currently set at 19%). |
2
| 3. | If, after the relevant payment date but before the 10th day of the month immediately following the relevant payment date the Trustee or Paying Agent provides the duly completed Payment Information Certificate to the Company, then the Company shall instruct the Trustee or Paying Agent to immediately transfer the amounts withheld in respect of the relevant payment pursuant to paragraph 1 above by way of reimbursement of the amounts withheld on the relevant payment date and completion of the corresponding income payment in respect of payments under the Senior Preferred Debt Securities. |
| 4. | If the Trustee or Paying Agent fails or for any reason is unable to submit a duly completed and executed Payment Information Certificate to the Company by the 10th day of the month immediately following the relevant payment date, the Trustee or Paying Agent shall immediately return (but in any event no later than the 10th day of the month immediately following the relevant payment date) to the Company any remaining amount of the 19% tax withheld in respect of the relevant payment, and investors will have to apply directly to the Spanish tax authorities for any refund to which they may be entitled. |
3
EXHIBIT I
Anexo al Reglamento General de las actuaciones y los procedimientos de gestión e inspección tributaria y de desarrollo de las normas comunes de los procedimientos de aplicación de los tributos, aprobado por Real Decreto 1065/2007
Modelo de declaración a que se refieren los apartados 3, 4 y 5 del artículo 44 del Reglamento General de las actuaciones y los procedimientos de gestión e inspección tributaria y de desarrollo de las normas comunes de los procedimientos de aplicación de los tributos
Annex to Royal Decree 1065/2007, of 27 July, approving the General Regulations of the tax inspection and management procedures and developing the common rules of the procedures to apply taxes
Declaration form referred to in paragraphs 3, 4 and 5 of Article 44 of the General Regulations of the tax inspection and management procedures and developing the common rules of the procedures to apply taxes
Don (nombre), con número de identificación fiscal ( )(1), en nombre y representación de (entidad declarante), con número de identificación fiscal ( )(1) y domicilio en ( ) en calidad de (marcar la letra que proceda):
Mr. (name), with tax identification number ( )(1), in the name and on behalf of (entity), with tax identification number ( )(1) and address in ( ) as (function—mark as applicable):
(a) Entidad Gestora del Mercado de Deuda Pública en Anotaciones.
(a) Management Entity of the Public Debt Market in book entry form.
(b) Entidad que gestiona el sistema de compensación y liquidación de valores con sede en el extranjero.
(b) Entity that manages the clearing and settlement system of securities resident in a foreign country.
(c) Otras entidades que mantienen valores por cuenta de terceros en entidades de compensación y liquidación de valores domiciliadas en territorio español.
(c) Other entities that hold securities on behalf of third parties within clearing and settlement systems domiciled in the Spanish territory.
(d) Agente de pagos designado por el emisor.
(d) Issuing and Paying Agent appointed by the issuer.
4
Formula la siguiente declaración, de acuerdo con lo que consta en sus propios registros:
Makes the following statement, according to its own records:
1. En relación con los apartados 3 y 4 del artículo 44:
1. In relation to paragraphs 3 and 4 of Article 44:
1.1 Identificación de los valores_____________________________________
1.1 Identification of the securities_____________________________________
1.2 Fecha de pago de los rendimientos (o de reembolso si son valores emitidos al descuento o segregados)
1.2 Income payment date (or refund if the securities are issued at discount or are segregated)
1.3 Importe total de los rendimientos (o importe total a reembolsar, en todo caso, si son valores emitidos al descuento o segregados)_________________________________
1.3 Total amount of income (or total amount to be refunded, in any case, if the securities are issued at discount or are segregated)
1.4 Importe de los rendimientos correspondiente a contribuyentes del Impuesto sobre la Renta de las Personas Físicas, excepto cupones segregados y principales segregados en cuyo reembolso intervenga una Entidad Gestora________________________
1.4 Amount of income corresponding to Personal Income Tax taxpayers, except segregated coupons and segregated principals for which reimbursement an intermediary entity is involved______________________
1.5 Importe de los rendimientos que conforme al apartado 2 del artículo 44 debe abonarse por su importe íntegro (o importe total a reembolsar si son valores emitidos al descuento o segregados).
1.5 Amount of income which according to paragraph 2 of Article 44 must be paid gross (or total amount to be refunded if the securities are issued at discount or are segregated).
2. En relación con el apartado 5 del artículo 44.
2. In relation to paragraph 5 of Article 44.
2.1 Identificación de los valores________________________________________________
2.1 Identification of the securities________________________________________________
5
2.2 Fecha de pago de los rendimientos (o de reembolso si son valores emitidos al descuento o segregados)______________________________
2.2 Income payment date (or refund if the securities are issued at discount or are segregated) _____________________________________
2.3 Importe total de los rendimientos (o importe total a reembolsar si son valores emitidos al descuento o segregados____________________________
2.3 Total amount of income (or total amount to be refunded if the securities are issued at discount or are segregated)
2.4 Importe correspondiente a la entidad que gestiona el sistema de compensación y liquidación de valores con sede en el extranjero A.
2.4 Amount corresponding to the entity that manages the clearing and settlement system of securities resident in a foreign country A.
2.5 Importe correspondiente a la entidad que gestiona el sistema de compensación y liquidación de valores con sede en el extranjero B.
2.5 Amount corresponding to the entity that manages the clearing and settlement system of securities resident in a foreign country B.
2.6 Importe correspondiente a la entidad que gestiona el sistema de compensación y liquidación de valores con sede en el extranjero C.
2.6 Amount corresponding to the entity that manages the clearing and settlement system of securities resident in a foreign country C.
Lo que declaro en_____________a ___de____________de ____
I declare the above in______________ on the___ of______________ of___
(1)En caso de personas, físicas o jurídicas, no residentes sin establecimiento permanente se hará constar el número o código de identificación que corresponda de conformidad con su país de residencia
(1)In case of non-residents (individuals or corporations) without permanent establishment in Spain it shall be included the number or identification code which corresponds according to their country of residence.
6
Exhibit 4.2
BANCO SANTANDER, S.A.
as Issuer
TO
THE BANK OF NEW YORK MELLON,
London Branch
as Trustee
INDENTURE
Subordinated Debt Securities
dated as of August 8, 2023
BANCO SANTANDER, S.A.
Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and this Subordinated Debt Securities Indenture, dated as of August 8, 2023.
| Trust Indenture Act Section |
Subordinated Debt Securities Indenture Section | |||
| §310 | (a)(1) | 6.10 | ||
| (a)(2) | 6.10 | |||
| (a)(3) | Not Applicable | |||
| (a)(4) | Not Applicable | |||
| (b) | 6.09, 6.11 | |||
| §311 | (a) | 6.14 | ||
| (b) | 6.14 | |||
| §312 | (a) | 7.01, 7.02(a) | ||
| (b) | 7.02(b) | |||
| (c) | 7.02(c) | |||
| §313 | (a) | 7.03(a) | ||
| (b) | 7.03(a) | |||
| (c) | 1.06, 7.03(a) | |||
| (d) | 7.03(b) | |||
| § 314 | (a) | 7.04, 10.06 | ||
| (b) | Not Applicable | |||
| (c)(1) | 1.02 | |||
| (c)(2) | 1.02 | |||
| (c)(3) | Not Applicable | |||
| (d) | Not Applicable | |||
| (e) | 1.02 | |||
| (f) | Not Applicable | |||
| §315 | (a) | 6.01 | ||
| (b) | 6.03, 7.03(a) | |||
| (c) | 6.01 | |||
| (d) | 6.01 | |||
| (d)(1) | 6.01 | |||
| (d)(2) | 6.01 | |||
| (d)(3) | 6.01 | |||
| (e) | 5.14 | |||
| §316 | (a)(1)(A) | 5.12 | ||
| (a)(l)(B) | 5.13 | |||
| (a)(2) | Not Applicable | |||
| (a)(last sentence) | 1.01 | |||
| (b) | 5.08 | |||
| §317 | (a)(1) | 5.03 | ||
| (a)(2) | 5.04 | |||
| (b) | 10.03 | |||
| §318 | (a) | 1.08 | ||
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Subordinated Debt Securities Indenture.
TABLE OF CONTENTS
| Page | ||||
| ARTICLE 1 | ||||
| DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION | ||||
| Section 1.01. Definitions |
1 | |||
| Section 1.02. Compliance Certificates and Opinions |
14 | |||
| Section 1.03. Form of Documents Delivered to Trustee |
15 | |||
| Section 1.04. Acts of Holders |
15 | |||
| Section 1.05. Notices, Etc. to Trustee or Company |
16 | |||
| Section 1.06. Notice to Holders; Waiver |
17 | |||
| Section 1.07. Language of Notices, Etc |
18 | |||
| Section 1.08. Conflict with Trust Indenture Act |
18 | |||
| Section 1.09. Effect of Headings and Table of Contents |
18 | |||
| Section 1.10. Successors and Assigns |
18 | |||
| Section 1.11. Separability Clause |
18 | |||
| Section 1.12. Benefits of Subordinated Debt Securities Indenture |
18 | |||
| Section 1.13. Governing Law |
19 | |||
| Section 1.14. Business Days and Legal Holidays |
19 | |||
| Section 1.15. Appointment of Agent for Service |
19 | |||
| Section 1.16. Calculation Agent |
20 | |||
| Section 1.17. Waiver of Jury Trial |
20 | |||
| Section 1.18. Judgment Currency |
20 | |||
| ARTICLE 2 | ||||
| SUBORDINATED DEBT SECURITY FORMS | ||||
| Section 2.01. Forms Generally |
21 | |||
| Section 2.02. Form of Trustee’s Certificate of Authentication |
22 | |||
| ARTICLE 3 | ||||
| THE SUBORDINATED DEBT SECURITIES | ||||
| Section 3.01. Amount Unlimited, Issuable in Series |
23 | |||
| Section 3.02. Denominations |
25 | |||
| Section 3.03. Execution, Authentication, Delivery and Dating |
26 | |||
| Section 3.04. Temporary Subordinated Debt Securities |
27 | |||
| Section 3.05. Registration, Registration of Transfer and Exchange |
27 | |||
| Section 3.06. Mutilated, Destroyed, Lost and Stolen Subordinated Debt Securities |
31 | |||
| Section 3.07. Payment; Interest Rights and Rights to Additional Amounts Preserved |
32 | |||
| Section 3.08. Persons Deemed Owners |
34 | |||
| Section 3.09. Cancellation |
35 | |||
| Section 3.10. Computation of Interest |
35 | |||
| Section 3.11. CUSIP Numbers |
35 | |||
| Section 3.12. Additional Subordinated Debt Securities |
36 | |||
i
| Section 3.13. Correction of Minor Defects in or Amendment of Subordinated Debt Securities |
36 | |||
| Section 3.14. Payments Subject to Fiscal Laws |
36 | |||
| ARTICLE 4 | ||||
| SATISFACTION AND DISCHARGE | ||||
| Section 4.01. Satisfaction and Discharge of Subordinated Debt Securities Indenture |
36 | |||
| Section 4.02. Defeasance and Covenant Defeasance |
38 | |||
| Section 4.03. Application of Trust Money |
42 | |||
| Section 4.04. Repayment to Company |
42 | |||
| Section 4.05. Reinstatement |
42 | |||
| ARTICLE 5 | ||||
| REMEDIES | ||||
| Section 5.01. Events of Default |
43 | |||
| Section 5.02. Enforcement of Remedies |
43 | |||
| Section 5.03. Collection of Indebtedness and Suits for Enforcement by the Trustee |
44 | |||
| Section 5.04. Trustee May File Proofs of Claim |
45 | |||
| Section 5.05. Trustee May Enforce Claims Without Possession of Subordinated Debt Securities |
46 | |||
| Section 5.06. Application of Money Collected |
46 | |||
| Section 5.07. Limitation on Suits |
46 | |||
| Section 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any, and Additional Amounts |
47 | |||
| Section 5.09. Restoration of Rights and Remedies |
47 | |||
| Section 5.10. Rights and Remedies Cumulative |
48 | |||
| Section 5.11. Delay or Omission Not Waiver |
48 | |||
| Section 5.12. Control by Holders |
48 | |||
| Section 5.13. Waiver of Past Defaults |
48 | |||
| Section 5.14. Undertaking for Costs |
49 | |||
| Section 5.15. No Additional Remedies |
49 | |||
| ARTICLE 6 | ||||
| THE TRUSTEE | ||||
| Section 6.01. Certain Duties and Responsibilities |
50 | |||
| Section 6.02. Spanish Tax Procedures and Obligations of the Trustee |
51 | |||
| Section 6.03. Notice of Defaults |
51 | |||
| Section 6.04. Certain Rights of Trustee |
52 | |||
| Section 6.05. Not Responsible for Recitals or Issuance of Subordinated Debt Securities |
53 | |||
| Section 6.06. May Hold Subordinated Debt Securities |
54 | |||
| Section 6.07. Money Held in Trust |
54 | |||
| Section 6.08. Compensation and Reimbursement |
54 | |||
| Section 6.09. Disqualification; Conflicting Interests |
56 | |||
ii
| Section 6.10. Corporate Trustee Required; Eligibility |
56 | |||
| Section 6.11. Resignation and Removal; Appointment of Successor |
56 | |||
| Section 6.12. Acceptance of Appointment by Successor |
58 | |||
| Section 6.13. Merger, Conversion, Consolidation or Succession to Business |
59 | |||
| Section 6.14. Preferential Collection of Claims |
59 | |||
| Section 6.15. Appointment of Authenticating Agent |
59 | |||
| Section 6.16. Appointment of Additional Trustees |
61 | |||
| Section 6.17. Tax Withholding |
61 | |||
| ARTICLE 7 | ||||
| HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY | ||||
| Section 7.01. The Company to Furnish Trustee Names and Addresses of Holders |
62 | |||
| Section 7.02. Preservation of Information; Communication to Holders |
62 | |||
| Section 7.03. Reports by Trustee |
62 | |||
| Section 7.04. Reports by the Company |
63 | |||
| ARTICLE 8 | ||||
| CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER | ||||
| Section 8.01. Company May Consolidate, Etc., Only on Certain Terms |
64 | |||
| Section 8.02. Successor Corporation Substituted |
64 | |||
| Section 8.03. Assumption of Obligations |
65 | |||
| Section 8.04. Substitution and Variation |
66 | |||
| ARTICLE 9 | ||||
| SUPPLEMENTAL INDENTURES | ||||
| Section 9.01. Supplemental Indentures without Consent of Holders |
67 | |||
| Section 9.02. Supplemental Indentures with Consent of Holders |
68 | |||
| Section 9.03. Execution of Supplemental Indentures |
69 | |||
| Section 9.04. Effect of Supplemental Indentures |
70 | |||
| Section 9.05. Conformity with Trust Indenture Act |
70 | |||
| Section 9.06. Reference in Subordinated Debt Securities to Supplemental Indentures |
70 | |||
| ARTICLE 10 | ||||
| COVENANTS | ||||
| Section 10.01. Payment of Principal, Premium, and Interest |
70 | |||
| Section 10.02. Maintenance of Office or Agency |
70 | |||
| Section 10.03. Money for Payments to be Held in Trust |
71 | |||
| Section 10.04. Additional Amounts |
72 | |||
| Section 10.05. Corporate Existence |
75 | |||
| Section 10.06. Statement as to Compliance |
75 | |||
| Section 10.07. Original Issue Document |
75 | |||
iii
| ARTICLE 11 | ||||
| REDEMPTION OF SUBORDINATED DEBT SECURITIES | ||||
| Section 11.01. Applicability of Article |
75 | |||
| Section 11.02. Election to Redeem; Notice to Trustee |
76 | |||
| Section 11.03. Selection by Trustee of Subordinated Debt Securities to Be Redeemed |
76 | |||
| Section 11.04. Notice of Redemption |
76 | |||
| Section 11.05. Deposit of Redemption Price |
77 | |||
| Section 11.06. Subordinated Debt Securities Payable on Redemption Date |
77 | |||
| Section 11.07. Subordinated Debt Securities Redeemed in Part |
78 | |||
| Section 11.08. Early Redemption Due to Changes in Tax Treatment |
78 | |||
| Section 11.09. Early Redemption For Capital Disqualification Event |
79 | |||
| Section 11.10. Early Redemption at the option of the Company |
79 | |||
| Section 11.11. Optional Early Redemption (Call) |
80 | |||
| Section 11.12. Repurchase of Subordinated Debt Securities |
81 | |||
| ARTICLE 12 | ||||
| SUBORDINATION OF SUBORDINATED DEBT SECURITIES | ||||
| Section 12.01. Subordinated Debt Securities Subordinate to Claims of Senior Creditors |
81 | |||
| Section 12.02. Status of the Subordinated Debt Securities |
82 | |||
| Section 12.03. Provisions Solely to Define Relative Rights |
82 | |||
| Section 12.04. Waiver of Right of Set-off |
83 | |||
| Section 12.05. Trustee to Effectuate Subordination |
83 | |||
| Section 12.06. Trustee Not Fiduciary for Senior Creditors |
83 | |||
| Section 12.07. Rights of Trustee as Senior Creditor; Preservation of Trustee’s Rights |
83 | |||
| Section 12.08. Article Applicable to Paying Agents |
84 | |||
| ARTICLE 13 | ||||
| BAIL-IN AND RESOLUTION ACTIONS | ||||
| Section 13.01. Agreement and Acknowledgement with Respect to the Exercise of the Bail-in Power |
84 | |||
iv
SUBORDINATED DEBT SECURITIES INDENTURE, dated as of August 8, 2023, between BANCO SANTANDER, S.A., a sociedad anónima incorporated under the laws of the Kingdom of Spain (the “Company”), having its principal executive office located at Ciudad Grupo Santander, Avenida de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain, as Issuer, and THE BANK OF NEW YORK MELLON, London Branch, a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the “Trustee”), having its Corporate Trust Office at 160 Queen Victoria Street, London, EC4V 4LA, United Kingdom.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Subordinated Debt Securities Indenture to provide for the issuance from time to time of its subordinated debt securities (the “Subordinated Debt Securities”), to be issued in one or more series, represented by one or more Global Securities in registered form, or represented by definitive Subordinated Debt Securities in registered form, the amount and terms of each such series to be determined as hereinafter provided.
All things necessary to make this Subordinated Debt Securities Indenture a valid and binding agreement of the Company, in accordance with its terms, have been done.
This Subordinated Debt Securities Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder that are required to be part of this Subordinated Debt Securities Indenture and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS SUBORDINATED DEBT SECURITIES INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Subordinated Debt Securities by the Holders (as defined herein) thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of Subordinated Debt Securities of any series as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions. For all purposes of this Subordinated Debt Securities Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
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(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the Kingdom of Spain at the date of such computation and as applied by the Company;
(4) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Subordinated Debt Securities Indenture as a whole and not to any particular Article, Section or other subdivision;
(5) any reference to an “Article” or a “Section” refers to an Article or Section of this Subordinated Debt Securities Indenture; and
(6) the word “or” is always used inclusively (for example, the phrase “A or B” means “A or B or both”, not “either A or B but not both”).
Certain terms used principally in certain Articles hereof are defined in those Articles.
“Act”, when used with respect to any Holder, has the meaning set forth in Section 1.04.
“Additional Amounts” has the meaning set forth in Section 10.04.
“Additional Subordinated Debt Securities” has the meaning set forth in Section 3.12.
“Additional Tier 1 Capital” means additional tier 1 capital (capital de nivel 1 adicional) in accordance with Chapter 3 (Additional Tier 1 capital) of Title I (Elements of own funds) of Part Two (Own Funds and Eligible Liabilities) of the CRR and/or Applicable Banking Regulations at any time, including any applicable transitional, phasing in or similar provisions.
“Additional Tier 1 Instrument” means any instrument of the Company qualifying as Additional Tier 1 Capital in whole or in part from time to time.
“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.
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“Agents” means the agents appointed in accordance with this Subordinated Debt Securities Indenture or applicable supplemental indenture.
“Agent Member” means a member of, or participant in, any Depositary.
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Subordinated Debt Securities of any series. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Applicable Banking Regulations” means at any time the laws, regulations, requirements, guidelines and policies relating to capital adequacy, resolution and/or solvency including, among others, those giving effect to the MREL and the TLAC or any equivalent or successor principles, then applicable to the Company and/or the Group including, without limitation to the generality of the foregoing, the CRD IV, the BRRD, the SRM Regulation and those regulations, requirements, guidelines and policies relating to capital adequacy, resolution and/or solvency of the Regulator then applicable to the Company and/or the Group including, among others, those giving effect to the MREL and the TLAC or any equivalent or successor principles, in each case to the extent then in effect in the Kingdom of Spain (whether or not such regulations, requirements, guidelines or policies have the force of law and whether or not they are applied generally or specifically to the Company and/or the Group).
“Authenticating Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Subordinated Debt Securities.
“Authorized Newspaper” means a newspaper, in an official language of the place of publication or in the English language, customarily published on each day that is a Business Day in the place of publication, whether or not published on days that are Legal Holidays in the place of publication, and of general circulation in each place in connection with which the term is used or in the financial community of each such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any day that is a Business Day in the place of publication.
“Authorized Officers” shall have the meaning as determined pursuant to Section 1.19.
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, including its articles 48 and 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
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“Board of Directors” means either the board of directors of the Company or any committee or Person duly authorized to act generally or in any particular respect for the Company hereunder.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary or any Person duly authorized by the Company to have been duly adopted by the relevant 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.
“BRRD” means Directive 2014/59/EU of 15 May establishing the framework for the recovery and resolution of credit institutions and investment firms or such other directive as may come into effect in place thereof, as amended from time to time.
“Business Day” means, unless otherwise provided in the form of Subordinated Debt Securities for any particular series pursuant to the provisions of this Subordinated Debt Securities Indenture, any day, other than Saturday or Sunday, that is not a Legal Holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in the City of New York or London nor a day when the Trans-European Automated Real-time Gross Settlement Express Transfer system (the “TARGET2 System”), or any successor thereto, is closed for business.
“Calculation Agent” means the Trustee or such other person authorized by the Company as the party responsible for calculating the rate(s) of interest and interest amount(s) and/or such other amount(s) from time to time in relation to any series of Subordinated Debt Securities and that accepts such appointment.
“Capital Disqualification Event” means a change in Spanish law, Applicable Banking Regulations or any change in the application or official interpretation thereof that results or is likely to result in the entire outstanding aggregate principal amount of Subordinated Debt Securities of any series ceasing to be included in, or counting towards, the Company and/or the Group’s Tier 2 Capital.
“CET1 Capital” means at any time, the common equity tier 1 capital of the Company or the Group, respectively, as calculated in accordance with Chapter 2 (Common Equity Tier 1 Capital) of Title I (Elements of own funds) of Part Two (Own Funds and Eligible Liabilities) of the CRR and/or Applicable Banking Regulations at such time, including any applicable transitional, phasing in or similar provisions.
“Clean-up Redemption” has the meaning set forth in Section 11.10.
“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
“Common Equity Tier 1 Instruments” means instruments qualifying as CET1 Capital.
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“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Subordinated Debt Securities Indenture, and thereafter “Company” shall mean such successor Person.
“Company Request” and “Company Order” mean, respectively, a written request or order, as the case may be, signed in the name of the Company by any member of the Board of Directors or any officer or representative of the Company empowered to do so by Board Resolution, and delivered to the Trustee.
“Conversion Event” means the cessation of use of (i) a Foreign Currency both by the government of the country which issued such currency and for the settlement of transactions by a central bank or other public institutions of or within the international banking community, or (ii) the euro both within the European monetary system and for the settlement of transactions by public institutions of or within the European Union.
“Corporate Trust Office” means the office of the Trustee at which its corporate trust business in London, England, is principally administered, which office as of the date hereof is located at 160 Queen Victoria Street, London, EC4V 4LA (Attention: Corporate Trust Administration) or, if a different Trustee is appointed for a particular series of Subordinated Debt Securities, the address set forth in the supplemental indenture naming the Trustee for that particular series of Subordinated Debt Securities.
The term “corporation” includes corporations, associations, companies, partnerships and business trusts.
“CRD IV” means any or any combination of the CRD IV Directive, the CRR, and any CRD IV Implementing Measures.
“CRD IV Directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC or such other directive as may come into effect in place thereof, as amended or replaced from time to time.
“CRD IV Implementing Measures” means any regulatory capital rules implementing the CRD IV Directive or the CRR which may from time to time be introduced, including, but not limited to, delegated or implementing acts (regulatory technical standards) adopted by the European Commission, national laws and regulations, and regulations and guidelines issued by the Regulator, the European Banking Authority or any other relevant authority, which are applicable to the Company (on a standalone basis) or the Group (on a consolidated basis) and which prescribe the requirements to be fulfilled by financial instruments for inclusion in the regulatory capital or the minimum requirement for own funds and eligible liabilities, as the case may be, of the Company (on a standalone basis) or the Group (on a consolidated basis).
“CRR” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on the prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 or such other regulation as may come into effect in place thereof, as amended from time to time.
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“Default Interest” has the meaning set forth in Section 3.07.
“Depositary” means, with respect to any series of Subordinated Debt Securities, a clearing agency that is designated to act as Depositary for the Global Securities evidencing all or part of such Subordinated Debt Securities as contemplated by Section 3.05.
“dollar” or “$” or any similar reference means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
“DTC” means The Depository Trust Company or its nominee or its or their successor.
“Early Redemption Amount (Call)” has the meaning set forth in Section 11.11.
“Early Redemption Amount (Capital Disqualification Event)” has the meaning set forth in Section 11.09.
“Early Redemption Amount (Clean-up Call)” has the meaning set forth in Section 11.10.
“Early Redemption Amount (Tax)” has the meaning set forth in Section 11.08.
“Early Termination Amount” means the amount immediately due and payable if any Event of Default set forth in paragraph (a)(ii) of Section 5.01 has occurred in relation to any series of Subordinated Debt Securities and the Trustee or the Holders of at least 25% in outstanding principal amount of the Subordinated Debt Securities of such series has, at their discretion, declared that the Subordinated Debt Securities of such series and all interest then accrued thereon is forthwith due and payable.
“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder.
“EUR”, “euro” or “€” means the currency of the member states of the European Union (“EU”) that, from time to time, have adopted the single currency in accordance with the treaty establishing the European Community, as amended from time to time.
“Event of Default” has the meaning specified in Section 5.01.
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“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder.
“Foreign Currency” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts.
“Foreign Government Securities” means with respect to Subordinated Debt Securities of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.
“Global Security” means one or more global certificates evidencing all or part of a series of Subordinated Debt Securities, authenticated and delivered to or on behalf of the Holder and registered in the name of the Holder or its nominee.
“Group” means Banco Santander, S.A. and its consolidated subsidiaries.
“Holder” means a Person in whose name a Subordinated Debt Security in global or definitive form is registered in the Subordinated Debt Security Register.
“Independent Public Accountants” means accountants or a firm of accountants that, with respect to the Company and any other obligor under the Subordinated Debt Securities, are independent public accountants within the meaning of the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder, who may be the independent public accountants regularly retained by the Company or who may be other independent public accountants.
“Instructions” shall have the meaning as determined pursuant to Section 1.19.
“Interest Payment Date”, when used with respect to any Subordinated Debt Security, means the Stated Maturity of any installment of interest on such Subordinated Debt Security.
“Law 10/2014” means Law 10/2014 on the regulation, supervision and solvency of credit institutions (Ley 10/2014, de 26 de junio, de ordenación, supervisión y solvencia de entidades de crédito) as amended or replaced from time to time.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
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“Legal Holiday”, with respect to any Place of Payment or other location, means a Saturday, a Sunday or a day on which banking institutions in such Place of Payment or other location are not authorized or obligated to be open.
“Losses” means any and all claims, losses, liabilities, damages, costs, expenses and judgments (including legal fees and expenses) sustained by the Company or the Trustee.
“Maturity”, when used with respect to any Subordinated Debt Security, means the date, if any, on which the principal or any installment of principal of such Subordinated Debt Security becomes due and payable as therein or herein provided, whether by call for redemption, repurchase, declaration of acceleration or otherwise.
“MREL” means the “minimum requirement for own funds and eligible liabilities” for credit institutions under the BRRD, set in accordance with Article 45 of the BRRD (as transposed in the Kingdom of Spain), Commission Delegated Regulation (EU) 2016/1450 of 23 May 2016, supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities and any other Applicable Banking Regulations.
“Officer’s Certificate” means a certificate signed by any member of the Board of Directors, the Secretary or the Deputy Secretary of the Board of Directors, a Vice President or any officer or any other Person duly authorized by the Company, that complies with the requirements of Section 314(e) of the Trust Indenture Act and is delivered to the Trustee.
“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 who shall be reasonably acceptable to the Trustee and that, if required by the Trust Indenture Act, complies therewith.
“Original Issue Discount Security” means any Subordinated Debt Security which provides for an amount less than the principal amount, to be due and payable upon maturity thereof.
“Outstanding”, when used with respect to Subordinated Debt Securities or any series of Subordinated Debt Securities means (except as otherwise specified pursuant to Section 3.01), as of the date of determination, all Subordinated Debt Securities or all Subordinated Debt Securities of such series, as the case may be, theretofore authenticated and delivered under this Subordinated Debt Securities Indenture, except:
(i) Subordinated Debt Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
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(ii) Subordinated Debt Securities, or portions thereof, for whose payment or redemption money, U.S. Government Obligations or Foreign Government Securities in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the Company) 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 Subordinated Debt Securities; provided, that, if such Subordinated Debt Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Subordinated Debt Securities Indenture or provision therefor satisfactory to the Trustee has been made;
(iii) any such Subordinated Debt Security with respect to which the Company has effected defeasance pursuant to the terms hereof, except to the extent provided in Section 4.02; and
(iv) Subordinated Debt Securities which have been paid pursuant to Section 11.06 or in exchange for or in lieu of which other Subordinated Debt Securities have been authenticated and delivered pursuant to this Subordinated Debt Securities Indenture, other than any such Subordinated Debt Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Subordinated Debt Securities are held by a bona fide purchaser in whose hands such Subordinated Debt Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Subordinated Debt Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of a Subordinated Debt Security denominated in a Foreign Currency shall be the dollar equivalent, determined on the date of original issuance of such Subordinated Debt Security, of the principal amount of such Subordinated Debt Security; and (ii) Subordinated Debt Securities beneficially owned by the Company or any other obligor upon the Subordinated Debt Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Subordinated Debt Securities for which a Responsible Officer of the Trustee has received an Officer’s Certificate stating that such Subordinated Debt Securities are so beneficially owned shall be so disregarded; provided, further, however, that Subordinated Debt Securities so beneficially owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Subordinated Debt Securities and that the pledgee is not the Company or any other obligor upon the Subordinated Debt Securities or any Affiliate of the Company or of such other obligor.
“Paying Agent” means any Person (which may include the Company) authorized by the Company to pay the principal of, or any premium or interest on, or any Additional Amounts with respect to, any Subordinated Debt Securities on behalf of the Company. Except as otherwise specified as contemplated by Section 3.01 hereof, The Bank of New York Mellon, London Branch will act as Principal Paying Agent in respect of the Subordinated Debt Securities of any series.
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“Payment Statement” means the statement to be delivered to the Company by the Trustee, substantially in the form set forth in Exhibit I to Appendix 1, pursuant to Section 6.02.
“Person” means any individual, company, corporation, firm, partnership, joint venture, association, organization, state or agency of a state or other entity, whether or not having separate legal personality.
“Place of Payment”, when used with respect to the Subordinated Debt Securities of any series, means the place or places where the principal of, or any premium or interest on, or any Additional Amounts with respect to the Subordinated Debt Securities of that series are payable as specified pursuant to Section 3.01 or, if not so specified, as specified in Section 10.02.
“Predecessor Security” of any particular Subordinated Debt Security means every previous Subordinated Debt Security evidencing all or a portion of the same debt as that evidenced by such particular Subordinated Debt Security; and, for the purposes of this definition, any Subordinated Debt Security authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Subordinated Debt Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Subordinated Debt Security.
“Qualifying Notes” means, with respect to each series of Subordinated Debt Securities, at any time, any securities issued directly by the Company that have terms not otherwise materially less favorable to the Holders of the Subordinated Debt Securities of such series than the terms of the Subordinated Debt Securities of such series, provided that such securities shall:
(i) contain terms which comply with the then current requirements for their inclusion in the Tier 2 Capital of the Company; and
(ii) carry the same rate of interest as the Subordinated Debt Securities of such series prior to the relevant substitution or variation pursuant to Section 8.04; and
(iii) have the same denomination and aggregate outstanding principal amount as the Subordinated Debt Securities of such series prior to the relevant substitution or variation pursuant to Section 8.04; and
(iv) have the same date of maturity and the same dates for payment of interest as the Subordinated Debt Securities of such series prior to the relevant substitution or variation pursuant to Section 8.04; and
(v) have at least the same ranking as the Subordinated Debt Securities of such series; and
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(vi) not, immediately following such substitution or variation, be subject to a Capital Disqualification Event and/or a tax event that would entitle the Company to redeem the debt securities as set forth under Section 11.08; and
(vii) be listed or admitted to trading on any stock exchange as selected by the Company, if the Subordinated Debt Securities of such series were listed or admitted to trading on a stock exchange immediately prior to the relevant substitution or variation pursuant to Section 8.04.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Redemption Date”, when used with respect to any Subordinated Debt Security to be redeemed, means the date fixed for such redemption by or pursuant to this Subordinated Debt Securities Indenture.
“Redemption Price”, when used with respect to any Subordinated Debt Security to be redeemed, means the price at which it is to be redeemed pursuant to this Subordinated Debt Securities Indenture, which shall include the Early Redemption Amount (Tax), Early Redemption Amount (Call), Early Redemption Amount (Clean-up Call) or Early Redemption Amount (Capital Disqualification Event), as applicable.
“Regular Record Date” for the interest payable on any Interest Payment Date on Subordinated Debt Securities of any series means the date specified for the purpose pursuant to Section 3.01.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Regulator” means the European Central Bank, the Bank of Spain, the Relevant Resolution Authority or such other or successor authority exercising primary bank supervisory authority or the role of primary bank resolution authority, in each case with respect to prudential or resolution matters in relation to the Company and/or the Group.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
“Responsible Officer”, when used with respect to the Trustee, means any officer of the Trustee assigned to or working in the Corporate Trust Administration unit (or any successor unit) of the Trustee located at the Corporate Trust Office of the Trustee, who shall have direct responsibility for the administration of this Subordinated Debt Securities Indenture and, for the purposes of Section 6.01(c)(ii), shall also include any other officer of the Trustee to whom any corporate trust matter is referred because of such officer’s knowledge of and familiarity with the particular subject.
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“Senior Creditors” means creditors of the Company whose claims are non-subordinated obligations of the Company, any Senior Subordinated Liabilities (as defined below) and any claim on the Company, which becomes subordinated as a consequence of article 281.1.1º of the Spanish Insolvency Law.
“Senior Non Preferred Liabilities” means any unsubordinated and unsecured senior non preferred obligations (créditos ordinarios no preferentes) of the Company under Additional Provision 14.2 of Law 11/2015 (including any senior non preferred debt securities) and any other obligations which, by law and/or by their terms, and to the extent permitted by Spanish law, rank pari passu with the Senior Non Preferred Liabilities.
“Spanish Insolvency Law” means the restated text of the Spanish Insolvency Law (Ley Concursal) approved by the Royal Decree-Legislative 1/2020, of 5 May, as amended from time to time.
“Special Record Date”, when used for the payment of any Default Interest on Subordinated Debt Securities of any series, means the date specified by the Company for the purpose pursuant to Section 3.07.
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
“Stated Maturity”, when used with respect to any Subordinated Debt Security or any installment of principal thereof or interest thereon, means the date or dates, if any, specified in, or determined in accordance with the terms of, such Subordinated Debt Security, including as the same may be modified pursuant to the Bail-in Power set forth in Article 13, as the fixed date or dates on which the principal of such Subordinated Debt Security or such installment of principal or interest (and Additional Amounts, if any) is due and payable.
“Subordinated Debt Securities”, has the meaning set forth in the recitals of the Company herein and more particularly means any series of Subordinated Debt Securities issued, authenticated and delivered under this Subordinated Debt Securities Indenture.
“Subordinated Debt Securities Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Subordinated Debt Securities established pursuant to Section 3.01.
“Subordinated Debt Security” means one of the Subordinated Debt Securities.
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“Subordinated Debt Security Register” and “Subordinated Debt Security Registrar” have the respective meanings specified in Section 3.05.
“Subsidiary” means any entity over which the Company may have, directly or indirectly, control in accordance with Applicable Banking Regulations.
“Supervisory Permission” means, in relation to any action, such supervisory permission (or, as appropriate, waiver) from the Regulator as is required therefor under Applicable Banking Regulations.
“Tier 2 Capital” means tier 2 capital (capital de nivel 2) in accordance with Chapter 4 (Tier 2 capital) of Title I (Elements of own funds) of Part Two (Own Funds and Eligible Liabilities) of the CRR and/or Applicable Banking Regulations at any time, including any applicable transitional, phasing in or similar provisions.
“Tier 2 Instrument” means any instrument of the Company qualifying as Tier 2 Capital in whole or in part from time to time.
“TLAC” means the “total loss-absorbing capacity” requirement for global systemically important institutions under the CRR, set in accordance with Article 92a of the CRR and/or any other Applicable Banking Regulations.
“TLAC/MREL Eligible Instrument” means an instrument that is eligible to be counted towards the TLAC and/or MREL and, for the avoidance of doubt, irrespective of the quantum limitation that may be applicable to certain types of instruments by the Applicable Banking Regulations.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor trustee shall have become such pursuant to the applicable provisions of this Subordinated Debt Securities Indenture, and thereafter “Trustee” shall mean the Person who is then the Trustee hereunder, or, if a different Trustee is appointed for a particular series of Subordinated Debt Securities, the Trustee named in the relevant indenture supplemental hereto as the Trustee for that particular series of Subordinated Debt Securities and if at any time there is more than one such Person, “Trustee” shall mean and include each such Person; and “Trustee” as used with respect to the Subordinated Debt Securities of any series shall mean the Trustee with respect to the Subordinated Debt Securities of such series.
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as in effect at the date as of which this instrument was executed, except as provided in Section 9.05.
“United States” and “U.S.” mean the United States of America and, except in the case of Section 6.10 and Section 6.15, its territories and possessions.
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“U.S. Government Obligations” means securities that are non-callable and nonredeemable at the option of the issuer and that are (i) direct obligations of the United States for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended), which may include the Trustee, 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 or other amount with respect to the U.S. Government Obligation evidenced by such depository receipt.
Section 1.02. Compliance Certificates and Opinions. Unless otherwise expressly provided for in this Subordinated Debt Securities Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Subordinated Debt Securities Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Subordinated Debt Securities Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of the legal advisor rendering such opinion all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Subordinated Debt Securities Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Subordinated Debt Securities Indenture (other than Section 10.06) shall include:
(a) a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.
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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 or her certificate or opinion or representations are 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, as the case may be, 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 Subordinated Debt Securities Indenture, they may, but need not, be consolidated and form one instrument.
Section 1.04. Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Subordinated Debt Securities Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Subordinated Debt Securities Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, 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 or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her 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.
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(c) The ownership of Subordinated Debt Securities shall be proved by the Subordinated Debt Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Subordinated Debt Security shall bind every future Holder of the same Subordinated Debt Security and the Holder of every Subordinated Debt Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, any Subordinated Debt Security Registrar, any Paying Agent, any Authenticating Agent, or the Company in reliance thereon, whether or not notation of such action is made upon such Subordinated Debt Security or such other Subordinated Debt Security.
(e) If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a Board Resolution or an Officer’s Certificate, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding Subordinated Debt Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Subordinated Debt Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Subordinated Debt Securities Indenture not later than six months after the record date.
Section 1.05. Notices, Etc. to Trustee or Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Subordinated Debt Securities Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile or e-mail delivery of a copy of such document) to the Trustee at its Corporate Trust Office, and the Trustee agrees to accept and act upon facsimile transmission or e-mail delivery of written instructions pursuant to this Subordinated Debt Securities Indenture, provided, however, that (x) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (y) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions; or
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(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, first-class air mail postage prepaid, to the Company, to the address of its principal office specified in the first paragraph of this Subordinated Debt Securities Indenture or at any other address previously furnished in writing to the Trustee by the Company.
The Trustee agrees to accept and act upon instructions or directions pursuant to this Subordinated Debt Securities Indenture sent by unsecured e-mail, portable document format (“PDF”), facsimile transmission or other similar unsecured electronic methods (including, without limitation, DocuSign and AdobeSign), provided, however, that the Trustee shall have received from the Company an incumbency certificate listing persons designated to give such instructions or directions and containing the titles and specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing, and provided further that the Trustee shall have no obligation or responsibility to confirm or verify that the instruction or direction was in fact sent by, or on behalf of, a person so designated to give instructions or directions. If the Company elects to give the Trustee e-mail, PDF or facsimile instructions (or instructions by a similar electronic method, including, without limitation, DocuSign and AdobeSign) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding a conflict or inconsistency between such instructions and a subsequent written instruction. The Company agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.
Section 1.06. Notice to Holders; Waiver. When this Subordinated Debt Securities Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if given in writing and mailed, first-class postage prepaid, to each Holder of a Subordinated Debt Security affected by such event in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act with respect to reports pursuant to Section 7.03(a).
For so long as the Subordinated Debt Securities of any series are represented by Global Securities, the Company will deliver a copy of all notices with respect to such series to the Holder (if the address of such Holder is known to the Company).
When notice to Holders of Subordinated Debt Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Subordinated Debt Securities Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either 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.
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Section 1.07. Language of Notices, Etc. Any notice under this Subordinated Debt Securities Indenture shall be in the English language, except that, if the Company so elects, any published notice may be in an official language of the country of publication.
Section 1.08. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Subordinated Debt Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision of the Trust Indenture Act shall control. If at any future time any provision required to be included herein by the Trust Indenture Act as in force at the date as of which this Subordinated Debt Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Subordinated Debt Securities Indenture were executed at such future time, the Company and the Trustee may enter into one or more indentures supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole or in part) such provision or limitation of this Subordinated Debt Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article 9) no provision or limitation required to be included herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Subordinated Debt Securities Indenture was executed may be so changed or eliminated.
Section 1.09. 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 1.10. Successors and Assigns. All covenants and agreements in this Subordinated Debt Securities Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
Section 1.11. Separability Clause. In case any provision in this Subordinated Debt Securities Indenture or in the Subordinated Debt Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.12. Benefits of Subordinated Debt Securities Indenture. Nothing in this Subordinated Debt Securities Indenture or in the Subordinated Debt Securities, express or implied, shall give to any Person, other than the parties hereto and any Subordinated Debt Securities Registrars or any Paying Agent or Calculation Agent with respect to any Subordinated Debt Securities and their successors hereunder, and the Holders of Subordinated Debt Securities, any benefit or any legal or equitable right, remedy or claim under this Subordinated Debt Securities Indenture.
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Section 1.13. Governing Law. This Subordinated Debt Securities Indenture and the Subordinated Debt Securities shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law provisions), except for Section 12.01, which shall be governed by and construed in accordance with the laws of Spain, and except that the authorization and execution of this Subordinated Debt Securities Indenture and the Subordinated Debt Securities shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
Section 1.14. Business Days and Legal Holidays. The terms of the Subordinated Debt Securities shall provide that, in any case where any Interest Payment Date, Redemption Date, Maturity or Stated Maturity, of a Subordinated Debt Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Subordinated Debt Securities Indenture or the Subordinated Debt Securities other than a provision in the Subordinated Debt Securities that specifically states that such provision shall apply in lieu of this Section) payments of interest, if any (and premium, if any) or principal and the exchange of the Subordinated Debt Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment (or such other Business Day as shall be provided in such Subordinated Debt Security) with the same force and effect as if made on such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, provided that no interest shall accrue on such payment for the period from and after such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, as the case may be.
Section 1.15. Appointment of Agent for Service. The Company has designated and appointed Banco Santander, S.A., New York Branch, 437 Madison Ave., New York, New York 10022, as its authorized agent (the “Authorized Agent”), upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Subordinated Debt Securities or this Subordinated Debt Securities Indenture, but for that purpose only, and agrees that service of process upon said Authorized Agent shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Subordinated Debt Securities remain Outstanding until the appointment of a successor by the Company 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 Authorized Agent in full force and effect so long as any of the Subordinated Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company hereby irrevocably submits (for the purposes of any such suit or proceeding) to the non-exclusive 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. To the extent that the Company may be entitled, in any jurisdiction in which
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judicial proceedings may at any time be commenced with respect to or arising out of this Subordinated Debt Securities Indenture to claim for itself or its revenues, assets or properties immunity (whether by reason of sovereign immunity or otherwise) from suit, from the jurisdiction of any court (including, but not limited to, any court of the United States of America or the State of New York) or from any legal process with respect to itself or its property, from attachment prior to judgment, from set-off, from execution of a judgment, from the grant of injunctive relief, whether prior to or after judgment, or from any other legal process (including, without limitation, in relation to enforcement of any arbitration award), and to the extent that in any such jurisdiction there may be attributed such an immunity (whether or not claimed), the Company hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity and consents to the grant of any such relief.
Section 1.16. Calculation Agent. If the Company appoints a Calculation Agent pursuant to Section 3.01 with respect to any series of Subordinated Debt Securities, any determination of the interest rate on, or other amounts in relation to, such series of Subordinated Debt Securities in accordance with the terms of such series of Subordinated Debt Securities by such Calculation Agent shall (in the absence of manifest error, bad faith or willful misconduct) be binding on the Company, the Trustee and all Holders and (in the absence of manifest error, bad faith or willful misconduct) no liability to the Holders shall attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions.
Section 1.17. Waiver of Jury Trial. EACH OF THE PARTIES HERETO, AND EACH HOLDER OF A SUBORDINATED DEBT SECURITY BY ITS ACCEPTANCE THEREOF, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBORDINATED DEBT SECURITIES INDENTURE, THE SUBORDINATED DEBT SECURITIES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 1.18. Judgment Currency. Any payment on account of an amount that is payable in U.S. dollars (the “Required Currency”) which is made to or for the account of any Holder or the Trustee in lawful currency of any other jurisdiction (the “Judgment Currency”), whether as a result of any judgment or order or the enforcement thereof or the liquidation of the Company shall constitute a discharge of the Company obligation under this Subordinated Debt Securities Indenture and the Subordinated Debt Securities only to the extent of the amount of the Required Currency such Holder or the Trustee, as the case may be, could purchase in the London foreign exchange markets with the amount of the Judgment Currency in accordance with normal banking procedures at the rate of exchange prevailing on the first Business Day following receipt of the payment in the Judgment Currency. If the amount of the Required Currency that could be so purchased is less than the amount of the Required Currency originally due to such Holder or the Trustee, as the case may be, the Company shall indemnify and hold harmless the Holder or the Trustee, as the case may be, from and against all loss or damage arising out of, or as a result of, such deficiency. This indemnity shall constitute an obligation separate and independent from the other obligations contained in this Subordinated Debt
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Securities Indenture or the Subordinated Debt Securities, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Holder or the Trustee from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due hereunder or under any judgment or order.
Section 1.19. Electronic Means. The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Subordinated Debt Securities Indenture and delivered using Electronic Means; provided, however, that the Company shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Company whenever a person is to be added or deleted from the listing. If the Company elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Company understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Company shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Company and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
Article 2
SUBORDINATED DEBT SECURITY FORMS
Section 2.01. Forms Generally. The Subordinated Debt Securities of each series shall be issuable in registered form and in such forms as shall be established by or pursuant to a Board Resolution of the Company, an Officer’s Certificate, or in one or more indentures supplemental hereto, pursuant to Section 3.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by
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this Subordinated Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or Depositary therefor, or as may, consistently herewith, be determined by the officers executing such Subordinated Debt Securities, all as evidenced by any such execution.
The Trustee’s certificates of authentication shall be in substantially the form set forth in Section 2.02 or Section 6.15.
Any definitive Subordinated Debt 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 Subordinated Debt Securities may be listed, all as determined by the officers executing such Subordinated Debt Securities, as evidenced by their execution thereof.
Section 2.02. Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication shall be in substantially the following form:
CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debt Securities of the series designated herein referred to in the within-mentioned Subordinated Debt Securities Indenture.
| Date: |
| |
| THE BANK OF NEW YORK MELLON, as Trustee | ||
| By: |
| |
| Authorized Signatory | ||
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ARTICLE 3
THE SUBORDINATED DEBT SECURITIES
Section 3.01. Amount Unlimited, Issuable in Series. The aggregate principal amount of Subordinated Debt Securities which may be authenticated and delivered under this Subordinated Debt Securities Indenture is unlimited. The Subordinated Debt Securities may be issued in one or more series.
There shall be established by or pursuant to a Board Resolution of the Company, or established by an Officer’s Certificate, or established in one or more indentures supplemental hereto, prior to the initial issuance of Subordinated Debt Securities of any series,
(a) the title of the Subordinated Debt Securities of the series (which shall distinguish the Subordinated Debt Securities of the series from all other Subordinated Debt Securities);
(b) the price or prices (expressed as a percentage of the principal amount thereof) at which the Subordinated Debt Securities of the series shall be issued;
(c) any limit upon the aggregate principal amount of the Subordinated Debt Securities of the series which may be authenticated and delivered under this Subordinated Debt Securities Indenture (except for Subordinated Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Subordinated Debt Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07 and except for any Subordinated Debt Securities which, pursuant to Section 3.03 are deemed never to have been authenticated and delivered hereunder);
(d) the date or dates, if any, on which the principal of (and premium, if any, on) the Subordinated Debt Securities of the series is payable;
(e) the rate or rates, if any, at which the Subordinated Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07 and the Regular Record Date for the interest payable on any Interest Payment Date and any dates required to be established pursuant to Section 7.01;
(f) whether any premium, upon redemption or otherwise, shall be payable by the Company on Subordinated Debt Securities of the series, and whether such premium shall be redeemable at the option of the Company or the Holder;
(g) the place or places where the principal of (and premium, if any) and any interest on Subordinated Debt Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and interest on Subordinated Debt Securities of such series, at least one of such Paying Agents having offices or agencies in the City of London;
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(h) whether or not such series of Subordinated Debt Securities are to be redeemable, in whole or in part, at the Company’s option and, if so redeemable, the period or periods within which, the price or prices at which and the terms and conditions upon which, Subordinated Debt Securities of the series may be redeemed;
(i) the obligation, if any, of the Company to redeem or purchase Subordinated Debt Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which Subordinated Debt Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(j) if other than denominations of $1,000 and any multiple thereof, the denominations in which Subordinated Debt Securities of the series in each applicable form shall be issuable;
(k) if other than the full principal amount thereof, the portion, or the manner of calculation of such portion, of the principal amount of Subordinated Debt Securities of the series which shall be payable upon a declaration of acceleration or acceleration of the Maturity thereof pursuant to Section 5.02, upon redemption of Subordinated Debt Securities of any series which are redeemable before their Stated Maturity, or which the Trustee shall be entitled to file and prove a claim pursuant to Section 5.04;
(l) if Additional Amounts, pursuant to Section 10.04, will not be payable;
(m) if other than dollars, provisions, if any, for the Subordinated Debt Securities of the series to be denominated, and payments thereon to be made, in Foreign Currencies and specifying the Place of Payment and the manner of payment thereon and any other terms with respect thereto;
(n) if other than the coin or currency in which the Subordinated Debt Securities of that series are denominated, the coin or currency in which payment of the principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of such series shall be payable;
(o) if the principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of such series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Subordinated Debt Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;
(p) whether the Subordinated Debt Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and the initial Holder with respect to such Global Security or Subordinated Debt Securities;
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(q) if the Subordinated Debt Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Subordinated Debt Security of such series or otherwise) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;
(r) if the amounts of payments of principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of the series may be determined with reference to an index or are otherwise not fixed on the original issue date thereof, the manner in which such amounts shall be determined and the Calculation Agent, if any, who shall be appointed and authorized to calculate such amounts;
(s) any other Events of Default or covenants with respect to the Subordinated Debt Securities of such series;
(t) if other than as provided in Article 12, the subordination terms with respect to the Subordinated Debt Securities of the series;
(u) the forms of Subordinated Debt Securities of the series;
(v) any other terms of the series (which terms shall not be inconsistent with the provisions of this Subordinated Debt Securities Indenture, except as permitted by Section 9.01(d)); and
(w) the Trustee and/or the Subordinated Debt Security Registrar for such series of Subordinated Debt Securities who shall also be named in an indenture supplemental hereto for a particular series of Subordinated Debt Securities if the Trustee and/or the Subordinated Debt Security Registrar for such series is not the Trustee named in the first paragraph of this Subordinated Debt Securities Indenture.
All Subordinated Debt Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such action or in any such Officer’s Certificate or indenture supplemental hereto.
If the forms of Subordinated Debt Securities of any series, or any of the terms thereof, are established by action taken pursuant to a Board Resolution, a copy of the Board Resolution in respect thereof shall be delivered to the Trustee at or prior to the delivery of the Company Order pursuant to Section 3.03 for the authentication and delivery of such Subordinated Debt Securities.
Section 3.02. Denominations. The Subordinated Debt Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specification with respect to Subordinated Debt Securities of any series, the Subordinated Debt Securities of each series shall be issuable in denominations of $1,000 each and any integral multiple thereof. Unless otherwise specified in accordance with Section 3.01, any Global Security issued and delivered to the Holder shall be issued in the form of units with each $1,000 principal amount of such Global Security constituting one unit.
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Section 3.03. Execution, Authentication, Delivery and Dating. The Subordinated Debt Securities shall be executed on behalf of the Company by any one of the representatives of the Company authorized to do so by Board Resolution or by any member of the Board of Directors. The signature of any of these authorized representatives on the Subordinated Debt Securities may be manual, facsimile, PDF or electronically imaged (including, without limitation, DocuSign and AdobeSign). Subordinated Debt Securities bearing the manual, facsimile, PDF or other electronically imaged signatures (including, without limitation, DocuSign and AdobeSign) of individuals who were at any time the proper officer of the Company shall bind the Company, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Subordinated Debt Securities.
At any time and from time to time after the execution and delivery of this Subordinated Debt Securities Indenture, the Company may deliver Subordinated Debt Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Subordinated Debt Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Subordinated Debt Securities. In authenticating such Subordinated Debt Securities and accepting the additional responsibilities under this Subordinated Debt Securities Indenture in relation to such Subordinated Debt Securities the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Subordinated Debt Securities Indenture.
If all the Subordinated Debt Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Opinion of Counsel and an Officer’s Certificate at the time of issuance of each Subordinated Debt Security, but such opinion and certificate, with appropriate modifications, shall be delivered at or before the time of issuance of the first Subordinated Debt Security of such series. After any such first delivery, any separate request by the Company that the Trustee authenticate Subordinated Debt Securities of such series for original issue will be deemed to be a certification by the Company that all conditions precedent provided for in this Subordinated Debt Securities Indenture relating to authentication and delivery of such Subordinated Debt Securities continue to have been complied with.
The Trustee shall not be required to authenticate such Subordinated Debt Securities if the issue of such Subordinated Debt Securities pursuant to this Subordinated Debt Securities Indenture will affect the Trustee’s own rights, duties or immunities under the Subordinated Debt Securities and this Subordinated Debt Securities Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.
Each Subordinated Debt Security shall be dated the date of its authentication.
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No Subordinated Debt Security appertaining thereto shall be entitled to any benefit under this Subordinated Debt Securities Indenture or be valid or obligatory for any purpose unless there appears on such Subordinated Debt Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual, PDF or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign), and such certificate upon any Subordinated Debt Security shall be conclusive evidence, and the only evidence, that such Subordinated Debt Security has been duly authenticated and delivered hereunder and that such Subordinated Debt Security is entitled to the benefits of this Subordinated Debt Securities Indenture. Notwithstanding the foregoing, if any Subordinated Debt Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Subordinated Debt Security to the Trustee for cancellation as provided in Section 3.09, for all purposes of this Subordinated Debt Securities Indenture, such Subordinated Debt Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefit of this Subordinated Debt Securities Indenture.
Section 3.04. Temporary Subordinated Debt Securities. Pending the preparation of definitive Subordinated Debt Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Subordinated Debt Securities, substantially of the tenor of the definitive Subordinated Debt Securities in lieu of which they are issued, and, if applicable, which Subordinated Debt Securities may be printed, lithographed, typewritten, photocopied or otherwise produced. Temporary Subordinated Debt Securities shall be issuable as Subordinated Debt Securities in registered form in any authorized denomination, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Subordinated Debt Securities may determine, all as evidenced by such execution.
If temporary Subordinated Debt Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Subordinated Debt Securities, definitive Subordinated Debt Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Subordinated Debt Securities of such series, the temporary Subordinated Debt Securities of such series shall be exchangeable for definitive Subordinated Debt Securities of such series containing identical terms and provisions upon surrender of the temporary Subordinated Debt Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Subordinated Debt Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate principal amount of definitive Subordinated Debt Securities of the same series of authorized denominations containing identical terms and provisions. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Subordinated Debt Securities of any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Subordinated Debt Securities Indenture as definitive Subordinated Debt Securities of such series.
Section 3.05. Registration, Registration of Transfer and Exchange. (a) Global Securities. This Section 3.05(a) shall apply to Global Securities unless otherwise specified, as contemplated by Section 3.01.
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Except as otherwise specified as contemplated by Section 3.01 hereof, the Subordinated Debt Securities shall be initially issued and represented by one or more Global Securities in registered form which shall be authenticated as contemplated by this Subordinated Debt Securities Indenture.
Each Global Security authenticated under this Subordinated Debt Securities Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Subordinated Debt Security for all purposes of this Subordinated Debt Securities Indenture. Except as otherwise specified as contemplated by Section 3.01 hereof, each Global Security authenticated under this Subordinated Debt Securities Indenture shall be initially registered in the name of DTC or its nominee only.
Unless the Global Security is presented by an authorized representative of the Holder to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Holder and any payment is made to such nominee, any transfer, pledge or other use of the Global Security for value or otherwise shall be wrongful since the registered owner of such Global Security, the nominee of the Holder, has an interest in such Global Security.
Except as otherwise specified as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Subordinated Debt Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary notifies the Trustee that it is unwilling or unable to continue to act as Depositary and a successor depositary is not appointed by the Trustee within 120 days of such notification, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Subordinated Debt Securities when due, or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series should be exchanged for definitive Subordinated Debt Securities of that series. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Subordinated Debt Securities bearing interest (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which such interest shall accrue, the same Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Subordinated Debt Securities shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.
Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be exchangeable for Subordinated Debt Securities issuable in authorized denominations of a like aggregate principal amount and tenor.
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No Global Security may be transferred except as a whole by the Holder to a nominee of the Holder or by the Holder or any such nominee to a successor of the Holder or a nominee of such successor. Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Subordinated Debt Securities in definitive form and will not be considered the Holders thereof for any purpose under this Subordinated Debt Securities Indenture.
In the event that a Global Security is surrendered for redemption in part pursuant to Section 11.07, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.
The Agent Members and any other beneficial owners shall have no rights under this Subordinated Debt Securities Indenture with respect to any Global Security held on their behalf by a Holder, and such Holder may be treated by the Company, the 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 (i) 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 (ii) impair, as between any such Holder or other clearance service and its Agent Members and Holders, the operation of customary practices governing the exercise of the rights of a holder of any security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Subordinated Debt Securities Indenture.
In connection with any exchange of interests in a Global Security for definitive Subordinated Debt Securities of another authorized form, as provided in this Section 3.05, then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Subordinated Debt Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Subordinated Debt Securities without charge (in which case the Company or Trustee may require payment of any taxes or governmental charges arising) and the Trustee shall authenticate and deliver, in exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Subordinated Debt Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 3.05 shall be exchangeable for Subordinated Debt Securities issuable in the denominations specified as contemplated by Section 3.01 and registered in such names as the Holder of such Global Security shall direct. If a definitive Subordinated Debt Security is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant Interest Payment Date, interest will not be payable on such Interest Payment Date in respect of such definitive Subordinated Debt Security, but will be payable on such Interest Payment Date only to the Person to whom payments of interest in respect of such portion of such Global Security are payable.
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A Depositary may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities.
(b) Except as otherwise specified pursuant to Section 3.01, Subordinated Debt Securities of any series may only be exchanged for a like aggregate principal amount of Subordinated Debt Securities of such series of other authorized denominations containing identical terms and provisions. Subordinated Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Subordinated Debt Security or Subordinated Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.
Except as otherwise specified pursuant to Section 3.01, the Company shall cause to be kept in the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Subordinated Debt Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Subordinated Debt Securities and of transfers of such Subordinated Debt Securities. Except as otherwise specified pursuant to Section 3.01, the Trustee is hereby appointed “Subordinated Debt Security Registrar” for the purpose of registering Subordinated Debt Securities and transfers of Subordinated Debt Securities as herein provided.
Subordinated Debt Securities shall be transferable only on the Subordinated Debt Security Register. Upon surrender for registration of transfer of any Subordinated Debt Security of any series, together with the form of transfer endorsed on it, duly completed and executed at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver to the address specified in the form of transfer, within three Business Days, in the name of the designated transferee or transferees, one or more new Subordinated Debt Securities of the same series of any authorized denominations containing identical terms and provisions, of a like aggregate principal amount. If only part of a Subordinated Debt Security is transferred, a new Subordinated Debt Security of an aggregate principal amount equal to the amount not being transferred shall be executed by the Company, and authenticated and delivered by the Trustee to the transferor, in the name of the transferor, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the Subordinated Debt Security. The new Subordinated Debt Security will be delivered to the transferor by uninsured post at the risk of the transferor to the address of the transferor appearing in the Subordinated Debt Security Register. A new
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Subordinated Debt Security of an aggregate principal amount equal to the amount being transferred shall be delivered by the Trustee to the transferee, in the name of the transferee, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the Subordinated Debt Security. The new Subordinated Debt Security will be delivered to the transferee by uninsured post at the risk of the transferee to the address of the transferee specified in the form of transfer.
All Subordinated Debt Securities issued upon any registration of transfer or exchange of Subordinated Debt Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Subordinated Debt Securities Indenture, as the Subordinated Debt Securities surrendered upon such registration of transfer or exchange.
Every Subordinated Debt Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Subordinated Debt Security Registrar duly executed, by the Holder thereof or his or her attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Subordinated Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Subordinated Debt Securities, other than exchanges pursuant to Section 3.04, Section 9.06 or Section 11.07 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or exchange any Subordinated Debt Security of any series during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Subordinated Debt Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the day of the giving of such notice, or (ii) to register the transfer of or exchange any Subordinated Debt Security so selected for redemption in whole or in part, except the unredeemed portion of any Subordinated Debt Securities being redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Subordinated Debt Securities. If any mutilated Subordinated Debt Security (including any Global Security) is surrendered to the Trustee, the Company may execute and the Trustee shall, in the case of a Subordinated Debt Security, authenticate and deliver in exchange therefor a new Subordinated Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Subordinated Debt Security (including any Global Security) and (ii) such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Trustee that such Subordinated Debt Security has been acquired
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by a bona fide purchaser, the Company shall execute and upon the Company’s request the Trustee shall authenticate and deliver in lieu of any such destroyed, lost or stolen Subordinated Debt Security a new Subordinated Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Subordinated Debt Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Subordinated Debt Security, pay such Subordinated Debt Security.
Upon the issuance of any new Subordinated Debt Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Subordinated Debt Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Subordinated Debt Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Subordinated Debt Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Subordinated Debt Securities Indenture equally and proportionately with any and all other Subordinated Debt Securities of that series duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to this Subordinated Debt Securities Indenture, are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities.
Section 3.07. Payment; Interest Rights and Rights to Additional Amounts Preserved. Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, interest, if any, and any Additional Amounts on any Subordinated Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid to the Holder (including through a Paying Agent of the Company designated pursuant to Section 3.01 for collection by the Holder) at the close of business on the Regular Record Date.
In the case of Subordinated Debt Securities where payment is to be made in dollars, payment at any Paying Agent’s office outside The City of New York will be made in dollars by check drawn on, or, at the request of the Holder, by transfer to a dollar account maintained by the payee with, a bank in The City of New York.
In the case of Subordinated Debt Securities where payment is to be made in a Foreign Currency, payment will be made as established pursuant to Section 3.01.
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Any interest on and any Additional Amounts with respect to any Subordinated Debt Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “Default Interest”. Default Interest on any Subordinated Debt Security of any series shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue then of having been such Holder, and such Default Interest may be paid by the Company, at its election, in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Default Interest to the Persons in whose names the Subordinated Debt Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Default Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Default Interest proposed to be paid on each Subordinated Debt Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Default Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Default Interest as in this clause provided. Thereupon the Company shall fix a Special Record Date for the payment of such Default Interest in respect of such Subordinated Debt Securities of such series which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after it delivers to the Trustee notice of the proposed payment. The Company shall promptly notify the Trustee of such Special Record Date and, in the name and at the expense of the Company, the Trustee shall cause notice of the proposed payment of such Default Interest and the Special Record Date therefor to be given in the manner and to the extent provided in Section 1.06, not less than 10 days prior to such Special Record Date. The Trustee shall, at the instruction of the Company, in the name and at the expense of the Company, cause a similar notice to be published in an Authorized Newspaper of general circulation in the Borough of Manhattan, The City of New York, but such publication shall be not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Default Interest on the Subordinated Debt Securities of such series and the Special Record Date therefor having been so given, such Default Interest on the Subordinated Debt Securities of such series shall be paid in the case of Subordinated Debt Securities to the Persons in whose names such Subordinated Debt Securities (or their respective Predecessor Securities) are registered in the Subordinated Debt Security Register at the close of business on the Special Record Date, and such Default Interest shall no longer be payable pursuant to the following clause (b); or
(b) The Company may make payment of any Default Interest on the Subordinated Debt Securities of any series to the Persons in whose names the Subordinated Debt Securities are registered in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Subordinated Debt Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
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Subject to the foregoing provisions of this Section, each Subordinated Debt Security delivered under this Subordinated Debt Securities Indenture upon registration of transfer of or in exchange for or in lieu of any other Subordinated Debt Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Subordinated Debt Security.
Section 3.08. Persons Deemed Owners. Prior to due presentment of a Subordinated Debt Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Subordinated Debt Security is registered as the owner of such Subordinated Debt Security for the purpose of receiving payment of principal of (and premium, if any) and interest, if any, on and any Additional Amounts with respect to such Subordinated Debt Security and for all other purposes whatsoever, whether or not such Subordinated Debt 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. The aggregate principal amount of the Subordinated Debt Securities of any series shall be reflected on the books and records of the Subordinated Debt Security Registrar.
None of the Company, the Trustee, the Paying Agent or the Subordinated Debt Security Registrar shall have any responsibility or obligation to any beneficial owner in a Global Security, an Agent Member or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any Agent Member, with respect to any ownership interest in the Subordinated Debt Securities or with respect to the delivery to any Agent Member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Subordinated Debt Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Subordinated Debt Securities and this Subordinated Debt Securities Indenture shall be given or made only to or upon the order of the registered holders (which shall be the Depositary or its nominee in the case of the Global Security). The rights of beneficial owners in the Global Security shall be exercised only through the Depositary subject to the applicable procedures. The Company, the Trustee, the Paying Agent and the Subordinated Debt Security Registrar shall be entitled to rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners. The Company, the Trustee, the Paying Agent and the Subordinated Debt Security Registrar shall be entitled to deal with the Depositary, and any nominee thereof, that is the registered holder of any Global Security for all purposes of this Subordinated Debt Securities Indenture relating to such Global Security (including the payment of principal, premium, if any, and interest and additional amounts, if any, and the giving of instructions or directions by or to the owner or holder of a beneficial ownership interest in such Global Security) as the sole holder of such Global Security and shall have no obligations to the beneficial owners thereof. None of the Company, the Trustee, the Paying Agent or the Subordinated Debt Security Registrar shall have any responsibility or liability for any acts or omissions of the Depositary with respect to such Global Security, for the records of any such Depositary, including records in respect of beneficial ownership interests in respect of any such Global Security, for any transactions between the Depositary and any Agent Member or between or among the Depositary, any such Agent Member and/or any holder or owner of a beneficial interest in such Global Security, or for any transfers of beneficial interests in any such Global Security.
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Notwithstanding the foregoing, with respect to any Global Security, 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 any Depositary (or its nominee), as a Holder, with respect to such Global Security or shall impair, as between such Depositary and owners of beneficial interests in such Global Security, the operation of customary practices governing the exercise of the rights of such Depositary (or its nominee) as Holder of such Global Security.
Each Holder and beneficial owner that acquires its Subordinated Debt Security in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in this Subordinated Debt Securities Indenture and the Subordinated Debt Securities to the same extent as the Holders and beneficial owners of the Subordinated Debt Securities that acquire the Subordinated Debt Securities upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Subordinated Debt Securities, including in relation to the Bail-in Power.
Section 3.09. Cancellation. All Subordinated Debt Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Subordinated Debt Securities previously authenticated and delivered hereunder and all Subordinated Debt Securities so delivered shall be promptly cancelled by the Trustee. No Subordinated Debt Securities shall be authenticated in lieu of or in exchange for any Subordinated Debt Securities cancelled as provided in this Section, except as expressly permitted by the provisions of the Subordinated Debt Securities of any series or pursuant to the provisions of this Subordinated Debt Securities Indenture. The Trustee shall deliver to the Company all cancelled Subordinated Debt Securities held by the Trustee.
Section 3.10. Computation of Interest. Except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series, payments of interest on the Subordinated Debt Securities of each series shall be computed on the basis of a 360- day year of twelve 30-day months.
Section 3.11. CUSIP Numbers. The Company in issuing any series of the Subordinated Debt Securities may use “CUSIP”, “ISIN” and/or “Common Code” and/or other similar numbers (if then generally in use) or any successor to such numbers and thereafter with respect to such series, the Trustee shall use “CUSIP”, “ISIN” and/or “Common Code” and/or other similar numbers or successor numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Subordinated Debt Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Subordinated Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP”, “ISIN” and/or “Common Code” and/or other similar numbers or successor numbers.
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Section 3.12. Additional Subordinated Debt Securities. The Company may, from time to time, without the consent of the Holders of the Subordinated Debt Securities of any series, issue additional Subordinated Debt Securities (“Additional Subordinated Debt Securities”) of one or more of the series of Subordinated Debt Securities issued under this Subordinated Debt Securities Indenture, having the same ranking and same interest rate, Maturity, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first Interest Payment Date, as the Subordinated Debt Securities; provided, however, that such Additional Subordinated Debt Securities will not have the same CUSIP, ISIN or other identifying number as the Outstanding Subordinated Debt Securities of such series unless the Additional Subordinated Debt Securities are fungible with the Outstanding Subordinated Debt Securities for U.S. federal income tax purposes. Any such Additional Subordinated Debt Securities, together with the Subordinated Debt Securities of the applicable series, will constitute a single series of Subordinated Debt Securities under this Subordinated Debt Securities Indenture and shall be included in the definition of “Subordinated Debt Securities” in this Subordinated Debt Securities Indenture where the context requires.
Section 3.13. Correction of Minor Defects in or Amendment of Subordinated Debt Securities. If, after issuance of any Subordinated Debt Security (including any Global Security), the Company or the Trustee shall become aware of any ambiguity, defect or inconsistency in any term of a Subordinated Debt Security or Global Security, as the case may be, or, with respect to any Subordinated Debt Security (including any Global Security) issued on or after the date hereof, the Company and the Trustee agree to amend such Subordinated Debt Security as contemplated by Section 9.01(l), the parties hereto shall provide for the execution, authentication, delivery and dating of one or more replacement Subordinated Debt Securities or Global Securities, as the case may be, pursuant to Section 3.03 hereto.
Section 3.14. Payments Subject to Fiscal Laws. All payments in respect of the Subordinated Debt Securities will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the Place of Payment (including FATCA, any regulations or agreements thereunder, any official interpretation thereof, any intergovernmental agreements with respect thereto, or any law implementing an intergovernmental agreement or any regulations or official interpretations relating thereto), but subject to the provisions of Section 10.04.
ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Subordinated Debt Securities Indenture. This Subordinated Debt Securities Indenture shall upon Company Request, cease to be of further effect with respect to Subordinated Debt Securities of any series (except as to any surviving rights of registration of transfer or exchange of Subordinated Debt Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series when:
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(a) either
(i) all Subordinated Debt Securities of such series theretofore authenticated and delivered (other than (A) Subordinated Debt Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Subordinated Debt Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or
(ii) all such Subordinated Debt Securities not theretofore delivered to the Trustee for cancellation:
(A) have become due and payable or will become due and payable at their Stated Maturity within one year, or
(B) are called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company has deposited or caused to be deposited with the Trustee, as trust funds in trust for the purpose, an amount in cash, or U.S. Government Obligations (with respect to Subordinated Debt Securities denominated in dollars) or Foreign Government Securities (with respect to Subordinated Debt Securities denominated in the same Foreign Currency) maturing, in the case of (A) and (B) above, as to principal and interest, if any, in such amounts and at such times as will ensure the availability of cash sufficient without reinvestment, as confirmed by a letter from an internationally recognized firm of independent public accountants (which shall not be subject to the requirements of Section 1.02) in the form of an agreed-upon procedures letter in its then customary form, to pay, satisfy and discharge all claims with respect to such Subordinated Debt Securities not theretofore delivered to the Trustee for cancellation, in the case of (A) and (B) above, for principal (and premium, if any) and accrued interest, if any, to the date of such deposit (in the case of Subordinated Debt Securities which have become due and payable) or to the Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Subordinated Debt 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 Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series have been complied with.
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In addition, upon the exercise of a Bail-in Power with respect to a series of Subordinated Debt Securities which results in the cancellation, or the conversion into other securities, of all the Amounts Due on such Subordinated Debt Securities or such Subordinated Debt Securities otherwise ceasing to be Outstanding, this Subordinated Debt Securities Indenture shall be satisfied and discharged as to such series.
Notwithstanding any satisfaction and discharge of this Subordinated Debt Securities Indenture, the obligations of the Company to the Trustee under Section 6.08, the obligations of the Trustee to any Authenticating Agent under Section 6.15 and, if cash, U.S. Government Obligations and/or Foreign Government Securities shall have been deposited with the Trustee pursuant to subclause 4.01(a)(ii) of clause 4.01(a) of this Section, the obligations of the Trustee under Section 4.03 and the last paragraph of Section 10.03 shall survive such satisfaction and discharge, including any termination under any bankruptcy law.
Section 4.02. Defeasance and Covenant Defeasance. (a) If, pursuant to Section 3.01, provision is made for either or both of (i) defeasance of the Subordinated Debt Securities of or within a series under subsection (b) of this Section 4.02 or (ii) covenant defeasance of the Subordinated Debt Securities of or within a series under subsection (c) of this Section 4.02, then such provisions, together with the other provisions of this Section 4.02 (with such modifications thereto as may be specified pursuant to Section 3.01 with respect to any Subordinated Debt Securities), shall be applicable to such Subordinated Debt Securities, and the Company may at its option by Company Order, at any time, with respect to such Subordinated Debt Securities elect to have Section 4.02(b) (if applicable) or Section 4.02(c) (if applicable) be applied to such Outstanding Subordinated Debt Securities upon compliance with the conditions set forth below in this Section 4.02.
(b) Upon the Company’s exercise of the above option applicable to this Section 4.02(b) with respect to any Subordinated Debt Securities of or within a series, the Company shall be deemed to have been discharged from its obligations with respect to such Outstanding Subordinated Debt Securities, on the date the conditions set forth in subsection (d) of this Section 4.02 are satisfied (hereinafter, “defeasance”). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Outstanding Subordinated Debt Securities, and such Subordinated Debt Securities shall thereafter be deemed to be “Outstanding” only for the purposes of subsection (e) of this Section 4.02 and the other Sections of this Subordinated Debt Securities Indenture referred to in clauses (i) and (ii) below, and the Company shall be deemed to have satisfied all of its other obligations under such Subordinated Debt Securities and this Subordinated Debt Securities Indenture insofar as such Subordinated Debt Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of such Outstanding Subordinated Debt Securities to receive, solely from the trust fund described in subsection (d) of this Section 4.02 and as more fully set forth in such Section, payments in respect of the principal of (and premium, if any) and interest, if any, and Additional Amounts on such Subordinated Debt
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Securities when such payments are due, (ii) the Company’s obligations with respect to such Subordinated Debt Securities under Section 3.05, Section 3.06, Section 10.02 and Section 10.03 and with respect to the payment of Additional Amounts, if any, on such Subordinated Debt Securities as contemplated by Section 10.04, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) this Section 4.02. The Company may exercise its option under this Section 4.02(b) notwithstanding the prior exercise of its option under subsection (c) of this Section 4.02 with respect to such Subordinated Debt Securities.
(c) Upon the Company’s exercise of the above option applicable to this Section 4.02(c) with respect to any Subordinated Debt Securities of or within a series, the Company shall be released from, if specified pursuant to Section 3.01, their obligations under any other covenant, with respect to such Outstanding Subordinated Debt Securities on and after the date the conditions set forth in subsection (d) of this Section 4.02 are satisfied (hereinafter, “covenant defeasance”), and such Subordinated Debt Securities shall thereafter be deemed to be not “Outstanding” for the purposes of any direction, waiver, consent or declaration (and the consequences of any thereof) in connection with such other covenant, but shall continue to be deemed “Outstanding” for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to such Outstanding Subordinated Debt Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section or such other covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such Section or such other covenant or by reason of reference in any such Section or such other covenant to any other provision herein or in any other document and such omission to comply shall not constitute a default or an Event of Default, but, except as specified above, the remainder of this Subordinated Debt Securities Indenture and such Subordinated Debt Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of subsection (b) or (c) of this Section 4.02 to any Outstanding Subordinated Debt Securities of or within a series:
(i) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 6.11 who shall agree to comply with the provisions of this Section 4.02 applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Subordinated Debt Securities, (A) an amount in dollars or in such Foreign Currency in which such Subordinated Debt Securities are then specified as payable at Stated Maturity, or (B) U.S. Government Obligations applicable to such Subordinated Debt Securities (determined on the basis of the Currency in which such Subordinated Debt Securities are then specified as payable at Stated Maturity) which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment of principal of (and premium, if any) and interest, if any, on such Subordinated Debt Securities, money in an amount, or (C) a combination thereof, in any case, in an amount, sufficient,
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without consideration of any reinvestment of such principal and interest, in the opinion of an internationally recognized firm of Independent Public Accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (y) the principal of (and premium, if any) and interest, if any, on such Outstanding Subordinated Debt Securities on the Stated Maturity of such principal or installment of principal or interest and Additional Amounts and (z) any mandatory sinking fund payments or analogous payments applicable to such Outstanding Subordinated Debt Securities on the day on which such payments are due and payable in accordance with the terms of this Subordinated Debt Securities Indenture and of such Subordinated Debt Securities.
(ii) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Subordinated Debt Securities Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound.
(iii) No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to such Subordinated Debt Securities shall have occurred and be continuing on the date of the establishment of such trust and, with respect to legal defeasance only, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).
(iv) In the case of an election under subsection (b) of this Section 4.02, the Company shall have delivered to the Trustee an opinion of counsel of recognized standing stating that (A) the Company has received from the Internal Revenue Service a letter ruling, or there has been published by the Internal Revenue Service a Revenue Ruling, or (B) since the date of execution of this Subordinated Debt Securities Indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the beneficial owners of such Outstanding Subordinated Debt Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred.
(v) In the case of an election under subsection (c) of this Section 4.02, the Company shall have delivered to the Trustee an opinion of counsel of recognized standing to the effect that the beneficial owners of such Outstanding Subordinated Debt Securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred.
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(vi) Such defeasance or covenant defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all relevant Securities are in default within the meaning of such Act).
(vii) Such defeasance or covenant defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act of 1940, as amended, and rules and regulations adopted by the Commission thereunder, unless such trust shall be registered under such Act or exempt from registration thereunder.
(viii) The Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance or covenant defeasance under subsection (b) or (c) of this Section 4.02 (as the case may be) have been complied with.
(ix) Notwithstanding any other provisions of this Section 4.02(d), such defeasance or covenant defeasance shall be effected in compliance with any additional or substitute terms, conditions or limitations which may be imposed on the Company in connection therewith pursuant to Section 3.01.
(e) Subject to the provisions of the last paragraph of Section 10.03, all money and U.S. Government Obligations (or other property as may be provided pursuant to Section 3.01) (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 4.02(e), the “Trustee”) pursuant to subsection (d) of Section 4.02 in respect of any Outstanding Subordinated Debt Securities of any series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Subordinated Debt Securities and this Subordinated Debt Securities Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Subordinated Debt Securities of all sums due and to become due thereon in respect of principal (and premium, if any) and interest and Additional Amounts, if any, but such money need not be segregated from other funds except to the extent required by law.
(f) Unless otherwise specified with respect to any Subordinated Debt Security pursuant to Section 3.01, if, after a deposit referred to in Section 4.02(d)(i) has been made, (i) the Holder of a Subordinated Debt Security in respect of which such deposit was made is entitled to, and does, elect pursuant to Section 3.01 or the terms of such Subordinated Debt Security to receive payment in a Currency other than that in which the deposit pursuant to Section 4.02(d)(i) has been made in respect of such Subordinated Debt Security, or (ii) a Conversion Event occurs in respect of the Foreign Currency in which the deposit pursuant to Section 4.02(d)(i) has been made, the indebtedness represented by such Subordinated Debt Security thereof shall be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium, if any), interest, if any, and Additional Amounts, if any, on such Subordinated Debt Security as the same becomes due out of the proceeds yielded by converting (from
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time to time as specified below in the case of any such election) the amount or other property deposited in respect of such Subordinated Debt Security into the Currency in which such Subordinated Debt Security becomes payable as a result of such election or Conversion Event based on the applicable market exchange rate for such Currency in effect on the second Business Day prior to each payment date, except, with respect to a Conversion Event, for such Foreign Currency in effect at the time of the Conversion Event.
(g) Anything in this Section 4.02 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations (or other property and any proceeds therefrom) held by it as provided in subsection (d) of this Section 4.02 which, in the opinion of an internationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect a defeasance or covenant defeasance, as applicable, in accordance with this Section 4.02.
Section 4.03. Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.03, all cash, U.S. Government Obligations and Foreign Government Securities deposited with the Trustee pursuant to Section 4.01 shall be held in trust and such cash and the proceeds from such U.S. Government Obligations and/or Foreign Government Securities shall be applied by it, in accordance with the provisions of the Subordinated Debt Securities of such series, and this Subordinated Debt Securities 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 interest for the payment of which such cash, U.S. Government Obligations and/or Foreign Government Securities have been deposited with the Trustee.
Section 4.04. Repayment to Company. The Trustee, the Calculation Agent and any Paying Agent promptly shall pay to the Company upon Company Request any excess money, U.S. Government Obligations and/or Foreign Government Securities held by them at any time with respect to any series of Subordinated Debt Securities.
Section 4.05. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 4 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Subordinated Debt Securities Indenture, the Subordinated Debt Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article 4 until such time as the Trustee or such Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 4; provided, however, that, if the Company has made any payment of principal of or interest on any Subordinated Debt Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Subordinated Debt Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or such Paying Agent.
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ARTICLE 5
REMEDIES
Section 5.01. Events of Default. (a) Except as otherwise provided pursuant to Section 3.01, if any of the following events occurs and is continuing with respect to the Subordinated Debt Securities of any series it shall constitute an “Event of Default”:
(i) Non-payment: default is made in the payment of any interest or principal due in respect of the Subordinated Debt Securities of that series or any of them and such default continues for a period of seven days (or such other period as may be specified pursuant to Section 3.01).
(ii) Winding up: any order is made by any competent court or resolution passed for the winding up or liquidation of the Company (except in any such case for the purpose of reconstruction or amalgamation or a merger or spin-off or any other structural modification (modificación estructural) subject to the provisions of Article 8.
(b) Neither a cancellation of the Subordinated Debt Securities of any series, a reduction, in part or in full, of the Amounts Due on the Subordinated Debt Securities of any series, the conversion thereof into another security or obligation of the Company or another person, in each case, as a result of the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Company, nor the exercise of any Bail-in Power or any other resolution power by the Relevant Resolution Authority with respect to such Subordinated Debt Securities, will be an Event of Default or otherwise constitute non-performance of a contractual obligation, or entitle the Holders of the Subordinated Debt Securities of such series to any remedies, which are hereby expressly waived.
(c) No exercise of a resolution tool or resolution power by the Relevant Resolution Authority or any action in compliance therewith shall constitute an Event of Default.
Section 5.02. Enforcement of Remedies. (a) If an Event of Default occurs as set forth in paragraph (a)(i) of Section 5.01, then the Trustee or the Holders of at least 25% in outstanding principal amount of the Subordinated Debt Securities of that series may institute proceedings for the winding up or liquidation of the Company but may take no further action in respect of such default.
(b) If an Event of Default occurs as set forth in paragraph (a)(ii) of Section 5.01, then the Trustee or the Holders of at least 25% in outstanding principal amount of the Subordinated Debt Securities of that series may declare such Subordinated Debt Securities of such series immediately due and payable whereupon the Subordinated Debt Securities of such series shall, when permitted by applicable Spanish insolvency law, become immediately due and payable at their Early Termination Amount together with all interest (if any) accrued thereon.
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(c) Without prejudice to paragraphs (a)(i) and (a)(ii) of Section 5.01, the Trustee or the holders of at least 25% in outstanding principal amount of the Subordinated Debt Securities of any series may at their discretion and without further notice, institute such proceedings against the Company as they may think fit to enforce any obligation, condition or provision binding on the Company under the Subordinated Debt Securities of such series, provided that, except as provided in Section 5.01(a)(ii) winding-up above, the Company shall not as a consequence of such proceedings be obliged to pay any sum or sums representing or measured by reference to principal or interest in respect of the Subordinated Debt Securities of such series sooner than the same would otherwise have been payable by it or any damages.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by the Trustee. (a) If an Event of Default with respect to the Subordinated Debt Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of the Subordinated Debt Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Subordinated Debt Securities Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy, including the institution of proceedings in Spain (but not elsewhere) for the winding-up of the Company, provided that, except as provided in (b) of Section 5.02 above, the Company shall not as a consequence of such proceedings be obliged to pay any sum or sums representing or measured by reference to principal or interest in respect of the Subordinated Debt Securities of such series sooner than the same would otherwise have been payable by it or any damages.
The Holders of Subordinated Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off or counterclaim or combination of accounts with respect to the Subordinated Debt Securities or this Subordinated Debt Securities Indenture (or between the obligations under or in respect of any Subordinated Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company, whether before or during a winding up of the Company.
Notwithstanding the foregoing, failure to make any payment in respect of a series of Subordinated Debt Securities shall not be an Event of Default in respect of such Subordinated Debt Securities if such payment is withheld or refused (i) in order to comply with any fiscal or other law or regulation or with the order of any court of competent jurisdiction, in each case applicable to such payment, or (ii) in case of doubt as to the validity or applicability of any such law, regulation or order, in accordance with advice given as to such validity or applicability at any time before the expiry of such period of 14 days by independent legal advisers acceptable to the Trustee, provided, however, that the Trustee may by notice to the Company require the Company to take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the
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doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days or seven days after the Trustee gives written notice to the Company informing it of such resolution.
No recourse for the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security, or for any claim based thereon, and no recourse under or upon any obligation, covenant or agreement of the Company in this Subordinated Debt Securities Indenture, or in any Subordinated Debt 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 either 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 Subordinated Debt Securities Indenture and the issue of the Subordinated Debt Securities of a series.
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 Subordinated Debt 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 Subordinated Debt Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or interest, if any) and Additional Amounts 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; provided that the Company shall not, as a result of the bringing of such proceedings, be obliged to pay any sum representing or measured by reference to principal, premium or interest on the Subordinated Debt Securities sooner than the same would otherwise have been payable by it. In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Subordinated Debt Security to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to first pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.08.
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Subject to Article 8 and Section 9.02, nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of any Subordinated Debt Security any plan of reorganization, arrangement, adjustment, or composition affecting any Subordinated Debt Securities or the rights of any Holder of any Subordinated Debt Security or to authorize the Trustee to vote in respect of the claim of any such Holder in any such proceeding.
The provisions of this Section 5.04 are subject to the provisions of Article 12.
Section 5.05. Trustee May Enforce Claims Without Possession of Subordinated Debt Securities. All rights of action and claims under this Subordinated Debt Securities Indenture or the Subordinated Debt Securities may be prosecuted and enforced by the Trustee without the possession of any of the Subordinated Debt Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel (subject, with regard to the Company, to the provisions of Article 12) be for the ratable benefit of the Holders of the Subordinated Debt Securities in respect of which such judgment has been recovered.
Section 5.06. Application of Money Collected. Any money collected by the Trustee pursuant to this Article or, after an Event of Default, any money or other property distributable in respect of the Company’s obligations under this Subordinated Debt Securities Indenture, in respect of any series of Subordinated Debt Securities shall, subject to the provisions of Section 5.03 in relation to waiver and set-off and Article 12 in relation to subordination, be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (and premium, if any) or interest, if any, and Additional Amounts upon presentation of such Subordinated Debt Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts applicable to such series of Subordinated Debt Securities due and owing to the Trustee (including any predecessor Trustee) under Section 6.08;
SECOND: Subject to Section 12.01, to the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest, if any, and Additional Amounts on such series of Subordinated Debt Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Subordinated Debt Securities for principal (and premium, if any) and interest, if any, respectively; and
THIRD: To the payment of the balance, if any, to the Company or any other Person or Persons legally entitled thereto.
Section 5.07. Limitation on Suits. No Holder of any Subordinated Debt Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Subordinated Debt Securities Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
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(a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to Subordinated Debt Securities of the same series specifying such Event of Default and stating that such notice is a “Notice of Default” hereunder;
(b) the Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series shall have made written request to the Trustee to institute proceedings in accordance with 5.02 to 5.05 hereof in respect of such Event of Default in its own name, as Trustee hereunder;
(c) such Holder of a Subordinated Debt Security has offered to the Trustee reasonable indemnity and/or security satisfactory to it (as determined by the Trustee in its sole discretion) against the costs, expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series;
it being understood and intended that no one or more Holders of Subordinated Debt Securities of a particular series shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Subordinated Debt Securities Indenture to affect, disturb or prejudice the rights of any other such Holders or holders, or to obtain or to seek to obtain priority or preference over any other such Holders or holders or to enforce any right under this Subordinated Debt Securities Indenture, except in the manner herein provided and for the equal and ratable benefit of all Holders of Subordinated Debt Securities of such series.
Section 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any, and Additional Amounts. Subject to Article 12 in relation to subordination of Subordinated Debt Securities and notwithstanding any other provision in this Subordinated Debt Securities Indenture, the Holder of any Subordinated Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and interest, if any, and Additional Amounts on such Subordinated Debt Security on the respective Stated Maturities as expressed in such Subordinated Debt Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
Section 5.09. Restoration of Rights and Remedies. If the Trustee or any Holder of any Subordinated Debt Security has instituted any proceeding to enforce any right or remedy under this Subordinated Debt Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in
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such proceeding, the Company, the Trustee and the Holders of Subordinated Debt Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Subordinated Debt Securities shall continue as though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities in the last paragraph of Section 3.06 and without prejudice to Section 5.02, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Subordinated Debt Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not, subject as aforesaid, prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Subordinated Debt Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Subordinated Debt Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Subordinated Debt Securities, as the case may be.
Section 5.12. Control by Holders. The Holders of a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee hereunder, or exercising any trust or power conferred on the Trustee hereunder with respect to the Subordinated Debt Securities of such series, provided that
(a) such direction shall not be in conflict with any rule of law or with this Subordinated Debt Securities Indenture or with the Subordinated Debt Securities of any series;
(b) the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders of any Subordinated Debt Securities of any series not taking part in such direction with respect to which the Trustee is acting as the Trustee; and
(c) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults. The Trustee may without prejudice to its rights in respect of any subsequent Event of Default from time to time and at any time waive any Event of Default or authorize any proposed Event of Default by the Company provided that in its opinion the interests of the Holders shall not be materially prejudiced
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thereby and, provided, further, that the Trustee shall not exercise any powers conferred on it by this clause in contravention of any notice in writing to the Trustee made pursuant to Section 5.07 hereof but no such notice shall affect any waiver or authorization previously given or made. The Holders of not less than a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities of any series may on behalf of the Holders of all the Subordinated Debt Securities of such series waive any past Event of Default hereunder with respect to such series and its consequences, except an Event of Default
(a) in the payment of the principal of (or premium, if any) or interest, if any, and Additional Amounts on any Subordinated Debt Security of such series, or
(b) in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Subordinated Debt Security of such series affected.
Upon any such waiver, such Event of Default shall cease to exist, and any Event of Default with respect to any series arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Subordinated Debt Securities Indenture, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs. All parties to this Subordinated Debt Securities Indenture agree, and each Holder of any Subordinated Debt Security by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Subordinated Debt Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Subordinated Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security on or after the respective Stated Maturities expressed in such Subordinated Debt Security (or, in the case of redemption, on or after the Redemption Date).
Section 5.15. No Additional Remedies. Section 5.16. No remedy against the Company other than as referred to in this Article 5 shall be available to the Holders, whether for the recovery of amounts owing to the Holders in respect of the Subordinated Debt Securities of any series or under this Subordinated Debt Securities Indenture or in respect of any breach by the Company of any of its other obligations under or in respect of the Subordinated Debt Securities of any series or under this Subordinated Debt Securities Indenture, except that the Holders shall have such rights and powers as they are required to have under the Trust Indenture Act.
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ARTICLE 6
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Subordinated Debt Securities Indenture, and no implied covenants or obligations shall be read into this Subordinated Debt Securities Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Subordinated Debt Securities Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Subordinated Debt Securities Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts, statements, opinions or conclusions stated therein).
(b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Subordinated Debt Securities Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
(c) No provision of this Subordinated Debt Securities Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that
(i) this paragraph (c) shall not be construed to limit the effect of paragraphs (a) or (d) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of any series, determined as provided herein, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series.
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(d) No provision of this Subordinated Debt Securities Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this Subordinated Debt Securities Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.
Section 6.02. Spanish Tax Procedures and Obligations of the Trustee. In connection with each payment made on any Payment Date (as defined in Appendix 1 attached hereto) in respect of the issued Subordinated Debt Securities hereunder, the Trustee or Paying Agent shall comply with the tax procedures set forth in Appendix 1 hereto. The Trustee or Paying Agent shall have no duty or responsibility to comply with other Spanish tax obligations arising out of this Subordinated Debt Securities Indenture. The Company shall be responsible for the payment of any and all amounts due under the Subordinated Debt Securities. Therefore, the Trustee or Paying Agent shall not be liable for any amounts owed to any person due to its failure to properly comply with the tax procedures referred to in this Section 6.02 and Appendix 1 hereto, except such as may result from the negligence, willful misconduct or fraud of the Trustee or Paying Agent or any of its agents or employees. The Trustee or Paying Agent may request and rely conclusively upon any instructions from the Company in respect of any action necessary or required to be taken by the Trustee or Paying Agent pursuant to this Section 6.02 and Appendix 1 hereto; provided, however, in no event shall the Trustee or Paying Agent be required to expend or risk its own funds in the performance of any of its duties pursuant to this Section 6.02 and Appendix 1 hereto, or be obligated to take any legal or other action which might in its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with acceptable indemnification and security.
Section 6.03. Notice of Defaults. Within 90 days after the occurrence of any Event of Default hereunder with respect to Subordinated Debt Securities of any series of which a Responsible Officer of the Trustee has received written notice of such Event of Default the Trustee shall transmit in the manner and to the extent provided in Section 1.06 to Holders of Subordinated Debt Securities of such series notice of such Event of Default hereunder of which the Trustee has received written notice, unless such Event of Default 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 Subordinated Debt Securities of such series.
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Section 6.04. 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, Officer’s Certificate, or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, as the case may be, 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 Subordinated Debt Securities Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate and/or an Opinion of Counsel;
(d) the Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in conclusive reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Subordinated Debt Securities Indenture at the request or direction of any of the Holders pursuant to this Subordinated Debt Securities Indenture, unless such Holders shall have offered to the Trustee reasonable security and/or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; at the sole reasonable cost and expense of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; provided that the Trustee shall not be entitled to such information which the Company is prevented from disclosing as a matter of law or contract;
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, without the consent of any other parties, and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;
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(h) the Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Subordinated Debt Securities Indenture, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(i) anything in this Subordinated Debt Securities Indenture notwithstanding, in no event shall the Trustee be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss or profit), even if the Trustee has been advised as to the likelihood of such loss or damage and regardless of whether the claim for loss or damage is made in negligence or otherwise;
(j) the Trustee shall not be liable with respect to any Losses arising from action taken or omitted to be taken by it in good faith in accordance with any instruction or communication received by e-mail from any person reasonably believed by the Trustee to be authorized by the Company to send such instruction or communication, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(k) the Trustee shall not be deemed to have notice of any Event of Default unless a Responsible Officer of the Trustee has received written notice of such an Event of Default at the Corporate Trust Office of the Trustee, and such notice references the Subordinated Debt Securities and/or this Subordinated Debt Securities Indenture;
(l) the Trustee shall not be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond its control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, strikes, work stoppages, civil or military disturbances, nuclear or natural catastrophes, fire, riot, embargo, loss or malfunctions of utilities, communications or computer (software and hardware) services, government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the services contemplated by this Subordinated Debt Securities Indenture;
(m) 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 to act hereunder; and
(n) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Subordinated Debt Securities Indenture, which certificate may be signed by any person authorized to sign an Officer’s Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.
Section 6.05. Not Responsible for Recitals or Issuance of Subordinated Debt Securities. The recitals contained herein and in the Subordinated Debt Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the
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validity or sufficiency of this Subordinated Debt Securities Indenture or of the Subordinated Debt Securities, except that the Trustee represents and warrants that it has duly authorized, executed and delivered this Subordinated Debt Securities Indenture. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Subordinated Debt Securities or the proceeds thereof. The Trustee shall not be responsible to make any calculation with respect to any matter under this Subordinated Debt Securities Indenture other than as specifically provided for herein. The Trustee shall have no duty to monitor or investigate the Company’s compliance with or the breach of, or cause to be performed or observed, any representation, warranty, or covenant, or agreement of any Person, other than the Trustee, made in this Subordinated Debt Securities Indenture. No provision of this Subordinated Debt Securities Indenture shall be deemed to impose any duty or obligation on the Trustee to perform any act or acts, receive or obtain any interest in property or exercise any interest in property, or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or would subject the Trustee to taxation or other consequences that, in the sole determination of the Trustee, are adverse to the Trustee, or in which the Trustee shall be unqualified or incompetent in accordance with applicable law to perform any such act or acts, to receive or obtain any such interest in property or to exercise any such right, power, duty or obligation.
Section 6.06. May Hold Subordinated Debt Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Subordinated Debt Security Registrar and any Calculation Agent or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Subordinated Debt Securities and, subject to 6.09 and 6.14, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Subordinated Debt Security Registrar, Calculation Agent or such other agent.
Section 6.07. 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 or to invest any money received by it hereunder except as otherwise agreed with the Company.
Section 6.08. 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);
(b) except as otherwise expressly provided herein, to reimburse the Trustee for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Subordinated Debt Securities Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and
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(c) to indemnify the Trustee (which for purposes of this subparagraph Section 6.08(c) shall be deemed to include its directors, officers, employees and agents) or any predecessor Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or expense (including legal fees and expenses) and taxes (other than taxes based upon, measured by or determined by the income of the Trustee) 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 (whether asserted by the Company, or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, or in connection with enforcing the provisions of this Section, but excluding any tax liabilities of the Trustee in respect of its net profits.
In addition to, but without prejudice to its other rights under this Subordinated Debt Securities Indenture, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.01, the fees, costs and expenses (including the charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.
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. If the Company and the Trustee are being represented by the same counsel and the Company has assumed the defense of the claim, the Trustee shall not be authorized to settle a claim without the written consent of the Company, which consent shall not be unreasonably withheld.
As security for the performance of the obligations of the Company under this Section, the Trustee shall have a senior lien to which the Subordinated Debt Securities are hereby made subordinate, upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (or premium, if any) or interest, if any, on the Subordinated Debt Securities.
“Trustee” for purposes of this Section shall include any predecessor Trustee; provided, however, that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.
The Trustee’s rights to payment of its fees, reimbursement and indemnity under, and its lien provided for in, this Section 6.08 shall survive the payment in full of the Subordinated Debt Securities, the satisfaction and discharge of this Subordinated Debt Securities Indenture, the resignation or removal of the Trustee, the termination for any reason of this Subordinated Debt Securities Indenture and the exercise of the Bail-in Power and the other relevant resolution tools by the Relevant Resolution Authority.
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Section 6.09. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of Section 310(b) 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, Section 310(b) of the Trust Indenture Act and this Subordinated Debt Securities Indenture.
Section 6.10. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder with respect to each series which shall be a Person organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State or District of Columbia authority and having a corporate trust office or agency in the Borough of Manhattan, The City of New York, New York. If such Person 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 Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee 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 6.11. 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 6.12.
(b) The Trustee may resign at any time with respect to the Subordinated Debt Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.12 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Subordinated Debt Securities of such series.
(c) The Trustee may be removed at any time with respect to the Subordinated Debt Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.12 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Subordinated Debt Securities of such series.
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(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.09 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Subordinated Debt Security of the series as to which the Trustee has a conflicting interest for at least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.10 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 Subordinated Debt Security for at least six months, or
(iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge, or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or
(iv) the Trustee shall fail to perform its obligations to the Company under this Subordinated Debt Securities Indenture in any material respect,
then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to any or all series of Subordinated Debt Securities or (B) subject to Section 5.14 (and except in the case of subparagraph 6.11(d)(iv) above), any Holder who has been a bona fide Holder of a Subordinated Debt Security for at least six months (and, in the case of Section 6.11(d)(i) above, who is a Holder of a Subordinated Debt Security of the series as to which the Trustee has a conflicting interest) may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Subordinated Debt Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Subordinated Debt Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Subordinated Debt Securities of such series (it being understood that any successor Trustee may be appointed with respect to the Subordinated Debt Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Subordinated Debt Securities of any particular series), and shall comply with the applicable requirements of Section 6.12. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Subordinated Debt Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series delivered to the Company 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 6.12, become the successor Trustee with respect to the Subordinated Debt Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Subordinated Debt Securities of any series shall have been so appointed by the Company or the Holders of Subordinated Debt Securities of such series and accepted appointment
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in the manner hereinafter required by Section 6.12, any Holder who has been a bona fide Holder of a Subordinated Debt Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Subordinated Debt Securities of such series.
(f) The Company shall give notice to Holders of each resignation and each removal of the Trustee with respect to the Subordinated Debt Securities of any series and each appointment of a successor Trustee with respect to the Subordinated Debt Securities of any series to the Holders in the manner and to the extent provided in Section 1.06. Each notice shall include the name of the successor Trustee with respect to the Subordinated Debt Securities of such series and the address of its Corporate Trust Office.
Section 6.12. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Trustee with respect to all Subordinated Debt Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company 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 and subject to its lien provided for in Section 6.08, 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 Senior Preferred Debt Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Senior Preferred Debt Securities of such series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Preferred Debt Securities of such series to which the appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Senior Preferred Debt Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Preferred Debt Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Senior Preferred Debt 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 cotrustees of the same trust and that each such Trustee shall be trustee of a trust or trusts 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
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successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates, subject to the lien provided for in Section 6.08.
(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 6.12, 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 6.13. Merger, Conversion, Consolidation or Succession to Business. Any Person into which the Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Subordinated Debt Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Subordinated Debt Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Subordinated Debt Securities.
Section 6.14. Preferential Collection of Claims. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Subordinated Debt Securities of a series), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).
Section 6.15. Appointment of Authenticating Agent. The Trustee may at any time appoint an Authenticating Agent or Agents with respect to one or more series of Subordinated Debt Securities which shall be authorized to act on behalf of the Trustee to authenticate Subordinated Debt Securities of such series upon original issue, or issued upon exchange, registration of transfer or partial redemption thereof or in lieu of destroyed, lost or stolen Subordinated Debt Securities, and Subordinated Debt Securities so authenticated shall be entitled to the benefits of this Subordinated Debt Securities Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Subordinated Debt Securities Indenture to the authentication and delivery of Subordinated Debt Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent
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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 6.15, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any Person succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such Person shall be otherwise eligible under this Section 6.15, 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 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 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 6.15, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice to the Holders of Subordinated Debt Securities in the manner and to the extent provided in Section 1.06. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 6.15.
The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.15.
If an appointment with respect to one or more series is made pursuant to this Section, the Subordinated Debt Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in substantively the following form:
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This is one of the Subordinated Debt Securities referred to in the within-mentioned Subordinated Debt Securities Indenture.
| THE BANK OF NEW YORK MELLON, as Trustee | ||
| By: |
| |
| as Authenticating Agent | ||
| By: |
| |
| Authenticating Signatory |
Section 6.16. Appointment of Additional Trustees. The Company may appoint a Trustee for a particular series of Subordinated Debt Securities other than the Trustee named in the first paragraph of this Subordinated Debt Securities Indenture by executing and delivering an indenture supplemental hereto where such Trustee accepts such appointment as contemplated by Section 3.01(w) and Section 9.01(k) (it being understood that at any time there shall be only one Trustee with respect to the Subordinated Debt Securities of any particular series); provided that, at the time of such acceptance, such Trustee shall be qualified and eligible under this Article 6. Upon such acceptance, such Trustee shall be vested with all the rights, powers, trusts and duties of a Trustee under this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series.
Section 6.17. Tax Withholding. Any amounts to be paid by the Company on the Subordinated Debt Securities shall be paid net of any deduction or withholding imposed or required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (or any law implementing such an intergovernmental agreement) (a “FATCA Withholding Tax”), and the Company shall not be required to pay Additional Amounts on account of any FATCA Withholding Tax.
Any Paying Agent shall be entitled to make a deduction or withholding from any payment which it makes under the Subordinated Debt Securities and this Subordinated Debt Securities Indenture for or on account of (i) any present or future taxes, duties or charges if and to the extent so required by any applicable law and (ii) any FATCA Withholding Tax (together, “Applicable Law”). In either case, the Paying Agent shall make any payment after a deduction or withholding has been made pursuant to Applicable Law and shall report to the relevant authorities the amount so deducted or withheld. In all cases, the Paying Agent shall have no obligation to gross up any payment made subject to any deduction or withholding pursuant to Applicable Law. In addition, amounts deducted or withheld by the Paying Agent as described in this paragraph will be treated as paid to the Holder of the Subordinated Debt Securities, and the Company will not pay Additional Amounts in respect of such deduction or withholding, except to the extent required under Section 10.04.
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ARTICLE 7
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. The Company to Furnish Trustee Names and Addresses of Holders. The Company with respect to any series of Subordinated Debt Securities, 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-interest bearing Subordinated Debt Securities and Subordinated Debt Securities on which interest is paid less frequently than quarterly as contemplated by Section 3.01), a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Subordinated Debt Securities as of such Regular Record Date or such specified date, and
(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.
The Company need not furnish or cause to be furnished to the Trustee pursuant to this Section 7.01 the names and addresses of Holders of Subordinated Debt Securities so long as the Trustee acts as Subordinated Debt Security Registrar with respect to such series of Subordinated Debt Securities.
Section 7.02. Preservation of Information; Communication to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders (i) contained in the most recent list furnished to the Trustee as provided in Section 7.01 and (ii) received by the Trustee in its capacity as Paying Agent or Subordinated Debt Security Registrar (if so acting). The Trustee may dispose of any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.
(b) The rights of the Holders of Subordinated Debt Securities of any series to communicate with other Holders with respect to their rights under this Subordinated Debt Securities Indenture or under the Subordinated Debt Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
(c) Every Holder, by receiving and holding a Subordinated Debt Security, agrees with the Company 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 Subordinated Debt Securities are Outstanding hereunder, the Trustee shall transmit to Holders as provided in the Trust Indenture Act a brief report dated as of a date required by and in compliance with the Trust Indenture Act.
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(b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each securities exchange upon which the Trustee has been notified that the Subordinated Debt Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when Subordinated Debt Securities are listed on any securities exchange.
Section 7.04. Reports by the 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 Article 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 Article 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 or actual 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 Subordinated Debt Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive or actual 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 (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.
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(d) The Trustee may conclusively presume that the Company is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise is complying with such reporting requirements unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office of the Trustee a written notification from the Company stating otherwise. The Trustee shall have no duty to examine any information, reports or other documents filed by the Company pursuant to Section 13 or 15(d) of the Exchange Act, and need make no determination as to whether they comply with the requirements of this Section 7.04, its sole duty in respect thereof being to place them in its files and make them available for inspection by any Holder upon reasonable request during normal business hours.
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 Subordinated Debt Securities of any series Outstanding under this Subordinated Debt Securities Indenture, consolidate or amalgamate with or merge into any other corporation or convey or transfer or lease its properties and assets substantially as an entirety to any Person, provided that:
(a) the corporation formed by or into which the Company is consolidated, amalgamated or 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 any part of the European Union, and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, in the case of the Company, the due and punctual payment of the principal of (and premium, if any) and interest and Additional Amounts, if any, on all the Subordinated Debt Securities in accordance with the provisions of such Subordinated Debt Securities and this Subordinated Debt Securities Indenture and the performance of every covenant of this Subordinated Debt Securities Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such consolidation, amalgamation, merger, conveyance or transfer, no Event of Default and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and
(c) 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 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. In the event of any merger, consolidation, sale, conveyance permitted by Section 8.01 or Section 5.01 above, Additional Amounts under the Subordinated Securities will thereafter be payable in respect of taxes imposed by the acquiring corporation’s, or the resulting corporation’s,
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jurisdiction of incorporation or tax residence (subject to exceptions equivalent to those that apply to the obligation to pay Additional Amounts pursuant to Section 10.04, as the case may be, in respect of taxes imposed by the laws of the Kingdom of Spain) rather than taxes imposed by the Kingdom of Spain. Additional Amounts with respect to payments of interest or principal due prior to the date of such merger, consolidation, sale, conveyance or lease will be payable only in respect of taxes imposed by the Kingdom of Spain. The acquiring or resulting corporation will also be entitled to redeem the Subordinated Debt Securities in the circumstances described in Section 11.08 with respect to any change or amendment to, or change in the application or official interpretation of the laws or regulations of such jurisdiction, which change or amendment must occur subsequent to the date of any merger, consolidation, sale, conveyance or lease permitted by Section 8.01 or Section 5.01 if the successor entity is not incorporated or tax resident in the Kingdom of Spain. In the event of assumption of the Company’s obligations in connection with a merger, consolidation, sale or conveyance of substantially all of its assets, the Company shall be released from all obligations and covenants under this Subordinated Debt Securities Indenture or the Subordinated Debt Securities and 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 Subordinated Debt Securities Indenture with the same effect as if such successor corporation had been named as the Company.
Section 8.03. Assumption of Obligations. Subject to the prior consent of the Regulator, if required, any direct or indirect subsidiary of the Company may assume the obligations of the Company (a “successor entity”) under the Subordinated Debt Securities of any series without the consent of the Holders of such series, provided that:
(a) the successor entity shall expressly assume such obligations by an amendment to this Subordinated Debt Securities Indenture, executed by the Company and such successor entity, if applicable, and delivered to the Trustee, in form satisfactory to the Trustee and the Company shall, by amendment to this Subordinated Debt Securities Indenture, unconditionally guarantee all of the obligations of such successor entity under the Subordinated Debt Securities of such series and this Subordinated Debt Securities Indenture as so modified by such amendment;
(b) immediately after giving effect to such assumption of obligations, no Event of Default and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and
(c) 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.
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Upon any such assumption, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Subordinated Debt Securities Indenture with respect to any such Subordinated Debt Securities with the same effect as if such successor entity had been named as the Company in this Subordinated Debt Securities Indenture, and the Company or any legal and valid successor corporation which shall theretofore have become such in the manner prescribed herein, shall be released from all liability as obligor upon any such Subordinated Debt Securities except as described in the following paragraph.
In the event of any assumption, Additional Amounts under the Subordinated Debt Securities will be payable in respect of taxes imposed by the assuming corporation’s jurisdiction of incorporation or tax residence (subject to exceptions equivalent to those that apply to the obligation to pay Additional Amounts pursuant to Section 10.04 in respect of taxes imposed by the laws of the Kingdom of Spain) on payments of interest or principal made on or subsequent to the date of such assumption. Additional Amounts with respect to payments of interest or principal due prior to the date of such assumption will be payable only in respect of taxes imposed by the Kingdom of Spain. The direct or indirect subsidiary thereof that assumes the obligations of the Company in such cases will also be entitled to redeem the Securities in the circumstances described in Section 11.08 with respect to any change or amendment to, or change in the application or official interpretation of the laws or regulations of such jurisdiction, which change or amendment must occur subsequent to the date of any such assumption if the assuming entity is not incorporated or tax resident in the Kingdom of Spain. In the event of any such assumption, all obligations of the Company under the Securities shall immediately be discharged.
Section 8.04. Substitution and Variation. If a Capital Disqualification Event or an event that would entitle the Company to redeem the Subordinated Debt Securities of any series as set forth in Section 11.08 occurs and is continuing, the Company may substitute all (but not some) of the Subordinated Debt Securities of any series or modify the terms of all (but not some) of the Subordinated Debt Securities of such series, without any requirement for the consent or approval of the holders of the Subordinated Debt Securities of such series, so that they are substituted for, or varied to, become, or remain, Qualifying Notes, subject to having given not less than 5 (five) nor more than 30 days’ notice to the Holders of such series in accordance with Section 1.06 and to the Trustee (which notice shall be irrevocable and shall specify the date for substitution or, as applicable, variation), and subject to obtaining Supervisory Permission therefor, if and as required under Applicable Banking Regulations.
Any such notice shall specify the relevant details of the manner in which such substitution or variation shall take effect and where the Holders of such series can inspect or obtain copies of the new terms and conditions of the Subordinated Debt Securities of such series. Such substitution or variation will be effected without any cost or charge to such Holders.
The Subordinated Debt Securities of any series shall cease to bear interest from (and including) the date of substitution thereof.
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Any Holder or beneficial owner of the Subordinated Debt Securities of any series shall, by virtue of its acquisition of the Subordinated Debt Securities of any series or any beneficial interest therein, be deemed to accept the substitution or variation of the terms of the Subordinated Debt Securities of such series as set forth in this Section 8.04 and to grant to the Company full power and authority to take any action and/or to execute and deliver any document in the name and/or on behalf of such Holder which is necessary or convenient to complete the substitution or variation of the terms of the Subordinated Debt Securities of such series, as applicable.
ARTICLE 9
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution of the Company 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 Subordinated Debt Securities;
(b) to add to the covenants of the Company for the benefit of the Holders of all or any series of Subordinated Debt Securities (and, if such covenants are to be for the benefit of fewer than all series of Subordinated Debt Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company;
(c) to add any additional Events of Default;
(d) to change or eliminate any of the provisions of this Subordinated Debt Securities Indenture, or any supplemental indenture, provided that any such change or elimination shall become effective only when there is no Outstanding Subordinated Debt Security of any series created prior to the execution of such supplemental indenture that is entitled to the benefit of such provision or as to which such supplemental indenture would apply;
(e) to secure the Subordinated Debt Securities;
(f) to establish the form or terms of Subordinated Debt Securities of any series as permitted by Section 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 in The City of New York;
(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;
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(i) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Subordinated Debt Securities of one or more series and to add to or change any of the provisions of this Subordinated Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.12(b);
(j) to change or eliminate any provision of this Subordinated Debt Securities Indenture as permitted by Section 1.08;
(k) to name a Trustee for a particular series of Subordinated Debt Securities other than the Trustee named in the first paragraph of this Subordinated Debt Securities Indenture and to provide for the appropriate changes related to such appointment for a particular series of Subordinated Debt Securities; or
(l) with respect to any Subordinated Debt Security (including a Global Security) issued on or after the date hereof, to amend any such Subordinated Debt Security to conform to the description of the terms of such Subordinated Debt Security in the prospectus, prospectus supplement, product supplement, pricing supplement or any other similar offering document related to the offering of such Subordinated Debt Security.
Section 9.02. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities of each series affected by such supplemental Subordinated Debt Securities Indenture (voting as a class), by Act of said Holders delivered to the Company 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 Subordinated Debt Securities Indenture or of modifying in any manner the rights of the Holders of Subordinated Debt Securities of such series under this Subordinated Debt Securities Indenture; provided, however, that no such supplemental indenture may, without the consent of the Holder of each Outstanding Subordinated Debt Security affected thereby,
(a) change the Stated Maturity, if any, of any principal amount or any interest amounts in respect of any such Subordinated Debt Security, reduce the principal amount thereof or the rate of interest and Additional Amounts, if any, thereon, or any premium payable upon the redemption thereof, or reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the Maturity thereof pursuant to Section 5.02, or change the obligation of the Company (or its successor) to pay Additional Amounts pursuant to Section 10.04 (except as contemplated by Section 8.01(a) and permitted by Section 9.01(a)) on the Subordinated Debt Securities, or the currency of payment of the principal amount of, premium, if any, or interest on, any such Subordinated Debt Security, or change the Place of Payment (except as contemplated by Section 9.01(g)), or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof or the date any such payment is otherwise due and payable (or, in the case of redemption, on or after the Redemption Date); or
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(b) reduce the percentage in aggregate principal amount of the Outstanding Subordinated Debt Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Subordinated Debt Securities Indenture or of certain defaults hereunder and their consequences) provided for in this Subordinated Debt Securities Indenture; or
(c) modify the subordination provisions of Article 12 or Section 13.01; or
(d) 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 Subordinated Debt Securities Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Subordinated Debt Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to the “Trustee” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 6.12(b) and 9.01(j); or
(e) change in any manner adverse to the interests of the Holders of any Subordinated Debt Securities, the subordination provisions of the Subordinated Debt Securities or the terms and conditions of the obligations of the Company in respect of the due and punctual payment of any amounts due and payable on the Subordinated Debt Securities.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other provision of this Subordinated Debt Securities Indenture which has expressly been included solely for the benefit of one or more particular series of Subordinated Debt Securities, or which modifies the rights of the Holders of Subordinated Debt Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Subordinated Debt Securities Indenture of the Holders of Subordinated Debt Securities of any other series.
Section 9.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Subordinated Debt Securities Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Subordinated Debt Securities Indenture and that such supplemental indenture constitutes a valid and binding obligation of the Company subject to customary exceptions. The Trustee may, but shall not be obliged to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Subordinated Debt Securities Indenture or otherwise.
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Section 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Subordinated Debt Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Subordinated Debt Securities Indenture for all purposes; and every Holder of Subordinated Debt Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby, except as otherwise expressed therein.
Section 9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. Reference in Subordinated Debt Securities to Supplemental Indentures. Subordinated Debt Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Subordinated Debt Securities of any series so modified as to conform, in the opinion of the Trustee, the Company, to any such supplemental indenture may be prepared and executed by the Company and such Subordinated Debt Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Subordinated Debt Securities of such series.
ARTICLE 10
COVENANTS
Section 10.01. Payment of Principal, Premium, and Interest. The Company covenants and agrees for the benefit of each series of Subordinated Debt Securities that it will (subject to Section 3.07 and to the subordination provisions in Article 12 and to Section 13.01) duly and punctually pay to the Holders the principal of (and premium, if any) and interest, if any, and Additional Amounts on the Subordinated Debt Securities of that series in accordance with the terms of the Subordinated Debt Securities and this Subordinated Debt Securities Indenture. Except as otherwise specified, as contemplated by Section 3.01 hereof, the Trustee shall act as Paying Agent with respect to any series of Subordinated Debt Securities.
Section 10.02. Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Subordinated Debt Securities an office or agency where Subordinated Debt Securities of that series may be presented or surrendered for payment, where Subordinated Debt Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Subordinated Debt Securities of that series and this Subordinated Debt Securities Indenture may be served; provided, however, that at the option of the Company in the case of definitive Subordinated Debt Securities of such
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series, payment of any interest thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Subordinated Debt Security Register. With respect to the Subordinated Debt Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be 160 Queen Victoria Street London EC4V 4LA. Unless otherwise specified pursuant to Section 3.01, the Company will maintain in the City of London, an office or agency where notices and demands to or upon the Company in respect of Subordinated Debt Securities of any series and this Subordinated Debt 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 City of London) where the Subordinated Debt Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of any obligation to maintain an office or agency in each Place of Payment (except as otherwise indicated in this Section) for Subordinated Debt Securities of any series for such purposes. The Company 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 Subordinated Debt Securities of any series, it will, on or before each due date for payment of the principal of (and premium, if any) or interest, if any, if any, on any of the Subordinated Debt Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of Subordinated Debt Securities, it will, prior to each due date for payment of the principal of (and premium, if any) or interest, if any, on any Subordinated Debt Securities of that series deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or its failure so to act. Unless otherwise specified as contemplated by Section 3.01, the Trustee shall be the Company’s Paying Agent. The Company will cause each Paying Agent for any series of Subordinated Debt Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:
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(a) hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Subordinated Debt Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other obligor upon the Subordinated Debt Securities of that series) in the making of any payment, when due and payable, or principal of (and premium, if any) or interest, if any, on Subordinated Debt Securities of that series; and
(c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.
The Company may at the time, for the purpose of obtaining the satisfaction and discharge of this Subordinated Debt Securities Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee such Paying Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest, if any, on any Subordinated Debt Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest, if any, have become due and payable shall be paid to the Company, on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Subordinated Debt 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 pursuant to Section 3.01, all amounts payable (whether in respect of principal, redemption amount, interest or otherwise) in respect of any series of Subordinated Debt Securities will be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges (collectively, the “Taxes”) of whatever nature imposed or levied by or on behalf of the Kingdom of Spain or any political subdivision thereof or any authority or agency therein or thereof having power to tax, unless the withholding or deduction of such Taxes is required by law. In that event, the Company shall pay such additional amounts (“Additional Amounts”) as will result in receipt by the Holders of the Subordinated Debt Securities of the particular series of such amounts as would have been received by them had no such withholding or deduction been required.
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The Company shall not be required to pay any Additional Amounts in respect of any series of Subordinated Debt Securities:
(i) to, or to a third party on behalf of, a Holder if the Holder or the beneficial owner of Subordinated Debt Securities is liable for such Taxes in respect of such Subordinated Debt Securities by reason of his or her having some connection with Spain other than (i) the mere holding of a Subordinated Debt Security or (ii) the receipt of any payment in respect of such Subordinated Debt Securities; or
(ii) to, or to a third party on behalf of, a Holder or a beneficial owner in respect of whose series of Subordinated Debt Securities the Company does not receive such information as may be required in order to comply with the applicable Spanish tax reporting obligations, including but not limited to the receipt in a timely manner of a duly executed and completed certificate in accordance with Law 10/2014 and Royal Decree 1065/2007, as amended, and any implementing legislation or regulation; or
(iii) to, or to a third party on behalf of, a Holder or a beneficial owner of Subordinated Debt Securities in respect of whom the Company does not receive such information concerning such Holder’s or beneficial owner’s identity and tax residence as may be required in order to comply with the procedures that may be implemented to comply with the interpretation of Royal Decree 1065/2007 eventually made by the Spanish tax authorities; or
(iv) presented for payment (where presentation is required) more than 30 days after the Relevant Date, except to the extent that the relevant Holder would have been entitled to such Additional Amounts on presenting the same for payment on the expiry of such period of 30 days; or
(v) in relation to any estate, inheritance, gift, sales, transfer or similar taxes; or
(vi) to, or to a third party on behalf of, individuals resident for tax purposes in the Kingdom of Spain if the Spanish tax authorities determine that payments made to such individuals are not exempt from withholding tax and require a withholding to be made; or
(vii) to, or to a third party on behalf of, a Spanish-resident legal entity subject to Spanish corporation tax if the Spanish tax authorities determine that the Subordinated Debt Securities of such series do not comply with exemption requirements specified in the Reply to a Consultation of the Directorate General for Taxation (Dirección General de Tributos) dated 27 July 2004 and require a withholding to be made; or
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(viii) where the withholding or deduction is required pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code (“FATCA”), any regulations or agreements thereunder, any official interpretations thereof, any intergovernmental agreements with respect thereto (including the intergovernmental agreement between the United States and Spain on the implementation of FATCA), or any law implementing an intergovernmental agreement or any regulations or official interpretations relating thereto; or
(ix) in the case of any combination of items listed in (i) through (viii) above.
Additional Amounts will also not be paid with respect to any payment to a Holder who is a fiduciary, a partnership, a limited liability company or person other than the sole beneficial owner of that payment, to the extent that payment would be required by the laws of Spain (or any political subdivision thereof) to be included in the income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership, an interest holder in that limited liability company or a beneficial owner who would not have been entitled to the Additional Amounts had it been the Holder.
For the purposes of (iv) above, the “Relevant Date” means, in respect of any payment, the date on which such payment first becomes due and payable, but if the full amount of the moneys payable has not been received by the Trustee on or prior to such due date, it means the first date on which, the full amount of such moneys having been so received and being available for payment to Holders of Subordinated Debt Securities, notice to that effect shall have been duly given to the Holders of the relevant series of Subordinated Debt Securities in accordance with Section 1.06.
Unless the context otherwise requires, any reference in this Section 10.04 to “principal” shall include any premium payable, or Redemption Amount and any other amounts in the nature of principal payable pursuant to this Subordinated Debt Securities Indenture and “interest” shall include all amounts payable pursuant to Section 3.07 and any other amounts in the nature of interest payable under this Subordinated Debt Securities Indenture.
As used in this Section 10.04, the term “Redemption Amount” means, as appropriate, the Maturity Redemption Amount, Early Redemption Amount (Tax), Early Redemption Amount (Capital Disqualification Event), Early Redemption Amount (Call), Early Redemption Amount (Clean-up Call) and Early Termination Amount or such other amount in the nature of a redemption amount as may be specified in, or determined in accordance with the Section 3.01.
Unless the context requires otherwise, any references in this Subordinated Debt Securities Indenture to payment of principal of or interest on a Subordinated Debt Security shall be deemed to include any Additional Amounts payable with respect thereto.
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In the event that any withholding or deduction for or on account of any taxes is required, at least 10 days prior to each date of payment of principal of or interest on the relevant series of Subordinated Debt Securities, or, if later, promptly after the obligation to withhold or deduct becomes known to the Company, the Company will furnish to the Trustee and the Paying Agent, if other than the Trustee, an Officer’s Certificate specifying the amount required to be withheld or deducted on such payments to such Holders, certifying that the Company shall pay such amounts required to be withheld to the appropriate taxing jurisdiction and certifying to the fact that the Additional Amounts will be payable and the amounts so payable to each Holder, and that the Company will pay to the Trustee or the Paying Agent the Additional Amounts required to be paid; provided that no such Officer’s Certificate will be required prior to any date of payment of principal of or interest on such Subordinated Debt Securities if there has been no change with respect to the matters set forth in a prior Officer’s Certificate. The Trustee and Paying Agent may rely on the fact that any Officer’s Certificate contemplated by this paragraph has not been furnished as evidence of the fact that no withholding or deduction for or on account of any taxes is required. The Company covenants to indemnify the Trustee and Paying Agent for and to hold them harmless against any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any such Officer’s Certificate furnished pursuant to this paragraph or on the fact that any Officer’s Certificate contemplated by this paragraph has not been furnished.
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 respective corporate existence, provided, however, that the foregoing shall not obligate the Company to preserve any such right or franchise if the Company shall determine that the preservation thereof is no longer desirable in the conduct of its business and that the loss thereof is not disadvantageous in any material respect to any Holder.
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.
Section 10.07. Original Issue Document. The Company shall provide to the Trustee on a timely basis such information, if any, as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Subordinated Debt Securities relating to any original issue discount, including, without limitation, Form 8281, Form 1099-OID or any successor forms.
ARTICLE 11
REDEMPTION OF SUBORDINATED DEBT SECURITIES
Section 11.01. Applicability of Article. Subordinated Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series) in accordance with this Article 11. Subordinated Debt Securities of any series may not be redeemed except in accordance with provisions of applicable law. The Subordinated Debt Securities of any series may not be redeemed in whole or in part at the option of the Holder thereof.
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Section 11.02. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Subordinated Debt Securities shall be evidenced by a Board Resolution. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company shall, at least five (5) days prior, but not more than 30 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Subordinated Debt Securities of such series to be redeemed and, if applicable, the tenor of the Subordinated Debt Securities to be redeemed.
Section 11.03. Selection by Trustee of Subordinated Debt Securities to Be Redeemed. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, if fewer than all the Subordinated Debt Securities of any series are to be redeemed, the particular Subordinated Debt Securities to be redeemed shall be selected not less than five (5) days nor more than 30 days prior to the Redemption Date by the Trustee, from the Outstanding Subordinated Debt Securities of such series not previously called for redemption, pro rata, by lot or by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Subordinated Debt Securities of that series or any multiple thereof) of the principal amount of Subordinated Debt Securities of such series of a denomination larger than the minimum authorized denomination for Subordinated Debt Securities of that series.
The Trustee shall promptly notify the Company in writing of the Subordinated Debt Securities selected for redemption and, in the case of any Subordinated Debt Securities selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Subordinated Debt Securities Indenture, unless the context otherwise requires, all provisions relating to the redemption of Subordinated Debt Securities shall relate in the case of any Subordinated Debt Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Subordinated Debt Security which has been or is to be redeemed.
Section 11.04. Notice of Redemption. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, notice of redemption shall be given not less than five (5) days nor more than 30 days prior to the Redemption Date to each Holder of Subordinated Debt Securities to be redeemed in the manner and to the extent provided in Section 1.06.
All notices of redemption shall state:
(a) the series of Subordinated Debt Securities subject to redemption,
(b) the Redemption Date,
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(c) the Redemption Price,
(d) if fewer than all the Outstanding Subordinated Debt Securities of any series are to be redeemed, the principal amount of the Subordinated Debt Securities to be redeemed, (except in the case of a redemption pursuant to Section 11.08 or 11.09, which must be a redemption in full),
(e) that on the Redemption Date the Redemption Price together with any accrued but unpaid interest will become due and payable upon each such Subordinated Debt Security to be redeemed and, if applicable, that interest thereon will cease to accrue on or after the said date,
(f) the place or places where such Subordinated Debt Securities are to be surrendered for payment of the Redemption Price, and
(g) the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to such Subordinated Debt Securities.
Any notice provided pursuant to this Section 11.04 shall be irrevocable, and the delivery thereof shall oblige the Company to make the redemption therein specified (unless the Bail-in Power is exercised by the Relevant Resolution Authority before the occurrence of such redemption).
Notice of redemption of Subordinated Debt Securities to be redeemed at the selection of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company, and the Company shall deliver an Officer’s Certificate requesting that the Trustee give such and setting forth the information to be stated in such notice no less than 10 Business Days prior to the date of the notice to Holders of Subordinated Debt Securities (unless a shorter notice shall be satisfactory to the Trustee).
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 an Interest Payment Date) accrued but unpaid interest on, all the Subordinated Debt Securities which are to be redeemed on that date.
Section 11.06. Subordinated Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Subordinated Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Subordinated Debt Securities shall cease to accrue interest. Upon surrender of any such Subordinated Debt Security for redemption in accordance with said notice, such Subordinated Debt Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid interest to the Redemption Date; provided, however, that with respect to any Subordinated Debt Securities, unless otherwise specified as
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contemplated by Section 3.01, a payment of interest which is payable on an Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Subordinated Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular or Special Record Date according to the terms of the Subordinated Debt Securities and the provisions of Section 3.07. Subordinated Debt Securities in definitive form shall be presented for redemption to the Paying Agent.
If any Subordinated Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Subordinated Debt Security shall, until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.
Section 11.07. Subordinated Debt Securities Redeemed in Part. Any Subordinated Debt Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his or her attorney duly authorized in writing), and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Subordinated Debt Security without service charge, a new Subordinated Debt Security or Subordinated Debt Securities of the same series of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Subordinated Debt Security so surrendered. If a Global Security is surrendered, the new Subordinated Debt Security will also be a Global Security.
Section 11.08. Early Redemption Due to Changes in Tax Treatment. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the following shall apply if, in relation to the Subordinated Debt Securities of any series, as a result of any change, or amendment to, in the laws or regulations of Spain or of any political subdivision thereof or any authority or agency therein or thereof having power to tax or in the interpretation or administration of any such laws or regulations which becomes effective on or after the date of issue of the first issued Subordinated Debt Securities of such series or any earlier date specified pursuant to Section 3.01, the Company shall determine that (a) the Company would be required to pay Additional Amounts pursuant to Section 10.04 or (b) the Company would not be entitled to claim a deduction in computing tax liabilities in Spain in respect of any interest to be paid on the next interest payment date on such series of Subordinated Debt Securities or the value of such deduction to the Company would be materially reduced or (c) the applicable tax treatment of the Subordinated Debt Securities of such series changes in a material way that was not reasonably foreseeable at the issue date. In any such case the Company may, at its option and having given no less than five (5) nor more than 30 days’ notice (or such lesser period as may be specified pursuant to Section 3.01) (ending, in the case of Subordinated Debt Securities which bear interest at a floating rate, on a day upon which interest is payable) to the Holders of the Subordinated Debt Securities of such series in accordance with Section 11.04 (which notice shall be irrevocable) and a concurrent copy thereof to the Trustee, redeem in whole, but not in
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part, the Outstanding Subordinated Debt Securities of such series (in accordance with the requirements of Applicable Banking Regulations in force at the relevant time) at their early tax redemption amount (the “Early Redemption Amount (Tax)”) (which shall be their principal amount or at such other Early Redemption Amount (Tax) as may be specified in or determined pursuant to Section 3.01), together with accrued interest (if any) thereon to (but excluding) the date fixed for redemption; provided, however, that (i) in the case of (a) above, no such notice of redemption may be given earlier than 90 days (or, in the case of Subordinated Debt Securities which bear interest at a floating rate a number of days which is equal to the aggregate of the number of days falling within the then current interest period applicable to the Subordinated Debt Securities of such series plus 60 days) prior to the earliest date on which the Company would be obliged to pay such Additional Amounts were a payment in respect of the Subordinated Debt Securities of such series then due and (ii) redemption for taxation reasons pursuant to this Section 11.08 may only take place in accordance with Applicable Banking Regulations in force at the relevant time and subject to the Company obtaining prior Supervisory Permission therefor, if and as required under Applicable Banking Regulations.
Section 11.09. Early Redemption For Capital Disqualification Event. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, if, in relation to the Subordinated Debt Securities of any series there is a Capital Disqualification Event, the Company may, at its option and having given no less than five (5) nor more than 30 days’ notice (or such lesser period as may be specified pursuant to Section 3.01) (ending, in the case of Subordinated Debt Securities which bear interest at a floating rate, on a day upon which interest is payable) to the holders of the Subordinated Debt Securities of such series in accordance with Section 11.04 (which notice shall be irrevocable) and a concurrent copy thereof to the Trustee, redeem in whole but not in part the Outstanding Subordinated Debt Securities of such series in accordance with the requirements of Applicable Banking Regulations in force at the relevant time) at their early capital disqualification event redemption amount (the “Early Redemption Amount (Capital Disqualification Event)”) (which shall be their principal amount or at such other Early Redemption Amount (Capital Disqualification Event) except as may be specified in or determined pursuant to Section 3.01), together with any accrued and unpaid interest thereon to (but excluding) the date fixed for redemption; provided, however, that the Regulator consents to redemption of the Subordinated Debt Securities of such series.
Redemption for a Capital Disqualification Event is subject to the prior consent of the Regulator if and as required under Applicable Banking Regulations and may only take place in accordance with Applicable Banking Regulations in force at the relevant time.
Section 11.10. Early Redemption at the option of the Company (“Clean-up Redemption”). If a Clean-up Redemption at the option of the Company is specifically provided for in respect of a series of Subordinated Debt Securities, as contemplated by Section 3.01, and if 75% or any higher percentage specifically provided for (the “Clean-up Percentage”) of the initial aggregate nominal amount of a series of Subordinated Debt Securities (which, for the avoidance of doubt, includes any
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additional issuances issued subsequently and constituting a single series of Subordinated Debt Securities under this Subordinated Debt Securities Indenture) have been redeemed or purchased by, or on behalf of, the Company, the Company may, on any date that is an interest payment date, as its option and having given not less than five (5) nor more than 30 days’ notice (or such lesser period as may be specified pursuant to Section 3.01) (ending, in the case of Subordinated Debt Securities which bear interest at a floating rate, on a day upon which interest is payable) to the Holders of the Subordinated Debt Securities of such series in accordance with Section 11.04 (which notice shall be irrevocable and shall specify the date for redemption) and a concurrent copy thereof to the Trustee, elect to redeem in whole but not in part the Outstanding Subordinated Debt Securities of such series at their principal amount or such other amount as may be specified in, or determined pursuant to Section 3.01, together with any accrued and unpaid interest thereon to (but excluding) the date fixed for redemption (the “Early Redemption Amount (Clean-up Call)”).
Redemption on the basis of a Clean-up Redemption is subject to the Company obtaining prior Supervisory Permission if and as required under Applicable Banking Regulations and may only take place in accordance with Applicable Banking Regulations in force at the relevant time. Clean-up Redemption of Subordinated Debt Securities may be made only after five years from their date of issuance or any other minimum period permitted by the Applicable Banking Regulations.
Section 11.11. Optional Early Redemption (Call). Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company may, at the date or dates specified as contemplated by Section 3.01 with respect to such series, upon the expiration of the appropriate notice pursuant to Section 11.04, redeem in whole (but not, except as otherwise specified pursuant to Section 3.01, in part) the Subordinated Debt Securities of such series at their call early redemption amount (the “Early Redemption Amount (Call)”) (which shall be their principal amount or such other Early Redemption Amount (Call) as may be specified in or determined pursuant to Section 3.01), together with any accrued interest thereon to (but excluding) the date fixed for redemption.
In the case of Subordinated Debt Securities constituting TLAC/MREL Eligible Instruments, redemption at the option of the Company pursuant to this Section 11.11 will be subject to the prior consent of the Regulator if and as required under Applicable Banking Regulations and may only take place in accordance with Applicable Banking Regulations in force at the relevant time. In particular, Optional Early Redemption (Call) of Subordinated Debt Securities may be made only after five years from their date of issuance or any other minimum period permitted by the Applicable Banking Regulations.
If the Subordinated Debt Securities of any series are to be redeemed in part only on any date in accordance with this Section 11.11, the Subordinated Debt Securities of such series shall be redeemed (so far as may be practicable) pro rata to their principal amounts, or by lot or such other method as the Trustee deems fair and appropriate, subject always as aforesaid and provided always that the amount redeemed in respect of the Subordinated Debt Securities of such series shall be equal to the minimum authorized
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denomination thereof or an integral multiple thereof, subject always to compliance with all applicable laws and the requirements of any clearing system on which the Subordinated Debt Securities of any such series may be cleared and of any listing authority, stock exchange and/or quotation system on which the Subordinated Debt Securities of such series may be listed and/or quoted.
Section 11.12. Repurchase of Subordinated Debt Securities. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company and any of its subsidiaries or any third party designated by any of them, may at any time repurchase Subordinated Debt Securities of any series in the open market or otherwise at any price; provided that the repurchase of the Subordinated Debt Securities of such series by the Company or any of its subsidiaries shall take place in accordance with Applicable Banking Regulations in force at the relevant time, including the applicable limits referred to in CRR, and will be subject to the prior consent of the Regulator, if and as required.
ARTICLE 12
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Section 12.01. Subordinated Debt Securities Subordinate to Claims of Senior Creditors. The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of the Subordinated Debt Securities of any series by his or her acceptance thereof, likewise covenants and agrees, that the payment obligations of the Company under the Subordinated Debt Securities of such series constitute direct, unconditional, unsecured and subordinated obligations (créditos subordinados) of the Company according to Article 281.1 of the Spanish Insolvency Law and, in accordance with Additional Provision 14.3 of Law 11/2015, but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise), upon the insolvency of the Company rank for so long as the obligations of the Company in respect of the Subordinated Debt Securities constitute Tier 2 Instruments:
| (i) | pari passu among themselves and with (a) all other claims in respect of Tier 2 Instruments, and (b) any other subordinated obligations (créditos subordinados) of the Company which by law and/or by their terms, to the extent permitted by Spanish law, rank pari passu with the Company’s obligations under Tier 2 Instruments; |
| (ii) | junior to (a) any unsubordinated obligations (créditos ordinarios) of the Company (including any claim of the Company in respect of Senior Non Preferred Liabilities), and (b) any other subordinated obligations (créditos subordinados) which by law and/or by their terms, to the extent permitted by Spanish law, rank senior to the Company’s obligations under the Tier 2 Instruments; and |
| (iii) | senior to (a) any claims in respect of Additional Tier 1 Instruments of the Company, and (b) any other subordinated obligations (créditos subordinados) of the Company which by law and/or by their terms, to the extent permitted by Spanish law, rank junior to the obligations of the Company under Tier 2 Instruments. |
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The provisions of this Article 12 shall apply only to rights or claims payable under any Subordinated Debt Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Section 6.08 hereof, or the rights and remedies of the Trustee in respect thereof.
The Company agrees with respect to any series of Subordinated Debt Securities and each Holder of Subordinated Debt Securities of any series, by his or her acquisition of a Subordinated Debt Security will be deemed to have agreed to the subordination as described in this Section 12.01. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the subordination provisions of the Subordinated Debt Security. In addition, each holder of Subordinated Debt Securities of any series by his or her acquisition of such Subordinated Debt Securities authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination of the such Subordinated Debt Securities as provided in this Subordinated Debt Securities Indenture and appoints the Trustee his or her attorney-in-fact for any and all such purposes.
The obligations of Banco Santander under the Subordinated Debt Securities are subject to the Bail-in Power.
Section 12.02. Status of the Subordinated Debt Securities. The Subordinated Debt Securities of any series constitute direct, unconditional, subordinated and unsecured obligations of the Company.
Section 12.03. Provisions Solely to Define Relative Rights. The provisions of this Article 12 are and are intended solely for the purpose of defining the relative rights of the Holders of the Subordinated Debt Securities of each series on the one hand and the Senior Creditors on the other hand. Nothing contained in this Article or elsewhere in this Subordinated Debt Securities Indenture or in such Subordinated Debt Securities is intended to or shall (a) impair, as among the Company and the Holders of the Subordinated Debt Securities, the obligation of the Company, which is absolute and unconditional, to pay to the holders of such claims the principal of, premium, if any, and interest, if any, on such Subordinated Debt Securities as and when the same shall become due and payable in accordance with their terms and the terms of this Subordinated Debt Securities Indenture; or (b) affect the relative rights against the Company of the Holders of such Subordinated Debt Securities; or (c) prevent the Trustee or the Holder of any Subordinated Debt Securities of the series from exercising all remedies otherwise permitted by applicable law upon default under this Subordinated Debt Securities Indenture, subject to the rights, if any, under this Article of the Senior Creditors to receive cash, property or securities otherwise payable or deliverable to the Trustee or such holder.
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Section 12.04. Waiver of Right of Set-off. Subject to applicable law, neither any Holder or beneficial owner of the Subordinated Debt Securities of any series nor the Trustee acting on behalf of the Holders of the Subordinated Debt Securities of such series may exercise, claim or plead any right of set-off, compensation, netting or retention in respect of any amount owed to it by the Company in respect of, or arising under, or in connection with, the Subordinated Debt Securities of such series or this Subordinated Debt Securities Indenture and each Holder and beneficial owner of the Subordinated Debt Securities of such series, by virtue of its holding of any Subordinated Debt Securities of such series or any interest therein, and the Trustee acting on behalf of the Holders of the Subordinated Debt Securities of such series, shall be deemed to have waived all such rights of set-off, compensation, netting, retention or counterclaim. If, notwithstanding the above, any amounts due and payable to any Holder or beneficial owner of a Subordinated Debt Security of any series or any interest therein by the Company in respect of, or arising under, the Subordinated Debt Securities of such series are discharged by set-off, such Holder or beneficial owner shall, subject to applicable law, immediately pay an amount equal to the amount of such discharge to the Company (or, if the event of any voluntary or involuntary liquidation of the Company shall have occurred, the liquidator or administrator of the Company, as the case may be) and, until such time as payment is made, shall hold an amount equal to such amount in trust (where possible) or otherwise for the Company (or the liquidator or administrator of the Company, as the case may be) and, accordingly, any such discharge shall be deemed not to have taken place.
Section 12.05. Trustee to Effectuate Subordination. Each Holder of a Subordinated Debt Security by his or her acceptance thereof authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination of the Subordinated Debt Securities provided in this Article 12 and appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Section 12.06. Trustee Not Fiduciary for Senior Creditors. With respect to the Senior Creditors, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Subordinated Debt Indenture, and no implied covenants or obligations with respect to the Senior Creditors shall be read into this Subordinated Debt Indenture against the Trustee. 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 mistakenly pay over or distribute to Holders of Subordinated Debt Securities of the series or to the Company or to any other Person cash, property or securities to which any Senior Creditors shall be entitled by virtue of this Article or otherwise.
Section 12.07. Rights of Trustee as Senior Creditor; Preservation of Trustee’s Rights. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any claims of Senior Creditors which may at any time be held by it, to the same extent as any other Senior Creditor, and nothing in this Subordinated Debt Securities Indenture or the Trust Indenture Act shall deprive the Trustee of any of its rights as such holder.
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Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 5.06 and Section 6.08.
Section 12.08. 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 12.06 shall not apply to the Company or any Affiliate of the Company if the Company or such Affiliate acts as Paying Agent.
ARTICLE 13
BAIL-IN AND RESOLUTION ACTIONS
Section 13.01. Agreement and Acknowledgement with Respect to the Exercise of the Bail-in Power. (a) Notwithstanding any other term of the Subordinated Debt Securities of any series or any other agreements, arrangements, or understandings between the Company and any Holder of the Subordinated Debt Securities of any series, by its acquisition of the Subordinated Debt Securities of any series, each Holder (which, for the purposes of this clause, includes each holder of a beneficial interest in the Subordinated Debt Securities of any series) acknowledges, accepts, consents to and agrees:
(i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof:
| • | the reduction of all, or a portion, of the Amounts Due on a permanent basis; |
| • | the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 Instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 Instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Subordinated Debt Securities, in which case the Holder agrees to accept in lieu of its rights under such Subordinated Debt Securities any such Common Equity Tier 1 Instruments, other securities or other obligations of the Company or another person; |
| • | the cancellation of the Subordinated Debt Securities or Amounts Due; |
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| • | the amendment or alteration of the maturity of the Subordinated Debt Securities or amendment of the interest payable on the Subordinated Debt Securities, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and |
(ii) that the terms of the Subordinated Debt Securities are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority.
(b) The exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Subordinated Securities shall not constitute an Event of Default and the terms and conditions of the Subordinated Securities shall continue to apply in relation to the residual principal amount of, or outstanding amount payable with respect to, the Subordinated Securities subject to any modification of the amount of distributions payable to reflect the reduction of the principal amount, and any further modification of the terms that the Relevant Resolution Authority may decide in accordance with applicable laws and regulations relating to the resolution of credit institutions, investment firms and/or Group entities incorporated in the relevant member state.
(c) No repayment or payment of the Amounts Due, if any, on the Subordinated Debt Securities of any series, will become due and payable or be paid after the exercise of any Bail-in Power by the Relevant Resolution Authority if and to the extent such amounts have been reduced, converted, cancelled, amended or altered as a result of such exercise.
(d) By its acquisition of the Subordinated Debt Securities of any series, each Holder of the Subordinated Debt Securities of such series, (which, for the purposes of this clause, includes each holder of a beneficial interest in the Subordinated Debt Securities of such series), to the extent permitted by the Trust Indenture Act, will waive any and all claims, in law and/or in equity, against the Trustee for, agree not to initiate a suit against the Trustee in respect of, and agree that the Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Subordinated Debt Securities of such series.
(e) Additionally, by its acquisition of the Subordinated Debt Securities of any series, each Holder of the Subordinated Debt Securities of such series acknowledges and agrees that, upon the exercise of the Bail-in Power by the Relevant Resolution Authority:
(i) the Trustee will not be required to take any further directions from the Holders of the Subordinated Debt Securities of such series with respect to any portion of the Subordinated Debt Securities of such series that are written-down, converted to equity and/or cancelled under this Subordinated Debt Securities Indenture, which authorizes holders of a majority in aggregate outstanding principal amount of the Outstanding Subordinated Debt Securities of such series to direct certain actions relating to the Subordinated Debt Securities of such series; and
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(ii) this Subordinated Debt Securities Indenture will not impose any duties upon the Trustee whatsoever with respect to the exercise of the Bail-in Power by the Relevant Resolution Authority;
provided, however, that notwithstanding the exercise of the Bail-in Power by the Relevant Resolution Authority, so long as the Subordinated Debt Securities of any series remain Outstanding, there will at all times be a Trustee for the Subordinated Debt Securities of such series in accordance with this Subordinated Debt Securities Indenture, and the resignation and/or removal of the Trustee and the appointment of a successor Trustee will continue to be governed by this Subordinated Debt Securities Indenture, including to the extent no additional supplemental indenture or amendment is agreed upon in the event the Subordinated Debt Securities of such series remain Outstanding following the completion of the exercise of the Bail-in Power.
(f) By its acquisition of the Subordinated Debt Securities of any series, each Holder of the Subordinated Debt Securities of such series acknowledges and agrees that neither a cancellation or deemed cancellation of the principal or interest (in each case, in whole or in part), nor the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Subordinated Debt Securities of such series will give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act.
(g) By purchasing the Subordinated Debt Securities of any series, each Holder (including each beneficial owner) of the Subordinated Debt Securities of such series shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds the Subordinated Debt Securities of such series to take any and all necessary action, if required, to implement the exercise of the Bail-in Power with respect to the Subordinated Debt Securities of such series as it may be imposed, without any further action or direction on the part of such Holder.
(h) Each Holder of the Subordinated Debt Securities of any series also acknowledges and agrees that the foregoing description of the Bail-in Power and its exercise is exhaustive on the matters described herein to the exclusion of any other agreements, arrangements or understandings relating to the application of any Bail-in Power to the Subordinated Debt Securities of any series.
(i) Each Holder of the Subordinated Debt Securities of any series that acquires such Subordinated Debt Securities in the secondary market (including each beneficial owner) shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the Holders of the Subordinated Debt Securities that acquire the Subordinated Debt Securities upon their initial issuance, including, without limitation, with respect to the acknowledgment and agreement to be bound by and consent to the terms of the Subordinated Debt Securities, including in relation to the Bail-in-Power.
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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. The exchange of copies of this Subordinated Debt Securities Indenture and of signature pages by facsimile, e-mail or electronic format (e.g., PDF, “tif” or “jpg”) transmission and other electronically imaged signatures (including, without limitation, DocuSign and AdobeSign) shall constitute effective execution and delivery of this Subordinated Debt Securities Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, e-mail or electronic format (e.g., PDF, “tif” or “jpg”) shall be deemed to be their original signatures for all purposes. This Subordinated Debt Securities Indenture, any indenture supplemental hereto and any other document, certificate or opinion delivered in connection with this Subordinated Debt Securities Indenture, such supplemental indenture or the issuance and delivery of the Subordinated Debt Securities Indenture may be signed by or on behalf of the Company and the Trustee by manual, facsimile, PDF or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign).
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Subordinated Debt Securities Indenture to be duly executed, all as of the day and year first above written.
| BANCO SANTANDER, S.A. | ||
| By: | /s/ Juan Urigoen Irusta | |
| Name: Juan Urigoen Irusta | ||
| Title: Authorized Signatory | ||
| THE BANK OF NEW YORK MELLON, LONDON BRANCH, as Trustee | ||
| By: | /s/ Ricardo Da Rocha | |
| Name: Ricardo Da Rocha | ||
| Title: Authorized Signatory | ||
APPENDIX 1: PROCEDURES FOR COMPLIANCE WITH SPANISH TAX LEGISLATION
Information Procedures and Certification Obligations of the Trustee or Paying Agent in respect of payments under the Subordinated Debt Securities
| 1. | Delivery of the Payment Information Certificate: In connection with each payment of income under the Subordinated Debt Securities, the Trustee or Paying Agent shall deliver to the Company by the close of business on the business day immediately preceding the day on which such payment is made a duly completed and executed Payment Information Certificate substantially in the form set forth in Exhibit I hereto (Form of Payment Information Certificate). Such form may be delivered initially by e-mail, in PDF form, by fax, or by other electronic format transmission (including, without limitation, DocuSign and AdobeSign), provided that the original is delivered by the end of the following month. |
If the Payment Information Certificate is delivered by the Trustee or Paying Agent in a timely and completed manner to the Company, the relevant income payment will be made free and clear of Spanish withholding tax.
The Trustee or Paying Agent shall have no duty or responsibility to comply with Spanish tax laws arising out of this Subordinated Debt Securities Indenture, and may request and rely conclusively upon any instructions from the Company in respect of any action necessary or required to be taken by the Trustee or Paying Agent pursuant to this Appendix 1; provided, however, that in no event shall the Trustee or Paying Agent be required to expend or risk its own funds in the performance of any of its duties pursuant to this Appendix 1, or be obligated to take any legal or other action which might in its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with acceptable indemnification.
The Company agrees to instruct the Trustee or Paying Agent in writing with respect to any certifications that may be required under Spanish law, and the Trustee or Paying Agent acknowledges that this Appendix 1 shall constitute an instruction in this regard, unless otherwise instructed in writing by the Company.
| 2. | Failure to deliver the Payment Information Certificate: In the event that the Trustee or Paying Agent fails or for any reason is unable to deliver a timely, duly completed Payment Information Certificate as described above to the Company in respect of a payment of income under the Subordinated Debt Securities, the Trustee or Paying Agent shall withhold Spanish income tax on behalf of the Company from the relevant payment at the then-applicable rate (currently set at 19%). |
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| 3. | If, after the relevant payment date but before the 10th day of the month immediately following the relevant payment date the Trustee or Paying Agent provides the duly completed Payment Information Certificate to the Company, then the Company shall instruct the Trustee or Paying Agent to immediately transfer the amounts withheld in respect of the relevant payment pursuant to paragraph 1 above by way of reimbursement of the amounts withheld on the relevant payment date and completion of the corresponding income payment in respect of payments under the Subordinated Debt Securities. |
| 4. | If the Trustee or Paying Agent fails or for any reason is unable to submit a duly completed and executed Payment Information Certificate to the Company by the 10th day of the month immediately following the relevant payment date, the Trustee or Paying Agent shall immediately return (but in any event no later than the 10th day of the month immediately following the relevant payment date) to the Company any remaining amount of the 19% tax withheld in respect of the relevant payment, and investors will have to apply directly to the Spanish tax authorities for any refund to which they may be entitled. |
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EXHIBIT I
Anexo al Reglamento General de las actuaciones y los procedimientos de gestión e inspección tributaria y de desarrollo de las normas comunes de los procedimientos de aplicación de los tributos, aprobado por Real Decreto 1065/2007
Modelo de declaración a que se refieren los apartados 3, 4 y 5 del artículo 44 del Reglamento General de las actuaciones y los procedimientos de gestión e inspección tributaria y de desarrollo de las normas comunes de los procedimientos de aplicación de los tributos
Annex to Royal Decree 1065/2007, of 27 July, approving the General Regulations of the tax inspection and management procedures and developing the common rules of the procedures to apply taxes
Declaration form referred to in paragraphs 3, 4 and 5 of Article 44 of the General Regulations of the tax inspection and management procedures and developing the common rules of the procedures to apply taxes
Don (nombre), con número de identificación fiscal (…)(1), en nombre y representación de (entidad declarante), con número de identificación fiscal (….)(1) y domicilio en (…) en calidad de (marcar la letra que proceda):
Mr. (name), with tax identification number (...)(1), in the name and on behalf of (entity), with tax identification number (....)(1) and address in (...) as (function—mark as applicable):
(a) Entidad Gestora del Mercado de Deuda Pública en Anotaciones.
(a) Management Entity of the Public Debt Market in book entry form.
(b) Entidad que gestiona el sistema de compensación y liquidación de valores con sede en el extranjero.
(b) Entity that manages the clearing and settlement system of securities resident in a foreign country.
(c) Otras entidades que mantienen valores por cuenta de terceros en entidades de compensación y liquidación de valores domiciliadas en territorio español.
(c) Other entities that hold securities on behalf of third parties within clearing and settlement systems domiciled in the Spanish territory.
(d) Agente de pagos designado por el emisor.
(d) Issuing and Paying Agent appointed by the issuer.
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Formula la siguiente declaración, de acuerdo con lo que consta en sus propios registros:
Makes the following statement, according to its own records:
1. En relación con los apartados 3 y 4 del artículo 44:
1. In relation to paragraphs 3 and 4 of Article 44:
1.1 Identificación de los valores
1.1 Identification of the securities
1.2 Fecha de pago de los rendimientos (o de reembolso si son valores emitidos al descuento o segregados)
1.2 Income payment date (or refund if the securities are issued at discount or are segregated)
1.3 Importe total de los rendimientos (o importe total a reembolsar, en todo caso, si son valores emitidos al descuento o segregados)
1.3 Total amount of income (or total amount to be refunded, in any case, if the securities are issued at discount or are segregated)
1.4 Importe de los rendimientos correspondiente a contribuyentes del Impuesto sobre la Renta de las Personas Físicas, excepto cupones segregados y principales segregados en cuyo reembolso intervenga una Entidad Gestora
1.4 Amount of income corresponding to Personal Income Tax taxpayers, except segregated coupons and segregated principals for which reimbursement an intermediary entity is involved
1.5 Importe de los rendimientos que conforme al apartado 2 del artículo 44 debe abonarse por su importe íntegro (o importe total a reembolsar si son valores emitidos al descuento o segregados).
1.5 Amount of income which according to paragraph 2 of Article 44 must be paid gross (or total amount to be refunded if the securities are issued at discount or are segregated).
2. En relación con el apartado 5 del artículo 44.
2. In relation to paragraph 5 of Article 44.
2.1 Identificación de los valores
2.1 Identification of the securities
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2.2 Fecha de pago de los rendimientos (o de reembolso si son valores emitidos al descuento o segregados)
2.2 Income payment date (or refund if the securities are issued at discount or are segregated)
2.3 Importe total de los rendimientos (o importe total a reembolsar si son valores emitidos al descuento o segregados
2.3 Total amount of income (or total amount to be refunded if the securities are issued at discount or are segregated)
2.4 Importe correspondiente a la entidad que gestiona el sistema de compensación y liquidación de valores con sede en el extranjero A.
2.4 Amount corresponding to the entity that manages the clearing and settlement system of securities resident in a foreign country A.
2.5 Importe correspondiente a la entidad que gestiona el sistema de compensación y liquidación de valores con sede en el extranjero B.
2.5 Amount corresponding to the entity that manages the clearing and settlement system of securities resident in a foreign country B.
2.6 Importe correspondiente a la entidad que gestiona el sistema de compensación y liquidación de valores con sede en el extranjero C.
2.6 Amount corresponding to the entity that manages the clearing and settlement system of securities resident in a foreign country C.
Lo que declaro en a de de
I declare the above in on the of of
(1)En caso de personas, físicas o jurídicas, no residentes sin establecimiento permanente se hará constar el número o código de identificación que corresponda de conformidad con su país de residencia
(1)In case of non-residents (individuals or corporations) without permanent establishment in Spain it shall be included the number or identification code which corresponds according to their country of residence.
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Exhibit 4.3
BANCO SANTANDER, S.A.
as Issuer,
THE BANK OF NEW YORK MELLON,
London Branch
as Trustee and Principal Paying Agent
and
THE BANK OF NEW YORK MELLON SA/NV,
Luxembourg Branch
as Senior Preferred Debt Securities Registrar
FIRST SUPPLEMENTAL INDENTURE
dated as of August 8, 2023
to
SENIOR PREFERRED DEBT SECURITIES INDENTURE
dated as of August 8, 2023
FIRST SUPPLEMENTAL INDENTURE (“First Supplemental Indenture”), dated as of August 8, 2023, among BANCO SANTANDER, S.A., a sociedad anónima incorporated under the laws of The Kingdom of Spain (the “Company”), having its principal executive office located at Ciudad Grupo Santander, Avenida de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain, as issuer, THE BANK OF NEW YORK MELLON, London Branch, a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the “Trustee,” which term includes any successor Trustee) and principal paying agent (the “Principal Paying Agent,” which term includes any successor Principal Paying Agent), having its Corporate Trust Office at 160 Queen Victoria Street, London EC4V 4LA, United Kingdom, and THE BANK OF NEW YORK MELLON SA/NV, Luxembourg Branch, a société anonyme/naamloze vennootschap, incorporated under the laws of Belgium, as senior preferred debt securities registrar (the “Senior Preferred Debt Securities Registrar”), having its principal office at 2-4 Rue Eugène Ruppert, L-2453 Luxembourg, Luxembourg.
WITNESSETH
WHEREAS, the Company and the Trustee have executed and delivered a Senior Preferred Debt Securities Indenture dated as of August 8, 2023 (the “Base Indenture” and, the Base Indenture, as supplemented and amended by this First Supplemental Indenture, the “Senior Preferred Debt Securities Indenture”), to provide for the issuance of the Company’s senior preferred debt securities (the “Senior Preferred Debt Securities”), including the Senior Preferred Notes (as defined below).
WHEREAS, Section 9.01(d) of the Base Indenture permits the Company and the Trustee to change or eliminate any provisions of the Base Indenture without the consent of Holders, subject to certain conditions;
WHEREAS, Section 9.01(f) of the Base Indenture permits the Company and the Trustee to enter into a supplemental indenture to establish the forms or terms of Senior Preferred Debt Securities of any series as permitted under Sections 2.01 and 3.01 of the Base Indenture without the consent of Holders;
WHEREAS, there are no Outstanding Senior Preferred Debt Securities of any series created prior to the execution of this First Supplemental Indenture that are entitled to the benefit of the provisions set forth herein or that would be adversely affected by such provisions;
WHEREAS, the Executive Committee of the Company has authorized the entry into this First Supplemental Indenture and the establishment of the Senior Preferred Notes (as defined below), as required by Section 9.01 of the Base Indenture;
WHEREAS, the parties hereto desire to establish a series of Senior Preferred Debt Securities to be known as the Series SP-179 5.588% Senior Preferred Fixed Rate Notes due 2028 (the “Senior Preferred Notes”), pursuant to Sections 2.01 and 3.01 of the Base Indenture. The Senior Preferred Notes may be issued from time to time and any Senior Preferred Notes issued as part of the series created herein will constitute a single series of Senior Preferred Debt Securities under the Senior Preferred Debt Securities Indenture and shall be included in the definition of “Senior Preferred Notes” where the context requires;
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WHEREAS, the Company has requested and hereby requests that the Trustee execute and deliver this First Supplemental Indenture and the Company has provided the Trustee with an Executive Committee Resolution authorizing the execution of this First Supplemental Indenture;
WHEREAS, all actions required by the Company to be taken in order to make this First Supplemental Indenture a valid, binding and enforceable instrument in accordance with its terms, have been taken and performed, and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects; and
WHEREAS, where indicated, this First Supplemental Indenture shall amend and supplement the Base Indenture; and to the extent that the terms of the Base Indenture are inconsistent with such provisions of this First Supplemental Indenture, the terms of this First Supplemental Indenture shall govern.
NOW, THEREFORE, the Company and the Trustee mutually covenant and agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definition of Terms. For all purposes of this First Supplemental Indenture:
(a) a term defined anywhere in this First Supplemental Indenture has the same meaning throughout;
(b) capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Base Indenture;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect interpretation; and
(e) for the purposes of this First Supplemental Indenture and the Base Indenture, the term “series” shall mean a series of the Senior Preferred Debt Securities.
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ARTICLE 2
FORM OF SENIOR PREFERRED NOTES
Section 2.01. Terms of the Senior Preferred Notes. The following terms relating to the Senior Preferred Notes are hereby established pursuant to Section 3.01 of the Base Indenture:
(a) The Senior Preferred Notes shall be designated as: the Series SP-179 5.588% Senior Preferred Fixed Rate Notes due 2028;
(b) The price at which the Senior Preferred Notes shall be issued is 100.000% of the principal amount thereof;
(c) The aggregate principal amount of the Senior Preferred Notes that may be authenticated and delivered under the Senior Preferred Debt Securities Indenture shall not exceed $1,500,000,000, except as otherwise provided in the Senior Preferred Debt Securities Indenture, including Section 2.01(t) hereof;
(d) Principal on the Senior Preferred Notes shall be payable on August 8, 2028 (the “Maturity Date”);
(e) The Senior Preferred Notes shall be issued in global registered form on August 8, 2023. From (and including) the date of issuance to (but excluding) the Maturity Date, interest on the Senior Preferred Notes will be payable at a fixed rate of 5.588% per annum. Interest will be payable semi-annually in arrears on February 8 and August 8 of each year (each, an “Interest Payment Date”), commencing on February 8, 2024, up to and including the Maturity Date or any date of earlier redemption;
Interest on the Senior Preferred Notes will be calculated on the basis of a 360-day year consisting of twelve 30-day months and, in the case of an incomplete month, on the basis of the actual number of days elapsed in such month. The Regular Record Dates for the Senior Preferred Notes will be 15 calendar days immediately preceding the relevant Interest Payment Date, whether or not a Business Day. If any scheduled Interest Payment Date is not a Business Day, the Company will pay interest on the next Business Day, but interest on that payment will not accrue during the period from and after the scheduled Interest Payment Date. If the scheduled maturity date or date of redemption or repayment is not a Business Day, the Company may pay interest and principal on the next succeeding Business Day, but interest on that payment will not accrue during the period from and after the scheduled maturity date or date of redemption or repayment;
(f) No premium, upon redemption or otherwise, shall be payable by the Company on the Senior Preferred Notes;
(g) Principal of and any interest on the Senior Preferred Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom and the Borough of Manhattan, The City of New York;
(h) The Senior Preferred Notes shall not be redeemable except as provided in Section 11.08 of the Senior Preferred Debt Securities Indenture;
(i) The Company shall have no obligation to redeem or purchase the Senior Preferred Notes pursuant to any sinking fund or analogous provision;
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(j) The Senior Preferred Notes shall be issued only in minimum denominations of $200,000 and integral multiples of $200,000 in excess thereof;
(k) The principal amount of the Senior Preferred Notes shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Base Indenture;
(l) Additional Amounts in respect of the Senior Preferred Notes shall be payable as set forth in the Senior Preferred Debt Securities Indenture;
(m) The Senior Preferred Notes shall be denominated in, and payments thereon shall be made in, U.S. Dollars only;
(n) The payment of principal of or interest, if any, on the Senior Preferred Notes shall be payable only in the coin or currency in which the Senior Preferred Notes are denominated;
(o) The Senior Preferred Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, the Depositary;
(p) The Senior Preferred Notes will not be initially issued in definitive form;
(q) The Events of Default on the Senior Preferred Notes are as provided for in this First Supplemental Indenture;
(r) The Company agrees with respect to the Senior Preferred Notes and each Holder of the Senior Preferred Notes, by his or her acquisition of the Senior Preferred Notes will be deemed to have agreed to the ranking as described in Section 2.02 of the Senior Preferred Debt Securities Indenture. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the ranking provisions of the Senior Preferred Notes. In addition, each Holder of the Senior Preferred Notes by his or her acquisition of such Senior Preferred Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the ranking of such Senior Preferred Notes as provided in the Senior Preferred Debt Securities Indenture, and appoints the Trustee as his or her attorney-in-fact for any and all such purposes;
(s) The form of the Senior Preferred Notes to be issued on the date hereof shall be substantially in the form of Exhibit A hereto;
(t) The Company may issue additional Senior Preferred Notes (“Additional Senior Preferred Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first Interest Payment Date, as the Senior Preferred Notes; provided, however, that such Additional Senior Preferred Notes
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will not have the same CUSIP, ISIN or other identifying number as the outstanding Senior Preferred Notes unless the Additional Senior Preferred Notes are fungible with the Senior Preferred Notes for U.S. federal income tax purposes. Any such Additional Senior Preferred Notes, together with the Senior Preferred Notes, will constitute a single series of securities under the Senior Preferred Debt Securities Indenture;
(u) The Company appoints The Bank of New York Mellon, London Branch, as the Principal Paying Agent for the Senior Preferred Notes;
(v) The Company appoints The Bank of New York Mellon SA/NV, Luxembourg Branch, as the Senior Preferred Debt Securities Registrar for the Senior Preferred Notes pursuant to Section 3.05 of the Base Indenture;
(w) The terms of substitution and variation of the Senior Preferred Notes are as provided for in this First Supplemental Indenture;
(x) Subject to applicable law, neither any Holder or beneficial owner of the Senior Preferred Notes nor the Trustee acting on behalf of the Holders of the Senior Preferred Notes may exercise, claim or plead any right of set-off, netting, compensation or retention in respect of any amount owed to it by the Company in respect of, or arising under, or in connection with, the Senior Preferred Notes as provided for in Section 5.15 of the Senior Preferred Debt Securities Indenture;
(y) Each Holder of the Senior Preferred Notes acknowledges, accepts, consents to and agrees to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority as provided for in Article 12 of the Senior Preferred Debt Securities Indenture; and
(z) The Bank of New York Mellon SA/NV, Luxembourg Branch, as the Senior Preferred Debt Securities Registrar for the Senior Preferred Notes acknowledges, accepts, consents to and agrees to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority as provided for in Article 12 of the Senior Preferred Debt Securities Indenture.
ARTICLE 3
ADDITIONAL TERMS APPLICABLE TO THE SENIOR PREFERRED NOTES
Section 3.01. Addition of Definitions. With respect to the Senior Preferred Notes, Section 1.01 of the Base Indenture is amended to include the following definitions (which shall be deemed to arise in Section 1.01 in their proper alphabetical order):
“Issue Date” means August 8, 2023, being the date of the initial issue of the Senior Preferred Notes.
“Maturity Date” means August 8, 2028.
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Section 3.02. Payment. Notwithstanding Section 3.07 of the Base Indenture, payments of interest, if any, and any Additional Amounts on the Senior Preferred Notes may be made by wire transfer of immediately available funds.
Section 3.03. Replacement of Provisions with Respect to Events of Default. With respect to the Senior Preferred Notes, Section 5.01(a) of the Base Indenture is hereby replaced with the following:
Except as otherwise specified, as contemplated by Section 3.01, an Event of Default with respect to any series of Senior Preferred Debt Securities shall result if:
(i) Non-payment: default is made in the payment of any interest or principal due in respect of the Senior Preferred Debt Securities of that series or any of them and such default continues for a period of seven days (or such other period as may be specified pursuant to Section 3.01); or
(ii) Winding up: any order is made by any competent court or resolution passed for the winding up or liquidation of the Company (for avoidance of doubt, any reconstruction or amalgamation or a merger, spin-off or any other structural modification (modificación estructural), subject to the provisions of Article 8 will not be considered as a winding up event of default).
Section 3.04. Replacement of Provisions with Respect to Status of the Senior Preferred Debt Securities. With respect to the Senior Preferred Notes, Section 2.02 of the Base Indenture is hereby replaced with the following:
The payment obligations of the Company in respect of principal under the Senior Preferred Debt Securities of any series constitute direct, unconditional, unsubordinated and unsecured obligations (créditos ordinarios) of the Company and, in accordance with Additional Provision 14.2 of Law 11/2015 (but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise)), upon the insolvency of the Company, such payment obligations rank (i) pari passu among themselves and with any other Senior Higher Priority Liabilities of the Company and (ii) senior to (x) any Senior Non Preferred Liabilities and (y) any present and future subordinated obligations (créditos subordinados) of the Company in accordance with Article 281 of the Spanish Insolvency Law.
Claims of Holders of Senior Preferred Debt Securities of any series in respect of interest accrued but unpaid as of the commencement of any insolvency procedure in respect of the Company shall constitute subordinated claims (créditos subordinados) against the Company ranking in accordance with the provisions of Article 281.1.3º of the Spanish Insolvency Law, and no further interest shall accrue from the date of the declaration of insolvency of the Company.
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The obligations of the Company under the Senior Preferred Debt Securities are subject to the Bail-in Power.
Section 3.05. Addition of Provisions with Respect to Acceleration of Maturity; Recession and Annulment. With respect to the Senior Preferred Notes, the following text is hereby added to the beginning of Section 5.02 of the Base Indenture.
If an Event of Default shall occur in relation to paragraph (a)(i) of Section 5.01, then the Trustee or the Holders of at least 25% in outstanding principal amount of the Senior Preferred Debt Securities of that series may institute proceedings for the winding up or liquidation of the Company but may take no further action in respect of such default.
Section 3.06. Replacement of Provisions with Respect to Repurchase of Senior Preferred Debt Securities. With respect to the Senior Preferred Notes, Section 11.09 of the Base Indenture is hereby replaced with the following:
The Company and any of its subsidiaries or any third party designated by any of them, may only repurchase Senior Preferred Debt Securities of any series in the open market or otherwise and at any price in accordance with Applicable Banking Regulations in force at the relevant time, and will be subject to the prior consent of the Regulator, as required.
ARTICLE 4
MISCELLANEOUS
Section 4.01. Effect of Supplemental Indenture. Upon the execution and delivery of this First Supplemental Indenture by each of the Company and the Trustee, the Base Indenture shall be supplemented in accordance herewith, and this First Supplemental Indenture shall form a part of the Base Indenture for all purposes in respect of the Senior Preferred Notes or otherwise as applicable.
Section 4.02. Confirmation of Indenture. The Base Indenture, as amended and supplemented by this First Supplemental Indenture with respect to the Senior Preferred Notes or otherwise as applicable, is in all respects ratified and confirmed, and the Base Indenture, this First Supplemental Indenture and all other indentures supplemental thereto shall, in respect of the Senior Preferred Notes or otherwise as applicable, be read, taken and construed as one and the same instrument. This First Supplemental Indenture constitutes an integral part of the Senior Preferred Debt Securities Indenture and, where applicable, with respect to the Senior Preferred Notes. In the event of a conflict between the terms and conditions of the Base Indenture and the terms and conditions of this First Supplemental Indenture, the terms and conditions of this First Supplemental Indenture shall prevail where applicable.
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Section 4.03. Concerning the Trustee. The Trustee does not make any representations as to the validity, sufficiency or adequacy of this First Supplemental Indenture or the Senior Preferred Notes. The recitals and statements herein and in the Senior Preferred Notes are deemed to be those of the Company and not the Trustee. In entering into this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Base Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.
Section 4.04. Governing Law. The Senior Preferred Debt Securities Indenture and the Senior Preferred Notes shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law provisions), except for Section 2.02 of the Senior Preferred Debt Securities Indenture, Section 2.01(r) of this First Supplemental Indenture and the status provisions of the Senior Preferred Notes, which shall be governed by and construed in accordance with the laws of the Kingdom of Spain, and except that the authorization and execution by the Company of the Senior Preferred Debt Securities Indenture and the Senior Preferred Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
Section 4.05. Separability. In case any provision contained in this First Supplemental Indenture 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 4.06. Counterparts. This First Supplemental Indenture 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. The exchange of copies of this First Supplemental Indenture and of signature pages by facsimile, email or other electronic format (e.g., PDF, “tif” or “jpg”) transmission and other electronically imaged signatures (including, without limitation, DocuSign and AdobeSign) shall constitute effective execution and delivery of this First Supplemental Indenture as to the parties hereto and may be used in lieu of the original First Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, email or other electronic format (e.g., PDF, “tif” or “jpg”) shall be deemed to be their original signatures for all purposes. This First Supplemental Indenture and any indenture supplemental hereto and any other document, certificate or opinion delivered in connection with this First Supplemental Indenture, such supplemental indenture or the issuance and delivery of the Senior Preferred Debt Securities may be signed by or on behalf of the Company and the Trustee by manual, facsimile or pdf or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign).
8
Section 4.07. Electronic Means. The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this First Supplemental Indenture and related financing documents and delivered using email, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder (collectively, the “Electronic Means”); provided, however, that the Company shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Company whenever a person is to be added or deleted from the listing. If the Company elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Company understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Company shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Company and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
Section 4.08. Recognition of Bail-In. Notwithstanding and to the exclusion of any other term of this First Supplemental Indenture or any other agreements, arrangements, or understanding between the Senior Preferred Debt Securities Registrar and the Company or any Holder, the Company and each Holder acknowledges and accepts that a BRRD Liability arising under this First Supplemental Indenture may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts, and agrees to be bound by:
(a) the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of the Senior Preferred Debt Securities Registrar to the Company or to any Holder under this First Supplemental Indenture, that (without limitation) may include and result in any of the following, or some combination thereof:
(i) the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;
9
(ii) the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the Senior Preferred Debt Securities Registrar or another person, and the issue to or conferral on the Company or on any Holder of such shares, securities or obligations;
(iii) the cancellation of the BRRD Liability;
(iv) the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period;
(b) the variation of the terms of this First Supplemental Indenture, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority in respect of the Senior Preferred Debt Securities Registrar.
Solely as used in this Section 4.08:
“Bail-in Legislation” means in relation to a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.
“Bail-in Powers” means any Write-down and Conversion Powers (as defined in the EU Bail-in Legislation Schedule), in relation to the relevant Bail-in Legislation.
“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms or such other directive as may come into effect in place thereof, as amended from time to time.
“BRRD Liability” means a liability in respect of which the relevant Write-down and Conversion Powers (as defined in the EU Bail-in Legislation Schedule) in the applicable Bail-in Legislation may be exercised.
“EU Bail-in Legislation Schedule” means the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/pages.aspx?p=499.
“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Bail-in Powers in relation to the Senior Preferred Debt Securities Registrar.
10
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first written above.
| BANCO SANTANDER, S.A., as Issuer | ||
| By: | /s/ Juan Urigoen Irusta | |
| Name: Juan Urigoen Irusta | ||
| Title: Authorized Signatory | ||
[Signature Page to First Supplemental Indenture]
| THE BANK OF NEW YORK MELLON, London Branch, as Trustee and Principal Paying Agent | ||
| By: | /s/ Ricardo Da Rocha | |
| Name: Ricardo Da Rocha | ||
| Title: Authorized Signatory | ||
[Signature Page to First Supplemental Indenture]
| THE BANK OF NEW YORK MELLON SA/NV, Luxembourg Branch, as Registrar | ||
| By: | /s/ Ricardo Da Rocha | |
| Name:Ricardo Da Rocha | ||
| Title: Authorized Signatory | ||
[Signature Page to First Supplemental Indenture]
EXHIBIT A
FORM OF GLOBAL NOTE
THIS NOTE IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY AS THE DEPOSITARY (AS DEFINED IN THE SENIOR PREFERRED DEBT SECURITIES INDENTURE GOVERNING THIS NOTE), OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE BASE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.05 OF THE BASE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.09 OF THE BASE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR PREFERRED NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE RANKING OF THIS NOTE IS SET FORTH IN SECTION 2.02 OF THE SENIOR PREFERRED DEBT SECURITIES INDENTURE, AND SECTION 2.01(r) OF THE FIRST SUPPLEMENTAL INDENTURE, AND THIS NOTE IS ISSUED SUBJECT TO THE PROVISIONS OF SUCH SECTIONS 2.02 AND 2.01(r), RESPECTIVELY, AND THE HOLDER OF THIS NOTE, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTION 2.02 OF THE SENIOR PREFERRED DEBT SECURITIES INDENTURE, SECTION 2.01(r) OF THE FIRST SUPPLEMENTAL INDENTURE AND THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE KINGDOM OF SPAIN.
CUSIP No. 05964H AU9
ISIN No. US05964HAU95
SERIES SP-179 5.588% SENIOR PREFERRED FIXED RATE NOTES DUE 2028 (THE “SENIOR PREFERRED NOTES”)
Issued by
BANCO SANTANDER, S.A.
| No. | $ |
BANCO SANTANDER, S.A., a sociedad anónima, incorporated under the laws of the Kingdom of Spain (herein called the “Company,” which term includes any successor person under the Senior Preferred Debt Securities Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $ ( dollars) on August 8, 2028 (the “Maturity Date”) or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrears on February 8 and August 8 of each year, commencing on February 8, 2024, and ending on August 8, 2028 (each, an “Interest Payment Date”). Interest so payable on any Interest Payment Date shall be paid to the Holder in whose name this Note is registered on the 15th calendar day immediately preceding the relevant Interest Payment Date, whether or not such day is a Business Day, as defined in the Senior Preferred Debt Securities Indenture (each a “Regular Record Date”).
From (and including) the date of issuance to (but excluding) the Maturity Date, interest on this Note will be payable at a fixed rate of 5.588% per annum.
Payments of interest on this Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such month.
Payment of the principal amount of and any interest on, this Note will be made by wire transfer of immediately available funds in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Such payment shall be made to the Holder including through a paying agent of the Company for collection by the Holder. If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Senior Preferred Debt Securities Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment, provided that no interest shall accrue on such payment for the period from and after such payment date.
The Senior Preferred Notes are issuable in minimum denominations of $200,000 and integral multiples of $200,000 in excess thereof.
A-2
For informational purposes only, without any substantive effect whatsoever and solely in order to comply with Article 413(d) of the Spanish Companies Law (Ley de Sociedades de Capital), approved by Royal Decree 1/2010, of July 2, to the extent applicable, it is hereby noted that the initial aggregate principal amount of the Senior Preferred Notes, i.e., US$1,500,000,000 was equivalent to approximately €1,364,250,000, at the Bloomberg reference exchange rate as of July 31, 2023 of US$1.00 per €0.9095. Amounts due on the Notes shall not under any circumstances whatsoever be payable in any currency other than U.S. Dollars.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner of such Note for the purpose of receiving payment of principal and interest, if any, on and any Additional Amounts with respect to such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee referred to on the reverse hereof by manual, PDF or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign), this Note shall not be entitled to any benefit under the Senior Preferred Debt Securities Indenture or be valid or obligatory for any purpose.
Notwithstanding any other term of this Note or any other agreements, arrangements, or understandings between the Company and any Holder of the Senior Preferred Notes, by its acquisition of this Note, each Holder (which includes each holder of a beneficial interest in this Note) acknowledges, accepts, consents to and agrees: (i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof: the reduction of all, or a portion, of the Amounts Due on a permanent basis; the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Senior Preferred Notes, in which case the Holder agrees to accept in lieu of its rights under this Note, any such Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person; the cancellation of this Note or Amounts Due; the amendment or alteration of the maturity of this Note or amendment of the interest payable on this Note, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and (ii) that the terms of this Note are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Senior Preferred Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
A-3
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, including its articles 48 and 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms or such other directive as may come into effect in place thereof, as amended from time to time.
“Business Day” means any day, other than Saturday or Sunday, that is not a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in the City of New York or London nor a day when the Trans-European Automated Real-time Gross Settlement Express Transfer system (the TARGET2 System), or any successor thereto, is closed for business.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
The public deed of issuance (escritura de emisión) related to the Senior Preferred Notes represented hereby was executed on August 3, 2023 before Mr. Miguel Ruiz-Gallardón García with the number 5,182 of his records.
A-4
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
Dated:
| BANCO SANTANDER, S.A., as Issuer | ||
| By: |
||
| Name: | ||
| Title: | ||
[Global Note Signature Page]
A-5
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Preferred Debt Securities of the series designated herein referred to in the within-mentioned Senior Preferred Debt Securities Indenture.
Dated:
| THE BANK OF NEW YORK MELLON, London Branch, as Trustee | ||
| By: | ||
| Name: | ||
| Title: | ||
[Global Note Signature Page]
A-6
[REVERSE OF SECURITY]
This Note is one of a duly authorized issue of securities of the Company of the series designated Series SP-179 5.588% Senior Preferred Fixed Rate Notes due 2028 (herein called the “Senior Preferred Notes”) issued and to be issued in one or more series under a Senior Preferred Debt Securities Indenture, dated as of August 8, 2023 (herein called the “Base Indenture”), between the Company, as issuer, and The Bank of New York Mellon, London Branch, as trustee (herein called the “Trustee,” which term includes any successor trustee under the Base Indenture), as amended and supplemented by the First Supplemental Indenture, dated as of August 8, 2023, among the Company, The Bank of New York Mellon, London Branch, as Trustee and Principal Paying Agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Senior Preferred Debt Securities Registrar (the “First Supplemental Indenture” and, the Base Indenture, as amended and supplemented by the First Supplemental Indenture, the “Senior Preferred Debt Securities Indenture”) to which Senior Preferred Debt Securities Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company and the Trustee and the Holders of the Senior Preferred Notes and of the terms upon which the Senior Preferred Notes are, and are to be, authenticated and delivered. Capitalized terms used herein are used as defined in the Senior Preferred Debt Securities Indenture unless otherwise indicated. The terms of the Senior Preferred Notes include those stated in the Senior Preferred Debt Securities Indenture. The Senior Preferred Notes are subject to all such terms, and Holders are referred to the Senior Preferred Debt Securities Indenture for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Senior Preferred Debt Securities Indenture, the terms of the Senior Preferred Debt Securities Indenture will control.
This Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $1,500,000,000; provided, that the Company may, from time to time, without the consent of the Holders of the Senior Preferred Notes, issue additional Senior Preferred Debt Securities under the Senior Preferred Debt Securities Indenture, having the same ranking and same interest rate, maturity, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first interest payment date, as the Senior Preferred Notes; provided, however, that such additional Senior Preferred Notes will not have the same CUSIP, ISIN or other identifying number as the outstanding Senior Preferred Notes unless the additional Senior Preferred Notes are fungible with the Senior Preferred Notes for U.S. federal income tax purposes. Any such additional Senior Preferred Notes, together with the Senior Preferred Notes, will constitute a single series of Senior Preferred Notes under the Senior Preferred Debt Securities Indenture and shall be included in the definition of “Senior Preferred Debt Securities” in the Base Indenture where the context requires.
The payment obligations of the Company in respect of principal under the Senior Preferred Notes constitute direct, unconditional, unsubordinated and unsecured obligations (créditos ordinarios) of the Company and, in accordance with Additional Provision 14.2 of Law 11/2015 (but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise)), upon the insolvency of the Company, such payment obligations rank (i) pari passu among themselves and with any other Senior Higher Priority Liabilities (as defined below) and (ii) senior to (x) any Senior Non Preferred Liabilities (as defined below) and (y) any present and future subordinated obligations (créditos subordinados) of the Company in accordance with Article 281 of the Spanish Insolvency Law (as defined below).
A-7
Claims of Holders of Senior Preferred Notes in respect of interest accrued but unpaid as of the commencement of any insolvency procedure in respect of the Company shall constitute subordinated claims (créditos subordinados) against the Company ranking in accordance with the provisions of Article 281.1.3º of the Spanish Insolvency Law, and no further interest shall accrue from the date of the declaration of insolvency of the Company.
The obligations of the Company under the Senior Preferred Notes are subject to the Bail-in Power.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“Senior Higher Priority Liabilities” means the unsubordinated and unsecured obligations (créditos ordinarios) of the Company (including the Senior Preferred Notes), other than the Senior Non Preferred Liabilities.
“Senior Non Preferred Liabilities” means any unsubordinated and unsecured senior non preferred obligations (créditos ordinarios no preferentes) of the Company under Additional Provision 14.2 of Law 11/2015 and any other obligations which, by law and/or by their terms, and to the extent permitted by Spanish law, rank pari passu with the Senior Non Preferred Liabilities.
“Spanish Insolvency Law” means the restated text of the Spanish Insolvency Law (Ley Concursal) approved by the Royal Decree-Legislative 1/2020, of 5 May, as amended from time to time.
The provisions of Section 2.02 of the Senior Preferred Debt Securities Indenture, and Section 2.01(r) of the First Supplemental Indenture shall apply only to rights or claims payable with respect to the Senior Preferred Notes and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Section 6.08 of the Base Indenture, or the rights and remedies of the Trustee in respect thereof.
The Company agrees with respect to the Senior Preferred Notes and each Holder of the Senior Preferred Notes, by his or her acquisition of the Senior Preferred Notes will be deemed to have agreed to the ranking as described herein. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the ranking provisions of the Senior Preferred Notes. In addition, each Holder of the Senior Preferred Notes by his or her acquisition of such Senior Preferred Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the ranking of such Senior Preferred Notes as provided in the Senior Preferred Debt Securities Indenture, and as summarized herein and appoints the Trustee as his or her attorney-in-fact for any and all such purposes.
A-8
Notwithstanding any other term of this Note or any other agreements, arrangements, or understandings between the Company and any Holder of the Senior Preferred Notes, by its acquisition of this Note, each Holder (which includes each holder of a beneficial interest in this Note) acknowledges, accepts, consents to and agrees: (i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof: the reduction of all, or a portion, of the Amounts Due on a permanent basis; the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Senior Preferred Notes, in which case the Holder agrees to accept in lieu of its rights under this Note, any such Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person; the cancellation of this Note or Amounts Due; the amendment or alteration of the maturity of this Note or amendment of the interest payable on this Note, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and (ii) that the terms of this Note are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Senior Preferred Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, including its articles 48 and 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms or such other directive as may come into effect in place thereof, as amended from time to time.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
A-9
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
The exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Senior Preferred Notes shall not constitute an event of default and the terms and conditions of the Senior Preferred Notes shall continue to apply in relation to the residual principal amount of, or outstanding amount payable with respect to, the Senior Preferred Notes subject to any modification of the amount of distributions payable to reflect the reduction of the principal amount, and any further modification of the terms that the Relevant Resolution Authority may decide in accordance with applicable laws and regulations relating to the resolution of credit institutions, investment firms and/or Company entities incorporated in the relevant member state.
No repayment or payment of Amounts Due, if any, on the Senior Preferred Notes, will become due and payable or be paid after the exercise of any Bail-in Power by the Relevant Resolution Authority if and to the extent such amounts have been reduced, converted, cancelled, amended or altered as a result of such exercise.
By its acquisition of this Note, each Holder of this Note, (which, for the purposes of this clause, includes each holder of a beneficial interest in this Note), to the extent permitted by the Trust Indenture Act, will waive any and all claims, in law and/or in equity, against the Trustee for, agree not to initiate a suit against the Trustee in respect of, and agree that the Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to this Note.
Additionally, by its acquisition of this Note, each Holder of this Note acknowledges and agrees that, upon the exercise of the Bail-in Power by the Relevant Resolution Authority:
(i) the Trustee will not be required to take any further directions from the Holders of the Senior Preferred Notes with respect to any portion of the Senior Preferred Notes that are written-down, converted to equity and/or cancelled under the Senior Preferred Debt Securities Indenture, which authorizes Holders of a majority in aggregate outstanding principal amount of the outstanding Senior Preferred Notes to direct certain actions relating to the Senior Preferred Notes; and
(ii) the Senior Preferred Debt Securities Indenture will not impose any duties upon the Trustee whatsoever with respect to the exercise of the Bail-in Power by the Relevant Resolution Authority;
provided, however, that notwithstanding the exercise of the Bail-in Power by the Relevant Resolution Authority, so long as the Senior Preferred Notes remain outstanding, there will at all times be a Trustee for the Senior Preferred Notes in accordance with the Senior Preferred Debt Securities Indenture, and the resignation and/or removal of the Trustee and the appointment of a successor Trustee will continue to be governed by the Base Indenture, including to the extent no additional supplemental indenture or amendment is agreed upon in the event the Senior Preferred Notes remain outstanding following the completion of the exercise of the Bail-in Power.
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By its acquisition of this Note, each Holder of this Note acknowledges and agrees that neither a cancellation or deemed cancellation of the principal or interest (in each case, in whole or in part), nor the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Senior Preferred Notes will give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act.
By purchasing this Note, each Holder (including each beneficial owner) of this Note shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds this Note to take any and all necessary action, if required, to implement the exercise of the Bail-in Power with respect to the Senior Preferred Notes as it may be imposed, without any further action or direction on the part of such Holder.
Each Holder of this Note also acknowledges and agrees that the foregoing description of the Bail-in Power and its exercise is exhaustive on the matters described herein to the exclusion of any other agreements, arrangements or understandings relating to the application of any Bail-in Power to the Senior Preferred Notes.
Each Holder of this Note that acquires such Senior Preferred Notes in the secondary market (including each beneficial owner) shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the Holders of the Senior Preferred Notes that acquire the Senior Preferred Notes upon their initial issuance, including, without limitation, with respect to the acknowledgment and agreement to be bound by and consent to the terms of the Senior Preferred Notes, including in relation to the Bail-in-Power.
Additional terms of the Senior Preferred Notes, including but not limited to events of default, remedies, payment of additional amounts in respect of withholding tax, substitution and variation of the Senior Preferred Notes upon certain regulatory events, and amendment are set forth in the Senior Preferred Debt Securities Indenture.
The Senior Preferred Debt Securities Indenture and the Senior Preferred Notes shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law provisions), except for Section 2.02 of the Senior Preferred Debt Securities Indenture, Section 2.01(r) of the First Supplemental Indenture and the status of the Senior Preferred Notes, which shall be governed by and construed in accordance with the laws of The Kingdom of Spain, and except that the authorization and execution by the Company of the Senior Preferred Debt Securities Indenture and the Senior Preferred Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
The Senior Preferred Notes and this Note have been issued in the State of New York.
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Exhibit 4.4
BANCO SANTANDER, S.A.
as Issuer,
THE BANK OF NEW YORK MELLON,
London Branch
as Trustee and Principal Paying Agent
and
THE BANK OF NEW YORK MELLON SA/NV,
Luxembourg Branch
as Subordinated Debt Securities Registrar
FIRST SUPPLEMENTAL INDENTURE
dated as of August 8, 2023
to
SUBORDINATED DEBT SECURITIES INDENTURE
dated as of August 8, 2023
FIRST SUPPLEMENTAL INDENTURE (“First Supplemental Indenture”), dated as of August 8, 2023, among BANCO SANTANDER, S.A., a sociedad anónima incorporated under the laws of The Kingdom of Spain (the “Company”), having its principal executive office located at Ciudad Grupo Santander, Avenida de Cantabria s/n, 28660 Boadilla del Monte, Madrid, Spain, as issuer, THE BANK OF NEW YORK MELLON, London Branch, a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the “Trustee,” which term includes any successor Trustee) and principal paying agent (the “Principal Paying Agent,” which term includes any successor Principal Paying Agent), having its Corporate Trust Office at 160 Queen Victoria Street, London EC4V 4LA, United Kingdom, and THE BANK OF NEW YORK MELLON SA/NV, Luxembourg Branch, a société anonyme/naamloze vennootschap, incorporated under the laws of Belgium, as subordinated debt securities registrar (the “Subordinated Debt Securities Registrar”), having its principal office at 2-4 Rue Eugène Ruppert, L-2453 Luxembourg, Luxembourg.
WITNESSETH
WHEREAS, the Company and the Trustee have executed and delivered a Subordinated Debt Securities Indenture dated as of August 8, 2023 (the “Base Indenture” and, the Base Indenture, as supplemented and amended by this First Supplemental Indenture, the “Subordinated Debt Securities Indenture”), to provide for the issuance of the Company’s subordinated debt securities (the “Subordinated Debt Securities”), including the Subordinated Notes (as defined below).
WHEREAS, Section 9.01(d) of the Base Indenture permits the Company and the Trustee to change or eliminate any provisions of the Base Indenture without the consent of Holders, subject to certain conditions;
WHEREAS, Section 9.01(f) of the Base Indenture permits the Company and the Trustee to enter into a supplemental indenture to establish the forms or terms of Subordinated Debt Securities of any series as permitted under Sections 2.01 and 3.01 of the Base Indenture without the consent of Holders;
WHEREAS, there are no Outstanding Subordinated Debt Securities of any series created prior to the execution of this First Supplemental Indenture that are entitled to the benefit of the provisions set forth herein or that would be adversely affected by such provisions;
WHEREAS, the Executive Committee of the Company has authorized the entry into this First Supplemental Indenture and the establishment of the Subordinated Notes (as defined below), as required by Section 9.01 of the Base Indenture;
WHEREAS, the parties hereto desire to establish a series of Subordinated Debt Securities to be known as the Series SUBSAN-189 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033 (the “Subordinated Notes”) pursuant to Sections 2.01 and 3.01 of the Base Indenture. The Subordinated Notes may be issued from time to time, and any Subordinated Notes issued as part of the series created herein will constitute a single series of Subordinated Debt Securities under the Subordinated Debt Securities Indenture and shall be included in the definition of “Subordinated Notes” where the context requires;
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WHEREAS, the Company has requested and hereby requests that the Trustee execute and deliver this First Supplemental Indenture and the Company has provided the Trustee with an Executive Committee Resolution authorizing the execution of this First Supplemental Indenture;
WHEREAS, all actions required by the Company to be taken in order to make this First Supplemental Indenture a valid, binding and enforceable instrument in accordance with its terms, have been taken and performed, and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects; and
WHEREAS, where indicated, this First Supplemental Indenture shall amend and supplement the Base Indenture; and to the extent that the terms of the Base Indenture are inconsistent with such provisions of this First Supplemental Indenture, the terms of this First Supplemental Indenture shall govern.
NOW, THEREFORE, the Company and the Trustee mutually covenant and agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definition of Terms. For all purposes of this First Supplemental Indenture:
(a) a term defined anywhere in this First Supplemental Indenture has the same meaning throughout;
(b) capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Base Indenture;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect interpretation; and
(e) for the purposes of this First Supplemental Indenture and the Base Indenture, the term “series” shall mean a series of the Subordinated Debt Securities.
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ARTICLE 2
FORM OF SUBORDINATED NOTES
Section 2.01. Terms of the Subordinated Notes. The following terms relating to the Subordinated Notes are hereby established pursuant to Section 3.01 of the Base Indenture:
(a) The Subordinated Notes shall be designated as: the Series SUBSAN-189 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033;
(b) The price at which the Subordinated Notes shall be issued is 100.000% of the principal amount thereof;
(c) The aggregate principal amount of the Subordinated Notes that may be authenticated and delivered under the Subordinated Debt Securities Indenture shall not exceed $2,000,000,000, except as otherwise provided in the Subordinated Debt Securities Indenture, including Section 2.01(t) hereof;
(d) Principal on the Subordinated Notes shall be payable on August 8, 2033 (the “Maturity Date”);
(e) The Subordinated Notes shall be issued in global registered form on August 8, 2023. From (and including) the date of issuance to (but excluding) the Maturity Date, interest on the Subordinated Notes will be payable at a fixed rate of 6.921% per annum. Interest will be payable semi-annually in arrears on February 8 and August 8 of each year (each, an “Interest Payment Date”), commencing on February 8, 2024, up to and including the Maturity Date or any date of earlier redemption;
Interest on the Subordinated Notes will be calculated on the basis of a 360-day year consisting of twelve 30-day months and, in the case of an incomplete month, on the basis of the actual number of days elapsed in such month. The Regular Record Dates for the Subordinated Notes will be 15 calendar days immediately preceding the relevant Interest Payment Date, whether or not a Business Day. If any scheduled Interest Payment Date is not a Business Day, the Company will pay interest on the next Business Day, but interest on that payment will not accrue during the period from and after the scheduled Interest Payment Date. If the scheduled maturity date or date of redemption or repayment is not a Business Day, the Company may pay interest and principal on the next succeeding Business Day, but interest on that payment will not accrue during the period from and after the scheduled maturity date or date of redemption or repayment;
(f) No premium, upon redemption or otherwise, shall be payable by the Company on the Subordinated Notes;
(g) Principal of and any interest on the Subordinated Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom and the Borough of Manhattan, The City of New York;
(h) The Subordinated Notes shall not be redeemable except as provided in Section 11.08 and Section 11.09 of the Subordinated Debt Securities Indenture;
(i) The Company shall have no obligation to redeem or purchase the Subordinated Notes pursuant to any sinking fund or analogous provision;
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(j) The Subordinated Notes shall be issued only in minimum denominations of $200,000 and integral multiples of $200,000 in excess thereof;
(k) The principal amount of the Subordinated Notes shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Base Indenture;
(l) Additional Amounts in respect of the Subordinated Notes shall be payable as set forth in the Subordinated Debt Securities Indenture;
(m) The Subordinated Notes shall be denominated in, and payments thereon shall be made in, U.S. Dollars only;
(n) The payment of principal of or interest, if any, on the Subordinated Notes shall be payable only in the coin or currency in which the Subordinated Notes are denominated;
(o) The Subordinated Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, the Depositary;
(p) The Subordinated Notes will not be initially issued in definitive form;
(q) The Events of Default on the Subordinated Notes are as provided for in this First Supplemental Indenture;
(r) The Company agrees with respect to the Subordinated Notes and each Holder of the Subordinated Notes, by his or her acquisition of the Subordinated Notes, will be deemed to have agreed to the subordination described in Sections 12.01 and 12.02 of the Base Indenture. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the subordination provisions of the Subordinated Notes. In addition, each Holder of the Subordinated Notes by his or her acquisition of such Subordinated Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination of the Subordinated Notes as provided in the Subordinated Debt Securities Indenture, and appoints the Trustee as his or her attorney-in-fact for any and all such purposes;
(s) The form of the Subordinated Notes to be issued on the date hereof shall be substantially in the form of Exhibit A hereto;
(t) The Company may issue additional Subordinated Notes (“Additional Subordinated Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first Interest Payment Date, as the Subordinated Notes; provided, however, that such Additional Subordinated Notes will not have the same CUSIP, ISIN or other identifying number as the outstanding Subordinated Notes unless the Additional Subordinated Notes are fungible with the Subordinated Notes for U.S. federal income tax purposes. Any such Additional Subordinated Notes, together with the Subordinated Notes, will constitute a single series of securities under the Subordinated Debt Securities Indenture;
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(u) The Company appoints The Bank of New York Mellon, London Branch, as the Principal Paying Agent for the Subordinated Notes;
(v) The Company appoints The Bank of New York Mellon SA/NV, Luxembourg Branch as the Subordinated Debt Securities Registrar for the Subordinated Notes pursuant to Section 3.05 of the Base Indenture;
(w) If (i) a Capital Disqualification Event or (ii) a tax event that would entitle the Company to redeem the Subordinated Notes as set forth in Section 11.08 of the Base Indenture occurs and is continuing, the Company may substitute all (but not some) of the Subordinated Notes or modify the terms of all (but not some) of the Subordinated Notes as provided for in Section 8.04 of the Subordinated Debt Securities Indenture;
(x) Subject to applicable law, neither any Holder or beneficial owner of the Subordinated Notes nor the Trustee acting on behalf of the Holders of the Subordinated Notes may exercise, claim or plead any right of set-off, netting, compensation or retention in respect of any amount owed to it by the Company in respect of, or arising under, or in connection with, the Subordinated Notes as provided for in Section 12.04 of the Subordinated Debt Securities Indenture;
(y) Each Holder of the Subordinated Notes acknowledges, accepts, consents to and agrees to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority as provided for in Article 13 of the Subordinated Debt Securities Indenture; and
(z) The Bank of New York Mellon SA/NV, Luxembourg Branch, as the Subordinated Debt Securities Registrar for the Subordinated Notes acknowledges, accepts, consents to and agrees to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority as provided for in Article 13 of the Subordinated Debt Securities Indenture.
ARTICLE 3
ADDITIONAL TERMS APPLICABLE TO THE SUBORDINATED NOTES
Section 3.01. Addition of Definitions. With respect to the Subordinated Notes, Section 1.01 of the Base Indenture is amended to include the following definitions (which shall be deemed to arise in Section 1.01 in their proper alphabetical order):
“Issue Date” means August 8, 2023, being the date of the initial issue of the Subordinated Notes.
“Maturity Date” means August 8, 2033.
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Section 3.02. Payment. Notwithstanding Section 3.07 of the Base Indenture, payments of interest, if any, and any Additional Amounts on the Subordinated Notes may be made by wire transfer of immediately available funds.
Section 3.03. Replacement of Provisions with Respect to Events of Default. With respect to the Subordinated Notes, Section 5.01(a) of the Base Indenture is hereby replaced with the following:
Except as otherwise provided pursuant to Section 3.01, if any of the following events occurs and is continuing with respect to the Subordinated Debt Securities of any series it shall constitute an “Event of Default”:
(i) Non-payment: default is made in the payment of any interest or principal due in respect of the Subordinated Debt Securities of that series or any of them and such default continues for a period of seven days (or such other period as may be specified pursuant to Section 3.01); or
(ii) Winding up: any order is made by any competent court or resolution passed for the winding up or liquidation of the Company (for avoidance of doubt, any reconstruction or amalgamation or a merger, spin-off or any other structural modification (modificación estructural), subject to the provisions of Article 8 will not be considered as a winding up event of default).
Section 3.04. Replacement of Provisions with Respect to Subordinated Debt Securities Subordinate to Claims of Senior Creditors. With respect to the Subordinated Notes, Section 12.01 of the Base Indenture is hereby replaced with the following:
The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of the Subordinated Debt Securities of any series by his or her acceptance thereof, likewise covenants and agrees, that the payment obligations of the Company under the Subordinated Debt Securities of such series constitute direct, unconditional, unsecured and subordinated obligations (créditos subordinados) of the Company according to Article 281.1 of the Spanish Insolvency Law and, in accordance with Additional Provision 14.3 of Law 11/2015 (but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise)), upon the insolvency of the Company and for so long as the obligations of the Company in respect of the Subordinated Debt Securities constitute Tier 2 Instruments, such payment obligations rank:
(i) pari passu among themselves and with (a) all other claims in respect of Tier 2 Instruments, and (b) any other subordinated obligations (créditos subordinados) of the Company which by law and/or by their terms, to the extent permitted by Spanish law, rank pari passu with the Company’s obligations under Tier 2 Instruments;
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(ii) junior to (a) any unsubordinated obligations (créditos ordinarios) of the Company (including any claim of the Company in respect of Senior Non Preferred Liabilities), and (b) any other subordinated obligations (créditos subordinados) which by law and/or by their terms, to the extent permitted by Spanish law, rank senior to the Company’s obligations under the Tier 2 Instruments; and
(iii) senior to (a) any claims in respect of Additional Tier 1 Instruments of the Company, and (b) any other subordinated obligations (créditos subordinados) of the Company which by law and/or by their terms, to the extent permitted by Spanish law, rank junior to the obligations of the Company under Tier 2 Instruments.
The provisions of this Article 12 shall apply only to rights or claims payable under any Subordinated Debt Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Section 6.08 hereof, or the rights and remedies of the Trustee in respect thereof.
The Company agrees with respect to any series of Subordinated Debt Securities and each Holder of Subordinated Debt Securities of any series, by his or her acquisition of a Subordinated Debt Security will be deemed to have agreed to the subordination as described in this Section 12.01. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the subordination provisions of the Subordinated Debt Security. In addition, each holder of Subordinated Debt Securities of any series by his or her acquisition of such Subordinated Debt Securities authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination of such Subordinated Debt Securities as provided in this Subordinated Debt Securities Indenture and appoints the Trustee his or her attorney-in-fact for any and all such purposes.
The obligations of the Company under the Subordinated Debt Securities are subject to the Bail-in Power.
Section 3.05. Replacement of Provisions with Respect to Repurchase of Subordinated Debt Securities. With respect to the Subordinated Notes, Section 11.12 of the Base Indenture is hereby replaced with the following:
The Company and any of its subsidiaries or any third party designated by any of them, may only repurchase Subordinated Debt Securities of any series in the open market or otherwise and at any price in accordance with Applicable Banking Regulations in force at the relevant time, and will be subject to the prior consent of the Regulator, as required.
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ARTICLE 4
MISCELLANEOUS
Section 4.01. Effect of Supplemental Indenture. Upon the execution and delivery of this First Supplemental Indenture by each of the Company and the Trustee, the Base Indenture shall be supplemented in accordance herewith, and this First Supplemental Indenture shall form a part of the Base Indenture for all purposes in respect of the Subordinated Notes or otherwise as applicable.
Section 4.02. Confirmation of Indenture. The Base Indenture, as amended and supplemented by this First Supplemental Indenture with respect to the Subordinated Notes or otherwise as applicable, is in all respects ratified and confirmed, and the Base Indenture, this First Supplemental Indenture and all other indentures supplemental thereto shall, in respect of the Subordinated Notes or otherwise as applicable, be read, taken and construed as one and the same instrument. This First Supplemental Indenture constitutes an integral part of the Subordinated Debt Securities Indenture and, where applicable, with respect to the Subordinated Notes. In the event of a conflict between the terms and conditions of the Base Indenture and the terms and conditions of this First Supplemental Indenture, the terms and conditions of this First Supplemental Indenture shall prevail where applicable.
Section 4.03. Concerning the Trustee. The Trustee does not make any representations as to the validity, sufficiency or adequacy of this First Supplemental Indenture or the Subordinated Notes. The recitals and statements herein and in the Subordinated Notes are deemed to be those of the Company and not the Trustee. In entering into this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Base Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.
Section 4.04. Governing Law. The Subordinated Debt Securities Indenture and the Subordinated Notes shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law provisions), except for Sections 12.01 and 12.02 of the Subordinated Debt Securities Indenture, Section 2.01(r) of this First Supplemental Indenture and the status provisions of the Subordinated Notes, which shall be governed by and construed in accordance with the laws of the Kingdom of Spain, and except that the authorization and execution by the Company of the Subordinated Debt Securities Indenture and the Subordinated Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
Section 4.05. Separability. In case any provision contained in this First Supplemental Indenture 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.
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Section 4.06. Counterparts. This First Supplemental Indenture 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. The exchange of copies of this First Supplemental Indenture and of signature pages by facsimile, email or other electronic format (e.g., PDF, “tif” or “jpg”) transmission and other electronically imaged signatures (including, without limitation, DocuSign and AdobeSign) shall constitute effective execution and delivery of this First Supplemental Indenture as to the parties hereto and may be used in lieu of the original First Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile, email or other electronic format (e.g., PDF, “tif” or “jpg”) shall be deemed to be their original signatures for all purposes. This First Supplemental Indenture and any indenture supplemental hereto and any other document, certificate or opinion delivered in connection with this First Supplemental Indenture, such supplemental indenture or the issuance and delivery of the Subordinated Debt Securities may be signed by or on behalf of the Company and the Trustee by manual, facsimile or pdf or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign).
Section 4.07. Electronic Means. The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this First Supplemental Indenture and related financing documents and delivered using email, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder (collectively, the “Electronic Means”); provided, however, that the Company shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Company whenever a person is to be added or deleted from the listing. If the Company elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Company understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Company shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Company and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the
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various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
Section 4.08. Recognition of Bail-In. Notwithstanding and to the exclusion of any other term of this First Supplemental Indenture or any other agreements, arrangements, or understanding between the Subordinated Debt Securities Registrar and the Company or any Holder, the Company and each Holder acknowledges and accepts that a BRRD Liability arising under this First Supplemental Indenture may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts, and agrees to be bound by:
(a) the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of the Subordinated Debt Securities Registrar to the Company or to any Holder under this First Supplemental Indenture, that (without limitation) may include and result in any of the following, or some combination thereof:
(i) the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;
(ii) the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the Subordinated Debt Securities Registrar or another person, and the issue to or conferral on the Company or on any Holder of such shares, securities or obligations;
(iii) the cancellation of the BRRD Liability;
(iv) the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period;
(b) the variation of the terms of this First Supplemental Indenture, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority in respect of the Subordinated Debt Securities Registrar.
Solely as used in this Section 4.08:
“Bail-in Legislation” means in relation to a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.
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“Bail-in Powers” means any Write-down and Conversion Powers (as defined in the EU Bail-in Legislation Schedule), in relation to the relevant Bail-in Legislation.
“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms or such other directive as may come into effect in place thereof, as amended from time to time.
“BRRD Liability” means a liability in respect of which the relevant Write-down and Conversion Powers (as defined in the EU Bail-in Legislation Schedule) in the applicable Bail-in Legislation may be exercised.
“EU Bail-in Legislation Schedule” means the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/pages.aspx?p=499.
“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Bail-in Powers in relation to the Subordinated Securities Registrar.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first written above.
| BANCO SANTANDER, S.A., as Issuer | ||
| By: | /s/ Juan Urigoen Irusta | |
| Name: | Juan Urigoen Irusta | |
| Title: | Authorized Signatory | |
[Signature Page to First Supplemental Indenture]
| THE BANK OF NEW YORK MELLON, London Branch, as Trustee | ||
| By: | /s/ Ricardo Da Rocha | |
| Name: | Ricardo Da Rocha | |
| Title: | Authorized Signatory | |
[Signature Page to First Supplemental Indenture]
| THE BANK OF NEW YORK MELLON SA/NV, Luxembourg Branch, as Registrar | ||
| By: | /s/ Ricardo Da Rocha | |
| Name: | Ricardo Da Rocha | |
| Title: | Authorized Signatory | |
[Signature Page to First Supplemental Indenture]
EXHIBIT A
FORM OF GLOBAL NOTE
THIS NOTE IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY AS THE DEPOSITARY (AS DEFINED IN THE SUBORDINATED DEBT SECURITIES INDENTURE GOVERNING THIS NOTE), OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE BASE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.05 OF THE BASE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.09 OF THE BASE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SUBORDINATED NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SUBORDINATION OF THIS NOTE IS SET FORTH IN SECTIONS 12.01 AND 12.02 OF THE SUBORDINATED DEBT SECURITIES INDENTURE, AND SECTION 2.01(r) OF THE FIRST SUPPLEMENTAL INDENTURE, AND THIS NOTE IS ISSUED SUBJECT TO THE PROVISIONS OF SUCH SECTIONS 12.01, 12.02 AND 2.01(r), RESPECTIVELY, AND THE HOLDER OF THIS NOTE, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTIONS 12.01 AND 12.02 OF THE SUBORDINATED DEBT SECURITIES INDENTURE, SECTION 2.01(r) OF THE FIRST SUPPLEMENTAL INDENTURE AND THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE KINGDOM OF SPAIN.
CUSIP No. 05964H AV7
ISIN No. US05964HAV78
SERIES SUBSAN-189 6.921% TIER 2 SUBORDINATED FIXED RATE NOTES DUE 2033
(THE “SUBORDINATED NOTES”)
Issued by
BANCO SANTANDER, S.A.
| No. | $ |
BANCO SANTANDER, S.A., a sociedad anónima, incorporated under the laws of the Kingdom of Spain (herein called the “Company,” which term includes any successor person under the Subordinated Debt Securities Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $ ( dollars) on August 8, 2033 (the “Maturity Date”) or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrears on February 8 and August 8 of each year, commencing on February 8, 2024, and ending on August 8, 2033 (each, an “Interest Payment Date”). Interest so payable on any Interest Payment Date shall be paid to the Holder in whose name this Note is registered on the 15th calendar day immediately preceding the relevant Interest Payment Date, whether or not such day is a Business Day, as defined in the Subordinated Debt Securities Indenture (each a “Regular Record Date”).
From (and including) the date of issuance to (but excluding) the Maturity Date, interest on this Note will be payable at a fixed rate of 6.921% per annum.
Payments of interest on this Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such month.
Payment of the principal amount of and any interest on, this Note will be made by wire transfer of immediately available funds in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Such payment shall be made to the Holder including through a paying agent of the Company for collection by the Holder. If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Subordinated Debt Securities Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment, provided that no interest shall accrue on such payment for the period from and after such payment date.
The Subordinated Notes are issuable in minimum denominations of $200,000 and integral multiples of $200,000 in excess thereof.
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For informational purposes only, without any substantive effect whatsoever and solely in order to comply with Article 413(d) of the Spanish Companies Law (Ley de Sociedades de Capital), approved by Royal Decree 1/2010, of July 2, to the extent applicable, it is hereby noted that the initial aggregate principal amount of the Subordinated Notes, i.e., US$2,000,000,000, was equivalent to approximately €1,819,000,000, at the Bloomberg reference exchange rate as of July 31, 2023 of US$1.00 per €0.9095. Amounts due on the Notes shall not under any circumstances whatsoever be payable in any currency other than U.S. Dollars.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner of such Note for the purpose of receiving payment of principal and interest, if any, on and any Additional Amounts with respect to such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee referred to on the reverse hereof by manual, PDF or other electronically imaged signature (including, without limitation, DocuSign and AdobeSign), this Note shall not be entitled to any benefit under the Subordinated Debt Securities Indenture or be valid or obligatory for any purpose.
Notwithstanding any other term of this Note or any other agreements, arrangements, or understandings between the Company and any Holder of the Subordinated Notes, by its acquisition of this Note, each Holder (which includes each holder of a beneficial interest in this Note) acknowledges, accepts, consents to and agrees:
(i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof:
| • | the reduction of all, or a portion, of the Amounts Due on a permanent basis; |
| • | the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Subordinated Notes, in which case the Holder agrees to accept in lieu of its rights under this Note, any such Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person; |
| • | the cancellation of this Note or Amounts Due; |
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| • | the amendment or alteration of the maturity of this Note or amendment of the interest payable on this Note, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and |
(ii) that the terms of this Note are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Subordinated Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, including its articles 48 and 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms or such other directive as may come into effect in place thereof, as amended from time to time.
“Business Day” means any day, other than Saturday or Sunday, that is not a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in the City of New York or London nor a day when the Trans-European Automated Real-time Gross Settlement Express Transfer system (the TARGET2 System), or any successor thereto, is closed for business.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
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“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
The public deed of issuance (escritura de emisión) related to the Subordinated Notes represented hereby was executed on August 3, 2023 before Mr. Miguel Ruiz-Gallardón García with the number 5,182 of his records.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
Dated:
| BANCO SANTANDER, S.A., as Issuer | ||
| By: | ||
| Name: | ||
| Title: | ||
[Global Note Signature Page]
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CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Debt Securities of the series designated herein referred to in the within-mentioned Subordinated Debt Securities Indenture.
Dated:
| THE BANK OF NEW YORK MELLON, | ||
| London Branch, as Trustee | ||
| By: | ||
| Authorized Signatory | ||
[Global Note Signature Page]
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[REVERSE OF SECURITY]
This Note is one of a duly authorized issue of securities of the Company of the series designated Series SUBSAN-189 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033 (herein called the “Subordinated Notes”) issued and to be issued in one or more series under a Subordinated Debt Securities Indenture, dated as of August 8, 2023 (herein called the “Base Indenture”), between the Company, as issuer, and The Bank of New York Mellon, London Branch, as trustee (herein called the “Trustee,” which term includes any successor trustee under the Base Indenture), as amended and supplemented by the First Supplemental Indenture, dated as of August 8, 2023, among the Company, The Bank of New York Mellon, London Branch, as Trustee and Principal Paying Agent and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Subordinated Debt Securities Registrar (the “First Supplemental Indenture” and, the Base Indenture, as amended and supplemented by the First Supplemental Indenture, the “Subordinated Debt Securities Indenture”) to which Subordinated Debt Securities Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company and the Trustee and the Holders of the Subordinated Notes and of the terms upon which the Subordinated Notes are, and are to be, authenticated and delivered. Capitalized terms used herein are used as defined in the Subordinated Debt Securities Indenture unless otherwise indicated. The terms of the Subordinated Notes include those stated in the Subordinated Debt Securities Indenture. The Subordinated Notes are subject to all such terms, and Holders are referred to the Subordinated Debt Securities Indenture for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Subordinated Debt Securities Indenture, the terms of the Subordinated Debt Securities Indenture will control.
This Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $2,000,000,000; provided, that the Company may, from time to time, without the consent of the Holders of the Subordinated Notes, issue additional Subordinated Debt Securities under the Subordinated Debt Securities Indenture, having the same ranking and same interest rate, maturity, redemption terms and other terms, except for the price to the public, original interest accrual date, issue date and first interest payment date, as the Subordinated Notes; provided, however, that such additional Subordinated Notes will not have the same CUSIP, ISIN or other identifying number as the outstanding Subordinated Notes unless the additional Subordinated Notes are fungible with the Subordinated Notes for U.S. federal income tax purposes. Any such additional Subordinated Notes, together with the Subordinated Notes, will constitute a single series of Subordinated Notes under the Subordinated Debt Securities Indenture and shall be included in the definition of “Subordinated Debt Securities” in the Base Indenture where the context requires.
The payment obligations of the Company under the Subordinated Notes constitute direct, unconditional, unsecured and subordinated obligations (créditos subordinados) of the Company according to Article 281.1 of the Spanish Insolvency Law and, in accordance with Additional Provision 14.3 of Law 11/2015 (but subject to any other ranking that may apply as a result of any mandatory provision of law (or otherwise)), upon the insolvency of the Company and for so long as the Subordinated Notes constitute Tier 2 Instruments (as defined below), such payment obligations rank: (i) pari passu among themselves and with (a) all other claims in respect of Tier 2 Instruments and (b) any other subordinated obligations (créditos subordinados) of the Company
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which by law and/or by their terms, to the extent permitted by Spanish law, rank pari passu with the Company’s obligations under the Tier 2 Instruments; (ii) junior to (a) any unsubordinated obligations (créditos ordinarios) of the Company (including any claim of the Company in respect of Senior Non Preferred Liabilities (as defined below)) and (b) any other subordinated obligations (créditos subordinados) which by law and/or by their terms, to the extent permitted by Spanish law, rank senior to the Company’s obligations under the Tier 2 Instruments; and (iii) senior to (a) any claims in respect of Additional Tier 1 Instruments (as defined below) of the Company, and (b) any other subordinated obligations (créditos subordinados) of the Company which by law and/or by their terms, to the extent permitted by Spanish law, rank junior to the obligations of the Company under the Tier 2 Instruments.
The obligations of the Company under the Subordinated Notes are subject to the Bail-in Power.
“Additional Tier 1 Capital” means any additional tier 1 capital (capital de nivel 1 adicional) in accordance with Chapter 3 (Additional Tier 1 capital) of Title I (Elements of own funds) of Part Two (Own Funds and Eligible Liabilities) of the CRR and/or Applicable Banking Regulations at any time, including any applicable transitional, phasing in or similar provisions.
“Additional Tier 1 Instrument” means any instrument of the Company qualifying as Additional Tier 1 Capital in whole or in part from time to time.
“Law 11/2015” means Law 11/2015 of 18 June, on recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión) as amended or replaced from time to time.
“Senior Non Preferred Liabilities” means any unsubordinated and unsecured senior non preferred obligations (créditos ordinarios no preferentes) of the Company under Additional Provision 14.2 of Law 11/2015 and any other obligations which, by law and/or by their terms, and to the extent permitted by Spanish law, rank pari passu with the Senior Non Preferred Liabilities.
“Spanish Insolvency Law” means the restated text of the Spanish Insolvency Law (Ley Concursal) approved by the Royal Decree-Legislative 1/2020, of 5 May, as amended from time to time.
“Tier 2 Capital” means tier 2 capital (capital de nivel 2) of the Company in accordance with Chapter 4 (Tier 2 capital) of Title I (Elements of own funds) of Part Two (Own Funds and Eligible Liabilities) of the CRR and/or Applicable Banking Regulations at any time, including any applicable transitional, phasing in or similar provisions.
“Tier 2 Instrument” means any instrument of the Company qualifying as Tier 2 Capital in whole or in part from time to time.
The provisions of Sections 12.01 and 12.02 of the Subordinated Debt Securities Indenture, and Section 2.01(r) of the First Supplemental Indenture shall apply only to rights or claims payable with respect to the Subordinated Notes and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Section 6.08 of the Base Indenture, or the rights and remedies of the Trustee in respect thereof.
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The Company agrees with respect to the Subordinated Notes and each Holder of the Subordinated Notes, by his or her acquisition of the Subordinated Notes will be deemed to have agreed to the above-described subordination. Each such Holder will be deemed to have irrevocably waived his or her rights of priority which would otherwise be accorded to him or her under the laws of Spain, to the extent necessary to effectuate the subordination provisions of the Subordinated Notes. In addition, each Holder of the Subordinated Notes by his or her acquisition of such Subordinated Notes authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination of the Subordinated Notes as provided in the Subordinated Debt Securities Indenture, and as summarized herein and appoints the Trustee as his or her attorney-in-fact for any and all such purposes.
Notwithstanding any other term of this Note or any other agreements, arrangements, or understandings between the Company and any Holder of the Subordinated Notes, by its acquisition of this Note, each Holder (which includes each holder of a beneficial interest in this Note) acknowledges, accepts, consents to and agrees:
(i) to be bound by the effect of the exercise of the Bail-in Power by the Relevant Resolution Authority, which may include and result in any of the following, or some combination thereof:
| • | the reduction of all, or a portion, of the Amounts Due on a permanent basis; |
| • | the conversion of all, or a portion, of the Amounts Due into Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person (and the issue to the Holder of such Common Equity Tier 1 instruments, securities or obligations), including by means of an amendment, modification or variation of the terms of the Subordinated Notes, in which case the Holder agrees to accept in lieu of its rights under this Note, any such Common Equity Tier 1 instruments, other securities or other obligations of the Company or another person; |
| • | the cancellation of this Note or Amounts Due; |
| • | the amendment or alteration of the maturity of this Note or amendment of the interest payable on this Note, or the date on which the interest becomes payable, including by suspending payment for a temporary period; and |
(ii) that the terms of this Note are subject to, and may be varied, if necessary, to give effect to, the exercise of the Bail-in Power by the Relevant Resolution Authority.
“Amounts Due” means the principal amount of, premium, if any, together with any accrued but unpaid interest, and Additional Amounts, if any, due on the Subordinated Notes. References to such amounts will include amounts that have become due and payable, but which have not been paid, prior to the exercise of the Bail-in Power by the Relevant Resolution Authority.
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“Bail-in Power” means any power existing from time to time under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the Kingdom of Spain, relating to (i) the transposition of the BRRD, including its articles 48 and 59 (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), (ii) the SRM Regulation and (iii) the instruments, rules or standards created thereunder, pursuant to which any obligation of a Regulated Entity (or an affiliate of such Regulated Entity) can be reduced, cancelled, suspended, modified, or converted into shares, other securities, or other obligations of such Regulated Entity (or affiliate of such Regulated Entity).
“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms or such other directive as may come into effect in place thereof, as amended from time to time.
“RD 1012/2015” means Royal Decree 1012/2015, of 6 November developing Law 11/2015, as amended or superseded from time to time.
“Regulated Entity” means any entity to which BRRD, as implemented in the Kingdom of Spain (including but not limited to, Law 11/2015, RD 1012/2015 and any other implementing regulations), or any other Spanish law relating to the Bail-in Power, applies, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.
“Relevant Resolution Authority” means the Spanish Fund for the Orderly Restructuring of Banks, the Bank of Spain, the European Single Resolution Board, as the case may be, according to Law 11/2015, and any other entity with the authority to exercise the Bail-in Power or any other resolution power from time to time.
“SRM Regulation” means Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014, establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No. 1093/2010, as amended or replaced from time to time.
The exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Subordinated Notes shall not constitute an event of default and the terms and conditions of the Subordinated Notes shall continue to apply in relation to the residual principal amount of, or outstanding amount payable with respect to, the Subordinated Notes subject to any modification of the amount of distributions payable to reflect the reduction of the principal amount, and any further modification of the terms that the Relevant Resolution Authority may decide in accordance with applicable laws and regulations relating to the resolution of credit institutions, investment firms and/or Company entities incorporated in the relevant member state.
No repayment or payment of Amounts Due, if any, on the Subordinated Notes, will become due and payable or be paid after the exercise of any Bail-in Power by the Relevant Resolution Authority if and to the extent such amounts have been reduced, converted, cancelled, amended or altered as a result of such exercise.
By its acquisition of this Note, each Holder of this Note, (which, for the purposes of this clause, includes each holder of a beneficial interest in this Note), to the extent permitted by the Trust Indenture Act, will waive any and all claims, in law and/or in equity, against the Trustee for, agree not to initiate a suit against the Trustee in respect of, and agree that the Trustee will not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to this Note.
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Additionally, by its acquisition of this Note, each Holder of this Note acknowledges and agrees that, upon the exercise of the Bail-in Power by the Relevant Resolution Authority:
(i) the Trustee will not be required to take any further directions from the Holders of the Subordinated Notes with respect to any portion of the Subordinated Notes that are written-down, converted to equity and/or cancelled under the Subordinated Debt Securities Indenture, which authorizes Holders of a majority in aggregate outstanding principal amount of the outstanding Subordinated Notes to direct certain actions relating to the Subordinated Notes; and
(ii) the Subordinated Debt Securities Indenture will not impose any duties upon the Trustee whatsoever with respect to the exercise of the Bail-in Power by the Relevant Resolution Authority;
provided, however, that notwithstanding the exercise of the Bail-in Power by the Relevant Resolution Authority, so long as the Subordinated Notes remain outstanding, there will at all times be a Trustee for the Subordinated Notes in accordance with the Subordinated Debt Securities Indenture, and the resignation and/or removal of the Trustee and the appointment of a successor Trustee will continue to be governed by the Base Indenture, including to the extent no additional supplemental indenture or amendment is agreed upon in the event the Subordinated Notes remain outstanding following the completion of the exercise of the Bail-in Power.
By its acquisition of this Note, each Holder of this Note acknowledges and agrees that neither a cancellation or deemed cancellation of the principal or interest (in each case, in whole or in part), nor the exercise of the Bail-in Power by the Relevant Resolution Authority with respect to the Subordinated Notes will give rise to a default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act.
By purchasing this Note, each Holder (including each beneficial owner) of this Note shall be deemed to have authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds this Note to take any and all necessary action, if required, to implement the exercise of the Bail-in Power with respect to the Subordinated Notes as it may be imposed, without any further action or direction on the part of such Holder.
Each Holder of this Note also acknowledges and agrees that the foregoing description of the Bail-in Power and its exercise is exhaustive on the matters described herein to the exclusion of any other agreements, arrangements or understandings relating to the application of any Bail-in Power to the Subordinated Notes.
Each Holder of this Note that acquires such Subordinated Notes in the secondary market (including each beneficial owner) shall be deemed to acknowledge, agree to be bound by and consent to the same provisions specified herein to the same extent as the Holders of the Subordinated Notes that acquire the Subordinated Notes upon their initial issuance, including, without limitation, with respect to the acknowledgment and agreement to be bound by and consent to the terms of the Subordinated Notes, including in relation to the Bail-in-Power.
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Additional terms of the Subordinated Notes, including but not limited to events of default, remedies, payment of additional amounts in respect of withholding tax, substitution and variation of the Subordinated Notes upon certain regulatory events, and amendment are set forth in the Subordinated Debt Securities Indenture.
The Subordinated Debt Securities Indenture and the Subordinated Notes shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law provisions), except for Sections 12.01 and 12.02 of the Subordinated Debt Securities Indenture, Section 2.01(r) of the First Supplemental Indenture and the status of the Subordinated Notes, which shall be governed by and construed in accordance with the laws of The Kingdom of Spain, and except that the authorization and execution by the Company of the Subordinated Debt Securities Indenture and the Subordinated Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.
The Subordinated Notes and this Note have been issued in the State of New York.
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Exhibit 5.1
Tel. (d): +34 91 586 07 96
Fax (d): +34 91 586 04 71
carolina.albuerne@uria.com
Banco Santander, S.A.
Ciudad Grupo Santander, Avenida de Cantabria s/n
28660 Boadilla del Monte Madrid
Spain
Madrid, 8 August 2023
Dear Sirs,
U.S.$1,500,000,000 5.588% Senior Preferred Fixed Rate Notes due 2028 and U.S.$2,000,000,000 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033
We write to you as Spanish counsel to Banco Santander, S.A. (the “Bank”) for the purposes of, among others, issuing a legal opinion in connection with the issuance by the Bank of U.S.$1,500,000,000 5.588% Senior Preferred Fixed Rate Notes due 2028 and U.S.$2,000,000,000 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033 (both issuances, jointly, the “Notes”) pursuant to the Bank’s registration statement on Form F-3 dated 16 May 2023 filed with the United States Securities and Exchange Commission (the “SEC”) under the United States Securities Act of 1933, as amended (the “Registration Statement”).
A. Documents and information reviewed
In arriving at our opinions, we have reviewed the documents and information listed in the Schedule 1 (the “Documents”).
B. Assumptions
Our opinions are based on the following assumptions:
| (a) | All signatures, stamps and seals on the Documents are genuine. |
| (b) | The original Documents we have received are authentic and complete. Any copies we have received are complete and correspond to the originals. |
| (c) | The drafts of the Documents reviewed are the same as the Documents that were executed and approved. |
| (d) | All the parties to the Documents (other than the Bank) have been duly organised and validly exist under the laws of their respective countries of incorporation. |
| (e) | All the parties to the Documents (other than the Bank) have the corporate power to perform the transactions and be a party to the contracts contemplated in the Documents and the contracts have been signed by an individual or individuals who have sufficient capacity to validly and effectively bind the parties to the same and compliance with that established in the contracts is within the legal capacity of each of the parties thereto (other than the Bank). |
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| (f) | Each person who signed the Documents on behalf of the Bank had the legal capacity (capacidad de obrar) to do so at the time. |
| (g) | All the documents that should have been filed with the Commercial Registry of Cantabria by the Bank had been filed and registered on or before the date of our search, and subsequent to this no other documents that bear any relation to the opinions expressed in this legal opinion have been filed or registered. |
The content of the commercial registry excerpt issued by the Commercial Registry of Cantabria in relation to the Bank on 21 July 2023 and the information issued electronically by the website www.rmc.es on the date of this legal opinion and the website of the Insolvency Register (www.publicidadconcursal.es) accurately reflect the registered information about the Bank.
The information held at the Commercial Registry is assumed to be correct and valid pursuant to article 7 of the Commercial Registry Rules (Reglamento del Registro Mercantil).
| (h) | The certificates of the corporate resolutions reviewed are true and accurate and correspond to resolutions that have been validly approved in duly convened, constituted and quorate meetings. |
| (i) | There are no contractual or other limitations that bind any of the parties to the Documents and that are included in any document that we have not reviewed but that could affect this opinion, nor are there any agreements between any of the parties to the Documents which fully or partially annul, modify or supersede the content of the Documents. |
There are no decisions or resolutions of the governing bodies of the Bank that revoke or amend the decisions and resolutions reviewed.
There are no factual circumstances that have not been disclosed to us and that could affect this legal opinion.
| (j) | The articles of association (estatutos sociales) of the Bank that we have reviewed are those in force on the date of this legal opinion. |
| (k) | The Transaction Documents and the Notes (including the Global Notes) governed by the laws of a jurisdiction other than Spain create legal, valid, binding and enforceable obligations for each party to the Transaction Documents and the Notes under such laws. |
| (l) | The obligations deriving from the Transaction Documents and the Notes (including the Global Notes) that must be complied with in a jurisdiction other than Spain, or that could be affected in any way by the laws of such other jurisdiction, will not be invalid or ineffective by virtue of the said laws, or contrary to its public policy. |
| (m) | The transactions described in, contemplated in, or financed under the Transaction Documents and the Notes are not contrary to the Bank’s corporate interest (interés social) and the Bank’s directors have not breached their duty of care (deberes de diligencia y lealtad) in relation to the transaction; and the issue of the Notes is justified in the best corporate interest (interés social) of the Bank. |
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| (n) | (i) The centre of main interests of the Bank is located in Spain; (ii) the Bank is not unable to pay its debts as per article 2 of the Insolvency Law (Ley Concursal), which restated text was approved by Royal Legislative Decree 1/2020 of 5 May (the “Insolvency Law”); (iii) the Bank will not be unable to pay its respective debts as per article 2 of the Insolvency Law as a consequence of performing its obligations under the Transaction Documents and the Notes; (iv) no petition for insolvency (concurso) or extrajudicial settlement of payments (acuerdo extrajudicial de pagos) has been filed in relation to the Bank; (v) no insolvency or administrative receiver or insolvency mediator (mediador concursal) has been appointed, or their appointment sought, to oversee any of the assets of the Bank; (vi) the Bank does not fall under any ground for winding-up as set out in article 363 of the Spanish Companies Law (Ley de Sociedades de Capital), which restated text was approved by Royal Legislative Decree 1/2010 of 2 July; and (vii) the Bank is not in a situation that could determine the application of early intervention or resolution measures pursuant to Law 11/2015, of June 18, for the recovery and resolution of credit institutions and investment firms (Ley 11/2015, de 18 de junio, de recuperación y resolución de entidades de crédito y empresas de servicios de inversión). |
| (o) | The Global Notes have been issued, authenticated and deposited in the State of New York. |
| (p) | The Notes will be admitted to trading on the New York Stock Exchange LLC prior to their first interest payment date and will not be admitted to trading on any Spanish market. |
| (q) | The Notes will not be offered, distributed or sold in Spain in any manner that is inconsistent with the Prospectus. |
| (r) | The Notes will be originally registered with a clearing and settlement system located outside Spain that is recognized by Spanish law or by the law of another OECD country. |
| (s) | The Notes qualify as debt instruments pursuant to the applicable Spanish accounting rules and regulations. |
Where we have not independently verified facts material to the opinions, we have examined and relied on certificates issued by duly authorised representatives of the Bank.
C. Opinion
We do not represent ourselves to be familiar with the laws of any jurisdiction other than Spain as they stand at present and therefore express no opinion on matters arising under any laws other than the laws of Spain currently in force. This legal opinion is issued on the basis that all related-matters will be governed by, and construed in accordance with Spanish law, and that all matters between the addressees of this legal opinion and ourselves (in particular, those regarding interpretation) will be brought before the Spanish courts.
Our involvement in the transaction described has been limited to our role as Spanish counsel to the Bank, and we therefore assume no obligation to advise any other party to the transaction. Furthermore, we assume no obligation to advise the Bank or any other party of any changes to the law or facts that may occur after today’s date, regardless of whether they affect the legal analysis or conclusions in this legal opinion.
Legal concepts are expressed in some of the documents in English terms and may not be identical or equivalent to the Spanish legal terms used.
Based on the above, and subject to the additional exceptions, limitations and qualifications set out below, it is our opinion that:
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| 1. | Valid existence |
The Bank was duly incorporated and validly exists as a “sociedad anónima” under the laws of Spain.
| 2. | Corporate power |
The Bank has the required corporate power to issue the Notes.
| 3. | Corporate approvals |
The issuance of the Notes has been duly authorised by all the necessary corporate actions of the Bank.
D. Qualifications
The opinions above are subject to the following:
| (i) | In the absence of case law or even settled academic doctrine on certain matters, it is impossible to rule out the possibility that a Spanish court would have a different interpretation. |
| (ii) | Our opinions are issued subject to the effects and outcome of transactions that may derive from insolvency, the recovery and resolution proceedings of credit institutions and investment firms, pre-insolvency mechanisms or any other similar proceedings that generally affect the rights of all or some creditors, including those that do not fall under judicial insolvency proceedings (in particular, but not limited to, transactions that may derive from the insolvency regulations with respect to claw-back actions and refinancing agreements), as well as to any principles of public policy (orden público). |
| (iii) | The information available from the website www.rmc.es may not be entirely accurate or up to date. |
| (iv) | We offer no opinion as to the financial or economic reasonableness of the Transaction Documents or the transaction described herein. |
This legal opinion is rendered to the addressee identified in this letter and in connection with the transactions described above. This legal opinion is not to be used, circulated, quoted or referred to in any other way or for any other purpose, and no persons other than its addressees may make decisions based on it, nor may they claim any liability for its content without our prior written consent. Notwithstanding the foregoing, we hereby consent to the filing of this opinion as an exhibit to a current information report on Form 6-K, to be incorporated by reference in the Registration Statement and to the use of our name under the caption “Legal Opinions” in the Base Prospectus and in the Prospectus Supplements. In giving this consent, we do not admit that we are experts under the Securities Act or the rules and regulations of the SEC issued thereunder with respect to any part of the Registration Statement, including this opinion.
This opinion shall be governed exclusively by Spanish law and the courts of the city of Madrid (Spain) shall have exclusive jurisdiction to settle any dispute relating to this opinion.
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| Very truly yours, |
| /s/ Carolina Albuerne |
| Carolina Albuerne |
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Schedule 1.- Documents and information reviewed
| (a) | The information on the Bank publicly available on the website of the Spanish Central Commercial Registry (www.rmc.es), dated as of the date hereof; |
| (b) | a copy of the articles of association (estatutos sociales) of the Bank as publicly available at the website of the Bank (www.santander.com), dated as of the date hereof; |
| (c) | a copy of a notarial deed granted on 12 May 2023 before the Notary Public of Madrid Mr. Rafael Martínez Díe under the number 2,400 of his records by virtue of which, among others, the resolutions adopted by the Executive Committee of the Bank on 8 May 2023 approving the registration of the Registration Statement and the execution of the documents to which the Bank is a party in connection thereto (including the Senior Preferred Debt Base Indenture and the Subordinated Debt Base Indenture, as defined below) are raised to public |
| (d) | a commercial registry excerpt with respect to the Bank regarding its due existence and the current directors of the Bank issued by the Commercial Registry of Cantabria on 21 July 2023; |
| (e) | a copy of a notarial deed granted on 24 April 2007 before the Notary Public of Santander Mr. José María de Prada Díez under the number 1,125 of his records by virtue of which, among others, the resolutions adopted by the Board of Directors of the Bank on 26 March 2007 delegating all its powers (except those that cannot be legally delegated) on the Executive Committee are raised to public; |
| (f) | a copy of a notarial deed granted on 20 July 2023 before the Notary Public of Madrid Mr. Rafael Martínez Díe under the number 3,671 of his records by virtue of which the resolutions adopted by the Executive Committee of the Bank on 17 July 2023 approving the issuance of the Notes and the execution of the documents to which the Bank is a party in connection thereto are raised to public; |
| (g) | a copy of the minutes of decisions taken by Ms. Silvana Borgatti Casale on 31 July 2023, determining, among others, the definitive principal amount of each of the issuances and the interest rates; |
| (h) | a copy of the notarial deed of issuance of the Notes (escritura pública de emisión) granted on 3 August 2023, before the Notary Public of Madrid, Mr. Miguel Ruiz-Gallardón García, under the number 5,182 of his records, by the Bank; |
| (i) | a copy of the underwriting agreement executed on 31 July 2023 by the Bank and BofA Securities, Inc., Citigroup Global Markets Inc., Goldman Sachs Bank Europe SE, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Jefferies LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Santander US Capital Markets LLC, TD Securities (USA) LLC and Wells Fargo Securities, LLC (the “Underwriting Agreement”); |
| (j) | a copy of the senior preferred debt indenture dated 8 August 2023 entered into by the Bank and The Bank of New York Mellon, London Branch, as Trustee, (the “Senior Preferred Debt Base Indenture”); |
| (k) | a copy of the first senior preferred supplemental indenture to the Senior Preferred Debt Base Indenture dated 8 August 2023 entered into by the Bank, the Bank of New York Mellon, London Branch, as Trustee and the Bank of New York Mellon SA/NV, Luxembourg Branch, as registrar (this document together with the Senior Preferred Debt Base Indenture, the “Senior Preferred Debt Indenture”); |
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| (l) | the subordinated debt indenture dated 8 August 2023 entered into by the Bank and The Bank of New York Mellon, London Branch, as Trustee, (the “Subordinated Debt Base Indenture”); |
| (m) | the first subordinated debt supplemental indenture to the Subordinated Debt Base Indenture dated 8 August 2023 entered into by the Bank, the Bank of New York Mellon, London Branch, as Trustee and the Bank of New York Mellon SA/NV, Luxembourg Branch, as registrar (this document together with the Subordinated Debt Base Indenture, the “Subordinated Debt Indenture”); |
| (n) | a copy of the global notes evidencing the Notes dated 8 August 2023 (the “Global Notes”); |
| (o) | a copy of the Registration Statement which includes a base prospectus (the “Base Prospectus”) dated 16 May 2023; |
| (p) | a copy of the preliminary prospectus supplements prepared in connection with the issuance of the Notes dated 31 July 2023 (the “Preliminary Prospectus Supplements”); and |
| (q) | a copy of the final prospectus supplements prepared in connection with the issuance of the Notes dated 31 July 2023 (this document together with the Preliminary Prospectus Supplements, the “Prospectus Supplements”). |
The Underwriting Agreement, the Senior Preferred Debt Indenture and the Subordinated Debt Indenture will be hereinafter collectively referred to as the “Transaction Documents”.
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Exhibit 5.2
|
+1 212 450 4000 davispolk.com |
Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 |
August 8, 2023
Banco Santander, S.A.
Ciudad Grupo Santander
Avenida de Cantabria s/n
28660 Boadilla del Monte, Madrid, Spain
Ladies and Gentlemen:
Banco Santander, S.A., a sociedad anónima incorporated under the laws of The Kingdom of Spain (the “Company”), has filed with the Securities and Exchange Commission a Registration Statement on Form F-3 (File No. 333-271955) (the “Registration Statement”) and the related prospectus (the “Prospectus”) for the purpose of registering under the Securities Act of 1933, as amended (the “Securities Act”), certain securities, including: (i) $1,500,000,000 aggregate principal amount of the Company’s 5.588% Senior Preferred Fixed Rate Notes due 2028 (the “Senior Preferred Debt Securities”); and (ii) $2,000,000,000 aggregate principal amount of the Company’s 6.921% Tier 2 Subordinated Fixed Rate Notes due 2033 (the “Subordinated Debt Securities” and, together with the Senior Preferred Debt Securities, the “Securities”). The Senior Preferred Debt Securities are to be issued pursuant to the provisions of the senior preferred debt securities indenture dated as of August 8, 2023 (the “SP Base Indenture”), between the Company and The Bank of New York Mellon, London Branch, as trustee (the “Trustee”), as supplemented by the first supplemental indenture dated as of the date hereof, among the Company, The Bank of New York Mellon, London Branch, as trustee and principal paying agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch, as registrar (the “First SP Supplemental Indenture” and, together with the SP Base Indenture, the “SP Indenture”). The Subordinated Debt Securities are to be issued pursuant to the provisions of the subordinated debt securities indenture dated as of August 8, 2023 (the “Subordinated Base Indenture” and, together with the SP Base Indenture, the “Base Indentures”), between the Company and the Trustee, as supplemented by the first supplemental indenture dated as of the date hereof, among the Company, The Bank of New York Mellon, London Branch, as trustee and principal paying agent, and The Bank of New York Mellon SA/NV, Luxembourg Branch, as registrar (the “First Subordinated Supplemental Indenture” and, together with the Subordinated Base Indenture, the “Subordinated Indenture”, and the Subordinated Indenture together with the SP Indenture, the “Indentures”). The Securities are to be sold pursuant to the underwriting agreement dated July 31, 2023 (the “Underwriting Agreement”) among the Company and the several underwriters named therein (the “Underwriters”).
We, as your counsel, have examined originals or copies of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion.
In rendering the opinions expressed herein, we have, without independent inquiry or investigation, assumed that (i) all documents submitted to us as originals are authentic and complete, (ii) all documents submitted to us as copies conform to authentic, complete originals, (iii) all signatures on all documents that we reviewed are genuine, (iv) all natural persons executing documents had and have the legal capacity to do so, (v) all statements in certificates of public officials and officers of the Company that we reviewed were and are accurate and (vi) all representations made by the Company as to matters of fact in the documents that we reviewed were and are accurate.
Based upon the foregoing, and subject to the additional assumptions and qualifications set forth below, we advise you that, in our opinion, assuming that the Securities have been duly authorized, executed and delivered by the Company insofar as Spanish law is concerned, the Securities (other than the terms thereof expressed to be governed by Spanish law, as to which we express no opinion), when executed and authenticated in accordance with the provisions of the SP Indenture or the Subordinated Indenture, as applicable, and delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability and may be subject to possible judicial or regulatory actions giving effect to governmental actions or foreign laws affecting creditors’ rights.
In connection with the opinion expressed above, we have assumed that the Company is validly existing as a corporation under the laws of Spain. In addition, we have assumed that the Indentures and the Securities (collectively, the “Documents”) are valid, binding and enforceable agreements of each party thereto, except to the extent expressly covered above with respect to the Company. We have also assumed that the execution, delivery and performance by each party to each Document to which it is a party (a) are within its corporate powers, (b) do not contravene, or constitute a default under, the certificate of incorporation or bylaws or other constitutive documents of such party, (c) require no action by or in respect of, or filing with, any governmental body, agency or official and (d) do not contravene, or constitute a default under, any provision of applicable law, regulation or any judgment, injunction, order or decree or any agreement or other instrument binding upon such party.
We express no opinion as to (i) the provisions in the Documents relating to bail-in, (ii) any provisions in the Indentures that purport to waive objections to venue, claims that a particular jurisdiction is an inconvenient forum or the like, (iii) the effectiveness of any service of process made other than in accordance with applicable law, (iv) whether a New York State or United States federal court would render or enforce a judgment in a currency other than U.S. Dollars or (v) the exchange rate that such a court would use in rendering a judgment in U.S. Dollars in respect of an obligation in any other currency.
We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York and the federal laws of the United States, except that we express no opinion as to any law, rule or regulation that is applicable to the Company, the Documents or such transactions solely because such law, rule or regulation is part of a regulatory regime applicable to any party to any of the Documents or any of its affiliates due to the specific assets or business of such party or such affiliate. Insofar as the foregoing opinion involves matters governed by Spanish law, we have relied, without independent inquiry or investigation, on the opinion of Uría Menéndez, special legal counsel in Spain for the Company, dated as of August 8, 2023, to be filed as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof concurrently with this opinion.
We hereby consent to the filing of this opinion as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof and its incorporation by reference into the Registration Statement and further consent to the reference to our name under the caption “Legal Opinions” in the prospectus supplement which is a part of the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
| August 8, 2023 | 2 |
Very truly yours,
/s/ Davis Polk & Wardwell LLP
| August 8, 2023 | 3 |