4. Terms and Conditions of the Notes
Version 1 - Released and Dated 14th November 2022
4. Terms and Conditions of the Notes
These (other than the sections herein which are set out in italics) are the terms and conditions ("Conditions") of the notes to be issued from time to time ("Notes") by “FRICTIONLESS MARKETS SECURITIES” a Securitisation Fund availing itself of separate compartments (each, a "Compartment"), managed and represented by its Management Company named FRICTIONLESS MARKETS Sàrl, a Luxembourg limited liability company organised as a securitisation management company within the meaning of the Law relating to securitisations of 22nd of March 2004, as amended (the "Securitisation Law"), acting for and on behalf of each of the Compartment of the Securitisation Fund (the "Issuer"). Definitions contained in this italicised paragraph shall be incorporated into the Conditions.
The Notes will be identified as forming different series (each, a "Series"), each of which will comprise Notes bearing interest (if any) on the same basis and at the same rate and on identical terms and which are issued by the Issuer on the same date (save for Notes that are consolidated and form a single Series with Notes of a later date).
Each Series will be issued at the charge of a separate Compartment of the Issuer (that is, by the Issuer acting in respect of and on account of such Compartment) and these Conditions apply separately to each such Series of Notes. References in these Conditions to "Notes" are to the Notes of one Series only, not to all Notes which may be issued under the Issuer's FRICTIONLESS MARKETS SECURITIES Note Programme (the "Programme").
The Notes of any single Series are constituted by and are initially subscribed for pursuant to a set of issuance documents
(i) setting out the final terms and conditions (which may amend or supplement these Conditions) of such Series (the "Final Terms");
(ii) constituting the Security (if any) for the Series of Notes;
(iii) appointing any Calculation Agent relevant to such Series of Notes; and (iv) to the extent agreed, amending or supplementing the Custody Agreement, Security Agreement or Agency Agreement in respect of such Series of Notes (each as defined below), by and between (among others) the Issuer and the relevant Agent.
These Conditions apply in relation to the Notes of any Series as completed, modified and amended by the provisions of the applicable Final Terms (and each reference herein to a specific provision is to such provision as so completed, modified or amended).
These Conditions apply to Notes in Eurosystem-eligible new global note form as completed, modified and amended by the provisions of the Final Terms and by the provisions of the relevant Global Note (as defined below).
The Issuer and (if appointed) the paying and/or settlement agent (the "Paying Agent") will enter into an agency agreement in respect of the Programme (the "Agency Agreement") which may be amended, modified or supplemented from time to time in respect of an individual series of Notes and which shall constitute a separate agency agreement in respect of each Series of Notes issued under the Programme.
The Issuer and (if appointed) the custodian (the "Custodian") will enter into a custody agreement in respect of the Programme (the "Custody Agreement") which may be amended, modified or supplemented from time to time in respect of an individual secured series of Notes and which shall constitute a separate custody agreement in respect of an individual secured Series of Notes to the extent the Issuer deems it necessary to appoint a Custodian in respect of such Series. A Custody Agreement will only apply to a secured Series of Notes. The Issuer may, in its discretion, choose to appoint a different entity as custodian on a secured Series of Notes and, where it does so, shall enter into custody appointment terms with such custodian (and such appointment terms shall be deemed to be a Custody Agreement for the purposes of these Conditions).
The Issuer may, to the extent it deems it necessary to do so, enter into a calculation agency agreement (the "Central Administration Service Agency Agreement") with a calculation agent (a "Calculation Agent") in respect of an individual Series of Notes.
The Issuer and (if appointed) the security trustee (the "Security Trustee") will enter into a security agreement in respect of the Programme (the "Security Agreement") which may be amended, modified or supplemented from time to time in respect of an individual secured series of Notes and which shall constitute a separate security agreement in respect of each secured Series of Notes issued under the Programme. The Security Agreement will only apply to a secured Series of Notes. The Issuer may, in its discretion, choose to appoint a different entity as security trustee on a secured Series of Notes and, where it does so, shall enter into security trustee appointment terms with such security trustee (and such appointment terms shall be deemed to be a Security Agreement for the purposes of these Conditions).
Copies of the Private Placement Memorandum, the respective Final Terms and the documents incorporated by reference herein and therein, including the provisions of the Agency Agreement, the Custody Agreement, any Centrale Administration Service Agreement and the respective Security Agreement, are available for inspection of the Website (www.frictionless.markets) or during normal office hours at the registered office of the Issuer in Luxembourg and (by prior appointment by a Noteholder) at the office of the Paying Agent. The holders of the Notes are deemed to have notice of and shall be bound by, all of the provisions of the aforementioned relevant documents and any other documents entered into in connection with the Notes as well as the articles of association of the Issuer, in each case as amended and restated from time to time.
1 Definitions and Interpretation
1.1 In these Conditions:
"Agents" means the Paying Agent and any Custodian and/or Calculation Agent appointed in respect of a Series of Notes;
"Business Day" means in the case of the euro, a day on which the TARGET System is open for the settlement of payments in euro and, in the case of a currency other than the euro, a day other than a Saturday or Sunday on which banks and foreign exchange markets settle payments in the principal financial centre for such currency;
"Commercial Companies Law 1915" means the Law concerning commercial companies of 10 August 1915 (Loi du 10 août 1915 concernant les sociétés commerciales), as amended;
"Day Count Fraction" means, in respect of the calculation of an amount of interest on any Note for any period of time (whether or not constituting an Interest Period, the "Calculation Period"):
(i) if "Actual/Actual (lCMA)" is specified hereon:
(a) in the case of Notes where the number of days in the relevant period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (the "Accrual Period") is equal to or shorter than the Determination Period during which the Accrual Period ends, the number of days in such Accrual Period divided by the product of (I) the number of days in such Determination Period and (II) the number of Interest Determination Dates (as specified in the applicable Final Terms) that would occur in one calendar year; or
(b) in the case of Notes where the Accrual Period is longer than the Determination Period during which the Accrual Period ends, the sum of:
(A) the number of days in such Accrual Period falling in the Determination Period in which the Accrual Period begins divided by the product of (x) the number of days in such Determination Period and (y) the number of Interest Determination Dates that would occur in one calendar year; and
(B) the number of days in such Accrual Period falling in the next Determination Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Interest Determination Dates that would occur in one calendar year; and
(ii) if "Actual/365" or "Actual/Actual (lSDA)” is specified hereon, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365);
(iii) if "Actual/365 (Fixed)" is specified hereon, the actual number of days in the Calculation Period divided by 365;
(iv) if "Actual/365 (Sterling)" is specified hereon, the actual number of days in the Interest Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366;
(v) If "Actual/360" is specified hereon, the actual number of days in the Calculation Period is divided by 360;
(vi) if "30/360" "360/360" or "Bond Basis is specified hereon, the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless (a) the last day of the Calculation Period is the 31st day of a month but the first day of the Calculation Period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (b) the last day of the Calculation Period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)); and
(vii) if "30E/360" is specified hereon, the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with 12 30-day months, without regard to the date of the first day or last day of the Calculation Period unless the last day of that Calculation Period is the Maturity Date and falls on the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month).
"Underlying Assets" means the Issuer's rights, titles and/or interests in and to the assets purchased or otherwise acquired by a Compartment of the Issuer with the net proceeds from the issue of a given Series of Notes together with all other assets of such Compartment, including without limitation all payments received by the relevant Compartment from time to time in respect of such assets;
"Equivalent Obligations" means any Obligations that are issued in fungible form and that share common terms and conditions;
"Event of Default" means each of the following events or circumstances:
(a) the Issuer does not pay on the due date any amount payable pursuant to these Conditions and the applicable Transaction Documents at the place at and in the currency in which it is expressed to be payable unless its failure to pay is caused by administrative or technical error and payment is made within ten Business Days of its due date;
(b) the Issuer does not comply with any provision of these Conditions and the applicable Transaction Documents other than those referred to in paragraph (a) above unless the failure to comply is capable of remedy and is remedied within ten Business Days of the Issuer becoming aware of the failure to comply;
(c) any express representation or statement made by the Issuer in the applicable Transaction Documents or any other document delivered by or on behalf of the Issuer under or in connection with the Notes is or proves to have been incorrect or misleading in any material respect when made or deemed to be made;
(d) the relevant Compartment of the Issuer is unable or admits inability to pay its debts as they fall due or suspends making payments on any of its debts; or
(e) it is or becomes unlawful for the Issuer to perform any of its obligations under the Transaction Documents;
"Interest Commencement Date" means the issue date of the Notes or such other date as may be specified as such in the applicable Final Terms;
"Interest Payment Date" means each date specified as such in the applicable Final Terms or if none is specified, the last day of each Interest Period;
"Interest Period" means each period determined in accordance with the applicable Final Terms, not extending beyond the Maturity Date; provided that if any such period would otherwise end on a day which is not a Business Day, unless otherwise specified in the applicable Final Terms, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not);
"Interest Rate" means the rate of interest payable from time to time in respect of the Notes and which is specified in, or calculated in accordance with the provisions of, the applicable Final Terms;
"Issue Date" means the date on which the Notes are issued by the Issuer as may be specified as such in the applicable Final Terms;
"Maturity Date" means the date specified as such in the applicable Final Terms;
"Meeting of Noteholders" means a meeting of the Noteholders held in accordance with the Agency Agreement;
"Noteholder" means a holder of one or more Notes save that, for so long as such Notes or any part thereof are represented by the Global Note deposited with a common safekeeper for Euroclear and Clearstream, Luxembourg or, in respect of Notes in definitive form held in an account with Euroclear or Clearstream, Luxembourg, each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg (other than Clearstream, Luxembourg, if Clearstream, Luxembourg shall be an accountholder of Euroclear, and Euroclear, if Euroclear shall be an accountholder of Clearstream, Luxembourg) as the holder of a particular principal amount of the Notes shall be deemed to be the holder of such principal amount of such Notes (and the holder of the relevant Global Note shall be deemed not to be the holder) for all purposes of the Transaction Documents other than with respect to the payment of principal or interest on such principal amount of such Notes, the rights to which shall be vested, as against the Issuer and the Security Trustee, solely in such common safekeeper and for which purpose such common safekeeper shall be deemed to be the holder of such principal amount of such Notes in accordance with and subject to its terms and the provisions of the Transaction Documents;
"Obligation" means any obligation of the Issuer for the payment or repayment of borrowed money, which shall include, without limitation, any Note and any other obligation that is in the form of, or represented by, a bond, note, certificated debt security or other debt security and any obligation that is documented by a term loan agreement, revolving loan agreement or other similar credit agreement (to the extent allowed under the Securitisation Law).
“Paying Agent” means an Agent whose principal function shall inter alia consist of the following :
1. delivering the Notes to the Noteholder(s) upon instruction of the Issuer and credit net proceeds to the relevant accounts;
2. collecting the interest and/or redemption amounts from an Issuer, one (1) Business Day prior to their payment date;
3. proceeding with the payment of the interest and/or redemption amounts to the Noteholders, through the ISCDs, on the applicable payment dates;
4. maintaining any books and accounting data pertaining to the services at all times up-to-date;
5. communicating to the Issuer and the ICSDs, without any undue delay, all information and documentation pertaining to the execution by the Paying Agent of the services;
6. completing, authenticating and delivering Global Notes and/or Certificates to the relevant ICSD or common depositary;
7. Exchanging temporary Global Notes and/or Permanent Global Notes for Definitive Notes, as the case may be; and
8. otherwise fulfilling its duties and obligations pursuant to the Agency Agreement.
"Potential Default" means an event which, with notice or lapse of time or both, would constitute an Event of Default;
"Redemption Amount" means, unless otherwise specified in the applicable Final Terms, the outstanding nominal amount of such Note;
“Registrar and Transfer Agent” means agent whose principal functions are to i) register and maintain detailed records of the transactions involving the Notes and ii) issue and cancel certificates (and any other relevant title) to reflect changes in ownership of the Notes (as the case may be).
"Relevant Currency" means the currency specified as such in the applicable Final Terms or if none is specified, euro;
"Secured Creditors" means the Security Trustee, the Agents, the Noteholders and each other person named as such in the Security Agreement;
"Secured Property" means the assets, rights, property and sums secured pursuant to the Transaction Documents including the Underlying Assets, all cash held by the Issuer in respect of the Series, all rights and interests of the Issuer under the Agency Agreement, the Custody Agreement and the other Transaction Documents and any other rights, titles and interest charged or assigned or secured in favour of the Security Trustee pursuant to the Transaction Documents (as the case may be), in each case securing the Issuer's payment obligations to the Secured Creditors under the relevant Series;
"Security" means the security constituted by the Issuance Documentation (including any covenants, representations or undertakings given in favour of the Security Trustee under the Security Agreement) for a specific Series of Notes and/or any other security documents (a "Security Document") in respect of such Notes which creates or purports to create security in favour of the Security Trustee for the benefit of the Secured Creditors;
"Transaction Documents" means the Notes, the Conditions, the Final Terms, the Agency Agreement, any Custody Agreement, any Central Administration Service Agreement (in each case in respect of any Series of Notes), the Security Agreement, any deed of covenant or similar executed in connection with a Series of Notes and any other security documents entered into in connection with a Series of Notes and any other documents named as Transaction Documents constituting such Series of Notes; and
"Transaction Party" means each party to a Transaction Document other than the Issuer, and any other person specified as a Transaction Party in the applicable Final Terms.
“Website” means the website created and maintained for the Issuer and the Noteholders, named www.frictionless.markets
1.2 Words and expressions denoting the singular shall, where the context permits or requires, include the plural and vice versa and words and expressions denoting the masculine shall, where the context permits or requires, include the feminine and neuter and vice versa.
2 Form, denomination and title
2.1 The Notes will be by default in denominations of EUR 100.000,00 each (or the equivalent amount in any other currency) unless otherwise specified in the Final Terms.
2.2 The Notes will be issued at an issue price corresponding to 100% of their face value unless otherwise stated in the relevant Final Terms.
For so long as the Notes are admitted to trading on the professional segment of the Euro MTF Market and the rules of this exchange so require, the Issuer will publish a notice of any change in these denominations in accordance with the requirements of such rules.
2.3 The Issuer shall be free from time to time without the consent of the Noteholders to create and issue further Notes in respect of the other Compartments.
The Issuer may without the prior written consent of the general meeting of the Noteholders, issue several Series of Notes (each, a “Series” or “Series of Notes") in which payments by the Issuer may be made in different currencies.
As used herein, “Tranche” means Notes which are identical and fungible in all respects and “Series” means a Tranche of Notes together with any further Tranche or Tranches of Notes which are (i) expressed to be consolidated and form a single Series and (ii) having the same Terms and Conditions and being identical and fungible in all respects except for their respective Issue Dates and/or subscription prices and/or redemption rules (as described in the relevant Final Terms).
2.4 The Notes of each Series issued in bearer form (“Bearer Notes”) will be represented on the issue by a temporary global note in bearer form (each a “Temporary Global Note”) or a permanent global note in bearer form (each a “Permanent Global Note”) (collectively, the “Global Notes”).
If the Global Notes are stated in the relevant Final Terms to be issued in new global note (“NGN”) form, the Global Notes will be delivered on or prior to the original issue date of the relevant Series/Tranche to a common safekeeper (the “Common Safekeeper”) for Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking S.A. (“Clearstream, Luxembourg”).
Notes in registered form (“Registered Notes”) will be represented by registered certificates (each a “Certificate”), one Certificate being issued in respect of each Noteholder's entire holding of Notes in the registered form of one Series. Certificates representing Registered Notes that are held in one or more clearing systems are referred to as global certificates (“Global Certificates”).
If a Global Certificate is held under the New Safekeeping Structure (the “NSS”) the Global Certificate will be delivered on or prior to the original issue date of the relevant Series/Tranche to a Common Safekeeper for Euroclear and Clearstream, Luxembourg.
Global notes which are not issued in NGN form (“Classic Global Notes” or “CGN”) and Global Certificates which are not held under the NSS will be deposited on the issue date of the relevant Tranche with a common depositary on behalf of Euroclear and Clearstream, Luxembourg (the “Common Depositary”).
Specific provisions will be set out in the relevant Final Terms in the cases where a Series of Notes is intended to be cleared through any clearing system other than Euroclear Bank SA/NV and Clearstream Banking S.A. or delivered outside a clearing system.
2.5 Global Notes will be deposited with a common safe keeper for Euroclear Bank SA/NV ("Euroclear") and/or Clearstream Banking S.A. ("Clearstream") and each Global Note may contain provisions which modify these terms and conditions as they apply to such Global Note (and references in these terms and conditions to "Notes" shall mean as the context may permit or require (a) units of a denomination of EUR 100.000,00 (one hundred thousand euros) each and (b) any Global Note).
2.6 Transfers of Notes are to be made in accordance with the respective rules and procedures of Euroclear or Clearstream, as applicable.
2.7 Global Notes may only be converted into definitive bearer notes (with, if applicable, coupons and talons attached) in the circumstances set out in such Global Notes and in accordance with the terms of the Transaction Documents. To the extent that it is necessary to issue Notes in definitive form, the costs of producing definitive bearer notes shall be borne by the Issuer and the Issuer shall use its best endeavours to effect all necessary amendments to the Transaction Documents to reflect such issue of definitive Notes. The Issuer and any Paying Agent may (to the fullest extent permitted by applicable laws) deem and treat the bearer of any Note as the absolute owner for all purposes (whether or not the Note shall be overdue and notwithstanding any notice of ownership or writing on the Note or any notice of previous loss or theft of the Note). Title to Notes shall pass by delivery.
3 Status of the notes, use of proceeds, Subordination rules
3.1 The Notes are limited recourse obligations of the Issuer, ranking pari passu without any preference among themselves, recourse in respect of which is limited in the manner described in Condition 4. The Notes are either secured or unsecured as described in Conditions 4.1 and 4.2.
3.2 The net proceeds from each issue of Notes will be used to purchase or otherwise acquire Underlying Assets, to pay for or enter into any ancillary transaction in connection with the issue of such Notes or acquisition of such Underlying Assets and to pay general expenses in connection with the administration of the Issuer, the issue of the Notes or acquisition of the Underlying Assets.
3.3 By default, the following subordination rules apply to financial instruments issued by the Issuer or the loan contracted by the Issuer :
The units issued at the charge of the Issuer are subordinated to the other financial instruments issued and to the loans contracted by the Issuer;
Non-fixed yield debt financial instruments issued by the Issuer are subordinated to fixed yield debt financial instruments issued by the Issuer.
Notwithstanding the above-mentioned provisions, any relevant Final terms may contain clauses defining differently the rank of the rights of investors and creditors.
4 Security, compartments and limited recourse
4.1 If so specified in the applicable Final Terms, the Notes of any Series issued by a Compartment of the Issuer will be secured in favour of the Security Trustee (for the benefit of itself and the other Secured Creditors) by a security interest in any and all securities and other financial instruments owned by such Compartment together with any and all claims that such Compartment has or may assert against any party as security for any and all financial obligations owed by the Compartment to the holders of Notes of the Series. Further, the Issuer shall in relation to any such secured Series of Notes, assign its rights (but not its obligations) under the Transaction Documents relating to such Series of Notes in favour of the Security Trustee.
4.2 Unless otherwise specified in the applicable Final Terms, such security interest (if any) shall be in the form of:
(a) a first fixed charge over the Underlying Assets and all property, assets and sums derived therefrom, in each case from time to time;
(b) an assignment by way of security of all the Issuer’s rights, title and interest attaching or relating to the Underlying Assets) and all property, sums or assets derived therefrom, including, without limitation, any right to delivery thereof or to an equivalent number or nominal value thereof which arises in connection with any such assets being held in a clearing system or through a financial intermediary;
(c) an assignment by way of security of the Issuer’s rights, title and interest against the Custodian and any relevant sub-custodian, to the extent that they relate to the Underlying Assets and/or the Notes;
(d) an assignment by way of security of the Issuer’s rights, title and interest under the Agency Agreement, the Custody Agreement and the Central Administration Service Agreement, to the extent that they relate to the Underlying Assets and/or the Notes;
(e) an assignment by way of security of the Issuer’s rights, titles and interests under the Custody Agreement, to the extent that they relate to any assets held by the Custodian and any relevant sub-custodian in respect of the Notes; and
(f) a first fixed charge over all sums held by the Paying Agent to meet payments due in respect of any amount owed to a Secured Creditor under the relevant Series.
4.3 The provisions of Conditions 4.4 to 4.6 shall apply in connection with any secured Series and shall not apply to any unsecured Series. The provisions of Conditions 4.7 to 4.8 shall apply in connection with any unsecured Series and shall not apply to any secured Series. The remainder of Condition 4 shall apply to a secured Series and an unsecured Series.
4.4 The obligations of the Issuer to pay any amounts due and payable in respect of a Series of Notes and to the other Transaction Parties at any time in respect of a Series shall be limited to the proceeds available out of the Secured Property in respect of such Series at such time to make such payments in accordance with Condition 11.4 and the Security Agreement. Notwithstanding anything to the contrary contained herein, or in any Transaction Document, in respect of a Series, the Transaction Parties and the Noteholders shall have recourse only to the Secured Property in respect of the Series, subject always to the Security, and not to any other assets of the Issuer. If, after (i) the Secured Property in respect of the Series is exhausted (whether following liquidation or enforcement of the Security or otherwise) and (ii) application of the available proceeds in accordance with Condition 11.4 and the Security Agreement, any outstanding claim, debt or liability against the Issuer in relation to the Notes of the Series or the Transaction Documents relating to the Notes of the Series remains unpaid, then such outstanding claim, debt or liability, as the case may be, shall be extinguished and no debt shall be owed by the Issuer in respect thereof. Following extinguishment in accordance with this Condition, none of the Transaction Parties or the Noteholders or any other person acting on behalf of any of them shall be entitled to take any further steps against the Issuer or any of its officers, shareholders, members, incorporators, corporate service providers or managers to recover any further sum in respect of the extinguished claim and no debt shall be owed to any such persons by the Issuer or any of its officers, shareholders, members, incorporators, corporate service providers or managers in respect of such further sum in respect of the Series.
4.5 None of the Transaction Parties (save for the Secured Parties who may lodge a claim in liquidation of the Issuer which is initiated by another party (but not otherwise) or take proceedings to obtain a declaration or judgment as to the obligations of the Issuer), the Noteholders, any Secured Creditor or any person acting on behalf of any of them may, at any time, institute, or join (except as aforesaid) with any other person in bringing, instituting or joining, the opening of any bankruptcy proceedings (faillite), insolvency proceedings, proceedings for voluntary or judicial liquidation (insolvabilité, liquidation volontaire ou judiciaire,) composition with creditors (concordat préventif de faillite), reprieve from payment (sursis de paiement) controlled management (gestion contrôlée), fraudulent conveyance (actio pauliana), general settlement with creditors or reorganisation proceedings or similar proceedings affecting the rights of creditors generally) or the appointment of an examiner in respect of the Issuer (including, without limitation, the appointment of any receiver (curateur), liquidator (liquidateur), auditor (commissaire), verifier (expert-vérificateur, juge délégué or juge commissaire), or any other similar proceedings (whether court-based or otherwise) in relation to the Issuer or any of its officers, shareholders, members, incorporators, corporate service providers or managers or any of its assets, and none of them shall have any claim arising with respect to the assets and/or property attributable to any notes other than the Notes issued by the Issuer (save for any further notes which form a single series with the Notes) or Secured Property in respect of a different Series of Notes or Obligations issued or entered into by the Issuer or any other assets of the Issuer (other than the Secured Property in respect of the Series).
4.6 In addition, none of the Transaction Parties, the Noteholders or any person acting on behalf of any of them shall have any recourse against any manager, shareholder, or officer of the Issuer in respect of any obligations, covenant or agreement entered into or made by the Issuer pursuant to the terms of these Conditions, the Security Agreement or any other Transaction Documents.
4.7 If the Underlying Assets of a Compartment and the net proceeds of the realisation of the security created pursuant to or in connection with the Security Document (if any) and/or any additional security are not sufficient to make all payments due in respect of the Notes issued by that Compartment, then the obligations of the Issuer in respect of such Notes will be limited to such Underlying Assets and net proceeds. For the avoidance of doubt, the assets of the other Compartments of the Issuer will not be available for payment of any shortfall (but will remain available to the holders of Notes issued by such Compartments). Accordingly, any shortfall shall be borne by the holders of the Notes issued by the relevant Compartment and no Secured Creditor shall have recourse to the Issuer or the Security Trustee in relation to any such shortfall in such circumstances.
4.8 The Issuer will not be obliged to make any further payment in excess of the aforementioned Underlying Assets and net proceeds and any right to receive any further sum in each case in respect of any shortfall remaining after application of the relevant Underlying Assets and net proceeds shall be extinguished and no Noteholder may take any further action to recover the shortfall (and failure to make any payment in respect of any shortfall shall in no circumstances constitute an Event of Default). In particular, subject to and in accordance with article 64, paragraph (1) of the Securitisation Law, no Noteholder can attach property of the Issuer or apply for bankruptcy of the Issuer or request the opening of any other collective or restructuring proceedings in respect of the Issuer.
4.9 The provisions of Condition 4.4 to 4.6 (inclusive) or Condition 4.7 to 4.8 (inclusive) (as applicable depending on whether a Series is a Secured Series or an unsecured Series) shall survive notwithstanding any redemption of the Notes of any Series or the termination or expiration of any Transaction Document.
4.10 The Issuer's general expenses and liabilities, which do not specifically relate to any Compartment or which otherwise relate to the general core of the Issuer, may be apportioned between the Compartments in such commercially reasonable manner as the Issuer's Management Company may determine in its sole discretion.
4.11 Notwithstanding the above, where any Underlying Assets and/or any property, assets and sums derived therefrom are held by the Custodian in book-entry form, the security interests granted in respect of the same might, as a result of such book-entry holding, take the form only of a security interest over the Issuer's rights against the Custodian in respect of such Underlying Assets and/or property, sums and assets, as the case may be, rather than a charge over such Underlying Assets and/or property, sums and assets derived therefrom themselves.
4.12 Certain of the assets being the subject of the Security shall be released from the Security automatically, without the need for any notice or other formalities, to the extent required for the Issuer to be able to duly make any payment or delivery in respect of the Notes and/or the other Transaction Documents which is due and payable or deliverable, or in connection with the purchase of Notes or as otherwise provided for under the Conditions or the relevant Transaction Documents in respect of a Series.
5 Role of the Security Trustee and Enforcement
5.1 Each Noteholder by purchasing and/or holding Notes acknowledges and agrees that a Security Trustee shall only be appointed if the requisite Notes are to be secured and, in the absence of a Security Trustee, each Noteholder shall be solely responsible for the enforcement of its rights under the Notes (including taking any steps or pursuing any remedies against the Issuer and/or accelerating the Notes in accordance with these Conditions) and that no Agent shall be responsible for taking any such action on behalf of a Noteholder.
5.2 Where a Security Trustee has been appointed in connection with a Series of Notes only the Security Trustee may enforce the Security and no Noteholder shall be entitled to enforce the Security unless the Security Trustee, having become bound to proceed in accordance with the Security Agreement, fails to do so within a reasonable period and such failure is continuing.
5.3 Where a Security Trustee has been appointed in connection with a Series of Notes, the rights, obligations and duties of the Security Trustee shall be set out in the Security Agreement which each Noteholder shall be deemed to have reviewed and approved in full. No Security Trustee shall suffer any liability to any person where it complies with its obligations under the Security Agreement.
5.4 Notwithstanding the foregoing (but subject to the detailed provisions of the Security Agreement) the Issuer, each Noteholder and each other Secured Party (other than the Security Trustee) acknowledge and agrees that:
(a) at any time after the occurrence of an Enforcement Event the Security Trustee (without the need for notice to any person) shall, if so directed by an Extraordinary Resolution (but subject to being indemnified and/or pre-funded and/or secured to its satisfaction), enforce all or any part of the Security constituted by the Transaction Documents (if applicable);
(b) in order to enforce the Security the Security Trustee may:
(i) sell, call in, collect and convert the Secured Property into money and the Security Trustee may take possession of all or part of the Secured Property over which the Security shall have become enforceable;
(ii) take such action, step or proceeding against any obligor as it is instructed to take by the Noteholders in accordance with the Security Agreement without any liability to any other Secured Creditor as to the consequence of such action and without having regard to the effect of such action, step or proceeding on individual Noteholders or any other Secured Creditor; and
(iii) take any such other action or step or enter into any such other proceedings as it is instructed to take by the Noteholders in accordance with the Security Agreement (including, without limitation, taking possession of all or any of the Secured Property and/or appointing a receiver) as are permitted under the Security Agreement,
and the Security Trustee shall not be required to take any action, step or proceeding in relation to the enforcement of the Security without first being indemnified and/or secured and/or pre-funded to its satisfaction;
(c) following an Enforcement Event the Security Trustee will hold amounts received by it under the Security Agreement on trust to apply them in accordance with such Security Agreement. The Noteholders and each other Secured Creditor is deemed to have knowledge of such order of application, including where the Security Agreement allows the Security Trustee to pay any amounts owing to it, or to any Agent, prior to applying amounts to Noteholders;
(d) the Security Trustee shall not be obliged (1) to take any action in relation to the realisation of Security over any Secured Property, (2) to take any proceedings to enforce repayment of sums due under the Transaction Documents, or (3) to take any other action under the Transaction Documents including but not limited to agreeing on modifications or waivers to any Transaction Document or exercising any other rights it has under any Transaction Document, unless it shall have been directed by an Extraordinary Resolution to do so and only then if it is indemnified, pre-funded or secured to its satisfaction. In no circumstances will the Security Trustee be obliged to take any action which may involve the Security Trustee in any personal liability or expense that is not assured to it. Notwithstanding the foregoing, the Security Trustee may at all times, whether or not so directed, take such action in respect of any right, power or discretion which is personal to the Security Trustee or is to preserve or protect the Security Trustee's position or is of a purely administrative nature;
(e) the Security Trustee is entitled to be indemnified and relieved from responsibility in certain circumstances and to be paid its costs and expenses in priority to the claims of the Noteholders. In addition, the Security Trustee is entitled to enter into business transactions with the Issuer and any entity relating to the Issuer without accounting for any profit and to act as trustee for the holders of any other securities issued or guaranteed by, or relating to, the Issuer and/or any of its subsidiaries;
(f) in connection with the exercise by it of any of its trusts, powers, authorities and discretions (including, without limitation, any modification, waiver, authorisation or determination referred to above), the Security Trustee shall have regard to the general interests of the Noteholders as a class (but shall not have regard to any interests arising from circumstances particular to individual Noteholders (whatever their number) and, in particular but without limitation, shall not have regard to the consequences of any such exercise for individual Noteholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Security Trustee shall not be entitled to require, nor shall any Noteholder be entitled to claim from the Security any indemnification or payment in respect of any tax consequences of any such exercise upon individual Noteholders;
(g) the Security Trustee may, in making any determination under the Transaction Documents, act on the opinion or advice of, or information obtained from, any accountants, financial advisers, investment bank, auditors or other experts and will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience which may result from it so acting; and
(h) the Security Trustee may rely without liability to Noteholders on any certificate or report prepared by any of the above-mentioned advisers, auditors or experts pursuant to the Transaction Documents, whether or not the expert, adviser or auditor’s liability in respect thereof is limited by a monetary cap or otherwise.
6 Undertakings
6.1 The Issuer shall in the Security Agreement provide an undertaking in favour of the Security Trustee stating that it will not grant or permit to subsist any security interest upon the whole or any part of its assets having priority over and ranking ahead of any other security interest created in accordance with Condition 4 (other than any lien or other security interest arising by operation of law or in the ordinary course of business and not as a result of any default or omission by the Issuer and excluding liens for taxes that are overdue and uncontested).
6.2 The Issuer covenants and undertakes to comply with all applicable laws, including without limitation all laws on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing and all regulations and guidelines promulgated thereunder.
6.3 The Issuer shall not, without the prior consent in writing of the Security Trustee (in the case of a secured Series of Notes) or the prior consent of the Noteholders acting by way of Extraordinary Resolution (in the case of an unsecured Series of Notes) and except as provided for or contemplated in the Transaction Documents and the Securitisation Law:
(a) engage in any business other than the issuance or entry into of Obligations, the entry into of related agreements and transactions and the performing of acts incidental thereto or necessary in connection therewith, and provided that such Obligations and any related agreements contain provisions that limit the recourse of any holder of, or counterparty to, such Obligations and of any party to any related agreement to assets other than those to which any other Obligations (other than Equivalent Obligations) have recourse;
(b) have any subsidiaries except special purpose vehicle to acquire the Underlying Assets (however, this shall not prevent the Issuer from purchasing shares in connection with the issuance or entry into of Obligations even where such purchase would result in the Issuer holding a controlling stake in another entity);
(c) consolidate or merge with any other person or convey or transfer its properties or assets substantially as an entirety to any person;
(d) have any employees;
(e) issue any shares (other than such shares as are in issue at the date hereof and such shares as may be issued in accordance with the Securitisation Law) or make any distribution to the shareholders of one Compartment (other than in relation to the above-mentioned shares) before having to reimburse the Notes issued at the charge of such Compartment;
(f) declare any dividends in relation to the units issued by one Compartment (other than in relation to such shares as may be issued in accordance with the Securitisation Law) before having to reimburse the Notes issued at the charge of such Compartment;
(g) except as is required in connection with the issuance or entry into of Obligations, purchase, own, lease or otherwise acquire any real property (including office premises or like facilities) except if such asset is the Underlying Asset of the relevant Compartment;
(h) guarantee, act as surety for or become obliged for the debts of any other entity or person or enter into any agreement with any other entity or person whereby it agrees to satisfy the obligations of such entity or person or any other entity or person;
(i) acquire any securities or shareholdings whatsoever from its shareholders or enter into any agreements whereby it would be acquiring the obligations and/or liabilities of its shareholders;
(j) except as is required in connection with the issuance or entry into of Obligations, advance or lend any of its moneys or assets, including but not limited to any Secured Property, to any other entity or person; or
(k) approve, sanction or propose any amendment to its constitutional documents.
7 Interest – Fixed Rate Notes
7.1 If, in their Final Terms, this Condition 7 is specified to apply to Notes ("Fixed Rate Notes"), then each such Note bears interest on its outstanding principal amount from the Interest Commencement Date at the rate per annum equal to the Interest Rate specified for each Interest Period in the Final Terms, such interest being payable in arrears on each Interest Payment Date.
7.2 Unless otherwise described in the Final Terms, any interest accruing under such Notes will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days (having regard to any issue of further Notes being consolidated with existing Notes to form a single Series during an Interest Period).
Where applicable, interest payable between parties will be calculated on a 30/360 basis in respect of the calculation of an amount for any period of time where such day count fraction, calculated on a formula basis as follows:
where: "Y1" is the year, expressed as a number, in which the first day of the Calculation
Period falls;
"Y2" is the year, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the
Calculation Period falls;
"M2" is the calendar month, expressed as a number, in which the day immediately following the last day included in the Calculation Period falls;
"D1" is the first calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30";
7.3 Interest will cease to accrue on each Note on the due date for redemption unless (where relevant, upon due presentation thereof) payment of principal is improperly withheld or refused, in which event interest will continue to accrue (both before and after judgment) at the Interest Rate in the manner provided herein.
7.4 If the Issuer fails to pay any amount payable by it under these Conditions or the applicable Final Terms on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at the Luxembourg statutory interest rate (taux d'intérêt légal) for commercial transactions. Any interest accruing under this Condition 7.4 shall be immediately payable but will not be compounded.
8 Interest - Floating Rate Notes, Zero Coupon Notes and Tracker Certificates
8.1 If Notes are identified as "Floating Rate Notes" or "Zero Coupon Notes" or “Tracker Certificates”, respectively, in the relevant Final Terms, then in lieu of Condition 7, this Condition 8 shall apply to such Notes ("Floating Rate Notes" or "Zero Coupon Notes" or "Tracker Certificates", respectively), except that Condition 7.3 and 7.4 shall continue to apply in all cases.
8.2 The Interest Rate of Floating Rate Notes will be specified in and determined by the Calculation Agent in respect of each Interest Period in accordance with the applicable Final Terms. Floating Rate Notes will bear interest at a rate set by reference to a benchmark such as EURIBOR or SOFR, as adjusted for any applicable margin or based on all or part of the value of the Underlying Assets, cash flows, risks acquired by the Compartment, or any other manner as specified in the relevant Final Terms.
8.3 Zero Coupon Notes do not bear interest.
Where a Zero Coupon Note is repayable prior to the Maturity Date and is not paid when due, the amount due and payable prior to the Maturity Date shall be the Early Redemption Amount of such Note, as further specified in the relevant Final Terms.
As from the Maturity Date, the rate of interest for any overdue principal of such a Note shall be a rate per annum (expressed as a percentage) equal to the Amortisation Yield, as further specified in the relevant Final Terms.
8.4. Tracker Certificates may bear interest based on a formula, a performance, an Index-Linked with all or part of the value and cash flows related to the Underlying Assets, the cash flows generated within the Compartment or the risks acquired by the Compartment as specified in the relevant Final Terms.
Conditions 7.3 and 7.4 shall continue to apply where such Tracker Certificate is repayable and is not paid when due by the Issuer.
9 Redemption and Purchase
9.1 Unless previously redeemed or purchased and cancelled as provided below, each Note will be redeemed at its Redemption Amount (which unless otherwise specified in the Final Terms, is its outstanding principal amount together with accrued interest minus any specified margin amount not exceeding such accrued interest) on the Maturity Date specified in respect of each Note.
9.2 By default, unless otherwise stated in the Final Terms, each of the Notes issued as a Zero Coupon Note/Tracker Certificates will be redeemed on the final maturity date at the registered office of the Issuer. Their Redemption Amount is calculated by taking the total value of the Underlying Assets minus the management costs of the Issuer related to the Compartment. Generally, all the Issuer's expenses will be paid by the Issuer but will be deducted from the final Redemption Amount including but not limited to the following (“the Management Expenses”):
• Any tax payable related to the holding or disposal of the Underlying Assets and income received by the Compartment;
• Banking, brokerage and transaction fees charged on the transactions carried out to acquire, manage, service, hold, deposit, transact, maintain, protect, transfer, sell or dispose of the Underlying Assets;
• Fees and expenses incurred by the Agents in charge of administration of the Compartment, the domiciliation agent, the transfer and administrative agent, audit, NAV calculation, calculation agent, the Security Trustee and the Settlement, Fiscal or Paying Agent appointed by the Issuer; • The Issuer’s Management Company' fees;
• Fees charged for custody services by the Custodian;
• Other operating expenses including expenses related to the Management Company's duties and functions, administration;
• The cost of drafting and printing the Private Placement Memorandum and any other printing, order confirmation and publication cost, Website and notices to Noteholders;
• The cost of preparing, printing and filing administrative documents, reports, Private Placement Memorandum, Final Terms and explanatory reports with the authorities, fees payable for the registration and maintenance of the Issuer with authorities and administrations, the cost of preparing, translating, printing and distributing periodic reports and other documents required by law or regulations;
• The cost of accounting and calculating the equity of a Compartment, the redemption value of any Series of Notes;
• the cost of preparing, distributing and publishing reports for shareholders and Noteholders, • The fees for setup, incorporation, liquidation, amalgamation and other corporate actions, legal consultants, administrator, receivers, experts and independent auditors, and any similar operating costs;
• All expertise reports and/or exceptional measures, or legal proceedings; and
• Third parties advisor, auditors, Agents and Index Provider’s fees.
The costs are related to several Compartments that are apportioned by the Management Company of the Issuer.
9.3 If so provided in the Final Terms, the Issuer may, on giving no less than 15 Business Days and no more than 30 Business Days' notice to the Noteholders (which notice shall be irrevocable) in accordance with these Conditions and, if the Notes are listed on any stock exchange and the rules and regulations thereof so require, such stock exchange, redeem (in whole or, if so provided, in part) all (or, if so provided, some) of the Notes on the date or dates so provided. Subject to the Final Terms, any such redemption of Notes shall be at their Redemption Amount together with interest accrued to (but excluding) the date fixed for redemption. All Notes in respect of which any such notice is given shall be redeemed on the date specified in such notice.
9.4 Where only some of the Notes are to be redeemed, the Notes to be redeemed will be selected by the Issuer, subject to and in accordance with applicable law and, if the Notes are represented by a Global Note deposited with a common safekeeper for Euroclear and/or Clearstream, the respective rules and procedures of Euroclear or Clearstream, as applicable, and, if the Notes are listed on any stock exchange, the rules and regulations of such exchange.
9.5. The Issuer may be authorised to restrict or limit the number of Notes to be redeemed and impose some lock-up period (“Lock-Up”), a minimum period of holding or gate at Noteholder’s Level or gate at the Tranche’s level (“Gate”). Such restrictions, limitations and conditions on redemption will be detailed in the relevant Final Terms.
9.6. The Issuer may at any time purchase one or more Notes in the open market at any price and from any one or more Noteholders. The Notes purchased in accordance with this Condition 9 will be cancelled and may not be resold. For the avoidance of doubt, the Issuer shall be released from any obligations in respect of purchased Notes.
9.7. If the Issuer is not able to receive the income from an Underlying Asset nor to dispose of it according to its original plans, the Issuer may not be able to make payments under the Conditions and the Noteholder(s) may receive in redemption some or part of the Underlying Assets in specie as an equivalent to cash. The Issuer decides to apply this procedure at its own discretion in order to meet the Obligations under the Notes.
9.8. The Management Company may, at its sole discretion, decide to redeem all the outstanding Notes held by a Noteholder in the following circumstances:
a) if the continued holding of Notes of one or more Noteholder(s) is likely to cause the Issuer and/or the Management Company to breach any material law, regulation, reputation or interpretation or would result in the Issuer and/or the Management Company or any Noteholder suffering material taxation, damage or other economic disadvantages which they would not have suffered had such person ceased to be a Noteholder;
b) if a Noteholder has materially breached any provision of the Issuance Documentation; c) if a Noteholder has breached any provision of the FATCA and CRS rules;
d) if the Notes were acquired or are being held in violation of the Securitisation Law or any of the Issuance Documentation, by in particular any person who is not or ceased to be a Professional Client. In that scenario, the Management Company may decide:
(a) to redeem all the outstanding Notes held by a Noteholder; or
(b) to have such Notes transferred to an existing Noteholder or to a third party;
e) if such other circumstances as the Management Company determines acting in good faith where continued ownership of Notes by a Noteholder would be materially prejudicial to the interests of the Issuer or its Noteholder;
f) in the case of the death of a Noteholder, where his/her heirs do not qualify as a Professional Client. In that scenario, the Management Company may decide:
(a) to redeem all the outstanding Notes held by a Noteholder; or
(b) to have such Notes transferred to an existing Noteholder or to a third party; and
g) in any other event as further set out in the Final Terms.
h) if the Compartment’s activities are not economically viable.
10 Payments
10.1 Payment of principal and/or interest in respect of the Notes will be made in the Relevant Currency by credit or transfer to a bank account (or any other account on which credits or transfers may be made in the Relevant Currency). Amounts received from the Issuer shall be applied in or towards payment of any accrued interest after repayment of principal on the Notes, to the extent any repayment of principal is due at such time.
10.2 Payments on a Global Note will be made in accordance with the respective rules and procedures of Euroclear and/or Clearstream. Each of the persons shown in the records of Euroclear or Clearstream as the holder of a Note represented by a Global Note must look solely to Euroclear or Clearstream, as applicable, for his share of each payment made by the Issuer to the bearer of such Global Note and in relation to all other rights arising under the Global Note, subject to and in accordance with the respective rules and procedures of Euroclear or Clearstream. Such persons shall have no claim directly against the Issuer in respect of payments due on the Notes for so long as the Notes are represented by such Global Note and such obligations of the Issuer will be discharged by payment to the bearer of such Global Note in respect of each amount so paid.
10.3 If any due date for payment of principal or interest in respect of any Note is not a Business Day, then the Noteholder thereof shall not be entitled to payment of the amount due until the following day which is a Business Day and shall not be entitled to any interest or other additional sums in respect of such postponed payment.
10.4 The Issuer shall, on each date on which payments are to be made to the Noteholders, apply amounts available to it as follows:
(a) first, in payment or satisfaction of any taxes owing by the Issuer and reimbursing the Custodian where the Custodian has, on behalf of the Issuer, paid or satisfied taxes owing by the Issuer in accordance with the Custody Agreement;
(b) secondly, in payment or satisfaction of any fees, costs, charges, expenses and liabilities of the Security Trustee (if any) under the Transaction Documents (including but not limited to any taxes, VAT, legal fees, remuneration and indemnity amounts);
(c) thirdly, in payment or satisfaction of any fees, costs, charges, expenses and liabilities of the Agents (on a pro-rata and pari passu basis) under the Transaction Documents (including but not limited to any taxes, VAT, legal fees, remuneration and indemnity amounts);
(d) fourthly, in or towards payment pro rata of any accrued interest due but unpaid under the Notes; (e) fifthly, in or towards payment pro rata of any principal due but unpaid under the Notes; and (f) sixthly, in or towards payment pro rata of any other sum due but unpaid under the Notes.
10.5 All payments to be made by the Issuer under the Notes shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
11 Calculations
To the extent the Issuer deems it necessary to do so in relation to an individual Series of Notes, it may appoint a Calculation Agent to perform all calculations and determinations in relation to any payments to be made by the Issuer under the Notes. Any Calculation Agent appointed shall perform its obligations in a commercially reasonable manner and shall (save in the case of manifest error at the time the relevant calculation or determination is made) be final and binding on the Noteholders. Any Calculation Agent appointed shall suffer no liability to any Noteholder or other person in connection with its obligations under the Transaction Documents unless it has acted with gross negligence, wilful misconduct or fraud.
12 Tax Deductions
12.1 The Issuer shall make all payments to be made by it without any deduction or withholding for or on account of any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) from a payment under the Notes (a "Tax Deduction") unless a Tax Deduction is required by law.
12.2 If a Tax Deduction is required by law to be made by the Issuer, the amount of the payment due from the Issuer to the Noteholders shall not be increased.
12.3 If the Issuer is required to make a Tax Deduction, the Issuer shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
12.4 If at any time the Issuer, the Paying Agent or the Security Trustee is required to make a Tax Deduction it shall be fully entitled to do so without liability to any person and shall have no obligation to gross-up amounts to account for such Tax Deduction. All payments made by the Issuer in respect of the Notes shall be reduced by any tax which may be required to be paid, withheld or deducted. Noteholders will not be entitled to receive grossed-up amounts to compensate for any such tax, duty, withholding or other payment and no event of default shall occur as a result of any such withholding or deduction.
13 Events of default
13.1 The Issuer will promptly and in any event within five calendar days notify the Noteholders of the occurrence of a Potential Default (of which it has knowledge) or the occurrence of an actual Event of Default.
13.2 On and at any time after the occurrence of an Event of Default which is continuing, the Noteholders of the relevant Series may (acting by way of Extraordinary Resolution) declare that all or part of the principal of the Notes of the relevant Series, together with accrued interest, if any, be immediately due and payable, whereupon it shall become immediately due and payable.
13.3 If a Security Trustee has been appointed in relation to a Series of Notes, Condition 13.2 shall not apply and Condition 13.3 shall instead apply. On and at any time after the occurrence of an Event of Default which is continuing, the Noteholders of the relevant Series may (acting by way of Extraordinary Resolution) declare that all the principal of the Notes of the relevant Series, together with accrued interest, if any, be immediately due and payable, whereupon it shall become immediately due and payable (the passing of such an Extraordinary Resolution being an "Enforcement Event").
14 Prescription, Replacement and Exchange
14.1 All claims against the Issuer for the payment of principal or interest in respect of the Notes shall lapse after five (5) years, both in the case of principal and interest, from the due date for payment thereof.
14.2 Should any Note be lost, stolen, mutilated, defaced or destroyed, it may be replaced at the registered office of the Issuer or the Paying Agent, in accordance with applicable law and upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security, indemnity and otherwise as the Issuer may require (provided that the requirement is reasonable in the light of prevailing market practice). Mutilated or defaced Notes must be surrendered before replacements will be issued.
15 Notices
15.1 Notices to be given by the Issuer to the Noteholders shall be validly given if published (in English) in a daily newspaper of general circulation in Luxembourg (which is expected to be Luxemburger Wort) or on the Website, save where all holders of Notes of a particular Series waive their rights to any particular notice in writing before or after the event that gives rise to the notice requirement. Any such notice published as aforementioned shall be deemed to have been given on the date of such publication or, if published more than once, on the date of the first such publication. Noteholders are deemed to be notified on the day on which the notice is uploaded on the Website. Noteholders are required to log in to the Website to be kept updated. If a Noteholder has mentioned his/her email address in the Subscription Agreement or Form, such notice can be sent and is deemed validly delivered by the Issuer to the Noteholder by using this email address.
15.2 For so long as one or more Notes are represented by a Global Note deposited with a common safekeeper for Euroclear and/or Clearstream, notices to Noteholders may be given (in lieu of publication in accordance with Condition 15.1) by delivery of the relevant notice to Euroclear and/or Clearstream, as applicable, for communication to the relevant accountholders except that if and for so long as the Notes are listed on a stock exchange, the Issuer shall also procure that all notices to holders of the Notes will be published in accordance with the rules of such stock exchange. Any such notice shall be deemed to have been given to the holders of the relevant Notes on the second day following the day on which such notice is delivered to the relevant clearing systems.
16 Variation and meetings of Noteholders
16.1 The Notes (including any Global Notes) of any Series and the Conditions may be amended by the Issuer without the consent of the holder of any Note (a) for the purpose of curing any ambiguity or for curing, correcting or supplementing any defective provision contained in these Conditions, or (b) in any manner which the Issuer may deem necessary or desirable and which shall not materially adversely affect the interests of the holders of the Notes of that Series. In addition, the parties to the Agency Agreement, the Custody Agreement and/or any Central Administration Service Agreement may agree to modify any provision thereof but the Issuer shall not agree, without the consent of the Noteholders, to any such modification unless it is of a formal, minor or technical nature, it is made to correct a manifest error or it is, in the opinion of the Issuer, not materially prejudicial to the interests of the Noteholders.
16.2 If a Security Trustee has been appointed in relation to a Series of Notes, the consent of the Security Trustee will be required to amend any Transaction Document that the Security Trustee is a party to or under which it has assigned rights as part of the Security for such Series and such consent shall only be given by the Security Trustee in accordance with the Security Agreement. The Security Trustee shall not be required to agree to any modification that would, in its sole opinion, result in it incurring additional liabilities or obligations or in its protections or rights under the Transaction Documents being reduced.
16.3 In addition, in respect of any Series of Notes, by resolution adopted by the holders of a majority in aggregate principal amount of a Series of Notes then outstanding (an "Extraordinary Resolution") present or represented at a Meeting of Noteholders of such Series at which a quorum of one or more holders representing not less than 25% (twenty-five per cent.) of the aggregate principal amount of the Series of Notes then outstanding is present or represented, the Issuer may from time to time vary the Transaction Documents as they apply to the relevant Series unless the business of such meeting includes consideration of a proposal to:
(a) change the stated maturity of the principal of or any instalment of interest on any Note or any redemption date of the Notes,
(b) reduce or cancel the denomination or nominal value of or interest or any other amount payable on any Note,
(c) to vary any method of, or basis for, calculating any interest, principal or other amounts payable on the Notes,
(d) to modify the provisions concerning the quorum required at any meeting of Noteholders or the majority required to pass an Extraordinary Resolution, or
(e) to modify the definition of the type of Underlying Assets linked with a Note or the Index linked with one Note
(f) to modify clauses of the Security Agreement or Condition 10.4, in which case the quorum shall be one or more holders representing not less than 50% (fifty per cent) of the aggregate principal amount of Notes then outstanding.
Any such variations of these Conditions will be conclusive and binding on all holders of Notes of the relevant Series, whether or not they have given such consent or were present or represented at any meeting, and whether or not notation of such variations or waivers is made upon the Notes.
16.4 In addition, in respect of any Series of Notes, (i) any written resolution signed by or on behalf of the holders of more than 50% (fifty per cent.) in principal amount of the Notes for the time being outstanding or (ii) where the Notes are held by or on behalf of Euroclear and/or Clearstream, approval of a resolution proposed by the Issuer given by way of electronic consent communicated through the electronic communications system of the relevant clearing system(s) in accordance with their operating rules and procedures by or on behalf of the holder of more than 50% (fifty per cent.) in principal amount of the Notes for the time being outstanding, has (in each case) effect as an Extraordinary Resolution as if duly passed at a Meeting of Noteholders of that Series, and references in these Conditions to resolutions passed at a Meeting of Noteholders or an Extraordinary Resolution shall be construed accordingly and any such written resolution or resolution by electronic consents will be binding on all Noteholders whether or not they participated in such written resolution or electronic consent.
16.5 Where it is required by law or under any applicable agreement that Noteholders be consulted, decisions shall be passed by Extraordinary Resolutions and Conditions 16.4 and 16.5 shall apply mutatis mutandis.
16.6 The Issuer or the Noteholders may convene a Meeting of Noteholders in accordance with the terms of the Agency Agreement, the Conditions, or applicable legal provisions, as the case may be.
17 Miscellaneous
17.1 Nothing in these Conditions shall be construed or be deemed to create a partnership or similar relationship between the Issuer and the Noteholders or between the Noteholders themselves, whether under the laws of Luxembourg or under the laws of any other jurisdiction.
17.2 Any provision of these Conditions which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
17.3 In any litigation or arbitration proceedings arising out of or in connection with the Notes, the entries made in the accounts maintained by the Issuer are prima facie evidence of the matters to which they relate.
17.4 Where a Security Trustee has been appointed in respect of a Series of Notes, the provisions of articles 470- 1 to 470-21 of the Commercial Companies Law 1915 shall not apply to these Conditions in the event that they are superseded by the provisions of this Private Placement Memorandum set out in Condition 5 (Role of the Security Trustee and Enforcement) and Condition 16 (Variation and Meeting of Noteholders) unless other described in the relevant Final Terms. The provisions of the Commercial Companies Law 1915 in respect of notes (obligations) or meetings of noteholders (obligataires) shall only apply in respect of the Issuer's obligations under the Transaction Documents if and to the extent consistent with these Conditions or if not capable of being derogated from.
17.5 The Issuer may from time to time without the consent of the Noteholders create and issue further notes, having terms and conditions the same as those of the Notes, or the same except for the amount of the first payment of interest, which may be consolidated and form a single series with the Notes.
17.6 If a Security Trustee has been appointed in relation to a Series of Notes, Condition 17.5 shall not apply and Condition 17.6 shall instead apply. The Issuer shall be at liberty from time to time (but subject always to the provisions of the Security Agreement and these Conditions) without the consent of the Noteholders or any other Secured Creditor to create and issue further Notes having terms and conditions the same as the Notes (or the same in all respects save for the amount and date of the first payment of interest thereon) and so that the same shall be consolidated and form a single series with the outstanding Notes of a particular Series. Any such further notes shall only form a single Series with the Notes (unless otherwise sanctioned by an Extraordinary Resolution) if the Issuer provides additional assets (as security for such further notes) which are fungible with, and have the same proportionate composition as, those forming part of the Secured Property for the Notes and in the same proportion as the proportion that the nominal amount of such new notes bears to the Notes. Any new notes forming a single series with the Notes shall be constituted and secured by a deed supplemental to the Security Agreement, such further security shall be added to the Secured Property so that the new notes and the existing Notes shall be secured by the same Secured Property (and, for the avoidance of doubt, all the holders of the first and all later tranches of Notes shall benefit from the Secured Property on a pari passu basis).
18 Governing law and jurisdiction
18.1 The Notes and these Conditions are governed by the laws of the Grand Duchy of Luxembourg.
18.2 The tribunals and courts of Luxembourg city have exclusive jurisdiction to settle any dispute or claim that may arise out of or in connection with any Notes and these Conditions and accordingly any legal action or proceedings arising out of or in connection with any Notes and these Conditions ("Proceedings") may be brought in such courts. This submission is made for the benefit of the Security Trustee, each Agent and each of the Noteholders and shall not limit the right of any of them to take Proceedings in any other court of competent jurisdiction nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).
18.3 The Agency Agreement, the Custody Agreement and any Security Agreement (in each case including any non-contractual obligations arising out of or in connection with them) are governed by and shall be construed in accordance with Luxembourg law. The courts of Luxembourg are to have exclusive jurisdiction to settle any disputes that may arise out of or in connection with the Agency Agreement, the Custody Agreement and any Security Agreement and accordingly any legal action or proceedings arising out of or in connection with the Agency Agreement, the Custody Agreement and any Security Agreement ("Transaction Document Proceedings") may be brought in such courts. The Issuer has in the Agency Agreement, the Custody Agreement and any Security Agreement irrevocably submitted to the jurisdiction of such courts. This submission is made for the benefit of the Security Trustee and the relevant Agents and shall not limit the right of any of them to take Transaction Document Proceedings in any other court of competent jurisdiction nor shall the taking of Transaction Document Proceedings in one or more jurisdictions preclude the taking of Transaction Document Proceedings in any other jurisdiction (whether concurrently or not).
19 Redemption of Notes at the initiative of the Issuer or the Noteholders
Redemption of Notes at the initiative of the Issuer:
The Notes may be redeemed before maturity at the initiative of the Issuer in full or in part as specified in the Final Terms.
In such case, unless otherwise stated in the relevant Final Terms, the Redemption Amount per Note shall be equal to 100% of the Issue Price per Note supplemented by any accrued yet outstanding Coupon as of the date of the voluntary early redemption date (as applicable).
The Issuer will proceed to inform the Noteholders accordingly, by publishing notice to the Noteholders at least five (5) Business Days before the actual redemption date indicated in the notice.
Redemption of Notes at the Initiative of the Noteholder(s):
Assuming that it is stated in the Final Terms the Notes may also be redeemed before the maturity at the initiative of one or several Noteholder(s) in full or in part.
Unless otherwise stated in the relevant Final Terms, the Redemption Amount per Note shall be equal to 100% of the Issue Price per Note supplemented by any accrued yet outstanding Coupon as of the date of the voluntary early redemption date (as applicable).
If such an option is available to the Noteholder(s) the relevant Final Terms will specify the conditions at which such redemption may be satisfied, the notice period of at least five (5) Business Days, the gate, the method of redemption, lock-up period or any other conditions as applicable.
20 Substitution of Issuer
In respect of any Series of Notes, by resolution adopted unanimously by the holders of that Series of Notes then outstanding present or represented at a Meeting of Noteholders of such Series at which a quorum of one or more holders representing not less than 75% (seventy-five per cent) of the aggregate principal amount of the Series of Notes then outstanding is present or represented, the Noteholders may agree to the substitution, in place of the Issuer (or of any previous substitute hereunder) of another entity (the “New Issuer”) as debtor in respect of all obligations arising under or in connection with the Notes and the Issuance Documentation, provided that:
a) the New Issuer assumes all rights and duties of the Issuer in respect of the Notes and under the Issuance Documentation;
b) the New Issuer has obtained all necessary authorisations and governmental approvals in the country in which it has its registered office and is in a position to fulfil all its obligations in respect of the Notes without discrimination against the Noteholders in their entirety;
c) the New Issuer may pay in the currency required hereunder and without being obliged to deduct or withhold any taxes or other duties of whatever nature levied by the country in which the New Issuer has its domicile or tax residence from any payments due under the Notes and the substitution shall not result in any withholding or deduction of taxes on the amounts payable under the Notes which would not arise if there was no such substitution; and
d) the Issuer and the New Issuer enter into such agreements and execute such documents as considered necessary for the effectiveness of the substitution.
The Management Company may also decide at any time and at its own discretion to substitute the Issuer of any Series of Note by a New Issuer provided that the same conditions - a) to d) above - are respected.
Upon fulfilment of the above conditions, the New Issuer shall in every respect substitute the Issuer and the Issuer shall be released from all its obligations to the Noteholders as issuer of the Notes except for the obligations assumed with respect to the substitution.
Upon the substitution, each reference to the Issuer in the Conditions shall from then on be deemed to be a reference to the New Issuer and any reference to the country in which the Issuer has its registered office, domicile or residency for tax purposes, as relevant, shall from then on be deemed to be a reference to the country in which the New Issuer has its registered office, domicile or residency for tax purposes, as relevant.
21 Provisions relating to notes while in Global Form
21.1 Issue of Notes
If the Global Notes or the Global Certificates are stated in the relevant Final Terms to be issued in NGN form or to be held under the NSS (as the case may be), the Global Notes or the Global Certificates will be delivered on or prior to the original issue date of the Series/Tranche to a Common Safekeeper. Depositing the Global Notes or the Global Certificates with the Common Safekeeper does not necessarily mean that the Notes will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem either upon issue, or at any or all times during their life. Such recognition will depend upon satisfaction of the Eurosystem eligibility criteria.
International bearer global form debt securities will have to be issued in NGN form to be eligible as collateral for Eurosystem intra-day credit and monetary policy.
Global Notes which are issued in CGN form and Global Certificates which are not held under the NSS may be delivered on or prior to the original issue date of the Series/Tranche to a Common Depositary.
If the Global Note is a CGN, upon the initial deposit of a Global Note with a Common Depositary or registration of Registered Notes in the name of any nominee for Euroclear and Clearstream, Luxembourg and delivery of the relative Global Certificate to the Common Depositary, Euroclear or Clearstream, Luxembourg will credit each subscriber with a nominal amount of Notes equal to the nominal amount thereof for which it has subscribed and paid. If the Global Note is an NGN, the nominal amount of the Notes shall be the aggregate amount from time to time entered in the records of Euroclear or Clearstream, Luxembourg.
The records of such clearing system shall be conclusive evidence of the nominal amount of Notes represented by the Global Note and a statement issued by such clearing system at any time shall be conclusive evidence of the records of the relevant clearing system at that time. Global Notes may also be deposited initially with other clearing systems which must be outside the United States and its possessions.
Notes that are initially deposited with the Common Depositary or delivered to the Common Safekeeper may also be credited to the accounts of subscribers with (if indicated in the relevant Final Terms Supplement) other clearing systems through direct or indirect accounts with Euroclear and Clearstream, Luxembourg held by such other clearing systems. Conversely, Notes that are initially deposited with any other clearing system may similarly be credited to the accounts of subscribers with Euroclear, Clearstream, Luxembourg or other clearing systems.
Each of the persons shown in the records of Euroclear and/or Clearstream, Luxembourg and/or any other permitted clearing system (“Alternative Clearing System”) as being entitled to an interest in a Global Note or a Global Certificate (each an “Accountholder”) must look solely to Euroclear and/or Clearstream, Luxembourg and/or such Alternative Clearing System (as the case may be) for such Accountholder’s share of each payment made by the Issuer to the holder of such Global Note or Global Certificate and in relation to all other rights arising under such Global Note or Global Certificate. The extent to which, and the manner in which, Accountholders may exercise any rights arising under the Global Note or Global Certificate will be determined by the respective rules and procedures of Euroclear and Clearstream, Luxembourg or such Alternative Clearing System (as the case may be). For so long as the relevant Notes are represented by a Global Note or Global Certificate, Accountholders shall have no claim directly against the Issuer in respect of payments due under the Notes and such obligations of the Issuer will be discharged by payment to the holder of such Global Note or Global Certificate.
21.2 Temporary Global Notes
Each Temporary Global Note will be exchangeable, free of charge to the holder, on or after its Exchange Date:
(i) if the relevant Final Terms indicate that such Global Note is issued in compliance with the TEFRA C Rules or in a transaction to which TEFRA is not applicable in whole, but not in part, for the Definitive Notes defined and described below; and
(ii) otherwise, in whole or in part upon certification as to non-U.S. beneficial ownership in the form set out in the Agency Agreement for interests in a Permanent Global Note or, if so provided in the relevant Final Terms, for Definitive Notes.
(the “Temporary Global Note Exchange Events”).
21.3 Permanent Global Notes
Each Permanent Global Note will be exchangeable, free of charge to the holder, on or after its Exchange Date in whole but not, except as provided under paragraph “Partial Exchange of Permanent Global Notes” below, in part for Definitive Notes:
(i) if the Permanent Global Note is held on behalf of Euroclear or Clearstream, Luxembourg or an Alternative Clearing System and any such clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or in fact does so; or
(ii) if principal in respect of any Notes is not paid when due, by the holder giving notice of its election for such exchange.
(the “Permanent Global Note Exchange Events”).
In the event that a Global Note is exchanged for Definitive Notes, such Definitive Notes shall be issued in Specified Denomination(s) only. A Noteholder who holds a principal amount of less than the minimum Specified Denomination will not receive a definitive Note in respect of such holding and would need to purchase a principal amount of Notes such that it holds an amount equal to one or more Specified Denominations.
21.4 Global Certificates
If the Final Terms state that the Notes are to be represented by a Permanent Global Certificate on issue, the following will apply in respect of transfers of Notes held in Euroclear or Clearstream, Luxembourg or an Alternative Clearing System. These provisions will not prevent the trading of interests in the Notes within a clearing system whilst they are held on behalf of such clearing system but will limit the circumstances in which the Notes may be withdrawn from the relevant clearing system.
Transfers of the holding of Notes represented by any Global Certificate may only be made in part:
(i) if the relevant clearing system is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business or does in fact do so; or
(ii) if principal in respect of any Notes is not paid when due; or
(iii) with the consent of the Issuer,
provided that, in the case of the first transfer of part of a holding pursuant to paragraph (i) or (ii) above, the Registered Holder has given the registrar not less than 30 days’ notice at its specified office of the Registered Holder’s intention to effect such transfer.
21.5 Partial Exchange of Permanent Global Notes
For so long as a Permanent Global Note is held on behalf of a clearing system and the rules of that clearing system permit, such Permanent Global Note will be exchangeable in part on one or more occasions for Definitive Notes if principal in respect of any Notes is not paid when due.
21.6 Delivery of Notes
If the Global Note is a CGN, on or after any due date for exchange, the holder of a Global Note may surrender such Global Note. In exchange for any Global Note, or the part thereof to be exchanged, the Issuer will (i) in the case of a Temporary Global Note exchangeable for a Permanent Global Note, deliver, or procure the delivery of, a Permanent Global Note in an aggregate nominal amount equal to that of the whole or that part of a Temporary Global Note that is being exchanged or, in the case of a subsequent exchange, endorse, or procure the endorsement of, a Permanent Global Note to reflect such exchange or (ii) in the case of a Global Note exchangeable for Definitive Notes, deliver, or procure the delivery of, an equal aggregate nominal amount of duly executed and authenticated Definitive Notes or if the Global Note is a NGN, the Issuer will procure that details of such exchange be entered pro rata in the records of the relevant clearing system. In this Offering Circular, “Definitive Notes” means, in relation to any Global Note, the definitive Bearer Notes for which such Global Note may be exchanged (if appropriate, having attached to them all Coupons in respect of interest that have not already been paid on the Global Note). Definitive Notes will be security printed in accordance with any applicable legal and stock exchange requirements in or substantially in the form set out in the Agency Agreement. On exchange in full of each Permanent Global Note, the Issuer will, if the holder so requests, procure that it is cancelled and returned to the holder together with the relevant Definitive Notes.
21.7 Exchange Date
“Exchange Date” means, in relation to a Temporary Global Note, the day falling after the expiry of 40 days after its issue date and, in relation to a Permanent Global Note, a day falling not less than 60 days, or in the case of failure to pay principal in respect of any Notes when due 30 days, after that on which the notice requiring exchange is given and on which banks are open for business in the city in which the relevant clearing system is located.
21.8. Exchange Events
“Exchange Events” means (i) the Temporary Global Note Exchange Events in relation to a Temporary Global Note and (ii) the Permanent Global Note Exchange Events in relation to a Permanent Global Note.
21.9 Conditions Applicable to Global Notes
Each Global Note and Global Certificate will contain provisions which modify the Terms and Conditions of the Notes as they apply to the Global Note or Global Certificate. The following is an overview of certain of those provisions:
Payments
No payment falling due after the Exchange Date will be made on any Global Note unless exchange for an interest in a Permanent Global Note or for Definitive Notes is improperly withheld or refused. Payments on any Temporary Global Note issued in compliance with the TEFRA D Rules before the Exchange Date will only be made against presentation of certification as to non-U.S. beneficial ownership in the form set out in the Agency Agreement. All payments in respect of Notes represented by a Global Note will be made against presentation for endorsement and, if no further payment falls to be made in respect of the Notes, surrender of that Global Note to or to the order of the Paying Agent as shall have been notified to the Noteholders for such purpose. If the Global Note is a CGN, a record of each payment so made will be endorsed on each Global Note, which endorsement will be prima facie evidence that such payment has been made in respect of the Notes. If the Global Note is a NGN or if the Global Certificate is held under the NSS, the Issuer shall procure that details of each such payment shall be entered pro rata in the records of the relevant clearing system and in the case of payments of principal, the nominal amount of the Notes recorded in the records of the relevant clearing system and represented by the Global Note or the Global Certificate will be reduced accordingly. Payments under a NGN will be made to its holder. Each payment so made will discharge the Issuer’s obligations in respect thereof. Any failure to make the entries in the records of the relevant clearing system shall not affect such discharge.
All payments in respect of Notes represented by a Global Certificate will be made to or to the order of, the person whose name is entered on the Register at the close of business on the record date which shall be on the Clearing System Business Day immediately prior to the date for payment, where “Clearing System Business Day” means Monday to Friday inclusive except 25 December and 1 January.
So long as the Notes are represented by a Global Note or Global Certificate and the Global Note or Global Certificate is held on behalf of a clearing system, the Issuer has undertaken, inter alia, to pay interest in respect of such Notes from the Interest Commencement Date in arrear at the rates, on the dates for payment, and in accordance with the method of calculation provided for in the Conditions, save that the calculation is made in respect of the total aggregate amount of the Notes represented by the Global Note or Global Certificate.
Prescription
Claims against the Issuer in respect of Notes that are represented by a Permanent Global Note will become void unless it is presented for payment within a period of 10 years (in the case of principal) and five years (in the case of interest) from the appropriate relevant date.
Meetings
The holder of a Permanent Global Note or of the Notes represented by a Global Certificate shall (unless such Permanent Global Note or Global Certificate represents only one Note) be treated as being two persons for the purposes of any quorum requirements of a meeting of Noteholders and, at any such meeting, the holder of a Permanent Global Note shall be treated as having one vote in respect of each integral currency unit of the Specified Currency of the Notes. (All holders of Registered Notes are entitled to one vote in respect of each integral currency unit of the Specified Currency of the Notes comprising such Noteholder’s holding, whether or not represented by a Global Certificate.)
Cancellation
Cancellation of any Note represented by a Permanent Global Note that is required by the Conditions to be cancelled (other than upon its redemption) will be effected by a reduction in the nominal amount of the relevant Permanent Global Note.
Purchase
Notes represented by a Permanent Global Note may only be purchased by the Issuer or any of its subsidiaries if they are purchased together with the rights to receive all future payments of interest thereon.
Issuer’s Option
Any option of the Issuer provided for in the Conditions of any Notes while such Notes are represented by a Permanent Global Note shall be exercised by the Issuer giving notice to the Noteholders within the time limits set out in and containing the information required by the Conditions, except that the notice shall not be required to contain the serial numbers of Notes drawn in the case of a partial exercise of an option and accordingly no drawing of Notes shall be required. In the event that any option of the Issuer is exercised in respect of some but not all of the Notes of any Series, the rights of accountholders with a clearing system in respect of the Notes will be governed by the standard procedures of Euroclear and/or Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion or any other Alternative Clearing System, as the case may be).
Noteholders’ Options
Any option of the Noteholders provided for in the Conditions of any Notes while such Notes are represented by a Permanent Global Note may be exercised by the holder of the Permanent Global Note giving notice within the time limits relating to the deposit of Notes with a Paying Agent set out in the Conditions substantially in the form of the notice available from any Paying Agent, except that the notice shall not be required to contain the serial numbers of the Notes in respect of which the option has been exercised, and stating the nominal amount of Notes in respect of which the option is exercised and at the same time, where the Permanent Global Note is a CGN, presenting the Permanent Global Note to the Paying Agent, for notation. Where the Global Note is a NGN or where the Global Certificate is held under the NSS, the Issuer shall procure that details of such exercise shall be entered pro rata in the records of the relevant clearing system and the nominal amount of the Notes recorded in those records will be reduced accordingly.
NGN nominal amount
Where the Global Note is an NGN, the Issuer shall procure that any exchange, payment, cancellation, exercise of any option or any right under the Notes, as the case may be, in addition to the circumstances set out above shall be entered in the records of the relevant clearing systems and upon any such entry being made, in respect of payments of principal, the nominal amount of the Notes represented by such Global Note shall be adjusted accordingly.
Notices
So long as any Notes are represented by a Global Note and such Global Note is held on behalf of a clearing system, notices to the holders of Notes of that Series may be given by delivery of the relevant notice to that clearing system for communication by it to entitled accountholders in substitution for publication as required by the Conditions or by delivery of the relevant notice to the holder of the Global Note, except that if and for so long as the Notes are listed on a stock exchange, all notices to holders of the Notes will be published in accordance with the rules of such stock exchange.
Electronic Consent and Written Resolution
While any Global Note is held on behalf of, or any Global Certificate is registered in the name of any nominee for, a clearing system, then:
(a) approval of a resolution proposed by the Issuer given by way of electronic consents communicated through the electronic communications systems of the relevant clearing system(s) in accordance with their operating rules and procedures by or on behalf of the holders of not less than 75 per cent. in nominal amount of the Notes outstanding (an “Electronic Consent” as defined in the Agency Agreement) shall, for all purposes (including matters that would otherwise require an Extraordinary Resolution to be passed at a meeting for which the Special Quorum was satisfied), take effect as an Extraordinary Resolution passed at a meeting of Noteholders duly convened and held, and shall be binding on all Noteholders and holders of Coupons whether or not they participated in such Electronic Consent; and
(b) where Electronic Consent is not being sought, for the purpose of determining whether a Written Resolution (as defined in the Fiscal Agency Agreement) has been validly passed, the Issuer shall be entitled to rely on consent or instructions given in writing directly to the Issuer by (a) accountholders in the clearing system with entitlements to such Global Note or Global Certificate and/or, where (b) the accountholders hold any such entitlement on behalf of another person, on written consent from or written instruction by the person identified by that accountholder as the person for whom such entitlement is held. For the purpose of establishing the entitlement to give any such consent or instruction, the Issuer shall be entitled to rely on any certificate or other document issued by, in the case of (a) above, Euroclear, Clearstream, Luxembourg or Alternative Clearing System (the “relevant clearing system”) and, in the case of (b) above, the relevant clearing system and the accountholder identified by the relevant clearing system for the purposes of (b) above. Any resolution passed in such manner shall be binding on all Noteholders and Couponholders, even if the relevant consent or instruction proves to be defective. Any such certificate or other document shall, in the absence of manifest error, be conclusive and binding for all purposes. Any such certificate or other document may comprise any form of statement or printout of electronic records provided by the relevant clearing system (including Euroclear’s EUCLID or Clearstream, Luxembourg’s CreationOnline system) in accordance with its usual procedures and in which the account holder of a particular principal or nominal amount of the Notes is clearly identified together with the amount of such holding. The Issuer shall not be liable to any person by reason of having accepted as valid or not having rejected any certificate or other document to such effect purporting to be issued by any such person and subsequently found to be forged or not authentic.
22 Provisions relating to Notes with several drawdown dates
Unless otherwise stated in the relevant Final Terms, the Nominal Amount of Notes is always payable by the Noteholder(s) in full on the Issue Date in which case the Note is partially funded.
The relevant Final Terms may provide for one or several date(s) (“Drawdown Date”) upon which the Noteholders will be requested to pay whole or part of the Nominal Amount of the Notes they have either subscribed or acquired. (“Capital Call”).
Such Final Terms may also provide that such Drawdown Dates and the amount of the Capital Calls are determined by the Issuer. By default, the Issuer will allow at least ten (10) Business Days between the date of a Capital Call and the Drawdown Date.
If a Noteholder fails to pay the amount due to the Issuer on time, the Issuer will have the right to declare such Noteholder as Defaulting Noteholder with effect from the Drawdown Date and all Notes of the same Series held by or on behalf of the Defaulting Noteholder (“Defaulting Note”) will have their voting rights suspended and will not carry the right to any Repayment or Coupon.
In addition, the Issuer will have the right to exercise one or more of the following remedies:
(a) repurchase, on account of the relevant Compartment, the Defaulting Notes at a price determined by the Issuer in its reasonable discretion (which price can be at a discount of up to 100% of the Issuer Price, but not lower than 1,00 EUR. (the “Defaulting Redemption Amount”), such Defaulting Redemption Amount to be payable subject to (a) the Compartment having sufficient available cash therefor and (b) all Noteholders having received full repayment of their Notes and, as applicable, the Coupons;
(b) exercise, on account of the relevant Compartment, an option to buy the Defaulting Notes of the Defaulting Noteholder at the Defaulting Redemption Amount, in which case, the Issuer will, after having acquired the Defaulting Notes of the Defaulting Noteholder pursuant to the exercise of its option, offer the Defaulting Notes of the Defaulting Noteholder to a third party (or parties) identified by the Issuer at the Defaulting Redemption Amount provided that before offering the Defaulting Noteholder's Defaulting Notes to any third party, the Issuer will offer them to the non-Defaulting Noteholders in the relevant Compartment at the Defaulting Redemption Amount, who will have a period of ten (10) calendar days to accept the offer. Any non-Defaulting Noteholder(s) expressing an interest in such purchase will be offered the Defaulting Notes pro-rata based on the portion of existing Note in issuance they are holding in the relevant Compartment.
(c) reduce or terminate the Defaulting Noteholder's unpaid Capital Call to the relevant Compartment or arrange for the forced assignment of such amount to a third party or a non-Defaulting Noteholder;
(d) off-set such unpaid amount and all other amounts payable by such Defaulting Noteholder to the Compartment,
including the relevant expenses against, or withhold, distributions unpaid or otherwise payable by the Compartment to the Defaulting Noteholder;
(e) prohibit the Defaulting Noteholder from paying any further amount to the Compartment
(f) pursue any available legal remedies against the Defaulting Noteholder for the account of the relevant Compartment to collect any and all of the unpaid amount due from the Defaulting Noteholder and any other damages (including consequential damages)
Any exercise of any or none of the remedies set out under this clause will not prejudice the right of the
Issuer to pursue any other available legal remedies against any Defaulting Noteholder. The Issuer will have the right to set off any of the relevant Compartment’s obligations to pay any amount to the Defaulting Noteholder as a result of the exercise of any of its rights under this clause against any obligation of the Defaulting Noteholder owed to the relevant Compartment.
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