SIXTH SUPPLEMENTAL INDENTURE

Exhibit 4.1

Execution Copy

 

WELLS FARGO & COMPANY

AND

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION

Trustee

 

SIXTH SUPPLEMENTAL INDENTURE

Dated as of September 10, 2008

to

INDENTURE

Dated as of August 1, 2005

 

Junior Subordinated Debt Securities

 

T ABLE OF C ONTENTS

 

 

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S IXTH S UPPLEMENTAL I NDENTURE , dated as of September 10, 2008 (this “ Supplemental Indenture ”), between W ELLS F ARGO  & C OMPANY , a Delaware corporation (the “ Company ”), having its principal office at 420 Montgomery Street, San Francisco, California 94163, and T HE B ANK OF N EW Y ORK M ELLON T RUST C OMPANY , N ATIONAL A SSOCIATION (as successor in interest to J.P. Morgan Trust Company, N.A.), not in its individual capacity but solely as trustee under the Indenture referred to herein and under this Sixth Supplemental Indenture (hereinafter called the “ Trustee ”), having its Corporate Trust Office at 2 North LaSalle, Suite 1020, Chicago, IL 60602.

R ECITALS OF THE C OMPANY

The Company and the Trustee have heretofore executed and delivered a certain Indenture, dated as of August 1, 2005 (as amended and supplemented as described below, the “ Indenture ”) providing for the issuance from time to time of Debt Securities.

Section 901 of the Indenture provides that a supplemental indenture may be entered into by the Company and the Trustee without the consent of any Holders to establish the form or terms of Debt Securities of any series as permitted by Sections 201 and 301 of the Indenture;

Pursuant to Sections 201 and 301 of the Indenture, the Company desires to provide for the establishment of a new series of Debt Securities under the Indenture, the form and substance of such Debt Securities and the terms, provisions and conditions thereof to be set forth as provided in the Indenture and this Supplemental Indenture; and

Wells Fargo Capital XV, a Delaware statutory trust (the “ Issuer Trust ”), has offered to the public its trust preferred securities known as 9.75% Fixed-to-Floating Rate Normal Preferred Purchase Securities (the “ Normal PPS ”), which are beneficial interests in the Issuer Trust, and proposes to invest the proceeds from such offering, together with the proceeds of the issuance and sale by the Issuer Trust to the Company of its Common Securities (the “ Trust Common Securities ” and together with the Normal PPS, the Stripped PPS and the Capital PPS, each as defined in the Trust Agreement referred to herein, the “ Trust Securities ”), in the Notes (as defined herein).

The Notes will be subject to Remarketing, in connection with which certain terms of the Notes may be changed, all in accordance with the procedures to be set forth in a Remarketing Agreement, to be entered into prior to the first Remarketing (as amended or supplemented from time to time, the “ Remarketing Agreement ”), among the Company, The Bank of New York Mellon Trust Company, National Association, as property trustee of the Issuer Trust, and the remarketing agent named in the Remarketing Agreement (including any successor or replacement, the “ Remarketing Agent ”).

The conditions set forth in the Indenture for the execution and delivery of this Supplemental Indenture have been satisfied and all things necessary have been done to make this Supplemental Indenture a valid agreement of the Company, in accordance with its terms, and a valid amendment of, and supplement to, the Indenture.

N OW , THEREFORE , THIS I NDENTURE WITNESSETH :

For and in consideration of the premises and the purchase of the Debt Securities of the series established by this Supplemental Indenture by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of such Debt Securities, that the Indenture is supplemented and amended, to the extent and for the purposes expressed herein, as follows:

ARTICLE I

D EFINITIONS

Section 1.1 Definitions .

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

(a) Terms defined in the Indenture or the Trust Agreement have the same meaning when used in this Supplemental Indenture unless otherwise specified herein; provided , however , in the event different meanings are assigned in the Indenture and the Trust Agreement, the meanings assigned in the Indenture shall control.

(b) The terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular.

(c) The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision, and any reference to an Article, Section, recital, preamble or other subdivision refers to an Article, Section, recital, preamble or other subdivision of this Supplemental Indenture.

“ additional amounts ” has the meaning specified in Section 2.9(b).

“ Additional Subordinated Notes ” means additional subordinated notes that may be issued to the Property Trustee in accordance with Section 2.5(c).

“ Capital Treatment Event ” means the reasonable determination by the Company that, as a result of:

(a) the occurrence of any amendment to, or change, including any announced prospective change, in the laws or regulations of the United States or any political subdivision thereof or therein or any rules, guidelines or policies of the Federal Reserve Board, or

(b) any official or administrative pronouncement or action or judicial decision interpreting or applying United States laws or regulations,

that in either case is effective or is announced on or after the date of the Prospectus Supplement, there is more than an insubstantial risk that the Company will not be entitled to treat an amount equal to the liquidation amount of the Normal PPS at any time prior to the Stock Purchase Date as Tier 1 capital under the risk-based capital adequacy guidelines of the Federal Reserve Board (or, if the Company elects to remarket the Notes in the form of New Trust Preferred Securities and does not elect to shorten the maturity of the Notes, that the Company will not be entitled to treat an amount equal to the liquidation amount of such trust preferred securities as Tier 1 capital under the risk-based capital adequacy guidelines of the Federal Reserve Board and this change becomes effective or would become effective on or after the Remarketing Settlement Date).

“ Company ” has the meaning specified in the preamble.

“ Creditor ” has the meaning specified in Section 4.1(b).

 

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“ Early Remarketing ” means a Remarketing conducted in accordance with the provisions of Section 3.4.

“ Early Settlement Event ” means the occurrence of: (i) the Company’s “total risk-based capital ratio” is less than 10%, (ii) the Company’s “Tier 1 risk-based capital ratio” is less than 6%, (iii) the Company’s “leverage capital ratio” is less than 4%; (iv) the Federal Reserve, in its discretion, anticipates that the Company may fail one or more of the capital tests referred to above in the near term and delivers a notice to the Company so stating; or (v) the Issuer Trust is dissolved pursuant to Section 9.2(d) of the Trust Agreement, where the related Early Settlement Event in the case of the tests described in each of (i), (ii) and (iii) above will be deemed to occur on the date the Company files a Form FR Y-9C showing in Schedule HC-R (or successor form) that the related capital measure has not been met and each such ratio will be determined as required pursuant to Appendix A to Regulation Y of the Federal Reserve Board, 12 C.F.R. Part 225 or any successor provisions.

“ Extension Period ” shall have the meaning specified in the form of Note set forth in Section 5.1.

“ Failed Remarketing ” means a Final Remarketing that is not Successful.

“ Final Remarketing ” means (i) the fifth scheduled Remarketing or (ii) in the case of an Early Remarketing in connection with clause (v) of the definition of Early Settlement Event, the first Remarketing.

“ First Optional Redemption Date ” means the later of (i) September 26, 2017 and (ii) if the Remarketing occurs during an Extension Period, the seventh anniversary of the first day of such Extension Period.

“ Fixed Rate Reset Cap ”, as of any Remarketing Settlement Date, means the prevailing market yield, as determined by the Remarketing Agent, of the benchmark U.S. treasury security having a remaining maturity that most closely corresponds to the period from such date until the earliest date on which the Notes may be redeemed at the option of the Company in the event of a Successful Remarketing, plus 700 basis points, or 7 % per annum .

“ Floating Rate Reset Cap ” means 596 basis points, or 5.96 % per annum .

“ Global Notes ” has the meaning specified in Section 2.4(b).

“ Guarantee Agreement ” means the Guarantee Agreement between the Company, as Guarantor and The Bank of New York Mellon Trust Company, National Association, as Guarantee Trustee named thereunder, dated as of the date hereof.

“ Indenture ” has the meaning specified in the recitals.

“ Interest Payment Date ” shall have the meaning specified in Section 5.1.

“ Interest Period ” means the period from and including the most recent Interest Payment Date to which interest has been paid or duly made available for payment (or September 10, 2008 if no interest has been paid or been duly made available for payment) to, but excluding, the next succeeding Interest Payment Date or, if earlier, then the Stated Maturity Date of the Notes.

 

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“ Investment Company Event ” means the Company’s receipt of an Opinion of Counsel to the effect that, as a result of the occurrence of a change in law or regulation or a written change, including any announced prospective change, in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Issuer Trust is or will be considered an investment company that is required to be registered under the 1940 Act at any time prior to the Stock Purchase Date, and this change becomes effective or would become effective on or after the date of the Prospectus Supplement (or, if the Company elects to remarket the Notes in the form of New Trust Preferred Securities, that the New Trust is or will be considered an investment company that is required to be registered under the 1940 Act and this change becomes effective or would become effective on or after the Remarketing Settlement Date).

“ Issuer Trust ” has the meaning specified in the recitals.

“ Make-Whole Amount ” means the sum of the present values of the principal amount of the Notes and each interest payment thereon that would have been payable to and including the Relevant Date (not including any portion of such payments of interest accrued as of the Redemption Date), discounted from the Relevant Date or the applicable interest payment date to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Rate plus 1.00%.

“ Normal PPS ” has the meaning specified in the recitals.

“ Notes ” has the meaning specified in Section 2.1.

“ Parity Securities ” has the meaning specified in Section 5.1.

“ Paying Agent ”, when used with respect to the Notes, means Wilmington Trust Company or any other Person authorized by the Company to pay the principal of (and premium, if any) or interest on the Notes on behalf of the Company.

“ Paying Agent Office ” means the office of the applicable Paying Agent at which at any particular time its corporate agency business shall principally be administered in a Place of Payment, which office at the date hereof in the case of Wilmington Trust Company, in its capacity as Paying Agent with respect to the Notes under the Indenture and this Supplemental Indenture, is located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration.

“ Prospectus Supplement ” means the Prospectus Supplement, dated September 3, 2008, with respect to the PPS.

“ Qualified Floating Rate ” has the meaning specified in U.S. Treasury Regulations section 1.1275-5(b).

“ Rating Agency ” means any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act that currently publishes a rating for the Company.

 

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“ Rating Agency Event ” means any Rating Agency amends, clarifies or changes the criteria it uses to assign equity credit to securities such as the PPS, which amendment, clarification or change results in:

(a) the shortening of the length of time prior to the Stock Purchase Date that the PPS are assigned a particular level of equity credit by that Rating Agency as compared to the length of time they would have been assigned that level of equity credit by that Rating Agency or its predecessor on the date of the Prospectus Supplement; or

(b) the lowering of the equity credit (including up to a lesser amount) assigned to the PPS prior to the Stock Purchase Date by that Rating Agency as compared to the equity credit assigned by that Rating Agency or its predecessor on the date of the Prospectus Supplement.

“ Released Note ” has the meaning specified in Section 2.4(d).

“ Relevant Date ” means September 26, 2013 in the case of any redemption prior to such date, September 26, 2014 in the case of any redemption on or after September 26, 2013 and prior to September 26, 2014 if the Stock Purchase Date shall not have occurred on or prior to September 26, 2013, and otherwise September 26, 2017.

“ Remarketed Notes ” has the meaning specified in Section 2.4(c).

“ Remarketing ” means a remarketing of Notes pursuant to ARTICLE III and the Remarketing Agreement.

“ Remarketing Agent ” has the meaning specified in the recitals.

“ Remarketing Agreement ” has the meaning specified in the recitals.

“ Remarketing Disruption Event ” means there shall have occurred an event that, if not disclosed in the offering document for the Remarketing, could cause such offering document to contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and either (i) in the Company’s judgment, such event is not required by law to be disclosed at such time and its disclosure might have a material adverse effect on the Company’s business, or (ii) the disclosure of such event relates to a previously undisclosed proposed or pending material business transaction, the disclosure of which would impede the Company’s ability to consummate such transaction.

“ Remarketing Period ” means the 30-day periods beginning on July 21, 2013, October 21, 2013, January 21, 2014, April 21, 2014 and July 21, 2014 until the settlement of a Successful Remarketing, or, if an Early Settlement Event shall have occurred, each of the periods determined in accordance with Section 3.4.

“ Remarketing Settlement Date ” means the third Business Day after the date of a Successful Remarketing.

“ Remarketing Value ” means with respect to each Note, the present value on the Remarketing Settlement Date of an amount equal to the principal amount of such Note, plus the interest payable on such Note on the next Interest Payment Date, including any deferred interest, assuming for this purpose, even if not true, that the interest rate on the Notes remains at the rate in effect immediately prior to the Remarketing and all accrued and unpaid interest on the Notes is paid in cash on such date, determined using a discount rate equal to the interest rate on the Deposit (as defined in the Stock Purchase Contract Agreement).

 

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“ Reset Rate ” means, if the Notes are remarketed as fixed rate notes, the rate of interest on the Notes, if any, set in a Remarketing, as specified in Section 3.3(a).

“ Reset Spread ” means, if the Notes are remarketed as floating rate notes, the spread, if any, set in a Remarketing, as specified in Section 3.3(a).

“ Responsible Officer ” means, when used with respect to Wilmington Trust Company in its capacity as Paying Agent with respect to the Notes, any officer within the Corporate Trust Administration (or any successor department, unit or division of Wilmington Trust Company) assigned to the Paying Agent Office of Wilmington Trust Company, in its capacity as Paying Agent, who has direct responsibility for the administration of the Paying Agent functions of the Indenture and this Supplemental Indenture.

“ Securities Registrar Office ” means the office of the applicable Securities Registrar at which at any particular time its corporate agency business shall principally be administered, which office at the date hereof in the case of Wilmington Trust Company, in its capacity as Securities Registrar under the Indenture, is located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration.

“ Senior Debt ” has the meaning set forth in the Indenture, as modified by Section 7.1.

“ STAMP ” has the meaning specified in Section 5.1.

“ Stated Maturity Date ” means September 26, 2044 or following a Remarketing such earlier date as may be specified by the Company in accordance with ARTICLE III.

“ Subjected Note ” has the meaning specified in Section 2.4(e).

“ Successful ” has the meaning specified in Section 3.5(a).

“ Supplemental Indenture ” has the meaning specified in the preamble hereto.

“ Tax Event ” means the Company has received an Opinion of Counsel to the effect that, as a result of any:

(a) amendment to or change in the laws or regulations of the United States or any political subdivision or taxing authority of or in the United States that is enacted or issued or becomes effective after the date of the Prospectus Supplement;

(b) proposed change in those laws or regulations that is announced after the date of the Prospectus Supplement;

(c) official administrative decision or judicial decision or administrative action or other official pronouncement interpreting or applying those laws or regulations that is announced after the date of the Prospectus Supplement; or

(d) threatened challenge asserted in connection with an audit of the Company, the Issuer Trust or the Company’s subsidiaries, or a threatened challenge asserted in writing against any other taxpayer that has raised capital through the issuance of securities that are substantially similar to the Notes or the PPS;

 

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there is more than an insubstantial increase in risk that:

(i) the Issuer Trust (or if the Company elects to remarket the Notes in the form of New Trust Preferred Securities, the New Trust) is, or will be, subject to United States federal income tax with respect to income received or accrued on the Notes;

(ii) interest payable by the Company on the Notes is not, or will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes; or

(iii) the Issuer Trust (or if the Company elects to remarket the Notes in the form of New Trust Preferred Securities, the New Trust) is, or will be, subject to more than a de minimis amount of other taxes, duties or other governmental charges at any time it is the holder of the Notes.

“ Treasury Dealer ” means J.P. Morgan Securities Inc. (or its successor) or, if J.P. Morgan Securities Inc. (or its successor) refuses to act as treasury dealer for this purpose or ceases to be a primary U.S. Government securities dealer, another nationally recognized investment banking firm that is a primary U.S. Government securities dealer specified by the Company for these purposes.

“ Treasury Price ” means the bid-side price for the Treasury Security as of the third trading day preceding the Redemption Date, as set forth in the table entitled “Treasury Bonds, Notes and Bills,” published by The Wall Street Journal (or any successor table), except that: (i) if that table (or any successor table) is not published or does not contain that price information on that trading day; or (ii) if the Treasury Dealer determines that the price information is not reasonably reflective of the actual bid-side price of the Treasury Security prevailing at 3:30 p.m., New York City time, on that trading day, then Treasury Price will instead mean the bid-side price for the Treasury Security at or around 3:30 p.m., New York City time, on that trading day (expressed on a next trading day settlement basis) as determined by the Treasury Dealer through such alternative means as the Treasury Dealer considers to be appropriate under the circumstances.

“ Treasury Rate ” means the semi-annual equivalent yield to maturity of the Treasury Security that corresponds to the Treasury Price (calculated in accordance with standard market practice and computed as of the second trading day immediately preceding the Redemption Date).

“ Treasury Security ” means the United States treasury security that the Treasury Dealer determines would be appropriate to use, at the time of determination and in accordance with standard market practice, in pricing the Notes being redeemed in a tender offer based on a spread to United States treasury yields.

“ Trust Agreement ” means the Amended and Restated Trust Agreement, dated as of the date hereof, among the Company, as Depositor, the Property Trustee, the Delaware Trustee, the Administrative Trustees (each as named therein) and the several Holders of the Trust Securities.

“ Trust Common Securities ” has the meaning specified in the recitals.

“ Trust Securities ” has the meaning specified in the recitals.

“ Unsuccessful ” has the meaning specified in Section 3.5(b).

 

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ARTICLE II

G ENERAL T ERMS AND C ONDITIONS OF THE N OTES

Section 2.1 Designation, Principal Amount and Authorized Denomination .

Pursuant to Sections 201 and 301 of the Indenture, there is hereby authorized a series of Debt Securities designated the “Remarketable 9.25% Junior Subordinated Notes due 2044” (the “ Notes ”), limited in aggregate principal amount to $1,750,100,000 (except for Notes authenticated and delivered upon registration of transfer of, or exchange for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture), which amount to be issued shall be as set forth in any Company Order for the authentication and delivery of Notes pursuant to the Indenture and may be increased in an unlimited amount at any time and from time to time within 13 days of the Time of Delivery pursuant to a Company Order. The denominations in which Notes shall be issuable is $1,000 principal amount and integral multiples thereof. Articles Twelve, Thirteen, Fourteen, Fifteen, Seventeen and Nineteen of the Indenture shall not apply to the Notes.

Section 2.2 Maturity .

The Stated Maturity of the principal of the Notes will be September 26, 2044, subject to change as provided in ARTICLE III.

Section 2.3 Form and Payment .

Except as provided in Section 2.4, the Notes shall be issued in fully registered definitive form without interest coupons. Principal of and interest on the Notes issued in definitive form will be payable, the transfer of such Notes will be registrable and such Notes will be exchangeable for Notes bearing identical terms and provisions and notices and demands to or upon the Company in respect of the Notes and the Indenture, as supplemented by this Supplemental Indenture, may be served at the Corporate Trust Office of the Trustee, and the Company appoints the Trustee as its agent for the foregoing purposes; provided that payment of interest may be made at the option of the Company by check mailed to the Holder at such address as shall appear in the Securities Register or by wire transfer in immediately available funds to the bank account number of the Holder specified in writing by the Holder and entered in the Securities Register by the Securities Registrar. Notwithstanding the foregoing, so long as the Holder of any Note is the Collateral Agent or the Custodial Agent, the payment of the principal of and interest (including expenses and taxes of the Issuer Trust set forth in Section 4.1, if any) on such Notes held by the Collateral Agent or the Custodial Agent will be made at the Paying Agent Office or such place and to such account as may be designated in writing by the Collateral Agent or the Custodial Agent, as the case may be. The Notes may be presented for registration of transfer or exchange at the Securities Registrar Office.

Section 2.4 Notes Held by Collateral Agent and Custodial Agent; Global Notes; Adjustment of Global Notes .

(a) The Notes shall be issued initially in fully registered form in the name of the Collateral Agent and the Custodial Agent, in their respective capacities as such. For so long as such Notes are held by the Collateral Agent or the Custodial Agent, each such Note shall represent the principal amount so indicated in the Securities Register, provided that the aggregate principal amount of all such Notes shall at all times equal the principal amount issued in accordance with Section 2.1.

 

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(b) At any time on or after the first to occur of the Remarketing Settlement Date (unless the Notes are remarketed in the form of New Trust Preferred Securities), an Early Termination Event or the redemption of the Capital PPS by the Issuer Trust in exchange for Notes, the Notes in definitive form may be presented to the Securities Registrar for exchange for one or more global Notes in an aggregate principal amount equal to the aggregate principal amount of the Notes so presented (a “ Global Note ”), to be registered in the name of The Depository Trust Company, which is hereby designated as the Depositary for the Notes if issued in the form of a Global Note pursuant to this Section 2.4(b), or its nominee, and delivered to the Depositary for crediting to the accounts of its participants pursuant to the instructions of the Administrative Trustees. The Company upon any such presentation shall execute one or more Global Notes in such aggregate principal amount and deliver the same to the Trustee for authentication and delivery in accordance with the Indenture. The Trustee, upon receipt of such Global Notes, together with an Officers’ Certificate and a Company Order to the Trustee requesting authentication, will authenticate such Global Notes and deliver them to the Securities Registrar, as custodian for the Depositary. Payments on the Notes issued as Global Notes will be made to the Depositary.

(c) In the event that (i) any Pledged Notes (as defined in the Collateral Agreement) for which no election has been validly made pursuant to Section 8.02(a) of the Collateral Agreement are to be released from the Pledge and transferred to the Remarketing Agent (or, if the Company elects to remarket the Notes in the form of New Trust Preferred Securities pursuant to Section 3.2, the property trustee of the New Trust) pursuant to Section 8.02(b) of the Collateral Agreement or (ii) any Pledged Notes for which an election has been validly made pursuant to Section 8.03(a) of the Collateral Agreement are to be delivered to the Remarketing Agent (or, if the Company elects to remarket the Notes in the form of New Trust Preferred Securities pursuant to Section 3.2, the property trustee of the New Trust) pursuant to Section 8.03(b) of the Collateral Agreement (collectively, the “ Remarketed Notes ”), such transfers shall be evidenced by an endorsement by the Securities Registrar on the Notes held by the Collateral Agent and the Custodial Agent, respectively, reflecting a reduction in the principal amount of such Notes equal in amount to the principal amount of the Remarketed Notes. The Securities Registrar shall confirm any such reduced principal amount by faxing or otherwise delivering a photocopy of such endorsement made on the Notes evidencing such reduced or increased principal amount to the Property Trustee at the facsimile number or address of the Property Trustee provided for notices to the Property Trustee in the Collateral Agreement (or at such other facsimile number or address as the Property Trustee shall provide to the Securities Registrar). Upon receipt of such confirmation, the Trustee, if the Remarketed Notes are to be issued in the form of a Global Note, shall instruct the Securities Registrar to increase the principal amount of such Global Note in an amount equal to the aggregate principal amount of the Remarketed Notes by an endorsement made by the Securities Registrar on such Global Note to reflect such increase. If the Notes are remarketed in the form of New Trust Preferred Securities, the Company shall execute and deliver to the Trustee for authentication a Note in the principal amount equal to the principal amount of the Remarketed Notes plus the liquidation amount of the common securities of the New Trust. The Trustee, upon receipt of such Notes, together with an Officers’ Certificate and a Company Order to the Trustee requesting authentication, will authenticate such Notes and deliver them to the property trustee of the New Trust and the Trustee shall promptly cancel the Remarketed Notes in accordance with Section 309 of the Indenture.

(d) In the event that any Pledged Note is to be released from the Pledge and transferred to the Custodial Account pursuant to Section 6.02(a) of the Collateral Agreement (a “ Released Note ”), as a result of the exchange of Normal PPS and Qualifying Treasury Securities for Stripped PPS and Capital PPS as provided in Section 6.02(a) of the Collateral Agreement, such transfer shall be evidenced by an endorsement by the Securities Registrar on the Note held by the Collateral Agent reflecting a reduction in the principal amount of such Note equal in amount to the principal amount of the Released Note. The Securities Registrar shall confirm any such reduced principal amount by faxing or otherwise delivering a photocopy of such endorsement made on the Note evidencing such reduced principal amount to the Property Trustee at the facsimile number or address of the Property Trustee provided for notices to the Property Trustee in the Collateral Agreement (or at such other facsimile number or address as the Property Trustee shall provide to the Securities Registrar). Upon receipt of such confirmation, the Trustee shall instruct the Custodial Agent or Securities Registrar to increase the principal amount of the Note held by the Custodial Agent in an amount equal to the reduced principal amount by an endorsement made by the Custodial Agent or Securities Registrar on such Note to reflect such increase.

 

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(e) In the event that a Note is transferred to the Collateral Account pursuant to Section 6.03(a)(i) of the Collateral Agreement (a “ Subjected Note ”) in connection with the exchange of Stripped PPS and Capital PPS for Normal PPS and Qualifying Treasury Securities as provided in Section 6.03 of the Collateral Agreement, such transfer shall be evidenced by an endorsement by the Securities Registrar on the Note held by the Collateral Agent reflecting an increase in the principal amount of such Note equal in amount to the principal amount of such Subjected Note. The Collateral Agent shall confirm any such increased principal amount by faxing or otherwise delivering a photocopy of such endorsement made on the Note evidencing such increased principal amount to the Property Trustee at the facsimile number or address of the Property Trustee provided for notices to the Property Trustee in the Collateral Agreement (or at such other facsimile number or address as the Property Trustee shall provide to the Securities Registrar). Upon receipt of such confirmation, the Trustee shall instruct the Custodial Agent or the Securities Registrar to decrease the principal amount of the Note held by the Custodial Agent in an amount equal to the increased principal amount by an endorsement made by the Collateral Agent or Securities Registrar on such Note to reflect such decrease.

Section 2.5 Interest .

(a) Each Note will bear interest as provided in the form of Notes set forth in Section 5.1.

(b) Section 313 of the Indenture shall not apply to the Notes. The Company shall have the right to (and shall, if so directed by the Federal Reserve Board) defer the payment of interest on the Notes, as provided in the form of Notes set forth in Section 5.1, for one or more Extension Periods extending to not later than seven years after the commencement of such Extension Period. The Trustee shall give notice of the Company’s election to begin or extend any Extension Period in the form of a notice thereof as shall have been prepared by the Company and furnished to the Trustee to the Holders of the Outstanding Notes, to the Administrative Trustees and the holders of the Capital PPS and, if such election is made prior to the Stock Purchase Date (as defined in the Stock Purchase Contract Agreement) or, if earlier, the Remarketing Settlement Date, to the holders of the Normal PPS. The Company’s rights to declare or pay dividends or make distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to any shares of its capital stock, to make payments on Parity Securities and on any of its debt securities that rank junior to the Notes or guarantees that rank junior to the Guarantee Agreement during any Extension Period are as provided in the form of Notes set forth in Section 5.1. Such restrictions shall also apply if (i) there has occurred and is continuing an Event of Default, (ii) the Notes are beneficially owned by the Issuer Trust (or the New Trust if the Company elects to remarket the Notes in the form of New Trust Preferred Securities) and the Company shall be in default relating to its payment of any obligations under the Guarantee Agreement (or the guarantee of such New Trust Preferred Securities), (iii) the Company shall have given notice of its election to defer payments of interest on the Notes and shall not have rescinded such notice, or (iv) the Company shall have paid deferred interest to the Issuer Trust in the form of Additional Subordinated Notes and not yet repaid all amount outstanding on such Notes.

(c) If on the Stock Purchase Date the Company has not paid in cash all interest accrued on the Notes and there is a Failed Remarketing, the Company will pay the Issuer Trust such deferred interest on the Notes that are Pledged Notes on the Stock Purchase Date in Additional Subordinated Notes that (i) have a principal amount equal to the aggregate amount of deferred interest as of the Stock Purchase Date, (ii) mature on the later of September 26, 2017 and seven years after commencement of the related Extension Period, (iii) bear interest at a rate per annum equal to the rate of interest originally in effect on the Notes (subject to deferral on the same basis as the Notes), (iv) are subordinate and rank junior in right of

 

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payment and upon liquidation to the Company’s obligations to the holders of Senior Debt on the same basis as the Notes and (v) are redeemable by the Company at any time or from time to time prior to their stated maturity at a redemption price equal to the principal amount thereof plus any accrued and unpaid interest to the date of redemption; provided that the Company shall register such Additional Subordinated Notes under the Securities Act prior to the delivery thereof to the Property Trustee unless they may be so delivered pursuant to an exemption or exception from registration thereunder.

(d) The Company shall give the Trustee, the Property Trustee, the Administrative Trustees and the Paying Agent for the PPS notice of its election to begin or extend any Extension Period at least five Business Days prior to the earlier of (i) the date on which distributions on the Normal PPS and Capital PPS would have been payable but for the election to begin or extend such Extension Period and (ii) the date the Administrative Trustees are required to give notice to any securities exchange or to the holders of the Normal PPS and Capital PPS of the Regular or Special Record Date or the date such distributions are payable, but in any event not less than five Business Days prior to such Regular or Special Record Date. The Trustee or its designee shall give notice of the Company’s election to begin or extend any Extension Period to the Holders of the Notes, to the Administrative Trustees and to the holders of the Capital PPS, and if such election is made prior to the Stock Purchase Date or, if earlier, the Remarketing Settlement Date, to the holders of the Normal PPS.

Section 2.6 Redemption of the Notes .

(a) The Notes shall not be subject to the right of redemption specified in Section 1108 of the Indenture.

(b) The Company may from time to time redeem the Notes, in whole or in part, at any date on or after September 26, 2017, at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest, including deferred interest (if any), to the date of redemption, in accordance with Article Eleven of the Indenture; provided that the Company may not redeem the Notes in part if the principal amount has been accelerated and such acceleration has not been rescinded or unless all accrued and unpaid interest has been paid in full on all outstanding Notes for all Interest Periods terminating on or before the Redemption Date. In connection with a Remarketing, the Company may change the date after which it may redeem Notes to a later date or change the redemption price in accordance with ARTICLE III.

(c) Prior to the Stock Purchase Date, the Comp