44KM Bos(shd)n2.a-bk

TIDM44KM

RNS Number : 6594J

BOS (Shared Appreciation Mrtg) No.2

25 August 2021

NOTICE OF NOTEHOLDER MEETING

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS NOTICE.

If Noteholders are in any doubt about any aspect of the proposals in this notice and/or the action they should take, they are recommended to seek their own financial advice immediately from their stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under the Financial Services and Markets Act 2000 (if they are in the United Kingdom) or from another appropriately authorised independent financial adviser and such other professional advisor from their own professional advisors as they deem necessary.

FURTHER INFORMATION REGARDING THE MATTERS REFERRED TO IN THIS NOTICE IS AVAILABLE IN THE CONSENT SOLICITATION MEMORANDUM (THE CONSENT SOLICITATION MEMORANDUM) ISSUED BY THE ISSUER TODAY, AND ELIGIBLE NOTEHOLDERS (AS DEFINED BELOW) ARE ENCOURAGED TO READ THIS NOTICE IN CONJUNCTION WITH THE SAME.

BOS (SHARED APPRECIATION MORTGAGES) NO. 2 PLC

(incorporated with limited liability in England and Wales with registered number 03149607)

(the Issuer)

NOTICE OF NOTEHOLDER MEETING

to the holders of the

GBP105,600,000 Asset Backed Notes due August 2072 (ISIN: XS0078634200)

(the Notes, and the holders thereof, the Noteholders) of the Issuer presently outstanding.

NOTICE IS HEREBY GIVEN that a meeting (the Meeting) of the Noteholders convened by the Issuer will be held via videoconference on 23 September 2021 for the purpose of considering and, if thought fit, passing the applicable resolution set out below which will be proposed as an Extraordinary Resolution in accordance with the provisions of the Trust Deed dated 25 July 1997 as amended, restated, modified and/or supplemented from time to time (the Trust Deed) made between the Issuer and Chase Manhattan Trustees Limited as trustee for the Noteholders and constituting the Notes.

The Meeting will commence at 10.20 a.m. (London time) (11.20 a.m. (CET)).

Capitalised terms used in this notice (the Notice) and not otherwise defined herein shall have the meanings given to them in the Consent Solicitation Memorandum dated 25 August 2021 (the Consent Solicitation Memorandum), which is available for inspection by Eligible Noteholders (as defined below) during normal business hours at the specified offices of the Principal Paying Agent on any weekday (public holidays excepted) and on the following website https://deals.lucid-is.com/sams (the Website) up to and including the date of the Meeting (see "Documents Available for Inspection" below). In accordance with normal practice, the Trustee, the Tabulation Agent and the Principal Paying Agent have not been involved in the formulation of the Noteholder Proposals outlined in the Consent Solicitation Memorandum or the Extraordinary Resolution. The Trustee, the Tabulation Agent, the Solicitation Agent and the Principal Paying Agent express no opinion on, and make no representations as to the merits of, the Noteholder Proposal set out in the Consent Solicitation Memorandum, the Amendment Documents, the Extraordinary Resolution or the proposed amendments referred to in the Extraordinary Resolution set out below.

None of the Trustee, the Tabulation Agent, the Solicitation Agent or the Principal Paying Agent makes any representation that all relevant information has been disclosed to Noteholders in or pursuant to this Notice, the Consent Solicitation Memorandum or otherwise. None of the Trustee, the Tabulation Agent, the Solicitation Agent or the Principal Paying Agent has approved the draft Amendment Documents referred to in the Extraordinary Resolution set out below and the Trustee recommends that Noteholders arrange to inspect and review such draft Amendment Documents as provided below in this Notice. Accordingly, Noteholders should take their own independent legal, financial, tax, regulatory or other advice on the merits and the consequences of voting in favour of the Extraordinary Resolution, including any tax consequences, and on the impact of the implementation of the Extraordinary Resolution.

None of the Trustee, the Tabulation Agent, the Solicitation Agent or the Principal Paying Agent are responsible for the accuracy, completeness, validity or correctness of the statements made in the Consent Solicitation Memorandum or omissions therefrom or for the acts or omissions of the Issuer, or any other person in connection with the Consent Solicitation.

In particular, Bank of Scotland plc assumes no responsibility for the information contained in the Consent Solicitation Memorandum and expresses no opinion on, and makes no representations as to the merits of, the Noteholder Proposal outlined in the Consent Solicitation Memorandum or the Extraordinary Resolution. No liability whatsoever in respect of the Consent Solicitation Memorandum, the Noteholder Proposal, the Extraordinary Resolution or the Notes is accepted by Bank of Scotland plc or any company in the same group of companies as Bank of Scotland plc (other than the Issuer).

Neither this Notice nor the Consent Solicitation Memorandum constitute or form part of, and should not be construed as, an offer for sale, exchange or subscription of, or a solicitation of any offer to buy, exchange or subscribe for, any securities of the Issuer or any other entity. The distribution of the Consent Solicitation Memorandum may nonetheless be restricted by law in certain jurisdictions. Persons into whose possession the Consent Solicitation Memorandum comes are required to inform themselves about, and to observe, any such restrictions.

Background

The UK Financial Conduct Authority (FCA) announced on 5 March 2021 (the 5 March Announcement) that all LIBOR settings will either cease to be provided by any administrator or no longer be representative of the underlying market and economic reality (and that representativeness will not be restored) immediately after (i) 31 December 2021, in the case of all sterling, euro, Japanese Yen and Swiss Franc, and certain U.S. dollar settings, or (ii) 30 June 2023, in the case of the remaining U.S. dollar settings.

In addition, the Bank of England and the FCA announced that it has mandated a working group to promote a broad-based transition to the Sterling Overnight Index Average (SONIA) across sterling bond, loan and derivative markets, so that SONIA is established as the primary sterling interest rate benchmark by the end of 2021.

There is now certainty that LIBOR in its current form will cease at the end of 2021. Regulators have urged market participants to take active steps to implement the transition to risk-free rates ahead of this deadline.

Further, the Trustee has informed the Issuer that, as a result of the EU Benchmarks Regulation (EU 596/2014) (the BMR) imposing certain obligations on market participants which are considered benchmark "users", legacy rate calculation provisions (in particular involving Trustee discretions and/or approvals) in affected transactions, which could create liability exposure for service providers which is not commensurate with their commercial position, have been widely re-examined.

On the basis that:

(a) certain elements used for calculations for the Notes reference sterling LIBOR, for which the cessation date of such settings has now been announced by the FCA to occur as at 31 December 2021;

(b) the Maturity Date (being the Interest Payment Date falling in August 2072) of the Notes occurs after the cessation date for sterling LIBOR rates; and

(c) the Trustee has requested that the Issuer remove certain Trustee approvals and discretions in the Conditions and the Trust Deed as, in common with changing regulatory practice and the position of the market, it is no longer able to perform any duties under or in connection with rate calculation provisions, whether discretionary or mandatory,

the Issuer has convened the Meeting for the purpose of enabling the Noteholders to consider and resolve, if they think fit, to approve the Noteholder Proposal (as further described below) by way of an Extraordinary Resolution in relation to the Notes (i) to convert the existing interest basis specified in the Conditions and the Transaction Documents as applicable to calculations for certain amounts payable under the Notes from sterling LIBOR to SONIA and (ii) to implement amendments to the Conditions and the Trust Deed to remove certain Trustee approvals and discretions and to update the notice and meeting provisions in each case to reflect current practices.

Noteholder Proposal

Pursuant to the above, the Issuer has convened the Meeting by the above notice to request that Noteholders consider and agree by Extraordinary Resolution to the matters contained in the Extraordinary Resolution set out below.

The Issuer, under the Noteholder Proposal (as defined below), is requesting that the Noteholders consider and, if thought fit, approve the Extraordinary Resolution. If approved by the Noteholders, the Extraordinary Resolution will be binding on all Noteholders, including those Noteholders who do not vote in favour of the Extraordinary Resolution or who do not vote in connection with the Extraordinary Resolution.

In order to convert the existing interest basis specified in the Conditions and the Transaction Documents as applicable to calculations for certain amounts payable under the Notes from sterling LIBOR to the SONIA Rate (as defined below):

   (a)        the interest basis for the calculation of: 
   (i)         default interest in accordance with the Conditions and the terms of the Trust Deed; 

(ii) the Funding Element in accordance with the terms of the Mortgage Portfolio Agreement; and

   (iii)       the Equity Compensation Amount in accordance with the Conditions; 

will be Compounded Daily SONIA for the relevant period (the SONIA Rate). The detailed provisions relating to the calculation of the SONIA Rate are set out in Annex A to this Notice.

(b) The applicable margin will be the sum of any existing margin already applicable to the relevant payments under the Transaction Documents (if any) and, in each case, the relevant Adjustment Spread. The detailed provisions relating to the determination of the Adjustment Spreads are set out in Annex B to this Notice.

It is also proposed that the Conditions and the Trust Deed will be amended in order to:

(a) remove (i) the requirement for Trustee approval of (A) LIBOR determined by the Reference Agent where no screen rate is available, (B) the appointment of replacement Reference Agents and Reference Banks, and (C) any alterations, or any successor indices, to the Halifax Regional Indices (as defined in the Conditions) and (ii) the discretion of the Trustee to calculate the relevant rate or amount on the failure of the Issuer or the Reference Agent (as applicable) to do so; and

(b) update the notice and meeting provisions: (i) to provide for Notices in relation to the Notes delivered via the Clearing Systems to be deemed given to Noteholders on the same day on which such Notice was delivered to the Clearing Systems; (ii) to ensure consistency between the Conditions and the provisions for meetings of Noteholders set out in Schedule 4 of the Trust Deed and (iii) to reflect provisions for (A) virtual Noteholder meetings being held, (Bi) electronic consent provisions, and (C) written resolutions to be approved by the same majority as an Extraordinary Resolution, rather than 100% approval being required,

in each case to reflect current practices.

The Extraordinary Resolution, if passed, constitutes (amongst others) a direction by the Noteholders to the Trustee to consent to and to concur in the amendments to the Conditions, the relevant Transaction Documents to implement relevant changes (i) to convert the existing interest basis specified in the Conditions and the Transaction Documents as applicable to calculations for certain amounts payable under the Notes from sterling LIBOR to SONIA and (ii) to remove certain Trustee approvals and discretions and to update the notice and meeting provisions in each case to reflect current practices, as more fully set out in the Amendment Documents and as may be necessary to give effect thereto, the Noteholder Proposal).

The Noteholder Proposal is being put to Noteholders for the reasons set out in the Consent Solicitation Memorandum.

Noteholders are referred to the Consent Solicitation Memorandum which provides further background to the Noteholder Proposal and the reasons therefor.

Consent Solicitation

Noteholders are further given notice that the Issuer has invited holders of the Notes (such invitation a Consent Solicitation) to consent to the approval, by Extraordinary Resolution at the Meeting, of the modification of the Conditions relating to the Notes as described in paragraph 1 of the Extraordinary Resolution as set out below, all as further described in the Consent Solicitation Memorandum (as defined in paragraph 10 of the Extraordinary Resolution set out below).

The Consent Solicitation Memorandum and any other documents or materials relating to the Consent Solicitation are only for distribution or to be made available to persons who are (i) located and resident outside the United States and who are not U.S. persons (as defined in Regulation S under the Securities Act) or acting for the account or benefit of any U.S. person, (ii) eligible counterparties (as defined in COBS), or professional clients (as defined in UK MiFIR) and, if applicable and acting on a non-discretionary basis, who are acting on behalf of a beneficial owner that is also an eligible counterparty or a professional client, in each case in respect of the Notes and (iii) otherwise a person to whom the Consent Solicitation can be lawfully made and that may lawfully participate in the Consent Solicitation (all such persons Eligible Noteholders).

Subject to the restrictions described in the previous paragraph, Noteholders may obtain from the date of this Notice a copy of the Consent Solicitation Memorandum from the Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a Noteholder will be required to provide confirmation as to his or her status as an Eligible Noteholder.

EXTRAORDINARY RESOLUTION

IN RESPECT OF THE GBP105,600,000 ASSET Backed Notes due August 2072

"THAT this Meeting of the holders (together, the Noteholders) of the GBP105,600,000 Asset Backed Notes due August 2072 (the Notes) of BOS (Shared Appreciation Mortgages) No. 2 Plc (the Issuer), constituted by the trust deed dated 25 July 1997 as amended, restated, modified and/or supplemented from time to time (the Trust Deed) made between the Issuer and Chase Manhattan Trustees Limited as trustee for, inter alios, the Noteholders:

1. (subject to paragraph 9 of this Extraordinary Resolution) assents to the modification of:

(a) the terms and conditions of the Notes (the Conditions), as set out in Schedule 3 to the Trust Deed, as may from time to time be modified or amended and restated in accordance with the Trust Deed, in order that the existing interest basis specified therein as being applicable to calculations for certain amounts payable under the Notes is converted from sterling LIBOR to the SONIA Rate for the relevant period, on the Interest Payment Date falling in November 2021 (the Transition Date) as more fully set out in the Supplemental Trust Deed (as defined in paragraph 2 below);

(b) certain terms of the Trust Deed, as set out in the Supplemental Trust Deed (as defined in paragraph 2 below) in order to include the method of calculation of the SONIA Rate and other consequential changes to the terms of the Trust Deed;

(c) certain terms of the Paying Agency Agreement, Mortgage Portfolio Agreement, Master Definitions Schedule and the Options Agreement (each as defined in the Transaction Documents) as more fully set out in the Deed of Amendment and Restatement and the ISDA Amendment Agreement (each as defined in paragraph 2below); and

(d) the Trust Deed and the Conditions, as set out in the Supplemental Trust Deed (as defined in paragraph 2 below) in order to remove certain Trustee approvals and discretions and to update the notice and meeting provisions, in each case to reflect current practices;

2. (subject to paragraph 9 of this Extraordinary Resolution) authorises, directs, requests and empowers:

(a) (i) the Issuer, the Trustee and BNYM (as defined in paragraph 10 below) to execute a deed supplemental to the Trust Deed which annexes the form of the Conditions (the Supplemental Trust Deed);

(ii) the Issuer, the Trustee, BNYM, the Principal Paying Agent, the Reference Agent, Bank of Scotland plc and UBS AG, London Branch to execute a deed of amendment and restatement amending and restating the Mortgage Portfolio Agreement, the Paying Agency Agreement and the Master Definitions Schedule (the Deed of Amendment and Restatement);

(iii) the Issuer, the Trustee, BNYM and UBS AG, London Branch to execute an ISDA amendment agreement amending the Options Agreement (the ISDA Amendment Agreement, together with the Supplemental Trust Deed and the Deed of Amendment and Restatement, the Amendment Documents and each an Amendment Document),

in each case to effect the modifications referred to in paragraph 1 of this Extraordinary Resolution, in the form or substantially in the form of the drafts produced to this Meeting and for the purpose of identification signed by the chairman thereof, with such amendments thereto (if any) as the Trustee shall require or agree to; and

(b) each of the Issuer and the Trustee to execute and to do all such deeds, instruments, acts and things as may be necessary, desirable or expedient in its sole opinion to carry out and to give effect to this Extraordinary Resolution and the implementation of the modifications referred to in paragraph 1 of this Extraordinary Resolution;

3. discharges and exonerates the Trustee from all liability for which it may have become or may become responsible under the Trust Deed, the Notes, the Conditions or any Transaction Document or any document related thereto in respect of any act or omission in connection with the passing of this Extraordinary Resolution or its implementation, the modifications referred to in paragraph 1 of this Extraordinary Resolution or the implementation of those modifications, the executing of the Amendment Documents and any deeds, agreements, documents or instructions or the performance of any acts, matters or things to be done to carry out and give effect to the matters contemplated in the Amendment Documents, the Notice or this Extraordinary Resolution;

4. irrevocably waives any claim that the Noteholders may have against the Trustee arising as a result of any loss or damage which the Noteholders may suffer or incur as a result of the Trustee acting upon this Extraordinary Resolution (including but not limited to circumstances where it is subsequently found that this Extraordinary Resolution is not valid or binding on the holders) and the Noteholders further confirm that the Noteholders will not seek to hold the Trustee liable for any such loss or damage;

5. expressly agrees and undertakes to indemnify and hold harmless the Trustee from and against all losses, liabilities, damages, costs, charges and expenses which may be suffered or incurred by them as a result of any claims (whether or not successful, compromised or settled), actions, demands or proceedings brought against the Trustee and against all losses, costs, charges or expenses (including legal fees) which the Trustee may suffer or incur which in any case arise as a result of the Trustee acting in accordance with the Extraordinary Resolution and the Trust Deed;

6. (subject to paragraph 9 of this Extraordinary Resolution) sanctions and assents to every abrogation, modification, compromise or arrangement in respect of the rights of the Noteholders appertaining to the Notes against the Issuer, whether or not such rights arise under the Conditions, the Notes, the Trust Deed or any other Transaction Documents involved in, resulting from or to be effected by the amendments referred to in paragraph 1 of this Extraordinary Resolution and their implementation;

7. waives any and all requirements, restrictions and conditions precedent set forth in the Transaction Documents on any person, in implementing the Amendment Documents, this Extraordinary Resolution and the Noteholder Proposal;

8. discharges and exonerates the Issuer from all liability for which it may have become or may become responsible under the Trust Deed, the Notes or any Transaction Document or any document related thereto in respect of any act or omission in connection with the passing of this Extraordinary Resolution or the executing of any deeds, agreements, documents or instructions, the performance of any acts, matters or things to be done to carry out and give effect to the matters contemplated in the Amendment Documents, the Notice or this Extraordinary Resolution;

9. declares that the implementation of this Extraordinary Resolution shall be conditional on:

   (a)        the passing of this Extraordinary Resolution; and 

(b) the quorum required for, and the requisite majority of votes cast at, this Meeting being satisfied by Eligible Noteholders, irrespective of any participation at this Meeting by Ineligible Noteholders and that, in the event that the Extraordinary Resolution is passed at this Meeting but such condition is not satisfied, the chairman of this Meeting is hereby authorised, directed, requested and empowered to adjourn this Meeting for such period being not less than 14 clear days nor more than 42 clear days, and shall be held via videoconference at such time as may be appointed by the chairman of this Meeting and approved by the Trustee, for the purpose of reconsidering resolutions 1 to 12 of this Extraordinary Resolution with the exception of resolution 9(b) of this Extraordinary Resolution. At any such adjournment of this Meeting, two or more persons present holding Definitive Notes or voting certificates or being proxies or representatives and holding or representing in aggregate not less than 25 per cent. of the aggregate Principal Amount Outstanding of the Notes then outstanding shall form a quorum and shall have the power to pass such Extraordinary Resolution, and this condition set out in this paragraph 9(b) will be satisfied if the quorum required for, and the requisite majority of votes cast at, such adjourned Meeting are satisfied by Eligible Noteholders irrespective of any participation at the adjourned Meeting by Ineligible Noteholders;

10. acknowledges that the following terms, as used in this Extraordinary Resolution, shall have the meanings given below:

Consent Solicitation means the invitation by the Issuer to all Eligible Noteholders to consent to the modification of the Conditions relating to the Notes as described in the Consent Solicitation Memorandum and as the same may be amended in accordance with its terms;

Consent Solicitation Memorandum means the consent solicitation memorandum dated 25 August 2021 prepared by the Issuer in relation to the Consent Solicitation;

Eligible Noteholder means each Noteholder who is (a) located and resident outside the United States and not a U.S. person (as defined in Regulation S under the Securities Act), (b) an eligible counterparty (as defined in COBS), or a professional client (as defined in UK MiFIR) and, if applicable and acting on a non-discretionary basis, who is acting on behalf of a beneficial owner that is also an eligible counterparty or a professional client, in each case in respect of the Notes and (c) otherwise a person to whom the Consent Solicitation can be lawfully made and that may lawfully participate in the Consent Solicitation;

Ineligible Noteholder means each Noteholder who is not a person to whom the Consent Solicitation is being made, on the basis that such Noteholder is either (i) a U.S. person and/or located or resident in the United States and/or (ii) not an eligible counterparty (as defined in COBS), or a professional client (as defined in UK MiFIR), and, if applicable and acting on a non-discretionary basis, who is not acting on behalf of a beneficial owner that is also an eligible counterparty or a professional client and/or (iii) a person to whom the Consent Solicitation cannot otherwise be lawfully made;

Securities Act means the U.S. Securities Act of 1933, as amended; and

Trustee means BNY Mellon Corporate Trustee Services Limited (as successor in business to J.P. Morgan Trustee and Depositary Company Limited, formerly known as Chase Manhattan Trustees Limited), or should The Bank of New York Mellon, London Branch (BNYM) at any time be determined as being the trustee for the time being under the Trust Deed, The Bank of New York Mellon, London Branch;

11. agrees that capitalised terms in this document where not defined herein shall have the meanings given to them in the Consent Solicitation Memorandum (a copy of which is available for inspection as referred to in the Notice); and

12. approves that the Trustee be and is hereby authorised and instructed not to obtain any legal opinions in relation to, or to enquire into, the power and capacity of any person to enter into the Amendment Documents, or the due execution and delivery thereof by any party thereto or the validity or enforceability thereof and that it shall not be liable to any Noteholder for any consequences resulting from following this instruction."

Ineligible Noteholders

Submission of Ineligible Holder Instructions

In respect of any Notes held through Euroclear Bank SA/NV (Euroclear) or Clearstream Banking, S.A. (Clearstream, Luxembourg), the submission of Ineligible Holder Instructions will be deemed to have occurred upon receipt by the Tabulation Agent from Euroclear or Clearstream, Luxembourg, as applicable, of a valid instruction (an Ineligible Holder Instruction) submitted in accordance with the requirements of Euroclear or Clearstream, Luxembourg, as applicable. Each such Ineligible Holder Instruction must specify, among other things, the aggregate principal amount of the Notes to which such Ineligible Holder Instruction relates, the securities account number at Euroclear or Clearstream, Luxembourg, as applicable, in which the relevant Notes are held and whether the Ineligible Noteholder wishes to instruct the Principal Paying Agent to appoint two or more representatives of the Tabulation Agent to attend (via videoconference) the Meeting (and any adjourned such Meeting) and vote in favour of or against the Extraordinary Resolution. The receipt of such Ineligible Holder Instruction by Euroclear or Clearstream, Luxembourg, as applicable, will be acknowledged in accordance with the standard practices of Euroclear or Clearstream, Luxembourg, as applicable, and will result in the blocking of the relevant Notes in the relevant Ineligible Noteholder's account with Euroclear or Clearstream, Luxembourg, as applicable, so that no transfers may be effected in relation to such Notes until the earlier of (i) the date on which the relevant Ineligible Holder Instruction is validly revoked (including their automatic revocation on the termination of the Consent Solicitation) and (ii) the conclusion of the Meeting (or, if applicable, any adjourned such Meeting).

Only Accountholders may submit Ineligible Holder Instructions. Each beneficial owner of Notes who is an Ineligible Noteholder and is not an Accountholder, must arrange for the Accountholder through which such beneficial owner of Notes who is an Ineligible Noteholder holds its Notes to submit an Ineligible Holder Instruction on its behalf to Euroclear or Clearstream, Luxembourg, as applicable, before the deadlines specified by the relevant clearing system.

By delivering, or arranging for the delivery on its behalf, of an Ineligible Holder Instruction in accordance with the procedures described below, a Noteholder shall be deemed to agree, undertake, acknowledge and represent to the Issuer, the Tabulation Agent and the Solicitation Agent that at (i) the time of submission of such Ineligible Holder Instruction; (ii) the Expiration Deadline; (iii) the time of the Meeting and at the time of any adjourned Meeting; and (iv) the Effective Date (and if a Noteholder is unable to make any such acknowledgement or give any such representation or warranty, such Noteholder or Accountholder should contact the Tabulation Agent immediately):

   (a)        It is an Ineligible Noteholder. 

(b) It is not a person or entity (a Person) (A) that is, or is directly or indirectly owned or controlled by a Person that is, described or designated in (i) the most current "Specially Designated Nationals and Blocked Persons" list (which as of the date hereof can be found at: https://www.treasury.gov/ofac/downloads/sdnlist.pdf) or (ii) the Foreign Sanctions Evaders List (which as of the date hereof can be found at: http://www.treasury.gov/ofac/downloads/fse/fselist.pdf) or (iii) the most current "Consolidated list of persons, groups and entities subject to EU financial sanctions" (which as of the date hereof can be found at: https://eeas.europa.eu/headquarters/headquarters-homepage_en/8442/Consolidated%20list%20of%20sanctions); or (B) that is otherwise the subject of any sanctions administered or enforced by any Sanctions Authority, other than solely by virtue of their inclusion in: (i) the most current "Sectoral Sanctions Identifications" list (which as of the date hereof can be found at: https://www.treasury.gov/ofac/downloads/ssi/ssilist.pdf) (the SSI List), (ii) Annexes 3, 4, 5 and 6 of Council Regulation No. 833/2014, as amended from time to time including by Council Regulation No. 960/2014 and Council Regulation (EU) No 1290/2014 and Council Regulation (EU) No 2015/1797 (the EU Annexes), or (iii) any other list maintained by a Sanctions Authority, with similar effect to the SSI List or the EU Annexes. For these purposes Sanctions Authority means each of: (i) the United States government; (ii) the United Nations; (iii) the European Union (or any of its member states) or the United Kingdom; (iv) any other equivalent governmental or regulatory authority, institution or agency which administers economic, financial or trade sanctions; and (v) the respective governmental institutions and agencies of any of the foregoing including, without limitation, the Office of Foreign Assets Control of the US Department of the Treasury, the United States Department of State, the United States Department of Commerce and Her Majesty's Treasury.

This representation shall not be sought or given at any time after such representation is first made if and to the extent that it is or would be unenforceable by reason of breach of (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996 (the EU Blocking Regulation) (or any law or regulation implementing the EU Blocking Regulation in any member state of the European Union), (ii) any provision of the EU Blocking Regulation as it forms part of domestic law of the United Kingdom by virtue of the EUWA and any secondary legislation made under it, or (iii) any similar blocking or anti-boycott law in the European Union or the United Kingdom.

(c) It is assuming all the risks inherent in participating in the Consent Solicitation and has undertaken all the appropriate analyses of the implications of the Consent Solicitation without reliance on the Issuer, the Trustee, the Principal Paying Agent, the Solicitation Agent or the Tabulation Agent.

(d) It has observed the laws of all relevant jurisdictions, obtained all requisite governmental, exchange control or other required consents, complied with all requisite formalities and paid any issue, transfer or other taxes or requisite payments due from it in each respect in connection with any vote in relation to the Extraordinary Resolution, in any jurisdiction and that it has not taken or omitted to take any action in breach of the representations or which will or may result in the Issuer, the Trustee, the Solicitation Agent, the Tabulation Agent or any other person acting in breach of the legal or regulatory requirements of any such jurisdiction in connection with any votes in relation to the Extraordinary Resolution.

   (e)        It has full power and authority to vote in the Meeting (or any such adjourned Meeting). 

(f) Each Ineligible Holder Instruction is made on the terms and conditions set out in this notice and therein.

(g) Each Ineligible Holder Instruction is being submitted in compliance with the applicable laws or regulations of the jurisdiction in which the Noteholder is located or in which it is resident or located and no registration, approval or filing with any regulatory authority of such jurisdiction is required in connection with each such Ineligible Holder Instruction.

(h) It holds and will hold, until the earlier of (i) the date on which its Ineligible Holder Instruction is validly revoked, in accordance with the terms of the Consent Solicitation and (ii) conclusion of the Meeting or (if applicable) any adjourned Meeting, as the case may be, the Notes the subject of the Ineligible Holder Instruction, in the relevant Clearing System and, if it holds its Notes through Euroclear, or Clearstream in accordance with the requirements of the relevant Clearing System and by the deadline required by the relevant Clearing System, it has submitted, or has caused to be submitted, an Ineligible Holder Instruction to the relevant Clearing System, as the case may be, to authorise the blocking of such Notes with effect on and from the date thereof so that no transfers of such Notes may be effected until the occurrence of any of the events listed in (i) or (ii) above.

(i) It acknowledges that none of the Issuer, the Trustee, the Solicitation Agent, the Tabulation Agent and/or the Principal Paying Agent or any of their respective affiliates, directors, officers, employees or agents has made any recommendation as to whether to vote on the Extraordinary Resolution and it represents that it has made its own decision with regard to voting on the Extraordinary Resolution based on any independent legal, financial, tax, regulatory or other advice that it has deemed necessary to seek.

(j) It acknowledges that all authority conferred or agreed to be conferred pursuant to these acknowledgements, representations, warranties and undertakings and every obligation of the Noteholder offering to vote on the Extraordinary Resolution shall to the extent permitted by applicable law be binding upon the successors, assigns, heirs, executors, trustees in bankruptcy and legal representatives of the Noteholder voting on the Extraordinary Resolution and shall not be affected by, and shall survive, the death or incapacity of the Noteholder voting on the Extraordinary Resolution, as the case may be.

(k) The Notes have not been and will not be registered under the Securities Act, or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons, unless an exemption from the registration requirements of the Securities Act is available (terms used in this paragraph that are, unless otherwise specified, defined in Regulation S are used as defined in Regulation S).

(l) None of the Issuer, the Solicitation Agent, the Tabulation Agent, the Principal Paying Agent or the Trustee or any of their respective directors, officers, employees, agents or affiliates has given (directly or indirectly through any other person) any assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence or benefit (including legal, regulatory, tax, financial, accounting or otherwise) of the Consent Solicitation.

(m) None of the Issuer, the Trustee, the Principal Paying Agent, the Solicitation Agent or the Tabulation Agent is acting as a fiduciary or financial or investment adviser for it.

(n) The terms and conditions of the Consent Solicitation shall be deemed to be incorporated in, and form a part of, the Ineligible Holder Instruction which shall be read and construed accordingly and that the information given by or on behalf of such Noteholder in the Ineligible Holder Instruction is true and will be true in all respects at the time of the Meeting (or any adjourned Meeting).

(o) No information has been provided to it by the Issuer, the Trustee, the Solicitation Agent or the Tabulation Agent, or any of their respective directors or employees or affiliates, with regard to the tax, regulatory or other consequences for Noteholders arising from the participation in the Consent Solicitation, the implementation of any Extraordinary Resolution, and it acknowledges that it is solely liable for any taxes and similar or related payments imposed on it under the laws of any applicable jurisdiction as a result of its participation in the Consent Solicitation, and agrees that it will not and does not have any right of recourse (whether by way of reimbursement, indemnity or otherwise) against the Issuer, the Trustee, the Solicitation Agent or the Tabulation Agent, or any of their respective directors or employees, or any other person in respect of such taxes and payments.

If the relevant Ineligible Noteholder is unable to give any of the representations and warranties described above, such Ineligible Noteholder should contact the Tabulation Agent.

Each Ineligible Noteholder submitting an Ineligible Holder Instruction in accordance with its terms shall be deemed to have agreed to indemnify the Issuer, the Solicitation Agent, the Tabulation Agent, the Principal Paying Agent, the Trustee and any of their respective affiliates, directors, officers, employees or agents against all and any losses, costs, fees, claims, liabilities, expenses, charges, actions or demands which any of them may incur or which may be made against any of them as a result of any breach of any of the terms of, or any of the representations, warranties and/or undertakings given pursuant to, such vote by such Noteholder.

REQUIREMENTS OF U.S. SECURITIES LAWS

If the Extraordinary Resolution is passed and implemented in respect of the Notes, until the expiry of the period of 40 days after the date of the Supplemental Trust Deed, offers or sales of the Notes may not be made in the United States or to U.S. persons unless made outside the United States pursuant to Rules 903 and 904 of Regulation S.

Noteholders who have submitted and not revoked a valid Consent Instruction or Ineligible Holder Instruction in respect of the Extraordinary Resolution by 4 p.m. (London time) (5 p.m. (CET)) on 20 September 2021 (the Expiration Deadline), by which they will have given instructions for the appointment of two or more representatives of the Tabulation Agent by the Principal Paying Agent as their proxy to vote in favour of or against (as specified in the relevant Consent Instruction or Ineligible Holder Instruction) the Extraordinary Resolution at the Meeting (or any adjourned such Meeting), need take no further action to be represented at the Meeting (or any such adjourned such Meeting).

General Information

The attention of Noteholders is particularly drawn to the quorum required for the Noteholders' Meeting and for any adjourned Meeting which is set out in paragraphs 1 , 2 , 3 , 4 and 5 of " Voting and Quorum " below. Having regard to such requirements, Noteholders are strongly urged either to attend (via videoconference) the Meeting or to take steps to be represented at the Meeting, as referred to below, as soon as possible.

Voting and Quorum

1. The provisions governing the convening and holding of the Meeting are set out in Schedule 4 (Provisions for Meetings of Noteholders) to the Trust Deed, a copy of which is available for inspection by the Noteholders during normal business hours at the specified offices of the Principal Paying Agent on any weekday (public holidays excepted) and on the Website up to and including the date of the Meeting and at the Meeting.

All of the Notes are represented by a global Note and are held by a common depositary for Euroclear Bank SA/NV (Euroclear) and Clearstream Banking, S.A. (Clearstream, Luxembourg). For the purpose of the Meeting, a Noteholder shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular Principal Amount Outstanding of the Notes.

Any Noteholder who indicates that they wish to participate in the videoconference for the Meeting in person (rather than being represented by the Tabulation Agent) will be provided with further details about attending the Meeting. A Noteholder wishing to attend (via videoconference) the Meeting must provide the Tabulation Agent with a valid voting certificate issued by the Principal Paying Agent relating to the Note(s) in respect of which it wishes to vote.

Any Noteholder who wishes to vote in respect of the Extraordinary Resolution but does not wish to attend (via videoconference) the Meeting should: (i) in the case of a beneficial owner whose Notes are held in book--entry form by a custodian, request such beneficial owner's custodian to vote on the Extraordinary Resolution in accordance with the procedures set out in Section 4 "Procedures in connection with the Consent Solicitation" of the Consent Solicitation Memorandum, or (ii) in the case of a Noteholder whose Notes are held in book--entry form directly in the relevant Clearing System, vote on the Extraordinary Resolution in accordance with the procedures set out in Section 4 "Procedures in connection with the Consent Solicitation" of the Consent Solicitation Memorandum.

Noteholders should note that the timings and procedures set out below reflect the requirements for Noteholders' Meetings set out in the Trust Deed, but that the Clearing Systems and the relevant intermediaries may have their own additional requirements as to timings and procedures for voting on the Extraordinary Resolution. Accordingly, Noteholders wishing to vote in respect of the Extraordinary Resolution are strongly urged either to contact their custodian (in the case of a beneficial owner whose Notes are held in book--entry form by a custodian) or the relevant Clearing System (in the case of a Noteholder whose Notes are held in book--entry form directly in the relevant Clearing System), as soon as possible.

2. The quorum at the Meeting for passing an Extraordinary Resolution (the business of which includes the sanctioning of a Basic Terms Modification) shall (subject as provided below) be two or more persons present holding or representing Notes or voting certificates or being proxies or representatives and holding or representing in aggregate not less than 75 per cent. of the aggregate Principal Amount Outstanding of the Notes then outstanding. If a quorum is not present within 15 minutes after the time fixed for the Meeting, the Meeting will be adjourned for such period being not less than 14 days nor more than 42 days, and shall be held via videoconference at such time as may be appointed by the chairman of the Meeting and approved by the Trustee. In addition, in the event that the quorum required for, and the requisite majority of votes cast at, the Meeting is satisfied but the Eligibility Condition in respect of such Meeting is not satisfied, the chairman of the Meeting will adjourn the Meeting for such period being not less than 14 days nor more than 42 days, and such Meeting shall be held via videoconference at such time as may be appointed by the chairman of the Meeting and approved by the Trustee. The Extraordinary Resolution will be considered at an adjourned Meeting (notice of which will be given to the Noteholders). At any adjourned Meeting, two or more persons present holding or representing Notes or voting certificates or being proxies or representatives and holding or representing in aggregate not less than 25 per cent. of the aggregate Principal Amount Outstanding of the Notes then outstanding shall (subject as provided below) form a quorum and shall have the power to pass the Extraordinary Resolution.

3. To be passed at the Meeting, the Extraordinary Resolution requires (a) a majority in favour consisting of at least 75 per cent. of the votes cast; or (b) a resolution in writing signed by or on behalf of all Noteholders who for the time being are entitled to receive notice of a meeting in accordance with the terms of the Trust Deed, which resolution in writing may be contained in one document or in several documents in like form each signed by or on behalf of one or more of the Noteholders. The question submitted to the Meeting shall be decided in the first instance by a show of hands unless a poll is (before, or on the declaration of, the result of the show of hands) demanded by the chairman of the Meeting, the Issuer or by two or more persons present holding Notes or a voting certificate or being a proxy or representative and representing or holding in the aggregate not less than one-fiftieth of the Principal Amount Outstanding of the Notes then outstanding. A declaration by the Chairman that a resolution has been carried or carried by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

4. The implementation of the Consent Solicitation and the Extraordinary Resolution will be conditional on:

   (a)        the passing of the Extraordinary Resolution; and 

(b) the quorum required for, and the requisite majority of votes cast at, the Meeting being satisfied by Eligible Noteholders, irrespective of any participation at the Meeting by Ineligible Noteholders (including the satisfaction of such condition at an adjourned Meeting) (the Eligibility Condition),

(together, the Consent Conditions).

5. If passed, the Extraordinary Resolution passed at the Meeting will be binding upon all the Noteholders whether or not present or voting at the Meeting.

Documents Available for Inspection

Copies of items (a) to (b) below (together, the Noteholder Information) will be available from the date of this Notice, for inspection during normal business hours at the specified offices of the Principal Paying Agent on any weekday (public holidays excepted) and on the Website up to and including the date of the Meeting and at the Meeting:

   (a)        this Notice; and 

(b) the current drafts of each Amendment Document, each as referred to in the Extraordinary Resolution set out above.

This Notice should be read in conjunction with the Noteholder Information.

The Noteholder Information may be supplemented from time to time. Existing Noteholders should note that the Amendment Documents may be subject to amendment (where such amendments are in line with the Proposed Amendments) up until 7 days prior to the date fixed for the Meeting. Should such amendments be made, blacklined copies (showing the changes from the originally available Amendment Documents) and clean versions will be available for inspection, at the specified office of the Principal Paying Agent and on the Website.

Certain blackline copies of the Amendment Documents have been prepared using automatic word conversions of scanned physical documents. As a result, the blacklines may show certain other amendments which reflect corrections of a typographical or formatting nature in order for the Amendment Documents to follow the original physical copies where necessary. None of the Issuer, the Trustee, the Solicitation Agent, the Tabulation Agent or the Principal Paying Agent makes any representation that the blacklines are an exact reflection of the amendments made to the relevant Transaction Documents.

Existing Noteholders will be informed of amendments to the Amendment Documents by announcements released on the regulatory news service of the London Stock Exchange. Announcements will also be made through the Clearing Systems for onward dissemination to the Existing Noteholders.

Contact Information

Further information relating to the Proposed Amendments can be obtained from the Solicitation Agent directly:

 
 Lloyds Bank Corporate Markets plc 
  10 Gresham Street 
  London EC2V 7AE 
  Telephone number: +44 (0)20 7158 1726 / 1719 
  Attention: Liability Management Group 
  Email: liability.management@lloydsbanking.com 
 

The address of the Principal Paying Agent, the Tabulation Agent, the Trustee are set out below:

 
 Trustee                                                           Tabulation Agent 
 BNY Mellon Corporate Trustee Services Limited                     Lucid Issuer Services Limited 
  40th Floor                                                        Tankerton Works 
  One Canada Square                                                 12 Argyle Walk 
  London E14 5AL                                                    London WC1H 8HA 
  Fax: +44 (0)20 7964 4637                                          Telephone number: +44 (0)20 7704 0880 
  Email: corpsov4@bnymellon.com                                     Email: sams@lucid-is.com 
  Attention: Trustee Administration Manager 
 Principal Paying Agent 
 The Bank of New York Mellon, London Branch, One Canada Square 
  London E14 5AL 
  Telephone: +44 (0)1202 689 984 
  Email: corpsov4@bnymellon.com 
  Attention: Corporate Trust Administration (Structured Finance) 
 

Noteholders whose Notes are held by Euroclear or Clearstream, Luxembourg should contact the Tabulation Agent at the address details above for further information on how to vote at the Meeting.

Announcements

If the Issuer is required to make an announcement relating to matters set out in this Notice, any such announcement will be made in accordance with all applicable rules and regulations via notices to the Clearing Systems for communication to Noteholders and an announcement released on the regulatory news service of the London Stock Exchange.

This Notice is given by:

BOS (SHARED APPRECIATION MORTGAGES) NO. 2 PLC

Dated 25 August 2021

Annex A

Compounded daily sonia

http://www.rns-pdf.londonstockexchange.com/rns/6594J_1-2021-8-24.pdf

Annex B

SPREAD ADJUSTMENT DETERMINATION

   1.         Rationale for the Proposal 

Due to the differences in the nature of LIBOR and SONIA, the replacement of LIBOR as the reference rate for the purposes of calculating certain amounts under the Notes will also require corresponding adjustments to the relevant margin or interest basis (as applicable). An adjustment (being the relevant Adjustment Spread (as defined below)) will be added when calculating any payment arising in the period from and including the Transition Date which is determined with reference to Compounded Daily SONIA.

The pricing methodologies for the Adjustment Spreads are based on the 5-year historical median lookback approach using principles outlined in the methodology for such adjustments contained in the ISDA IBOR Fallback Supplement (supplement number 70 to the 2006 ISDA Definitions (which can be found at http://assets.isda.org/media/3062e7b4/23aa1658-pdf/), which incorporates into the ISDA definitions new interbank offered rate fallbacks).

The date from which the proposed change in reference rate for the provisions which currently reference sterling LIBOR is scheduled to occur on the Interest Payment Date falling in November 2021 (the Transition Date). For the avoidance of doubt, the interest basis applicable to the calculation of certain amounts payable under the Notes up to but excluding the Transition Date will continue to be sterling LIBOR and the Adjustment Spreads will not apply to any calculations for the period up to but excluding the Transition Date.

   2.         The Adjustment Spreads 

Using the principles outlined in the ISDA IBOR Fallback Supplement:

(i) the 3M Adjustment Spread will be the rate specified on Bloomberg screen "SBP0003M Index", or any successor page, as calculated by Bloomberg Index Services Limited (or a successor provider as approved and/or appointed by ISDA from time to time) (Bloomberg) in relation to 3-month Sterling LIBOR; and

(ii) the 12M Adjustment Spread will be the rate specified on Bloomberg screen "SBP0012M Index", or any successor page, as calculated by Bloomberg in relation to 12-month Sterling LIBOR,

in each case as shown on the relevant Bloomberg screen as at the date of this Consent Solicitation Memorandum. The 3M Adjustment Spread and the 12M Adjustment Spread are together the Adjustment Spreads and each an Adjustment Spread.

As at the date of this Consent Solicitation Memorandum, and as a result of the Financial Conduct Authority's announcement on 5 March 2021[1]:

(i) the rate specified on Bloomberg screen "SBP0003M Index" in relation to 3-month Sterling LIBOR has been fixed at 0.1193 per cent., and such rate (subject to any corrections or adjustments made to such rate by Bloomberg in accordance with its rule book) will be the 3M Adjustment Spread; and

(ii) the rate specified on Bloomberg screen "SBP0012M Index" in relation to 12-month Sterling LIBOR has been fixed at 0.4644 per cent., and such rate (subject to any corrections or adjustments made to such rate by Bloomberg in accordance with its rule book) will be the 12M Adjustment Spread.

3. The adjusted margin for default interest calculated in accordance with the Conditions and the terms of the Trust Deed for any payments relating to the period commencing on and including the Transition Date

The margin for default interest calculated in accordance with the Conditions and the terms of the Trust Deed (the Default Interest Margin) shall be adjusted as follows:

the sum of:

   (A)       0.30 per cent. per annum; plus 
   (B)       the 12M Adjustment Spread. 

4. The adjusted margin for the Funding Element calculated in accordance with the terms of the Mortgage Portfolio Agreement for any payments relating to the period commencing on and including the Transition Date

The margin for the Funding Element calculated in accordance with the terms of the Mortgage Portfolio Agreement (the Funding Element Margin) shall be adjusted as follows:

the sum of:

   (A)       0.30 per cent. per annum; plus 
   (B)       the 3M Adjustment Spread. 

5. The margin to be applied in calculating the Equity Compensation Amount in accordance with the Conditions for any payments relating to the period commencing on and including the Transition Date

The margin to be applied in calculating the Equity Compensation Amount in accordance with the Conditions (the Equity Compensation Amount Margin) shall be the 3M Adjustment Spread.

The detailed provisions relating to the calculation of Compounded Daily SONIA are set out in the Amendment Documents available at the following link: https://deals.lucid-is.com/sams.

For all payments arising in the period up to but excluding the Transition Date, the payments for such periods shall continue to be determined by reference to the applicable GBP LIBOR rate in effect at such time.

[1] https://www.fca.org.uk/publication/documents/future-cessation-loss-representativeness-libor-benchmarks.pdf

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August 25, 2021 02:01 ET (06:01 GMT)