£[insert number] [insert rate]% [subordinated ]redeemable loan notes 20[insert year] [insert name of Issuer] This Instrument is dated [insert day and month] 20[insert year] Parties 1 [Insert name of issuing company] incorporated in England and Wales under number [insert company number] whose registered office is at [insert address] (Issuer) background: The Issuer has resolved to create up to a maximum nominal amount of £[insert number] [insert rate]% [subordinated ]redeemable loan notes to be constituted as set out in this document. It is agreed as follows: 1 Definitions and Interpretation 1.1 In this Instrument, unless the context otherwise requires, the following expressions shall have the following meanings: Articles • means the Issuer’s articles of association in force from time to time; Business Day • means a day, other than a Saturday, Sunday or public holiday, on which clearing banks are open for non-automated commercial business in the City of London; Certificate • means the certificate in the form set out in Schedule 3; Conditions • means the conditions set out in Schedule 1 as amended from time to time in accordance with this document; Default Event • means

£[insert number] [insert rate]% [subordinated ]redeemable loan notes 20[insert year] [insert name of Issuer] This Instrument is dated [insert date] 20[insert year] Parties 1 [Insert name of issuing company] incorporated in England and Wales under number [insert company number] whose registered office is at [insert address] (Issuer) background The Issuer has resolved to create up to a maximum nominal amount of £[insert number] [insert rate]% [subordinated ]redeemable loan notes to be constituted as set out in this document. It is Agreed as follows: 1 Definitions and Interpretation 1.1 In this Instrument, unless the context otherwise requires the following expressions shall have the following meanings: Business Day • means a day, other than a Saturday, Sunday or public holiday, on which clearing banks are open for non-automated commercial business in the City of London; Certificate • means the certificate in the form set out in Schedule 3; Conditions • means the conditions set out in Schedule 1 as amended from time to time in accordance with this document; Default Event • means any of the events specified in clause 10; [Exit • means Sale or Quotation;] Group

£ [insert number] [insert rate]% [subordinated ]redeemable loan notes 20[insert year] [insert name of issuer] This Instrument is dated [insert day and month] 20[insert year] Parties 1 [Insert name of issuing company] incorporated in England and Wales under number [insert company number] whose registered office is at [insert address] (Issuer) Background The Issuer has resolved to create up to a maximum nominal amount of £[insert number] [insert rate]% [subordinated ]redeemable loan notes to be constituted as set out in this document. It is agreed as follows: 1 Definitions and interpretation 1.1 In this Instrument, unless the context otherwise requires the following expressions shall have the following meanings: Business Day • means a day, other than a Saturday, Sunday or public holiday, on which clearing banks are open for non-automated commercial business in the City of London; Certificate • means the certificate in the form set out in Schedule 3; Conditions • means the conditions set out in Schedule 1 as amended from time to time in accordance with this document; Default Event • means any of the events specified in clause 10; Encumbrance • means any mortgage, claim, charge, pledge, lien, hypothecation, guarantee, right of set-off, trust, assignment, right of first refusal, right of pre-emption,

This Instrument is dated [insert date] 20[insert year] Parties 1 [Insert name of issuing company] incorporated in England and Wales under number [insert company number] whose registered office is at [insert address] (Issuer) Background: The Issuer has resolved to create up to a maximum nominal amount of £[insert value] [insert rate]% [subordinated] redeemable loan notes to be constituted as set out in this document. It is agreed as follows: 1 Definitions and Interpretation 1.1 In this Instrument, unless the context otherwise requires the following expressions shall have the following meanings: Business Day • means a day, other than a Saturday, Sunday or public holiday, on which clearing banks are open for non-automated commercial business in the City of London; Certificate • means the certificate in the form set out in Schedule 3; Conditions • means the conditions set out in Schedule 1 as amended from time to time in accordance with this document; Default Event • means any of the events specified in clause 10; Group • means the Issuer and each Holding Company and Subsidiary of the Issuer; Holding Company • means

This Loan Note Instrument is made on [insert day and month] 20[insert year] by 1 [insert name of offeror], incorporated in England and Wales under number [insert company number] whose registered office is at [insert address] (Company) Background (A) In order to facilitate a takeover offer for [offeree PLC] (the Offeree), the Company offered Offeree shareholders the opportunity to elect to receive loan notes of the Company as an alternative to receiving [cash AND/OR [and ]new Company shares] as consideration for the sale of their shares in the Offeree to the Company (the Loan Note Alternative). (B) The offer terms are contained in [an offer document OR a scheme document] published by the Company on [date] 20[year] (the [Offer OR Scheme] Document) which sets out, inter alia, a summary of the principal terms of the loan notes proposed to be issued pursuant to the Loan Note Alternative. (C) The Company has by resolution of its directors passed on [date] 20[year] resolved to create up to a maximum nominal amount of £[insert number] [insert rate]%[ guaranteed] redeemable loan notes to be constituted as set out in this Instrument and

Insert the following definitions as new definitions into clause 1 of Precedent: Share purchase agreement—pro-buyer—corporate seller—conditional—long form: 1 Definitions and interpretation [Completion Accounts Determination Date means the date on which the Completion Accounts are agreed pursuant to this Agreement;] Determination Date means the date on which a Relevant Claim becomes a Determined Claim in accordance with paragraph 1.1.1 of Schedule 9; Determined Claim means a Relevant Claim which has become a Determined Claim pursuant to paragraph 1.1.1 of Schedule 9 and determined and determination shall be construed accordingly; Due Date means the date on which any Loan Note Payment is payable to the Seller in accordance with the terms of the Loan Notes; Loan Note Instrument means the instrument constituting the Loan Notes in the agreed form marked '[insert details]' to be executed by the Buyer on Completion; Loan Note Payment means any amount (including principal and interest) payable by the Buyer to the Seller under the Loan Notes as at a Due Date; Loan Notes means the [unsecured OR bank guaranteed] [floating-rate OR [insert rate]%]

This fundamentals note considers some of the key characteristics of loan notes which may be issued by a private limited company incorporated in England and Wales. What is a loan note? A loan note is a form of debt instrument issued by the debtor (known as the issuer) which entitles the noteholder (the lender) to principal and interest on the agreed sum. Interest to be paid out under a loan note is typically for a set period of time, which ends on a date at which the entire loan, ie the principal of the loan note and any previously accrued interest, is to be repaid. What is a convertible loan note? A convertible loan note is a loan note which is convertible into a different type of security (typically shares) of an issuer. Convertible loan notes offer flexibility for investors in terms of their investment in a company and typically include the freedom for them to choose between their repayment or conversion in exit scenarios allowing investors to select which option will provide them with the best return on

This Practice Note considers some of the key issues which can arise on a loan portfolio sale and which may be relevant to banking law practitioners involved in large-scale loan (and other financial product) disposals. For information on the typical parties and process involved in a loan portfolio sale, see Practice Note: Introductory guide to loan portfolio sales and for information on the legal documentation used, see Practice Note: Loan portfolio sales—legal documentation. For further detail on the types of issues which may arise on single asset debt trades, see Practice Note: Introductory guide to loan transfers. Both buyers and sellers will need to consider whether the EU rules on non-performing loans contained in Directive (EU) 2021/2167 and Implementing Regulation EU 2023/2083 may apply. If so, there will be certain additional requirements on buyers, sellers and ‘credit servicers’. There is no equivalent legislation in place in the UK, however, while the EU rules apply to loans originated by EU banks, they affect non-EU purchasers of non-performing loans,

This Practice Note provides an overview of the main legal documentation which may be used to conclude the disposal of a loan portfolio and suggests typical negotiating positions taken by sellers and buyers. For an introduction to loan portfolio sales and an example of the process these often follow, see Practice Note: Introductory guide to loan portfolio sales. For an explanation of some of the key issues which can arise on loan portfolio sales, see Practice Note: Loan portfolio sales—key issues. The market's approach to legal documentation for loan portfolio sales is not completely uniform, but there are some common elements and conventions that have developed which are explored in this Practice Note. Key documents used in portfolio sales The main documents which are commonly used in loan portfolio sales are the following: • Confidentiality agreements • Sale and purchase agreement • Disclosure letter • Sub-participation agreement/synthetic transfer arrangements • Hedging transfer documentation • Loan and equity transfer documentation, and • Transitional services agreement/third-party servicing agreements Why

A regime that brings together the interest and exchange movements arising on a company's debt relationships and gains and losses arising from the company's holding of a financial instrument.

A self-contained regime for the taxation of corporate debt. It set out the rules for taxing the profits and relieving the losses (including interest and expenses) arising from a company's lending and borrowing activities.

A foundational principle of the loan relationships regime is that companies are taxed on their borrowing and lending activities and other forms of corporate debt on the basis of the measure of profit and loss recognised in their accounts. In other words, the recognition and measurement of a loan relationship pursuant to accounting rules will, generally, determine the debits and credits brought into account for corporation tax purposes under the loan relationships rules. While the loan relationships rules deviate from this principle in several circumstances, this close link between tax and the accounts means that it is necessary to have an understanding of the accounting treatment of corporate finance transactions in order to be able to apply the computational provisions of the loan relationships rules. This Practice Notice considers the accounting framework and principles relevant to the taxation of loan relationships, and in particular the following: • ‘generally accepted accounting practice’ (GAAP) • UK GAAP v IFRS • the key UK GAAP and IFRS standards relevant to loan relationships • financial statements and accounting terminology • recognition