ROYAL BANK OF CANADA
US$3,258,000
SENIOR GLOBAL MEDIUM-TERM NOTES, SERIES B
Notes due May 3, 2011
(Redeemable Fixed Rate Step-Up Coupons Notes, due 2011)
TERMS AGREEMENT
April 28, 2006
RBC CAPITAL MARKETS CORPORATION
1 Liberty Plaza
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Royal Bank of Canada, a Canadian chartered Bank (the "Bank"), proposes,
subject to the terms and conditions stated herein and in the Distribution
Agreement, dated December 21, 2005 (the "Distribution Agreement"), between the
Bank on the one hand and RBC Capital Markets Corporation, RBC Xxxx Xxxxxxxx Inc.
and any other party acting as Agent thereunder on the other, to issue and sell
to you the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the Bank,
of offers to purchase Securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto an
agent of the Bank or make such party subject to the provisions therein relating
to the solicitation of offers to purchase Securities from the Bank, solely by
virtue of its execution of this Terms Agreement. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement, except that each representation and warranty that
refers to the Prospectus, the Time of Sale Information or the Shelf Prospectus
(as therein defined) in Section 1 of the Distribution Agreement shall be deemed
to be a representation or warranty as of the date of the Distribution Agreement
in relation to the Prospectus, the Time of Sale Information or the Shelf
Prospectus, and also a representation and warranty as of the date of this Terms
Agreement in relation to the Prospectus, the Time of Sale Information or the
Shelf Prospectus, as the case may be, each as amended or supplemented to the
date hereof and each as amended or supplemented relating to the Purchased
Securities that are the subject of this Terms Agreement. Unless otherwise
defined herein, terms defined in the Distribution Agreement are used herein as
therein defined.
An amendment and/or supplement to each of the Prospectus and the Shelf
Prospectus, each in the form heretofore delivered to you is now proposed to be
filed with the Commission pursuant to General Instruction II.K., in the case of
the Prospectus, and with the AMF pursuant to Quebec Securities Laws, in the case
of the Shelf Prospectus.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Bank agrees to
issue and sell to you, and you agree to purchase from the Bank at the time and
place and at the purchase price set forth in Schedule I hereto, the principal
amount of Purchased Securities set forth in Schedule I hereto. You further agree
that any Purchased Securities offered and sold by you to initial purchasers will
be offered and sold at the price to public, and in accordance with the
provisions relating to commissions and fees, if any, set forth in the Schedule
hereto, unless you and the Bank otherwise agree.
You also represent, and warrant to, and agree with, the Bank, that:
(a) you are actually engaged in the investment banking or securities
business;
(b) you are a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") and you agree that in offering and selling
any Purchased Securities, you will comply with all applicable rules of the NASD,
including without limitation Rules 2720(k) and (l), 2730, 2740, 2750 and 2420 of
the NASD's Conduct Rules; and
(c) in the event this offering of Purchased Securities is terminated or
not completed under the terms of the Distribution Agreement, you will not
receive any compensation other than reimbursement of out-of-pocket accountable
expenses actually incurred pursuant to Section 7 of the Distribution Agreement.
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If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including the provisions of the Distribution
Agreement incorporated herein by reference, shall constitute a binding agreement
between you and the Bank.
Very truly yours,
ROYAL BANK OF CANADA
By: /s/ Xxx Xxxxxx-Shee
-------------------------------
Name: Xxx Xxxxxx-Shee
Title: Executive Vice-President,
Corporate Treasury and Treasurer
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Operating Officer
Accepted as of the date hereof:
RBC CAPITAL MARKETS CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------------
Name: Xxxxxx Xxxxx
Title: Managing Director
TERMS AGREEMENT
SCHEDULE I
TITLE OF PURCHASED SECURITIES:
Senior Global Medium-Term Notes, Series B (Redeemable Fixed Rate Step-Up Coupon
Notes, due 2011)
AGGREGATE PRINCIPAL AMOUNT:
US$3,258,000
PRICE TO PUBLIC:
100% of the principal amount of the Purchased Securities
PURCHASE PRICE BY AGENTS:
99.425% of the principal amount of the Purchased Securities
COMMISSION:
0.575% of the principal amount of the Purchased Securities
FORM OF PURCHASED SECURITIES:
Book-entry only form represented by one or more global securities deposited with
The Depository Trust Company ("DTC") or its designated custodian.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same-day) funds
CLOSING DATE:
10 a.m. (New York City time), May 3, 2006
CLOSING LOCATION:
RBC Capital Markets Corporation
1 Liberty Plaza
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
INDENTURE:
Indenture dated as of October 23, 2003, between the Bank and JPMorgan Chase
Bank, N.A., as Trustee.
MATURITY DATE:
May 3, 2011
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INTEREST RATE:
The interest rate on the Purchased Securities will be equal to 5.30% per annum
from and including May 3, 2006 up to but excluding May 3, 2007.
On May 3, 2007, and on the Interest Payment Dates set forth in the schedule
below, the interest rate on the Purchased Securities will be reset. The
applicable interest per annum with respect to each period set forth below (each,
an "Interest Period") will be in effect from and including the first day of each
Interest Period, to and including the last day of such Interest Period (except
for the last Interest Period):
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Interest Period: Interest Rate:
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May 3, 2007 to May 3, 2008 5.40% per annum
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May 3, 2008 to May 3, 2009 5.50% per annum
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May 3, 2009 to May 3, 2010 5.75% per annum
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May 3, 2010 to but excluding May 3, 2011 6.00% per annum
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INTEREST PAYMENT DATES:
Each 3rd day of the months of May and November of each year, in arrears,
commencing November 3, 2006.
REDEMPTION PROVISIONS:
The Bank may at its option elect to redeem the Purchased Securities in whole on
May 3, 2007 or on any 3rd day of the months of May and November of each year
thereafter (each such date, an "Optional Redemption Date) at 100% of their
principal amount plus accrued interest to but excluding the date of redemption.
In the event the Bank elects to redeem the Purchased Securities, notice will be
given to registered holders not more than 60 nor less than 30 days prior to the
Optional Redemption Date.
SINKING FUND PROVISIONS:
No sinking fund provisions
DEFEASANCE PROVISIONS:
No defeasance provisions
SURVIVOR'S OPTION:
The holders of the Purchased Securities will have the right to require repayment
prior to the maturity date upon the death of the beneficial owner as described
below.
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Upon exercise of the survivor's option, the Bank will, at its option, either
repay or purchase any Purchased Security properly delivered for repayment by or
on behalf of the person that has authority to act on behalf of the deceased
beneficial owner of the Purchased Security at a price equal to the sum of:
o 100% of the principal amount of such Purchased Security, and
o accrued and unpaid interest, if any, to the date of such repayment,
subject to the following limitations.
The survivor's option may not be exercised until at least six months following
the date of purchase by the deceased beneficial owner. In addition, the
aggregate principal amount of Purchased Securities as to which the survivor's
option may be exercised is limited as follows:
o In any calendar year, to the greater of 1% of the outstanding
aggregate principal amount of the Purchased Securities as of
December 31 of the most recently completed year or $1,000,000 (the
"Annual Put Limitation").
o For any individual deceased beneficial owner of Purchased
Securities, to $200,000 for any calendar year (the "Individual Put
Limitation").
The Bank will not make principal repayments pursuant to the exercise of the
survivor's option in amounts that are less than $1,000. If the limitations
described above would result in the partial repayment of any Purchased Security,
the principal amount of the Purchased Security remaining outstanding after
repayment must be at least $1,000.
DOCUMENTS TO BE DELIVERED:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
The officers' certificate referred to in Section 5(l).
NAME AND ADDRESS OF AGENT:
RBC Capital Markets Corporation
1 Liberty Plaza
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
OTHER TERMS:
None
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SCHEDULE II
In connection with the offering of Notes due May 3, 2011 (Redeemable Fixed Rate
Step-Up Coupon Notes) of Royal Bank of Canada (the "Bank"), RBC Capital Markets
Corporation (the "Agent") and the Bank agree as follows:
a. Time of Sale Information
The preliminary pricing supplements that are to be included in the Time of Sale
Information are as follows:
o Preliminary Pricing Supplement No. 16 dated April 24, 2006 (to the
Prospectus dated December 21, 2005 and the Prospectus Supplement
dated December 21, 2005)
The Free Writing Prospectuses that are to be included in the Time of Sale
Information are as follows:
o None
b. Pricing Information Provided Orally by Agents
The script to be used by the Agent to confirm sales is as follows:
o None
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