As filed with the Securities and Exchange Commission on September 30, 2009
Registration No. 333-●

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

 
The Royal Bank of Scotland Group plc
 
The Royal Bank of Scotland plc
 
 (Exact Name of Registrant as Specified in Its Charter)
United Kingdom
(State or Other Jurisdiction of Incorporation or Organization)
Not Applicable
(I.R.S. Employer Identification No.)
 
RBS Gogarburn, PO Box 1000
Edinburgh EH12 1HQ
United Kingdom
011-44-131-626-0000
(Address and Telephone Number of Registrant’s Principal Executive Offices)
 
John Fawcett
Chief Financial Officer
Citizens Financial Group, Inc.
600 Washington Boulevard
Stamford, Connecticut, 06901
United States
(203) 897 5087
(Name, Address and Telephone Number of Agent for Service)
 
Please send copies of all communications to:
Keith L. Kearney
Nigel D. J. Wilson
Davis Polk & Wardwell LLP
99 Gresham Street
London EC2V 7NG
England
Tel. No.: 011-44-20-7418-1300
 
Richard J. B. Price
Shearman & Sterling LLP
Broadgate West
9 Appold Street
London EC2A 2AP
England
Tel. No.: 011-44-20-7655-5000
 
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
 
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box.  x
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
 
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. x
 
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. o

 
CALCULATION OF REGISTRATION FEE
Title of Each Class
of Securities to be Registered
Amount to be Registered/Proposed maximum offering pre unit/Proposed maximum price
Amount of
registration fee
Debt Securities of The Royal Bank of Scotland Group plc
Unspecified (1)
$0 (2)
Dollar Preference Shares of The Royal Bank of Scotland Group plc (3)
Unspecified (1)
$0 (2)
Debt Securities of The Royal Bank of Scotland plc
Unspecified (1)
$0 (2)
The Royal Bank of Scotland Group plc Guarantees of Debt Securities of The Royal Bank of Scotland plc (4)
Unspecified (1)
$0 (2)
 
(1)
An unspecified initial offering price, aggregate number of, or principal amount of, the Debt Securities and the Dollar Preference Shares of The Royal Bank of Scotland Group plc or the Debt Securities of The Royal Bank of Scotland plc and the related Guarantees of The Royal Bank of Scotland Group plc, as the case may be, are being registered as may from time to time be offered at unspecified prices.  Separate consideration may or may not be received for securities that are issuable on exercise, conversion or exchange of other securities or that are issued in units or represented by depositary shares.
 
(2)
Deferred in reliance upon Rule 456(b) and Rule 457(r), except for $370.22 that has already been paid with respect to $10,000,000,000 aggregate initial offering price of securities that were previously registered pursuant to Registration Statement No. 333-123972 of The Royal Bank of Scotland Group plc, which was initially filed on April 8, 2005 and were not sold thereunder.  Pursuant to Rule 457(p) under the Securities Act, such unutilized filing fee may be applied to the filing fee payable pursuant to this Registration Statement.
 
(3)
American Depositary Shares evidenced by American Depositary Receipts issuable upon deposit of the Preference Shares registered hereby have been registered under a separate Registration Statement on Form F-6.
 
(4)
Guarantees of the Debt Securities of The Royal Bank of Scotland plc will be issued by The Royal Bank of Scotland Group plc.  No separate consideration will be received for any of these guarantees.
 
 
 

 
 
 

PROSPECTUS
 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
By this prospectus we may offer —
 
DEBT SECURITIES
DOLLAR PREFERENCE SHARES
 
We will provide the specific terms of these securities, and the manner in which they will be offered, in one or more supplements to this prospectus. Any supplement may also add, update or change information contained, or incorporated by reference, in this prospectus. You should read this prospectus and the supplements carefully before you invest.
 
You should read both this prospectus and any prospectus supplement, together with the additional information described under the heading “Where You Can Find More Information” and the heading “Incorporation of Documents by Reference”, before investing in our securities. The amount and price of the offered securities will be determined at the time of the offering.
 
Our American depositary shares, or ADSs, each representing one ordinary share (or a right to receive one ordinary share), and evidenced by an American Depositary Receipt or uncertificated securities, are listed on the New York Stock Exchange under the symbol “RBS”. Our ordinary shares are listed on the London Stock Exchange. Our series of American Depositary Shares representing non-cumulative dollar preference shares and evidenced by American Depositary Receipts (Series F, Series H, Series L, Series M, Series N, Series P, Series Q, Series R, Series S, Series T, and Series U) are also listed on the New York Stock Exchange.
 
Investing in our debt securities involves risks that are described in the “Risk Factors” section of our annual reports filed with the Securities and Exchange Commission or in the applicable prospectus supplement.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this prospectus is truthful or complete.  Any representation to the contrary is a criminal offense.
 
This prospectus may not be used to sell securities unless it is accompanied by a prospectus supplement.
 
The date of this prospectus is September 30, 2009.
 

 
 
 

TABLE OF CONTENTS
 
 
 
Page
   
About this Prospectus
1
Use of Proceeds
1
The Royal Bank of Scotland Group plc
1
Description of Debt Securities
2
Description of Dollar Preference Shares
15
Description of American Depositary Receipts
22
Plan of Distribution
26
Legal Opinions
27
Experts
27
Enforcement of Civil Liabilities
27
Where You Can Find More Information
28
Incorporation of Documents by Reference
28
Cautionary Statement on Forward-Looking Statements
29

 
 
 
 
 
ABOUT THIS PROSPECTUS
 
This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission (“SEC”) using a “shelf” registration or continuous offering process.  Under this shelf process, we may sell the securities described in this prospectus in one or more offerings of an unspecified amount in one or more foreign currencies or currency units.
 
This prospectus provides you with a general description of the debt securities and dollar preference shares we may offer, which we will refer to collectively as the “securities”.  Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering.  The prospectus supplement will provide information regarding certain tax consequences of the purchase, ownership and disposition of the offered securities.  The prospectus supplement may also add to, update or change information contained in this prospectus.  If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the information in that prospectus supplement.  We will file each prospectus supplement with the SEC.  You should read both this prospectus and the applicable prospectus supplement, together with the additional information described under the heading “Where You Can Find More Information”.
 
The registration statement containing this prospectus, including exhibits to the registration statement, provides additional information about us and the securities offered under this prospectus.  The registration statement can be read at the SEC’s offices or obtained from the SEC’s website mentioned under the heading “Where You Can Find More Information”.
 
Certain Terms
 
In this prospectus, the terms “we”, “us”, “our” or “RBSG” refer to The Royal Bank of Scotland Group plc, the term “Group” means The Royal Bank of Scotland Group plc and its subsidiaries, the term “RBS plc” means The Royal Bank of Scotland plc, the term “RBS” or the “Royal Bank” means RBS plc and its subsidiaries, the term “NWB Plc” means National Westminster Bank Plc and the term “NatWest” means NWB Plc and its subsidiaries.
 
We publish our consolidated financial statements in pounds sterling (“£” or “sterling”), the lawful currency of the United Kingdom.  In this prospectus and any prospectus supplement, references to “dollars” and “$” are to United States dollars.
 
USE OF PROCEEDS
 
Unless we have disclosed a specific plan in the accompanying prospectus supplement, we will use the net proceeds from the sale of the securities offered by this prospectus in the general business of our Group and to strengthen further our Group’s capital base.  The Group has raised capital in various markets from time to time and we expect to continue to raise capital in appropriate markets as and when required.
 
THE ROYAL BANK OF SCOTLAND GROUP PLC
 
RBSG is a public limited company incorporated in Scotland with registration number SC045551.  RBSG was incorporated under Scots law on March 25, 1968.  RBSG is the holding company of a large global banking and financial services group. Headquartered in Edinburgh, the Group operates in the United Kingdom, the United States and internationally through its two principal subsidiaries, RBS and NatWest.  Both RBS and NatWest are major U.K. clearing banks whose origins go back over 275 years.  In the United States, the Group’s subsidiary Citizens Financial Group, Inc. is a large commercial banking organisation.  The Group has a large and diversified customer base and provides a wide range of products and services to personal, commercial and large corporate and institutional customers.
 
The Commissioners of Her Majesty’s Treasury currently holds 70.3% of the issued ordinary share capital of RBSG.  On February 26, 2009, RBSG announced its intention to issue up to £25.5 billion of B Shares to the U.K. Government.  If all such B Shares are issued, conversion of the B Shares would increase this ownership interest to approximately 84.4% of the issued ordinary share capital of RBSG.
 
 
 
 
The Group had total assets of £2,401.7 billion and owners’ equity of £58.9 billion at December 31, 2008. The Group’s capital ratios at that date, which included the equity minority interest of the State of the Netherlands and Banco Santander, S.A. (“Santander”) in ABN AMRO Holdings N.V. (“ABN AMRO”), were a total capital ratio of 14.1%., a Core Tier 1 capital ratio of 6.8% and a Tier 1 capital ratio of 10.0%.  As at June 30, 2009, RBSG had total assets of £1,818.9 billion and owners’ equity of £55.7 billion.  RBSG’s Tier 1 and Core Tier 1 capital ratios at that date were 9.3% and 7.0%, respectively.
 
On October 17, 2007, RFS Holdings B.V. (“RFS Holdings”), which at the time was owned by RBSG, Fortis N.V., Fortis SA/NY, Fortis Bank Nederland (Holding) N.V. and Santander, completed the acquisition of ABN AMRO.  RFS Holdings, which is now jointly owned by RBSG, the State of the Netherlands and Santander (the “Consortium Members”), is in the process of implementing an orderly separation of the business units of ABN AMRO, with ABN AMRO’s global wholesale businesses and international retail businesses in Asia and the Middle East subject to the outcome of RBSG’s strategic review.  Certain other assets will continue to be shared by the Consortium Members.
 
RBSG’s registered office is 36 St Andrew Square, Edinburgh EH2 2YB, Scotland and its principal place of business is RBS Gogarburn, PO Box 1000, Edinburgh EH12 1HQ, Scotland, telephone +44 131 626 0000.
 
 
DESCRIPTION OF DEBT SECURITIES
 
The following is a summary of the general terms of the debt securities.  Each time that we issue debt securities, we will file a prospectus supplement with the SEC, which you should read carefully.  The prospectus supplement may contain additional terms of those debt securities.  The terms presented here, together with the terms contained in the prospectus supplement, will be a description of the material terms of the debt securities, but if there is any inconsistency between the terms presented here and those in the prospectus supplement, those in the prospectus supplement will apply and will replace those presented here.  You should also read the indentures under which we will issue the debt securities, which we have filed with the SEC as exhibits to the registration statement of which this prospectus is a part.
 
When we refer to “debt securities” in this prospectus, we mean the senior debt securities, the subordinated debt securities and the capital securities.  The subordinated debt securities and the capital securities of any series will be our subordinated obligations.  Senior debt securities will be issued under a senior debt indenture.  Subordinated debt securities will be issued under a subordinated debt indenture.  Capital debt securities that have no stated maturity will be issued under a capital securities indenture.  Each indenture is a contract between us and The Bank of New York Mellon, which will initially act as trustee.  The indentures are substantially identical, except for certain provisions such as those relating to subordination, which are included only in the subordinated debt indenture and the capital securities indenture.  None of the indentures limit our ability to incur additional indebtedness, including additional senior indebtedness.
 
General
 
The debt securities are not deposits and are not insured or guaranteed by the U.S. Federal Deposit Insurance Corporation or any other government agency of the United States or the United Kingdom.
 
The indentures do not limit the amount of debt securities that we may issue.  We may issue debt securities in one or more series.  The relevant prospectus supplement for any particular series of debt securities will describe the terms of the offered debt securities, including some or all of the following terms:
 
 
·
whether they are senior debt securities, capital securities or subordinated debt securities;
 
 
·
their specific designation, authorized denomination and aggregate principal amount;
 
 
·
the price or prices at which they will be issued;
 
 
2
 
 
 
·
whether such debt securities will be dated debt securities with a specified maturity date or undated debt securities with no specified maturity date;
 
 
·
the annual interest rate or rates, or how to calculate the interest rate or rates;
 
 
·
the date or dates from which interest, if any, will accrue or the method, if any, by which such date or dates will be determined;
 
 
·
whether payments are subject to a condition that we are able to make such payment and remain able to pay our debts as they fall due and our assets continue to exceed our liabilities (other than subordinated liabilities);
 
 
·
the times and places at which any interest payments are payable;
 
 
·
the terms of any mandatory or optional redemption, including the amount of any premium;
 
 
·
any modifications or additions to the events of defaults with respect to the debt securities offered;
 
 
·
any provisions relating to conversion or exchange for other securities issued by us;
 
 
·
the currency or currencies in which they are denominated and in which we will make any payments;
 
 
·
any index used to determine the amount of any payments on the debt securities;
 
 
·
any restrictions that apply to the offer, sale and delivery of the debt securities and the exchange of debt securities of one form for debt securities of another form;
 
 
·
whether and under what circumstances, if other than those described in this prospectus, we will pay additional amounts on the debt securities following certain developments with respect to withholding tax or information reporting laws and whether, and on what terms, if other than those described in this prospectus, we may redeem the debt securities following those developments;
 
 
·
the terms of any mandatory or optional exchange; and
 
 
·
any listing on a securities exchange.
 
In addition, the prospectus supplement will describe the material U.S. federal and U.K. tax considerations that apply to any particular series of debt securities.
 
Debt securities may bear interest at a fixed rate or a floating rate.  We will sell any subordinated debt securities that bear no interest, or that bear interest at a rate that at the time of issuance is below the prevailing market rate, at a discount to their stated principal amount.
 
Holders of debt securities shall have no voting rights except those described under the heading “— Modification and Waiver” below.
 
Form of Debt Securities; Book-Entry System
 
General
 
Unless the relevant prospectus supplement states otherwise, the debt securities shall initially be represented by one or more global securities in registered form, without coupons attached, and will be deposited with or on behalf of one or more depositary, including, without limitation, The Depository Trust Company (“DTC”), Euroclear Bank S.A./N.V. (“Euroclear Bank”), as operator of the Euroclear System (“Euroclear”) and/or Clearstream Banking S.A. (“Clearstream Luxembourg”), and will be registered in the name of such depositary or its nominee. Unless and until the debt securities are exchanged in whole or in part for other securities that we issue or the global securities are exchanged for definitive securities, the global securities may not be transferred except as a whole by the depositary to a nominee or a successor of the depositary.
 
 
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The debt securities may be accepted for clearance by DTC, Euroclear and Clearstream Luxembourg.  Unless the relevant prospectus supplement states otherwise, the initial distribution of the debt securities will be cleared through DTC only.  In such event, beneficial interests in the global debt securities will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its direct and indirect participants, including, as applicable, Euroclear and Clearstream Luxembourg.
 
The laws of some states may require that certain investors in securities take physical delivery of their securities in definitive form.  Those laws may impair the ability of investors to own interests in book-entry securities.
 
So long as the depositary, or its nominee, is the holder of a global debt security, the depositary or its nominee will be considered the sole holder of such global debt security for all purposes under the indentures.  Except as described below under the heading “—Issuance of Definitive Securities”, no participant, indirect participant or other person will be entitled to have debt securities registered in its name, receive or be entitled to receive physical delivery of debt securities in definitive form or be considered the owner or holder of the debt securities under the indentures.  Each person having an ownership or other interest in debt securities must rely on the procedures of the depositary, and, if a person is not a participant in the depositary, must rely on the procedures of the participant or other securities intermediary through which that person owns its interest to exercise any rights and obligations of a holder under the indentures or the debt securities.
 
Payments on the Global Debt Security
 
Payments of any amounts in respect of any global securities will be made by the trustee to the depositary.  Payments will be made to beneficial owners of debt securities in accordance with the rules and procedures of the depositary or its direct and indirect participants, as applicable.  Neither we nor the trustee nor any of our agents will have any responsibility or liability for any aspect of the records of any securities intermediary in the chain of intermediaries between the depositary and any beneficial owner of an interest in a global security, or the failure of the depositary or any intermediary to pass through to any beneficial owner any payments that we make to the depositary.
 
The Clearing Systems
 
DTC, Euroclear and Clearstream Luxembourg have advised us as follows:
 
DTC .  DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants deposit with DTC. DTC also facilitates the post-trade settlement among direct participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between direct participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The DTC rules applicable to its participants are on file with the SEC. More information about DTC can be found at www.dtcc.com and www.dtc.org.
 
Euroclear .  Euroclear holds securities for its participants and clears and settles transactions between its participants through simultaneous electronic book-entry delivery against payment.  Euroclear provides various other services, including safekeeping, administration, clearance and settlement and securities lending and borrowing, and interfaces with domestic markets in several countries.  Securities clearance accounts and cash accounts with
 
 
4
 
Euroclear are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable law (collectively, the “Euroclear Terms and Conditions”).  The Euroclear Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear.
 
Clearstream Luxembourg .  Clearstream Luxembourg is incorporated under the laws of The Grand Duchy of Luxembourg as a professional depositary.  Clearstream Luxembourg holds securities for its participants and facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates.  Clearstream Luxembourg provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.  Clearstream Luxembourg interfaces with domestic markets in several countries.
 
Issuance of Definitive Securities
 
So long as the depositary holds the global securities of a particular series of debt securities, such global securities will not be exchangeable for definitive securities of that series unless:
 
 
·
the depositary notifies the trustee that it is unwilling or unable to continue to act as depositary for the debt securities or the depositary ceases to be a clearing agency registered under the Exchange Act;
 
 
·
we are wound up and we fail to make a payment on the debt securities when due; or
 
 
·
at any time we determine at our option and in our sole discretion that the global securities of a particular series of debt securities should be exchanged for definitive debt securities of that series in registered form.
 
Each person having an ownership or other interest in a debt security must rely exclusively on the rules or procedures of the depositary as the case may be, and any agreement with any direct or indirect participant of the depositary, including Euroclear or Clearstream Luxembourg and their participants, as applicable, or any other securities intermediary through which that person holds its interest, to receive or direct the delivery of possession of any definitive security.  The indentures permit us to determine at any time and in our sole discretion that debt securities shall no longer be represented by global securities.  DTC has advised us that, under its current practices, it would notify its participants of our request, but will only withdraw beneficial interests from the global securities at the request of each DTC participant.  We would issue definitive certificates in exchange for any such beneficial interests withdrawn.
 
Unless otherwise specified in the prospectus supplement, definitive debt securities will be issued in registered form only.  To the extent permitted by law, we, the trustee and any paying agent shall be entitled to treat the person in whose name any definitive security is registered as its absolute owner.
 
Payments in respect of each series of definitive securities will be made to the person in whose name the definitive securities are registered as it appears in the register for that series of debt securities.  Payments will be made in respect of the debt securities by check drawn on a bank in New York or, if the holder requests, by transfer to the holder’s account in New York.  Definitive securities should be presented to the paying agent for redemption.
 
If we issue definitive debt securities of a particular series in exchange for a particular global debt security, the depositary, as holder of that global debt security, will surrender it against receipt of the definitive debt securities, cancel the book-entry debt securities of that series, and distribute the definitive debt securities of that series to the persons and in the amounts that the depositary specifies pursuant to the internal procedures of such depositary.
 
If definitive securities are issued in the limited circumstances described above, those securities may be transferred in whole or in part in denominations of any whole number of securities upon surrender of the definitive securities certificates together with the form of transfer endorsed on it, duly completed and executed at the specified office of a paying agent.  If only part of a securities certificate is transferred, a new securities certificate representing the balance not transferred will be issued to the transferor within three business days after the paying agent receives the certificate.  The new certificate representing the balance will be delivered to the transferor by uninsured post at the risk of the transferor, to the address of the transferor appearing in the records of the paying agent.  The new
 
 
5
 
 
certificate representing the securities that were transferred will be sent to the transferee within three business days after the paying agent receives the certificate transferred, by uninsured post at the risk of the holder entitled to the securities represented by the certificate, to the address specified in the form of transfer.
 
Settlement
 
Initial settlement for each series of debt securities and settlement of any secondary market trades in the debt securities will be made in same-day funds.  Book-entry debt securities held through DTC will settle in DTC’s Same-Day Funds Settlement System.
 
Payments
 
We will make any payments of interest and, in the case of subordinated debt securities, principal, on any particular series of debt securities on the dates and, in the case of payments of interest, at the rate or rates, that we set out in, or that are determined by the method of calculation described in, the relevant prospectus supplement.
 
Subordinated Debt Securities
 
Unless the relevant prospectus supplement provides otherwise, if we do not make a payment on that series of subordinated debt securities on any payment date, our obligation to make that payment shall be deferred, if it is an interest payment, until the date upon which we pay a dividend on any class of our share capital and, if it is a principal payment, until the first business day after the date that falls six months after the original payment date (a “Deferred Payment Date”). If we fail to make a payment before the Deferred Payment Date, that failure shall not create a default or otherwise allow any holder to sue us for the payment or take any other action.  Each payment that is deferred in this way will accrue interest at the rate prevailing in accordance with the terms of the series of debt securities immediately before the original payment date.  Any payment deferred in this way shall not be treated as due for any purpose, including for the purposes of ascertaining whether or not a Subordinated Debt Security Default has occurred, until the Deferred Payment Date.
 
Capital Securities
 
We are not required to make payments on any series of capital securities on any payment date and if we fail to make a payment, such failure shall not create a default.  Any payment that we do not make in respect of any series of capital securities on any applicable payment date, together with any other unpaid payments, so long as they remain unpaid, shall be “Missed Payments” and will accumulate until paid.  Missed Payments will not bear interest.
 
We may choose to pay any Missed Payments in whole or in part at any time on not less than 14 days’ notice to the trustee, but, except as otherwise provided in the prospectus supplement, all Missed Payments on all capital securities of a particular series outstanding at the time shall become due and payable in full upon the occurrence of an “Event of Default” or, subject to the “solvency condition”, a “Capital Security Default”.  These terms are defined below under the heading “—Events of Default and Defaults; Limitation of Remedies”.  If we give notice that we intend to pay all or part of the Missed Payments on the capital securities of any series, we shall be obliged, subject to the solvency condition, to do so at the time specified in our notice.
 
Except in a winding up, all payments on the capital securities of any series will be conditional upon our being solvent at the time of payment, and we will not make any payment unless we will still be solvent immediately afterwards.  This is called the “solvency condition”.  For this purpose, we shall be solvent if we are able to pay our debts as they fall due and our total non-consolidated assets exceed our total non-consolidated liabilities, excluding liabilities that do not constitute “Senior Claims” (as defined under the heading “—Subordination” below) except in the case of the optional redemption or repurchase of any capital securities.  A report as to our solvency by a director or, in certain circumstances, our auditors shall, unless there is a manifest error, be treated and accepted by us, the trustee and any holder of capital securities as correct and sufficient evidence of solvency or insolvency.  If we fail to make any payment as a result of failure to satisfy the solvency condition, that payment will constitute a Missed Payment and will accumulate with any other Missed Payments until paid.  In a winding up, the amount payable on capital securities of any series will be determined in accordance with the capital security subordination provisions described under the heading “ —Subordination” below.
 
 
6
 
You should note that if we are unable to make any payment on the capital securities of any series because we are not able to satisfy the solvency condition, the amount of any payment which we would otherwise make will be available to meet our losses.
 
Subordination
 
Senior Debt Securities
 
Unless the relevant prospectus supplement provides otherwise, senior debt securities and coupons (if any) appertaining thereto constitute our direct, unconditional, unsecured and unsubordinated obligations ranking pari passu, without any preference among themselves, with all of our other outstanding unsecured and unsubordinated obligations, present and future, except such obligations as are preferred by operation of law.
 
Subordinated Debt Securities
 
Unless the relevant prospectus supplement provides otherwise, in a winding up, all payments on any series of subordinated debt securities will be subordinate to, and subject in right of payment to the prior payment in full of, all claims of all of our creditors other than claims in respect of any liability that is, or is expressed to be, subordinated, whether only in the event of a winding up or otherwise, to the claims of all or any of our creditors, in the manner provided in the subordinated debt indenture.
 
Capital Securities
 
Unless the relevant prospectus supplement provides otherwise, in a winding up, the principal amount of, and payments and any Missed Payments on, any series of capital securities will be subordinate to, and subject in right of payment to the prior payment in full of, all Senior Claims.  The following are “Senior Claims” in respect of any series of capital securities:
 
 
·
all claims of our unsubordinated creditors admitted in the winding up;
 
 
·
all claims of our creditors in respect of liabilities that are, or are expressed to be, subordinated, whether only in the event of a winding up or otherwise, to the claims of our unsubordinated creditors but not further or otherwise; and
 
 
·
all other claims except those that rank, or are expressed to rank, equally with or junior to the claims of any holder of capital securities of any series.
 
Additional senior claims, if any, may be set forth in the accompanying prospectus supplement.
 
If at any time an order is made or a shareholders’ resolution is passed for a winding up, any amounts that would have been payable in respect of the capital securities of any series if, on and after the day immediately before the winding up began, any holder of those capital securities had been the holder of preference shares in our capital with a preferential right to a return of assets in the winding up over the holders of all other issued shares, including all classes of our preference shares, will be payable on those capital securities.  These amounts will be calculated assuming that such preference shares were entitled, to the exclusion of all other rights or privileges, to receive as a return of capital an amount equal to the principal amount of the capital securities of the series then outstanding, together with all payments accrued to the date of repayment at the rate provided for in those capital securities and any Missed Payments.  Accordingly, no amount will be payable in a winding up on any series of capital securities until all Senior Claims admitted in the winding up have been paid in full.
 
General
 
As a consequence of these subordination provisions, if winding up proceedings should occur, each holder may recover less ratably than the holders of our unsubordinated liabilities and, in the case of the holders of capital securities, the holders of certain of our subordinated liabilities, including the holders of subordinated debt securities.  If, in any winding up, the amount payable on any series of debt securities and any claims ranking equally with that series are not paid in full, those debt securities and other claims ranking equally will share ratably in any distribution
 
 
7
 
of our assets in a winding up in proportion to the respective amounts to which they are entitled.  If any holder is entitled to any recovery with respect to the debt securities in any winding up or liquidation, the holder might not be entitled in those proceedings to a recovery in U.S. dollars and might be entitled only to a recovery in pounds sterling or any other lawful currency of the United Kingdom.
 
In addition, because we are a holding company, our rights to participate in the assets of any subsidiary if it is liquidated will be subject to the prior claims of its creditors, including, in the case of our bank subsidiaries, their depositors, except to the extent that we may be a creditor with recognized claims against the subsidiary.
 
Additional Amounts
 
Unless the relevant prospectus supplement provides otherwise, we will pay any amounts to be paid by us on any series of debt securities without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any U.K. political subdivision thereof or authority that has the power to tax (a “U.K. taxing jurisdiction”), unless such deduction or withholding is required by law.  If at any time a U.K. taxing jurisdiction requires us to make such deduction or withholding, we will pay additional amounts with respect to the principal of, and payments and Missed Payments on, the debt securities (“Additional Amounts”) that are necessary in order that the net amounts paid to the holders of those debt securities, after the deduction or withholding, shall equal the amounts of principal and any payments and Missed Payments which would have been payable on that series of debt securities if the deduction or withholding had not been required.  However, this will not apply to any tax that would not have been payable or due but for the fact that:
 
 
·
the holder or the beneficial owner of the debt securities is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, a U.K. taxing jurisdiction or otherwise having some connection with the U.K. taxing jurisdiction other than the holding or ownership of a debt security, or the collection of any payment of, or in respect of, principal of, or any payments or Missed Payments on, any debt security of the relevant series;
 
 
·
except in the case of a winding up in the United Kingdom, the relevant debt security is presented (where presentation is required) for payment in the United Kingdom;
 
 
·
the relevant debt security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the holder would have been entitled to the Additional Amounts on presenting the debt security for payment at the close of that 30 day period;
 
 
·
the holder or the beneficial owner of the relevant debt security or the beneficial owner of any payment of or in respect of principal of, or any payments or Missed Payments on, the debt security failed to comply with a request by us or our liquidator or other authorized person addressed to the holder to provide information concerning the nationality, residence or identity of the holder or the beneficial owner or to make any declaration or other similar claim to satisfy any information requirement, which is required or imposed by a statute, treaty, regulation or administrative practice of a U.K. taxing jurisdiction as a precondition to exemption from all or part of the tax;
 
 
·
the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to, in the case of capital securities and senior debt securities, European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directive or, in the case of subordinated debt securities, any European Union Directive on the taxation of savings implementing the proposal for a European Union Directive presented by the European Commission on July 18, 2001 or any law implementing or complying with, or introduced in order to conform to, such a directive;
 
 
8
 
 
 
·
the relevant debt security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant debt security to another paying agent in a Member State of the European Union; or
 
 
·
any combination of the above items;
 
nor shall Additional Amounts be paid with respect to the principal of, and payments and Missed Payments on, the debt securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any taxing jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.
 
Whenever we refer in this prospectus and any prospectus supplement, in any context, to the payment of the principal of or any payments, or any Missed Payments on, or in respect of, any debt security of any series, we mean to include the payment of Additional Amounts to the extent that, in the context, Additional Amounts are, were or would be payable.
 
Redemption
 
Unless the relevant prospectus supplement provides otherwise, we will, in the case of capital securities, if the solvency condition is satisfied, have the option to redeem the debt securities of any series as a whole upon not less than 30 nor more than 60 days’ notice to each holder of debt securities, on any payment date, at a redemption price equal to 100% of their principal amount together with any accrued but unpaid payments of interest in the case of senior debt securities and subordinated debt securities, and all payments and Missed Payments in the case of capital securities, to the redemption date, or, in the case of discount securities, their accreted face amount, together with any accrued interest, if we determine that as a result of a change in or amendment to the laws or regulations of a U.K. taxing jurisdiction, including any treaty to which it is a party, or a change in an official application or interpretation of those laws or regulations, including a decision of any court or tribunal, which becomes effective on or after the date of the applicable prospectus supplement:
 
 
·
in making any payments, including Missed Payments in the case of capital securities, on the particular series of debt securities, we have paid or will or would on the next payment date be required to pay Additional Amounts;
 
 
·
payments, including Missed Payments in the case of capital securities, on the next payment date in respect of any of the series of debt securities would be treated as “distributions” within the meaning of Section 209 of the Income and Corporation Taxes Act 1988 of the United Kingdom, or any statutory modification or re-enactment of the Act; or
 
 
·
on the next payment date we would not be entitled to claim a deduction in respect of the payments in computing our U.K. taxation liabilities, or the value of the deduction to us would be materially reduced.
 
In each case we shall be required, before we give a notice of redemption, to deliver to the trustee a written legal opinion of independent English counsel of recognized standing, selected by us, in a form satisfactory to the trustee confirming that we are entitled to exercise our right of redemption.
 
The relevant prospectus supplement will specify whether or not we may redeem the debt securities of any series, in whole or in part, at our option, in any other circumstances and, if so, the prices and any premium at which and the dates on which we may do so.  In the case of capital securities, redemption will only be allowed if the solvency condition is satisfied.  Any notice of redemption of debt securities of any series will state, among other items:
 
 
·
the redemption date;
 
 
·
the amount of debt securities to be redeemed if less than all of the series is to be redeemed;
 
 
9
 
 
 
·
the redemption price;
 
 
·
that the redemption price will, subject to the solvency condition, become due and payable on the redemption date and that payments will cease to accrue on such date; and
 
 
·
the place or places at which each holder may obtain payment of the redemption price.
 
In the case of a partial redemption, the trustee shall select the debt securities to be redeemed in any manner which it deems fair and appropriate.
 
We or any of our subsidiaries may at any time and from time to time purchase debt securities of any series in the open market or by tender (available to each holder of debt securities of the relevant series) or by private agreement, if applicable law allows and if, in the case of the capital securities, the solvency condition is satisfied.  Any debt securities of any series that we purchase beneficially for our own account, other than in connection with dealing in securities, will be treated as cancelled and will no longer be issued and outstanding.
 
Under existing U.K. Financial Services Authority (“FSA”) requirements, we may not make any redemption or repurchase of any debt securities beneficially for our own account, other than a repurchase in connection with dealing in securities, unless we give prior notice to the FSA and, in certain circumstances, it consents in advance.  The FSA may impose conditions on any redemption or repurchase.
 
Modification and Waiver
 
We and the trustee may make certain modifications and amendments of the applicable indenture with respect to any series of debt securities without the consent of the holders of the debt securities.  We may make other modifications and amendments with the consent of the holder or holders of not less than a majority in aggregate outstanding principal amount of the debt securities of the series outstanding under the indenture that are affected by the modification or amendment, voting as one class.  However, we may not make any modification or amendment without the consent of the holder of each debt security affected that would:
 
 
·
change the stated maturity of the principal amount of any subordinated debt security;
 
 
·
change the terms of any capital security to include a stated maturity date;
 
 
·
reduce the principal amount of, or in the case of subordinated debt securities, the interest rates, or any premium payable upon the redemption of, or the payments, in the case of capital securities or any Missed Payments, with respect to any debt security;
 
 
·
change our obligation (or any successor’s) to pay Additional Amounts;
 
 
·
change the currency of payment;
 
 
·
impair the right to institute suit for the enforcement of any payment due and payable;
 
 
·
reduce the percentage in aggregate principal amount of outstanding debt securities of the series necessary to modify or amend the indenture or to waive compliance with certain provisions of the indenture and any past Event of Default, Senior Debt Security Event of Default, Subordinated Debt Security Default or Capital Security Default (as such terms are defined below);
 
 
·
modify the subordination provisions or the terms of our obligations in respect of the due and punctual payment of the amounts due and payable on the debt securities in a manner adverse to the holders; or
 
 
·
modify the above requirements.
 
In addition, material variations in the terms and conditions of debt securities of any series, including modifications relating to subordination, redemption, Events of Default, Senior Debt Security Event of Default, Subordinated Debt Security Defaults, Capital Security Defaults or Capital Security Payment Events (as those terms
 
 
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are defined under the heading “Event of Default and Defaults; Limitations of Remedies” below), may require the non-objection from, or consent of, the FSA.
 
Events of Default and Defaults; Limitation of Remedies
 
Senior Debt Security Event of Default
 
Unless the relevant prospectus supplement provides otherwise, a “Senior Debt Security Event of Default” with respect to any series of senior debt securities shall result if:
 
·
we do not pay any principal or interest on any senior debt securities of that series within 14 days from the due date for payment and the principal or interest has not been duly paid within a further 14 days following written notice from the trustee or from holders of 25% in outstanding principal amount of the senior debt securities of that series to us requiring the payment to be made.  It shall not, however, be a Senior Debt Security Event of Default if during the 14 days after the notice, we satisfy the trustee that such sums were not paid in order to comply with a law, regulation or order of any court of competent jurisdiction.  Where there is doubt as to the validity or applicability of any such law, regulation or order, it shall not be a Senior Debt Security Event of Default if we act on the advice given to us during the 14 day period by independent legal advisers approved by the trustee; or
 
·
we breach any covenant or warranty of the senior debt indenture (other than as stated above with respect to payments when due) and that breach has not been remedied within 60 days of receipt of a written notice from the trustee certifying that in its opinion the breach is materially prejudicial to the interests of the holders of the senior debt securities of that series and requiring the breach to be remedied or from holders of at least 25% in outstanding principal amount of the senior debt securities of that series requiring the breach to be remedied; or
 
·
either a court of competent jurisdiction issues an order which is not successfully appealed within 30 days, or an effective shareholders’ resolution is validly adopted, for our winding-up (other than under or in connection with a scheme of reconstruction, merger or amalgamation not involving bankruptcy or insolvency).
 
If a Senior Debt Security Event of Default occurs and is continuing, the trustee or the holders of at least 25% in outstanding principal amount of the senior debt securities of that series may at their discretion declare the senior debt securities of that series to be due and repayable immediately (and the senior debt securities of that series shall thereby become due and repayable) at their outstanding principal amount (or at such other repayment amount as may be specified in or determined in accordance with the relevant prospectus supplement) together with accrued interest, if any, as provided in the prospectus supplement. The trustee may at its discretion and without further notice institute such proceedings as it may think suitable, against us to enforce payment. Subject to the indenture provisions for the indemnification of the trustee, the holder(s) of a majority in aggregate principal amount of the outstanding senior debt securities of any series shall have the right to direct the time, method and place of conducting any proceeding in the name or and on the behalf of the trustee for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the series. However, this direction must not be in conflict with any rule of law or the senior debt indenture, and must not be unjustly prejudicial to the holder(s) of any senior debt securities of that series not taking part in the direction, and determined by the trustee. The trustee may also take any other action, consistent with the direction, that it deems proper.
 
Notwithstanding any contrary provisions, nothing shall impair the right of a holder, absent the holder’s consent, to sue for any payments due but unpaid with respect to the senior debt securities.
 
By accepting a senior debt security, each holder will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the senior debt securities or the applicable indenture that they might otherwise have against us, whether before or during our winding up.
 
Events of Default – Subordinated Debt Securities and Capital Securities
 
Unless the relevant prospectus supplement provides otherwise, if (i) a court of competent jurisdiction makes an order which is not successfully appealed within 30 days or (ii) an effective shareholders’ resolution is validly adopted, for our winding up, other than under or in connection with a scheme of amalgamation or reconstruction not
 
 
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involving a bankruptcy or insolvency, that order or resolution will constitute an “Event of Default” with respect to the debt securities of each series.  If an Event of Default occurs and is continuing, the trustee or the holder or holders of at least 25% in aggregate principal amount of the outstanding debt securities of each series may declare the principal amount of, any accrued but unpaid payments (or, in the case of discount securities, the accreted face amount, together with any accrued interest), and, in the case of capital securities, any Missed Payments, on the debt securities of the series to be due and payable immediately in accordance with the terms of the indenture.  However, after this declaration but before the trustee obtains a judgment or decree for payment of money due, the holder or holders of a majority in aggregate principal amount of the outstanding debt securities of the series may rescind the declaration of acceleration and its consequences, but only if all Events of Default have been remedied and all payments due, other than those due as a result of acceleration, have been made.
 
Subordinated Debt Security Defaults
 
Unless the relevant prospectus supplement provides otherwise, it shall be a “Subordinated Debt Security Default” with respect to any series of subordinated debt securities if:
 
 
·
any installment of interest upon any subordinated debt security of that series is not paid on or before its Deferred Payment Date and such failure continues for 14 days; or
 
 
·
all or any part of the principal of any subordinated debt security of that series is not paid on its Deferred Payment Date, or when it otherwise becomes due and payable, whether upon redemption or otherwise, and such failure continues for seven days.
 
If a Subordinated Debt Security Default occurs and is continuing, the trustee may commence a proceeding in Scotland (but not elsewhere) for our winding up, but the trustee may not declare the principal amount of any outstanding subordinated debt security due and payable. However, failure to make any payment on a series of subordinated debt securities shall not be a Subordinated Debt Security Default if it is withheld or refused in order to comply with any applicable fiscal or other law or regulation or order of any court of competent jurisdiction, or if there is doubt as to the validity or applicability of any such law, regulation or order, in accordance with advice given at any time before the expiry of the applicable 14-day or seven day period by independent legal advisers acceptable to the trustee. In the second case, the trustee may require us to take action (including proceedings for a court declaration) to resolve the doubt, if counsel advises it that such action is appropriate and reasonable in the circumstances, in which case we will immediately take and expeditiously proceed with the action and will be bound by any final resolution of the doubt. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the payment shall become due and payable on the expiration of the applicable 14 day or seven day period after the trustee gives written notice to us informing us of such determination.
 
By accepting a subordinated debt security, each holder and the trustee will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the subordinated debt securities or the applicable indenture (or between our obligations under or in respect of any subordinated debt security and any liability owed by a holder or the trustee to us) that they might otherwise have against us, whether before or during our winding up.
 
Capital Security Defaults
 
Unless the relevant prospectus supplement provides otherwise, it shall be a “Capital Security Default” with respect to any series of capital securities if:
 
 
·
we fail to pay or to set aside a sum to provide for payment of any Missed Payments on or prior to the date upon which a dividend is paid on any class of our share capital, or we make a redemption or repurchase of any other capital securities of the same series other than a repurchase in connection with dealing in securities, and such failure continues for 30 days;
 
 
·
we fail to pay or to set aside a sum to provide for payment of the principal amount (and premium, if any), any accrued but unpaid payments and any Missed Payments on the date fixed for redemption of the capital security and such failure continues for seven days; or
 
 
12
 
 
 
·
any other Capital Security Default or “Capital Security Payment Event” (as defined below) provided with respect to capital securities of such series pursuant to a prospectus supplement;
 
provided , however, that it shall not be a Capital Security Default if we fail to make payment as described in any of the three paragraphs above and the “solvency condition” is not satisfied on the thirtieth day following such failure, in the case of the first paragraph above or on the seventh day following such failure, in the case of the second paragraph above and on the relevant day following such failure, in the case of the third paragraph above.  Our failure to make a payment specified in any of the three paragraphs above because of a failure to satisfy the “solvency condition” is referred to herein as a “Capital Security Payment Event”.
 
If any Capital Security Default shall occur and is continuing, the trustee may commence a judicial proceeding for the collection of the sums due and unpaid or a proceeding for our winding up in Scotland (but not elsewhere), but the trustee may not declare the principal amount of any outstanding capital security to be due and payable and in so doing any such proceedings shall not prejudice the provisions relating to subordination set out above.
 
By accepting a capital security, each holder and the trustee will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to such capital security or the applicable indenture (or between our obligations under or in respect of any capital securities and any liability owed by a holder or the trustee to us) that they might otherwise have against us, whether before or during our winding up.
 
General
 
The holder or holders of not less than a majority in aggregate principal amount of the outstanding debt securities of any series may waive any past Event of Default, Senior Debt Security Event of Default, Subordinated Debt Security Default, Capital Security Default or Capital Security Payment Event with respect to the series, except an Event of Default, Senior Debt Security Event of Default, Subordinated Debt Security Default or Capital Security Default in respect of the payment of interest, if any, or principal of (or premium, if any) or payments or, in the case of capital securities, Missed Payments on, any debt security or a covenant or provision of the applicable indenture which cannot be modified or amended without the consent of each holder of debt securities of such series.
 
Subject to exceptions, the trustee may, without the consent of the holders, waive or authorize a Senior Debt Security Event of Default if, in the opinion of the trustee, the Senior Debt Security Event of Default would not be materially prejudicial to the interests of the holders.
 
Subject to the provisions of the applicable indenture relating to the duties of the trustee, if an Event of Default, Senior Debt Security Event of Default, Subordinated Debt Security Default, Capital Security Default or Capital Security Payment Event occurs and is continuing with respect to the debt securities of any series, the trustee will be under no obligation to any holder or holders of the debt securities of the series, unless they have offered reasonable indemnity to the trustee.  Subject to the indenture provisions for the indemnification of the trustee, the holder or holders of a majority in aggregate principal amount of the outstanding debt securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the series, if the direction is not in conflict with any rule of law or with the applicable indenture and the trustee does not determine that the action would be unjustly prejudicial to the holder or holders of any debt securities of any series not taking part in that direction.  The trustee may take any other action that it deems proper which is not inconsistent with that direction.
 
The indentures provide that the trustee will, within 90 days after the occurrence of an Event of Default, Senior Debt Security Event of Default, Subordinated Debt Security Default, Capital Security Default or Capital Security Payment Event with respect to the debt securities of any series, give to each holder of the debt securities of the affected series notice of the Event of Default, Senior Debt Security Event of Default, Subordinated Debt Security Default, Capital Security Default, or Capital Security Payment Event known to it, unless the Event of Default, Senior Debt Security Event of Default, Subordinated Debt Security Default, Capital Security Default or Capital Security Payment Event has been cured or waived.  However, the trustee shall be protected in withholding notice if it determines in good faith that withholding notice is in the interest of the holders.
 
 
13
 
We are required to furnish to the trustee annually a statement as to our compliance with all conditions and covenants under the indenture.
 
Consolidation, Merger and Sale of Assets; Assumption
 
We may, without the consent of the holders of any of the debt securities, consolidate with, merge into or transfer or lease our assets substantially as an entirety to any person, provided that any successor corporation formed by any consolidation or amalgamation, or any transferee or lessee of our assets, is a company organized under the laws of any part of the United Kingdom that assumes, by a supplemental indenture, our obligations on the debt securities and under the applicable indenture, and we procure the delivery of a customary officer’s certificate and legal opinion providing that the conditions precedent to the transaction have been complied with.
 
Subject to applicable law and regulation, any of our wholly-owned subsidiaries may assume our obligations under the debt securities of any series without the consent of any holder, provided that we unconditionally guarantee, on a subordinated basis in substantially the manner described under the heading “—Subordination” above, the obligations of the subsidiary under the debt securities of that series.  If we do, all of our direct obligations under the debt securities of the series and the applicable indenture shall immediately be discharged.  Any Additional Amounts under the debt securities of the series will be payable in respect of taxes imposed by the jurisdiction in which the assuming subsidiary is incorporated, subject to exceptions equivalent to those that apply to any obligation to pay Additional Amounts in respect of taxes imposed by any U.K. taxing jurisdiction, rather than taxes imposed by any U.K. taxing jurisdiction.  However, if we make payment under the guarantee, we shall be required to pay Additional Amounts related to taxes, subject to the exceptions described under the heading “—Additional Amounts” above, imposed by any U.K. taxing jurisdiction by reason of the guarantee payment.  The subsidiary that assumes our obligations will also be entitled to redeem the debt securities of the relevant series in the circumstances described in “—Redemption” above with respect to any change or amendment to, or change in the application or official interpretation of, the laws or regulations (including any treaty) of the assuming subsidiary’s jurisdiction of incorporation which occurs after the date of the assumption.  However, the determination of whether the solvency condition has been satisfied shall continue to be made with reference to us, unless applicable law requires otherwise.
 
An assumption of our obligations under the debt securities of any series might be deemed for U.S. federal income tax purposes to be an exchange of those debt securities for new debt securities by each beneficial owner, resulting in a recognition of taxable gain or loss for those purposes and possibly certain other adverse tax consequences.  You should consult your tax advisor regarding the U.S. federal, state and local income tax consequences of an assumption.
 
Governing Law
 
The debt securities and the indentures will be governed by and construed in accordance with the laws of the State of New York, except that, as the indentures specify, the subordination provisions of each series of debt securities and the indentures will be governed by and construed in accordance with the laws of Scotland.
 
Notices
 
All notices to holders of registered debt securities shall be validly given if in writing and mailed, first-class postage prepaid, to them at their respective addresses in the register maintained by the trustee.
 
The Trustee
 
The Bank of New York Mellon, acting through its London Branch, One Canada Square, London E14 5AL, is the trustee under the indentures.  The trustee shall have and be subject to all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act of 1939 (“TIA”).  Subject to the provisions of the TIA, the trustee is under no obligation to exercise any of the powers vested in it by the indentures at the request of any holder of notes, unless offered reasonable indemnity by the holder against the costs, expense and liabilities which might be incurred thereby.  We and certain of our subsidiaries maintain deposit accounts and conduct other banking transactions with The Bank of New York Mellon in the ordinary course of our business.  The Bank of New York Mellon is also the book-entry depositary with respect to certain of our debt securities and the depositary with respect to the ADSs representing certain of our preference shares, and trustee with respect to certain of our exchangeable capital securities.
 
 
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Consent to Service of Process
 
Under the indentures, we irrevocably designate John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., as our authorized agent for service of process in any legal action or proceeding arising out of or relating to the indentures or any debt securities brought in any federal or state court in The City of New York, New York and we irrevocably submit to the jurisdiction of those courts.
 
 
DESCRIPTION OF DOLLAR PREFERENCE SHARES
 
The following is a summary of the general terms of the dollar preference shares of any series.  Each time that we issue dollar preference shares, we will file a prospectus supplement with the SEC, which you should read carefully.  The prospectus supplement will designate the terms of the dollar preference shares of the particular series, which are set out in the resolutions establishing the series that our board of directors or an authorized committee thereof (referred to in this section as the board of directors) adopt.  These terms may amend, supplement or be different from those summarized below, and if so the applicable prospectus supplement will state that, and the description of the dollar preference shares of that series contained in the prospectus supplement will apply.  You should also read our Articles of Association, which we have filed with the SEC as an exhibit to the registration statement of which this prospectus is a part.  You should read the summary of the general terms of the ADR deposit agreement under which American Depositary Receipts evidencing American Depositary Shares that may represent dollar preference shares may be issued, under the heading “Description of American Depositary Receipts”.
 
General
 
Under our Articles of Association, our board of directors is authorized to provide for the issuance of dollar preference shares, in one or more series, with the dividend rights, liquidation value per share, redemption provisions, voting rights and other rights, preferences, privileges, limitations and restrictions that are set forth in resolutions providing for their issue adopted by our board of directors.  Our board of directors may only provide for the issuance of dollar preference shares of any series if a resolution of our shareholders has authorized the allotment of shares.
 
The dollar preference shares of any series will have the dividend rights, rights upon liquidation, redemption provisions and voting rights described below, unless the relevant prospectus supplement provides otherwise.  You should read the prospectus supplement for the specific terms of any series, including:
 
 
·
the number of shares offered, the number of shares offered in the form of ADSs and the number of dollar preference shares represented by each ADS;
 
 
·
the public offering price of the series;
 
 
·
the liquidation value per share of that series;
 
 
·
the dividend rate, or the method of calculating it;
 
 
·
the place where we will pay dividends;
 
 
·
the dates on which dividends will be payable;
 
 
·
the circumstances under which dividends may not be payable;
 
 
·
voting rights;
 
 
·
the restrictions applicable to the sale and delivery of the dollar preference shares;
 
 
·
whether and under what circumstances we will pay additional amounts on the dollar preference shares in the event of certain developments with respect to withholding tax or information reporting laws;
 
 
15
 
 
·
any redemption, conversion or exchange provisions;
 
 
·
any listing on a securities exchange; and
 
 
·
any other rights, preferences, privileges, limitations and restrictions relating to the series.
 
The prospectus supplement will also describe material U.S. and U.K. tax considerations that apply to any particular series of dollar preference shares.
 
The dollar preference shares of any series will rank junior as to dividends to the cumulative preference shares, equally as to dividends with other non-cumulative preference shares, the exchange preference shares of any series and the sterling preference shares, equally as to repayment of capital on a winding up or liquidation with other non-cumulative preference shares, the exchange preference shares of any series, the sterling preference shares and the cumulative preference shares and, unless the resolutions of our board of directors establishing any series of dollar preference shares specify otherwise and the related prospectus supplement so states, will rank equally in all respects with the dollar preference shares of each other series and any other of our shares which are expressed to rank equally with them.  The preferential rights to dividends of the holders of the cumulative preference shares are cumulative whereas the preferential rights to dividends of the holders of any series of dollar preference shares, any series of exchange preference shares, the euro preference shares, and any sterling preference shares will be or are non-cumulative.  Holders of dollar preference shares will have no pre-emptive rights.
 
The dollar preference shares will rank in priority to our ordinary shares as regards the right to receive dividends and rights to repayment of capital if we are wound up or liquidated, whether or not voluntarily.
 
There are no restrictions under our Articles of Association or under Scots law as currently in effect that limit the right of non-resident or foreign owners, as such, to acquire dollar preference shares of any series freely or, when entitled to vote dollar preference shares of a particular series, to vote those dollar preference shares.  There are currently no English or Scots laws, decrees, or regulations that would prevent the remittance of dividends or other payments on the dollar preference shares of any series to non-resident holders.
 
Dividends
 
Non-cumulative preferential dividends on each series of dollar preference shares will be payable at the rate or rates and on the dates set out in the relevant prospectus supplement and will accrue from their date of issue.
 
Pursuant to our Articles of Association, our board of directors may resolve prior to the issue and allotment of any series of dollar preference shares that full dividends on such series of dollar preference shares in respect of a particular dividend payment date will not be declared and paid if, (i) in its sole and absolute discretion, the board of directors resolves prior to the relevant dividend payment date that such dividend (or part thereof) shall not be paid or (ii) in the opinion of the board of directors, payment of a dividend would breach or cause a breach of the capital adequacy requirements of the FSA that apply at that time to us and/or any of our subsidiaries, or subject to the next following paragraph, our distributable profits, after the payment in full, or the setting aside of a sum to provide for the payment in full, of all dividends stated to be payable on or before the relevant dividend payment date on the cumulative preference shares (and any arrears of dividends thereon), are insufficient to cover the payment in full of dividends on that series of dollar preference shares and dividends on any of our other preference shares stated to be payable on the same date as the dividends on that series and ranking equally as to dividends with the dollar preference shares of that series.  The U.K. Companies Act 1985 (as amended) defines “distributable profits” as, in general terms, and subject to adjustment, accumulated realized profits less accumulated realized losses.
 
Unless the applicable prospectus supplement states otherwise, if dividends are to be paid but our distributable profits are, in the opinion of the board of directors, insufficient to enable payment in full of dividends on any series of dollar preference shares on any dividend payment date and also the payment in full of all other dividends stated to be payable on such date on any other non-cumulative preference shares and any other share capital expressed to rank pari passu therewith as regards participation in profits, after payment in full, or the setting aside of a sum to cover the payment in full, of all dividends stated to be payable on or before such date on any cumulative preference share, then the board of directors shall (subject always to sub-clauses (i) and (ii) of the preceding paragraph) declare and
 
 
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pay dividends to the extent of the available distributable profits, (if any) on a pro rata basis so that (subject as aforesaid) the amount of dividends declared per share on the dollar preference shares of the series and the dividends stated to be payable on such date on any other non-cumulative preference shares and any other share capital expressed to rank pari passu therewith as regards distribution of profits will bear to each other the same ratio that accrued dividends per share on the dollar preference shares of the series and other non-cumulative preference shares, and any other share capital expressed to rank pari passu therewith as regards participation in profits, bear to each other.
 
Dividends on the cumulative preference shares, including any arrears, are payable in priority to any dividends on any series of dollar preference shares, and as a result, we may not pay any dividend on any series of dollar preference shares unless we have declared and paid in full dividends on the cumulative preference shares, including any arrears.
 
If we have not declared and paid in full the dividend stated to be payable on any series of dollar preference shares on the most recent dividend payment date, or if we have not set aside a sum to provide for payment in full, in either case for the reasons set out in sub-clause (ii) of the second paragraph of this section, we may not declare or pay any dividends upon any of our other share capital (other than the cumulative preference shares) and we may not set aside any sum to pay such dividends, unless, on the date of declaration, we set aside an amount equal to the dividend for the then-current dividend period payable on that series of dollar preference shares to provide for the payment in full of the dividend on that series of dollar preference shares on the next dividend payment date.  If we have not declared and paid in full any dividend payable on any series of dollar preference shares on any dividend payment date, or if we have not set aside a sum to provide for payment in full, in either case for the reasons set out in sub-clause (ii) of the second paragraph of this section, we may not redeem, purchase or otherwise acquire for any consideration any of our other share capital and may not set aside any sum or establish any sinking fund to redeem, purchase or otherwise acquire them, until we have declared and paid in full dividends on that series of dollar preference shares in respect of successive dividend periods singly or together aggregating no less than 12 months.
 
To the extent that any dividend on any dollar preference share to which sub-clause (i) of the second paragraph of this section applies is, on any occasion, not declared and paid by reason of the exercise of the board of directors’ discretion referred to in sub-clause (i) of the second paragraph of this section, holders of such dollar preference shares shall have no claim in respect of such non-payment.  In addition, such non-payment shall not prevent or restrict (a) the declaration and payment of dividends on any other series of dollar preference shares or on any of our non-cumulative preference shares expressed to rank pari passu with our dollar preference shares, (b) the setting aside of sums for the payment of dividends referred to in (a), (c) except as set forth in the following paragraph, the redemption, purchase or other acquisition of our shares by us, or (d) except as set forth in the following paragraph, the setting aside of sums, or the establishment of sinking funds, for any such redemption, purchase or other acquisition by us.
 
If we have not declared and paid in full the dividend stated to be payable on any series of dollar preference shares as a result of the board of directors’ discretion referred to in sub-clause (i) of the second paragraph of this section, then we may not redeem, purchase or otherwise acquire for any consideration any of our share capital ranking after such dollar preference shares, and may not set aside any sum nor establish any sinking fund for the redemption, purchase or other acquisition thereof, until such time as we have declared and paid in full dividends on such series of dollar preference shares in respect of successive dividend periods singly or together aggregating no less than 12 months.  In addition, no dividend may be declared or paid on any of our share capital ranking after such dollar preference shares as to dividends until such time as the dividend stated to be payable on the dollar preference shares to which the discretion in sub-clause (i) of the second paragraph of this section applies in respect of a dividend period has been declared and paid in full.
 
No series of dollar preference shares rank after any other series of preference shares with which it is expressed to rank pari passu as regards participation in profits, by reason only of the board of directors’ discretion referred to in sub-clause (i) of the second paragraph of this section, or any dividend on that series not being paid by virtue of such discretion.
 
 
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Dividends on the dollar preference shares of any series will be non-cumulative.  If the board of directors does not pay a dividend or any part of a dividend when due on a dividend payment date in respect of any series of dollar preference shares because it is not required to do so, then holders of dollar preference shares of the applicable series will have no claim in respect of the non-payment and we will have no obligation to pay the dividend accrued for the dividend period or to pay any interest on the dividend, whether or not dividends on the dollar preference shares of the series are declared for any future dividend period.  The holders of the dollar preference shares of any series will have no right to participate in our profits.
 
Any dividend which has remained unclaimed for 12 years from the date when it became due shall be forfeited and shall revert to us.
 
We will calculate the amount of dividends payable on the dollar preference shares of any series for each dividend period using the method determined by the board of directors before the shares are issued, except for any dividend period shorter than a full dividend period, for which the amount of dividend payable will be calculated on the basis of 12 30-day months, a 360-day year and the actual number of days elapsed in the period, unless the applicable prospectus supplement states otherwise. Payments of less than $0.01 will be rounded upwards.
 
Dividends declared on the dollar preference shares of any series will be payable to the ADR depositary or the record holders as they appear on the register on the appropriate record dates, which will be the number of days before the relevant dividend payment dates that the board of directors determines before the allotment of the particular series.  If applicable fiscal or other laws and regulations permit, each payment will be made, in the case of dollar preference shares of any series in bearer form, by dollar check drawn on, or by transfer to a dollar account maintained by the payee with, a bank in London or in The City of New York or, in the case of dollar preference shares of any series in registered form, by dollar check drawn on a bank in London or in The City of New York and mailed to the record holder at the holder’s address as it appears on the register for the dollar preference shares.  If any date on which dividends are payable on the dollar preference shares of any series is not a business day, then we will pay the dividend on the next business day, without any interest or other payment in respect of the delay, unless it falls in the next calendar month, in which case we will make the payment on the preceding business day.  A “business day” is any day on which banks are open for business, and foreign exchange dealings may be conducted, in London and The City of New York.
 
Liquidation Rights
 
If we are wound up or liquidated, whether or not voluntarily, the holders of the dollar preference shares of each series will be entitled to receive out of our surplus assets available for distribution to shareholders, after payment of arrears (if any) of dividends on the cumulative preference shares up to the date of payment, equally with our cumulative preference shares, any other series of non-cumulative preference shares then outstanding, and all of our other shares ranking equally with that series of dollar preference shares as regards participation in our surplus assets, a distribution in U.S. dollars per dollar preference share equal to the liquidation value per share, together with an amount equal to dividends for the then current dividend period accrued to the date of payment, before any distribution or payment may be made to holders of our ordinary shares or any other class of our shares ranking after the dollar preference shares of that series.  If the assets available for distribution are insufficient to pay in full the amounts payable with respect to the dollar preference shares of that series and any of our other preference shares ranking equally as to any such distribution with those dollar preference shares, the holders of those dollar preference shares and other preference shares will share ratably in any distribution of our surplus assets in proportion to the full respective preferential amounts to which they are entitled.  After payment of the full amount of the liquidation distribution to which they are entitled, the holders of the dollar preference shares will have no right or claim to any of our surplus assets and will not be entitled to any further participation in surplus assets.  If the holders of the dollar preference shares are entitled to any recovery with respect to the dollar preference shares in any winding up or liquidation, they might not be entitled in such proceedings to a recovery in U.S. dollars and might be entitled only to a recovery in pounds sterling.
 
Optional Redemption
 
Unless the relevant prospectus supplement specifies otherwise, we may redeem the dollar preference shares of each series, at our option, in whole or in part from time to time, on any date no earlier than five years and one day after they are issued, in accordance with the notice period and at the redemption prices set forth in the prospectus supplement plus the dividends otherwise payable for the then-current dividend period accrued to the redemption date.
 
 
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Each notice of redemption will specify:
 
 
·
the redemption date;
 
 
·
the particular dollar preference shares of the series to be redeemed;
 
 
·
the redemption price, specifying the amount of the accrued but unpaid dividend per share to be included and stating that dividends shall cease to accrue on redemption; and
 
 
·
the place or places where holders may surrender documents of title and obtain payment of the redemption price.
 
Our Articles of Association provide that no defect in the notice of redemption or in the giving of the notice will affect the validity of the redemption proceedings.
 
If fewer than all of the outstanding dollar preference shares of a series are to be redeemed, our Articles of Association provide that, for the purposes of determining the particular dollar preference shares to be redeemed, we shall cause a drawing to be made in the presence of our independent auditors.
 
If certain limitations contained in our Articles of Association, the special rights of any of our shares, and the provisions of applicable law permit (including, without limitation, the U.S. federal securities laws), we may, at any time or from time to time, purchase outstanding dollar preference shares of any series by tender, available to all holders of those dollar preference shares, in the open market, or by private agreement, in each case upon the terms and conditions that the board of directors shall determine.  Any dollar preference shares of any series that we purchase for our own account will pursuant to applicable law be treated as cancelled and will no longer be issued and outstanding.
 
Under existing FSA requirements, we may not redeem or purchase any dollar preference shares unless we give prior notice to the FSA and, in certain circumstances, it (i) consents in advance and (ii) at the time when the notice of redemption is given and immediately following such redemption, we are or will be (as the case may be) in compliance with our capital adequacy requirements as provided in the regulations relating to capital adequacy then in effect of the FSA. The FSA may impose conditions on any redemption or purchase.
 
Voting Rights
 
The holders of the dollar preference shares of any series will not be entitled to receive notice of, attend or vote at any general meeting of our shareholders except as provided by applicable law or as described below.
 
If any resolution is proposed for adoption by our shareholders varying or abrogating any of the rights attaching to the dollar preference shares of a particular series or proposing that we be wound up, the holders of the outstanding dollar preference shares will be entitled to receive notice of and to attend the general meeting of shareholders at which the resolution is to be proposed and will be entitled to speak and vote on that resolution, but not on any other resolution.  In addition, if, before any general meeting of shareholders, we have failed to pay in full the dividend payable on the dollar preference shares of a particular series for a number of dividend periods specified in the relevant prospectus supplement, the holders of the dollar preference shares of that series shall be entitled to receive notice of, attend, speak and vote at that meeting on all matters.  In these circumstances only, the rights of the holders of dollar preference shares of that series to vote shall continue until we have resumed the payment in full of dividends on the dollar preference shares of that series for the number of dividend periods specified in the prospectus supplement.  Holders of any series of dollar preference shares shall be entitled to receive notice of, attend, speak and vote at general meetings in other circumstances if the board of directors determines, as specified in the prospectus supplement.
 
 
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Whenever holders of dollar preference shares are entitled to vote at a general meeting of shareholders, on a show of hands each holder present in person, and each proxy for a holder, shall have one vote and on a poll each holder present in person or by proxy shall have the number of votes for each dollar preference share of the relevant series that the board of directors determines, as specified in the relevant prospectus supplement.
 
Our Articles of Association provide that all resolutions shall be decided on a show of hands unless, either before or on the declaration of the result of the vote taken on a show of hands, a poll is demanded by:
 
 
·
the chairman of the meeting;
 
 
·
not less than three shareholders present in person or by proxy;
 
 
·
the ADR depositary;
 
 
·
a shareholder or shareholders, including holders of any series of dollar preference shares entitled to vote on the resolution, present in person or by proxy who represent at least 10% of the total voting rights of all shareholders entitled to vote on the resolution; or
 
 
·
a shareholder or shareholders present in person or by proxy and holding shares conferring a right to vote at the meeting on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all shares conferring that right.
 
The holders, including holders of any series of dollar preference shares at a time when they have voting rights as a result of our having failed to pay dividends on the series for the number of dividend periods specified in the applicable prospectus supplement, of not less than 10% of the paid up capital that at the relevant date carries the right of voting at our general meetings are entitled to require our board of directors to convene a general meeting.  In addition, the holders of any series of dollar preference shares may have the right to vote separately as a class in certain circumstances as described below under the heading “— Variation of Rights”.
 
At December 31, 2008, we had approximately 39,456,005,000 ordinary shares outstanding.   The dollar preference shares of any series will not limit our ability to issue additional ordinary shares.
 
Form
 
The dollar preference shares of any series will, when issued, be fully paid and, as such, will not be subject to a call for any additional payment.  For each dollar preference share of each series issued, an amount equal to its nominal value will be credited to our issued share capital account and an amount equal to the difference between its issue price and its nominal value will be credited to our share premium account.
 
The dollar preference shares of each series will be represented by a single certificate.  If in registered form, the certificate will be issued to the ADR depositary and if in bearer form the certificate will be deposited with the ADR depositary under the ADR deposit agreement.  We may consider the ADR depositary to be the holder and absolute owner of any series of dollar preference shares represented by the certificate so deposited for all purposes.  Unless the relevant prospectus supplement specifies otherwise, dollar preference shares of any series withdrawn from deposit under the ADR deposit agreement will be evidenced by share certificates in registered form without dividend coupons.  If an ADR holder elects to receive share certificates in registered form, the share certificates will be delivered at the time of withdrawal.  Unless the prospectus supplement specifies otherwise, the dollar preference shares of any series may not be withdrawn from deposit in bearer form.
 
Title to dollar preference shares of any series in registered form will pass by transfer and registration on the register for the dollar preference shares of the series.  Title to dollar preference shares of any series in bearer form, or to any dividend coupons appertaining to them, will pass by delivery of the relevant bearer share warrants or dividend coupons.  If our Articles of Association and the limitations described in the following paragraph and in any relevant prospectus supplement permit, dollar preference shares of a particular series in bearer form will be exchangeable for the same number of dollar preference shares of the series in registered form upon surrender of the relevant bearer share warrants and all unmatured dividend coupons, if any, appertaining to them.  Unless the prospectus supplement specifies otherwise, dollar preference shares of any series in registered form will not be exchangeable, in whole or in part, for dollar preference shares of such series in bearer form.
 
 
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Each exchange or registration of transfer of dollar preference shares of any series in registered form will be effected by entry on the register for the dollar preference shares of the series kept by our registrar at its office in the United Kingdom.  Any exchange or registration of transfer will be effected without charge to the person requesting the exchange or registration, but the requesting person will be required to pay any related taxes, stamp duties or other governmental charges.  The exchange of dollar preference shares of any series in bearer form for the dollar preference shares of such series in registered form will also be subject to applicable U.K. tax laws and regulations in effect at the time of the exchange.  No exchange will be made unless any resulting taxes, stamp duties or other governmental charges have been paid to us.
 
Variation of Rights
 
If applicable law permits, the rights attached to any series of dollar preference shares may be varied or abrogated only with the written consent of the holders of 75% in nominal value of the outstanding dollar preference shares of that series or with the sanction of a special resolution passed at a separate class meeting of the holders of the outstanding dollar preference shares of that series.  A special resolution will be adopted if passed by a majority of 75% of those holders voting in person or by proxy at the meeting.  The quorum required for any such class meeting will be two persons holding or representing by proxy at least one-third in nominal amount of the outstanding dollar preference shares of the particular series affected, except at any adjourned meeting, where any two holders present in person or by proxy will constitute a quorum.
 
The written consent of the holders of 75% in nominal value of the outstanding dollar preference shares of a particular series or the sanction of a special resolution passed at a separate class meeting of holders of the outstanding dollar preference shares of the series will be required if our directors propose to authorize, create or increase the amount of any shares of any class or any security convertible into shares of any class ranking as regards rights to participate in our profits or assets, other than if we redeem or purchase the shares, in priority to the series of dollar preference shares.
 
If we have paid the most recent dividend payable on the dollar preference shares of a particular series in full, the rights attached to that series will not be deemed to be varied by the creation or issue of any further series of dollar preference shares or of any sterling preference shares or of any other further shares ranking equally as regards participation in our profits or assets with or junior to the dollar preference shares of that series, whether carrying identical rights or different rights in any respect, including as to dividend, premium on a return of capital, redemption or conversion or denominated in dollars or any other currency.
 
Notices of Meetings
 
We will cause a notice of any meeting at which holders of dollar preference shares of a particular series are entitled to vote to be mailed to each record holder of dollar preference shares of that series.  Each such notice will state:
 
 
·
the date of the meeting;
 
 
·
a description of any resolution to be proposed for adoption at the meeting on which those holders are entitled to vote; and
 
 
·
instructions for the delivery of proxies.
 
A holder of dollar preference shares of any series in registered form who is not registered with an address in the United Kingdom and who has not supplied an address within the United Kingdom to us for the purpose of service of notices is not entitled to receive notices of meetings.  For a description of notices that we will give to the ADR depositary and that the ADR depositary will give to ADR holders, you should see “Where You Can Find More Information”.
 
Governing Law
 
The creation and issuance of the dollar preference shares of any series and the rights attached to them shall be governed by and construed in accordance with Scots law.
 
 
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Registrar and Paying Agent
 
Unless the relevant prospectus supplement specifies otherwise, Computershare Investor Services PLC will act as registrar and paying agent for the dollar preference shares of each series.  Computershare’s current address is P.O. Box 435, Owen House, 8 Bankhead Crossway North, Edinburgh EH11 4BR, Scotland.
 
DESCRIPTION OF AMERICAN DEPOSITARY RECEIPTS
 
The following is a summary of the general terms and provisions of the ADR deposit agreement under which the ADRs will be issued.  The ADR deposit agreement is among us, The Bank of New York Mellon, as depositary, and all holders from time to time of ADRs issued under it.  This summary does not purport to be complete.  You should read the ADR deposit agreement, which we have filed with the SEC as an exhibit to the registration statement of which this prospectus is a part.  You may also read the ADR deposit agreement at the principal offices of The Bank of New York Mellon in The City of New York and London.
 
American Depositary Receipts
 
ADRs will evidence ADSs of a particular series, which will represent dollar preference shares of a corresponding series.  Unless the relevant prospectus supplement specifies otherwise, each ADS will represent one dollar preference share, or evidence of rights to secure one dollar preference share, deposited with the ADR depositary or the London branch of The Bank of New York Mellon, as custodian.  An ADR may evidence any number of ADSs of the corresponding series.
 
Deposit and Withdrawal of Deposited Securities
 
Upon receipt of dollar preference shares of a particular series or evidence of rights to receive dollar preference shares, and subject to the terms of the ADR deposit agreement, the ADR depositary will execute and deliver at its principal office, which is presently located at 101 Barclay Street, New York, New York 10286, U.S.A., to the person or persons specified by the depositor in writing upon payment of the fees, charges and taxes provided in the ADR deposit agreement, an ADR or ADRs registered in the name of that person or persons evidencing the number of ADSs of the series corresponding to the dollar preference shares of that series.
 
Upon surrender of ADRs at the principal office of the ADR depositary and upon payment of the taxes, charges and fees provided in the ADR deposit agreement and subject to the terms of the ADR deposit agreement, an ADR holder is entitled to delivery to or upon its order, at the principal office of the ADR depositary or at the office of the custodian in London, of dollar preference shares of the relevant series in registered form in respect of the deposited dollar preference shares and any other documents of title evidenced by the surrendered ADRs.  The forwarding of share certificates and other documents of title for delivery at the principal office of the ADR depositary will be at the risk and expense of the ADR holder.
 
Dividends and Other Distributions
 
The ADR depositary will distribute all cash dividends or other cash distributions that it receives in respect of deposited dollar preference shares of a particular series to ADR holders in proportion to their holdings of ADSs of the series representing the dollar preference shares.  The cash amount distributed will be reduced by any amounts that we or the ADR depositary must withhold on account of taxes.
 
If we make any distribution other than in cash in respect of any deposited dollar preference shares of a particular series, the ADR depositary will distribute the property received by it to ADR holders in proportion to their holdings of ADSs of the series representing the dollar preference shares.  If a distribution that we make in respect of deposited dollar preference shares of a particular series consists of a dividend in, or free distribution of, dollar preference shares of that series, the ADR depositary may, if we approve, and will, if we request, distribute to ADR holders, in proportion to their holdings of ADSs of the series representing the dollar preference shares, additional ADRs for an aggregate number of ADSs of that series received as the dividend or free distribution.  If the ADR depositary does not distribute additional ADRs, each ADS of that series will from then also represent the additional dollar preference shares of the corresponding series distributed in respect of the deposited dollar preference shares before the dividend or free distribution.
 
 
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If the ADR depositary determines that any distribution in property, other than cash or dollar preference shares of a particular series, cannot be made proportionately among ADR holders or if for any other reason, including any requirement that we or the ADR depositary withhold an amount on account of taxes, the ADR depositary deems that such a distribution is not feasible, the ADR depositary may dispose of all or a portion of the property in the amounts and in the manner, including by public or private sale, that it deems equitable and practicable, and it will distribute the net proceeds of any such sale or the balance of any such property after deduction of any taxes that we or the ADR depositary must withhold to ADR holders as in the case of a distribution received in cash.
 
Redemption of ADSs
 
If we redeem any dollar preference shares of a particular series, the ADR depositary will redeem, from the amounts that it receives from the redemption of deposited dollar preference shares, a number of ADSs of the series representing those dollar preference shares which corresponds to the number of deposited dollar preference shares.  The ADS redemption price will correspond to the redemption price per share payable with respect to the redeemed dollar preference shares.  If we redeem less than all of the outstanding dollar preference shares of a particular series, the ADR depositary will select the ADSs of the corresponding series to be redeemed, either by lot or in proportion to the number of dollar preference shares represented.  We must give our notice of redemption in respect of the dollar preference shares of a particular series to the ADR depositary before the redemption date and the ADR depositary will promptly deliver the notice to all holders of ADRs of the corresponding series.
 
Record Dates
 
Whenever any dividend or other distribution becomes payable or shall be made in respect of dollar preference shares of a particular series, or any dollar preference shares of a particular series are to be redeemed, or the ADR depositary receives notice of any meeting at which holders of dollar preference shares of a particular series are entitled to vote, the ADR depositary will fix a record date for the determination of the ADR holders who are entitled to receive the dividend, distribution, amount in respect of redemption of ADSs of the corresponding series, or the net proceeds of their sale, or to give instructions for the exercise of voting rights at the meeting, subject to the provisions of the ADR deposit agreement.  Such record date will be as close in time as practicable to the record date for the dollar preference shares.
 
Voting of the Underlying Deposited Securities
 
Upon receipt of notice of any meeting at which holders of dollar preference shares of a particular series are entitled to vote, the ADR depositary will, as soon as practicable thereafter, send to the record holders of ADRs of the corresponding series a notice which shall contain:
 
 
·
a summary of the notice of meeting;
 
 
·
a statement that the record holders of ADRs at the close of business on a specified record date are entitled under the ADR deposit agreement, if applicable laws and regulations and our Articles of Association permit, to instruct the ADR depositary as to the exercise of the voting rights pertaining to the dollar preference shares of the series represented by their ADSs; and
 
 
·
a brief statement of how they may give instructions, including an express indication that they may instruct the ADR depositary to give a discretionary proxy to a designated member or members of our board of directors.
 
The ADR depositary has agreed that it will try, if practicable, to vote or cause to be voted the dollar preference shares in accordance with any written nondiscretionary instructions of record holders of ADRs that it receives on or before the date set by the ADR depositary.  The ADR depositary has agreed not to vote the dollar preference shares except in accordance with written instructions from the record holders of ADRs.
 
 
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Inspection of Transfer Books
 
The ADR depositary will keep books, at its transfer office in The City of New York, for the registration and transfer of ADRs that at all reasonable times will be open for inspection by ADR holders.  However, this inspection may not be for the purpose of communicating with ADR holders in the interest of a business or object other than our business or a matter related to the ADR deposit agreement or the ADRs.
 
Reports and Notices
 
The ADR depositary will make available at its principal office for inspection by ADR holders any reports and communications received from us that are both received by the ADR depositary as the holder of dollar preference shares of the applicable corresponding series and made generally available to the holders of those dollar preference shares by us, including our annual report and accounts.  The ADR depositary will also send copies of those reports to ADR holders when furnished by us as provided in the ADR deposit agreement.
 
On or before the first date on which we give notice, by publication or otherwise, of any meeting at which holders of the dollar preference shares of a particular series are entitled to vote, or of any reconvening of any such adjourned meeting of holders, or of the taking of any action in respect of any cash or other distributions on or any redemption of dollar preference shares of a particular series, we shall transmit to the ADR depositary a copy of the notice in the form given or to be given to holders of the dollar preference shares.  The ADR depositary will, at our expense, arrange for the prompt transmittal by the custodian to the ADR depositary of such notices, and, if we request in writing, arrange for the mailing, at our expense, of copies to all holders of ADRs evidencing ADSs of the corresponding series.
 
Amendment and Termination of the ADR Deposit Agreement
 
The form of the ADRs evidencing ADSs of a particular series and any provisions of the ADR deposit agreement relating to those ADRs may at any time and from time to time be amended by agreement between us and the ADR depositary in any respect which we may deem necessary or desirable.  Any amendment that imposes or increases any fees or charges, other than taxes and other governmental charges, or that otherwise prejudices any substantial existing right of holders of outstanding ADRs evidencing ADSs of a particular series, will not take effect as to any ADRs until 30 days after notice of the amendment has been given to the record holders of those ADRs.  Every holder of any ADR at the time an amendment becomes effective, if it has been given notice, will be deemed by continuing to hold the ADR to consent and agree to the amendment and to be bound by the ADR deposit agreement or the ADR as amended.  In no event may any amendment impair the right of any holder of ADRs to surrender ADRs and receive in return the dollar preference shares of the corresponding series and other property represented by the ADRs.
 
Whenever we direct, the ADR depositary has agreed to terminate the ADR deposit agreement as to dollar preference shares of any and all series and the deposited securities, ADSs and ADRs of all corresponding series by mailing a termination notice to the record holders of all those outstanding ADRs at least 30 days before the date fixed in the notice for termination.  The ADR depositary may likewise terminate the ADR deposit agreement as to dollar preference shares of any and all series and the deposited securities, ADSs and ADRs of all corresponding series by mailing a termination notice to us and the record holders of all those outstanding ADRs at any time 60 days after it has delivered to us a written notice of its election to resign, if a successor depositary has not been appointed and accepted its appointment as provided in the ADR deposit agreement.  If any ADRs evidencing ADSs of a particular series remain outstanding after the date of any termination, the ADR depositary will then discontinue the registration of transfers of those ADRs, will suspend the distribution of dividends to holders and will not give any further notices or perform any further acts under the ADR deposit agreement with respect to those ADRs, except that it will continue to collect dividends and other distributions pertaining to the dollar preference shares of the corresponding series and any other property represented by those ADRs, and will continue the delivery of dollar preference shares of the corresponding series, together with any dividends or other distributions received with respect to them and the net proceeds of the sale of any property, in exchange for ADRs surrendered to it.  At any time after two years from the date of termination of the ADR deposit agreement as to ADRs evidencing ADSs of a particular series, the ADR depositary may sell the dollar preference shares of the corresponding series and any other property represented by those ADRs and may hold the net proceeds, together with any other cash then held by it under the ADR deposit agreement in respect of those ADRs, without liability for interest, for the ratable benefit of the holders of ADRs that have not previously been surrendered .
 
 
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Charges of ADR Depositary
 
The ADR depositary will charge the party to whom it delivers ADRs against deposits, and the party surrendering ADRs for delivery of dollar preference shares of a particular series or other deposited securities, property and cash, $5 for each 100, or fraction of 100, ADSs evidenced by the ADRs issued or surrendered.  We will pay all other charges of the ADR depositary and those of any registrar, co-transfer agent and co-registrar under the ADR deposit agreement, but, unless the relevant prospectus supplement with respect to a particular series of dollar preference shares or securities convertible into or exchangeable for dollar preference shares of any series states otherwise, we will not pay:
 
 
·
taxes, including U.K. stamp duty or U.K. stamp duty reserve tax, and other governmental charges;
 
 
·
any applicable share transfer or registration fees on deposits or withdrawals of dollar preference shares;
 
 
·
cable, telex, facsimile transmission and delivery charges which the ADR deposit agreement provides are at the expense of the holders of ADRs or persons depositing or withdrawing dollar preference shares of any series; or
 
 
·
expenses incurred or paid by the ADR depositary in any conversion of foreign currency into dollars.
 
You will be responsible for any taxes or other governmental charges payable on your ADRs or on the deposited securities underlying your ADRs (including U.K. stamp duty or U.K. stamp duty reserve tax, but not stamp duty reserve tax arising on issue of the securities underlying your ADRs).  The ADR depositary may refuse to transfer your ADRs or allow you to withdraw the deposited securities underlying your ADRs until such taxes or other charges are paid.  The ADR depositary may withhold any dividends or other distributions, or may sell for the account of the holder any part or all of the deposited securities evidenced by the ADR, and may apply dividends or other distributions or the proceeds of any sale in payment of the tax or other governmental charge, with the ADR holder remaining liable for any deficiency.
 
General
 
Neither the ADR depositary nor we will be liable to ADR holders if prevented or forbidden or delayed by any present or future law of any country or by any governmental authority, or by reason of any provision, present or future, of our Memorandum or Articles of Association, or any act of God or war or other circumstances beyond our control in performing our obligations under the ADR deposit agreement.  The obligations of both of us under the ADR deposit agreement are expressly limited to performing our duties without gross negligence or bad faith.
 
If any ADSs of a particular series are listed on one or more stock exchanges in the United States, the ADR depositary will act as registrar or, if we request or with our approval, appoint a registrar or one or more co-registrars, for registration of the ADRs evidencing the ADSs in accordance with any exchange requirements.  The registrars or co-registrars may be removed and a substitute or substitutes appointed by the ADR depositary if we request or with our approval.
 
The ADRs evidencing ADSs of any series are transferable on the books of the ADR depositary.  However, the ADR depositary may close the transfer books as to ADRs evidencing ADSs of a particular series at any time or from time to time when it deems it expedient to do so in connection with the performance of its duties or if we request.  As a condition precedent to the execution and delivery, registration of transfer, split-up, combination or surrender of any ADR evidencing ADSs of a particular series, or transfer and withdrawal of dollar preference shares of the corresponding series, the ADR depositary or the custodian may require the person presenting the ADR or depositing the dollar preference shares to pay a sum sufficient to reimburse it for any related tax or other governmental charge and any share transfer or registration fee and any applicable fees payable as provided in the ADR deposit agreement, and the ADR depositary may withhold any dividends or other distributions, or may sell for the account of the holder any part or all of the dollar preference shares evidenced by the ADR, and may apply dividends or other distributions or the proceeds of any sale in payment of the tax or other governmental charge, with the ADR holder remaining
 
 
25
 
 liable for any deficiency.  Any person presenting dollar preference shares of any series for deposit or any holder of an ADR may be required from time to time to furnish the ADR depositary or the custodian with proof of citizenship or residence, exchange control approval, information relating to the registration on our books or registers or those maintained for us by the registrar for the dollar preference shares of that series, or other information, to execute certificates and to make representations and warranties that the ADR depositary or the custodian deems necessary or proper.  Until those requirements have been satisfied, the ADR depositary may withhold the delivery or registration of transfer of any ADR or the distribution of any dividend or other distribution or proceeds of any sale or distribution.  The delivery, transfer and surrender of ADRs of any series generally may be suspended during any period when the transfer books of the ADR depositary are closed or if we or the ADR depositary deem necessary or advisable at any time or from time to time because of any requirement of law or of any government or governmental authority, body or commission, or under any provision of the ADR deposit agreement or for any other reason, subject to the provisions of the following sentence.  The surrender of outstanding ADRs of any series and withdrawal of deposited securities may only be suspended as a result of:
 
 
·
temporary delays caused by closing our transfer books or those of the ADR depositary or the deposit of dollar preference shares of the corresponding series in connection with voting at a shareholders’ meeting or the payment of dividends;
 
 
·
the non-payment of fees, taxes and similar charges; and
 
 
·
compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs of the series or to the withdrawal of the deposited securities.
 
The ADR deposit agreement and the ADRs are governed by and construed in accordance with New York law.
 
 
PLAN OF DISTRIBUTION
 
We may sell relevant securities to or through underwriters or dealers and also may sell all or part of such securities directly to other purchasers or through agents.
 
The distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.
 
In connection with the sale of securities, we may compensate underwriters in the form of discounts, concessions or commissions or in any other way that the applicable prospectus supplement describes.  Underwriters may sell securities to or through dealers, and the dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents.  Underwriters, dealers and agents that participate in the distribution of securities may be deemed to be underwriters, and any discounts or commissions that we pay them and any profit on the resale of securities by them may be deemed to be underwriting discounts and commissions, under the Securities Act of 1933, as amended (the “Securities Act”).  Any such underwriter or agent will be identified, and any such compensation that we pay will be described, in the prospectus supplement.
 
Under agreements which we may enter into, we may be required to indemnify underwriters, dealers and agents who participate in the distribution of securities against certain liabilities, including liabilities under the Securities Act.
 
Each new series of debt securities or dollar preference shares will be a new issue of securities with no established trading market.  If securities of a particular series are not listed on a U.S. national securities exchange, certain broker-dealers may make a market in those securities, but will not be obligated to do so and may discontinue any market making at any time without notice.  We cannot give any assurance that any broker-dealer will make a market in securities of any series or as to the liquidity of the trading market for those securities.
 
26
 
 
To the extent an initial offering of the securities will be distributed by an affiliate of ours each such offering of securities will be conducted in compliance with the requirements of NASD Rule 2720 of the Financial Industry Regulatory Authority, which is commonly referred to as FINRA, regarding a FINRA member firm’s distribution of securities of an affiliate.  Following the initial distribution of any of these securities, affiliates of ours may offer and sell these securities in the course of their businesses as broker-dealers. Such affiliates may act as principals or agents in these transactions and may make any sales at varying prices related to prevailing market prices at the time of sale or otherwise.  Such affiliates may also use this prospectus in connection with these transactions.  None of our affiliates is obligated to make a market in any of these securities and may discontinue any market-making activities at any time without notice.
 
Underwriting discounts and commissions on securities sold in the initial distribution will not exceed 8% of the offering proceeds.
 
Any underwriter, selling agent or dealer utilized in the initial offering of securities will not confirm sales to accounts over which it exercises discretionary authority without the prior specific written approval of its customer.
 
Delayed Delivery Arrangements
 
If so indicated in the prospectus supplement, we may authorize underwriters or other persons acting as its agents to solicit offers by certain institutions to purchase dollar preference shares or debt securities from it pursuant to contracts providing for payment and delivery on a future date.  Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved by us.  The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the offered securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject.  The underwriters and such other agents will not have any responsibility in respect of the validity or performance of such contracts.
 
 
LEGAL OPINIONS
 
Our United States counsel, Davis Polk & Wardwell LLP, will pass upon certain legal matters relating to the securities.  Our Scottish solicitors, Dundas & Wilson CS LLP, will pass upon the validity of the dollar preference shares under Scots law and certain matters of Scots law relating to the subordination provisions of the securities.
 
 
EXPERTS
 
The consolidated financial statements as of December 31 2008 and 2007, and for each of the three years in the period ended December 31, 2008 incorporated in this prospectus, which is part of this Registration Statement, by reference and the effectiveness of RBSG’s internal control over financial reporting have been audited by Deloitte LLP, an independent registered public accounting firm, as stated in their reports which are incorporated herein by reference from RBSG’s Report on Form 6-K dated September 30, 2009, (which reports (1) express an unqualified opinion on the 2008 financial statements and include an explanatory paragraph stating that the consolidated financial statements for 2008, 2007 and 2006 have been restated for the retrospective adjustment related to the adoption of IFRS 2 described in Note 1 of the Accounting Policies, the change in the composition of reportable segments described in Note 38 and the consolidating financial information included in Note 43 in respect of  The Royal Bank of Scotland plc in accordance with Regulation S-X Rule 3-10, and (2) express an unqualified opinion on the effectiveness of internal control over financial reporting).  Such financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
 
 
ENFORCEMENT OF CIVIL LIABILITIES
 
We are a public limited company incorporated and registered in Scotland, United Kingdom.  All but one of our directors and executive officers, and certain experts named in this prospectus, reside outside the United States.  All or a substantial portion of our assets and the assets of those non-resident persons are located outside the United States.  As a result, it may not be possible for investors to effect service of process within the United States upon us or those persons or to enforce against them judgments obtained in U.S. courts predicated upon civil liability provisions of the federal securities laws of the United States.  We have been advised by our Scottish solicitors, Dundas & Wilson CS LLP (as to Scots law) that, both in original actions and in actions for the enforcement of judgments of U.S. courts, there is doubt as to whether civil liabilities predicated solely upon the U.S. federal securities laws are enforceable in Scotland.
 
 
27
 
 
WHERE YOU CAN FIND MORE INFORMATION
 
Ongoing Reporting
 
We file reports and other information with the SEC.  You can read and copy these reports and other information at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, U.S.A.  You may call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room.  The SEC also maintains a website at http://www.sec.gov which contains in electronic form each of the reports and other information that we have filed electronically with the SEC.  You can also read this material at the offices of The New York Stock Exchange, 20 Broad Street, New York, New York 10005, U.S.A. on which certain of our securities are listed.
 
We will provide the trustee for any debt securities and the ADR depositary for any dollar preference shares with our annual reports, which will include a description of operations and our annual audited consolidated financial statements.  We will also provide any trustee or ADR depositary with interim reports that will include unaudited interim summary consolidated financial information. Upon receipt, the trustee or the ADR depositary will mail the reports to all record holders of the debt securities or dollar preference shares. In addition, we will provide the trustee or the ADR depositary with all notices of meetings at which holders of debt securities or dollar preference shares are entitled to vote, and all other reports and communications that are made generally available to holders of debt securities or dollar preference shares.
 
Registration Statement
 
This prospectus is part of a registration statement that we filed with the SEC.  As exhibits to the registration statement, we have also filed the indentures, the ADR deposit agreement and our Articles of Association.  Statements contained in this prospectus as to the contents of any contract or other document referred to in this prospectus are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.  For further information, you should refer to the registration statement.  You can obtain the full registration statement from the SEC or from us.
 
 
INCORPORATION OF DOCUMENTS BY REFERENCE
 
The SEC allows us to “incorporate by reference” the information that we file with the SEC.  This permits us to disclose important information to you by referring to these filed documents.  Any information referred to in this way is considered part of this prospectus, and any information that we file with the SEC after the date of this prospectus will automatically be deemed to update and supersede this information.
 
We incorporate by reference (i) RBSG’s Annual Report on Form 20-F for the fiscal year ended December 31, 2008 filed with the SEC on April 29, 2009, as restated by RBSG’s report on Form 6-K filed with the SEC on September 30, 2009; (ii) RBSG’s report on Form 6-K furnished with the SEC on August 7, 2009 noting a change of director; (iii) RBSG’s report on Form 6-K furnished with the SEC on August 12, 2009; and (iv) RBSG’s interim report on Form 6-K including Pro Forma Financial Information filed with the SEC on September 30, 2009.  We also incorporate by reference all subsequent Annual Reports filed on Form 20-F and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and certain Reports on Form 6-K, if they state that they are incorporated by reference into this prospectus, that we furnish to the SEC after the date of this prospectus and until we or any underwriters sell all of the securities.
 
Upon written or oral request, we will provide free of charge a copy of any or all of the documents that we incorporate by reference into this prospectus, other than exhibits which are not specifically incorporated by reference into this prospectus.  To obtain copies you should contact us at Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901 U.S.A; Attention: John Fawcett, telephone (203) 897 5087.
 
 
28
 
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
 
Certain statements included in this prospectus are forward-looking statements.  We may make forward-looking statements in other documents filed with the SEC that are incorporated by reference into this prospectus.  Forward-looking statements can be identified by the use of forward-looking terminology such as words “expect,” “estimate,” “project,” “anticipate,” “believes,” “should,” “could,” ‘intend,” “plan,” “probability,” “risk,” “target,” “goal,” “objective,” “may,” “endeavor,” “outlook,” “optimistic,” “prospects” or by the use of similar expressions or variations on such expressions, or by the discussion of strategy or objectives.  Forward-looking statements are based on current plans, estimates and projections, and are subject to inherent risks, uncertainties and other factors which could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements.
 
In particular, this prospectus and certain documents incorporated by reference into this prospectus include forward-looking statements relating, but not limited, to possible future write-downs and our capital planning projections, our potential exposures to various types of market risks, such as interest rate risk, foreign exchange rate risk, liquidity risk, credit risk and commodity and equity price risk.  Such statements are subject to risks and uncertainties.  For example, certain of the market risk disclosures are dependent on choices about key model characteristics, assumptions and estimates, and are subject to various limitations.  By their nature, certain of the market risk disclosures are only estimates and, as a result, actual future gains and losses could differ materially from those that have been estimated.
 
Other factors could also adversely affect our results or the accuracy of forward-looking statements in this prospectus, and you should not consider the factors discussed here or in our Form 20-F filed on April 29, 2009, incorporated by reference herein, to be a complete set of all potential risks or uncertainties.  We have economic, financial market, credit, legal and other specialists who monitor economic and market conditions and government policies and actions.  However, because it is difficult to predict with accuracy any changes in economic or market conditions or in governmental policies and actions, it is difficult for us to anticipate the effects that such changes could have on our financial performance and business operations.
 
The forward-looking statements made in this prospectus speak only as of the date of this prospectus.  We do not intend to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this prospectus, and we do not assume any responsibility to do so.  You should, however, consult any further disclosures of a forward-looking nature we made in other documents filed with the SEC that are incorporated by reference into this prospectus.  This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.
 


 
29
 

PROSPECTUS
 
THE ROYAL BANK OF SCOTLAND plc
fully and unconditionally guaranteed by
THE ROYAL BANK OF SCOTLAND GROUP plc
 
By this prospectus we may offer —
 
DEBT SECURITIES
 
We will provide the specific terms of these securities, and the manner in which they will be offered, in one or more supplements to this prospectus.  Any supplement may also add, update or change information contained, or incorporated by reference, in this prospectus.  You should read this prospectus and the supplements carefully before you invest.
 
You should read both this prospectus and any prospectus supplement, together with the additional information described under the heading “Where You Can Find More Information” and the heading “Incorporation of Documents by Reference”, before investing in our securities.  The amount and price of the offered securities will be determined at the time of the offering.
 
Investing in our debt securities involves risks that are described in the “Risk Factors” section of our annual reports filed with the Securities and Exchange Commission or in the applicable prospectus supplement.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined that this prospectus is truthful or complete.  Any representation to the contrary is a criminal offense.
 
This prospectus may not be used to sell securities unless it is accompanied by a prospectus supplement.
 
The date of this prospectus is September 30, 2009.
 

 
 
 

TABLE OF CONTENTS

 
 
Page
   
About this Prospectus
1
Use of Proceeds
1
The Royal Bank of Scotland plc
1
The Royal Bank of Scotland Group plc
2
Description of Debt Securities
2
Plan of Distribution
11
Legal Opinions
12
Experts
13
Enforcement of Civil Liabilities
13
Where You Can Find More Information
13
Incorporation of Documents by Reference
14
Cautionary Statement on Forward-Looking Statements
14


 
 
 
 
 
ABOUT THIS PROSPECTUS
 
This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission (“SEC”) using a “shelf” registration or continuous offering process.  Under this shelf process, we may sell the securities described in this prospectus in one or more offerings of an unspecified amount in one or more foreign currencies or currency units.
 
This prospectus provides you with a general description of the debt securities we may offer, which we will refer to as the “debt securities”.  Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering.  The prospectus supplement will provide information regarding certain tax consequences of the purchase, ownership and disposition of the offered securities.  The prospectus supplement may also add to, update or change information contained in this prospectus.  If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the information in that prospectus supplement.  We will file each prospectus supplement with the SEC.  You should read both this prospectus and the applicable prospectus supplement, together with the additional information described under the heading “Where You Can Find More Information”.
 
The registration statement containing this prospectus, including exhibits to the registration statement, provides additional information about us and the securities offered under this prospectus.  The registration statement can be read at the SEC’s offices or obtained from the SEC’s website mentioned under the heading “Where You Can Find More Information”.
 
Certain Terms
 
In this prospectus, the terms “we”, “us”, “our” and “RBS” refer to The Royal Bank of Scotland plc, the term “RBSG” means The Royal Bank of Scotland Group plc, the term “Group” means The Royal Bank of Scotland Group plc and its subsidiaries, the term “NWB Plc” means National Westminster Bank Plc and the term “NatWest” means NWB Plc and its subsidiaries.
 
RBSG publishes its consolidated financial statements in pounds sterling (“£” or “sterling”), the lawful currency of the United Kingdom.  In this prospectus and any prospectus supplement, references to “dollars” and “$” are to United States dollars.
 
 
USE OF PROCEEDS
 
Unless we have disclosed a specific plan in the accompanying prospectus supplement, we will use the net proceeds from the sale of the securities offered by this prospectus in the general business of the Group and to strengthen further the Group’s capital base.  The Group has raised capital in various markets from time to time and we expect to continue to raise capital in appropriate markets as and when required.
 
 
THE ROYAL BANK OF SCOTLAND PLC
 
RBS is a public limited company incorporated in Scotland with registration number SC090312.  RBS was incorporated under Scots law on October 31, 1984.  RBS is a wholly owned subsidiary of RBSG, which is the holding company of a large global banking and financial services group and is described more fully below.  RBS had total assets of £1,877.9 billion and shareholder’s equity of £46.0 billion as at December 31, 2008.  RBS’s capital ratios were a total capital ratio of 14.2% and a Tier 1 capital ratio of 8.5% as at December 31, 2008.
 
RBS’s registered office is 36 St Andrew Square, Edinburgh EH2 2YB, Scotland and its principal place of business is RBS Gogarburn, PO Box 1000, Edinburgh EH12 1HQ, Scotland, telephone +44 131 626 0000.
 
 
1
 
 
THE ROYAL BANK OF SCOTLAND GROUP PLC
 
RBSG is a public limited company incorporated in Scotland with registration number SC045551.  RBSG was incorporated under Scots law on March 25, 1968.  RBSG is the holding company of a large global banking and financial services group. Headquartered in Edinburgh, the Group operates in the United Kingdom, the United States and internationally through its two principal subsidiaries, RBS and NatWest.  Both RBS and NatWest are major U.K. clearing banks whose origins go back over 275 years.  In the United States, the Group’s subsidiary Citizens Financial Group, Inc. is a large commercial banking organisation.  The Group has a large and diversified customer base and provides a wide range of products and services to personal, commercial and large corporate and institutional customers.
 
The Commissioners of Her Majesty’s Treasury currently holds 70.3% of the issued ordinary share capital of RBSG.  On February 26, 2009, RBSG announced its intention to issue up to £25.5 billion of B Shares to the U.K. Government.  If all such B Shares are issued, conversion of the B Shares would increase this ownership interest to approximately 84.4% of the issued ordinary share capital of RBSG.
 
The Group had total assets of £2,401.7 billion and owners’ equity of £58.9 billion at December 31, 2008. The Group’s capital ratios at that date, which included the equity minority interest of the State of the Netherlands and Banco Santander, S.A. (“Santander”) in ABN AMRO Holdings N.V. (“ABN AMRO”), were a total capital ratio of 14.1%., a Core Tier 1 capital ratio of 6.8% and a Tier 1 capital ratio of 10.0%.  As of June 30, 2009, RBSG had total assets of £1,818.9 billion and owner’s equity of £55.7 billion.  RBSG’s Tier 1 and Core Tier 1 capital ratios at that date were 9.3% and 7.0%, respectively.
 
On October 17, 2007, RFS Holdings B.V. (“RFS Holdings”), which at the time was owned by RBSG, Fortis N.V., Fortis SA/NY, Fortis Bank Nederland (Holding) N.V. and Santander, completed the acquisition of ABN AMRO.  RFS Holdings, which is now jointly owned by RBSG, the State of the Netherlands and Santander (the “Consortium Members”), is in the process of implementing an orderly separation of the business units of ABN AMRO, with ABN AMRO’s global wholesale businesses and international retail businesses in Asia and the Middle East subject to the outcome of RBSG’s strategic review.  Certain other assets will continue to be shared by the Consortium Members.
 
RBSG’s registered office is 36 St Andrew Square, Edinburgh EH2 2YB, Scotland and its principal place of business is RBS Gogarburn, PO Box 1000, Edinburgh EH12 1HQ, Scotland, telephone +44 131 626 0000.
 
 
DESCRIPTION OF DEBT SECURITIES
 
The following is a summary of the general terms of the debt securities.  Each time that we issue debt securities, we will file a prospectus supplement with the SEC, which you should read carefully.  The prospectus supplement may contain additional terms of those debt securities.  The terms presented here, together with the terms contained in the prospectus supplement, will be a description of the material terms of the debt securities, but if there is any inconsistency between the terms presented here and those in the prospectus supplement, those in the prospectus supplement will apply and will replace those presented here.  You should also read the indentures under which we will issue the debt securities, which we have filed with the SEC as exhibits to the registration statement of which this prospectus is a part.
 
When we refer to “debt securities” in this prospectus, we mean the senior debt securities.  Senior debt securities will be issued under a senior debt indenture.  The senior debt indenture is a contract between RBS, The Bank of New York Mellon as trustee, and RBSG, as guarantor.  The indenture does not limit our ability to incur additional indebtedness, including additional senior indebtedness.
 
General
 
The debt securities are not deposits and are not insured or guaranteed by the U.S. Federal Deposit Insurance Corporation or any other government agency of the United States or the United Kingdom.
 
 
2
 
The indentures do not limit the amount of debt securities that we may issue.  We may issue debt securities in one or more series.  The relevant prospectus supplement for any particular series of debt securities will describe the terms of the offered debt securities, including some or all of the following terms:
 
 
·
their specific designation, authorized denomination and aggregate principal amount;
 
 
·
the price or prices at which they will be issued;
 
 
·
whether such debt securities will be dated debt securities with a specified maturity date or undated debt securities with no specified maturity date;
 
 
·
the annual interest rate or rates, or how to calculate the interest rate or rates;
 
 
·
the date or dates from which interest, if any, will accrue or the method, if any, by which such date or dates will be determined;
 
 
·
whether payments are subject to a condition that we are able to make such payment and remain able to pay our debts as they fall due and our assets continue to exceed our liabilities (other than subordinated liabilities);
 
 
·
the times and places at which any interest payments are payable;
 
 
·
the terms of any mandatory or optional redemption, including the amount of any premium;
 
 
·
any modifications or additions to the events of defaults with respect to the debt securities offered;
 
 
·
any provisions relating to conversion or exchange for other securities issued by us;
 
 
·
the currency or currencies in which they are denominated and in which we will make any payments;
 
 
·
any index used to determine the amount of any payments on the debt securities;
 
 
·
any restrictions that apply to the offer, sale and delivery of the debt securities and the exchange of debt securities of one form for debt securities of another form;
 
 
·
whether and under what circumstances, if other than those described in this prospectus, we will pay additional amounts on the debt securities following certain developments with respect to withholding tax or information reporting laws and whether, and on what terms, if other than those described in this prospectus, we may redeem the debt securities following those developments;
 
 
·
the terms of any mandatory or optional exchange; and
 
 
·
any listing on a securities exchange.
 
In addition, the prospectus supplement will describe the material U.S. federal and U.K. tax considerations that apply to any particular series of debt securities.
 
Debt securities may bear interest at a fixed rate or a floating rate.  Holders of debt securities shall have no voting rights except those described under the heading “— Modification and Waiver” below.
 
Guarantee
 
RBSG will fully and unconditionally guarantee payment in full to the holders of senior debt securities issued by us.  The guarantee is set forth in, and forms part of, the indenture under which senior debt securities will be issued by us.  If, for any reason, we do not make any required payment in respect of our senior debt securities when due, RBSG will cause the payment to be made to or to the order of the applicable trustee.  The guarantee will be on a senior basis when the guaranteed debt securities are issued under the senior indenture.  Holders of senior debt securities issued by us may sue RBSG to enforce their rights under the guarantee without first suing any other
 
3
 
person or entity.  RBSG may, without the consent of the holders of the debt securities, assume all of our rights and obligations under the debt securities and upon such assumption, we will be released from its liabilities under the senior debt indenture and the senior debt securities.
 
Form of Debt Securities; Book-Entry System
 
General
 
Unless the relevant prospectus supplement states otherwise, the debt securities shall initially be represented by one or more global securities in registered form, without coupons attached, and will be deposited with or on behalf of one or more depositary, including, without limitation, The Depository Trust Company (“DTC”), Euroclear Bank S.A./N.V. (“Euroclear Bank”), as operator of the Euroclear System (“Euroclear”) and/or Clearstream Banking S.A. (“Clearstream Luxembourg”), and will be registered in the name of such depositary or its nominee. Unless and until the debt securities are exchanged in whole or in part for other securities that we issue or the global securities are exchanged for definitive securities, the global securities may not be transferred except as a whole by the depositary to a nominee or a successor of the depositary.
 
The debt securities may be accepted for clearance by DTC, Euroclear and Clearstream Luxembourg.  Unless the relevant prospectus supplement states otherwise, the initial distribution of the debt securities will be cleared through DTC only.  In such event, beneficial interests in the global debt securities will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its direct and indirect participants, including, as applicable, Euroclear and Clearstream Luxembourg.
 
The laws of some states may require that certain investors in securities take physical delivery of their securities in definitive form.  Those laws may impair the ability of investors to own interests in book-entry securities.
 
So long as the depositary, or its nominee, is the holder of a global debt security, the depositary or its nominee will be considered the sole holder of such global debt security for all purposes under the indentures.  Except as described below under the heading “—Issuance of Definitive Securities”, no participant, indirect participant or other person will be entitled to have debt securities registered in its name, receive or be entitled to receive physical delivery of debt securities in definitive form or be considered the owner or holder of the debt securities under the indentures.  Each person having an ownership or other interest in debt securities must rely on the procedures of the depositary, and, if a person is not a participant in the depositary, must rely on the procedures of the participant or other securities intermediary through which that person owns its interest to exercise any rights and obligations of a holder under the indentures or the debt securities.
 
Payments on the Global Debt Security
 
Payments of any amounts in respect of any global securities will be made by the trustee to the depositary.  Payments will be made to beneficial owners of debt securities in accordance with the rules and procedures of the depositary or its direct and indirect participants, as applicable.  Neither we nor RBSG, nor the trustee nor any of our agents will have any responsibility or liability for any aspect of the records of any securities intermediary in the chain of intermediaries between the depositary and any beneficial owner of an interest in a global security, or the failure of the depositary or any intermediary to pass through to any beneficial owner any payments that we or RBSG make to the depositary.
 
The Clearing Systems
 
DTC, Euroclear and Clearstream Luxembourg have advised us as follows:
 
DTC .  DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants deposit with DTC. DTC also facilitates the post-trade settlement among direct
 
 
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participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between direct participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The DTC rules applicable to its participants are on file with the SEC. More information about DTC can be found at www.dtcc.com and www.dtc.org.
 
Euroclear .  Euroclear holds securities for its participants and clears and settles transactions between its participants through simultaneous electronic book-entry delivery against payment.  Euroclear provides various other services, including safekeeping, administration, clearance and settlement and securities lending and borrowing, and interfaces with domestic markets in several countries.  Securities clearance accounts and cash accounts with Euroclear are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System, and applicable law (collectively, the “Euroclear Terms and Conditions”).  The Euroclear Terms and Conditions govern transfers of securities and cash within Euroclear, withdrawals of securities and cash from Euroclear, and receipts of payments with respect to securities in Euroclear.
 
Clearstream Luxembourg .  Clearstream Luxembourg is incorporated under the laws of The Grand Duchy of Luxembourg as a professional depositary.  Clearstream Luxembourg holds securities for its participants and facilitates the clearance and settlement of securities transactions between its participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates.  Clearstream Luxembourg provides to its participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing.  Clearstream Luxembourg interfaces with domestic markets in several countries.
 
Issuance of Definitive Securities
 
So long as the depositary holds the global securities of a particular series of debt securities, such global securities will not be exchangeable for definitive securities of that series unless:
 
 
·
the depositary notifies the trustee that it is unwilling or unable to continue to act as depositary for the debt securities or the depositary ceases to be a clearing agency registered under the Exchange Act;
 
 
·
we or RBSG are wound up and we or RBSG fail to make a payment on the debt securities when due; or
 
 
·
at any time we determine at our option and in our sole discretion that the global securities of a particular series of debt securities should be exchanged for definitive debt securities of that series in registered form.
 
Each person having an ownership or other interest in a debt security must rely exclusively on the rules or procedures of the depositary as the case may be, and any agreement with any direct or indirect participant of the depositary, including Euroclear or Clearstream Luxembourg and their participants, as applicable, or any other securities intermediary through which that person holds its interest, to receive or direct the delivery of possession of any definitive security.  The indentures permit us to determine at any time and in our sole discretion that debt securities shall no longer be represented by global securities.  DTC has advised us that, under its current practices, it would notify its participants of our request, but will only withdraw beneficial interests from the global securities at the request of each DTC participant.  We would issue definitive certificates in exchange for any such beneficial interests withdrawn.
 
Unless otherwise specified in the prospectus supplement, definitive debt securities will be issued in registered form only.  To the extent permitted by law, we, RBSG, the trustee and any paying agent shall be entitled to treat the person in whose name any definitive security is registered as its absolute owner.
 
 
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Payments in respect of each series of definitive securities will be made to the person in whose name the definitive securities are registered as it appears in the register for that series of debt securities.  Payments will be made in respect of the debt securities by check drawn on a bank in New York or, if the holder requests, by transfer to the holder’s account in New York.  Definitive securities should be presented to the paying agent for redemption.
 
If we issue definitive debt securities of a particular series in exchange for a particular global debt security, the depositary, as holder of that global debt security, will surrender it against receipt of the definitive debt securities, cancel the book-entry debt securities of that series, and distribute the definitive debt securities of that series to the persons and in the amounts that the depositary specifies pursuant to the internal procedures of such depositary.
 
If definitive securities are issued in the limited circumstances described above, those securities may be transferred in whole or in part in denominations of any whole number of securities upon surrender of the definitive securities certificates together with the form of transfer endorsed on it, duly completed and executed at the specified office of a paying agent.  If only part of a securities certificate is transferred, a new securities certificate representing the balance not transferred will be issued to the transferor within three business days after the paying agent receives the certificate.  The new certificate representing the balance will be delivered to the transferor by uninsured post at the risk of the transferor, to the address of the transferor appearing in the records of the paying agent.  The new certificate representing the securities that were transferred will be sent to the transferee within three business days after the paying agent receives the certificate transferred, by uninsured post at the risk of the holder entitled to the securities represented by the certificate, to the address specified in the form of transfer.
 
Settlement
 
Initial settlement for each series of debt securities and settlement of any secondary market trades in the debt securities will be made in same-day funds.  Book-entry debt securities held through DTC will settle in DTC’s Same-Day Funds Settlement System.
 
Payments
 
We will make any payments of interest and, principal, on any particular series of debt securities on the dates and, in the case of payments of interest, at the rate or rates, that we set out in, or that are determined by the method of calculation described in, the relevant prospectus supplement.
 
Subordination
 
Unless the relevant prospectus supplement provides otherwise, debt securities and coupons (if any) appertaining thereto constitute our direct, unconditional, unsecured and unsubordinated obligations ranking pari passu, without any preference among themselves, with all of our other outstanding unsecured and unsubordinated obligations, present and future, except such obligations as are preferred by operation of law.
 
Additional Amounts
 
Unless the relevant prospectus supplement provides otherwise, we will pay any amounts to be paid by us on any series of debt securities without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any U.K. political subdivision thereof or authority that has the power to tax (a “U.K. taxing jurisdiction”), unless such deduction or withholding is required by law.  If at any time a U.K. taxing jurisdiction requires us to make such deduction or withholding, we will pay additional amounts with respect to the principal of, and payments on, the debt securities (“Additional Amounts”) that are necessary in order that the net amounts paid to the holders of those debt securities, after the deduction or withholding, shall equal the amounts of principal and any payments which would have been payable on that series of debt securities if the deduction or withholding had not been required.  However, this will not apply to any tax that would not have been payable or due but for the fact that:
 
 
·
the holder or the beneficial owner of the debt securities is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, a U.K. taxing jurisdiction or otherwise having some connection with the U.K. taxing jurisdiction other than the holding or ownership of
 
 
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    a debt security, or the collection of any payment of, or in respect of, principal of, or any payments on, any debt security of the relevant series;
 
 
·
except in the case of a winding up in the United Kingdom, the relevant debt security is presented (where presentation is required) for payment in the United Kingdom;
 
 
·
the relevant debt security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the holder would have been entitled to the Additional Amounts on presenting the debt security for payment at the close of that 30 day period;
 
 
·
the holder or the beneficial owner of the relevant debt security or the beneficial owner of any payment of or in respect of principal of, or any payments on, the debt security failed to comply with a request by us or our liquidator or other authorized person addressed to the holder to provide information concerning the nationality, residence or identity of the holder or the beneficial owner or to make any declaration or other similar claim to satisfy any information requirement, which is required or imposed by a statute, treaty, regulation or administrative practice of a U.K. taxing jurisdiction as a precondition to exemption from all or part of the tax;
 
 
·
the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directive;
 
 
·
the relevant debt security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant debt security to another paying agent in a Member State of the European Union; or
 
 
·
any combination of the above items;
 
nor shall Additional Amounts be paid with respect to the principal of, and payments on, the debt securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any taxing jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.
 
Whenever we refer in this prospectus and any prospectus supplement, in any context, to the payment of the principal of or any payments on, or in respect of, any debt security of any series, we mean to include the payment of Additional Amounts to the extent that, in the context, Additional Amounts are, were or would be payable.
 
Redemption
 
Unless the relevant prospectus supplement provides otherwise, we will have the option to redeem the debt securities of any series as a whole upon not less than 30 nor more than 60 days’ notice to each holder of debt securities, on any payment date, at a redemption price equal to 100% of their principal amount together with any accrued but unpaid payments of interest, to the redemption date, or, in the case of discount securities, their accreted face amount, together with any accrued interest, if we determine that as a result of a change in or amendment to the laws or regulations of a U.K. taxing jurisdiction, including any treaty to which it is a party, or a change in an official application or interpretation of those laws or regulations, including a decision of any court or tribunal, which becomes effective on or after the date of the applicable prospectus supplement:
 
 
·
in making any payments, on the particular series of debt securities, we have paid or will or would on the next payment date be required to pay Additional Amounts;
 
 
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·
payments, on the next payment date in respect of any of the series of debt securities would be treated as “distributions” within the meaning of Section 209 of the Income and Corporation Taxes Act 1988 of the United Kingdom, or any statutory modification or re-enactment of the Act; or
 
 
·
on the next payment date we or RBSG would not be entitled to claim a deduction in respect of the payments in computing our U.K. taxation liabilities, or the value of the deduction to us would be materially reduced.
 
In each case we shall be required, before we give a notice of redemption, to deliver to the trustee a written legal opinion of independent English counsel of recognized standing, selected by us, in a form satisfactory to the trustee confirming that we are entitled to exercise our right of redemption.
 
The relevant prospectus supplement will specify whether or not we may redeem the debt securities of any series, in whole or in part, at our option, in any other circumstances and, if so, the prices and any premium at which and the dates on which we may do so.  Any notice of redemption of debt securities of any series will state, among other items:
 
 
·
the redemption date;
 
 
·
the amount of debt securities to be redeemed if less than all of the series is to be redeemed;
 
 
·
the redemption price;
 
 
·
that the redemption price will become due and payable on the redemption date and that payments will cease to accrue on such date; and
 
 
·
the place or places at which each holder may obtain payment of the redemption price.
 
In the case of a partial redemption, the trustee shall select the debt securities to be redeemed in any manner which it deems fair and appropriate.
 
We, RBSG or any of RBSG’s subsidiaries may at any time and from time to time purchase debt securities of any series in the open market or by tender (available to each holder of debt securities of the relevant series) or by private agreement, if applicable law allows.  Any debt securities of any series that we purchase beneficially for our own account, other than in connection with dealing in securities, will be treated as cancelled and will no longer be issued and outstanding.
 
Under existing U.K. Financial Services Authority (“FSA”) requirements, we may not make any redemption or repurchase of any debt securities beneficially for our own account, other than a repurchase in connection with dealing in securities, unless we give prior notice to the FSA and, in certain circumstances, it consents in advance.  The FSA may impose conditions on any redemption or repurchase.
 
Modification and Waiver
 
We, RBSG, and the trustee may make certain modifications and amendments of the applicable indenture with respect to any series of debt securities without the consent of the holders of the debt securities.  Other modifications and amendments may be made to the indenture with the consent of the holder or holders of not less than a majority in aggregate outstanding principal amount of the debt securities of the series outstanding under the indenture that are affected by the modification or amendment, voting as one class.  However, no modifications or amendments may be made without the consent of the holder of each debt security affected that would:
 
 
·
change the stated maturity of the principal amount of any debt security;
 
 
·
reduce the principal amount of, the interest rates, or any premium payable upon the redemption of, or the payments with respect to any debt security;
 
 
·
change any obligation (or any successor’s) to pay Additional Amounts;
 
 
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·
change the currency of payment;
 
 
·
impair the right to institute suit for the enforcement of any payment due and payable;
 
 
·
reduce the percentage in aggregate principal amount of outstanding debt securities of the series necessary to modify or amend the indenture or to waive compliance with certain provisions of the indenture and any past Senior Debt Security Event of Default, (as such term is defined below);
 
 
·
modify the terms of our obligations or RBSG’s obligations in respect of the due and punctual payment of the amounts due and payable on the debt securities in a manner adverse to the holders; or
 
 
·
modify the above requirements.
 
In addition, material variations in the terms and conditions of debt securities of any series, including modifications relating to redemption, Senior Debt Security Event of Default (as defined under the heading “Event of Default; Limitations of Remedies” below), may require the non-objection from, or consent of, the FSA.
 
Events of Default; Limitation of Remedies
 
Senior Debt Security Event of Default
 
Unless the relevant prospectus supplement provides otherwise, a “Senior Debt Security Event of Default” with respect to any series of senior debt securities shall result if:
 
·
we or RBSG do not pay any principal or interest on any senior debt securities of that series within 14 days from the due date for payment and the principal or interest has not been duly paid within a further 14 days following written notice from the trustee or from holders of 25% in outstanding principal amount of the senior debt securities of that series to us or RBSG requiring the payment to be made.  It shall not, however, be a Senior Debt Security Event of Default if during the 14 days after the notice, we or RBSG satisfy the trustee that such sums were not paid in order to comply with a law, regulation or order of any court of competent jurisdiction.  Where there is doubt as to the validity or applicability of any such law, regulation or order, it shall not be a Senior Debt Security Event of Default if we or RBSG act on the advice given to us during the 14 day period by independent legal advisers approved by the trustee; or
 
·
we or RBSG breach any covenant or warranty of the senior debt indenture (other than as stated above with respect to payments when due) and that breach has not been remedied within 60 days of receipt of a written notice from the trustee certifying that in its opinion the breach is materially prejudicial to the interests of the holders of the senior debt securities of that series and requiring the breach to be remedied or from holders of at least 25% in outstanding principal amount of the senior debt securities of that series requiring the breach to be remedied; or
 
·
either a court of competent jurisdiction issues an order which is not successfully appealed within 30 days, or an effective shareholders’ resolution is validly adopted, for our winding-up or RBSG’s winding-up (other than under or in connection with a scheme of reconstruction, merger or amalgamation not involving bankruptcy or insolvency).
 
If a Senior Debt Security Event of Default occurs and is continuing, the trustee or the holders of at least 25% in outstanding principal amount of the senior debt securities of that series may at their discretion declare the senior debt securities of that series to be due and repayable immediately (and the senior debt securities of that series shall thereby become due and repayable) at their outstanding principal amount (or at such other repayment amount as may be specified in or determined in accordance with the relevant prospectus supplement) together with accrued interest, if any, as provided in the prospectus supplement. The trustee may at its discretion and without further notice institute such proceedings as it may think suitable, against us or RBSG to enforce payment. Subject to the indenture provisions for the indemnification of the trustee, the holder(s) of a majority in aggregate principal amount of the outstanding senior debt securities of any series shall have the right to direct the time, method and place of conducting any proceeding in the name or and on the behalf of the trustee for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the series. However, this direction must not be
 
 
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in conflict with any rule of law or the senior debt indenture, and must not be unjustly prejudicial to the holder(s) of any senior debt securities of that series not taking part in the direction, and determined by the trustee.  The trustee may also take any other action, consistent with the direction, that it deems proper.
 
Notwithstanding any contrary provisions, nothing shall impair the right of a holder, absent the holder’s consent, to sue for any payments due but unpaid with respect to the senior debt securities.
 
By accepting a senior debt security, each holder will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to the senior debt securities or the applicable indenture that they might otherwise have against us or RBSG, whether before or during our winding up.
 
General
 
The holder or holders of not less than a majority in aggregate principal amount of the outstanding debt securities of any series may waive any past Senior Debt Security Event of Default with respect to the series, except a Senior Debt Security Event of Default, in respect of the payment of interest, if any, or principal of (or premium, if any) or payments on any debt security or a covenant or provision of the applicable indenture which cannot be modified or amended without the consent of each holder of debt securities of such series.
 
Subject to exceptions, the trustee may, without the consent of the holders, waive or authorize a Senior Debt Security Event of Default if, in the opinion of the trustee, the Senior Debt Security Event of Default would not be materially prejudicial to the interests of the holders.
 
Subject to the provisions of the applicable indenture relating to the duties of the trustee, if a Senior Debt Security Event of Default occurs and is continuing with respect to the debt securities of any series, the trustee will be under no obligation to any holder or holders of the debt securities of the series, unless they have offered reasonable indemnity to the trustee.  Subject to the indenture provisions for the indemnification of the trustee, the holder or holders of a majority in aggregate principal amount of the outstanding debt securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to the series, if the direction is not in conflict with any rule of law or with the applicable indenture and the trustee does not determine that the action would be unjustly prejudicial to the holder or holders of any debt securities of any series not taking part in that direction.  The trustee may take any other action that it deems proper which is not inconsistent with that direction.
 
The indentures provide that the trustee will, within 90 days after the occurrence of a Senior Debt Security Event of Default with respect to the debt securities of any series, give to each holder of the debt securities of the affected series notice of the Senior Debt Security Event of Default, known to it, unless the Senior Debt Security Event of Default, has been cured or waived.  However, the trustee shall be protected in withholding notice if it determines in good faith that withholding notice is in the interest of the holders.
 
We are required to furnish to the trustee annually a statement as to our compliance with all conditions and covenants under the indenture.
 
Consolidation, Merger and Sale of Assets; Assumption
 
We or RBSG may, without the consent of the holders of any of the debt securities, consolidate with, merge into or transfer or lease our assets substantially as an entirety to any person, provided that any successor corporation formed by any consolidation or amalgamation, or any transferee or lessee of our assets, is a company organized under the laws of any part of the United Kingdom that assumes, by a supplemental indenture, our obligations or, if applicable, RBSG’s obligations, on the debt securities and under the indenture, and we procure the delivery of a customary officer’s certificate and legal opinion providing that the conditions precedent to the transaction have been complied with.
 
Subject to applicable law and regulation, any of our wholly-owned subsidiaries may assume our obligations under the debt securities of any series without the consent of any holder, provided that we unconditionally guarantee the obligations of the subsidiary under the debt securities of that series.  If we do, all of our direct obligations under the debt securities of the series and the applicable indenture shall immediately be discharged.  Any Additional
 
 
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Amounts under the debt securities of the series will be payable in respect of taxes imposed by the jurisdiction in which the assuming subsidiary is incorporated, subject to exceptions equivalent to those that apply to any obligation to pay Additional Amounts in respect of taxes imposed by any U.K. taxing jurisdiction, rather than taxes imposed by any U.K. taxing jurisdiction.  However, if we make payment under the guarantee, we shall be required to pay Additional Amounts related to taxes, subject to the exceptions described under the heading “—Additional Amounts” above, imposed by any U.K. taxing jurisdiction by reason of the guarantee payment.  The subsidiary that assumes our obligations will also be entitled to redeem the debt securities of the relevant series in the circumstances described in “—Redemption” above with respect to any change or amendment to, or change in the application or official interpretation of, the laws or regulations (including any treaty) of the assuming subsidiary’s jurisdiction of incorporation which occurs after the date of the assumption.
 
An assumption of our obligations under the debt securities of any series might be deemed for U.S. federal income tax purposes to be an exchange of those debt securities for new debt securities by each beneficial owner, resulting in a recognition of taxable gain or loss for those purposes and possibly certain other adverse tax consequences.  You should consult your tax advisor regarding the U.S. federal, state and local income tax consequences of an assumption.
 
Governing Law
 
The debt securities and the indentures will be governed by and construed in accordance with the laws of the State of New York.
 
Notices
 
All notices to holders of registered debt securities shall be validly given if in writing and mailed, first-class postage prepaid, to them at their respective addresses in the register maintained by the trustee.
 
The Trustee
 
The Bank of New York Mellon, acting through its London Branch, One Canada Square, London E14 5AL, is the trustee under the indenture.  The trustee shall have and be subject to all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act of 1939 (“TIA”).  Subject to the provisions of the TIA, the trustee is under no obligation to exercise any of the powers vested in it by the indenture at the request of any holder of notes, unless offered reasonable indemnity by the holder against the costs, expense and liabilities which might be incurred thereby.  We, RBSG and certain of RBSG’s subsidiaries maintain deposit accounts and conduct other banking transactions with The Bank of New York Mellon in the ordinary course of our business.  The Bank of New York Mellon is also the book-entry depositary with respect to certain of RBSG’s debt securities and the depositary with respect to the ADSs representing certain of RBSG’s preference shares, and trustee with respect to certain of RBSG’s exchangeable capital securities.
 
Consent to Service of Process
 
Under the indenture, we and RBSG irrevocably designate John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., as our authorized agent for service of process in any legal action or proceeding arising out of or relating to the indentures or any debt securities brought in any federal or state court in The City of New York, New York and we and RBSG irrevocably submit to the jurisdiction of those courts.
 
 
PLAN OF DISTRIBUTION
 
We may sell relevant securities to or through underwriters or dealers and also may sell all or part of such securities directly to other purchasers or through agents.
 
The distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.
 
 
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In connection with the sale of securities, we may compensate underwriters in the form of discounts, concessions or commissions or in any other way that the applicable prospectus supplement describes.  Underwriters may sell securities to or through dealers, and the dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents.  Underwriters, dealers and agents that participate in the distribution of securities may be deemed to be underwriters, and any discounts or commissions that we pay them and any profit on the resale of securities by them may be deemed to be underwriting discounts and commissions, under the Securities Act of 1933, as amended (the “Securities Act”).  Any such underwriter or agent will be identified, and any such compensation that we pay will be described, in the prospectus supplement.
 
Under agreements which we may enter into, we may be required to indemnify underwriters, dealers and agents who participate in the distribution of securities against certain liabilities, including liabilities under the Securities Act.
 
Each new series of debt securities will be a new issue of securities with no established trading market.  If securities of a particular series are not listed on a U.S. national securities exchange, certain broker-dealers may make a market in those securities, but will not be obligated to do so and may discontinue any market making at any time without notice.  We cannot give any assurance that any broker-dealer will make a market in securities of any series or as to the liquidity of the trading market for those securities.
 
To the extent an initial offering of the securities will be distributed by an affiliate of ours each such offering of securities will be conducted in compliance with the requirements of NASD Rule 2720 of the Financial Industry Regulatory Authority, which is commonly referred to as FINRA, regarding a FINRA member firm’s distribution of securities of an affiliate.  Following the initial distribution of any of these securities, affiliates of ours may offer and sell these securities in the course of their businesses as broker-dealers. Such affiliates may act as principals or agents in these transactions and may make any sales at varying prices related to prevailing market prices at the time of sale or otherwise.  Such affiliates may also use this prospectus in connection with these transactions.  None of our affiliates is obligated to make a market in any of these securities and may discontinue any market-making activities at any time without notice.
 
Underwriting discounts and commissions on securities sold in the initial distribution will not exceed 8% of the offering proceeds.
 
Any underwriter, selling agent or dealer utilized in the initial offering of securities will not confirm sales to accounts over which it exercises discretionary authority without the prior specific written approval of its customer.
 
Delayed Delivery Arrangements
 
If so indicated in the prospectus supplement, we may authorize underwriters or other persons acting as its agents to solicit offers by certain institutions to purchase debt securities from it pursuant to contracts providing for payment and delivery on a future date.  Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved by us.  The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the offered securities shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject.  The underwriters and such other agents will not have any responsibility in respect of the validity or performance of such contracts.
 
 
LEGAL OPINIONS
 
Our United States counsel, Davis Polk & Wardwell LLP, will pass upon certain legal matters relating to the securities.  Our Scottish solicitors, Dundas & Wilson CS LLP, will pass upon the validity of the debt securities under Scots law.
 
 
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EXPERTS
 
The consolidated financial statements as of December 31 2008 and 2007, and for each of the three years in the period ended December 31, 2008 incorporated in this prospectus, which is part of this Registration Statement, by reference and the effectiveness of RBSG’s internal control over financial reporting have been audited by Deloitte LLP, an independent registered public accounting firm, as stated in their reports which are incorporated herein by reference from RBSG’s Report on Form 6-K dated September 30, 2009, (which reports (1) express an unqualified opinion on the 2008 financial statements and include an explanatory paragraph stating that the consolidated financial statements for 2008, 2007 and 2006 have been restated for the retrospective adjustment related to the adoption of IFRS 2 described in Note 1 of the Accounting Policies, the change in the composition of reportable segments described in Note 38 and the consolidating financial information included in Note 43 in respect of  The Royal Bank of Scotland plc in accordance with Regulation S-X Rule 3-10, and (2) express an unqualified opinion on the effectiveness of internal control over financial reporting).  Such financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.
 
 
ENFORCEMENT OF CIVIL LIABILITIES
 
We and RBSG are public limited companies incorporated and registered in Scotland, United Kingdom.  All but one of our and RBSG’s directors and executive officers, and certain experts named in this prospectus, reside outside the United States.  All or a substantial portion of our and RBSG’s assets and the assets of those non-resident persons are located outside the United States.  As a result, it may not be possible for investors to effect service of process within the United States upon us, RBSG or these persons or to enforce against us, RBSG or these persons judgments obtained in U.S. courts predicated upon civil liability provisions of the federal securities laws of the United States.  We have been advised by our Scottish solicitors, Dundas & Wilson CS LLP (as to Scots law) that, both in original actions and in actions for the enforcement of judgments of U.S. courts, there is doubt as to whether civil liabilities predicated solely upon the U.S. federal securities laws are enforceable in Scotland.
 
 
WHERE YOU CAN FIND MORE INFORMATION
 
Ongoing Reporting
 
RBSG is subject to the informational requirements of the Exchange Act an in accordance therewith, RBSG files reports and other information with the SEC.  You can read and copy these reports and other information at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, U.S.A.  You may call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room.  The SEC also maintains a website at http://www.sec.gov which contains in electronic form each of the reports and other information that we have filed electronically with the SEC.  You can also read this material at the offices of The New York Stock Exchange, 20 Broad Street, New York, New York 10005, U.S.A. on which certain of our securities are listed.
 
We will provide the trustee for any debt securities with RBSG’s annual reports, which will include a description of operations and RBSG’s annual audited consolidated financial statements. We will also provide any trustee with RBSG’s interim reports that will include unaudited interim summary consolidated financial information. Upon receipt, the trustee will mail the reports to all record holders of the debt securities. In addition, we will provide the trustee with all notices of meetings at which holders of debt securities are entitled to vote, and all other reports and communications that are made generally available to holders of debt securities.
 
Registration Statement
 
This prospectus is part of a registration statement that we and RBSG filed with the SEC.  As exhibits to the registration statement, we have also filed the indentures, and RBSG’s Articles of Association.  Statements contained in this prospectus as to the contents of any contract or other document referred to in this prospectus are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.  For further information, you should refer to the registration statement.  You can obtain the full registration statement from the SEC or from us or RBSG.
 
 
13
 
INCORPORATION OF DOCUMENTS BY REFERENCE
 
The SEC allows us to “incorporate by reference” the information that RBSG files with the SEC.  This permits us to disclose important information to you by referring to these filed documents.  Any information referred to in this way is considered part of this prospectus, and any information that RBSG files with the SEC after the date of this prospectus will automatically be deemed to update and supersede this information.
 
We incorporate by reference (i) RBSG’s Annual Report on Form 20-F for the fiscal year ended December 31, 2008 filed with the SEC on April 29, 2009, as restated by RBSG's report on Form 6-K filed with the SEC on September 30, 2009; (ii) RBSG’s report on Form 6-K furnished with the SEC on August 7, 2009 noting a change of director; (iii) RBSG’s report on Form 6-K furnished with the SEC on August 12, 2009; and (iv) RBSG’s interim report on Form 6-K including Pro Forma Financial Information filed with the SEC on September 30, 2009.  We also incorporate by reference all subsequent Annual Reports of RBSG filed on Form 20-F and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and certain Reports on Form 6-K, if they state that they are incorporated by reference into this prospectus, that RBSG furnishes to the SEC after the date of this prospectus and until we or any underwriters sell all of the securities.
 
Upon written or oral request, we will provide free of charge a copy of any or all of the documents that we incorporate by reference into this prospectus, other than exhibits which are not specifically incorporated by reference into this prospectus.  To obtain copies you should contact us at Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901 U.S.A; Attention: John Fawcett, telephone (203) 897 5087.
 
 
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
 
Certain statements included in this prospectus are forward-looking statements.  We may make forward-looking statements in other documents filed with the SEC that are incorporated by reference into this prospectus.  Forward-looking statements can be identified by the use of forward-looking terminology such as words “expect,” “estimate,” “project,” “anticipate,” “believes,” “should,” “could,” ‘intend,” “plan,” “probability,” “risk,” “target,” “goal,” “objective,” “may,” “endeavor,” “outlook,” “optimistic,” “prospects” or by the use of similar expressions or variations on such expressions, or by the discussion of strategy or objectives.  Forward-looking statements are based on current plans, estimates and projections, and are subject to inherent risks, uncertainties and other factors which could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements.
 
In particular, this prospectus and certain documents incorporated by reference into this prospectus include forward-looking statements relating, but not limited, to possible future write-downs and our capital planning projections, our potential exposures to various types of market risks, such as interest rate risk, foreign exchange rate risk, liquidity risk, credit risk and commodity and equity price risk.  Such statements are subject to risks and uncertainties.  For example, certain of the market risk disclosures are dependent on choices about key model characteristics, assumptions and estimates, and are subject to various limitations.  By their nature, certain of the market risk disclosures are only estimates and, as a result, actual future gains and losses could differ materially from those that have been estimated.
 
Other factors could also adversely affect our results or the accuracy of forward-looking statements in this prospectus, and you should not consider the factors discussed here or in RBSG’s Form 20-F filed on April 29, 2009, incorporated by reference herein, to be a complete set of all potential risks or uncertainties.  We have economic, financial market, credit, legal and other specialists who monitor economic and market conditions and government policies and actions.  However, because it is difficult to predict with accuracy any changes in economic or market conditions or in governmental policies and actions, it is difficult for us to anticipate the effects that such changes could have on our financial performance and business operations.
 
The forward-looking statements made in this prospectus speak only as of the date of this prospectus.  We do not intend to publicly update or revise these forward-looking statements to reflect events or circumstances after the date of this prospectus, and we do not assume any responsibility to do so.  You should, however, consult any further disclosures of a forward-looking nature we made in other documents filed with the SEC that are incorporated by reference into this prospectus.  This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.
 
 
14
 
 
PART II
 
INFORMATION NOT REQUIRED IN THE PROSPECTUS
 
Item 8.              Indemnification of Directors and Officers
 
Except as hereinafter set forth, there is no provision of the Memorandum and Articles of Association of The Royal Bank of Scotland Group plc (the “Company”) or any contract, arrangement or statute under which any director or officer of the Company is insured or indemnified in any manner against any liability that he may incur in his capacity as such.
 
Deed of Indemnity
 
The Company has entered into Deeds of Indemnity with the directors and officers of the Company and its wholly-owned subsidiaries (referred to herein as the “Royal Bank Group”) that, subject to certain conditions precedent, in consideration of such director or officer continuing in or accepting office as a (i) director of officer of (a) any company within the Royal Bank Group or (b) a company in which a member of the Royal Bank Group is to invest or has invested in less than 50% of the issued share capital of such company (an “Investee Company”), or (ii) an authorized or approved person (or equivalent) under the rule of any regulatory body, the Company will indemnify the director or officer, his estate and his personal representatives from all costs, charges, losses, expenses and liabilities incurred by him in the actual or purported execution and/or discharge of his duties and/or the exercise or purported exercise of his powers and/or otherwise in relation to or in connection with his duties, powers or office including any liability incurred by him as an authorized or approved person (or equivalent) (but only to the extent that such position is held in pursuance of the business of the Royal Bank Group) or in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of any company within the Royal Bank Group (or of an Investee Company) and in which decree or judgment is given in his favor (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted or in connection with any application for relief from liability in respect of any such act or omission in which relief is granted to him by the Court.
 
Article 169 of the Company’s Articles of Association provides:
 
 
“(A)
Subject to the provisions of the 2006 Act, but without prejudice to any indemnity to which the person concerned may otherwise be entitled, every Director or other officer of the Company (including, but only if the Directors so determine, any person (whether an officer or not) engaged by the Company as auditor) shall be entitled to be indemnified out of the assets of the Company against (a) any liability incurred by him for negligence, default, breach of duty or breach of trust in relation to the affairs of the Company, (b) any liability incurred by him in connection with the Company’s activities as a trustee of an occupational pension scheme (as defined in section 235(6) of the 2006 Act), or (c) any other liability incurred by him in relation to the Company or its affairs, provided that this Article 169(A) shall be deemed not to provide for, or entitle any such person to, indemnification to the extent that it would cause this Article 169(A), or any element of it, to be treated as void under the 2006 Act or otherwise under the Statutes.
     
 
(B)
Without prejudice to paragraph (A) above or to any indemnity to which a Director may otherwise be entitled, to the extent permitted by the Statutes and otherwise upon such terms and subject to such conditions as the Directors may in their absolute discretion think fit, the Directors shall have power to make arrangements to provide a Director with funds to meet expenditure incurred or to be incurred by him:
       
   
(i)
in defending any criminal or civil proceedings or in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to the Company or any associated company;
 
 
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(ii)
in defending himself in an investigation by a regulatory authority, or against action proposed to be taken by a regulatory authority, in connection with any such alleged negligence, default, breach of duty or breach of trust as foresaid; or
       
   
(iii)
in connection with any application referred to in section 205(5) of the 2006 Act,
       
     
or to enable a Director to avoid incurring such expenditure.
     
 
(C)
In paragraph (A) above, “liability” includes costs, charges, losses and expenses.  For the purposes of paragraph (B) above, “associated company” shall be construed in accordance with Section 256 of the 2006 Act.”
   
 
Section 232 of the Companies Act 2006 provides:
     
 
“(1)
Any provision that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.
     
 
(2)
Any provision by which a company directly or indirectly provides an indemnity (to any extent) for a director of the company, or of an associated company, against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director is void, except as permitted by—
       
   
(a)
section 233 (provision of insurance),
       
   
(b)
section 234 (qualifying third party indemnity provision), or
       
   
(c)
section 235 (qualifying pension scheme indemnity provision).
     
 
(3)
This section applies to any provision, whether contained in a company’s articles or in any contract with the company or otherwise.
     
 
(4)
Nothing in this section prevents a company’s articles from making such provision as has previously been lawful for dealing with conflicts of interest.”
   
 
Section 233 of the Companies Act 2006 provides:
   
 
“Section 232(2)(voidness of provisions for indemnifying directors) does not prevent a company from purchasing and maintaining for a director of the company, or of an associated company, insurance against any such liability as is mentioned in that subsection.”
   
 
Section 234 of the Companies Act 2006 provides:
     
 
“(1)
Section 232(2)(voidness of provisions for indemnifying directors) does not apply to qualifying third party indemnity provision.
     
 
(2)
Third party indemnity provision means provision for indemnity against liability incurred by the director to a person other than the company or an associated company.
     
   
Such provision is qualifying third party indemnity provision if the following requirements are met.
     
 
(3)
The provision must not provide any indemnity against—
       
   
(a)
any liability of the director to pay—
         
     
(i)
a fine imposed in criminal proceedings, or
         
 
 
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(ii)
a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or
       
   
(b)
any liability incurred by the director—
         
     
(i)
in defending criminal proceedings in which he is convicted, or
         
     
(ii)
in defending civil proceedings brought by the company, or an associated company, in which judgment is given against him, or
         
     
(iii)
in connection with an application for relief (see subsection (6)) in which the court refuses to grant him relief.
     
 
(4)
The references in subsection (3)(b) to a conviction, judgment or refusal of relief are to the final decision in the proceedings.
     
 
(5)
For this purpose—
       
   
(a)
a conviction, judgment or refusal of relief becomes final—
         
     
(i)
if not appealed against, at the end of the period for bringing an appeal, or
         
     
(ii)
if appealed against, at the time when the appeal (or any further appeal) is disposed of; and
       
   
(b)
an appeal is disposed of—
         
     
(i)
if it is determined and the period for bringing any further appeal has ended, or
         
     
(ii)
if it is abandoned or otherwise ceases to have effect.
     
 
(6)
The reference in subsection (3)(b)(iii) to an application for relief is to an application for relief under—
     
   
section 661(3) or (4)(power of court to grant relief in case of acquisition of shares by innocent nominee), or
     
   
section 1157 (general power of court to grant relief in case of honest and reasonable conduct).”
   
 
Section 235 of the Companies Act 2006 provides:
     
 
“(1)
Section 232(2)(voidness of provisions for indemnifying directors) does not apply to qualifying pension scheme indemnity provision.
     
 
(2)
Pension scheme indemnity provision means provision indemnifying a director of a company that is a trustee of an occupational pension scheme against liability incurred in connection with the company’s activities as trustee of the scheme.
     
   
Such provision is qualifying pension scheme indemnity provision if the following requirements are met.
     
 
(3)
The provision must not provide any indemnity against—
       
   
(a)
any liability of the director to pay—
         
     
(i)
a fine imposed in criminal proceedings, or
         
     
(ii)
a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising); or
     
 
(b)
any liability incurred by the director in defending criminal proceedings in which he is convicted.
 
 
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(4)
The reference in subsection (3)(b) to a conviction is to the final decision in the proceedings.
     
 
(5)
For this purpose—
       
   
(a)
a conviction becomes final—
         
     
(i)
if not appealed against, at the end of the period for bringing an appeal, or
         
     
(ii)
if appealed against, at the time when the appeal (or any further appeal) is disposed of; and
       
   
(b)
an appeal is disposed of—
         
     
(i)
if it is determined and the period for bringing any further appeal has ended, or
         
     
(ii)
if it is abandoned or otherwise ceases to have effect.
     
 
(6)
In this section “occupational pension scheme” means an occupational pension scheme as defined in section 150(5) of the Finance Act 2004 (c. 12) that is established under a trust.”
   
 
Section 1157 of the Companies Act 2006 provides:
     
 
“(1)
If in proceedings for negligence, default, breach of duty or breach of trust against—
       
   
(a)
an officer of a company, or
       
   
(b)
a person employed by a company as auditor (whether he is or is not an officer of the company),
         
   
it appears to the court hearing the case that the officer or person is or may be liable but that he acted honestly and reasonably, and that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused, the court may relieve him, either wholly or in part, from his liability on such terms as it thinks fit.
     
 
(2)
If any such officer or person has reason to apprehend that a claim will or might be made against him in respect of negligence, default, breach of duty or breach of trust—
       
   
(a)
he may apply to the court for relief, and
       
   
(b)
the court has the same power to relieve him as it would have had if it had been a court before which proceedings against him for negligence, default, breach of duty or breach of trust had been brought.
     
 
(3)
Where a case to which subsection (1) applies is being tried by a judge with a jury, the judge, after hearing the evidence, may, if he is satisfied that the defendant (in Scotland, the defender) ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case from the jury and forthwith direct judgment to be entered for the defendant (in Scotland, grant decree of absolvitor) on such terms as to costs (in Scotland, expenses) or otherwise as the judge may think proper.”
 
Any underwriters of securities registered on this registration statement will each agree, severally, to indemnify the Company’s directors, the Company’s officers who sign the registration statement and the Company’s authorized representative in the United States from and against certain civil liabilities based on information relating to such underwriter furnished in writing by such underwriter expressly for use herein.
 
The Company will agree to indemnify the Company’s authorized representative in the United States from and against certain directors’ and officers’ liabilities.
 
In addition, the Company has obtained directors’ and officers’ insurance coverage, which, subject to policy terms and limitations, includes coverage to reimburse the Company for amounts that it may be required or permitted by law to pay directors or officers of the Company and its consolidated subsidiaries.
 
 
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Item 9.              Exhibits
 
Reference is made to the Exhibit Index included herewith which is incorporated herein by reference.
 
Item 10.            Undertakings
 
The undersigned registrant hereby undertakes:
 
(1)          To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
 
(i)            to include any prospectus required by Section 10(a)(3) of the Securities Act;
 
(ii)           to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
 
(iii)           to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
 
provided , however , that paragraphs (1)(i) and (1)(ii) above shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement.
 
(2)          That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
(3)          To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
 
(4)          To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F, or to incorporate such financial statements by reference to a report filed pursuant to the Exchange Act, at the start of any delayed offering or throughout a continuous offering.  Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided , that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.
 
(5)          That, for the purpose of determining liability under the Securities Act to any purchaser:
 
(A)         Each prospectus filed by a registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
 
(B)          Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of this registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after
 
 
II-5
 
effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in this registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
 
(6)          That, for the purpose of determining liability of a registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned undertakes that in a primary offering of securities of the undersigned pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
 
(i)      any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
 
(ii)     any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
 
(iii)    the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
 
(iv)    any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
 
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section l5(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
 
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by a final adjudication of such issue.
 

 
II-6
 


 
SIGNATURES
 
Pursuant to the requirements of the Securities Act, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement on Form F-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in Stamford, Connecticut, on the 30th day of September, 2009.
 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
   
   
By:
/s/ Stephen Hester
 
 
Name:
Stephen Hester
 
 
Title:
Group Chief Executive
 

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Miller Roy McLean, Aileen Norma Taylor, Angela Claire McEntee and Janis Cargill and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, with full power of substitution, and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement or any registration statement in connection herewith that is to be effective upon filing pursuant to Rule 462(b) of the Securities Act, as amended, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.
 
Pursuant to the requirements of the Securities Act, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
 
Signature
Title
Date
     
/s/ Philip Hampton
   
Sir Philip Hampton
(Chairman)
September 30, 2009
     
/s/ Stephen Hester
   
Stephen Hester
(Director and Group Chief Executive)
September 30, 2009
     
/s/ Gordon Pell
   
Gordon Pell
(Deputy Chief Executive)
September 30, 2009
     
/s/ Guy Whittaker
   
Guy Whittaker
(Group Finance Director)
September 30, 2009
     
/s/ Colin Buchan
   
Colin Buchan
(Director)
September 30, 2009
     
/s/ Archie Hunter
   
Archie Hunter
(Director)
September 30, 2009
     
/s/ Joe MacHale
   
Joe MacHale
(Director)
September 30, 2009
 
 


II-7
 
 
 
Signature
Title
Date
     
/s/ John McFarlane
   
John McFarlane
(Director)
September 30, 2009
     
/s/ Arthur Ryan
   
Arthur “Art” Ryan
(Director)
September 30, 2009
     
/s/ Sandy Crombie
   
Sir Sandy Crombie
(Director)
September 30, 2009
     
/s/ John Fawcett
   
John Fawcett
Authorized U.S. Representative
September 30, 2009



 
II-8
 


 
SIGNATURES
 
Pursuant to the requirements of the Securities Act, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement on Form F-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in Stamford, Connecticut, on the 30th day of September, 2009.
 
THE ROYAL BANK OF SCOTLAND plc
 
   
   
By:
/s/ Stephen Hester
 
 
Name:
Stephen Hester
 
 
Title:
Group Chief Executive
 

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Miller Roy McLean, Aileen Norma Taylor, Angela Claire McEntee and Janis Cargill and each of them (with full power to each of them to act alone) his true and lawful attorney-in-fact and agent, with full power of substitution, and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement or any registration statement in connection herewith that is to be effective upon filing pursuant to Rule 462(b) of the Securities Act, as amended, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.
 
Pursuant to the requirements of the Securities Act, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
 
Signature
Title
Date
     
/s/ Philip Hampton
   
Sir Philip Hampton
(Chairman)
September 30, 2009
     
/s/ Stephen Hester
   
Stephen Hester
(Director and Group Chief Executive)
September 30, 2009
     
/s/ Gordon Pell
   
Gordon Pell
(Deputy Chief Executive)
September 30, 2009
     
/s/ Guy Whittaker
   
Guy Whittaker
(Group Finance Director)
September 30, 2009
     
/s/ Colin Buchan
   
Colin Buchan
(Director)
September 30, 2009
     
/s/ Archie Hunter
   
Archie Hunter
(Director)
September 30, 2009
     
/s/ Joseph P. MacHale
   
Joe MacHale
(Director)
September 30, 2009
 

 
II-9
 
 
Signature
Title
Date
     
/s/ John McFarlane
   
John McFarlane
(Director)
September 30, 2009
     
/s/ Arthur Ryan
   
Arthur “Art” Ryan
(Director)
September 30, 2009
     
/s/ Sandy Crombie
   
Sir Sandy Crombie
(Director)
September 30, 2009
     
/s/ John Fawcett
   
John Fawcett
Authorized U.S. Representative
September 30, 2009



 
II-10
 


 
EXHIBIT INDEX
 

Number
Description
1.1
Form of Underwriting Agreement for the capital securities/subordinated securities of The Royal Bank of Scotland Group plc.
1.2
Form of Underwriting Agreement for the dollar preference shares of The Royal Bank of Scotland Group plc.
1.3
Form of Underwriting Agreement for the senior debt securities of The Royal Bank of Scotland plc.
1.4
Form of Underwriting Agreement for senior debt securities of The Royal Bank of Scotland Group plc.
4.1
Form of Senior Debt Indenture between The Royal Bank of Scotland plc, as Issuer, The Royal Bank of Scotland Group plc, as Guarantor, and The Bank of New York Mellon, as Trustee.
4.2
Form of Subordinated Debt Indenture between The Royal Bank of Scotland Group plc and The Bank of New York Mellon, as Trustee.
4.3
Form of Capital Securities Indenture between The Royal Bank of Scotland Group plc and The Bank of New York Mellon, as Trustee.
4.4
Form of Senior Debt Indenture between The Royal Bank of Scotland Group plc and The Bank of New York Mellon, as Trustee.
4.5* 
Memorandum and Articles of Association of The Royal Bank of Scotland Group plc, as amended (filed as Exhibit 1.1 to the Annual Report filed on Form 20-F for the year ended December 31, 2008, No. 001-10306).
4.6*
Amended and Restated Deposit Agreement among the Company, The Bank of New York Mellon and all holders from time to time of American Depositary Receipts issued thereunder, including the Form of the American Depositary Receipt (previously filed in preliminary form as an Exhibit to the Registration Statement on Form F-6 filed on July 20, 2007, Registration No. 333-144756).
5.1
Opinion of Dundas & Wilson CS LLP, Scottish solicitors to the Company, as to the legality of the Non-Cumulative Dollar Preference Shares and the subordination provisions of the capital securities and the subordinated debt securities.
5.2
Opinion of Davis Polk & Wardwell LLP, US counsel to the Company, as to the validity of the capital securities and the subordinated debt securities.
23.1
Consent of Dundas & Wilson CS LLP (included in Exhibit 5.1 above).
23.2
Consent of Davis Polk & Wardwell LLP (included in Exhibit 5.2 above).
23.3
Consent of Deloitte LLP.
24
Powers of Attorney (included on signature page to the registration statement).
25.1
Statement of Eligibility for the form of Senior Debt Indenture among The Royal Bank of Scotland plc, as Issuer, The Royal Bank of Scotland Group plc, as Guarantor and The Bank of New York Mellon, as Indenture Trustee (this Form T-1 would have securities descriptions of “Senior Debt Securities and Guarantees of Senior Debt Securities”).
25.2
Statement of Eligibility for the form of Subordinated Debt Indenture between The Royal Bank of Scotland Group plc, as Issuer and The Bank of New York Mellon, as Indenture Trustee (this Form T-1 would have a securities description of “Subordinated Debt Securities”).
25.3
Statement of Eligibility for the form of Capital Securities Indenture between The Royal Bank of Scotland Group plc, as Issuer and The Bank of New York Mellon, as Indenture Trustee (this Form T-1 would have a securities description of “Capital Securities”).
25.4
Statement of Eligibility for the form of Senior Debt Indenture between The Royal Bank of Scotland Group plc, as Issuer and The Bank of New York Mellon, as Indenture Trustee (this Form T-1 would have a securities description of “Senior Debt Securities”).

*           Incorporated by reference.
 
Exh-1
 
 

 
Exhibit 1.1
 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
Underwriting Agreement * 1
 
$[   ]
[ ]% Capital Securities
Due _____
 
__________ __, ____
 
[NAMES OF REPRESENTATIVES]
 
Ladies and Gentlemen:
 
From time to time The Royal Bank of Scotland Group plc, a public limited company incorporated and registered in Scotland, United Kingdom (the “ Company ”), proposes to enter into one or more Pricing Agreements (each a “ Pricing Agreement ”) in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the several firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the “ Underwriters ” with respect to such Pricing Agreement and the securities specified therein), or to purchasers procured by them, certain of the Company’s debt securities specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the “ Securities ”).
 
The terms of, and rights attached to, any particular issuance of Securities shall be as specified in the Pricing Agreement relating thereto and in or pursuant to a subordinated debt securities indenture (the “ Indenture ”). The offering of the Securities will be governed by this Agreement, as supplemented by the Pricing Agreement. From and after the date of the execution and delivery of the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
 
1.           Particular sales of the Securities may be made from time to time to the Underwriters of such Securities, or to purchasers procured by them, for whom the firms designated as representatives of the Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the “ Representatives ”). The term “ Representatives ” also refers to a single firm acting as sole representative of the Underwriters and to an Underwriter or Underwriters who act without any firm being designated as its or their representatives. This Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase, or procure purchasers for, the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase, or procure purchasers for, any of the Securities shall be evidenced by the Pricing Agreement with respect to the Securities specified therein. Each Pricing Agreement shall specify the aggregate principal amount of such Securities, the initial public offering price of such Securities, the purchase price to the Underwriters of such Securities, the names of the Underwriters of such Securities, the names of
 
 
* To be modified as appropriate for issuances of subordinated notes.
 
the Representatives of such Underwriters and the principal amount of such Securities to be purchased by each Underwriter, or by purchasers procured by such Underwriter, and shall set forth the date, time and manner of delivery of such Securities and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Indenture and the Registration Statement (as defined below), the Disclosure Package (as defined below) and prospectus with respect thereto) the terms of such Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of facsimile communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.
 
The Company has prepared and filed with the Securities and Exchange Commission (the “ Commission ”) an “automatic shelf registration statement” as defined under Rule 405 under the U.S. Securities Act of 1933, as amended (the “ 1933 Act ”) on Form F-3 (No. 333-________ ) and related preliminary prospectus for the registration of, among other securities, certain debt securities of the Company, including the Securities, in accordance with the provisions of the 1933 Act, and the rules and regulations of the Commission thereunder (the “ 1933 Act Regulations ”).
 
The registration statement on Form F-3, as amended to the date on which it became effective prior to the date of this Agreement (including any prospectus supplement relating to the Securities and any other information, if any, deemed to be part of such registration statement pursuant to Rule 430B of the 1933 Act Regulations), and the prospectus constituting a part thereof (including in each case all documents, if any, incorporated by reference therein to such date) are hereinafter referred to as the “ Registration Statement ” and the “ Prospectus ”, respectively, except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company for use in connection with the offering of the Securities which differs from the Prospectus on file at the Commission at the time the Registration Statement became effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the term “ Prospectus ” shall refer to such revised prospectus or include such prospectus supplement, as the case may be, from and after the time such revised prospectus or prospectus supplement is first provided to the Underwriters for such use and if the Company files any documents pursuant to Section 13, 14 or 15 of the U.S. Securities Exchange Act of 1934, as amended (the “ 1934 Act ”), after the Registration Statement became effective and prior to the termination of the offering of the Securities by the Underwriters, which documents are deemed to be or, in the case of a Report on Form 6-K, are designated as being incorporated by reference into the Prospectus pursuant to Form F-3 under the 1933 Act Regulations, the term “ Prospectus ” shall refer to said prospectus as modified to include the documents so filed from and after the time said documents are filed with or furnished to the Commission.  The term “ Preliminary Prospectus ” means any preliminary form of the Prospectus (including any preliminary prospectus supplement) which is used prior to the filing of the Prospectus and first filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations.  The term “ Free Writing Prospectus ” has the meaning set forth in Rule 405 of the 1933 Act Regulations. The term “ Issuer Free Writing Prospectus ” means (i) any material that satisfies the conditions set forth in Rule 433 of the 1933 Act Regulations and (ii) any roadshow presentation, including any Bloomberg roadshow presentation. The term “ Disclosure Package ” means (i) the Preliminary Prospectus, (ii) any Issuer Free Writing Prospectuses identified in
 
 
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Annex II hereto, (iii) the final term sheet prepared and filed pursuant to Section 5(d) of this Agreement (the “ Term Sheet ”) and (iv) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
 
“ Applicable Time ” means [  ] p.m. (Eastern time) on the date hereof or such other time as agreed by the Company and the Representatives.
 
2.           The Company represents and warrants to, and agrees with, each of the Underwriters as of the date hereof, as of the Applicable Time, and as of the Time of Delivery referred to in Section 4 hereof that:
 
(a)           (i) An “automatic shelf registration statement” as defined under Rule 405 under the 1933 Act on Form F-3 (File No. 333-_____) in respect of the Securities has been filed with the Commission not earlier than three years prior to the date hereof; such registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been initiated or threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act has been received by the Company; (ii) No order preventing or suspending the use of the Prospectus, any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission.
 
(b)           (i) The Disclosure Package does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (ii) any individual Issuer Free Writing Prospectus, when considered together with the Disclosure Package, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, the Disclosure Package or any Issuer Free Writing Prospectus made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Disclosure Package.
 
(c)           The Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, the Prospectus made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Registration Statement or Prospectus, provided , further , that the representations and warranties in this subsection shall not apply to that part of the Registration Statement that constitutes the Statement of Eligibility (the “ Form T-1 ”) under the U.S. Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”), of the trustee (the “ Trustee ”).
 
 
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(d)           The documents incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, at the time they were filed with the Commission or when they become effective, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “ 1934 Act Regulations ”) and, at each time the Registration Statement became effective, the Registration Statement complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Trust Indenture Act and the rules and regulations of the Commission thereunder, and did not 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 any further documents deemed to be or, in the case of a Report on Form 6-K, designated as being incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, after the date of this Agreement but prior to the termination of the offering of Securities, will, when they are filed with or furnished to the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and, when read together with the other information included or incorporated in the Registration Statement, the Disclosure Package and the Prospectus, will not 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, provided that the representations and warranties in this subsection shall not apply to the Form T-1 of the Trustee.
 
(e)           The audited consolidated financial statements of the Company for the years ended December 31, ____, and December 31, ____, were prepared in accordance with International Financial Reporting Standards and give a true and fair view (in conjunction with the notes thereto) of the state of the Company and its subsidiaries’ affairs as at such dates and of its profit and cash flows for the years then ended[, and the unaudited consolidated financial statements of the Company for the six month periods ended June 30, ____ and June 30, ____ have been stated on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement.]
 
(f)           The unaudited pro forma condensed combined financial information (the “ Pro Forma Financial Information ”), comprising a balance sheet as at _____ and income statements for the year ended _____ [and for the six months ended _____] and the related notes included in the Prospectus, has been properly compiled on the basis of the assumptions stated therein and the assumptions used in the preparation of the Pro Forma Financial Information are reasonable.
 
(g)           Since the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, there has been no material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries, together considered as one enterprise.
 
(h)           The Company (A) has been duly incorporated in, and is validly registered under the laws of, Scotland; (B) has the requisite corporate power and authority to
 
 
 
4
 
execute and deliver this Agreement and the Pricing Agreement and had the requisite corporate power and authority to execute and deliver the Indenture, to issue the Securities, and, in each case, to perform its obligations hereunder and thereunder; (C) has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; (D) has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; and (E) has duly authorized, executed and delivered this Agreement and the Pricing Agreement and this Agreement and the Pricing Agreement constitute the valid and legally binding agreement of the Company enforceable in accordance with its terms, except as rights to indemnity or contribution may be limited by applicable law and subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
(i)           The Royal Bank of Scotland plc (the “ Bank ”) has been duly incorporated in, and is validly registered under the laws of, Scotland, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; and all of the issued and outstanding share capital or capital stock of the Bank is owned, directly or indirectly, by the Company. National Westminster Bank Plc (“ NatWest ”) has been duly incorporated under the laws of England, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; and all of the issued and outstanding ordinary share capital of NatWest is owned, directly or indirectly, by the Company.  ABN AMRO Holding N.V. (“ ABN AMRO ”) has been duly incorporated under the laws of the Netherlands, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus.
 
(j)           The Indenture has been duly qualified under the Trust Indenture Act and duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Trustee, will constitute the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
(k)           The forms of Securities have been duly authorized and established in conformity with the provisions of the Indenture and, when the Securities have been executed and authenticated in accordance with the provisions of the Indenture and delivered to and duly paid for by the purchasers thereof, the Securities will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and will be entitled to the benefits of the Indenture.
 
 
5
 
(l)           Each of the Indenture and the Securities will conform in all material respects to the descriptions thereof contained in the Disclosure Package and the Prospectus.
 
(m)           All consents, approvals, authorizations, orders and decrees of any court or governmental agency or body of the United States, the United Kingdom or the Netherlands, having jurisdiction over the Company required for the consummation by the Company of the transactions contemplated by this Agreement or the Pricing Agreement or to permit the Company to effect interest payments in U.S. dollars on the Securities in accordance with the terms of the Indenture have been obtained and are in full force and effect, except as may be required by U.S. state securities laws (the “ Blue Sky laws ”).
 
(n)           The execution, delivery and performance of this Agreement, the Pricing Agreement and Indenture, the allotment, issuance, authentication, sale and delivery of the Securities and the compliance by the Company with the respective terms thereof, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach under any agreement or instrument to which the Company is a party or by which the Company is bound that is material to the Company and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Memorandum and Articles of Association of the Company or any statute or any order, filing, rule or regulation of any United States, English, Scottish or Dutch court or governmental agency or regulatory body having jurisdiction over the Company.
 
(o)           The Company is not, and after giving effect to the offer and sales of the Securities and application of the proceeds thereof as described in the Prospectus and the Disclosure Package, will not be, required to register as an “investment company”, as defined in the Investment Company Act of 1940, as amended.
 
(p)           No event has occurred or circumstances arisen which (after the issuance of the Securities) will constitute, or which, with the giving of notice and/or the lapse of time would constitute, an Event of Default or a Default under the Securities.
 
(q)           There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against or affecting the Company or any subsidiary, which is required to be disclosed in the Registration Statement (other than as disclosed therein).
 
(r)           (A) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), and (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the 1933 Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the 1933 Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under the 1933 Act; and (B) at the earliest time after the filing of the Registration Statement that the
 
 
6
 
Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) of the Securities, the Company was not an “ineligible issuer” as defined in Rule 405 under the 1933 Act.
 
(s)           Deloitte LLP, who have certified certain financial statements of the Company and its subsidiaries, and have audited the Company’s internal control over financial reporting and management’s assessment thereof, are independent public accountants as required by the 1933 Act and the rules and regulations of the Commission thereunder.
 
(t)           Neither any Issuer Free Writing Prospectus nor the Term Sheet includes any information that conflicts with the information contained in the Registration Statement, the Disclosure Package and the Prospectus, including any document incorporated therein or any prospectus supplement deemed to be a part thereof that has not been superseded or modified; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, any Issuer Free Writing Prospectus or the Term Sheet made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Issuer Free Writing Prospectus.
 
(u)           None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently included on the U.S. Treasury Department’s List of Specially Designated Nationals or otherwise subject to any U.S. sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“ OFAC ”); and the capital raised by the issuance and sale of the Securities will not directly or indirectly be lent, contributed or otherwise made available to:
 
(i)           any subsidiary, joint venture partner or other entity under the control of the Company; or
 
(ii)           to the knowledge of the Company, any other person or entity,
 
in each case for the purpose of financing the activities of any person, entity, or government currently subject to any U.S. sanctions administered by OFAC.
 
3.           Upon the execution of the Pricing Agreement applicable to any Securities and authorization by the Representatives of the release of such Securities, the several Underwriters propose to offer such Securities for sale upon the terms and conditions set forth in the Prospectus (as amended or supplemented).
 
4.           The Securities to be purchased by each Underwriter and/or by purchasers procured by such Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriters, against payment by the Underwriters, or by the Representatives on behalf of the Underwriters, of the purchase price therefor by wire transfer of immediately available funds to an account designated
 
 
7
 
by the Company as specified in the Pricing Agreement, all in the manner and at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the “ Time of Delivery ” for such Securities.
 
5.           The Company agrees with each of the Underwriters of any Securities that:
 
(a)           The Company will notify the Representatives immediately on becoming aware of (i) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information relating to the Registration Statement or the offering of the Securities, and (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of any Preliminary Prospectus or other Prospectus in respect of the Securities, or the issuance by the Commission of any notice of objection to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
 
(b)           If at any time prior to the filing of a final prospectus pursuant to Rule 424(b) of the 1933 Act Regulations, any event occurs as a result of which the Disclosure Package would then include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company will (i) promptly notify the Representatives so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or omission; and (iii) supply any such amendment or supplement to the Underwriters in such quantities as they may reasonably request.
 
(c)           The Company will, for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities (including in circumstances where such requirement may be satisfied pursuant to Rule 172 or Rule 173(a) of the 1933 Act Regulations), file promptly all reports required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and will give the Representatives notice of its intention to file any amendment to the Registration Statement or any amendment or supplement to the Disclosure Package or the Prospectus (including any prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Securities which differs from the Prospectus, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations) and will furnish the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus without prior consultation with the Representatives.
 
 
8
 
(d)           The Company will prepare the Term Sheet, containing solely a description of the final terms of the Securities and the offering thereof, in a form approved by the Representatives and will file the Term Sheet not later than the time required by Rule 433(d) of the 1933 Act Regulations.
 
(e)           The Company will prepare the Prospectus in relation to the Securities and file such Prospectus pursuant to Rule 424(b) of the 1933 Act Regulations not later than the time required by Rule 424(b) of the 1933 Act Regulations following the execution and delivery of the Pricing Agreement relating to the Securities.
 
(f)           The Company will deliver to each Representative a conformed copy of the Registration Statement as originally filed, and of each amendment thereto (including exhibits and documents filed therewith or incorporated by reference, as the case may be, into the Registration Statement).
 
(g)           The Company will furnish the Underwriters with copies of the Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus (including, in each case, any supplement thereto) in such quantities as the Representatives may from time to time reasonably request, and will use all reasonable efforts to make the initial delivery of the Prospectus by no later than 9:00 a.m. on the second business day prior to the Time of Delivery and, if the delivery of a Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering and sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act), not misleading, or, if for any reason it shall be necessary during such period to amend or supplement the Prospectus, or to file under the 1934 Act any document incorporated by reference in the Prospectus, in order to comply with the 1933 Act, notify the Underwriters and upon the Representatives’ request prepare and furnish without charge to each Underwriter as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) in connection with sales of the Securities (including in circumstances where such requirement may be satisfied pursuant to Rule 172 or 173(a) of the 1933 Act Regulations) at any time nine months or more after the time of issue of the Prospectus, upon the Representatives’ request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act.
 
(h)           The Company shall at the reasonable request of the Underwriters at any time prior to the completion (in the view of the Underwriters) of distribution of the Securities, amend or supplement the Prospectus in order to comply with applicable law or
 
 
9
 
the requirements of the [Luxembourg Stock Exchange] [London Stock Exchange] and deliver to the Underwriters from time to time as many copies of the relevant amendment or supplement as the Underwriters may reasonably request.
 
(i)           The Company agrees that, unless it has obtained or will obtain (as the case may be) the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained or will obtain (as the case may be) the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or Free Writing Prospectus required to be filed by the Company with the Commission or retained by the Company under Rule 433 of the 1933 Act Regulations, other than the information contained in the Term Sheet, provided , however , that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Annex II hereto. Any such free writing prospectus consented to by the parties is hereinafter referred to as a “ Permitted Free Writing Prospectus .” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 of the 1933 Act Regulations applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
 
(j)           The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Disclosure Package or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representative and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided , however , that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein.
 
(k)           The Company will endeavour to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will maintain such qualifications for as long as the Representatives shall reasonably request; provided that in connection with any such qualification none of the Company shall be required to qualify as a foreign corporation in any such jurisdiction or to file a general consent to service of process in any such jurisdiction.
 
(l)           The Company will make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement, an earnings statement of the Company and its subsidiaries on
 
 
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a consolidated basis (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158 of the 1933 Act Regulations).
 
(m)           During the period beginning from the date of the Pricing Agreement for such Securities and continuing to and including the Time of Delivery, the Company will not offer, sell, contract to sell or otherwise dispose of any securities of the Company which mature more than one year after such Time of Delivery and which are substantially similar to such Securities (other than (i) the Securities, (ii) securities previously agreed to be sold by the Company and (iii) commercial paper issued in the ordinary course of business), except as otherwise may be provided in this Agreement, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld.
 
(n)           Unless the Pricing Agreement provides otherwise, prior to the first payment due under the terms of the Securities, the Securities will be listed on a “recognised stock exchange” within section 1005 of the Income Tax Act 2007; as soon as practicable, application will be made to list the Securities on such recognised stock exchange.
 
(o) The Company will apply the net proceeds from the sale of the Securities as set forth in the Prospectus.
 
(p)           The Company will cooperate with the Underwriters and use its best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of The Depository Trust Company (“ DTC ”), Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be.
 
(q)           Prior to the issuance of the Securities, the Company will have obtained all consents, approvals, authorizations, orders, registrations, qualifications and decrees of any court or governmental agency or body of the United States and the United Kingdom necessary or required for the valid issuance of the Securities and to permit the Company to make interest payments on the Securities in U.S. dollars.
 
6.           The Company will pay all expenses incident to the performance of its obligations under this Agreement, any Pricing Agreement, the Indenture and the Securities, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, any Issuer Free Writing Prospectus, the Prospectus and any related preliminary prospectus (and any amendments or supplements thereto) and the cost of furnishing copies thereof to the Underwriters; (ii) the printing, if any, of this Agreement, the Pricing Agreement, the Indenture and the Blue Sky Survey; (iii) the printing or reproduction, preparation, issuance and delivery of the certificates, if any, for the Securities to (or at the direction of) the Underwriters, including any transfer or other taxes or duties payable upon the delivery of the Securities to a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be, or the sale of the Securities to the Underwriters; (iv) the fees and disbursements of the Company’s counsel and accountants; (v) the qualification of the Securities under the applicable securities laws in accordance with the provisions of Section 5(j) hereof, including filing fees and the fees and disbursements of counsel
 
 
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for the Underwriters in connection therewith in an aggregate amount not in excess of $5,000 with respect to a particular issue of the Securities and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (vi) the delivery to the Underwriters of copies of such Blue Sky Survey, if any; (vii) any costs, fees and charges of any paying agent appointed under the Indenture; (viii) all expenses and listing fees in connection with the listing of the Securities, if any, on stock exchange and the clearance and settlement of the Securities through the facilities of DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be; (ix) any fees charged by securities rating services for rating the Securities; (x) the fees and expenses incurred in connection with the filing of any materials with the Financial Industry Regulatory Authority (“ FINRA ”), if any; (xi) any fees associated with a Bloomberg roadshow presentation; (xii) any United Kingdom stamp duty, stamp duty reserve tax or similar tax or duty imposed by the United Kingdom or any political subdivision thereof upon the original issuance by, or on behalf of, the Company of the Securities, the initial delivery of the Securities, the deposit of the Securities with a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be, the purchase by the Underwriters of the Securities, the sale and delivery of the Securities by the Underwriters to the initial purchasers thereof, and the execution and delivery of this Agreement, the Pricing Agreement and the Indenture; (xiii) the fees and expenses of the Trustee and any authorized agent of the Trustee, and the reasonable fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; and (xiv) any value added taxes payable in the United Kingdom in respect of any of the above expenses.

If this Agreement is terminated by the Representatives in accordance with the provisions of Section 7 or Section 11(a)(i) (v), and (ix) hereof, the Company shall reimburse the Underwriters for their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters, except that in the case of a termination in accordance with Section 11(a)(i) (v), and (ix) hereof, such reimbursement shall include only any expenses actually incurred (not to exceed $[          ]).
 
7.           The obligations of the Underwriters of any Securities under the Pricing Agreement relating to such Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties of the Company in or incorporated by reference in the Pricing Agreement relating to such Securities are, at and as of the Time of Delivery for such Securities, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:
 
(a)           The Registration Statement is effective and at the Time of Delivery no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission and no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act should have been received.  The Prospectus shall have been transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the time period prescribed by Rule 424(b) of the 1933 Act Regulations; the Term Sheet and any other material required to be filed by the Company pursuant to Rule 433(d) of the
 
 
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1933 Act Regulations shall have been transmitted to the Commission for filing pursuant to Rule 433(d) of the 1933 Act Regulations; and, in each case, prior to the Time of Delivery the Company shall have provided evidence satisfactory to the Representatives of such timely filing; and no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission have been complied with.
 
(b)           At the Time of Delivery, the Representatives shall have received:
 
(i)           The opinion and 10b-5 letter, each, dated as of the Time of Delivery, of Davis Polk & Wardwell LLP, U.S. counsel for the Company, with respect to the matters set forth in Annex III hereto in form and substance reasonably satisfactory to the Representatives.
 
(ii)           The opinion, dated as of the Time of Delivery, of Dundas & Wilson CS LLP, Scottish solicitors to the Company, with respect to the matters set forth in Annex IV hereto in form and substance reasonably satisfactory to the Representatives.
 
(iii)           The opinion, dated as of the Time of Delivery, of Linklaters LLP, English solicitors to the Company, with respect to the matters set forth in Annex V hereto in form and substance reasonably satisfactory to the Representatives.
 
(iv)           The opinion and 10b-5 letter, each dated as of the Time of Delivery, of Shearman & Sterling LLP, counsel for the Underwriters, with respect to the matters set forth in Annex VI hereto in form and substance reasonably satisfactory to the Representatives.
 
(c)           The independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus (the “ Independent Accountants ”) shall have furnished to the Representatives a letter, delivered at a time prior to the execution of the Pricing Agreement and dated the date of delivery thereof, with regard to matters customarily covered by accountants’ “comfort letters” and otherwise in form and substance satisfactory to the Representatives.
 
(d)           The Independent Accountants shall have furnished to the Representatives a letter, dated at the Time of Delivery, to the effect that it reaffirms the statements made in the letter furnished pursuant to Section 7(c), except that the specified “cut-off” date referred to therein shall be a date not more than three business days prior to the Time of Delivery.
 
(e)           If required pursuant to the Pricing Agreement, an application shall have been made for listing the Securities on the [Luxembourg Stock Exchange] [London Stock Exchange].
 
 
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(f)           At the Time of Delivery (1) there shall not have been, since the date of the Pricing Agreement or since the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries considered as one enterprise, and (2) the Representatives shall have received a certificate of the Company executed on its behalf by an officer of the Company, dated as of the Time of Delivery, to the effect that (i) the representations and warranties in Section 2 hereof are true and correct in all material respects as though expressly made at and as of the Time of Delivery; (ii) the Company has complied in all material respects with all agreements hereunder and satisfied in all material respects all conditions on its part to be performed or satisfied hereunder at or prior to the Time of Delivery; and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of the Company, no proceedings for that purpose have been initiated or threatened by the Commission.
 
(g)           The Company shall have furnished to the Underwriters a certificate, dated the Time of Delivery, of a deputy secretary of the Company, stating that to the best knowledge and belief of the deputy secretary signing such certificate after reasonable inquiry, the issue and sale of the Securities in the manner contemplated in the Disclosure Package and Prospectus do not and will not result in a breach, default or acceleration of any payment or amount under any contract, agreement or undertaking to which the Company or any of its subsidiaries is a party (or by which any such entity is bound), which breach, default or acceleration would have a material adverse effect on the Company and its subsidiaries taken as a whole.
 
(h)           [There shall not have occurred any lowering of the rating of any of the Company’s securities by Moody’s Investors Service, Inc., Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch Ratings, Inc.]
 
(i)           If an affiliate (as defined in applicable NASD rules) of the Company is participating in the offering of the Securities, FINRA shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
 
If any condition specified in this Section 7 shall not have been fulfilled when and as required to be fulfilled and not otherwise waived by the Underwriters, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Time of Delivery, and such termination shall be without liability of any party to any other party except as provided in Section 6 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 herein shall remain in effect.
 
8.           (a)           The Company agrees to indemnify and hold harmless each Underwriter, each of the Underwriters’ affiliates, directors, officers and employees, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows:
 
 
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(i)           against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be part of the Registration Statement pursuant to Rule 430A(b) of the 1933 Act Regulations or, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus, the Preliminary Prospectus, the Term Sheet, any Issuer Free Writing Prospectus or any related preliminary prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
 
(ii)           against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and
 
(iii)           against any and all expense whatsoever, as reasonably incurred (including, subject to Section 8(c) hereof, the fees and disbursements of counsel chosen by the Representatives), in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above;
 
provided , however , provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), the Prospectus, the Preliminary Prospectus, the Term Sheet, any Issuer Free Writing Prospectus or any related preliminary prospectus (or any amendment or supplement thereto).
 
(b)           Each Underwriter severally agrees to indemnify and hold harmless each of the Company, its directors, each of the officers of the Company who signed the Registration Statement, the Company’s authorized representative in the United States and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 8 as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), the Prospectus, any related preliminary prospectus (or any amendment or supplement thereto) in reliance upon and in
 
 
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conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), or the Prospectus or such preliminary prospectus (or any amendment or supplement thereto).
 
(c)           Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement.
 
(d)           Any indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. In the case of parties indemnified pursuant to Section 8(a) above, counsel to the indemnified parties shall be selected by the Underwriters, and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.  No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
 
(e)           If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Securities on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall, if permitted by applicable law, contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Securities on the other in connection with the statements or omissions which
 
 
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resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts, concessions and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.
 
(f)           The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act.
 
9.           If one or more of the Underwriters shall fail at the Time of Delivery to purchase the Securities which it is or they are obligated to purchase under this Agreement and the Pricing Agreement (the “ Defaulted Securities ”), the Representatives shall have the right, within 36 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase, or procure purchasers for, all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if the Representatives shall not have completed such arrangements within such 36-hour period, then:
 
 
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(a)           if the number of Defaulted Securities does not exceed 10% of the Securities which the Underwriters are obligated to purchase at the Time of Delivery, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations under the Pricing Agreement relating to such Securities bear to the underwriting obligations of all non-defaulting Underwriters, or
 
(b)           if the number of Defaulted Securities exceeds 10% of the Securities which the Underwriters are obligated to purchase or procure purchasers for at the Time of Delivery, the Pricing Agreement relating to such Securities shall terminate without liability on the part of any non-defaulting Underwriter.
 
No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default.
 
In the event of any such default which does not result in a termination of the relevant Pricing Agreement, either the Representatives or the Company shall have the right to postpone the Time of Delivery for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements.
 
10.           All representations, warranties and agreements contained in this Agreement and any Pricing Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters pursuant to this Agreement.
 
11.           (a)           The Representatives may terminate this Agreement, immediately upon notice to the Company, at any time prior to the Time of Delivery (i) if there has been, since the date of the Pricing Agreement or the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations, of the Company and its subsidiaries considered as one enterprise, or (ii) if there has occurred any outbreak or escalation of hostilities involving the United States or the United Kingdom or the declaration by the United States or the United Kingdom of a national emergency or war, or (iii) the occurrence of another calamity or crisis or any change in financial, political or economic conditions or currency exchange rates or controls in the United States, the United Kingdom or elsewhere, if the effect of any such event specified in clause (ii) and (iii) in the judgment of the Representatives (after consultation with the Company if practicable) makes it impracticable or inadvisable to market the Securities or enforce contracts for the sale of the Securities in the manner contemplated in the Prospectus, or (iv) if there has occurred a suspension or material limitation in trading in securities generally on the New York Stock Exchange, London Stock Exchange or any other stock exchange on which the Company’s securities are listed, or (v) if there has occurred a suspension or material limitation in trading the Company’s securities on the New York Stock Exchange or the London Stock Exchange, or (vi) if there has occurred a material adverse change in the financial markets in the United States or in the international financial markets, or (vii) if a banking moratorium on commercial banking
 
 
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activities has been declared by the relevant authorities in New York or London, or a material disruption in commercial banking or securities settlement or clearance services in the United States or the United Kingdom has occurred, or (viii) if there has occurred a change or development involving a prospective change in the United States or the United Kingdom taxation which has, or will have, a material adverse effect on the Company or the Securities or the transfer thereof, or (ix) if there is any lowering of the rating of any of the Company’s debt securities, preference shares, American depositary shares representing preference shares or American depositary receipts evidencing American depositary shares representing preference shares, or a public announcement that such rating is under surveillance or review, with possible negative implications, in each case, by Moody’s Investors Service, Inc., Standard and Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch, Inc.
 
(b)           If this Agreement is terminated pursuant to Sections 7, 9 or 11 hereof, such termination shall be without liability of any party to any other party except as provided in Section 6 or Section 9 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 shall remain in effect.
 
12.           In all dealings hereunder, the Representatives of the Underwriters of the Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement.
 
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Company Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
 
13.           This Agreement and any Pricing Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement or any Pricing Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers, directors and authorized representative of the Company referred to in Section 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Pricing Agreement or any provision herein or therein contained. This Agreement and any Pricing Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers, directors and authorized representative of the Company and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
 
 
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14.           (a)           The Company irrevocably consents and agrees, for the benefit of the Underwriters, that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement or the Pricing Agreement may be brought in the courts of the State of New York or the courts of the United States of America located in the Borough of Manhattan, The City of New York and hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam , generally and unconditionally with respect to any action, suit or proceeding for itself and in respect of its properties, assets and revenues.
 
(b)           The Company hereby irrevocably designates, appoints, and empowers John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its designee, appointee and agent to take process, receive and forward process or to be served with process for and on its behalf of any and all legal process, summons, notices and documents which may be served in any such action, suit or proceeding brought in any such United States or State court which may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Company agrees to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 14 satisfactory to the Representatives. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents out of any of the aforesaid courts in any such action, suit or proceeding by serving a copy thereof upon the relevant agent for service of process referred to in this Section 14 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified air mail, first class, postage prepaid, to each of them at their respective addresses specified in or designated pursuant to this Agreement. The Company agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of any Underwriter to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or proceedings against the undersigned in any jurisdictions, and in any manner, as may be permitted by applicable law. The Company hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement or the Pricing Agreement brought in the United States federal courts or the courts of the State of New York located in the Borough of Manhattan, The City of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
 
15.           Each Underwriter severally represents and agrees that: (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning
 
 
20
 
of section 21 of the Financial Services and Markets Act 2000 (the “ FSMA ”)) received by it in connection with the issue or sale of any Securities in circumstances in which section 21(1) of the FSMA would not, if the Company was not an authorised person, apply to the Company; and (b) it has complied and will comply with all applicable provisions of the FSMA (and all rules and regulations made pursuant to the FSMA) with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.
 
16.           In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “ Relevant Member State ”), each Underwriter severally represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “ Relevant Implementation Date ”), it has not made and will not make an offer of Securities to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Securities which has been approved by the competent authority in that Relevant Member State or where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Securities to the public in that Relevant Member State: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than EUR 43,000,000; and (3) an annual net turnover of more than EUR 50,000,000, as shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Underwriters; or (d) in any other circumstances falling under Article 3(2) of the Prospectus Directive, provided that no such offer of Securities requires the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this Section 16 of this Agreement, the expression “an offer of Securities to the public” in relation to any Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

17.           The Company hereby acknowledges that (a) the purchase, or procurement of purchasers of, and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through which any Underwriter may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in connection with   the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on related or other matters).  The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
 
 
21
 
 
 
 
18.           Time shall be of the essence of each Pricing Agreement. As used herein, “ business day ” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
 
19.           This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to conflict of laws provisions thereof. Specified times of day refer to New York City time.
 
20.           This Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement.
 
[The rest of this page is intentionally left blank.]

 

 
22
 


If the foregoing is in accordance with your understanding, please sign and return to us [        ] counterparts hereof.
 
Very truly yours,
 
   
THE ROYAL BANK OF SCOTLAND GROUP plc
 
   
   
By:
   
 
Name:
 
 
Title:
 
 
 




[The rest of this page is intentionally left blank.]

 
23
 

Accepted as of the date hereof:
 
[names of representatives]
 
 
By:
 
 
Name:
 
Title:


 
For themselves and as representatives of the several Underwriters
 


 
24
 

ANNEX I
 
Pricing Agreement

 
[Names of Representatives]
 
[As Representatives of the several
Underwriters named in Schedule I hereto,]
___________ __, ____
 

 
Ladies and Gentlemen:
 
The Royal Bank of Scotland Group plc, a public limited company incorporated under the laws of, and registered in, Scotland (the “ Company ”), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated _________ __, ____ (the “ Underwriting Agreement ”), between the Company on the one hand and the several Underwriters on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the “ Underwriters ”), or to purchasers procured by them, the securities specified in Schedule II hereto (the “ Securities ”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Disclosure Package and/or the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Disclosure Package and/or the Prospectus (each as therein defined), as the case may be, and also a representation and warranty as of the date of this Pricing Agreement in relation to the Disclosure Package and/or the Prospectus (as amended or supplemented), as the case may be, relating to the Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto.
 
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.
 
Subject to the terms and conditions set forth herein (including Schedules I and II hereto) and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, or to purchasers procured by them, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, or to procure purchasers to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Securities set forth opposite the name of such Underwriter in Schedule I hereto.
 
 
25
 
 
If the foregoing is in accordance with your understanding, please sign and return to us [        ] counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.
 
[The rest of this page is intentionally left blank.]

 
26
 


 
 
Very truly yours,
 
   
THE ROYAL BANK OF SCOTLAND GROUP plc
 
   
   
By:
   
 
Name:
 
 
Title:
 
 
 

 
[The rest of this page is intentionally left blank.]

 
27
 

Accepted as of the date hereof:
 
[names of representatives]
 
 
 
By:
 
 
Name:
 
Title:


For themselves and as representatives of the several Underwriters

 
28
 

SCHEDULE I
 
     
Principal Amount of
Securities to be Purchased
     
 
[Names of Representatives]
   
[          ]
[Names of other Underwriters]
   
[          ]
     
 
 
Total:
 
[_____]


 
29
 


 
SCHEDULE II
 
Capitalized terms used herein, unless otherwise stated, shall have the meaning set forth in the Underwriting Agreement.
 
Title of Securities:
 
[ ]% [Capital Securities] due [ ]
 
Aggregate principal amount:
 
$[ ] principal amount of the Securities
 
Price to Public:
 
[ ]% of the principal amount of the Securities
 
Purchase Price by Underwriters:
 
[ ]% of the principal amount of the Securities
 
Underwriting Commission:
 
[ ]%
 
Form of Securities:
 
Book-entry only form represented by one or more global securities deposited with a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System and Clearstream Banking, sociéte anonyme , as the case may be.
 
Specified funds for payment of purchase price:
 
Wire transfer of immediately available funds
 
Time of Delivery:
 
9:30 a.m. (New York time), ________ __, ____
 
Indenture:
 
Indenture dated as of [     ] between the Company and The Bank of New York, as Trustee.
 
Maturity:
 
________ __, ____
 
Interest Rate:
 
[ ]%
 
 
 
30
 
Interest Payment Dates:
 
Interest will be paid on the Securities on ________ ___ and ________ ___ of each year, commencing __________ __, ____.
 
Redemption Provisions:
 
The Securities may be redeemed as described in the Prospectus.
 
Sinking Fund Provisions:
 
No sinking fund provisions.
 
Closing location for delivery of Securities:
 
Offices of Davis Polk & Wardwell LLP, 99 Gresham Street, London EC2V 7NG, United Kingdom
 
Names and addresses of Representatives:
 
Designated Representatives:
 
Address for Notices:
 
Stock Exchange Listing:
 
The [Luxembourg Stock Exchange] [London Stock Exchange]
 
Other Terms:
 
The Securities will have additional terms as more fully described in the Disclosure Package and the Prospectus.
 

 

 
31
 


 
ANNEX II
 
 

  Issuer Free Writing Prospectuses Included in Disclosure Package

 
32
 

ANNEX III
 
FORM OF OPINION OF
DAVIS POLK & WARDWELL LLP, U.S. COUNSEL
FOR THE COMPANY
 
[To be included as a Statement of Fact before the opinion: The Registration Statement became effective under the 1933 Act and the Indenture qualified under the Trust Indenture Act upon the filing of the Registration Statement with the Commission on [ date of filing ] pursuant to Rule 461(e)].

Based upon the foregoing, we are of the opinion that:
 
1.           Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly executed and delivered by the Company.

2.           Assuming the Indenture has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Indenture has been duly executed and delivered by the Company, and the Indenture is a valid and binding agreement of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability.

3.           Assuming the Securities have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Securities, when the Securities are authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement (including the Pricing Agreement), will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability, and will be entitled to the benefits of the Indenture pursuant to which such Securities are to be issued.

4.           Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, under the laws of the State of New York relating to personal jurisdiction, the Company has, pursuant to Section 14 of the Underwriting Agreement and Section 1.14 of the Indenture, validly and irrevocably submitted to the personal jurisdiction of any New York state or U.S. federal court located in the State of New York, Borough of Manhattan in the City of New York (each a “ New York Court ”), in any action arising out of or relating to the Underwriting Agreement and the Pricing Agreement or the transactions contemplated thereby, and has validly and irrevocably waived to the fullest extent it may effectively do so, any objection to the venue of a proceeding in any such New York Court, and has validly and irrevocably appointed John Fawcett as its initial authorized agent for the purposes described in Section 14 of the
 
 
33
 
 
Underwriting Agreement and Section 1.14 of the Indenture; and service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement and Section 1.14 of the Indenture will be effective service of process in any such action upon the Company.

5.           The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an investment company as such term is defined in the Investment Company Act of 1940, as amended.

6.           Except as disclosed in the Prospectus, the execution and delivery by the Company of, and the performance by the Company of its obligations under, the Underwriting Agreement (including the Pricing Agreement), the Indenture and the Securities (collectively, the “ Documents ”) will not contravene any provision of the laws of the State of New York or any federal law of the United States of America that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated thereby, provided that we express no opinion as to federal or state securities laws.

7.           No consent, approval, authorization or order of, or qualification with, any governmental body or agency under the laws of the State of New York or any federal law of the United States of America that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated by the Documents is required for the execution, delivery and performance by the Company of its obligations under the Documents, except such as may be required under federal or state securities or Blue Sky laws as to which we express no opinion.

We have considered the statements included in the Prospectus under the caption “Description of Debt Securities” insofar as they summarize provisions of the Indentures and the Securities. In our opinion, such statements fairly summarize these provisions in all material respects. The statements included in the Prospectus under the caption “Certain U.S. Federal and U.K. Tax Consequences”, insofar as they purport to describe provisions of U.S. federal income tax laws or legal conclusions with respect thereto, fairly and accurately summarize the matters referred to therein in all material respects.


 
34
 

FORM OF 10b-5 LETTER OF
DAVIS POLK & WARDWELL LLP, U.S. COUNSEL
FOR THE COMPANY
 
On the basis of the information gained in the course of the performance of the services rendered above, but without independent check or verification except as st ated :

1.           The Registration Statement and the Prospectus appear on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder; and

2.           nothing has come to our attention that causes us to believe that, insofar as relevant to the offering of the Securities:

 
a.
the Registration Statement or the Prospectus included therein at the time the Registration Statement became effective contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading,

 
b.
at the [Time of Sale], the Disclosure Package contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or

 
c.
the Prospectus as of the date of the Underwriting Agreement or as of the date hereof contained or contain any untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

In providing this letter to you and the other several Underwriters, we have not been called to pass upon, and we express no view regarding: (1) the financial statements or financial schedules or other financial or accounting data included in the Registration Statement, the Disclosure Package or the Prospectus or (2) the Statement of Eligibility of the Trustee on Form T-1. It is understood, for the purpose of this letter, that any data furnished in accordance with “Guide 3.  Statistical Disclosure by Bank Holding Companies” under the 1933 Act and the pro forma accounts of the Company and [ABN AMRO Holdings N.V.] is financial data.  In addition, we express no view as to the conveyance of the Disclosure Package or the information contained therein to investors.
 

 
35
 

ANNEX IV
 
FORM OF OPINION OF
DUNDAS & WILSON CS LLP, SCOTTISH SOLICITORS
TO THE COMPANY
 
Based upon and subject to the foregoing and subject to the qualifications set out below and to any matters not disclosed to us, it is our opinion that so far as the present law of Scotland is concerned:
 
1.           The Company and the Bank have been duly incorporated in Scotland as limited liability companies and are validly registered under the law of Scotland, are not in liquidation, and have the corporate power and authority under such law to conduct their respective businesses as described in the Prospectus and/or the Prospectus Supplement.
 
2.           The execution, delivery and performance by the Company of the Underwriting Agreement and the Pricing Agreement is within the corporate power of the Company and has been duly authorized by all necessary corporate action on the part of the Company.
 
3.           The creation and issuance of the Securities and the execution, delivery and performance by the Company of the Indenture is within the corporate power of the Company and has been duly authorized by all necessary corporate action on the part of the Company; assuming, inter alia , due authorization and execution of the Indenture by the Trustee, the obligations on the part of the Company under the Indenture are valid and legally binding against the Company, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
4.           The Securities (in global or definitive form) (when executed by the Company in accordance with the Indenture), insofar as Scots law governs the  formalities of execution and delivery thereof, will have been duly executed by or on behalf of the Company and (upon their issue, authentication and delivery in accordance with the terms of the Underwriting Agreement, the Pricing Agreement  and the Indenture) will have been duly issued and delivered, and they will  constitute valid and legally binding obligations of the Company subject as to  enforcement to bankruptcy, insolvency, reorganisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
5.           The obligations on the part of the Company under the Indenture are valid and legally binding against the Company subject as to enforcement to  bankruptcy, insolvency, reorganisation and other laws of general applicability  relating to or affecting creditors’ rights generally and to general equity principles.
 
6.           No authorisations, approvals, consents or licences of governmental, judicial or public bodies or authorities of or in Scotland (together “ consents ”), except such consents as may be required under statutory provisions (other than the Companies Acts, 1985, 1989 and 2006 as they apply to a company having its registered office in Scotland) or regulations or practices applying in Great Britain as a whole, are required by the Company as a result of the Company being a Scottish registered company for the execution, issue and delivery of the Securities.
 
 
36
 
7.           Neither the execution, delivery and performance by the Company of the Indenture, nor the execution, issue and delivery of the Securities, will of itself result in any violation in any material respect of:
 
(a)  the Memorandum or Articles of Association of the Company or the Bank; or
 
(b)  any existing applicable mandatory provision of Scots law or regulation; or
 
(c)  any existing judgment, order or decree of any Scottish court.
 
8.           The Underwriters would under current practice of the Scottish courts (assuming the effect of Section 14 of the Underwriting Agreement is not to prorogate the exclusive jurisdiction of the United States courts or the courts of or in the State of New York) be permitted to commence proceedings in the Scottish courts for enforcement of the Underwriting Agreement and Pricing Agreement and the Scottish courts would accept jurisdiction in any proceedings for so long as the Company remained domiciled in Scotland and, upon proper averments being made in a Scottish court in any such proceedings, the choice of the law of the State of New York as the proper law of the Underwriting Agreement would be upheld as a valid choice of law by that court.
 
9.           The submission by the Company in Section 14 of the Underwriting Agreement to the jurisdiction of the courts of or in New York, and the designation, appointment and empowerment by the Company under the said Section 14 of an agent for service, would be upheld by the Scottish courts as valid and effective.
 
10.           In relation to any Agreement which is expressed to be governed by the law of the State of New York as its proper law, a judgment of the courts of the State of New York as the relevant forum would be recognised in Scotland through an action of decree conform under common law in the Court of Session in Scotland, assuming that (I) the court which issued the judgment had jurisdiction and acted judicially with no element of unfairness, (II) such judgment was final, not obtained by fraud, or a revenue or penal action, remained capable of enforcement in the place it was pronounced and was not contrary to natural justice, and (III) enforcement of the judgment is not contrary to Scottish public policy.
 
11.           The Underwriting Agreement, the Pricing Agreement and the Indenture have, insofar as Scots law governs the formalities of execution and  delivery thereof, been duly executed and delivered by or on behalf of the  Company.
 
12.           Assuming that the subordination provisions in Section 12.01 of the Indenture are, in respect of the Securities (as defined in the Indenture) legal and valid and binding obligations of the Company and each holder of the Securities enforceable against each of them (and against a liquidator or  administrator of the Company), in accordance with their terms, under English  law, such provisions will, in respect of the Securities, be given effect by the  courts of Scotland (including, without limitation in the event of a winding-up  administration or other insolvency proceeding of or affecting the Company) in  accordance with their terms.
 
13.           [The subordination provisions of the Securities and in the Indenture each as they are described in the Prospectus, are accurate in all  material respects; provided however that we
 
 
 
37
 
express no opinion as to the reasonableness, completeness or fairness of such statements in the context of a prospectus issued publicly in the United States of America or as to the compliance of such statements with the requirements of the securities laws of the United States of America or any part thereof;]
 

 

 

 
38
 

ANNEX V
 
FORM OF OPINION OF LINKLATERS LLP
 
ENGLISH SOLICITORS TO THE COMPANY
 
Assuming that the Company is resident in the United Kingdom for the purposes of United Kingdom taxation, we are of the opinion that:
 
1.           It is not necessary either to ensure the validity of the Securities, the Underwriting Agreement, the Pricing Agreement or the Indenture or to ensure the compliance by the Representatives with any mandatory provision of English law, to obtain any approval, consent, order or permission of, or to effect any further filing, recording or registration with, any public authority or governmental agency in England or authorisation from any regulatory authority, government department or court in England (other than any consents, approvals or authorisations required under the Companies Act 2006 as it applies to a company having its registered office in Scotland - as to which we understand you are relying upon an opinion of Dundas & Wilson CS LLP) in respect of the execution, delivery or performance of the Securities, the Underwriting Agreement, the Pricing Agreement, or the Indenture.  [ Additional language to be added if notes are listed in London ]
 
2.           The statements in the Disclosure Package and the Prospectus Supplement under the section headed “Certain U.S. Federal and U.K. Tax Consequences”, insofar as such statements constitute a general summary of both current United Kingdom tax law and United Kingdom H.M. Revenue & Customs’ practice relevant to the issue of the Securities, if any, fairly and accurately summarise the matters referred to therein.
 
3.           No United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes are payable by the Underwriters on the creation, issue or delivery of the Securities by the Company which comprise loan capital falling within the exemption in Section 79(4) and not within Sections 79(5) or (6) of the Finance Act 1986. Furthermore, even if the above exemption does not apply, there will nevertheless be no such United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes payable by the Underwriters provided that (i) such Underwriters are not persons falling within any of Sections 93(2), 93(3) or 96 (1) of the Finance Act 1986 and (ii) any other person falling within any of Sections 93(2), 93(3) or 96(1) of the Finance Act 1986 to whom the Securities are issued or delivered does not seek to pass on the cost of any charge to United Kingdom stamp duty, stamp duty reserve tax or other issue or documentary taxes falling on them to the Underwriters.
 
4.           No United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes should be payable in the United Kingdom on the creation, issue which comprise loan capital falling within Section 79(4) and not within Sections 79(5) and (6) of the Finance Act 1986, or on delivery by, or on behalf of, the Company of the Securities in registered form, the execution and delivery of the Pricing Agreement, the Underwriting Agreement or the consummation of the transactions contemplated thereby;
 
 
39
 
5.           No United Kingdom value added tax will be payable by the Underwriters in respect of their underwriting commissions under the Underwriting Agreement.
 
6.           Payments of interest in respect of the Securities may be made without withholding taxes or duties in the United Kingdom provided that the Securities are listed on a “recognised stock exchange” within the meaning of  section 1005 of the Income Tax Act 2007 at the time of the  payment: The [Luxembourg Stock Exchange] [London Stock Exchange] is a  “recognised stock exchange” for purposes of section 1005;
 
7.           Each holder of a Security may, in certain limited circumstances as set out in, and subject always to the terms of the Indenture, (if and when a valid cause of action which is enforceable by a holder in the English courts arises under the Securities) bring such a claim as a claimant in the English courts for the enforcement of its rights against the Company. Such a claim will not be subject to any procedural rules which are not applicable to residents of England, save that an English court may take residency or domicile of a claimant into account when considering the procedural rules and/or legal principles in relation to security for costs and forum non conveniens .
 
8.           Neither the execution and delivery of the Underwriting Agreement, the Pricing Agreement and the Indenture by the Company, nor the compliance by the Company with its obligations under the Underwriting Agreement, the Pricing Agreement or the Indenture will, of itself, breach (A) any mandatory provision of English law of general application binding on the Company, or (B) any covenant of the Company (other than any financial or similar covenant) contained in any of the following documents:
 
(a)           Trust Deed dated 11 December 1985 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$350,000,000 undated floating rate primary capital notes;
 
(b)           [Trust Deed dated 24 August 1989 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$400,000,000 undated floating rate primary capital notes;]
 
(c)           First Supplemental Trust Deed dated 1 March 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £150,000,000 10½% subordinated bonds 2013;
 
(d)           Second Supplemental Trust Deed dated 12 August 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £200,000,000 9½% undated subordinated bonds;
 
(e)           Trust Deed dated 10 June 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting €1,250,001,000 fixed/floating rate callable subordinated notes due 2042;
 
(f)           Trust Deed dated 5 December 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$750,001,000 fixed rate callable subordinated notes due 2042;
 
 
 
1 To be confirmed.
 
 
40
 
(g)           Trust Deed dated 21 May 2003 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$850,001,000 fixed/floating rate callable subordinated notes due 2043;
 
(h)           Trust Deed dated 10 December 2003 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$650,001,000 fixed/floating rate callable subordinated notes due 2043;
 
(i)           Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$950,001,000 fixed/floating rate callable subordinated notes due 2044;
 
(j)           Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$550,001,000 floating rate callable subordinated notes due 2044, [as supplemented by a supplemental Trust Deed dated 27 September 2004 constituting an additional U.S.$450,001,000 floating rate callable subordinated notes due 2044;] 1
 
(k)           Trust Deed dated 12 December 2005 between the Company and The Law Debenture Trust Corporation p.l.c. constituting €500,001,000 fixed/floating rate callable subordinated notes due 2046;
 
(l)           Trust Deed dated 8 December 2006 between the Company and The Law Debenture Trust Corporation p.l.c. constituting £400,001,000 fixed/floating rate callable subordinated notes due 2047; and
 
(m)           Trust Deed dated 4 October 2007 between the Company and BNY Corporate Trustee Services Limited constituting U.S.$.1,600,000,000 6.990 per cent. fixed/floating rate preferred capital securities.
 
[ Add any subsequent Trust Deeds ]
 
For the purposes of the opinion contained in paragraph 8 above we have interpreted the effect of the Underwriting Agreement, the Pricing Agreement, the Indenture and the Securities as if they were governed by and construed in accordance with English law. Such opinion should not be taken as expressing an opinion as to the observance of any financial or similar covenant contained in the documents listed above.
 
9.           Assuming the entry into the Indenture has been duly authorized by the Company in accordance with Scots law, the Indenture (to the extent only of the subordination provisions thereof which are expressed to be governed by English law) when executed and delivered, will constitute a legal, valid and  binding obligation of the Company enforceable against the Company in the  English courts, subject to paragraph 7 above, and the subordination provided for  therein will be binding upon a liquidator or administrator of the Company or any  holder of the Securities.
 
 
1 To be confirmed.
 
 
41
 
 
10.           Assuming the issue of the Securities has been duly authorized by the Company in accordance with Scots law, the Securities (to the extent only of the subordination provisions thereof which are expressed to be governed by English law) when executed and delivered, will constitute legal, valid and binding obligations of the Company enforceable against the Company in the English courts, subject to paragraph 8 above, and the subordination provided for therein will be binding upon a liquidator or administrator of the Company or any holder of the Securities.
 

 
42
 

ANNEX VI
 
FORM OF OPINION OF SHEARMAN & STERLING LLP,
 
COUNSEL FOR THE UNDERWRITERS
 
1.           Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly executed and delivered by the Company.

2.           Assuming that the Indenture has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Indenture has been duly executed and delivered and is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

3.           Assuming that the Securities have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned and authenticated by the Trustee in accordance with the Indenture and delivered and paid for as provided in the Underwriting Agreement and the Pricing Agreement, the Securities will be the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture.

4.           The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended.

5.           Assuming the validity of such action under Scots law, under the laws of the State of New York relating to submission to jurisdiction, pursuant to Section 14 of the Underwriting Agreement, the Company has (i) validly and irrevocably submitted to the jurisdiction of the federal courts of the United States of America located in the Borough of Manhattan, the City of New York and the courts of the State of New York located in the Borough of Manhattan, the City of New York, for the purposes specified therein, (ii) to the fullest extent permitted by law, waived any objection which it may now or hereafter have to the laying of venue in any legal suit, action or proceeding in any federal or state court in the Borough of Manhattan, the City of New York and (iii) validly and, to the extent stated therein, irrevocably appointed John Fawcett as its initial authorized agent for the purpose described in Section 14 of the Underwriting Agreement.  Service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement will be effective to confer valid personal jurisdiction over the Company.

6 .             Insofar as the statements in the Disclosure Package and the Final Offering Memorandum (i) under the caption “ Taxation” purport to describe certain U.S . federal income tax laws as they relate to U.S. Holders (as defined therein) and (ii) under the caption “ Certain ERISA Considerations” constitute summaries of legal matters referred to therein, such statements fairly and accurately summarize in all mater i al respects the matters referred to therein.
 
 
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7.             Insofar as the statements in the Disclosure Package and the Prospectus under the caption “ Description of Debt Securities” constitute summaries of documents referred to therein, fairly summarize in all materi al respects the documents referred to therein.

 
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FORM OF 10b-5 LETTER OF
SHEARMAN & STERLING LLP,
COUNSEL FOR THE UNDERWRITERS
 
Subject to the limitations set forth in the immediately preceding paragraph, we advise you that, on the basis of the information we gained in the course of performing the services referred to above, in our opinion, (a) each of the documents incorporated by reference in the Disclosure Package and the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we express no opinion) at the time it was filed with the Commission, appears on its face to have been appropriately responsive in all material respects to the requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations of the Commission thereunder and (b) each of the Registration Statement, the Preliminary Prospectus and the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we express no opinion), appears on its face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder.
 
We further advise you that, subject to the limitations set forth in the second preceding paragraph, on the basis of the information we gained in the course of performing the services referred to above, no facts came to our attention which gave us reason to believe that (i) the Registration Statement (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of the date of the Pricing Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Disclosure Package (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of the Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of its date or the date hereof, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In expressing the foregoing opinions and belief, we have not been called to pass upon, and we express no opinion or belief as to, any Statement of Eligibility of the Trustee on Form T-1. For the purposes of this and the preceding paragraph, the term “financial data” includes, without limitation, the pro forma accounts of the Company and [ABN AMRO Holdings N.V.] and the data required to be included in the Registration Statement and the Prospectus under the 1933 Act by Guide 3, Statistical Disclosure by Bank Holding Companies.
 
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Exhibit 1.2
 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
[ ] American Depositary Shares, Series [ ] Representing
 
[ ] Non-Cumulative Dollar Preference Shares, Series [ ] (Nominal Value $.01 each)
 
Underwriting Agreement
 
_______________ __, ____
 

[NAMES OF REPRESENTATIVES]
 
Ladies and Gentlemen:
 
From time to time The Royal Bank of Scotland Group plc, a public limited company incorporated and registered in Scotland, United Kingdom (the “ Company ”), proposes to enter into one or more Pricing Agreements (each a “ Pricing Agreement ”) in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the several firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the “ Underwriters ” with respect to such Pricing Agreement and the securities specified therein), or to purchasers procured by them, an aggregate number of American depositary shares representing non-cumulative preference shares as specified in Schedule II to the Pricing Agreement. It is contemplated hereby that a Pricing Agreement will be entered into on the date hereof with respect to [ ] authorized but unissued Category II Non-cumulative Dollar Preference Shares, Series [ ] in the capital of the Company, having a nominal value of $.01 each (the “ Series [ ] Preference Shares ”), to be represented by [ ] American Depositary Shares, Series [ ] (the “ ADSs ”, and together with the Series [ ] Preference Shares, the “ Securities ”). In accordance with the Amended and Restated Nominee Agreement dated November 8, 2005 between the Company and RBS Shelf Nominees Limited (as amended and/or supplemented from time to time), the Series [ ] Preference Shares are to be issued to RBS Shelf Nominees Limited in fully registered form, and then subsequently in the form of share warrants to bearer. RBS Shelf Nominees Limited will deposit the Series [ ] Preference Shares with The Bank of New York, as Depositary (the “ ADR Depositary ”), in bearer form, on behalf of the Company pursuant to a deposit agreement, as amended and restated as of November 2, 2001 (the “ ADR Deposit Agreement ”) among the Company, the ADR Depositary and the holders from time to time of the American Depositary Receipts to be issued thereunder representing the Series [ ] Preference Shares. The American Depositary Receipts evidencing the ADSs are herein referred to as the “ ADRs .”
 
[Subject to certain conditions, the Company may substitute the Series [ ] Preference Shares in whole, but not in part, with Qualifying Non-Innovative Tier 1 Securities (as defined in the Prospectus) (the “ Substituted Securities ”), at any time after [   ] (the “ substitution date ”) in accordance with the terms of the Series [ ] Preference Shares without any requirement for consent or approval of the holders of the Series [ ] Preference Shares.]
 
 
 
The terms of, and rights attached to, any particular issuance of Securities shall be as specified in the Pricing Agreement relating thereto. The offering of the Securities will be governed by this Agreement, as supplemented by the Pricing Agreement. From and after the date of the execution and delivery of the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
 
1.      Particular sales of Securities may be made from time to time to the Underwriters of such Securities, or to purchasers procured by them, for whom the firms designated as representatives of the Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the “ Representatives ”). The term “ Representatives ” also refers to a single firm acting as sole representative of the Underwriters and to an Underwriter or Underwriters who act without any firm being designated as its or their representatives. This Underwriting Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase, or procure purchasers for, the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase, or procure purchasers for, any of the Securities shall be evidenced by the Pricing Agreement with respect to the Securities specified therein. Each Pricing Agreement shall specify the aggregate number of shares of such Securities, the initial public offering price of such Securities, the purchase price to the Underwriters of such Securities, the names of the Underwriters of such Securities, the names of the Representatives of such Underwriters and the number of shares of such Securities to be purchased by each Underwriter, or by purchasers procured by such Underwriter, and shall set forth the date, time and manner of delivery of such Securities and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Registration Statement (as defined below), the Disclosure Package (as defined below) and prospectus with respect thereto) the terms of such Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of facsimile communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.
 
The Company has prepared and filed with the Securities and Exchange Commission (the “ Commission ”) an automatic shelf registration statement as defined under Rule 405 under the U.S. Securities Act of 1933, as amended the (“ 1933 Act ”) on Form F-3 (No. 333-_______) and related preliminary prospectus for the registration of, among other securities, dollar preference shares of the Company, including the Series [ ] Preference Shares, in accordance with the provisions of the 1933 Act and the rules and regulations of the Commission thereunder (the “ 1933 Act Regulations ”). In addition, the Company has prepared and filed with the Commission a registration statement on Form F-6 (No. 333-127867) and a related prospectus for the registration under the 1933 Act of the ADSs.
 
The registration statement on Form F-3, as amended to the date on which it became effective prior to the date of this Agreement (including any prospectus supplement relating to the Securities and any other information, if any, deemed to be part of such registration statement pursuant to Rule 430B of the 1933 Act Regulations), and the prospectus constituting a part thereof (including in each case all documents, if any, incorporated by reference therein to such date) are hereinafter referred to as the “ Registration Statement ” and the “ Prospectus ”,
 
 
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respectively, except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company for use in connection with the offering of the Securities which differs from the Prospectus on file at the Commission at the time the Registration Statement became effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the term “ Prospectus ” shall refer to such revised prospectus or include such prospectus supplement, as the case may be, from and after the time such revised prospectus or prospectus supplement is first provided to the Underwriters for such use and if the Company files any documents pursuant to Section 13, 14 or 15 of the U.S. Securities Exchange Act of 1934, as amended (the “ 1934 Act ”), after the Registration Statement became effective and prior to the termination of the offering of the Securities by the Underwriters, which documents are deemed to be or, in the case of a Report on Form 6-K, are designated as being incorporated by reference into the Prospectus pursuant to Form F-3 under the 1933 Act Regulations, the term “ Prospectus ” shall refer to said prospectus as modified to include the documents so filed from and after the time said documents are filed with or furnished to the Commission.  The term “ Preliminary Prospectus ” means any preliminary form of the Prospectus (including any preliminary prospectus supplement) which is used prior to the filing of the Prospectus and first filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations.  The term “ Free Writing Prospectus ” has the meaning set forth in Rule 405 of the 1933 Act Regulations. The term “ Issuer Free Writing Prospectus ” means (i) any material that satisfies the conditions set forth in Rule 433 of the 1933 Act Regulations and (ii) any roadshow presentation, including any Bloomberg roadshow presentation. The term “ Disclosure Package ” means (i) the Preliminary Prospectus, (ii) any Issuer Free Writing Prospectuses identified in Annex II hereto, (iii) the final term sheet prepared and filed pursuant to Section 5(d) of this Agreement (the “ Term Sheet ”) and (iv) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
 
The registration statement on Form F-6 for the registration of the ADSs evidenced by ADRs, in the form in which it became effective prior to the date of this Agreement, and the prospectus included therein are hereinafter called the “ ADR Registration Statement ” and the “ ADR Prospectus ”, respectively.
 
“ Applicable Time ” means [  ] p.m. (Eastern time) on the date hereof or such other time as agreed by the Company and the Representatives.
 
2.      The Company represents and warrants to, and agrees with, each of the Underwriters, as of the date hereof, as of the Applicable Time, and as of the Time of Delivery referred to in Section 4 hereof that:
 
(a)                 (i) An “automatic shelf registration statement” as defined under Rule 405 under the 1933 Act on Form F-3 (File No. 333-_____) in respect of the Securities has been filed with the Commission not earlier than three years prior to the date hereof; such registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been initiated or threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act has been received by the Company; (ii) No order
 
 
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preventing or suspending the use of the Prospectus, any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission.
 
(b)                 (i) The Disclosure Package does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (ii) any individual Issuer Free Writing Prospectus, when considered together with the Disclosure Package, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, the Disclosure Package or any Issuer Free Writing Prospectus made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Disclosure Package.
 
(c)                 The Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, the Prospectus made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Registration Statement or Prospectus, provided , further , that the representations and warranties in this subsection shall not apply to that part of the Registration Statement that constitutes the Statement of Eligibility (the “ Form T-1 ”) under the U.S. Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”), of the trustee (the “ Trustee ”).
 
(d)                 The documents incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, at the time they were filed with the Commission or when they became effective, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “ 1934 Act Regulations ”), and, at each time the Registration Statement became effective, the Registration Statement complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations, and did not 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 any further documents deemed to be or, in the case of a Report on Form 6-K, designated as being incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus after the date of this Agreement but prior to the termination of the offering of Securities, will, when they are filed with or furnished to the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and, when read together with the other information included or incorporated in the Registration Statement, the Disclosure Package and the Prospectus, will not 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, provided that the
 
 
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representations and warranties in this subsection shall not apply to the Form T-1 of the Trustee.
 
(e)                 At the time the ADR Registration Statement became effective, the ADR Registration Statement and the ADR Prospectus complied in all material respects with the provisions of the 1933 Act and the 1933 Act Regulations and the ADR Registration Statement did not 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. The ADR Prospectus, as amended or supplemented, if applicable, will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they will be made, not misleading.
 
(f)                 The audited consolidated financial statements of the Company for the years ended December 31, ____, and December 31, ____, were prepared in accordance with International Financial Reporting Standards and give a true and fair view (in conjunction with the notes thereto) of the state of the Company and its subsidiaries’ affairs as at such dates and of its profit and cash flows for the years then ended[, and the unaudited consolidated financial statements of the Company for the six month periods ended June 30, ____ and June 30, ____ have been stated on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement.]
 
(g)                 The unaudited pro forma condensed combined financial information (the “ Pro Forma Financial Information ”), comprising a balance sheet as at _____ and income statements for the year ended _____ [and for the six months ended _____] and the related notes included in the Prospectus, has been properly compiled on the basis of the assumptions stated therein and the assumptions used in the preparation of the Pro Forma Financial Information are reasonable.
 
(h)                 (i) Since the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, there has been no material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries, together considered as one enterprise.
 
(i)                 The Company (A) has been duly incorporated in, and is validly registered under the laws of, Scotland; (B) has the requisite corporate power and authority to execute and deliver this Agreement and the Pricing Agreement and had the requisite corporate power and authority to execute and deliver the ADR Deposit Agreement, to issue the Securities, and, in each case, to perform its obligations hereunder and thereunder; (C) has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; (D) has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in
 
 
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any such jurisdiction; and (E) has duly authorized, executed and delivered this Agreement and the Pricing Agreement and this Agreement and the Pricing Agreement constitute the valid and legally binding agreement of the Company enforceable in accordance with its terms, except as rights to indemnity or contribution may be limited by applicable law and subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
(j)                 The ADR Deposit Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the ADR Depositary, constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
(k)                 The Royal Bank of Scotland plc (the “ Bank ”) has been duly incorporated in, and is validly registered under the laws of, Scotland, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; and all of the issued and outstanding share capital or capital stock of the Bank is owned, directly or indirectly, by the Company. National Westminster Bank Plc (“ NatWest ”) has been duly incorporated under the laws of England, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; and all of the issued and outstanding ordinary share capital of NatWest is owned, directly or indirectly, by the Company.  ABN AMRO Holding N.V. (“ ABN AMRO ”) has been duly incorporated under the laws of the Netherlands, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus.
 
(l)                 The Series [ ] Preference Shares are to be represented by the ADSs and, when allotted, issued and paid for in accordance with this Agreement and the Pricing Agreement, the Series [ ] Preference Shares (a) will be validly issued in accordance with the requirements of the Companies Act of 1985 of Great Britain and will be fully paid and not subject to further call or contribution and (b) no holder thereof will be subject to any personal liability to the Company or to creditors of the Company solely by reason of being such a holder.
 
(m)                 Each of the Series [ ] Preference Shares and the ADRs will conform in all material respects to the descriptions thereof contained in the Disclosure Package and the Prospectus.
 
(n)                 All consents, approvals, authorizations, orders and decrees of any court or governmental agency or body of the United States, the United Kingdom or the Netherlands, having jurisdiction over the Company required for the consummation by the Company of the transactions contemplated by this Agreement or the Pricing Agreement or to permit the Company to effect dividend payments in U.S. dollars on the Securities have been obtained and are in full force and effect, except as may be required by United States state securities laws (the “ Blue Sky laws ”).
 
 
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(o)                 The execution, delivery and performance of this Agreement and the Pricing Agreement, the allotment, issuance, authentication, sale and delivery of the Securities and the compliance by the Company with the respective terms thereof, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach under any agreement or instrument to which the Company is a party or by which the Company is bound that is material to the Company and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Memorandum and Articles of Association of the Company or any statute or any order, filing, rule or regulation of any United States, English, Scottish or Dutch court or governmental agency or regulatory body having jurisdiction over the Company.
 
(p)                 The Company is not, and after giving effect to the offer and sales of the Securities and application of the proceeds thereof as described in the Prospectus and the Disclosure Package, will not be, required to register as an “investment company,” as defined in the Investment Company Act of 1940, as amended.
 
(q)                 There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against or affecting the Company or any subsidiary, which is required to be disclosed in the Registration Statement (other than as disclosed therein).
 
(r)                 (A) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), and (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the 1933 Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the 1933 Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under the 1933 Act; and (B) at the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) of the Securities, the Company was not an “ineligible issuer” as defined in Rule 405 under the 1933 Act.
 
(s)                 Deloitte LLP, who have certified certain financial statements of the Company and its subsidiaries, and have audited the Company’s internal control over financial reporting and management’s assessment thereof, are independent public accountants as required by the 1933 Act and the rules and regulations of the Commission thereunder.
 
(t)                 Neither any Issuer Free Writing Prospectus nor the Term Sheet includes any information that conflicts with the information contained in the Registration Statement, the Disclosure Package and the Prospectus, including any document
 
 
 
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incorporated therein or any prospectus supplement deemed to be a part thereof that has not been superseded or modified; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, any Issuer Free Writing Prospectus or the Term Sheet made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Issuer Free Writing Prospectus.
 
(u)                 None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently included on the U.S. Treasury Department’s List of Specially Designated Nationals or otherwise subject to any U.S. sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“ OFAC ”); and the capital raised by the issuance and sale of the Securities will not directly or indirectly be lent, contributed or otherwise made available to:
 
(i)              any subsidiary, joint venture partner or other entity under the control of the Company; or
 
(ii)              to the knowledge of the Company, any other person or entity,
 
in each case for the purpose of financing the activities of any person, entity, or government currently subject to any U.S. sanctions administered by OFAC.
 
3.      Upon the execution of the Pricing Agreement applicable to any Securities and authorization by the Representatives of the release of such Securities, the several Underwriters propose to offer such Securities for sale upon the terms and conditions set forth in the Prospectus (as amended or supplemented).
 
4.      The Securities to be purchased by each Underwriter and/or by purchasers procured by such Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriters (which may include any direction by the Underwriters to deposit the Series [ ] Preference Shares in global form with the ADR Depositary), against payment by the Underwriters, or by the Representatives on behalf of the Underwriters, of the purchase price therefor by wire transfer of immediately available funds to an account designated by the Company as specified in the Pricing Agreement, all in the manner and at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the “ Time of Delivery ” for such Securities.
 
5.      The Company agrees with each of the Underwriters of any Securities that:
 
(a)                 The Company will notify the Representatives immediately on becoming aware of (i) any request by the Commission for any amendment to the Registration Statement or the ADR Registration Statement or any amendment or supplement to the Prospectus or ADR Prospectus or for additional information relating to the Registration Statement, the ADR Registration Statement or the offering of the Securities, and (ii) the
 
 
8
 
 
issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the ADR Registration Statement or any order preventing or suspending the use of any Preliminary Prospectus or other Prospectus in respect of the Securities, or the issuance by the Commission of any notice of objection to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
 
(b)                 If at any time prior to the filing of a final prospectus pursuant to Rule 424(b) of the 1933 Act Regulations, any event occurs as a result of which the Disclosure Package would then include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company will (i) promptly notify the Representatives so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or omission; and (iii) supply any such amendment or supplement to the Underwriters in such quantities as they may reasonably request.
 
(c)                 The Company will, for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities (including in circumstances where such requirement may be satisfied pursuant to Rule 172 or Rule 173(a) of the 1933 Act Regulations), file promptly all reports required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and will give the Representatives notice of its intention to file any amendment to the Registration Statement or any amendment to the ADR Registration Statement or any amendment or supplement to the Disclosure Package, the Prospectus or ADR Prospectus (including any prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Securities which differs from the Prospectus, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations) and will furnish the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus without prior consultation with the Representatives.
 
(d)                 The Company will prepare the Term Sheet, containing solely a description of the final terms of the Securities and the offering thereof, in a form approved by the Representatives and will file the Term Sheet not later than the time required by Rule 433(d) of the 1933 Act Regulations.
 
(e)                 The Company will prepare the Prospectus in relation to the Securities and file such Prospectus pursuant to Rule 424(b) of the 1933 Act Regulations not later than the time required by Rule 424(b) of the 1933 Act Regulations following the execution and delivery of the Pricing Agreement relating to the Securities.
 
 
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(f)                 The Company will deliver to each Representative a conformed copy of the Registration Statement and the ADR Registration Statement in each case, as originally filed, and of each amendment thereto (including exhibits and documents filed therewith or incorporated by reference, as the case may be, into the Registration Statement).
 
(g)                 The Company will furnish the Underwriters with copies of the Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus (including, in each case, any supplement thereto) in such quantities as the Representatives may from time to time reasonably request, and will use all reasonable efforts to make the initial delivery of the Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) by no later than 9:00 a.m. on the second business day prior to the Time of Delivery and, if the delivery of a Prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering and sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) is delivered, not misleading, or, if for any reason it shall be necessary during such period to amend or supplement the Prospectus, or to file under the 1934 Act any document incorporated by reference in the Prospectus, in order to comply with the 1933 Act, notify the Underwriters and upon the Representatives’ request prepare and furnish without charge to each Underwriter as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) in connection with sales of the Securities (including in circumstances where such requirement may be satisfied pursuant to Rule 172 or 173(a) of the 1933 Act Regulations) at any time nine months or more after the time of issue of the Prospectus, upon the Representatives’ request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act.
 
(h)                 The Company agrees that, unless it has obtained or will obtain (as the case may be) the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained or will obtain (as the case may be) the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or Free Writing Prospectus required to be filed by the Company with the Commission or retained by the Company under Rule 433 of the 1933 Act Regulations, other than the information contained in the Term Sheet provided , however , that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Annex II hereto. Any such free writing prospectus consented to by the parties is hereinafter referred to as a “ Permitted Free Writing Prospectus .” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii)
 
 
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it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 of the 1933 Act Regulations applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
 
(i)                 The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Disclosure Package or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representative and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein.
 
(j)                 The Company will endeavour to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will maintain such qualifications for as long as the Representatives shall reasonably request; provided that in connection with any such qualification the Company shall not be required to qualify as a foreign corporation in any such jurisdiction or to file a general consent to service of process in any such jurisdiction.
 
(k)                 The Company will make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement, an earnings statement of the Company and its subsidiaries on a consolidated basis (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158 of the 1933 Act Regulations).
 
(l)                 During the period beginning from the date of the Pricing Agreement for such Securities and continuing to and including the Time of Delivery, the Company will not offer, sell, contract to sell or otherwise dispose of any securities of the Company which are substantially similar to such Securities (other than (i) the Securities, (ii) securities previously agreed to be sold by the Company and the Group and (iii) commercial paper issued in the ordinary course of business), except as otherwise may be provided in this Agreement, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld.
 
(m)                 The Company will cooperate with the Underwriters and use its best efforts to permit the ADRs to be eligible for clearance and settlement through the facilities of The Depository Trust Company (“ DTC ”).
 
 
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(n)                 Prior to the issuance of the Securities, the Company will have obtained all consents, approvals, authorizations, orders, registrations, qualifications and decrees of any court or governmental agency or body of the United States and the United Kingdom necessary or required for the valid issuance of the Securities and to permit the Company to make dividend payments on the Securities in U.S. dollars.
 
(o)                 [In the event the Company elects to substitute the Series [ ] Preference Shares in accordance with the terms of issue thereof, the Company shall have in place at the time of substitution the necessary corporate authorizations necessary to effect a substitution. The Company shall ensure that any Substituted Securities so issued upon substitution will be validly issued in accordance with the requirements of the relevant laws and regulations governing the issuance of such Substituted Securities in the jurisdiction in which the issuer of such Substituted Securities is organized.]
 
6.      The Company will pay all expenses incident to the performance of its obligations under this Agreement, any Pricing Agreement and the Securities, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, the ADR Registration Statement, any Issuer Free Writing Prospectus, the Prospectus and any related preliminary prospectus (or any amendments or supplements thereto), and the cost of furnishing copies thereof to the Underwriters; (ii) the printing, if any, of this Agreement, the Pricing Agreement, the ADR Deposit Agreement, the ADRs and the Blue Sky Survey; (iii) the printing or reproduction, preparation, issuance and delivery of the certificates, if any, for the Securities to (or at the direction of) the Underwriters or the ADR Depositary, including any stock transfer or other taxes or duties payable upon the delivery of the Series [ ] Preference Shares to the ADR Depositary or the sale of the Securities to the Underwriters; (iv) the fees and disbursements of the Company’s counsel and accountants; (v) the qualification of the Securities under the applicable securities laws in accordance with the provisions of Section 5(i) hereof, including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith in an aggregate amount not in excess of $5,000 with respect to a particular issue of the Securities and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (vi) the delivery to the Underwriters of copies of such Blue Sky Survey, if any; (vii) any costs, fees and charges of the ADR Depositary in connection with the issuance and delivery of Series [ ] Preference Shares to the ADR Depositary and ADSs to the registered holders thereof and all other costs, fees and charges of the ADR Depositary and any transfer agent or registrar; (viii) all expenses and listing fees in connection with the listing of the Securities, if any, and the clearance and settlement of the Securities through the facilities of DTC; (ix) any fees charged by securities rating services for rating the Securities; (x) the fees and expenses incurred in connection with the filing of any materials with the Financial Industry Regulatory Authority (“ FINRA ”), if any; (xi) any fees associated with a Bloomberg roadshow presentation; (xii) any United Kingdom stamp duty, stamp duty reserve tax or similar tax or duty imposed by the United Kingdom or any political subdivision thereof upon the original issuance by, or on behalf of, the Company of the Securities, the initial delivery of the Securities, the deposit of Series [ ] Preference Shares under the ADR Deposit Agreement by the Company, the purchase by the Underwriters of the Securities, the sale and delivery of the Securities by the Underwriters to the initial purchasers thereof, and the execution and delivery of this Agreement, the Pricing Agreement and the ADR Deposit Agreement; and (xiii) any value added taxes payable in the United Kingdom in respect of any of the above expenses.
 
 
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If this Agreement is terminated by the Representatives in accordance with the provisions of Section 7 or Section 11(a)(i), (v) and (ix) hereof, the Company shall reimburse the Underwriters for their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters, except that in the case of a termination in accordance with Section 11(a)(i), (v) and (ix) hereof, such reimbursement shall include only any expenses actually incurred (not to exceed $[   ]).
 
7.      The obligations of the Underwriters of any Securities under the Pricing Agreement relating to such Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties of the Company in or incorporated by reference in the Pricing Agreement relating to such Securities are, at and as of the Time of Delivery for such Securities, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:
 
(a)                 The Registration Statement is effective and at the Time of Delivery no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission and no notice of objection of the Commission to the use of the Registration Statements or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act shall have been received. The Prospectus shall have been transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the time period prescribed by Rule 424(b) of the 1933 Act Regulations; the Term Sheet and any other material required to be filed by the Company pursuant to Rule 433(d) of the 1933 Act Regulations shall have been transmitted to the Commission for filing pursuant to Rule 433(d) of the 1933 Act Regulations; and, in each case, prior to the Time of Delivery the Company shall have provided evidence satisfactory to the Representatives of such timely filing and no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission and all requests for additional information on the part of the Commission have been complied with.
 
(b)                 At the Time of Delivery, the Representatives shall have received:
 
(i)              The opinion and 10b-5 letter, each dated as of the Time of Delivery, of Davis Polk & Wardwell LLP, U.S. counsel for the Company, with respect to the matters set forth in Annex III hereto in form and substance reasonably satisfactory to the representatives.
 
(ii)              The opinion, dated as of the Time of Delivery, of Dundas & Wilson CS LLP, Scottish solicitors to the Company, with respect to the matters set forth in Annex IV hereto in form and substance reasonably satisfactory to the representatives.
 
(iii)              The opinion, dated as of the Time of Delivery, of Linklaters LLP, English solicitors to the Company, with respect to the matters set forth in Annex V hereto in form and substance reasonably satisfactory to the representatives.
 
 
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(iv)              The opinion, dated as of the Time of Delivery, of Emmet, Marvin & Martin, LLP, counsel to the ADR Depositary with respect to the matters set forth in Annex VI hereto in form and substance reasonably satisfactory to the representatives.
 
(v)              The opinion and 10b-5 letter, each dated as of the Time of Delivery, of Shearman & Sterling LLP, counsel for the Underwriters, with respect to the matters set forth in Annex VII in form and substance reasonably satisfactory to the representatives.
 
(c)                 The independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus (the “ Independent Accountants ”) shall have furnished to the Representatives a letter delivered at a time prior to the execution of the Pricing Agreement and dated the date of delivery thereof, with regard to matters customarily covered by accountants’ “comfort letters” and otherwise in form and substance satisfactory to the Representatives.
 
(d)                 The Independent Accountants shall have furnished to the Representatives a letter, dated at the Time of Delivery, to the effect that it reaffirms the statements made in the letter furnished pursuant to Section 7(c), except that the specified “cut-off” date referred to therein shall be a date not more than three business days prior to the Time of Delivery.
 
(e)                 If required pursuant to the Pricing Agreement, the Securities shall have been duly authorized for listing by the New York Stock Exchange, Inc.
 
(f)                 At the Time of Delivery (1) there shall not have been, since the date of the Pricing Agreement or since the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries considered as one enterprise, and (2) the Representatives shall have received a certificate of the Company executed on its behalf by an officer of the Company, dated as of the Time of Delivery, to the effect that (i) the representations and warranties in Section 2 hereof are true and correct in all material respects as though expressly made at and as of the Time of Delivery; (ii) the Company has complied in all material respects with all agreements hereunder and satisfied in all material respects all conditions on its part to be performed or satisfied hereunder at or prior to the Time of Delivery; and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of the Company, no proceedings for that purpose have been initiated or threatened by the Commission.
 
(g)                 The Company shall have furnished to the Underwriters a certificate, dated the Time of Delivery, of a deputy secretary of the Company stating that to the best knowledge and belief of the deputy secretary signing such certificate after reasonable inquiry, the issue and sale of the Securities in the manner contemplated in the Disclosure
 
 
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Package and Prospectus do not and will not result in a breach, default or acceleration of any payment or amount under any contract, agreement or undertaking to which the Company or any of its subsidiaries is a party (or by which any such entity is bound), which breach, default or acceleration would have a material adverse effect on the Company and its subsidiaries taken as a whole.
 
(h)                 If an affiliate (as defined in applicable NASD rules) of the Company is participating in the offering of the Securities, FINRA shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
 
If any condition specified in this Section 7 shall not have been fulfilled when and as required to be fulfilled and not otherwise waived by the Underwriters, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Time of Delivery, and such termination shall be without liability of any party to any other party except as provided in Section 6 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 herein shall remain in effect.
 
8.                     (a)             The Company agrees to indemnify and hold harmless each Underwriter, each of the Underwriters’ affiliates, directors, officers and employees, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows:
 
(i)              against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be part of the Registration Statement pursuant to Rule 430A(b) of the 1933 Act Regulations or, if applicable, the ADR Registration Statement, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus, the Preliminary Prospectus, the Term Sheet, any Issuer Free Writing Prospectus or the ADR Prospectus or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
 
(ii)              against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and
 
(iii)              against any and all expense whatsoever, as reasonably incurred (including, subject to Section 8(c) hereof, the fees and disbursements of counsel chosen by the Representatives), in investigating, preparing or defending against
 
 
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any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above;
 
provided , however , that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), the ADR Registration Statement (or any amendment thereto), the Prospectus, the Preliminary Prospectus, the Term Sheet, any Issuer Free Writing Prospectus or the ADR Prospectus.
 
(b)                 Each Underwriter severally agrees to indemnify and hold harmless each of the Company, its directors, each of the officers of the Company who signed the Registration Statement or the ADR Registration Statement, the Company’s authorized representative in the United States and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 8 as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the documents referred to in subsection (a) of this Section 8 in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use in such documents.
 
(c)                 Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement. Any indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. In the case of parties indemnified pursuant to Section 8(a) above, counsel to the indemnified parties shall be selected by the Underwriters, and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.  No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an
 
 
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unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
 
(d)                 If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Securities on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall, if permitted by applicable law, contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts, concessions and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Securities in this
 
 
 
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subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.
 
(e)                 The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act.
 
9.                   If one or more of the Underwriters shall fail at the Time of Delivery to purchase the Securities which it is or they are obligated to purchase under this Agreement and the Pricing Agreement (the “ Defaulted Securities ”), the Representatives shall have the right, within 48 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase, or procure purchasers for, all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if the Representatives shall not have completed such arrangements within such 48-hour period, then:
 
(a)                 if the number of Defaulted Securities does not exceed 10% of the Securities which the Underwriters are obligated to purchase at the Time of Delivery, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations under the Pricing Agreement relating to such Securities bear to the underwriting obligations of all non-defaulting Underwriters, or
 
(b)                 if the number of Defaulted Securities exceeds 10% of the Securities which the Underwriters are obligated to purchase or procure purchasers for at the Time of Delivery, the Pricing Agreement relating to such Securities shall terminate without liability on the part of any non-defaulting Underwriter.
 
No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default.
 
In the event of any such default which does not result in a termination of the relevant Pricing Agreement, either the Representatives or the Company shall have the right to postpone the Time of Delivery for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the ADR Registration Statement or Prospectus or in any other documents or arrangements.
 
10.                   All representations, warranties and agreements contained in this Agreement and any Pricing Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any controlling person, or by or on
 
 
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behalf of the Company, and shall survive delivery of the Securities to the Underwriters pursuant to this Agreement.
 
11.                   (a)           The Representatives may terminate this Agreement, immediately upon notice to the Company, at any time prior to the Time of Delivery (i) if there has been, since the date of the Pricing Agreement or the respective dates as of which information is given in the Registration Statement, the ADR Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations, of the Company and its subsidiaries considered as one enterprise, or (ii) if there has occurred any outbreak or escalation of hostilities involving the United States or the United Kingdom or the declaration by the United States or the United Kingdom of a national emergency or war, or (iii) the occurrence of another calamity or crisis or any change in financial, political or economic conditions or currency exchange rates or controls in the United States, the United Kingdom or elsewhere, if the effect of any such event specified in clause (ii) and (iii) in the judgment of the Representatives (after consultation with the Company if practicable) makes it impracticable or inadvisable to market the Securities or enforce contracts for the sale of the Securities in the manner contemplated in the Prospectus, or (iv) if there has occurred a suspension or material limitation in trading in securities generally on the New York Stock Exchange, London Stock Exchange or any other stock exchange on which the Company’s securities are listed, or (v) if there has occurred a suspension or material limitation in trading the Company’s securities on the New York Stock Exchange or the London Stock Exchange, or (vi) if there has occurred a material adverse change in the financial markets in the United States or in the international financial markets, or (vii) if a banking moratorium on commercial banking activities has been declared by the relevant authorities in New York or London, or a material disruption in commercial banking or securities settlement or clearance services in the United States or the United Kingdom has occurred, or (viii) if there has occurred a change or development involving a prospective change in the United States or the United Kingdom taxation which has, or will have, a material adverse effect on the Company or the Securities or the transfer thereof, or (ix) if there is any lowering of the rating of any of the Company’s debt securities, preference shares, ADSs or ADRs, or a public announcement that such rating is under surveillance or review, with possible negative implication, in each case, by Moody’s Investors Service, Inc., Standard and Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch, Inc.
 
(b)                 If this Agreement is terminated pursuant to Sections 7, 9 or 11 hereof, such termination shall be without liability of any party to any other party except as provided in Section 6 or Section 9 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 shall remain in effect.
 
12.                   In all dealings hereunder, the Representatives of the Underwriters of the Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement.
 
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address
 
 
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of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Company Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
 
13.                   This Agreement and any Pricing Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement or any Pricing Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers, directors and authorized representative of the Company referred to in Section 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Pricing Agreement or any provision herein or therein contained. This Agreement and any Pricing Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers, directors and authorized representative of the Company and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
 
14.                   (a)           The Company irrevocably consents and agrees, for the benefit of the Underwriters, that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement or the Pricing Agreement may be brought in the courts of the State of New York or the courts of the United States of America located in the Borough of Manhattan, The City of New York and hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam , generally and unconditionally with respect to any action, suit or proceeding for itself and in respect of its properties, assets and revenues.
 
(b)                 The Company hereby irrevocably designates, appoints, and empowers John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its designee, appointee and agent to take process, receive and forward process or to be served with process for and on its behalf of any and all legal process, summons, notices and documents which may be served in any such action, suit or proceeding brought in any such United States or State court which may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Company agrees to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 14 satisfactory to the Representatives. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents out of any of the aforesaid courts in any such action, suit or proceeding by serving a copy thereof upon the relevant agent for service of
 
 
 
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process referred to in this Section 14 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified air mail, first class, postage prepaid, to each of them at their respective addresses specified in or designated pursuant to this Agreement. The Company agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of any Underwriter to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or proceedings against the undersigned in any jurisdictions, and in any manner, as may be permitted by applicable law. The Company hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement or the Pricing Agreement brought in the United States federal courts or the courts of the State of New York located in the Borough of Manhattan, The City of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
 
15.                   Each Underwriter severally represents and agrees that: (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the “ FSMA ”)) received by it in connection with the issue or sale of any Securities in circumstances in which section 21(1) of the FSMA would not, if the Company was not an authorized person, apply to the Company; and (b) it has complied and will comply with all applicable provisions of the FSMA (and all rules and regulations made pursuant to the FSMA) with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.
 
16.                   In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “ Relevant Member State ”), each Underwriter severally represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “ Relevant Implementation Date ”), it has not made and will not make an offer of Securities to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Securities which has been approved by the competent authority in that Relevant Member State or where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Securities to the public in that Relevant Member State: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than EUR 43,000,000; and (3) an annual net turnover of more than EUR 50,000,000, as shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons
 
 
21
 
(other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Underwriters; or (d) in any other circumstances falling under Article 3(2) of the Prospectus Directive, provided that no such offer of Securities requires the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this Section 16 of this Agreement, the expression “an offer of Securities to the public” in relation to any Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
 
17.                   The Company hereby acknowledges that (a) the purchase, or procurement of purchasers of, and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through which any Underwriter may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in connection with   the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on related or other matters).  The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
 
18.                   Time shall be of the essence of each Pricing Agreement. As used herein, “ business day ” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
 
19.                   This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to conflict of laws provisions thereof. Specified times of day refer to New York City time.
 
20.                   This Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement.
 

 
22
 


If the foregoing is in accordance with your understanding, please sign and return to us
 
[        ] counterparts hereof.
 

Very truly yours,
 
       
THE ROYAL BANK OF SCOTLAND GROUP plc
 
       
By:
   
 
 
 
 
Name:
   
 
Title:
   

[The rest of this page is intentionally left blank.]

 
23
 


 
Accepted as of the date hereof:
 
[N AMES OF R EPRESENTATIVES ]
 
     
By:
   
 
 
 
Name:
 
 
Title:
 

 
For themselves and as representatives of the several Underwriters
 


 
24
 

ANNEX I
 
Pricing Agreement

 
[Names of Representatives]
 
[As Representatives of the several
Underwriters named in Schedule I hereto,]
___________ __, ____
 

 
Ladies and Gentlemen:
 
The Royal Bank of Scotland Group plc, a public limited company incorporated under the laws of, and registered in, Scotland (the “ Company ”), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated ___________ __, ____ (the “ Underwriting Agreement ”), between the Company on the one hand and the several Underwriters on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the “ Underwriters ”), or to purchasers procured by them, the securities specified in Schedule II hereto (the “ Securities ”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Disclosure Package and/or the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Disclosure Package and/or the Prospectus (each as therein defined), as the case may be, and also a representation and warranty as of the date of this Pricing Agreement in relation to the Disclosure Package and/or the Prospectus (as amended or supplemented), as the case may be, relating to the Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto.
 
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.
 
Subject to the terms and conditions set forth herein (including Schedules I and II hereto) and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, or to purchasers procured by them, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, or to procure purchasers to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the number of Securities set forth opposite the name of such Underwriter in Schedule I hereto.
 
 
25
If the foregoing is in accordance with your understanding, please sign and return to us [        ] counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.
 
[The rest of this page is intentionally left blank.]

 
26
 


 

Very truly yours,
 
       
THE ROYAL BANK OF SCOTLAND GROUP plc
 
       
By:
   
 
 
 
 
Name:
   
 
Title:
   


 
[The rest of this page is intentionally left blank.]

 
27
 


 
Accepted as of the date hereof:
 
[N AMES OF R EPRESENTATIVES ]
 
     
By:
   
 
 
 
Name:
 
 
Title:
 

For themselves and as representatives of the several Underwriters

 
28
 

SCHEDULE I
 
     
Number of
Securities to be Purchased
[Names of Representatives]
   
[          ]
[Names of other Underwriters]
   
[          ]
 
Total:
 
[_____]


 
29
 


 
SCHEDULE II
 
Capitalized terms used herein, unless otherwise stated, shall have the meaning set forth in the Underwriting Agreement.
 
Title of Securities:

Category II Non-cumulative Dollar Preference Shares, Series [ ], to be represented by American Depositary Shares, Series [ ], to be evidenced by American Depositary Receipts, with one American Depositary Share representing one Non-cumulative Dollar Preference Share

Number of Shares :

[       ]

Price to Public:

Underwriting Commission :

Form of Securities:

American Depositary Receipts evidencing American Depositary Shares, Series [ ] representing Non-cumulative Dollar Preference Shares, Series [ ], to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery at the office of the Representatives.

Listing:

Specified Funds for Payment of Purchase Price:

Wire transfer of immediately available funds

Account for Payment of Purchase Price:

Time of Delivery:

9:30 a.m. (New York time) on __________ __, ____

Redemption Provisions:

Initial Dividend Payment Date:

__________ __, ____

 
 
30

 
Dividends:
 
[$[     ] annually per Series [ ] Preference Share, payable quarterly on each March 31, June 30, September 30 and December 31.]

Votes per Preference Share:

One in certain circumstances only

Closing Location:

Offices of Davis Polk & Wardwell LLP, 99 Gresham Street, London EC2V 7NG, United Kingdom

Names and Addresses of Representatives:
 
Designated Representatives:
Address for Notices, etc.:

Other Terms:

The Securities will have additional terms as more fully described in the Disclosure Package and the Prospectus.

 
31
 


 
ANNEX II
 
 

  Issuer Free Writing Prospectuses Included in Disclosure Package

 
32
 

ANNEX III
 
FORM OF OPINION OF
DAVIS POLK & WARDWELL LLP, U.S. COUNSEL
FOR THE COMPANY
 
 
[To be included as a Statement of Fact before the opinion:  The Registration Statement became effective under the 1933 Act and the Indenture qualified under the Trust Indenture Act upon the filing of the Registration Statement with the Commission on [ date of filing ] pursuant to Rule 461(e)].

Based upon the foregoing, we are of the opinion that:

1.      Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly executed and delivered by the Company.
 
2.      Assuming that the ADR Deposit Agreement has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the ADR Deposit Agreement has been duly executed and delivered by the Company, and the ADR Deposit Agreement is a valid and binding agreement of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equity principles of general applicability.
 
3.      Upon due issuance by the ADR Depositary of the ADRs evidencing ADSs being delivered on the date hereof against the deposit of the Series [ ] Preference Shares in respect thereof in accordance with the provisions of the ADR Deposit Agreement and due execution of such ADRs by one of the ADR Depositary’s authorized officers, such ADRs will be duly and validly issued and the person in whose names such ADRs are registered will be entitled to the rights specified therein and in the ADR Deposit Agreement.
 
4.      Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, under the laws of the State of New York relating to personal jurisdiction, the Company has, pursuant to Section 14 of the Underwriting Agreement validly and irrevocably submitted to the personal jurisdiction of any New York state or U.S. federal court located in the State of New York, Borough of Manhattan in the City of New York (each a “ New York Court ”), in any action arising out of or relating to the Underwriting Agreement and the Pricing Agreement or the transactions contemplated thereby, has validly and irrevocably waived to the fullest extent it may effectively do so any objection to the venue of a proceeding in any such New York Court, and has validly and irrevocably appointed John Fawcett as its initial authorized agent for the purposes described in Section 14 of the Underwriting Agreement; and service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement will be effective service of process in any such action upon the Company.
 
 
33
 
5.      The Company is not and, after giving effect to the offering and sale of the Series [ ] Preference Shares and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended.
 
6.      Except as disclosed in the Prospectus, the execution and delivery by the Company of, and the performance by the Company of its obligations under, the Underwriting Agreement (including the Pricing Agreement) will not contravene any provision of the laws of the State of New York or any federal law of the United States of America that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated thereby, provided that we express no opinion as to federal or state securities laws.
 
7.      No consent, approval, authorization or order of, or qualification with, any state governmental body or agency under the laws of the State of New York or any federal law of the United States of America that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated by the Underwriting Agreement (including the Pricing Agreement), is required for the execution, delivery and performance by the Company of its obligations under the Underwriting Agreement (including the Pricing Agreement), except such as may be required under state securities or Blue Sky laws as to which we express no opinion.
 
The statements included in the Prospectus under the caption “Certain U.S. Federal and U.K. Tax Consequences,” insofar as they purport to describe provisions of U.S. federal income tax laws or legal conclusions with respect thereto, fairly and accurately summarize the matters referred to therein in all material respects.

In rendering the opinions in paragraphs (1), (2) and (3) above, we have assumed that each party to the Underwriting Agreement (including the Pricing Agreement), the ADR Deposit Agreement and the ADRs has been duly incorporated and is validly existing under the laws of the jurisdiction of its organization. In addition, we have assumed that (i) the execution, delivery and performance by each party thereto of the Underwriting Agreement (including the Pricing Agreement), the ADR Deposit Agreement and the ADRs (a) are within its corporate powers, (b) do not contravene, or constitute a default under, the certificate of incorporation or bylaws or other constitutive documents of such party, (c) require no action by or in respect of, or filing with, any governmental body, agency or official and (d) do not contravene, or constitute a default under, any provision of applicable law or regulation or any judgment, injunction, order or decree or any agreement or other instrument binding upon such party and (ii) each of the ADR Deposit Agreement and ADRs is a valid, binding and enforceable agreement of each party thereto, (other than as expressly covered above in respect of the Company).
 

 

 
34
 

FORM OF 10b-5 LETTER OF
DAVIS POLK & WARDWELL LLP, U.S. COUNSEL
FOR THE COMPANY

 
On the basis of the information gained in the course of the performance of the services rendered above, but without independent check or verification except as st ated :

1.      The Registration Statement, the ADR Registration Statement and the Prospectus appear on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder; and
 
2.      nothing has come to our attention that causes us to believe that, insofar as relevant to the offering of the Series [ ] Preference Shares:
 
(a)                 on the date of the Underwriting Agreement, the Registration Statement or the ADR Registration Statement contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading,
 
(b)                 at the [Time of Sale], the Disclosure Package contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or
 
(c)                 the Prospectus as of the date of the Underwriting Agreement or as of the date hereof contained or contain any untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
 
In providing this letter to you and the other several Underwriters, we have not been called to pass upon, and we express no view regarding, the financial statements or financial schedules or other financial or accounting data included in the Registration Statement, the ADR Registration Statement, the Disclosure Package or the Prospectus. It is understood, for the purpose of this letter, that any data furnished in accordance with “Guide 3.  Statistical Disclosure by Bank Holding Companies” under the 1933 Act and the pro forma accounts of the Company and ABN AMRO Holdings N.V. is financial data. In addition, we express no view as to the conveyance of the Disclosure Package or the information contained therein to investors.

 
35
 

ANNEX IV
 
FORM OF OPINION OF
DUNDAS & WILSON CS LLP, SCOTTISH SOLICITORS
TO THE COMPANY
 
Based upon and subject to the foregoing and subject to the qualifications set out below and to any matters not disclosed to us, it is our opinion that so far as the present law of Scotland is concerned:
 
1.      The Company and the Bank have been duly incorporated in Scotland as limited liability companies and are validly registered under the law of Scotland, are not in liquidation, and have the corporate power and authority under such law to conduct their respective businesses as described in the Prospectus and/or the Prospectus Supplement.
 
2.      The Series [ ] Preference Shares have been duly created and, when allotted, issued and paid for in accordance with the Pricing Agreement, the Underwriting Agreement (including payment in full of premium) and the Nominee Agreement (a) will be validly issued, fully paid and not subject to further calls or contribution and (b) no holder thereof will be subject to personal liability to the Company or any creditors thereof by reason only of being such a holder, and the issue of Preference Shares will not be subject to the pre-emptive rights of any shareholder of the Company.
 
3.      The statements made in the Disclosure Package and the Prospectus with regard to Scots law under the heading “Description of Dollar Preference Shares”, and in the Disclosure Package and the Prospectus Supplement with regard to Scots law under the heading “Certain Terms of the Series [ ] Preference Shares” insofar as such statements constitute a summary of certain of the rights and privileges of the holders of the Series [ ] Preference Shares under Scots law or a summary of the documents, legal matters or proceedings under Scots law referred to therein, are accurate in all material respects, provided that we express no opinion as to the reasonableness, completeness or fairness of such statements as an indication of shareholder rights generally in the context of a prospectus issued publicly in the United States of America.
 
4.      The creation and issue of the Series [ ] Preference Shares and the execution, delivery and performance by the Company of the Agreements and the Nominee Agreement is within the corporate power of the Company and have been duly authorised by all necessary corporate action of the Company.
 
5.      The obligations on the part of the Company under the Deposit Agreement and the Nominee Agreement are valid and legally binding against the Company, subject as to enforcement to bankruptcy, insolvency, re-organisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
6.      No authorisations, approvals, consents or licences of governmental, judicial or public bodies or authorities of or in Scotland (together “ consents ”), except such consents as may be required under statutory provisions (other than the Companies Acts, 1985, 1989 and 2006 as they apply to a company having its registered office in Scotland) or regulations or practices applying in Great Britain as a whole, are required by the Company as a result of the Company being a Scottish registered company for the valid creation, allotment, issue and delivery of the Series [ ] Preference Shares.
 
 
36
 
7.      Neither the execution, delivery and performance by the Company of the Agreements and the Nominee Agreement, nor the creation, allotment and issue of the Series [ ]  Preference Shares will of itself result in any violation in any material respect of:-
 
(a)                 the Memorandum or Articles of Association of the Company or the Bank; or
 
(b)                 any existing applicable mandatory provision of Scots law or regulation; or
 
(c)                 any existing judgment, order of decree or any Scottish court.
 
8.      The Underwriters would under current practice of the Scottish courts (assuming the effect of Section 14 of the Underwriting Agreement is not to prorogate the exclusive jurisdiction of the United States courts or the courts of or in the State of New York) be permitted to commence proceedings in the Scottish courts for enforcement of the Underwriting Agreement and the Scottish courts would accept jurisdiction in any proceedings for so long as the Company remained domiciled in Scotland and, upon proper averments being made in a Scottish court in any such proceedings, the choice of the law of the State of New York as the proper law of the Underwriting Agreement would be upheld as a valid choice of law by that court.
 
9.      The Agreements and the Nominee Agreement have, insofar as Scots law governs the formalities of execution and delivery thereof, been duly executed by or on behalf of the Company.
 
10.    The submission by the Company in Section 14 of the Underwriting Agreement to the jurisdiction of the courts of or in New York, and the designation, appointment and empowerment by the Company under the said Section 14 of an agent for service, would be upheld by the Scottish courts as valid and effective.
 
11.    In relation to any Agreement which is expressed to be governed by the law of the State of New York as its proper law, a judgment of the courts of the State of New York as the relevant forum would be recognised in Scotland through an action of decree–conform under common law in the Court of Session in Scotland, assuming that (i) the court which issued the judgment had jurisdiction and acted judicially with no element of unfairness, (ii) such judgment was final, not obtained by fraud, or a revenue or penal action, remained capable of enforcement in the place it was pronounced and was not contrary to natural justice, and (iii) enforcement of the judgment is not contrary to Scottish public policy.
 

 
37
 

ANNEX V
 
FORM OF OPINION OF LINKLATERS LLP
ENGLISH SOLICITORS TO THE COMPANY
 
On the basis of, and subject to, the foregoing assumptions and subject as set out below and to any matters not disclosed to us and having regard to such considerations of English law and United Kingdom tax law in force and our understanding of the practice of H.M. Revenue and Customs applying as at the date of this opinion as we consider relevant, and assuming that the Company is resident in the United Kingdom for the purposes of United Kingdom taxation, we are of the opinion that:
 
1.      It is not necessary to obtain any approval, consent, order or permission of, or to effect any further filing, recording or registration with, any public authority or governmental agency in England or authorisation from any regulatory authority, government department or court in England (other than any consents, approvals or authorisations required under the Companies Act 1985 and/or the Companies Act 2006 as they apply to a company having its registered office in Scotland - as to which we understand that you are relying on an opinion of Dundas & Wilson CS LLP) in respect of the execution, delivery or performance of the Securities, the ADR Deposit Agreement, the Underwriting Agreement, the Pricing Agreement, the Nominee Agreement.
 
[ADDITIONAL LANGUAGE TO BE ADDED IF NOTES ARE LISTED IN LONDON]
 
2.      No filing or registration of the Registration Statement, the Disclosure Package, the Prospectus and Prospectus Supplement, the ADR Registration Statement, the ADR Prospectus, or any other prospectus or circular is necessary under legislation of general application in the United Kingdom (other than any filings or registrations required under the Companies Act 1985 and/or the Companies Act 2006 as they apply to a company having its registered office in Scotland - as to which we do not express an opinion) in connection with the allotment, issue and delivery of the Preference Shares or the sale of Preference Shares to the Underwriters.
 
3.      The statements in the Disclosure Package and the Prospectus Supplement under the section headed “Certain U.S. Federal and U.K. Tax Consequences”, insofar as such statements constitute a general summary of both current United Kingdom tax law and United Kingdom H.M. Revenue & Customs’ practice relevant to the issue of the Securities, if any, fairly and accurately summarise the matters referred to therein; provided however that we express no opinion as to the reasonableness, completeness or fairness of such statements in the context of a prospectus issued publicly in the United States of America or as to the compliance of such statements with the requirements of the securities laws of the United States of America or any part thereof.
 
4.      Subject as described under the heading “Stamp Duty and Stamp Duty Reserve Tax” in the section of the Disclosure Package and the Prospectus Supplement headed “Certain U.S. Federal and U.K. Tax Consequences”, no United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes are payable in the United Kingdom on (i) the creation, issue or delivery by, or on behalf of, the Company of the Preference Shares in bearer form or (ii) the deposit with the Depositary of the Preference Shares in
 
 
38
 
bearer form, or (ii) the deposit with the Depository of the Preference Shares in bearer form, the execution and delivery of the Pricing Agreement, the Underwriting Agreement, the Nominee Agreement or the Deposit Agreement or the consummation of the transactions contemplated thereby.
 
5.      No United Kingdom value added tax will be payable by the Underwriters in respect of their underwriting commissions under the Underwriting Agreement and the Pricing Agreement.
 
6.      Neither the execution and delivery of the Underwriting Agreement, the Pricing Agreement, the Nominee Agreement and the ADR Deposit Agreement by the Company, nor the compliance by the Company with its obligations under the Underwriting Agreement, the Pricing Agreement, the Nominee Agreement or the ADR Deposit Agreement will, of itself, breach (A) any mandatory provision of English law of general application binding on the Company, or (B) any covenant of the Company (other than any financial or similar covenant) contained in any of the following documents:
 
(a)                 Trust Deed dated 11 December 1985 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$350,000,000 undated floating rate primary capital notes;
 
(b)                 [Trust Deed dated 24 August 1989 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S. $400,000,000 undated floating rate primary capital notes;] 1
 
(c)                 First Supplemental Trust Deed dated 1 March 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £150,000,000 10½% subordinated bonds 2013;
 
(d)                 Second Supplemental Trust Deed dated 12 August 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £200,000,000 9½% undated subordinated bonds;
 
(e)                 Trust Deed dated 10 June 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting €1,250,001,000 fixed/floating rate callable subordinated notes due 2042;
 
(f)                 Trust Deed dated 5 December 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$750,001,000 fixed rate callable subordinated notes due 2042;
 
(g)                 Trust Deed dated 21 May 2003 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$850,001,000 fixed/floating rate callable subordinated notes due 2043;
 
(h)                 Trust Deed dated 10 December 2003 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$650,001,000 fixed/floating rate callable subordinated notes due 2043;
 
 
1 To be confirmed.
 
 
39
 
(i)                  Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$950,001,000 fixed/floating rate callable subordinated notes due 2044;
 
(j)                  Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$550,001,000 floating rate callable subordinated notes due 2044, [as supplemented by a supplemental Trust Deed dated 27 September 2004 constituting an additional U.S.$450,001,000 floating rate callable subordinated notes due 2044;] 1
 
(k)                 Trust Deed dated 12 December 2005 between the Company and The Law Debenture Trust Corporation p.l.c. constituting €500,001,000 fixed/floating rate callable subordinated notes due 2046;
 
(l)                  Trust Deed dated 8 December 2006 between the Company and The Law Debenture Trust Corporation p.l.c. constituting £400,001,000 fixed/floating rate callable subordinated notes due 2047; and
 
(m)                Trust Deed dated 4 October 2007 between the Group and BNY Corporate Trustee Services Limited constituting U.S.$1,600,000,000 6.990 per cent. fixed/floating rate preferred capital securities.
 
[ Add any subsequent Trust Deeds ]
 
7.      The Nominee Agreement constitutes valid and binding obligations of the Company and RBS Nominee, enforceable against each such company in accordance with its terms. Clause 2 of the Nominee Agreement is sufficient to create a valid trust under English law and to ensure that no Group Company (as defined therein) will be beneficially interested under that trust.
 
For the purposes of the opinion contained in paragraph 6 above we have interpreted the effect of the Underwriting Agreement, the Pricing Agreement and the ADR Deposit Agreement as if they were governed by and construed in accordance with English law. Such opinion should not be taken as expressing an opinion as to the observance of any financial or similar covenant contained in the documents listed above.
 
1 To be confirmed.
 

 
40
 

ANNEX VI
 
FORM OF OPINION OF EMMETT, MARVIN & MARTIN LLP,
COUNSEL TO THE ADR DEPOSITARY
 
1.      The Deposit Agreement has been duly authorized, executed and delivered by the Depositary and, assuming due authorization, execution and delivery of the Deposit Agreement by the Company and further assuming that the Deposit Agreement is a valid and binding agreement of the Company, constitutes a valid and legally binding obligation of the Depositary enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws of general application relating to or affecting creditors’ rights and by general principles of equity;
 
2.      Upon the issuance by the Depositary of ADRs evidencing ADSs against the deposit of Shares in accordance with the provisions of the Deposit Agreement (assuming such Shares were, at the time of such deposit, (a) duly authorized and validly issued, fully paid and not subject to further calls or contribution and (b) registered in compliance with the Securities Act of 1933, as amended), such ADRs will be duly and validly issued; and
 
3.      The ADRs issued under and in accordance with the provisions of the Deposit Agreement will entitle the holders thereof to the rights specified therein and in the Deposit Agreement.
 

 
41
 

ANNEX VII
 
FORM OF OPINION OF SHEARMAN & STERLING LLP,
COUNSEL FOR THE UNDERWRITERS
 
1.      The ADR Deposit Agreement constitutes a valid and binding agreement of the Company, enforceable in accordance with its terms.
 
2.      Assuming the ADRs are issued in conformity with the Deposit Agreement, the statements in the Disclosure Package and the Prospectus under the caption “Certain Terms of the Series [   ] Preference Shares,” insofar as such statements constitute summaries of the ADRs, fairly summarize the ADRs in all material respects as to legal matters.
 
3.      Upon due issuance by the ADR Depositary of the ADRs evidencing the ADSs against deposit of the Series [   ] Preference Shares in accordance with the provisions of the ADR Deposit Agreement, such ADRs will be validly issued and persons in whose names such ADRs are registered will be entitled to the rights of registered holders of ADRs specified therein and in the ADR Deposit Agreement.
 
4.      Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly executed and delivered by the Company.
 
5.      Assuming the validity of such action under Scots law, under the laws of the State of New York relating to submission to jurisdiction, pursuant to Section 14 of the Underwriting Agreement, the Company has (i) validly and irrevocably submitted to the jurisdiction of the federal courts of the United States of America located in the Borough of Manhattan, the City of New York and the courts of the State of New York located in the Borough of Manhattan, the City of New York, for the purposes specified therein, (ii) to the fullest extent permitted by law, waived any objection which it may now or hereafter have to the laying of venue in any legal suit, action or proceeding in any federal or state court in the Borough of Manhattan, the City of New York and (iii) validly and, to the extent stated therein, irrevocably appointed John Fawcett as its initial authorized agent for the purpose described in Section 14 of the Underwriting Agreement.  Service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement will be effective to confer valid personal jurisdiction over the Company.
 
6.      Insofar as the statements in the Disclosure Package and the Prospectus (i) under the caption “Certain U.S. Federal and U.K. Tax Consequences” purport to describe certain U.S. federal income tax laws as they relate to US Holders (as defined therein) and (ii) under the caption “Certain ERISA Considerations” constitute summaries of legal matters referred to therein, such statements fairly and accurately summarize in all material respects the matters referred to therein.
 
42

FORM OF 10b-5 LETTER OF
SHEARMAN & STERLING LLP,
COUNSEL FOR THE UNDERWRITERS
 
Subject to the limitations set forth in the immediately preceding paragraph, we advise you that, on the basis of the information we gained in the course of performing the services referred to above, in our opinion, (a) each of the documents incorporated by reference in the Disclosure Package and the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we express no opinion) at the time it was filed with the Commission, appears on its face to have been appropriately responsive in all material respects to the requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations of the Commission thereunder and (b) each of the Registration Statement, the Preliminary Prospectus and the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we express no opinion), appears on its face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder.
 
We further advise you that, subject to the limitations set forth in the second preceding paragraph, on the basis of the information we gained in the course of performing the services referred to above, no facts came to our attention which gave us reason to believe that (i) the Registration Statement (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of the date of the Pricing Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Disclosure Package (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of the Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of its date or the date hereof, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In expressing the foregoing opinions and belief, we have not been called to pass upon, and we express no opinion or belief as to, any Statement of Eligibility of the Trustee on Form T-1. For the purposes of this and the preceding paragraph, the term “financial data” includes, without limitation, the pro forma accounts of the Company and ABN AMRO Holdings N.V. and the data required to be included in the Registration Statement and the Prospectus under the 1933 Act by Guide 3, Statistical Disclosure by Bank Holding Companies.
 

43
 
 

 
Exhibit 1.3
 
THE ROYAL BANK OF SCOTLAND plc
 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
Underwriting Agreement
 
$[   ]
 
[ ]% Senior Debt Securities
 
Due _____
 
__________ __, ____
 
[NAMES OF REPRESENTATIVES]
 
Ladies and Gentlemen:
 
From time to time The Royal Bank of Scotland plc, a public limited company incorporated and registered in Scotland, United Kingdom (the “ Company ”), and The Royal Bank of Scotland Group plc, a public limited company incorporated and registered in Scotland, United Kingdom (the “ Group ”), proposes to enter into one or more Pricing Agreements (each a “ Pricing Agreement ”) in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the several firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the “ Underwriters ” with respect to such Pricing Agreement and the securities specified therein), or to purchasers procured by them, certain of the Company’s debt securities specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the “ Securities ”).
 
The terms of, and rights attached to, any particular issuance of Securities shall be as specified in the Pricing Agreement relating thereto and in or pursuant to a senior debt securities indenture (the “ Indenture ”).  The offering of the Securities will be governed by this Agreement, as supplemented by the Pricing Agreement. From and after the date of the execution and delivery of the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement. The Securities will be entitled to the benefit of a full and unconditional guarantee (the “ Guarantees ”) by the Group as set forth in the Indenture, as delivered below, pursuant to which Group will guarantee the obligations of the Company under the Securities.
 
1.           Particular sales of the Securities may be made from time to time to the Underwriters of such Securities, or to purchasers procured by them, for whom the firms designated as representatives of the Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the “ Representatives ”).  The term “ Representatives ” also refers to a single firm acting as sole representative of the Underwriters and to an Underwriter or Underwriters who act without any firm being designated as its or their representatives.  This Agreement shall not be construed as an obligation of the Company or the Group to sell any of the Securities or as an obligation of any of the Underwriters to purchase, or procure purchasers for, the Securities.  The obligation of the Company and the Group to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase, or procure purchasers for, any of the Securities shall be evidenced by the Pricing Agreement with
 
 
 
respect to the Securities specified therein.  Each Pricing Agreement shall specify the aggregate principal amount of such Securities, the initial public offering price of such Securities, the purchase price to the Underwriters of such Securities, the names of the Underwriters of such Securities, the names of the Representatives of such Underwriters and the principal amount of such Securities to be purchased by each Underwriter, or by purchasers procured by such Underwriter, and shall set forth the date, time and manner of delivery of such Securities and payment therefor.  The Pricing Agreement shall also specify (to the extent not set forth in the Indenture and the Registration Statement (as defined below), the Disclosure Package (as defined below) and prospectus with respect thereto) the terms of such Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of facsimile communications or any other rapid transmission device designed to produce a written record of communications transmitted.  The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.
 
The Company and the Group have prepared and filed with the Securities and Exchange Commission (the “ Commission ”) an “automatic shelf registration statement” as defined under Rule 405 under the U.S. Securities Act of 1933, as amended (the “ 1933 Act ”) on Form F-3 (No. 333-________ ) and related preliminary prospectus for the registration of, among other securities, certain debt securities of the Company, including the Securities and the Guarantees, in accordance with the provisions of the 1933 Act, and the rules and regulations of the Commission thereunder (the “ 1933 Act Regulations ”).
 
The registration statement on Form F-3, as amended to the date on which it became effective prior to the date of this Agreement (including any prospectus supplement relating to the Securities and any other information, if any, deemed to be part of such registration statement pursuant to Rule 430B of the 1933 Act Regulations), and the prospectus constituting a part thereof (including in each case all documents, if any, incorporated by reference therein to such date) are hereinafter referred to as the “ Registration Statement ” and the “ Prospectus ”, respectively, except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company and the Group for use in connection with the offering of the Securities which differs from the Prospectus on file at the Commission at the time the Registration Statement became effective (whether or not such revised prospectus is required to be filed by the Company and the Group pursuant to Rule 424(b) of the 1933 Act Regulations), the term “ Prospectus ” shall refer to such revised prospectus or include such prospectus supplement, as the case may be, from and after the time such revised prospectus or prospectus supplement is first provided to the Underwriters for such use and if the Company or the Group files any documents pursuant to Section 13, 14 or 15 of the U.S. Securities Exchange Act of 1934, as amended (the “ 1934 Act ”), after the Registration Statement became effective and prior to the termination of the offering of the Securities by the Underwriters, which documents are deemed to be or, in the case of a Report on Form 6-K, are designated as being incorporated by reference into the Prospectus pursuant to Form F-3 under the 1933 Act Regulations, the term “ Prospectus ” shall refer to said prospectus as modified to include the documents so filed from and after the time said documents are filed with or furnished to the Commission.  The term “ Preliminary Prospectus ” means any preliminary form of the Prospectus (including any preliminary prospectus supplement) which is used prior to the filing of the Prospectus and first filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations.  The term “ Free Writing Prospectus ” has the meaning set forth in Rule 405 of the 1933 Act Regulations. The
 
 
2
 
term “ Issuer Free Writing Prospectus ” means (i) any material that satisfies the conditions set forth in Rule 433 of the 1933 Act Regulations and (ii) any roadshow presentation, including any Bloomberg roadshow presentation. The term “ Disclosure Package ” means (i) the Preliminary Prospectus, (ii) any Issuer Free Writing Prospectuses identified in Annex II hereto, (iii) the final term sheet prepared and filed pursuant to Section 5(d) of this Agreement (the “ Term Sheet ”) and (iv) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
 
“ Applicable Time ” means [  ] p.m. (Eastern time) on the date hereof or such other time as agreed by the Company, the Group and the Representatives.
 
2.           Each of the Company and the Group represents and warrants to, and agrees with, each of the Underwriters as of the date hereof, as of the Applicable Time, and as of the Time of Delivery referred to in Section 4 hereof that:
 
(a)           (i) An “automatic shelf registration statement” as defined under Rule 405 under the 1933 Act on Form F-3 (File No. 333-_____) in respect of the Securities has been filed with the Commission not earlier than three years prior to the date hereof; such registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been initiated or threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act has been received by the Company or the Group; (ii) No order preventing or suspending the use of the Prospectus, any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission.
 
(b)           (i) The Disclosure Package does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (ii) any individual Issuer Free Writing Prospectus, when considered together with the Disclosure Package, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, the Disclosure Package or any Issuer Free Writing Prospectus made in reliance upon, and in conformity with, information furnished to the Company or the Group in writing by any Underwriter through the Representatives expressly for use in the Disclosure Package.
 
(c)           The Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, the Prospectus made in reliance upon, and in conformity with, information furnished to the Company or the Group in writing by any Underwriter through the Representatives expressly for use in the Registration Statement or Prospectus,
 
 
3
 
provided , further , that the representations and warranties in this subsection shall not apply to that part of the Registration Statement that constitutes the Statement of Eligibility (the “ Form T-1 ”) under the U.S. Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”), of the trustee (the “ Trustee ”).
 
(d)           The documents incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, at the time they were filed with the Commission or when they become effective, complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “ 1934 Act Regulations ”) and, at each time the Registration Statement became effective, the Registration Statement complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Trust Indenture Act and the rules and regulations of the Commission thereunder, and did not 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 any further documents deemed to be or, in the case of a Report on Form 6-K, designated as being incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, after the date of this Agreement but prior to the termination of the offering of Securities, will, when they are filed with or furnished to the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and, when read together with the other information included or incorporated in the Registration Statement, the Disclosure Package and the Prospectus, will not 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, provided that the representations and warranties in this subsection shall not apply to the Form T-1 of the Trustee.
 
(f)           The audited consolidated financial statements of the Group for the years ended December 31, ____, and December 31, ____, were prepared in accordance with International Financial Reporting Standards and give a true and fair view (in conjunction with the notes thereto) of the state of the Group and its subsidiaries’ affairs as at such dates and of its profit and cash flows for the years then ended[, and the unaudited consolidated financial statements of the Group for the six month periods ended June 30, ____ and June 30, ____ have been stated on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement.]
 
(g)           The unaudited pro forma condensed combined financial information (the “ Pro Forma Financial Information ”), comprising a balance sheet as at _____ and income statements for the year ended _____ [and for the six months ended _____] and the related notes included in the Prospectus, has been properly compiled on the basis of the assumptions stated therein and the assumptions used in the preparation of the Pro Forma Financial Information are reasonable.
 
(h)           Since the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, there has been no material adverse change in the
 
 
4
 
condition, financial or otherwise, or in the results of operations of the Company, Group and any of their subsidiaries, together considered as one enterprise.
 
(i)           Each of the Company and the Group (A) has been duly incorporated in, and are validly registered under the laws of, Scotland; (B) has the requisite corporate power and authority to execute and deliver this Agreement and the Pricing Agreement and had the requisite corporate power and authority to execute and deliver the Indenture, to issue the Securities and the Guarantees, and, in each case, to perform its obligations hereunder and thereunder; (C) has the corporate power and authority to own, lease and operate its properties and to conduct businesses as described in the Disclosure Package and the Prospectus; (D) has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; and (E) has duly authorized, executed and delivered this Agreement and the Pricing Agreement and this Agreement and the Pricing Agreement constitute the valid and legally binding agreement of the Company or the Group, as the case may be, enforceable in accordance with their terms, except as rights to indemnity or contribution may be limited by applicable law and subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
(j)           National Westminster Bank Plc (“ NatWest ”) has been duly incorporated under the laws of England, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; and all of the issued and outstanding ordinary share capital of NatWest is owned, directly or indirectly, by the Company.  ABN AMRO Holding N.V. (“ ABN AMRO ”) has been duly incorporated under the laws of the Netherlands, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus.
 
(m)           The Indenture has been duly qualified under the Trust Indenture Act and duly authorized, executed and delivered by each of the Company and the Group and, assuming due authorization, execution and delivery by the Trustee, will constitute the legal, valid and binding obligation of each of the Company and the Group, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
(n)           The forms of Securities and Guarantees have been duly authorized and established in conformity with the provisions of the Indenture and, when the Securities have been executed and authenticated in accordance with the provisions of the Indenture and delivered to and duly paid for by the purchasers thereof, (i) the Securities will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company and (ii) the Guarantees will be entitled to the benefits of the Indenture and will be a valid and binding obligation of the Group, each enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general
 
 
5
 
applicability relating to or affecting creditors’ rights and to general equity principles, and will be entitled to the benefits of the Indenture.
 
(o)           Each of the Indenture, the Securities and the Guarantees will conform in all material respects to the descriptions thereof contained in the Disclosure Package and the Prospectus.
 
(p)           All consents, approvals, authorizations, orders and decrees of any court or governmental agency or body of the United States, the United Kingdom or the Netherlands, having jurisdiction over the Company and the Group required for the consummation by the Company and the Group of the transactions contemplated by this Agreement or the Pricing Agreement or to permit the Company or the Group to effect interest payments in U.S. dollars on the Securities in accordance with the terms of the Indenture have been obtained and are in full force and effect, except as may be required by U.S. state securities laws (the “ Blue Sky laws ”).
 
(q)           The execution, delivery and performance of this Agreement, the Pricing Agreement and Indenture, the allotment, issuance, authentication, sale and delivery of the Securities and the Guarantees, and the compliance by the Company and the Group with the respective terms thereof, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach under any agreement or instrument to which the Company or the Group is a party or by which the Company or the Group is bound that is material to the Company, the Group and their subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Memorandum and Articles of Association of the Company or the Group or any statute or any order, filing, rule or regulation of any United States, English, Scottish or Dutch court or governmental agency or regulatory body having jurisdiction over the Company or the Group.
 
(s)           The Company is not, and after giving effect to the offer and sales of the Securities and application of the proceeds thereof as described in the Prospectus and the Disclosure Package, will not be, required to register as an “investment company”, as defined in the Investment Company Act of 1940, as amended.
 
(t)           No event has occurred or circumstances arisen which (after the issuance of the Securities) will constitute, or which, with the giving of notice and/or the lapse of time would constitute, an Event of Default or a Default under the Securities.
 
(u)           There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company or the Group, threatened against or affecting the Company or the Group or any subsidiary, which is required to be disclosed in the Registration Statement (other than as disclosed therein).
 
(v)           (A) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment,
 
 
6
 
 
incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), and (iii) at the time the Company, the Group or any person acting on their behalf (within the meaning, for this clause only, of Rule 163(c) under the 1933 Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the 1933 Act, the Group was a “well-known seasoned issuer” as defined in Rule 405 under the 1933 Act; and (B) at the earliest time after the filing of the Registration Statement that the Company, the Group or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) of the Securities, neither the Group nor the Company was an “ineligible issuer” as defined in Rule 405 under the 1933 Act.
 
(w)           Deloitte LLP, who have certified certain financial statements of the Group and its subsidiaries, and have audited the Group’s internal control over financial reporting and management’s assessment thereof, are independent public accountants as required by the 1933 Act and the rules and regulations of the Commission thereunder.
 
(y)           Neither any Issuer Free Writing Prospectus nor the Term Sheet includes any information that conflicts with the information contained in the Registration Statement, the Disclosure Package and the Prospectus, including any document incorporated therein or any prospectus supplement deemed to be a part thereof that has not been superseded or modified; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, any Issuer Free Writing Prospectus or the Term Sheet made in reliance upon, and in conformity with, information furnished to the Company or the Group in writing by any Underwriter through the Representatives expressly for use in the Issuer Free Writing Prospectus.
 
(z)           None of the Company, the Group, any of their subsidiaries or, to the knowledge of the Company, or the Group, any director, officer, agent, employee or affiliate of the Company or the Group, or any of their subsidiaries is currently included on the U.S. Treasury Department’s List of Specially Designated Nationals or otherwise subject to any U.S. sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“ OFAC ”); and the capital raised by the issuance and sale of the Securities will not directly or indirectly be lent, contributed or otherwise made available to:
 
(i)           any subsidiary, joint venture partner or other entity under the control of the Company or the Group; or
 
(ii)           to the knowledge of the Company or the Group, any other person or entity,
 
in each case for the purpose of financing the activities of any person, entity, or government currently subject to any U.S. sanctions administered by OFAC.
 
3.           Upon the execution of the Pricing Agreement applicable to any Securities and authorization by the Representatives of the release of such Securities, the several Underwriters propose to offer such Securities for sale upon the terms and conditions set forth in the Prospectus (as amended or supplemented).
 
 
7
 
4.           The Securities to be purchased by each Underwriter and/or by purchasers procured by such Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriters, against payment by the Underwriters, or by the Representatives on behalf of the Underwriters, of the purchase price therefor by wire transfer of immediately available funds to an account designated by the Company as specified in the Pricing Agreement, all in the manner and at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the “ Time of Delivery ” for such Securities.
 
5.           Each of the Company and the Group agrees with each of the Underwriters of any Securities that:
 
(a)           The Company or the Group will notify the Representatives immediately on becoming aware of (i) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information relating to the Registration Statement or the offering of the Securities, and (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of any Preliminary Prospectus or other Prospectus in respect of the Securities, or the issuance by the Commission of any notice of objection to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or the initiation of any proceedings for that purpose. The Company or the Group will make every reasonable effort to prevent the issuance of any such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
 
(b)           If at any time prior to the filing of a final prospectus pursuant to Rule 424(b) of the 1933 Act Regulations, any event occurs as a result of which the Disclosure Package would then include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company or the Group will (i) promptly notify the Representatives so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or omission; and (iii) supply any such amendment or supplement to the Underwriters in such quantities as they may reasonably request.
 
(c)           The Group will, for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities (including in circumstances where such requirement may be satisfied pursuant to Rule 172 or Rule 173(a) of the 1933 Act Regulations), file promptly all reports required to be filed by the Group with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and will give the Representatives notice of its intention to file any amendment to the Registration Statement or any amendment or supplement to the Disclosure Package or the Prospectus
 
 
8
 
 
(including any prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Securities which differs from the Prospectus, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations) and will furnish the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus without prior consultation with the Representatives.
 
(d)           The Company or the Group will prepare the Term Sheet, containing solely a description of the final terms of the Securities and the offering thereof, in a form approved by the Representatives and will file the Term Sheet not later than the time required by Rule 433(d) of the 1933 Act Regulations.
 
(e)           The Company or the Group will prepare the Prospectus in relation to the Securities and file such Prospectus pursuant to Rule 424(b) of the 1933 Act Regulations not later than the time required by Rule 424(b) of the 1933 Act Regulations following the execution and delivery of the Pricing Agreement relating to the Securities.
 
(f)           The Company or the Group will deliver to each Representative a conformed copy of the Registration Statement as originally filed, and of each amendment thereto (including exhibits and documents filed therewith or incorporated by reference, as the case may be, into the Registration Statement).
 
(g)           The Company or the Group will furnish the Underwriters with copies of the Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus (including, in each case, any supplement thereto) in such quantities as the Representatives may from time to time reasonably request, and will use all reasonable efforts to make the initial delivery of the Prospectus by no later than 9:00 a.m. on the second business day prior to the Time of Delivery and, if the delivery of a Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering and sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act), not misleading, or, if for any reason it shall be necessary during such period to amend or supplement the Prospectus, or to file under the 1934 Act any document incorporated by reference in the Prospectus, in order to comply with the 1933 Act, notify the Underwriters and upon the Representatives’ request prepare and furnish without charge to each Underwriter as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) in connection with sales of the Securities (including in circumstances where such requirement may be satisfied pursuant to Rule 172 or 173(a) of the 1933 Act Regulations) at any time nine months or more after the time of issue of the
 
 
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Prospectus, upon the Representatives’ request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act.
 
(h)           The Company or the Group shall at the reasonable request of the Underwriters at any time prior to the completion (in the view of the Underwriters) of distribution of the Securities, amend or supplement the Prospectus in order to comply with applicable law or the requirements of the [Luxembourg Stock Exchange] [London Stock Exchange] and deliver to the Underwriters from time to time as many copies of the relevant amendment or supplement as the Underwriters may reasonably request.
 
(i)           Each of the Company and the Group agrees that, unless it has obtained or will obtain (as the case may be) the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained or will obtain (as the case may be) the prior written consent of the Company and the Group, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or Free Writing Prospectus required to be filed by the Company with the Commission or retained by the Company under Rule 433 of the 1933 Act Regulations, other than information contained in the Term Sheet, provided , however , that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Annex II hereto. Any such free writing prospectus consented to by the parties is hereinafter referred to as a “ Permitted Free Writing Prospectus .”  Each of the Company and the Group agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 of the 1933 Act Regulations applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
 
(j)           Each of the Company and the Group agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Disclosure Package or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company and the Group will give prompt notice thereof to the Representative and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company or the Group by an Underwriter through the Representatives expressly for use therein.
 
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(k)           The Company or the Group will endeavour to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will maintain such qualifications for as long as the Representatives shall reasonably request; provided that in connection with any such qualification none of the Company or the Group shall be required to qualify as a foreign corporation in any such jurisdiction or to file a general consent to service of process in any such jurisdiction.
 
(l)           The Group will make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement, an earnings statement of the Group and its subsidiaries on a consolidated basis (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158 of the 1933 Act Regulations).
 
(m)           During the period beginning from the date of the Pricing Agreement for such Securities and continuing to and including the Time of Delivery, the Company and the Group will not offer, sell, contract to sell or otherwise dispose of any securities of the Company which mature more than one year after such Time of Delivery and which are substantially similar to such Securities (other than (i) the Securities, (ii) securities previously agreed to be sold by the Company and the Group and (iii) commercial paper issued in the ordinary course of business), except as otherwise may be provided in this Agreement, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld.
 
(n)           Unless the Pricing Agreement provides otherwise, prior to the first payment due under the terms of the Securities, the Securities will be listed on a “recognised stock exchange” within section 1005 of the Income Tax Act 2007; as soon as practicable, application will be made to list the Securities on such recognised stock exchange.
 
(o)           The Company will apply the net proceeds from the sale of the Securities as set forth in the Prospectus.
 
(p)           Each of the Company and the Group will cooperate with the Underwriters and use its best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of The Depository Trust Company (“ DTC ”), Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be.
 
(q)           Prior to the issuance of the Securities and Guarantees, the Company and the Group will have obtained all consents, approvals, authorizations, orders, registrations, qualifications and decrees of any court or governmental agency or body of the United States and the United Kingdom necessary or required for the valid issuance of the Securities and Guarantees and to permit the Company to make interest payments on the Securities in U.S. dollars.
 
 
 
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6.           The Company will pay all expenses incident to the performance of its obligations under this Agreement, any Pricing Agreement, the Indenture, the Securities, and the Guarantees including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, any Issuer Free Writing Prospectus, the Prospectus and any related preliminary prospectus (and any amendments or supplements thereto) and the cost of furnishing copies thereof to the Underwriters; (ii) the printing, if any, of this Agreement, the Pricing Agreement, the Indenture and the Blue Sky Survey; (iii) the printing or reproduction, preparation, issuance and delivery of the certificates, if any, for the Securities to (or at the direction of) the Underwriters, including any transfer or other taxes or duties payable upon the delivery of the Securities to a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme, as the case may be, or the sale of the Securities to the Underwriters; (iv) the fees and disbursements of the Company’s counsel and accountants; (v) the qualification of the Securities under the applicable securities laws in accordance with the provisions of Section 5(j) hereof, including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith in an aggregate amount not in excess of $5,000 with respect to a particular issue of the Securities and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (vi) the delivery to the Underwriters of copies of such Blue Sky Survey, if any; (vii) any costs, fees and charges of any paying agent appointed under the Indenture; (viii) all expenses and listing fees in connection with the listing of the Securities, if any, on any stock exchange and the clearance and settlement of the Securities through the facilities of DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme, as the case may be; (ix) any fees charged by securities rating services for rating the Securities; (x) the fees and expenses incurred in connection with the filing of any materials with the F inanc ial Industry Regulatory Authority (“FINRA”), if any; (xi) any fees associated with a Bloomberg roadshow presentation; (xii) any United Kingdom stamp duty, stamp duty reserve tax or similar tax or duty imposed by the United Kingdom or any political subdivision thereof upon the original issuance by, or on behalf of, the Company of the Securities, the initial delivery of the Securities, the deposit of the Securities with a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme, as the case may be, the purchase by the Underwriters of the Securities, the sale and delivery of the Securities by the Underwriters to the initial purchasers thereof, and the execution and delivery of this Agreement, the Pricing Agreement and the Indenture; (xiii) the fees and expenses of the Trustee and any authorized agent of the Trustee, and the reasonable fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; and (xiv) any value added taxes payable in the United Kingdom in respect of any of the above expenses.
 
If this Agreement is terminated by the Representatives in accordance with the provisions of Section 7 or Section 11(a)(i) (v), and (ix) hereof, the Company shall reimburse the Underwriters for their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters, except that in the case of a termination in accordance with Section 11(a)(i) (v), and (ix) hereof, such reimbursement shall include only any expenses actually incurred (not to exceed $[     ]).
 
7.           The obligations of the Underwriters of any Securities under the Pricing Agreement relating to such Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties of the Company and the Group in or incorporated by reference in the Pricing Agreement relating to such Securities are, at and as of the Time of Delivery for such Securities, true and correct, the condition that the Company and the Group shall have performed all of their obligations hereunder theretofore to be performed, and the following additional conditions:
 
 
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(a)           The Registration Statement is effective and at the Time of Delivery no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission and no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act should have been received. The Prospectus shall have been transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the time period prescribed by Rule 424(b) of the 1933 Act Regulations; the Term Sheet and any other material required to be filed by the Company or the Group pursuant to Rule 433(d) of the 1933 Act Regulations shall have been transmitted to the Commission for filing pursuant to Rule 433(d) of the 1933 Act Regulations; and, in each case, prior to the Time of Delivery the Company shall have provided evidence satisfactory to the Representatives of such timely filing; and no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission have been complied with.
 
(b)           At the Time of Delivery, the Representatives shall have received:
 
(i)           The opinion and 10b-5 letter, each, dated as of the Time of Delivery, of Davis Polk & Wardwell LLP, U.S. counsel for the Company and the Group, with respect to the matters set forth in Annex III hereto in form and substance reasonably satisfactory to the Representatives.
 
(ii)           The opinion, dated as of the Time of Delivery, of Dundas & Wilson CS LLP, Scottish solicitors to the Company and the Group, with respect to the matters set forth in Annex IV hereto in form and substance reasonably satisfactory to the Representatives.
 
(iii)           The opinion, dated as of the Time of Delivery, of Linklaters LLP, English solicitors to the Company and the Group, with respect to the matters set forth in Annex V hereto in form and substance reasonably satisfactory to the Representatives.
 
(iv)           The opinion and 10b-5 letter, each dated as of the Time of Delivery, of Shearman & Sterling LLP, counsel for the Underwriters, with respect to the matters set forth in Annex VI hereto in form and substance reasonably satisfactory to the Representatives.
 
(c)           The independent accountants of the Company and the Group who have certified the financial statements of the Group and its subsidiaries included or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus (the “ Independent Accountants ”) shall have furnished to the Representatives a letter, delivered at a time prior to the execution of the Pricing Agreement and dated the
 
 
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date of delivery thereof, with regard to matters customarily covered by accountants’ “comfort letters” and otherwise in form and substance satisfactory to the Representatives.
 
(d)           The Independent Accountants shall have furnished to the Representatives a letter, dated at the Time of Delivery, to the effect that it reaffirms the statements made in the letter furnished pursuant to Section 7(c), except that the specified “cut-off” date referred to therein shall be a date not more than three business days prior to the Time of Delivery.
 
(e)           If required pursuant to the Pricing Agreement, an application shall have been made for listing the Securities on the [Luxembourg Stock Exchange] [London Stock Exchange].
 
(f)           At the Time of Delivery (1) there shall not have been, since the date of the Pricing Agreement or since the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations of the Group and its subsidiaries considered as one enterprise, and (2) the Representatives shall have received a certificate of each of the Company and or the Group executed on its behalf by an officer of the Company, or Group as the case may be, dated as of the Time of Delivery, to the effect that (i) the representations and warranties in Section 2 hereof are true and correct in all material respects as though expressly made at and as of the Time of Delivery; (ii) it has complied in all material respects with all agreements hereunder and satisfied in all material respects all conditions on its part to be performed or satisfied hereunder at or prior to the Time of Delivery; and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and, to its knowledge, no proceedings for that purpose have been initiated or threatened by the Commission.
 
(g)           The Company shall have furnished to the Underwriters a certificate, dated the Time of Delivery, of a deputy secretary of the Company, stating that to the best knowledge and belief of the deputy secretary signing such certificate after reasonable inquiry, the issue and sale of the Securities in the manner contemplated in the Disclosure Package and Prospectus do not and will not result in a breach, default or acceleration of any payment or amount under any contract, agreement or undertaking to which the Company or any of its subsidiaries is a party (or by which any such entity is bound), which breach, default or acceleration would have a material adverse effect on the Group and its subsidiaries taken as a whole.
 
(h)           [There shall not have occurred any lowering of the rating of any of the Company’s or the Group’s securities by Moody’s Investors Service, Inc., Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch Ratings, Inc.]
 
(i)           If an affiliate (as defined in applicable NASD rules) of the Company is participating in the offering of the Securities, FINRA shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
 
 
 
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If any condition specified in this Section 7 shall not have been fulfilled when and as required to be fulfilled and not otherwise waived by the Underwriters, this Agreement may be terminated by the Representatives by notice to the Company or the Group at any time at or prior to the Time of Delivery, and such termination shall be without liability of any party to any other party except as provided in Section 6 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 herein shall remain in effect.
 
8.           (a)           The Company and the Group agree to indemnify and hold harmless each Underwriter, each of the Underwriters’ affiliates, directors, officers and employees, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows:
 
(i)           against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be part of the Registration Statement pursuant to Rule 430A(b) of the 1933 Act Regulations or, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus, the Preliminary Prospectus, the Term Sheet, any Issuer Free Writing Prospectus or any related preliminary prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
 
(ii)           against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company and the Group; and
 
(iii)           against any and all expense whatsoever, as reasonably incurred (including, subject to Section 8(c) hereof, the fees and disbursements of counsel chosen by the Representatives), in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above;
 
 
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provided , however , that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company or the Group by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), the Prospectus, the Preliminary Prospectus, the Term Sheet, any Issuer Free Writing Prospectus or any related preliminary prospectus (or any amendment or supplement thereto).
 
(b)           Each Underwriter severally agrees to indemnify and hold harmless each of the Company, the Group, their directors, each of the officers of the Company and the Group who signed the Registration Statement, the Company’s or the Group’s authorized representative in the United States and each person, if any, who controls the Company or the Group within the meaning of Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 8 as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), the Prospectus, any related preliminary prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company or the Group by such Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), or the Prospectus or such preliminary prospectus (or any amendment or supplement thereto).
 
(c)           Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement.
 
(d)           Any indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. In the case of parties indemnified pursuant to Section 8(a) above, counsel to the indemnified parties shall be selected by the Underwriters, and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by the Company or the Group. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.  No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and
 
 
 
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(ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
 
(e)           If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Group on the one hand and the Underwriters of the Securities on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall, if permitted by applicable law, contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Group on the one hand and the Underwriters of the Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and the Group on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts, concessions and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Group on the one hand or such Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Group and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Securities in this
 
 
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subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.
 
(f)           The obligations of the Company and the Group under this Section 8 shall be in addition to any liability which the Company and the Group may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and the Group and to each person, if any, who controls the Company or the Group within the meaning of Section 15 of the 1933 Act.
 
9.           If one or more of the Underwriters shall fail at the Time of Delivery to purchase the Securities which it is or they are obligated to purchase under this Agreement and the Pricing Agreement (the “ Defaulted Securities ”), the Representatives shall have the right, within 36 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase, or procure purchasers for, all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if the Representatives shall not have completed such arrangements within such 36-hour period, then:
 
(a)           if the number of Defaulted Securities does not exceed 10% of the Securities which the Underwriters are obligated to purchase at the Time of Delivery, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations under the Pricing Agreement relating to such Securities bear to the underwriting obligations of all non-defaulting Underwriters, or
 
(b)           if the number of Defaulted Securities exceeds 10% of the Securities which the Underwriters are obligated to purchase or procure purchasers for at the Time of Delivery, the Pricing Agreement relating to such Securities shall terminate without liability on the part of any non-defaulting Underwriter.
 
No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default.
 
In the event of any such default which does not result in a termination of the relevant Pricing Agreement, any of the Representatives, the Company or the Group shall have the right to postpone the Time of Delivery for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements.
 
10.           All representations, warranties and agreements contained in this Agreement and any Pricing Agreement, or contained in certificates of officers of the Company or the Group submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company or the Group, and shall survive delivery of the Securities to the Underwriters pursuant to this Agreement.
 
 
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11.           (a)           The Representatives may terminate this Agreement, immediately upon notice to the Company and to the Group, at any time prior to the Time of Delivery (i) if there has been, since the date of the Pricing Agreement or the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations, of the Group and its subsidiaries considered as one enterprise, or (ii) if there has occurred any outbreak or escalation of hostilities involving the United States or the United Kingdom or the declaration by the United States or the United Kingdom of a national emergency or war, or (iii) the occurrence of another calamity or crisis or any change in financial, political or economic conditions or currency exchange rates or controls in the United States, the United Kingdom or elsewhere, if the effect of any such event specified in clause (ii) and (iii) in the judgment of the Representatives (after consultation with the Company and the Group if practicable) makes it impracticable or inadvisable to market the Securities or enforce contracts for the sale of the Securities in the manner contemplated in the Prospectus, or (iv) if there has occurred a suspension or material limitation in trading in securities generally on the New York Stock Exchange, London Stock Exchange or any other stock exchange on which the Group’s securities are listed, or (v) if there has occurred a suspension or material limitation in trading the Company’s or the Group’s securities on the New York Stock Exchange or the London Stock Exchange, or (vi) if there has occurred a material adverse change in the financial markets in the United States or in the international financial markets, or (vii) if a banking moratorium on commercial banking activities has been declared by the relevant authorities in New York or London, or a material disruption in commercial banking or securities settlement or clearance services in the United States or the United Kingdom has occurred, or (viii) if there has occurred a change or development involving a prospective change in the United States or the United Kingdom taxation which has, or will have, a material adverse effect on the Company or the Group or the Securities or the transfer thereof, or (ix) if there is any lowering of the rating of any of the Group’s debt securities, preference shares, American depositary shares representing preference shares or American depositary receipts evidencing American depositary shares representing preference shares, or a public announcement that such rating is under surveillance or review, with possible negative implications, in each case, by Moody’s Investors Service, Inc., Standard and Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch, Inc.
 
(b)           If this Agreement is terminated pursuant to Sections 7, 9 or 11 hereof, such termination shall be without liability of any party to any other party except as provided in Section 6 or Section 9 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 shall remain in effect.
 
12.           In all dealings hereunder, the Representatives of the Underwriters of the Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement.
 
 
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All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company or the Group shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company or the Group set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
 
13.           This Agreement and any Pricing Agreement shall each inure to the benefit of and be binding upon the Underwriters, the Company and the Group and their respective successors. Nothing expressed or mentioned in this Agreement or any Pricing Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company and the Group and their respective successors and the controlling persons and officers, directors and authorized representative of the Company and the Group referred to in Section 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Pricing Agreement or any provision herein or therein contained. This Agreement and any Pricing Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company and the Group and their respective successors, and said controlling persons and officers, directors and authorized representative of the Company and the Group and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
 
14.           (a)           Each of the Company and the Group irrevocably consents and agrees, for the benefit of the Underwriters, that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement or the Pricing Agreement may be brought in the courts of the State of New York or the courts of the United States of America located in the Borough of Manhattan, The City of New York and hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam , generally and unconditionally with respect to any action, suit or proceeding for itself and in respect of its properties, assets and revenues.
 
(b)           Each of the Company and the Group hereby irrevocably designates, appoints, and empowers John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its designee, appointee and agent to take process, receive and forward process or to be served with process for and on its behalf of any and all legal process, summons, notices and documents which may be served in any such action, suit or proceeding brought in any such United States or State court which may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Company and the Group agree to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 14 satisfactory to the Representatives. The Company and the Group further hereby irrevocably consents and
 
 
20
 
agrees to the service of any and all legal process, summons, notices and documents out of any of the aforesaid courts in any such action, suit or proceeding by serving a copy thereof upon the relevant agent for service of process referred to in this Section 14 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified air mail, first class, postage prepaid, to each of them at their respective addresses specified in or designated pursuant to this Agreement. The Company and the Group agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of any Underwriter to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or proceedings against the undersigned in any jurisdictions, and in any manner, as may be permitted by applicable law. The Company and the Group hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement or the Pricing Agreement brought in the United States federal courts or the courts of the State of New York located in the Borough of Manhattan, The City of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
 
15.           Each Underwriter severally represents and agrees that: (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the “ FSMA ”)) received by it in connection with the issue or sale of any Securities in circumstances in which section 21(1) of the FSMA would not, if the Company was not an authorised person, apply to the Company; and (b) it has complied and will comply with all applicable provisions of the FSMA (and all rules and regulations made pursuant to the FSMA) with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.
 
16.           In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “ Relevant Member State ”), each Underwriter severally represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “ Relevant Implementation Date ”), it has not made and will not make an offer of Securities to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Securities which has been approved by the competent authority in that Relevant Member State or where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Securities to the public in that Relevant Member State: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than EUR 43,000,000; and (3) an annual net turnover of more than EUR 50,000,000, as
 
 
21
 
shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Underwriters; or (d) in any other circumstances falling under Article 3(2) of the Prospectus Directive, provided that no such offer of Securities requires the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this Section 16 of this Agreement, the expression “an offer of Securities to the public” in relation to any Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

17.           Each of the Company and the Group hereby acknowledges that (a) the purchase, or procurement of purchasers of, and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company and the Group, on the one hand, and the Underwriters and any affiliate through which any Underwriter may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s and the Group’s engagement of the Underwriters in connection with   the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company and the Group agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company or the Group on related or other matters).  Each of the Company and the Group agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
 
18.           Time shall be of the essence of each Pricing Agreement. As used herein, “ business day ” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
 
19.           This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to conflict of laws provisions thereof. Specified times of day refer to New York City time.
 
20.           This Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement.
 
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22
 


If the foregoing is in accordance with your understanding, please sign and return to us [        ] counterparts hereof.
 
Very truly yours,
 
   
THE ROYAL BANK OF SCOTLAND plc
 
   
   
By:
   
 
Name:
 
 
Title:
 
   
   
THE ROYAL BANK OF SCOTLAND GROUP plc
 
   
   
By:
   
 
Name:
 
 
Title:
 




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23
 

Accepted as of the date hereof:
 
[names of representatives]
 
 
By:
 
 
Name:
 
Title:


 
For themselves and as representatives of the several Underwriters
 


 
24
 

ANNEX I
 
Pricing Agreement

 
[Names of Representatives]
 
[As Representatives of the several
Underwriters named in Schedule I hereto,]
___________ __, ____
 

 
Ladies and Gentlemen:
 
The Royal Bank of Scotland plc, a public limited company incorporated under the laws of, and registered in, Scotland (the “ Company ”), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated _________ __, ____ (the “ Underwriting Agreement ”), among the Company, The Royal Bank of Scotland Group plc, as guarantor (the “ Group ”) and the several Underwriters, to issue and sell to the Underwriters named in Schedule I hereto (the “ Underwriters ”), or to purchasers procured by them, the securities specified in Schedule II hereto (the “ Securities ”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Disclosure Package and/or the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Disclosure Package and/or the Prospectus (each as therein defined), as the case may be, and also a representation and warranty as of the date of this Pricing Agreement in relation to the Disclosure Package and/or the Prospectus (as amended or supplemented), as the case may be, relating to the Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto.
 
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.
 
Subject to the terms and conditions set forth herein (including Schedules I and II hereto) and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, or to purchasers procured by them, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, or to procure
 
 
25
 
purchasers to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Securities set forth opposite the name of such Underwriter in Schedule I hereto to be guaranteed by the Group.
 
If the foregoing is in accordance with your understanding, please sign and return to us [        ] counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters, the Company and the Group. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company and the Group for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.
 
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26
 


 
 
Very truly yours,
 
   
THE ROYAL BANK OF SCOTLAND plc
 
   
   
By:
   
 
Name:
 
 
Title:
 
   
   
THE ROYAL BANK OF SCOTLAND GROUP plc
   
   
By:
   
 
Name:
 
 
Title:
 


 
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27
 

Accepted as of the date hereof:
 
[names of representatives]
 
 
By:
 
 
Name:
 
Title:
 
 



For themselves and as representatives of the several Underwriters

 
28
 

SCHEDULE I
 
     
Principal Amount of
Securities to be Purchased
[Names of Representatives]
   
[          ]
[Names of other Underwriters]
   
[          ]
 
Total:
 
[_____]


 
29
 


 
SCHEDULE II
 
 
Capitalized terms used herein, unless otherwise stated, shall have the meaning set forth in the Underwriting Agreement.
 
Title of Securities:
 
[ ]% [Senior Debt Securities] due [ ]
 
Aggregate principal amount:
 
$[ ] principal amount of the Securities
 
Price to Public:
 
[ ]% of the principal amount of the Securities
 
Purchase Price by Underwriters:
 
[ ]% of the principal amount of the Securities
 
Underwriting Commission:
 
[ ]%
 
Form of Securities:
 
Book-entry only form represented by one or more global securities deposited with a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System and Clearstream Banking, sociéte anonyme , as the case may be.
 
Specified funds for payment of purchase price:
 
Wire transfer of immediately available funds
 
Time of Delivery:
 
9:30 a.m. (New York time), ________ __, ____
 
Indenture:
 
Indenture dated as of ________ __, ____ between the Company, the Group and The Bank of New York, as Trustee.
 
Maturity:
 
________ __, ____
 
 
 
30
 
Interest Rate:
 
[ ]%
 
Interest Payment Dates:
 
Interest will be paid on the Securities on ________ ___ and ________ ___ of each year, commencing __________ __, ____.
 
Redemption Provisions:
 
The Securities may be redeemed as described in the Prospectus.
 
Sinking Fund Provisions:
 
No sinking fund provisions.
 
Closing location for delivery of Securities:
 
Offices of Davis Polk & Wardwell LLP, 99 Gresham Street, London EC2V 7NG, United Kingdom
 
Names and addresses of Representatives:
 
Designated Representatives:
 
Address for Notices:
 
Stock Exchange Listing:
 
The [Luxembourg Stock Exchange] [London Stock Exchange]
 
Guarantee:
 
The Group will fully and unconditionally guarantee due and punctual payment in full to the holders of the Securities.
 
Other Terms:
 
The Securities will have additional terms as more fully described in the Disclosure Package and the Prospectus.
 

 

 
31
 


 
ANNEX II
 
 

Issuer Free Writing Prospectuses Included in Disclosure Package




 
32
 

ANNEX III
 
FORM OF OPINION OF
DAVIS POLK & WARDWELL LLP, U.S. COUNSEL
FOR THE COMPANY AND THE GROUP
 
[To be included as a Statement of Fact before the opinion: The Registration Statement became effective under the 1933 Act and the Indenture qualified under the Trust Indenture Act upon the filing of the Registration Statement with the Commission on [ date of filing ] pursuant to Rule 461(e)].

Based upon the foregoing, we are of the opinion that:
 
1.           Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company and the Group insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly executed and delivered by the Company and the Group.

2.           Assuming the Indenture has been duly authorized, executed and delivered by the Company and the Group insofar as Scots law is concerned, the Indenture has been duly executed and delivered by the Company and the Group, and the Indenture is a valid and binding agreement of the Company and the Group, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability.

3.           Assuming the Securities have been duly authorized, executed and delivered by the Company and the Group insofar as Scots law is concerned, the Securities and the Guarantees, when the Securities are authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement (including the Pricing Agreement), will be valid and binding obligations of the Company and the Group, respectively, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability, and will be entitled to the benefits of the Indenture pursuant to which such Securities are to be issued.

4.           Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company and the Group insofar as Scots law is concerned, under the laws of the State of New York relating to personal jurisdiction, each of the Company and the Group has, pursuant to Section 14 of the Underwriting Agreement and Section 1.14 of the Indenture, validly and irrevocably submitted to the personal jurisdiction of any New York state or U.S. federal court located in the State of New York, Borough of Manhattan in the City of New York (each a “ New York Court ”), in any action arising out of or relating to the Underwriting Agreement and the Pricing Agreement or the transactions contemplated thereby, and has validly and irrevocably waived to the fullest extent it may effectively do so, any objection to the venue of a proceeding in any such New York Court, and
 
 
33
 
has validly and irrevocably appointed John Fawcett as its initial authorized agent for the purposes described in Section 14 of the Underwriting Agreement and Section 1.14 of the Indenture; and service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement and Section 1.14 of the Indenture will be effective service of process in any such action upon the Company and the Group.

5.           The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an investment company as such term is defined in the Investment Company Act of 1940, as amended.

6.           Except as disclosed in the Prospectus, the execution and delivery by the Company of, and the performance by the Company of its obligations under, the Underwriting Agreement (including the Pricing Agreement), the Indenture and the Securities (collectively, the “ Documents ”) and the execution and delivery by the Group, and the performance by the Group of its obligations under the Documents will not contravene any provision of the laws of the State of New York or any federal law of the United States of America that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated thereby, provided that we express no opinion as to federal or state securities laws.

7.           No consent, approval, authorization or order of, or qualification with, any governmental body or agency under the laws of the State of New York or any federal law of the United States of America that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated by the Documents is required for the execution, delivery and performance by the Company or the Group of its obligations under the Documents, except such as may be required under federal or state securities or Blue Sky laws as to which we express no opinion.

We have considered the statements included in the Prospectus under the caption “Description of Debt Securities” insofar as they summarize provisions of the Indentures and the Securities. In our opinion, such statements fairly summarize these provisions in all material respects. The statements included in the Prospectus under the caption “Certain U.S. Federal and U.K. Tax Consequences”, insofar as they purport to describe provisions of U.S. federal income tax laws or legal conclusions with respect thereto, fairly and accurately summarize the matters referred to therein in all material respects.


 
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FORM OF 10b-5 LETTER OF
DAVIS POLK & WARDWELL LLP, U.S. COUNSEL
FOR THE COMPANY AND THE GROUP
 
On the basis of the information gained in the course of the performance of the services rendered above, but without independent check or verification except as st ated :

1.           The Registration Statement and the Prospectus appear on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder; and

2.           nothing has come to our attention that causes us to believe that, insofar as relevant to the offering of the Securities:

 
a.
the Registration Statement or the Prospectus included therein at the time the Registration Statement became effective contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading,

 
b.
at the [Time of Sale], the Disclosure Package contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or

 
c.
the Prospectus as of the date of the Underwriting Agreement or as of the date hereof contained or contain any untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

In providing this letter to you and the other several Underwriters, we have not been called to pass upon, and we express no view regarding: (1) the financial statements or financial schedules or other financial or accounting data included in the Registration Statement, the Disclosure Package or the Prospectus or (2) the Statement of Eligibility of the Trustee on Form T-1. It is understood, for the purpose of this letter, that any data furnished in accordance with “Guide 3.  Statistical Disclosure by Bank Holding Companies” under the 1933 Act and the pro forma accounts of the Group and [ABN AMRO Holdings N.V.] is financial data.  In addition, we express no view as to the conveyance of the Disclosure Package or the information contained therein to investors.
 

 
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ANNEX IV
 
FORM OF OPINION OF
DUNDAS & WILSON CS LLP, SCOTTISH SOLICITORS
TO THE COMPANY AND THE GROUP
 
Based upon and subject to the foregoing and subject to the qualifications set out below and to any matters not disclosed to us, it is our opinion that so far as the present law of Scotland is concerned:
 
1.           The Company and the Group have been duly incorporated in Scotland as limited liability companies and are validly registered under the law of Scotland, are not in liquidation, and have the corporate power and authority under such law to conduct their respective businesses as described in the Prospectus and/or the Prospectus Supplement.
 
2.           The execution, delivery and performance by the Company and the Group of the Underwriting Agreement and the Pricing Agreement is within the corporate power of the Company and the Group and has been duly authorized by all necessary corporate action on the part of the Company and the Group.
 
3.           The creation and issuance of the Securities and the execution, delivery and performance by the Company and the Group of the Indenture is within the corporate power of the Company and the Group and has been duly authorized by all necessary corporate action on the part of the Company and the Group; assuming, inter alia , due authorization and execution of the Indenture by the Trustee, the obligations on the part of the Company and the Group under the Indenture are valid and legally binding against the Company and the Group, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
4.           The Securities (in global or definitive form) and the Guarantees (when executed by the Company and the Group in accordance with the Indenture), insofar as Scots law governs the formalities of execution and delivery thereof, will have been duly executed by or on behalf of the Company and the Group and (upon their issue, authentication and delivery in accordance with the terms of the Underwriting Agreement, the Pricing Agreement and the Indenture) will have been duly issued and delivered, and they will constitute valid and legally binding obligations of the Company and the Group subject as to enforcement to bankruptcy, insolvency, reorganisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
5.           The obligations on the part of the Company and the Group under the Indenture are valid and legally binding against the Company and the Group subject as to enforcement to bankruptcy, insolvency, reorganisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
6.           No authorisations, approvals, consents or licences of governmental, judicial or public bodies or authorities of or in Scotland (together “ consents ”), except such consents as may be required under statutory provisions (other than the Companies Acts, 1985, 1989 and 2006 as they apply to a company having its registered office in Scotland) or regulations or practices
 
 
36
 
applying in Great Britain as a whole, are required by the Company or the Group as a result of the Company and the Group being Scottish registered companies for the execution, issue and delivery of the Securities.
 
7.           Neither the execution, delivery and performance by the Company or the Group of the Indenture, nor the execution, issue and delivery of the Securities, will of itself result in any violation in any material respect of:
 
(a)  the Memorandum or Articles of Association of the Company or the Group; or
 
(b)  any existing applicable mandatory provision of Scots law or regulation; or
 
(c)  any existing judgment, order or decree of any Scottish court.
 
8.           The Underwriters would under current practice of the Scottish courts (assuming the effect of Section 14 of the Underwriting Agreement is not to prorogate the exclusive jurisdiction of the United States courts or the courts of or in the State of New York) be permitted to commence proceedings in the Scottish courts for enforcement of the Underwriting Agreement and Pricing Agreement and the Scottish courts would accept jurisdiction in any proceedings for so long as the Company remained domiciled in Scotland and, upon proper averments being made in a Scottish court in any such proceedings, the choice of the law of the State of New York as the proper law of the Underwriting Agreement would be upheld as a valid choice of law by that court.
 
9.           The submission by the Company and the Group in Section 14 of the Underwriting Agreement to the jurisdiction of the courts of or in New York, and the designation, appointment and empowerment by the Company and the Group under the said Section 14 of an agent for service, would be upheld by the Scottish courts as valid and effective.
 
10.           In relation to any Agreement which is expressed to be governed by the law of the State of New York as its proper law, a judgment of the courts of the State of New York as the relevant forum would be recognised in Scotland through an action of decree conform under common law in the Court of Session in Scotland, assuming that (I) the court which issued the judgment had jurisdiction and acted judicially with no element of unfairness, (II) such judgment was final, not obtained by fraud, or a revenue or penal action, remained capable of enforcement in the place it was pronounced and was not contrary to natural justice, and (III) enforcement of the judgment is not contrary to Scottish public policy.
 
11.           The Underwriting Agreement, the Pricing Agreement and the Indenture have, insofar as Scots law governs the formalities of execution and delivery thereof, been duly executed and delivered by or on behalf of the Company and the Group.
 


 
37
 

ANNEX V
 
FORM OF OPINION OF LINKLATERS LLP
ENGLISH SOLICITORS TO THE COMPANY AND THE GROUP
 
Assuming that the Company and the Group are resident in the United Kingdom for the purposes of United Kingdom taxation, we are of the opinion that:
 
1.           It is not necessary either to ensure the validity of the Securities, the Guarantees, the Underwriting Agreement, the Pricing Agreement or the Indenture or to ensure the compliance by the Representatives with any mandatory provision of English law, to obtain any approval, consent, order or permission of, or to effect any further filing, recording or registration with, any public authority or governmental agency in England or authorisation from any regulatory authority, government department or court in England (other than any consents, approvals or authorisations required under the Companies Act 2006 as it applies to a company having its registered office in Scotland - as to which we understand you are relying upon an opinion of Dundas & Wilson CS LLP) in respect of the execution, delivery or performance of the Securities, the Guarantees, the Underwriting Agreement, the Pricing Agreement, or the Indenture.  [ Additional language to be added if notes are listed in London ]
 
2.           The statements in the Disclosure Package and the Prospectus Supplement under the section headed “Certain U.S. Federal and U.K. Tax Consequences”, insofar as such statements constitute a general summary of both current United Kingdom tax law and United Kingdom H.M. Revenue & Customs’ practice relevant to the issue of the Securities, if any, fairly and accurately summarise the matters referred to therein.
 
3.           No United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes are payable by the Underwriters on the creation, issue or delivery of the Securities by the Company which comprise loan capital falling within the exemption in Section 79(4) and not within Sections 79(5) or (6) of the Finance Act 1986. Furthermore, even if the above exemption does not apply, there will nevertheless be no such United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes payable by the Underwriters provided that (i) such Underwriters are not persons falling within any of Sections 93(2), 93(3) or 96 (1) of the Finance Act 1986 and (ii) any other person falling within any of Sections 93(2), 93(3) or 96(1) of the Finance Act 1986 to whom the Securities are issued or delivered does not seek to pass on the cost of any charge to United Kingdom stamp duty, stamp duty reserve tax or other issue or documentary taxes falling on them to the Underwriters.
 
4.           No United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes should be payable in the United Kingdom on the creation, issue which comprise loan capital falling within Section 79(4) and not within Sections 79(5) and (6) of the Finance Act 1986, or on delivery by, or on behalf of, the Company or the Group of the Securities in registered form, the execution and delivery of the Pricing Agreement, the Underwriting Agreement or the consummation of the transactions contemplated thereby.
 
 
38
 
5.           No United Kingdom value added tax will be payable by the Underwriters in respect of their underwriting commissions under the Underwriting Agreement.
 
6.           Payments of interest in respect of the Securities may be made without withholding taxes or duties in the United Kingdom provided that the Securities are listed on a “recognised stock exchange” within the meaning of section 1005 of the Income Tax Act 2007 at the time of the  payment: The [Luxembourg Stock Exchange] [London Stock Exchange] is a  “recognised stock exchange” for purposes of section 1005.
 
7.           Each holder of a Security may, in certain limited circumstances as set out in, and subject always to the terms of the Indenture, (if and when a valid cause of action which is enforceable by a holder in the English courts arises under the Securities or the Guarantees) bring such a claim as a claimant in the English courts for the enforcement of its rights against the Company or the Group, as applicable. Such a claim will not be subject to any procedural rules which are not applicable to residents of England, save that an English court may take residency or domicile of a claimant into account when considering the procedural rules and/or legal principles in relation to security for costs and forum non conveniens .
 
8.           Neither the execution and delivery of the Underwriting Agreement, the Pricing Agreement and the Indenture by the Company or the Group, nor the compliance by the Company or the Group with its obligations under the Underwriting Agreement, the Pricing Agreement or the Indenture will, of itself, breach (A) any mandatory provision of English law of general application binding on the Company or the Group, or (B) any covenant of either the Company or the Group (other than any financial or similar covenant) contained in any of the following documents:
 
(a)           Trust Deed dated 11 December 1985 between the Group and The Law Debenture Trust Corporation p.l.c. constituting U.S.$350,000,000 undated floating rate primary capital notes;
 
(b)           [Trust Deed dated 24 August 1989 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$400,000,000 undated floating rate primary capital notes;] 1
 
(c)           First Supplemental Trust Deed dated 1 March 1993 between The Royal Bank of Scotland plc, the Group and The Law Debenture Trust Corporation p.l.c. constituting £150,000,000 10½% subordinated bonds 2013;
 
(d)           Second Supplemental Trust Deed dated 12 August 1993 between the Company, the Group and The Law Debenture Trust Corporation p.l.c. constituting £200,000,000 9½% undated subordinated bonds;
 
(e)           Trust Deed dated 10 June 2002 between the Group and The Law Debenture Trust Corporation p.l.c. constituting €1,250,001,000 fixed/floating rate callable subordinated notes due 2042;
 
1 To be confirmed.
 
39
 
(f)           Trust Deed dated 5 December 2002 between the Group and The Law Debenture Trust Corporation p.l.c. constituting U.S.$750,001,000 fixed rate callable subordinated notes due 2042;
 
(g)           Trust Deed dated 21 May 2003 between the Group and The Law Debenture Trust Corporation p.l.c. constituting U.S.$850,001,000 fixed/floating rate callable subordinated notes due 2043;
 
(h)           Trust Deed dated 10 December 2003 between the Group and The Law Debenture Trust Corporation p.l.c. constituting U.S.$650,001,000 fixed/floating rate callable subordinated notes due 2043;
 
(i)           Trust Deed dated 24 August 2004 between the Group and The Law Debenture Trust Corporation p.l.c. constituting U.S.$950,001,000 fixed/floating rate callable subordinated notes due 2044;
 
(j)           Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$550,001,000 floating rate callable subordinated notes due 2044, [as supplemented by a supplemental Trust Deed dated 27 September 2004 constituting an additional U.S.$450,001,000 floating rate callable subordinated notes due 2044;] 1
 
(k)           Trust Deed dated 12 December 2005 between the Group and The Law Debenture Trust Corporation p.l.c. constituting €500,001,000 fixed/floating rate callable subordinated notes due 2046;
 
(l)           Trust Deed dated 8 December 2006 between the Group and The Law Debenture Trust Corporation p.l.c. constituting £400,001,000 fixed/floating rate callable subordinated notes due 2047; and
 
(m)           Trust Deed dated 4 October 2007 between the Group and BNY Corporate Trustee Services Limited constituting U.S.$. 1,600,000,000 6.990 per cent. fixed/floating rate preferred capital securities.
 
[ Add any subsequent Trust Deeds ]
 
For the purposes of the opinion contained in paragraph 8 above we have interpreted the effect of the Underwriting Agreement, the Pricing Agreement, the Indenture and the Securities as if they were governed by and construed in accordance with English law. Such opinion should not be taken as expressing an opinion as to the observance of any financial or similar covenant contained in the documents listed above.
 

 
1 To be confirmed.
 

 
40
 

ANNEX VI
 
FORM OF OPINION OF SHEARMAN & STERLING LLP,
COUNSEL FOR THE UNDERWRITERS
 
1.           Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company and the Group insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly executed and delivered by the Company and the Group.

2.           Assuming that the Indenture has been duly authorized, executed and delivered by the Company and the Group insofar as Scots law is concerned, the Indenture has been duly executed and delivered and is the legal, valid and binding obligation of the Company and the Group, enforceable against the Company and the Group in accordance with its terms.

3.           Assuming that the Securities have been duly authorized, executed and delivered by the Company and the Group insofar as Scots law is concerned and authenticated by the Trustee in accordance with the Indenture and delivered and paid for as provided in the Underwriting Agreement and the Pricing Agreement, the Securities will be the legal, valid and binding obligations of the Company and the Group, enforceable against the Company and the Group in accordance with their terms and entitled to the benefits of the Indenture.

4.           The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended.

5.           Assuming the validity of such action under Scots law, under the laws of the State of New York relating to submission to jurisdiction, pursuant to Section 14 of the Purchase Agreement, the Company and the Group have (i) validly and irrevocably submitted to the jurisdiction of the federal courts of the United States of America located in the Borough of Manhattan, the City of New York and the courts of the State of New York located in the Borough of Manhattan, the City of New York, for the purposes specified therein, (ii) to the fullest extent permitted by law, waived any objection which it may now or hereafter have to the laying of venue in any legal suit, action or proceeding in any federal or state court in the Borough of Manhattan, the City of New York and (iii) validly and, to the extent stated therein, irrevocably appointed John Fawcett as its initial authorized agent for the purpose described in Section 14 of the Underwriting Agreement.  Service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement will be effective to confer valid personal jurisdiction over the Company and the Group.

6 .             Insofar as the statements in the Di sclosure Package and the Final Offering Memorandum (i) under the caption “ Taxation” purport to describe certain U.S. federal income tax laws as they relate to U.S. Holders (as defined therein) and (ii) under the caption “ Certain ERISA Considerations” cons t itute summaries of legal matters referred
 
 
41
 
to therein, such statements fairly and accurately summarize in all material respects the matters referred to therein.

7.             Insofar as the statements in the Disclosure Package and the Prospectus under the caption “ De scription of Debt Securities” constitute summaries of documents referred to therein, fairly summarize in all material respects the documents referred to therein.

 
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FORM OF 10b-5 LETTER OF
SHEARMAN & STERLING LLP,
COUNSEL FOR THE UNDERWRITERS
 
Subject to the limitations set forth in the immediately preceding paragraph, we advise you that, on the basis of the information we gained in the course of performing the services referred to above, in our opinion, (a) each of the documents incorporated by reference in the Disclosure Package and the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we express no opinion) at the time it was filed with the Commission, appears on its face to have been appropriately responsive in all material respects to the requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations of the Commission thereunder and (b) each of the Registration Statement, the Preliminary Prospectus and the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we express no opinion), appears on its face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder.
 
We further advise you that, subject to the limitations set forth in the second preceding paragraph, on the basis of the information we gained in the course of performing the services referred to above, no facts came to our attention which gave us reason to believe that (i) the Registration Statement (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of the date of the Pricing Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Disclosure Package (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of the Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of its date or the date hereof, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In expressing the foregoing opinions and belief, we have not been called to pass upon, and we express no opinion or belief as to, any Statement of Eligibility of the Trustee on Form T-1. For the purposes of this and the preceding paragraph, the term “financial data” includes, without limitation, the pro forma accounts of the Group and [ABN AMRO Holdings N.V.] and the data required to be included in the Registration Statement and the Prospectus under the 1933 Act by Guide 3, Statistical Disclosure by Bank Holding Companies.
 
43
 
Exhibit 1.4
 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
Underwriting Agreement
 
$[   ]
 
[  ]% Senior Debt Securities
 
Due _____
 
__________ __, ____
 
[NAMES OF REPRESENTATIVES]
 
Ladies and Gentlemen:
 
From time to time The Royal Bank of Scotland Group plc, a public limited company incorporated and registered in Scotland, United Kingdom (the “ Company ”), proposes to enter into one or more Pricing Agreements (each a “ Pricing Agreement ”) in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the several firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the “ Underwriters ” with respect to such Pricing Agreement and the securities specified therein), or to purchasers procured by them, certain of the Company’s debt securities specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the “ Securities ”).
 
The terms of, and rights attached to, any particular issuance of Securities shall be as specified in the Pricing Agreement relating thereto and in or pursuant to a senior debt securities indenture (the “ Indenture ”).  The offering of the Securities will be governed by this Agreement, as supplemented by the Pricing Agreement. From and after the date of the execution and delivery of the Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
 
1.           Particular sales of the Securities may be made from time to time to the Underwriters of such Securities, or to purchasers procured by them, for whom the firms designated as representatives of the Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the “ Representatives ”).  The term “ Representatives ” also refers to a single firm acting as sole representative of the Underwriters and to an Underwriter or Underwriters who act without any firm being designated as its or their representatives.  This Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase, or procure purchasers for, the Securities.  The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase, or procure purchasers for, any of the Securities shall be evidenced by the Pricing Agreement with respect to the Securities specified therein.  Each Pricing Agreement shall specify the aggregate principal amount of such Securities, the initial public offering price of such Securities, the purchase price to the Underwriters of such Securities, the names of the Underwriters of such Securities, the names of the Representatives of such Underwriters and the principal amount of such Securities to be purchased by each Underwriter, or by purchasers procured by such Underwriter, and shall set forth the date, time and manner of delivery of such Securities and payment therefor.  The Pricing Agreement shall also specify (to the extent not set forth in the Indenture and the Registration
 
 
Statement (as defined below), the Disclosure Package (as defined below) and prospectus with respect thereto) the terms of such Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of facsimile communications or any other rapid transmission device designed to produce a written record of communications transmitted.  The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.
 
The Company has prepared and filed with the Securities and Exchange Commission (the “ Commission ”) an “automatic shelf registration statement” as defined under Rule 405 under the U.S. Securities Act of 1933, as amended (the “ 1933 Act ”) on Form F-3 (No. 333-________ ) and related preliminary prospectus for the registration of, among other securities, certain debt securities of the Company, including the Securities, in accordance with the provisions of the 1933 Act, and the rules and regulations of the Commission thereunder (the “ 1933 Act Regulations ”).
 
The registration statement on Form F-3, as amended to the date on which it became effective prior to the date of this Agreement (including any prospectus supplement relating to the Securities and any other information, if any, deemed to be part of such registration statement pursuant to Rule 430B of the 1933 Act Regulations), and the prospectus constituting a part thereof (including in each case all documents, if any, incorporated by reference therein to such date) are hereinafter referred to as the “ Registration Statement ” and the “ Prospectus ”, respectively, except that if any revised prospectus or prospectus supplement shall be provided to the Underwriters by the Company for use in connection with the offering of the Securities which differs from the Prospectus on file at the Commission at the time the Registration Statement became effective (whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations), the term “ Prospectus ” shall refer to such revised prospectus or include such prospectus supplement, as the case may be, from and after the time such revised prospectus or prospectus supplement is first provided to the Underwriters for such use and if the Company files any documents pursuant to Section 13, 14 or 15 of the U.S. Securities Exchange Act of 1934, as amended (the “ 1934 Act ”), after the Registration Statement became effective and prior to the termination of the offering of the Securities by the Underwriters, which documents are deemed to be or, in the case of a Report on Form 6-K, are designated as being incorporated by reference into the Prospectus pursuant to Form F-3 under the 1933 Act Regulations, the term “ Prospectus ” shall refer to said prospectus as modified to include the documents so filed from and after the time said documents are filed with or furnished to the Commission.  The term “ Preliminary Prospectus ” means any preliminary form of the Prospectus (including any preliminary prospectus supplement) which is used prior to the filing of the Prospectus and first filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations.  The term “ Free Writing Prospectus ” has the meaning set forth in Rule 405 of the 1933 Act Regulations. The term “ Issuer Free Writing Prospectus ” means (i) any material that satisfies the conditions set forth in Rule 433 of the 1933 Act Regulations and (ii) any roadshow presentation, including any Bloomberg roadshow presentation. The term “ Disclosure Package ” means (i) the Preliminary Prospectus, (ii) any Issuer Free Writing Prospectuses identified in Annex II hereto, (iii) the final term sheet prepared and filed pursuant to Section 5(d) of this Agreement (the “ Term Sheet ”) and (iv) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
 
2
 
 
“ Applicable Time ” means [  ] p.m. (Eastern time) on the date hereof or such other time as agreed by the Company and the Representatives.
 
2.           The Company represents and warrants to, and agrees with, each of the Underwriters as of the date hereof, as of the Applicable Time, and as of the Time of Delivery referred to in Section 4 hereof that:
 
(a)           (i) An “automatic shelf registration statement” as defined under Rule 405 under the 1933 Act on Form F-3 (File No. 333-_____) in respect of the Securities has been filed with the Commission not earlier than three years prior to the date hereof; such registration statement, and any post-effective amendment thereto, became effective on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been initiated or threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act has been received by the Company; (ii) No order preventing or suspending the use of the Prospectus, any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission.
 
(b)           (i) The Disclosure Package does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (ii) any individual Issuer Free Writing Prospectus, when considered together with the Disclosure Package, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, the Disclosure Package or any Issuer Free Writing Prospectus made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Disclosure Package.
 
(c)           The Prospectus does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, the Prospectus made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Registration Statement or Prospectus, provided , further , that the representations and warranties in this subsection shall not apply to that part of the Registration Statement that constitutes the Statement of Eligibility (the “ Form T-1 ”) under the U.S. Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”), of the trustee (the “ Trustee ”).
 
(d)           The documents incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, at the time they were filed with the Commission or when they become effective, complied in all material respects with the
 
3
 
requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the “ 1934 Act Regulations ”) and, at each time the Registration Statement became effective, the Registration Statement complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Trust Indenture Act and the rules and regulations of the Commission thereunder, and did not 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 any further documents deemed to be or, in the case of a Report on Form 6-K, designated as being incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus, after the date of this Agreement but prior to the termination of the offering of Securities, will, when they are filed with or furnished to the Commission, comply in all material respects with the requirements of the 1934 Act and the 1934 Act Regulations, and, when read together with the other information included or incorporated in the Registration Statement, the Disclosure Package and the Prospectus, will not 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, provided that the representations and warranties in this subsection shall not apply to the Form T-1 of the Trustee.
 
(e)           The audited consolidated financial statements of the Company for the years ended December 31, ____, and December 31, ____, were prepared in accordance with International Financial Reporting Standards and give a true and fair view (in conjunction with the notes thereto) of the state of the Company and its subsidiaries’ affairs as at such dates and of its profit and cash flows for the years then ended[, and the unaudited consolidated financial statements of the Company for the six month periods ended June 30, ____ and June 30, ____ have been stated on a basis substantially consistent with that of the audited consolidated financial statements included in the Registration Statement.]
 
(f)           The unaudited pro forma condensed combined financial information (the “ Pro Forma Financial Information ”), comprising a balance sheet as at _____ and income statements for the year ended _____ [and for the six months ended _____] and the related notes included in the Prospectus, has been properly compiled on the basis of the assumptions stated therein and the assumptions used in the preparation of the Pro Forma Financial Information are reasonable.
 
(g)           Since the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, there has been no material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries, together considered as one enterprise.
 
(h)           The Company (A) has been duly incorporated in, and is validly registered under the laws of, Scotland; (B) has the requisite corporate power and authority to execute and deliver this Agreement and the Pricing Agreement and had the requisite corporate power and authority to execute and deliver the Indenture, to issue the Securities, and, in each case, to perform its obligations hereunder and thereunder; (C) has
 
4
 
the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; (D) has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; and (E) has duly authorized, executed and delivered this Agreement and the Pricing Agreement and this Agreement and the Pricing Agreement constitute the valid and legally binding agreement of the Company, enforceable in accordance with their terms, except as rights to indemnity or contribution may be limited by applicable law and subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
(i)           The Royal Bank of Scotland plc (the “ Bank ”) has been duly incorporated in, and is validly registered under the laws of, Scotland, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; and all of the issued and outstanding share capital or capital stock of the Bank is owned, directly or indirectly, by the Company.  National Westminster Bank Plc (“ NatWest ”) has been duly incorporated under the laws of England, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus; and all of the issued and outstanding ordinary share capital of NatWest is owned, directly or indirectly, by the Company.  ABN AMRO Holding N.V. (“ ABN AMRO ”) has been duly incorporated under the laws of the Netherlands, has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Disclosure Package and the Prospectus.
 
(j)           The Indenture has been duly qualified under the Trust Indenture Act and duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Trustee, will constitute the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
(k)           The forms of Securities have been duly authorized and established in conformity with the provisions of the Indenture and, when the Securities have been executed and authenticated in accordance with the provisions of the Indenture and delivered to and duly paid for by the purchasers thereof, the Securities will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and will be entitled to the benefits of the Indenture.
 
5
 
 
(l)           Each of the Indenture and the Securities will conform in all material respects to the descriptions thereof contained in the Disclosure Package and the Prospectus.
 
(m)         All consents, approvals, authorizations, orders and decrees of any court or governmental agency or body of the United States, the United Kingdom or the Netherlands, having jurisdiction over the Company required for the consummation by the Company of the transactions contemplated by this Agreement or the Pricing Agreement or to permit the Company to effect interest payments in U.S. dollars on the Securities in accordance with the terms of the Indenture have been obtained and are in full force and effect, except as may be required by U.S. state securities laws (the “ Blue Sky laws ”).
 
(n)           The execution, delivery and performance of this Agreement, the Pricing Agreement and Indenture, the allotment, issuance, authentication, sale and delivery of the Securities and the compliance by the Company with the respective terms thereof, and the consummation of the transactions contemplated hereby and thereby will not conflict with or result in a breach under any agreement or instrument to which the Company is a party or by which the Company is bound that is material to the Company and its subsidiaries, taken as a whole, nor will such action result in any violation of the provisions of the Memorandum and Articles of Association of the Company or any statute or any order, filing, rule or regulation of any United States, English, Scottish or Dutch court or governmental agency or regulatory body having jurisdiction over the Company.
 
(o)           The Company is not, and after giving effect to the offer and sales of the Securities and application of the proceeds thereof as described in the Prospectus and the Disclosure Package, will not be, required to register as an “investment company”, as defined in the Investment Company Act of 1940, as amended.
 
(p)           No event has occurred or circumstances arisen which (after the issuance of the Securities) will constitute, or which, with the giving of notice and/or the lapse of time would constitute, an Event of Default or a Default under the Securities.
 
(q)           There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against or affecting the Company or any subsidiary, which is required to be disclosed in the Registration Statement (other than as disclosed therein).
 
(r)           (A) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the 1934 Act or form of prospectus), and (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the 1933 Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the 1933 Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under the 1933 Act; and (B) at the earliest time after the filing of the Registration Statement that the
 
6
 
Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) of the Securities, the Company was not an “ineligible issuer” as defined in Rule 405 under the 1933 Act.
 
(s)           Deloitte LLP, who have certified certain financial statements of the Group and its subsidiaries, and have audited the Company’s internal control over financial reporting and management’s assessment thereof, are independent public accountants as required by the 1933 Act and the rules and regulations of the Commission thereunder.
 
(t)           Neither any Issuer Free Writing Prospectus nor the Term Sheet includes any information that conflicts with the information contained in the Registration Statement, the Disclosure Package and the Prospectus, including any document incorporated therein or any prospectus supplement deemed to be a part thereof that has not been superseded or modified; provided , however , that the representations and warranties in this subsection shall not apply to statements in, or omissions from, any Issuer Free Writing Prospectus or the Term Sheet made in reliance upon, and in conformity with, information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Issuer Free Writing Prospectus.
 
(u)           None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently included on the U.S. Treasury Department’s List of Specially Designated Nationals or otherwise subject to any U.S. sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“ OFAC ”); and the capital raised by the issuance and sale of the Securities will not directly or indirectly be lent, contributed or otherwise made available to:
 
(i)           any subsidiary, joint venture partner or other entity under the control of the Company; or
 
(ii)           to the knowledge of the Company, any other person or entity,
 
in each case for the purpose of financing the activities of any person, entity, or government currently subject to any U.S. sanctions administered by OFAC.
 
3.           Upon the execution of the Pricing Agreement applicable to any Securities and authorization by the Representatives of the release of such Securities, the several Underwriters propose to offer such Securities for sale upon the terms and conditions set forth in the Prospectus (as amended or supplemented).
 
4.           The Securities to be purchased by each Underwriter and/or by purchasers procured by such Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and registered in such names as the Representatives may request upon at least forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriters, against payment by the Underwriters, or by the Representatives on behalf of the Underwriters, of the purchase price therefor by wire transfer of immediately available funds to an account designated by the Company as specified in the Pricing Agreement, all in the manner and at the place and
 
7
 
time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the “ Time of Delivery ” for such Securities.
 
5.           The Company agrees with each of the Underwriters of any Securities that:
 
(a)           The Company will notify the Representatives immediately on becoming aware of (i) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information relating to the Registration Statement or the offering of the Securities, and (ii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any order preventing or suspending the use of any Preliminary Prospectus or other Prospectus in respect of the Securities, or the issuance by the Commission of any notice of objection to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.
 
(b)           If at any time prior to the filing of a final prospectus pursuant to Rule 424(b) of the 1933 Act Regulations, any event occurs as a result of which the Disclosure Package would then include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company will (i) promptly notify the Representatives so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or omission; and (iii) supply any such amendment or supplement to the Underwriters in such quantities as they may reasonably request.
 
(c)           The Company will, for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities (including in circumstances where such requirement may be satisfied pursuant to Rule 172 or Rule 173(a) of the 1933 Act Regulations), file promptly all reports required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act and will give the Representatives notice of its intention to file any amendment to the Registration Statement or any amendment or supplement to the Disclosure Package or the Prospectus (including any prospectus which the Company proposes for use by the Underwriters in connection with the offering of the Securities which differs from the Prospectus, whether or not such revised prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations) and will furnish the Representatives with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file any such amendment or supplement or use any such prospectus without prior consultation with the Representatives.
 
(d)           The Company will prepare the Term Sheet, containing solely a description of the final terms of the Securities and the offering thereof, in a form approved by the Representatives and will file the Term Sheet not later than the time required by Rule 433(d) of the 1933 Act Regulations.
 
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(e)           The Company will prepare the Prospectus in relation to the Securities and file such Prospectus pursuant to Rule 424(b) of the 1933 Act Regulations not later than the time required by Rule 424(b) of the 1933 Act Regulations following the execution and delivery of the Pricing Agreement relating to the Securities.
 
(f)           The Company will deliver to each Representative a conformed copy of the Registration Statement as originally filed, and of each amendment thereto (including exhibits and documents filed therewith or incorporated by reference, as the case may be, into the Registration Statement).
 
(g)           The Company will furnish the Underwriters with copies of the Preliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus (including, in each case, any supplement thereto) in such quantities as the Representatives may from time to time reasonably request, and will use all reasonable efforts to make the initial delivery of the Prospectus by no later than 9:00 a.m. on the second business day prior to the Time of Delivery and, if the delivery of a Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering and sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act), not misleading, or, if for any reason it shall be necessary during such period to amend or supplement the Prospectus, or to file under the 1934 Act any document incorporated by reference in the Prospectus, in order to comply with the 1933 Act, notify the Underwriters and upon the Representatives’ request prepare and furnish without charge to each Underwriter as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) in connection with sales of the Securities (including in circumstances where such requirement may be satisfied pursuant to Rule 172 or 173(a) of the 1933 Act Regulations) at any time nine months or more after the time of issue of the Prospectus, upon the Representatives’ request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the 1933 Act.
 
(h)           The Company shall at the reasonable request of the Underwriters at any time prior to the completion (in the view of the Underwriters) of distribution of the Securities, amend or supplement the Prospectus in order to comply with applicable law or the requirements of the [Luxembourg Stock Exchange] [London Stock Exchange] and
 
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deliver to the Underwriters from time to time as many copies of the relevant amendment or supplement as the Underwriters may reasonably request.
 
(i)           The Company agrees that, unless it has obtained or will obtain (as the case may be) the prior written consent of the Representatives, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has obtained or will obtain (as the case may be) the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or Free Writing Prospectus required to be filed by the Company with the Commission or retained by the Company under Rule 433 of the 1933 Act Regulations, other than the information contained in the Term Sheet; provided , however , that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Annex II hereto. Any such free writing prospectus consented to by the parties is hereinafter referred to as a “ Permitted Free Writing Prospectus .”  The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 of the 1933 Act Regulations applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
 
(j)           The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Disclosure Package or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representative and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided , however , that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives expressly for use therein.
 
(k)           The Company will endeavour to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will maintain such qualifications for as long as the Representatives shall reasonably request; provided that in connection with any such qualification none of the Company shall be required to qualify as a foreign corporation in any such jurisdiction or to file a general consent to service of process in any such jurisdiction.
 
(l)           The Company will make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement, an earnings statement of the Company and its subsidiaries on a consolidated basis (which need not be audited) complying with Section 11(a) of the 1933 Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158 of the 1933 Act Regulations).
 
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(m)           During the period beginning from the date of the Pricing Agreement for such Securities and continuing to and including the Time of Delivery, the Company will not offer, sell, contract to sell or otherwise dispose of any securities of the Company which mature more than one year after such Time of Delivery and which are substantially similar to such Securities (other than (i) the Securities, (ii) securities previously agreed to be sold by the Company and (iii) commercial paper issued in the ordinary course of business), except as otherwise may be provided in this Agreement, without the prior written consent of the Representatives, which consent shall not be unreasonably withheld.
 
(n)           Unless the Pricing Agreement provides otherwise, prior to the first payment due under the terms of the Securities, the Securities will be listed on a “recognised stock exchange” within section 1005 of the Income Tax Act 2007; as soon as practicable, application will be made to list the Securities on such recognised stock exchange.
 
(o)           The Company will apply the net proceeds from the sale of the Securities as set forth in the Prospectus.
 
(p)           The Company will cooperate with the Underwriters and use its best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of The Depository Trust Company (“ DTC ”), Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be.
 
(q)           Prior to the issuance of the Securities, the Company will have obtained all consents, approvals, authorizations, orders, registrations, qualifications and decrees of any court or governmental agency or body of the United States and the United Kingdom necessary or required for the valid issuance of the Securities and to permit the Company to make interest payments on the Securities in U.S. dollars.
 
6.           The Company will pay all expenses incident to the performance of its obligations under this Agreement, any Pricing Agreement, the Indenture and the Securities, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, any Issuer Free Writing Prospectus, the Prospectus and any related preliminary prospectus (and any amendments or supplements thereto) and the cost of furnishing copies thereof to the Underwriters; (ii) the printing, if any, of this Agreement, the Pricing Agreement, the Indenture and the Blue Sky Survey; (iii) the printing or reproduction, preparation, issuance and delivery of the certificates, if any, for the Securities to (or at the direction of) the Underwriters, including any transfer or other taxes or duties payable upon the delivery of the Securities to a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be, or the sale of the Securities to the Underwriters; (iv) the fees and disbursements of the Company’s counsel and accountants; (v) the qualification of the Securities under the applicable securities laws in accordance with the provisions of Section 5(j) hereof, including filing fees and the fees and disbursements of counsel for the Underwriters in connection therewith in an aggregate amount not in excess of $5,000 with
 
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respect to a particular issue of the Securities and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (vi) the delivery to the Underwriters of copies of such Blue Sky Survey, if any; (vii) any costs, fees and charges of any paying agent appointed under the Indenture; (viii) all expenses and listing fees in connection with the listing of the Securities, if any, on stock exchange and the clearance and settlement of the Securities through the facilities of DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be; (ix) any fees charged by securities rating services for rating the Securities; (x) the fees and expenses incurred in connection with the filing of any materials with the Financial Industry Regulatory Authority (“ FINRA ”), if any; (xi) any fees associated with a Bloomberg roadshow presentation; (xii) any United Kingdom stamp duty, stamp duty reserve tax or similar tax or duty imposed by the United Kingdom or any political subdivision thereof upon the original issuance by, or on behalf of, the Company of the Securities, the initial delivery of the Securities, the deposit of the Securities with a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System or Clearstream Banking, sociéte anonyme , as the case may be, the purchase by the Underwriters of the Securities, the sale and delivery of the Securities by the Underwriters to the initial purchasers thereof, and the execution and delivery of this Agreement, the Pricing Agreement and the Indenture; (xiii) the fees and expenses of the Trustee and any authorized agent of the Trustee, and the reasonable fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; and (xiv) any value added taxes payable in the United Kingdom in respect of any of the above expenses.

If this Agreement is terminated by the Representatives in accordance with the provisions of Section 7 or Section 11(a)(i) (v), and (ix) hereof, the Company shall reimburse the Underwriters for their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters, except that in the case of a termination in accordance with Section 11(a)(i) (v), and (ix) hereof, such reimbursement shall include only any expenses actually incurred (not to exceed $[            ]).
 
7.           The obligations of the Underwriters of any Securities under the Pricing Agreement relating to such Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties of the Company in or incorporated by reference in the Pricing Agreement relating to such Securities are, at and as of the Time of Delivery for such Securities, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:
 
(a)           The Registration Statement is effective and at the Time of Delivery no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission and no notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the 1933 Act should have been received. The Prospectus shall have been transmitted to the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the time period prescribed by Rule 424(b) of the 1933 Act Regulations; the Term Sheet and any other material required to be filed by the Company pursuant to Rule 433(d) of the 1933 Act Regulations shall have been transmitted to the Commission for filing pursuant
 
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to Rule 433(d) of the 1933 Act Regulations; and, in each case, prior to the Time of Delivery the Company shall have provided evidence satisfactory to the Representatives of such timely filing; and no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission have been complied with.
 
(b)           At the Time of Delivery, the Representatives shall have received:
 
(i)           The opinion and 10b-5 letter, each, dated as of the Time of Delivery, of Davis Polk & Wardwell LLP, U.S. counsel for the Company, with respect to the matters set forth in Annex III hereto in form and substance reasonably satisfactory to the Representatives.
 
(ii)           The opinion, dated as of the Time of Delivery, of Dundas & Wilson CS LLP, Scottish solicitors to the Company, with respect to the matters set forth in Annex IV hereto in form and substance reasonably satisfactory to the Representatives.
 
(iii)           The opinion, dated as of the Time of Delivery, of Linklaters LLP, English solicitors to the Company, with respect to the matters set forth in Annex V hereto in form and substance reasonably satisfactory to the Representatives.
 
(iv)           The opinion and 10b-5 letter, each dated as of the Time of Delivery, of Shearman & Sterling LLP, counsel for the Underwriters, with respect to the matters set forth in Annex VI hereto in form and substance reasonably satisfactory to the Representatives.
 
(c)           The independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement, the Disclosure Package and the Prospectus (the “ Independent Accountants ”) shall have furnished to the Representatives a letter, delivered at a time prior to the execution of the Pricing Agreement and dated the date of delivery thereof, with regard to matters customarily covered by accountants’ “comfort letters” and otherwise in form and substance satisfactory to the Representatives.
 
(d)           The Independent Accountants shall have furnished to the Representatives a letter, dated at the Time of Delivery, to the effect that it reaffirms the statements made in the letter furnished pursuant to Section 7(c), except that the specified “cut-off” date referred to therein shall be a date not more than three business days prior to the Time of Delivery.
 
(e)           If required pursuant to the Pricing Agreement, an application shall have been made for listing the Securities on the [Luxembourg Stock Exchange] [London Stock Exchange].
 
(f)           At the Time of Delivery (1) there shall not have been, since the date of the Pricing Agreement or since the respective dates as of which information is given in the
 
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Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations of the Company and its subsidiaries considered as one enterprise, and (2) the Representatives shall have received a certificate of the Company executed on its behalf by an officer of the Company, dated as of the Time of Delivery, to the effect that (i) the representations and warranties in Section 2 hereof are true and correct in all material respects as though expressly made at and as of the Time of Delivery; (ii) the Company has complied in all material respects with all agreements hereunder and satisfied in all material respects all conditions on its part to be performed or satisfied hereunder at or prior to the Time of Delivery; and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of the Company, no proceedings for that purpose have been initiated or threatened by the Commission.
 
(g)           The Company shall have furnished to the Underwriters a certificate, dated the Time of Delivery, of a deputy secretary of the Company, stating that to the best knowledge and belief of the deputy secretary signing such certificate after reasonable inquiry, the issue and sale of the Securities in the manner contemplated in the Disclosure Package and Prospectus do not and will not result in a breach, default or acceleration of any payment or amount under any contract, agreement or undertaking to which the Company or any of its subsidiaries is a party (or by which any such entity is bound), which breach, default or acceleration would have a material adverse effect on the Company and its subsidiaries taken as a whole.
 
(h)           [There shall not have occurred any lowering of the rating of any of the Company’s securities by Moody’s Investors Service, Inc., Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch Ratings, Inc.]
 
(i)           If an affiliate (as defined in applicable NASD rules) of the Company is participating in the offering of the Securities, FINRA shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
 
If any condition specified in this Section 7 shall not have been fulfilled when and as required to be fulfilled and not otherwise waived by the Underwriters, this Agreement may be terminated by the Representatives by notice to the Company at any time at or prior to the Time of Delivery, and such termination shall be without liability of any party to any other party except as provided in Section 6 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 herein shall remain in effect.
 
8.           (a)           The Company agrees to indemnify and hold harmless each Underwriter, each of the Underwriters’ affiliates, directors, officers and employees, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows:
 
(i)           against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any
 
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amendment thereto), including the information deemed to be part of the Registration Statement pursuant to Rule 430A(b) of the 1933 Act Regulations or, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus, the Preliminary Prospectus, the Term Sheet, any Issuer Free Writing Prospectus or any related preliminary prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
 
(ii)           against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and
 
(iii)           against any and all expense whatsoever, as reasonably incurred (including, subject to Section 8(c) hereof, the fees and disbursements of counsel chosen by the Representatives), in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clause (i) or (ii) above;
 
provided , however , that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), the Prospectus, the Preliminary Prospectus, the Term Sheet, any Issuer Free Writing Prospectus or any related preliminary prospectus (or any amendment or supplement thereto).
 
(b)           Each Underwriter severally agrees to indemnify and hold harmless each of the Company, its directors, each of the officers of the Company who signed the Registration Statement, the Company’s authorized representative in the United States and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section 8 as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), the Prospectus, any related preliminary prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use in the Registration Statement (or any amendment thereto), or the Prospectus or such preliminary prospectus (or any amendment or supplement thereto).
 
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(c)           Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement.
 
(d)           Any indemnifying party may participate at its own expense in the defense of such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. In the case of parties indemnified pursuant to Section 8(a) above, counsel to the indemnified parties shall be selected by the Underwriters, and, in the case of parties indemnified pursuant to Section 8(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party.  No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
 
(e)           If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Securities on the other from the offering of the Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall, if permitted by applicable law, contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the
 
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Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts, concessions and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.
 
(f)           The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act.
 
9.           If one or more of the Underwriters shall fail at the Time of Delivery to purchase the Securities which it is or they are obligated to purchase under this Agreement and the Pricing Agreement (the “ Defaulted Securities ”), the Representatives shall have the right, within 36 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase, or procure purchasers for, all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if the Representatives shall not have completed such arrangements within such 36-hour period, then:
 
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(a)           if the number of Defaulted Securities does not exceed 10% of the Securities which the Underwriters are obligated to purchase at the Time of Delivery, the non-defaulting Underwriters shall be obligated to purchase the full amount thereof in the proportions that their respective underwriting obligations under the Pricing Agreement relating to such Securities bear to the underwriting obligations of all non-defaulting Underwriters, or
 
(b)           if the number of Defaulted Securities exceeds 10% of the Securities which the Underwriters are obligated to purchase or procure purchasers for at the Time of Delivery, the Pricing Agreement relating to such Securities shall terminate without liability on the part of any non-defaulting Underwriter.
 
No action taken pursuant to this Section 9 shall relieve any defaulting Underwriter from liability in respect of its default.
 
In the event of any such default which does not result in a termination of the relevant Pricing Agreement, either the Representatives or the Company shall have the right to postpone the Time of Delivery for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements.
 
10.           All representations, warranties and agreements contained in this Agreement and any Pricing Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriters pursuant to this Agreement.
 
11.           (a)           The Representatives may terminate this Agreement, immediately upon notice to the Company, at any time prior to the Time of Delivery (i) if there has been, since the date of the Pricing Agreement or the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise set forth or contemplated therein, any material adverse change in the condition, financial or otherwise, or in the results of operations, of the Company and its subsidiaries considered as one enterprise, or (ii) if there has occurred any outbreak or escalation of hostilities involving the United States or the United Kingdom or the declaration by the United States or the United Kingdom of a national emergency or war, or (iii) the occurrence of another calamity or crisis or any change in financial, political or economic conditions or currency exchange rates or controls in the United States, the United Kingdom or elsewhere, if the effect of any such event specified in clause (ii) and (iii) in the judgment of the Representatives (after consultation with the Company if practicable) makes it impracticable or inadvisable to market the Securities or enforce contracts for the sale of the Securities in the manner contemplated in the Prospectus, or (iv) if there has occurred a suspension or material limitation in trading in securities generally on the New York Stock Exchange, London Stock Exchange or any other stock exchange on which the Company’s securities are listed, or (v) if there has occurred a suspension or material limitation in trading the Company’s securities on the New York Stock Exchange or the London Stock Exchange, or (vi) if there has occurred a material adverse change in the financial markets in the United States or in the international financial markets, or (vii) if a banking moratorium on commercial banking
 
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activities has been declared by the relevant authorities in New York or London, or a material disruption in commercial banking or securities settlement or clearance services in the United States or the United Kingdom has occurred, or (viii) if there has occurred a change or development involving a prospective change in the United States or the United Kingdom taxation which has, or will have, a material adverse effect on the Company or the Securities or the transfer thereof, or (ix) if there is any lowering of the rating of any of the Company’s debt securities, preference shares, American depositary shares representing preference shares or American depositary receipts evidencing American depositary shares representing preference shares, or a public announcement that such rating is under surveillance or review, with possible negative implications, in each case, by Moody’s Investors Service, Inc., Standard and Poor’s Rating Services, a division of the McGraw-Hill Companies, Inc., or Fitch, Inc.
 
(b)           If this Agreement is terminated pursuant to Sections 7, 9 or 11 hereof, such termination shall be without liability of any party to any other party except as provided in Section 6 or Section 9 hereof. Notwithstanding any such termination, the provisions of Sections 6, 8, 10 and 14 shall remain in effect.
 
12.           In all dealings hereunder, the Representatives of the Underwriters of the Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement.
 
All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Company Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
 
13.           This Agreement and any Pricing Agreement shall each inure to the benefit of and be binding upon the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in this Agreement or any Pricing Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers, directors and authorized representative of the Company referred to in Section 8 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Pricing Agreement or any provision herein or therein contained. This Agreement and any Pricing Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company and their respective successors, and said controlling persons and officers, directors and authorized representative of the Company and their heirs and legal representatives, and for the benefit of no other person, firm or corporation.
 
19
 
No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
 
14.           (a)           The Company irrevocably consents and agrees, for the benefit of the Underwriters, that any legal action, suit or proceeding against it with respect to its obligations, liabilities or any other matter arising out of or in connection with this Agreement or the Pricing Agreement may be brought in the courts of the State of New York or the courts of the United States of America located in the Borough of Manhattan, The City of New York and hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam , generally and unconditionally with respect to any action, suit or proceeding for itself and in respect of its properties, assets and revenues.
 
(b)           The Company hereby irrevocably designates, appoints, and empowers John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its designee, appointee and agent to take process, receive and forward process or to be served with process for and on its behalf of any and all legal process, summons, notices and documents which may be served in any such action, suit or proceeding brought in any such United States or State court which may be made on such designee, appointee and agent in accordance with legal procedures prescribed for such courts. If for any reason such designee, appointee and agent hereunder shall cease to be available to act as such, the Company agrees to designate a new designee, appointee and agent in The City of New York on the terms and for the purposes of this Section 14 satisfactory to the Representatives. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents out of any of the aforesaid courts in any such action, suit or proceeding by serving a copy thereof upon the relevant agent for service of process referred to in this Section 14 (whether or not the appointment of such agent shall for any reason prove to be ineffective or such agent shall accept or acknowledge such service) or by mailing copies thereof by registered or certified air mail, first class, postage prepaid, to each of them at their respective addresses specified in or designated pursuant to this Agreement. The Company agrees that the failure of any such designee, appointee and agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any way be deemed to limit the ability of any Underwriter to serve any such legal process, summons, notices and documents in any other manner permitted by applicable law or to obtain jurisdiction over the undersigned or bring actions, suits or proceedings against the undersigned in any jurisdictions, and in any manner, as may be permitted by applicable law. The Company hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Agreement or the Pricing Agreement brought in the United States federal courts or the courts of the State of New York located in the Borough of Manhattan, The City of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
 
15.           Each Underwriter severally represents and agrees that: (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning
 
20
 
of section 21 of the Financial Services and Markets Act 2000 (the “ FSMA ”)) received by it in connection with the issue or sale of any Securities in circumstances in which section 21(1) of the FSMA would not, if the Company was not an authorised person, apply to the Company; and (b) it has complied and will comply with all applicable provisions of the FSMA (and all rules and regulations made pursuant to the FSMA) with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.
 
16.           In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “ Relevant Member State ”), each Underwriter severally represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “ Relevant Implementation Date ”), it has not made and will not make an offer of Securities to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Securities which has been approved by the competent authority in that Relevant Member State or where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Securities to the public in that Relevant Member State: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than EUR 43,000,000; and (3) an annual net turnover of more than EUR 50,000,000, as shown in its last annual or consolidated accounts; (c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Underwriters; or (d) in any other circumstances falling under Article 3(2) of the Prospectus Directive, provided that no such offer of Securities requires the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this Section 16 of this Agreement, the expression “an offer of Securities to the public” in relation to any Securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to purchase or subscribe the Securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

17.           The Company hereby acknowledges that (a) the purchase, or procurement of purchasers of, and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters and any affiliate through which any Underwriter may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company and (c) the Company’s engagement of the Underwriters in connection with   the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, the Company agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company on related or other matters). The Company agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.
 
21
 
 
18.           Time shall be of the essence of each Pricing Agreement. As used herein, “ business day ” shall mean any day when the Commission’s office in Washington, D.C. is open for business.
 
19.           This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to conflict of laws provisions thereof. Specified times of day refer to New York City time.
 
20.           This Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together shall constitute one and the same agreement.
 
[The rest of this page is intentionally left blank.]

22
 
 
If the foregoing is in accordance with your understanding, please sign and return to us [        ] counterparts hereof.
 
Very truly yours,
 
   
   
THE ROYAL BANK OF SCOTLAND GROUP plc
 
   
   
By:
   
 
Name:
 
 
Title:
 


 
[The rest of this page is intentionally left blank.]
 
 
23
 
 
Accepted as of the date hereof:
 
[names of representatives]
 
 
By:
 
 
Name:
 
Title:



 
For themselves and as representatives of the several Underwriters
 
24

ANNEX I
 
Pricing Agreement

 
[Names of Representatives]
 
[As Representatives of the several
Underwriters named in Schedule I hereto,]
___________ __, ____
 

 
Ladies and Gentlemen:
 
The Royal Bank of Scotland Group plc, a public limited company incorporated under the laws of, and registered in, Scotland (the “ Company ”), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated _________ __, ____ (the “ Underwriting Agreement ”), between the Company on the one hand and the several Underwriters on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the “ Underwriters ”), or to purchasers procured by them, the securities specified in Schedule II hereto (the “ Securities ”). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Disclosure Package and/or the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Disclosure Package and/or the Prospectus (each as therein defined), as the case may be, and also a representation and warranty as of the date of this Pricing Agreement in relation to the Disclosure Package and/or the Prospectus (as amended or supplemented), as the case may be, relating to the Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto.
 
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.
 
Subject to the terms and conditions set forth herein (including Schedules I and II hereto) and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, or to purchasers procured by them, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, or to procure purchasers to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Securities set forth opposite the name of such Underwriter in Schedule I hereto.
 
25
 
If the foregoing is in accordance with your understanding, please sign and return to us [        ] counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.
 
[The rest of this page is intentionally left blank.]

26
 
Very truly yours,
 
   
   
THE ROYAL BANK OF SCOTLAND GROUP plc
 
   
   
By:
   
 
Name:
 
 
Title:
 


 
[The rest of this page is intentionally left blank.]
 
 
27
 
 
Accepted as of the date hereof:
 
[names of representatives]
 
 
By:
 
 
Name:
 
Title:




For themselves and as representatives of the several Underwriters
 
 
28
 
 
SCHEDULE I
 
     
 
Principal Amount of
Securities to be Purchased
 
[Names of Representatives]
   
[          ]
[Names of other Underwriters]
   
[          ]
 
Total :
 
[_____]


29
 
SCHEDULE II
 
Capitalized terms used herein, unless otherwise stated, shall have the meaning set forth in the Underwriting Agreement.
 
Title of Securities:
 
[ ]% [Senior Debt Securities] due [ ]
 
Aggregate principal amount:
 
$[ ] principal amount of the Securities
 
Price to Public:
 
[ ]% of the principal amount of the Securities
 
Purchase Price by Underwriters:
 
[ ]% of the principal amount of the Securities
 
Underwriting Commission:
 
[ ]%
 
Form of Securities:
 
Book-entry only form represented by one or more global securities deposited with a custodian for DTC, Euroclear Bank SA/NV, as operator of the Euroclear System and Clearstream Banking, sociéte anonyme , as the case may be.
 
Specified funds for payment of purchase price:
 
Wire transfer of immediately available funds
 
Time of Delivery:
 
9:30 a.m. (New York time), ________ __, ____
 
Indenture:
 
Indenture dated as of ________ __, ____ between the Company and The Bank of New York, as Trustee.
 
Maturity:
 
________ __, ____
 
30
 
 
Interest Rate:
 
[ ]%
 
Interest Payment Dates:
 
Interest will be paid on the Securities on ________ ___ and ________ ___ of each year, commencing __________ __, ____.
 
Redemption Provisions:
 
The Securities may be redeemed as described in the Prospectus.
 
Sinking Fund Provisions:
 
No sinking fund provisions.
 
Closing location for delivery of Securities:
 
Offices of Davis Polk & Wardwell LLP, 99 Gresham Street, London EC2V 7NG, United Kingdom
 
Names and addresses of Representatives:
 
Designated Representatives:
 
Address for Notices:
 
Stock Exchange Listing:
 
The [Luxembourg Stock Exchange] [London Stock Exchange]
 
Other Terms:
 
The Securities will have additional terms as more fully described in the Disclosure Package and the Prospectus.
 

 

31
 
 
ANNEX II
 
 

  Issuer Free Writing Prospectuses Included in Disclosure Package
 
 
32
 
ANNEX III
 
FORM OF OPINION OF
DAVIS POLK & WARDWELL LLP, U.S. COUNSEL
FOR THE COMPANY
 
[To be included as a Statement of Fact before the opinion: The Registration Statement became effective under the 1933 Act and the Indenture qualified under the Trust Indenture Act upon the filing of the Registration Statement with the Commission on [ date of filing ] pursuant to Rule 461(e)].

Based upon the foregoing, we are of the opinion that:
 
1.        Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly executed and delivered by the Company.

2.        Assuming the Indenture has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Indenture has been duly executed and delivered by the Company, and the Indenture is a valid and binding agreement of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability.

3.        Assuming the Securities have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Securities, when the Securities are authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement (including the Pricing Agreement), will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability, and will be entitled to the benefits of the Indenture pursuant to which such Securities are to be issued.

4.        Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, under the laws of the State of New York relating to personal jurisdiction, the Company has, pursuant to Section 14 of the Underwriting Agreement and Section 1.14 of the Indenture, validly and irrevocably submitted to the personal jurisdiction of any New York state or U.S. federal court located in the State of New York, Borough of Manhattan in the City of New York (each a “ New York Court ”), in any action arising out of or relating to the Underwriting Agreement and the Pricing Agreement or the transactions contemplated thereby, and has validly and irrevocably waived to the fullest extent it may effectively do so, any objection to the venue of a proceeding in any such New York Court, and has validly and irrevocably appointed John Fawcett as its initial authorized agent for the purposes described in Section 14 of the
 
33
 
Underwriting Agreement and Section 1.14 of the Indenture; and service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement and Section 1.14 of the Indenture will be effective service of process in any such action upon the Company.

5.        The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus will not be, required to register as an investment company as such term is defined in the Investment Company Act of 1940, as amended.

6.        Except as disclosed in the Prospectus, the execution and delivery by the Company of, and the performance by the Company of its obligations under, the Underwriting Agreement (including the Pricing Agreement), the Indenture and the Securities (collectively, the “ Documents ”) will not contravene any provision of the laws of the State of New York or any federal law of the United States of America that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated thereby, provided that we express no opinion as to federal or state securities laws.

7.        No consent, approval, authorization or order of, or qualification with, any governmental body or agency under the laws of the State of New York or any federal law of the United States of America that in our experience is normally applicable to general business corporations in relation to transactions of the type contemplated by the Documents is required for the execution, delivery and performance by the Company of its obligations under the Documents, except such as may be required under federal or state securities or Blue Sky laws as to which we express no opinion.

We have considered the statements included in the Prospectus under the caption “Description of Debt Securities” insofar as they summarize provisions of the Indentures and the Securities. In our opinion, such statements fairly summarize these provisions in all material respects. The statements included in the Prospectus under the caption “Certain U.S. Federal and U.K. Tax Consequences”, insofar as they purport to describe provisions of U.S. federal income tax laws or legal conclusions with respect thereto, fairly and accurately summarize the matters referred to therein in all material respects.
 
 
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FORM OF 10b-5 LETTER OF
DAVIS POLK & WARDWELL LLP, U.S. COUNSEL
FOR THE COMPANY
 
On the basis of the information gained in the course of the performance of the services rendered above, but without independent check or verification except as st ated :

1.        The Registration Statement and the Prospectus appear on their face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder; and

2.       nothing has come to our attention that causes us to believe that, insofar as relevant to the offering of the Securities:

a.  
the Registration Statement or the Prospectus included therein at the time the Registration Statement became effective contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading,

b.  
at the [Time of Sale], the Disclosure Package contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or

c.  
the Prospectus as of the date of the Underwriting Agreement or as of the date hereof contained or contain any untrue statement of a material fact or omitted or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

In providing this letter to you and the other several Underwriters, we have not been called to pass upon, and we express no view regarding: (1) the financial statements or financial schedules or other financial or accounting data included in the Registration Statement, the Disclosure Package or the Prospectus or (2) the Statement of Eligibility of the Trustee on Form T-1. It is understood, for the purpose of this letter, that any data furnished in accordance with “Guide 3.  Statistical Disclosure by Bank Holding Companies” under the 1933 Act and the pro forma accounts of the Company and [ABN AMRO Holdings N.V.] is financial data.  In addition, we express no view as to the conveyance of the Disclosure Package or the information contained therein to investors.
 
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ANNEX IV
 
FORM OF OPINION OF
DUNDAS & WILSON CS LLP, SCOTTISH SOLICITORS
TO THE COMPANY
 
Based upon and subject to the foregoing and subject to the qualifications set out below and to any matters not disclosed to us, it is our opinion that so far as the present law of Scotland is concerned:
 
1.           The Company and the Bank have been duly incorporated in Scotland as limited liability companies and are validly registered under the law of Scotland, are not in liquidation, and have the corporate power and authority under such law to conduct their respective businesses as described in the Prospectus and/or the Prospectus Supplement.
 
2.           The execution, delivery and performance by the Company of the Underwriting Agreement and the Pricing Agreement is within the corporate power of the Company and has been duly authorized by all necessary corporate action on the part of the Company.
 
3.           The creation and issuance of the Securities and the execution, delivery and performance by the Company of the Indenture is within the corporate power of the Company and has been duly authorized by all necessary corporate action on the part of the Company; assuming, inter alia , due authorization and execution of the Indenture by the Trustee, the obligations on the part of the Company under the Indenture are valid and legally binding against the Company, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
4.           The Securities (in global or definitive form) (when executed by the Company in accordance with the Indenture), insofar as Scots law governs the formalities of execution and delivery thereof, will have been duly executed by or on behalf of the Company and (upon their issue, authentication and delivery in accordance with the terms of the Underwriting Agreement, the Pricing Agreement  and the Indenture) will have been duly issued and delivered, and they will constitute valid and legally binding obligations of the Company subject as to enforcement to bankruptcy, insolvency, reorganisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
5.           The obligations on the part of the Company under the Indenture are valid and legally binding against the Company subject as to enforcement to bankruptcy, insolvency, reorganisation and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.
 
6.           No authorisations, approvals, consents or licences of governmental, judicial or public bodies or authorities of or in Scotland (together “ consents ”), except such consents as may be required under statutory provisions (other than the Companies Acts, 1985, 1989 and 2006 as they apply to a company having its registered office in Scotland) or regulations or practices applying in Great Britain as a whole, are required by the Company as a result of the Company being a Scottish registered company for the execution, issue and delivery of the Securities.
 
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7.           Neither the execution, delivery and performance by the Company of the Indenture, nor the execution, issue and delivery of the Securities, will of itself result in any violation in any material respect of:
 
(a)  the Memorandum or Articles of Association of the Company or the Bank; or
 
(b)  any existing applicable mandatory provision of Scots law or regulation; or
 
(c)  any existing judgment, order or decree of any Scottish court.
 
8.           The Underwriters would under current practice of the Scottish courts (assuming the effect of Section 14 of the Underwriting Agreement is not to prorogate the exclusive jurisdiction of the United States courts or the courts of or in the State of New York) be permitted to commence proceedings in the Scottish courts for enforcement of the Underwriting Agreement and Pricing Agreement and the Scottish courts would accept jurisdiction in any proceedings for so long as the Company remained domiciled in Scotland and, upon proper averments being made in a Scottish court in any such proceedings, the choice of the law of the State of New York as the proper law of the Underwriting Agreement would be upheld as a valid choice of law by that court.
 
9.           The submission by the Company in Section 14 of the Underwriting Agreement to the jurisdiction of the courts of or in New York, and the designation, appointment and empowerment by the Company under the said Section 14 of an agent for service, would be upheld by the Scottish courts as valid and effective.
 
10.           In relation to any Agreement which is expressed to be governed by the law of the State of New York as its proper law, a judgment of the courts of the State of New York as the relevant forum would be recognised in Scotland through an action of decree conform under common law in the Court of Session in Scotland, assuming that (I) the court which issued the judgment had jurisdiction and acted judicially with no element of unfairness, (II) such judgment was final, not obtained by fraud, or a revenue or penal action, remained capable of enforcement in the place it was pronounced and was not contrary to natural justice, and (III) enforcement of the judgment is not contrary to Scottish public policy.
 
11.           The Underwriting Agreement, the Pricing Agreement and the Indenture have, insofar as Scots law governs the formalities of execution and delivery thereof, been duly executed and delivered by or on behalf of the Company.
 

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ANNEX V
 
FORM OF OPINION OF LINKLATERS LLP
ENGLISH SOLICITORS TO THE COMPANY
 
Assuming that the Company is resident in the United Kingdom for the purposes of United Kingdom taxation, we are of the opinion that:
 
1.           It is not necessary either to ensure the validity of the Securities, the Underwriting Agreement, the Pricing Agreement or the Indenture or to ensure the compliance by the Representatives with any mandatory provision of English law, to obtain any approval, consent, order or permission of, or to effect any further filing, recording or registration with, any public authority or governmental agency in England or authorisation from any regulatory authority, government department or court in England (other than any consents, approvals or authorisations required under the Companies Act 2006 as it applies to a company having its registered office in Scotland - as to which we understand you are relying upon an opinion of Dundas & Wilson CS LLP) in respect of the execution, delivery or performance of the Securities, the Underwriting Agreement, the Pricing Agreement, or the Indenture.  [ Additional language to be added if notes are listed in London ]
 
2.           The statements in the Disclosure Package and the Prospectus Supplement under the section headed “Certain U.S. Federal and U.K. Tax Consequences”, insofar as such statements constitute a general summary of both current United Kingdom tax law and United Kingdom H.M. Revenue & Customs’ practice relevant to the issue of the Securities, if any, fairly and accurately summarise the matters referred to therein;
 
3.           No United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes are payable by the Underwriters on the creation, issue or delivery of the Securities by the Company which comprise loan capital falling within the exemption in Section 79(4) and not within Sections 79(5) or (6) of the Finance Act 1986. Furthermore, even if the above exemption does not apply, there will nevertheless be no such United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes payable by the Underwriters provided that (i) such Underwriters are not persons falling within any of Sections 93(2), 93(3) or 96 (1) of the Finance Act 1986 and (ii) any other person falling within any of Sections 93(2), 93(3) or 96(1) of the Finance Act 1986 to whom the Securities are issued or delivered does not seek to pass on the cost of any charge to United Kingdom stamp duty, stamp duty reserve tax or other issue or documentary taxes falling on them to the Underwriters;
 
4.           No United Kingdom stamp duty, stamp duty reserve tax, capital duty, registration or other issue or documentary taxes should be payable in the United Kingdom on the creation, issue which comprise loan capital falling within Section 79(4) and not within Sections 79(5) and (6) of the Finance Act 1986, or on delivery by, or on behalf of, the Company of the Securities in registered form, the execution and delivery of the Pricing Agreement, the Underwriting Agreement or the consummation of the transactions contemplated thereby;
 
38
 
 
5.           No United Kingdom value added tax will be payable by the Underwriters in respect of their underwriting commissions under the Underwriting Agreement.
 
6.           Payments of interest in respect of the Securities may be made without withholding taxes or duties in the United Kingdom provided that the Securities are listed on a “recognised stock exchange” within the meaning of section 1005 of the Income Tax Act 2007 at the time of the  payment: The [Luxembourg Stock Exchange] [London Stock Exchange] is a  “recognised stock exchange” for purposes of section 1005.
 
7.           Each holder of a Security may, in certain limited circumstances as set out in, and subject always to the terms of the Indenture, (if and when a valid cause of action which is enforceable by a holder in the English courts arises under the Securities) bring such a claim as a claimant in the English courts for the enforcement of its rights against the Company. Such a claim will not be subject to any procedural rules which are not applicable to residents of England, save that an English court may take residency or domicile of a claimant into account when considering the procedural rules and/or legal principles in relation to security for costs and forum non conveniens .
 
8.           Neither the execution and delivery of the Underwriting Agreement, the Pricing Agreement and the Indenture by the Company, nor the compliance by the Company with its obligations under the Underwriting Agreement, the Pricing Agreement or the Indenture will, of itself, breach (A) any mandatory provision of English law of general application binding on the Company, or (B) any covenant of the Company (other than any financial or similar covenant) contained in any of the following documents:
 
(a)          Trust Deed dated 11 December 1985 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$350,000,000 undated floating rate primary capital notes;
 
(b)          [Trust Deed dated 24 August 1989 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$400,000,000 undated floating rate primary capital notes;] 1
 
(c)          First Supplemental Trust Deed dated 1 March 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £150,000,000 10½% subordinated bonds 2013;
 
(d)          Second Supplemental Trust Deed dated 12 August 1993 between The Royal Bank of Scotland plc, the Company and The Law Debenture Trust Corporation p.l.c. constituting £200,000,000 9½% undated subordinated bonds;
 
(e)          Trust Deed dated 10 June 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting €1,250,001,000 fixed/floating rate callable subordinated notes due 2042;
 
(f)           Trust Deed dated 5 December 2002 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$750,001,000 fixed rate callable subordinated notes due 2042;
 
 
1 To be confirmed.
 
39
 
 
(g)          Trust Deed dated 21 May 2003 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$850,001,000 fixed/floating rate callable subordinated notes due 2043;
 
(h)          Trust Deed dated 10 December 2003 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$650,001,000 fixed/floating rate callable subordinated notes due 2043;
 
(i)           Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$950,001,000 fixed/floating rate callable subordinated notes due 2044;
 
(j)           Trust Deed dated 24 August 2004 between the Company and The Law Debenture Trust Corporation p.l.c. constituting U.S.$550,001,000 floating rate callable subordinated notes due 2044, [as supplemented by a supplemental Trust Deed dated 27 September 2004 constituting an additional U.S.$450,001,000 floating rate callable subordinated notes due 2044;] 1
 
(k)          Trust Deed dated 12 December 2005 between the Company and The Law Debenture Trust Corporation p.l.c. constituting €500,001,000 fixed/floating rate callable subordinated notes due 2046;
 
(l)           Trust Deed dated 8 December 2006 between the Company and The Law Debenture Trust Corporation p.l.c. constituting £400,001,000 fixed/floating rate callable subordinated notes due 2047; and
 
(m)         Trust Deed dated 4 October 2007 between the Company and BNY Corporate Trustee Services Limited constituting U.S.$. 1,600,000,000 6.990 per cent. fixed/floating rate preferred capital securities.
 
[ Add any subsequent Trust Deeds ]
 
For the purposes of the opinion contained in paragraph 8 above we have interpreted the effect of the Underwriting Agreement, the Pricing Agreement, the Indenture and the Securities as if they were governed by and construed in accordance with English law. Such opinion should not be taken as expressing an opinion as to the observance of any financial or similar covenant contained in the documents listed above.
 
 
 
1 To be confirmed.
 
 
40

 
ANNEX VI
 
FORM OF OPINION OF SHEARMAN & STERLING LLP,
 
COUNSEL FOR THE UNDERWRITERS
 
1.           Assuming that the Underwriting Agreement (including the Pricing Agreement) has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting Agreement (including the Pricing Agreement) has been duly executed and delivered by the Company.

2.           Assuming that the Indenture has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Indenture has been duly executed and delivered and is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

3.           Assuming that the Securities have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned and authenticated by the Trustee in accordance with the Indenture and delivered and paid for as provided in the Underwriting Agreement and the Pricing Agreement, the Securities will be the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture.

4.           The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended.

5.           Assuming the validity of such action under Scots law, under the laws of the State of New York relating to submission to jurisdiction, pursuant to Section 14 of the Purchase Agreement, the Company has (i) validly and irrevocably submitted to the jurisdiction of the federal courts of the United States of America located in the Borough of Manhattan, the City of New York and the courts of the State of New York located in the Borough of Manhattan, the City of New York, for the purposes specified therein, (ii) to the fullest extent permitted by law, waived any objection which it may now or hereafter have to the laying of venue in any legal suit, action or proceeding in any federal or state court in the Borough of Manhattan, the City of New York and (iii) validly and, to the extent stated therein, irrevocably appointed John Fawcett as its initial authorized agent for the purpose described in Section 14 of the Underwriting Agreement.  Service of process effected on such agent in the manner set forth in Section 14 of the Underwriting Agreement will be effective to confer valid personal jurisdiction over the Company.

6 .             Insofar as the statements in the Disclosure Package and the Final Offering Memorandum (i) under the cap tion “ Taxation” purport to describe certain U.S. federal income tax laws as they relate to U.S. Holders (as defined therein) and (ii) under the caption “ Certain ERISA Considerations” constitute summaries of legal matters referred to therein, such statemen t s fairly and accurately summarize in all material respects the matters referred to therein.

41
 
 
7.             Insofar as the statements in the Disclosure Package and the Prospectus under the caption “ Description of Debt Securities” constitute summaries of documents refe rred to therein, fairly summarize in all material respects the documents referred to therein.
 
42
 
FORM OF 10b-5 LETTER OF
SHEARMAN & STERLING LLP,
COUNSEL FOR THE UNDERWRITERS
 
Subject to the limitations set forth in the immediately preceding paragraph, we advise you that, on the basis of the information we gained in the course of performing the services referred to above, in our opinion, (a) each of the documents incorporated by reference in the Disclosure Package and the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we express no opinion) at the time it was filed with the Commission, appears on its face to have been appropriately responsive in all material respects to the requirements of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations of the Commission thereunder and (b) each of the Registration Statement, the Preliminary Prospectus and the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we express no opinion), appears on its face to be appropriately responsive in all material respects to the requirements of the 1933 Act and the applicable rules and regulations of the Commission thereunder.
 
We further advise you that, subject to the limitations set forth in the second preceding paragraph, on the basis of the information we gained in the course of performing the services referred to above, no facts came to our attention which gave us reason to believe that (i) the Registration Statement (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of the date of the Pricing Agreement, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Disclosure Package (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of the Applicable Time, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) the Prospectus (other than the financial statements and other financial or statistical data contained therein or omitted therefrom, as to which we have not been requested to comment), as of its date or the date hereof, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In expressing the foregoing opinions and belief, we have not been called to pass upon, and we express no opinion or belief as to, any Statement of Eligibility of the Trustee on Form T-1. For the purposes of this and the preceding paragraph, the term “financial data” includes, without limitation, the pro forma accounts of the Company and [ABN AMRO Holdings N.V.] and the data required to be included in the Registration Statement and the Prospectus under the 1933 Act by Guide 3, Statistical Disclosure by Bank Holding Companies.
 
 
 
 

 

Exhibit 4.1


THE ROYAL BANK OF SCOTLAND PLC
as Issuer


THE ROYAL BANK OF SCOTLAND GROUP PLC
as Guarantor


TO


THE BANK OF NEW YORK MELLON, acting through its London Branch
as Trustee
 

INDENTURE

 
Senior Debt Securities


 

 
 
 



THE ROYAL BANK OF SCOTLAND GROUP plc

Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and Senior Debt Securities Indenture, dated ________ ___, ____.

 
Trust Indenture Act Section
 
Senior Debt Securities Indenture Section
§310
(a)(1)                                                                 
6.09
 
(a)(2)                                                                 
6.09
 
(a)(3)                                                                 
Not Applicable
 
(a)(4)                                                                 
Not Applicable
 
(b)                                                                 
6.08, 6.10
 
(c)                                                                 
Not Applicable
§311
(a)                                                                 
6.13
 
(b)                                                                 
6.13
 
(b)(2)                                                                 
7.03(a), 7.03(b)
 
(c)                                                                 
Not Applicable
§312
(a)                                                                 
7.01, 7.02(a)
 
(b)                                                                 
7.02(b)
 
(c)                                                                 
7.02(c)
§313
(a)                                                                 
7.03(a)
 
(b)                                                                 
7.03(a)
 
(c)                                                                 
1.06, 7.03(a)
 
(d)                                                                 
7.03(b)
§314
(a)                                                                 
7.04, 10.06
 
(b)                                                                 
Not Applicable
 
(c)(1)                                                                 
1.02
 
(c)(2)                                                                 
1.02
 
(c)(3)                                                                 
Not Applicable
 
(d)                                                                 
Not Applicable
 
(e)                                                                 
1.02
 
(f)                                                                 
Not Applicable
§315
(a)                                                                 
6.01
 
(b)                                                                 
6.02, 7.03(a)
 
(c)                                                                 
6.01
 
(d)                                                                 
6.01
 
(d)(1)                                                                 
6.01
 
(d)(2)                                                                 
6.01
 
(d)(3)                                                                 
6.01
 
(e)                                                                 
5.14
 
 

 
 
 


Trust Indenture Act Section
 
Senior Debt Securities Indenture Section
§316 (a)(1)(A)       5.02, 5.12
  (a)(l)(B)      5.13
  (a)(2)     Not Applicable
 
(a)(last sentence)                                                                 
1.01
 
(b)                                                                 
5.08
§317
(a)(1)                                                                 
5.03
 
(a)(2)                                                                 
5.04
 
(b)                                                                 
10.03
§318
(a)                                                                 
1.07

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Senior Debt Securities Indenture.

 

 
 
 



TABLE OF CONTENTS

   
   
 
P AGE
   
ARTICLE 1
 
D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION
 
   
Section 1.01 .  Definitions
3
Section 1.02 .  Compliance Certificates and Opinions
11
Section 1.03 .  Form of Documents Delivered to Trustee
11
Section 1.04 .  Acts of Holders
12
Section 1.05 .  Notices, Etc. to Trustee and Company
13
Section 1.06 .  Notice to Holders; Waiver
13
Section 1.07 .  Conflict with Trust Indenture Act
14
Section 1.08 .  Effect of Headings and Table of Contents
14
Section 1.09 .  Successors and Assigns
14
Section 1.10 .  Separability Clause
14
Section 1.11 .  Benefits of Senior Debt Securities Indenture
14
Section 1.12 .  Governing Law
15
Section 1.13 .  Saturdays, Sundays and Legal Holidays
15
Section 1.14 .  Appointment of Agent for Service
15
Section 1.15 .  Calculation Agent
16
   
ARTICLE 2
 
S ENIOR D EBT S ECURITY F ORMS
 
   
Section 2.01 .  Forms Generally
16
Section 2.02 .  Form of Trustee’s Certificate of Authentication
17
   
ARTICLE 3
 
T HE S ENIOR D EBT S ECURITIES
 
   
Section 3.01 .  Amount Unlimited; Issuable in Series
18
Section 3.02 .  Denominations
21
Section 3.03 .  Execution, Authentication, Delivery and Dating
21
Section 3.04 .  Temporary Senior Debt Securities
22
Section 3.05 .  Registration, Registration of Transfer and Exchange.
23
Section 3.06 .  Mutilated, Destroyed, Lost and Stolen Senior Debt Securities
27
Section 3.07 .  Payment; Interest Rights Preserved
28
Section 3.08 .  Persons Deemed Owners
30
Section 3.09 .  Cancellation
30
Section 3.10 .  Computation of Interest
30
Section 3.11 .  CUSIP Numbers
30
   
 
 
i
 
ARTICLE 4
 
S ATISFACTION AND D ISCHARGE
 
   
Section 4.01 .  Satisfaction and Discharge of Senior Debt Securities Indenture
 
Section 4.02 .   Application of Trust Money
32
Section 4.03 .  Repayment to Company
33
   
ARTICLE 5
 
R EMEDIES
 
   
Section 5.01 .  Events of Default
33
Section 5.02 .  Acceleration of Maturity; Rescission and Annulment
34
Section 5.03 .  Collection of Indebtedness and Suits for Enforcement by Trustee
35
Section 5.04 .  Trustee May File Proofs of Claim
36
Section 5.05 .  Trustee May Enforce Claims Without Possession of Senior Debt Securities
37
Section 5.06 .  Application of Money Collected
37
Section 5.07 .  Limitation on Suits
38
Section 5.08 .  Unconditional Right of Holders to Receive Principal, Premium and Interest, If Any
 
Section 5.09 .  Restoration of Rights and Remedies
39
Section 5.10 .  Rights and Remedies Cumulative
39
Section 5.11 .  Delay or Omission Not Waiver
39
Section 5.12 .  Control by Holders
39
Section 5.13 .  Waiver of Past Defaults
40
Section 5.14 .  Undertaking for Costs
40
   
ARTICLE 6
 
T HE T RUSTEE
 
   
Section 6.01 .  Certain Duties and Responsibilities
41
Section 6.02 .  Notice of Defaults
41
Section 6.03 .  Certain Rights of Trustee
41
Section 6.04 .  Not Responsible for Recitals or Issuance of Senior Debt Securities
43
Section 6.05 .  May Hold Senior Debt Securities
43
Section 6.06 .  Money Held in Trust
43
Section 6.07 .  Compensation and Reimbursement.
43
Section 6.08 .  Disqualification; Conflicting Interests
45
Section 6.09 .  Corporate Trustee Required; Eligibility
45
Section 6.10 .  Resignation and Removal; Appointment of Successor
45
Section 6.11 .  Acceptance of Appointment by Successor.
47
Section 6.12 .  Merger, Conversion, Consolidation or Succession to Business
48
 
 
ii
 
   
Section 6.13 .  Preferential Collection of Claims
49
Section 6.14 .  Appointment of Authenticating Agent
49
   
ARTICLE 7
 
H OLDERS L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY
 
   
Section 7.01 .  Company and Guarantor to Furnish Trustee Names and Addresses of Holders
51
Section 7.02 .  Preservation of Information; Communication to Holders.
51
Section 7.03 .  Reports by Trustee.
52
Section 7.04 .  Reports by the Company and the Guarantor
52
   
ARTICLE 8
 
C ONSOLIDATION , M ERGER , C ONVEYANCE OR T RANSFER
 
   
Section 8.01 .  Company or Guarantor May Consolidate, Etc. Only on Certain Terms
53
Section 8.02 .  Successor Corporation Substituted
54
Section 8.03 .  Assumption of Obligations
54
   
ARTICLE 9
 
S UPPLEMENTAL I NDENTURES
 
   
Section 9.01 .  Supplemental Indentures without Consent of Holders
56
Section 9.02 .  Supplemental Indentures with Consent of Holders
57
Section 9.03 .  Execution of Supplemental Indentures
58
Section 9.04 .  Effect of Supplemental Indentures
59
Section 9.05 .  Conformity with Trust Indenture Act
59
Section 9.06 .  Reference in Senior Debt Securities to Supplemental Indentures
59
   
ARTICLE 10
 
C OVENANTS
 
   
Section 10.01 .  Payment of Principal, Premium, and Interest
59
Section 10.02 .  Maintenance of Office or Agency
59
Section 10.03 .  Money for Payments to be Held in Trust
60
Section 10.04 .  Additional Amounts
62
Section 10.05 .  Corporate Existence
64
Section 10.06 .  Statement as to Compliance
64
Section 10.07 .  Original Issue Document
64
   
ARTICLE 11
 
R EDEMPTION OF S ENIOR D EBT S ECURITIES
 
   
Section 11.01 .  Applicability of Article
64
 
 
iii
 
Section 11.02 .  Election to Redeem; Notice to Trustee
64
Section 11.03 .  Selection by Trustee of Senior Debt Securities to be Redeemed
65
Section 11.04 .  Notice of Redemption
65
Section 11.05 .  Deposit of Redemption Price
66
Section 11.06 .  Senior Debt Securities Payable on Redemption Date
66
Section 11.07 .  Senior Debt Securities Redeemed in Part
66
Section 11.08 .  Optional Redemption Due to Changes in Tax Treatment
67
   
ARTICLE 12
 
G UARANTEE A ND I NDEMNITY
 
   
Section 12.01 .  The Guarantee
68
Section 12.02 .  Net Payments
68
Section 12.03 .  Guarantee Unconditional, Etc
71
Section 12.04 .  Reinstatement
71
Section 12.05 .  Subrogation
72
Section 12.06 .  Indemnity
72
Section 12.07 .  Assumption By Guarantor
72
   
   
   
   


 
iv
 

SENIOR DEBT SECURITIES INDENTURE, dated as of _________ ___, 2009 between THE ROYAL BANK OF SCOTLAND PLC, a corporation incorporated in Scotland with registered number SC090312 (the “Company” ), THE ROYAL BANK OF SCOTLAND GROUP PLC, a corporation incorporated in Scotland with registered number SC045551 (the “Guarantor” ) and THE BANK OF NEW YORK MELLON (previously named The Bank of New York), acting through its London Branch, a banking corporation duly organized and existing under the laws of the State of New York as Trustee (the “Trustee” ), having its Corporate Trust Office at One Canada Square, London, E14 5AL.

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Senior Debt Securities Indenture to provide for the issuance from time to time of its senior debt securities (the “ Senior Debt Securities ”), to be issued in one or more series, represented by one or more Global Securities in registered form without coupons for payments attached, or represented by definitive Senior Debt Securities in registered form without coupons for payments attached, the amount and terms of each such series to be determined as hereinafter provided.

All things necessary to make this Senior Debt Securities Indenture a valid and binding agreement of the Company, in accordance with its terms, have been done.

All things necessary to make the Guarantees, when executed by the Guarantor and endorsed on the Senior Debt Securities issued under this Senior Debt Securities Indenture, and authenticated and delivered hereunder, the valid obligations of the Guarantor, and to make this Senior Debt Securities Indenture a valid agreement of the Guarantor, in accordance with their and its terms, have been done.

NOW, THEREFORE, THIS SENIOR DEBT SECURITIES INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Senior Debt Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of Senior Debt Securities as follows:

 
 
2
 

 
ARTICLE 1
D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION

Section 1.01 . Definitions. For all purposes of this Senior Debt Securities Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1)           the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(2)           all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3)           all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United Kingdom at the date of such computation and as applied by the Company;

(4)           the words “ herein ,” “ hereof ” and “ hereunder ” and other words of similar import refer to this Senior Debt Securities Indenture as a whole and not to any particular Article, Section or other subdivision; and

(5)           any reference to an “ Article ” or a “ Section ” refers to an Article or Section of this Senior Debt Securities Indenture.

Certain terms, used principally in Article 6, are defined in those Articles.

“ Act ”, when used with respect to any Holder, has the meaning specified in Section 1.04.

“ Additional Amounts ” shall have the meaning set forth in Section 10.04, of this Agreement.

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “ control ” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.
 

 
3
 



“ Agent Member ” means a member of, or participant in, any Depositary.

“ Auditors ” means the Auditors from time to time of the Company or if there shall be joint Auditors of the Company any one or more of such joint Auditors.

“ Authenticating Agent ” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Senior Debt Securities. Initially the Trustee shall act as Authenticating Agent.

“ Authorized Newspaper ” means a newspaper in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in the place in connection with which the term is used, which, in the United Kingdom, will be the Financial Times of London, if practicable, and which, in the United States, will be the Wall Street Journal , if practicable, and which, in Luxembourg, will be the Luxemburger Wort , if practicable and for so long as and only with respect to any Senior Debt Securities listed on the Luxembourg Stock Exchange, and if it shall be impracticable in the opinion of the Company to make any publication of any notice required hereby in any such newspaper, shall mean any publication or other notice in lieu thereof which is made or given with the approval of the Company which may include through the means of DTC, Euroclear and Clearstream.

“ Board of Directors ” means either the board of directors, or any committee of such board duly authorized to act with respect hereto, of the Company, which board of directors or committee may, to the extent permitted by applicable law, delegate its authority.

“ Board Resolution ” means a copy of a resolution certified by the Secretary or a Deputy or Assistant Secretary of the Company to have been duly adopted by the Board of Directors or duly authorized committee thereof and to be in full force and effect on the date of such certification and delivered to the Trustee.

“ Business Day ” means, with respect to any Place of Payment, except as may otherwise be provided in the form of Senior Debt Securities of any particular series, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

“ Calculation Agent ” means the Person, if any, authorized by the Company, to calculate the interest rate or other amounts from time to time in relation to any series of Senior Debt Securities.
 

 
4
 



“ Commission ” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“ Company Request” and “ Company Order ” mean, respectively, a written request or order signed in the name of the Company by an Executive Director or Director or the Secretary of a Deputy or Assistant Secretary, and delivered to the Trustee.

“ Corporate Trust Office ” means the office of the Trustee in which its corporate trust business is principally administered, located at One Canada Square, London E14 5AL (Attention: Corporate Trust Administration, facsimile: +44 20 7964 2536).

The term “ corporation ” includes corporations, associations, companies and business trusts.

“ Deferred Interest ” has the meaning specified in Section 3.07.

“ Depositary ” means, with respect to any series of Senior Debt Securities, a clearing agency that is designated to act as Depositary for the Global Securities evidencing all or part of such Senior Debt Securities as contemplated by Section 3.01.

“ Dollar ” or “ $ ” or any similar reference means the coin or currency of the United States which as at the time of payment is legal tender for the payment of public and private debts.

“ DTC ” means The Depository Trust Company or its nominee or its or their successor.

“ euro ” or “ € ” means the single currency of the participating member states in the Third Stage of European economic and monetary union pursuant to the Treaty establishing the European Community (as amended from time to time). “ participating member states ” means those member states of the European Union from time to time which adopt a single, shared currency in the Third Stage, as defined and identified in the EMU legislation.

“ Event of Default ” has the meaning specified in Section 5.01.

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

 
5
 



“ Executive Officer ” means, for each of the Company and the Guarantor, any executive officer or any Designated Signatory as defined in the minutes of a meeting of a committee of the Board of Directors held on [                        ], 2009, and, in each case, any other person authorized by a Board Resolution to carry out the functions such officer performs.

“ Foreign Currency ” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts.

“ Foreign Government Securities ” means with respect to Senior Debt Securities of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

“ Global Security ” means a global certificate evidencing all or part of a series of Senior Debt Securities, authenticated and delivered to the Holder and registered in the name of the Holder or its nominee.

“ Guarantee ” means the unconditional guarantee of the payment by the Guarantor of the principal of, any premium or interest on, and any additional amounts with respect to the Senior Debt Securities.

“ Guarantor ” means The Royal Bank of Scotland Group PLC, until a successor Person shall have become such pursuant to the applicable provisions of the Senior Debt Securities Indenture, and thereafter “Guarantor” shall mean such successor Person.

“ Guarantor’s Officer Certificate ” means a certificate signed by any two duly authorized signatories of the Guarantor acting together, that complies with the requirements of Section 314(e) of the Trust Indenture Act and is delivered to the Trustee.

“ Guarantor Taxing Jurisdiction ” shall have the meaning set forth in Section 12.02.

“ Holder ” means a Person in whose name a Senior Debt Security in global or definitive form is registered in the Senior Debt Security Register.
 


 
6
 



The term “ interest ”, when used with respect to a Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

“ Interest Payment Date ”, when used with respect to any Senior Debt Security, means the Stated Maturity of any installment of interest on such Senior Debt Security.

“ Maturity ”, when used with respect to any Senior Debt Security, means the date, if any, on which the principal of such Senior Debt Security becomes due and payable as therein or herein provided, whether by call for redemption, winding-up of the Company or otherwise.

“ Officer’s Certificate ” means a certificate delivered to the Trustee and signed by an Executive Director or an Assistant Director or the Secretary or a Deputy or Assistant Secretary of the Company.

“ Opinion of Counsel ” means a written opinion of legal advisors, who may be an employee of or legal advisors for the Company or other legal advisors acceptable to the Trustee.

“ Original Issue Discount Security ” means any Senior Debt Security which provides for an amount less than the principal amount to be due and payable upon a declaration of the Maturity thereof pursuant to Section 5.02.

“ Outstanding ”, when used with respect to Senior Debt Securities or any series of Senior Debt Securities means (except as otherwise specified pursuant to Section 3.01), as of the date of determination, all Senior Debt Securities or all Senior Debt Securities of such series, as the case may be, theretofore authenticated and delivered under this Senior Debt Securities Indenture, except :

(i)         Senior Debt Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii)          Senior Debt Securities, or portions thereof, for whose payment or redemption money, U.S. Government Obligations or Foreign Government Securities in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the Company or the Guarantor) in trust or set aside and segregated in trust by the Company or the Guarantor (if the Company shall act as its own or authorized the Guarantor to act as, Paying Agent) for the Holders of such Senior Debt Securities; provided , that, if such Senior Debt Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Senior Debt Securities Indenture or provision therefor satisfactory to the Trustee has been made; and
 


 
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(iii) Senior Debt Securities which have been paid pursuant to Section 11.06 or in exchange for or in lieu of which other Senior Debt Securities have been authenticated and delivered pursuant to this Senior Debt Securities Indenture, other than any such Senior Debt Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Senior Debt Securities are held by a bona fide purchaser in whose hands such Senior Debt Securities are valid obligations of the Company;

provided, however , that in determining whether the Holders of the requisite   principal amount of the Outstanding Senior Debt Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of a Senior Debt Security denominated in a Foreign Currency shall be the Dollar equivalent, determined on the date of original issuance of such Senior Debt Security, of the principal amount of such Senior Debt Security; and (ii) Senior Debt Securities beneficially owned by the Company, the Guarantor or any other obligor upon the Senior Debt Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Senior Debt Securities for which a Responsible Officer of the Trustee has received an Officer’s Certificate stating that such Senior Debt Securities are so beneficially owned shall be so disregarded; provided , further , however , that Senior Debt Securities so beneficially owned   which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Senior Debt Securities and that the pledgee is not the Company, the Guarantor or any other obligor upon the Senior Debt Securities or any Affiliate of the Company, the Guarantor or of such other obligor.

“ Paying Agent ” means any Person (which may include the Company or the Guarantor) authorized by the Company to pay the principal of (and premium, if any) or interest, if any on any Senior Debt Securities on behalf of the Company.

“ Person ” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“ Place of Payment ”, when used with respect to the Senior Debt Securities of any series, means the place or places where the principal of (and premium, if any) and interest, if any, on the Senior Debt Securities of that series are payable as specified pursuant to Section 3.01 or, if not so specified, as specified in Section 10.02.
 


 
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“ Predecessor Security ” of any particular Senior Debt Security means every previous Senior Debt Security evidencing all or a portion of the same debt as that evidenced by such particular Senior Debt Security; and, for the purposes of this definition, any Senior Debt Security authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Senior Debt Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Senior Debt Security.

“ Redemption Date ”, when used with respect to any Senior Debt Security to be redeemed, means the date fixed for such redemption by or pursuant to this Senior Debt Securities Indenture.

“ Redemption Price ”, when used with respect to any Senior Debt Security to be redeemed, means the price at which it is to be redeemed pursuant to this Senior Debt Securities Indenture.

“ Regular Record Date ” for the interest payable on any Interest Payment Date on registered Senior Debt Securities of any series means the date specified for the purpose pursuant to Section 3.01.

“ Responsible Officer ”, when used with respect to the Trustee, means any officer of the Trustee assigned to or working in the corporate trust department of the Trustee or, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Senior Debt Securities Indenture.

“ Senior Debt Securities ” has the meaning set forth in the recitals herein and more particularly means any series of Senior Debt Securities issued, authenticated and delivered under this Senior Debt Securities Indenture.

“ Senior Debt Securities Indenture ” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Senior Debt Securities established pursuant to Section 3.01.

“ Senior Debt Security ” means one of the Senior Debt Securities.

“ Senior Debt Security Register ” and “ Senior Debt Security Registrar ” have the respective meanings specified in Section 3.05.

“ Special Record Date ”, when used for the payment of any Deferred Interest on registered Senior Debt Securities of any series, means the date specified by the Company for the purpose pursuant to Section 3.07.
 


 
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“ Stated Maturity ”, when used with respect to any Senior Debt Security or any installment of principal thereof or interest thereon, means the date, if any, specified in, or determined in accordance with the terms of, such Senior Debt Security as the fixed date on which the principal of such Senior Debt Security is due and payable.

“ Subsidiary ” has the meaning attributed thereto by Section 736 of the Companies Act 1985 of Great Britain as in force at the date as of which this instrument was executed.

“ Taxing Jurisdiction ” has the meaning specified in Section 10.04.

“ Trustee ” means the Person named as the “ Trustee ” in the first paragraph of this instrument until a successor trustee shall have become such pursuant to the applicable provisions of this Senior Debt Securities Indenture, and thereafter “ Trustee ” shall mean the Person who is then the Trustee hereunder, and if at any time there is more than one such Person, “ Trustee ” shall mean and include each such Person; and “ Trustee ” as used with respect to the Senior Debt Securities of any series shall mean the Trustee with respect to the Senior Debt Securities of such series.

“ Trust Indenture Act ” means the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at the date as of which this instrument was executed, except as provided in Section 9.05.

“ United Kingdom ” means the United Kingdom of Great Britain and Northern Ireland.

“ United States ” and “ U.S. ” mean the United States of America and, except in the case of Sections 6.09 and 6.14, its territories and possessions.

“ U.S. Government Obligations ” means noncallable (i) direct obligations of the United States for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.
 


 
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Section 1.02 . Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Senior Debt Securities Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Senior Debt Securities Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of the legal advisor rendering such opinion all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Senior Debt Securities Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Senior Debt Securities Indenture shall include:

(a)          a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b)          a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c)          a statement that, in the opinion of each such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d)          a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.

Section 1.03 . Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company or the Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, legal advisors, unless such officer knows, or in the exercise
 

 
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of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representations by, legal advisors may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or the Guarantor, as the case may be, stating that the information with respect to such factual matters is in the possession of the Company or the Guarantor, as the case may be, unless such legal advisors know, or in the exercise of reasonable care should know, that the certificate or opinion or representation with respect to such matters is erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Senior Debt Securities Indenture, they may, but need not, be consolidated and form one instrument.

Section 1.04 . Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Senior Debt Securities Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company and the Guarantor. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “ Act ” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Senior Debt Securities Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company and the Guarantor, if made in the manner provided in this Section.

(b)          The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. When such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c)          The ownership of registered Senior Debt Securities shall be proved by the Senior Debt Security Register.
 

 
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(d)           Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Senior Debt Security shall bind every future Holder of the same Senior Debt Security and the Holder of every Senior Debt Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Senior Debt Security or such other Senior Debt Security.

Section 1.05 . Notices, Etc. to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Senior Debt Securities Indenture to be made upon, given or furnished to, or filed with,

(a)          the Trustee by any Holder or by the Company or Guarantor shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile) to the Trustee at its Corporate Trust Office, or

(b)          the Company or Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class air mail postage prepaid, to the Company or the Guarantor, to RBS Gogarburn, P.O. Box 1000, Edinburgh EH12 1HQ (Attention: Group Secretariat) or at any other address previously furnished in writing to the Trustee by the Company or the Guarantor.

Section 1.06 . Notice to Holders; Waiver. When this Senior Debt Securities Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if given in writing and mailed, first-class postage prepaid, to each Holder of a registered Senior Debt Security affected by such event in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act with respect to reports pursuant to Section 7.03(a).

For so long as the Senior Debt Securities of any series are represented by Global Securities, the Company will deliver a copy of all notices with respect to such series to the Holder (if the address of such Holder is known to the Company).

When notice to Holders of registered Senior Debt Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Senior Debt Securities Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
 

 
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the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Section 1.07 . Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Senior Debt Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. If at any future time any provision required to be included herein by the Trust Indenture Act as in force at the date as of which this Senior Debt Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Senior Debt Securities Indenture were executed at such future time, the Company, the Guarantor and the Trustee may enter into one or more indentures supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole or in part) such provision or limitation of this Senior Debt Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article Nine) no provision or limitation required to be included herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Senior Debt Securities Indenture was executed may be so changed or eliminated.

Section 1.08 . Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 1.09 . Successors and Assigns. All covenants and agreements in this Senior Debt Securities Indenture by the Company or the Guarantor shall bind its successors and assigns, whether so expressed or not.

Section 1.10 . Separability Clause. In case any provision in this Senior Debt Securities Indenture or in the Senior Debt Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 1.11 . Benefits of Senior Debt Securities Indenture. Nothing in this Senior Debt Securities Indenture or in the Senior Debt Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Holders of Senior Debt Securities, any benefit or any legal or equitable right, remedy or claim under this Senior Debt Securities Indenture.
 

 
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Section 1.12 . Governing Law. This Senior Debt Securities Indenture and the Senior Debt Securities shall be governed by and construed in accordance with the laws of the State of New York, except that the authorization and execution of the Senior Debt Securities Indenture and the Senior Debt Securities shall be governed by (in addition to the laws of the State of New York relevant to execution) by the respective jurisdictions of the Company, the Guarantor and the Trustee, as the case may be.

Section 1.13 . Saturdays, Sundays and Legal Holidays. The terms of the Senior Debt Securities shall provide that, in any case where any Interest Payment Date, Redemption Date, Maturity or Stated Maturity, of a Senior Debt Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Senior Debt Securities Indenture or the Senior Debt Securities other than a provision in the Senior Debt Securities that specifically states that such provision shall apply in lieu of this Section) payments of interest, if any (and premium, if any) or principal and the exchange of the Senior Debt Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment (or such other Business Day as shall be provided in such Senior Debt Security) with the same force and effect as if made on such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, provided that no interest shall accrue on such payment for the period from and after such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, as the case may be.

Section 1.14 . Appointment of Agent for Service. Each Company and the Guarantor has designated and appointed John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Senior Debt Securities or this Senior Debt Securities Indenture, but for that purpose only, and agrees that service of process upon said John Fawcett shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Senior Debt Securities remain Outstanding until the appointment of a successor by the Company or the Guarantor and such successor’s acceptance of such appointment. Upon such acceptance, the Company or the Guarantor shall notify the Trustee of the name and address of such successor. Each Company and the Guarantor further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said John Fawcett in full force and effect so long as any of the Senior Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company or the Guarantor to take any such action. The Company
 
 
 
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and the Guarantor hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

Section 1.15 . Calculation Agent. If the Company appoints a Calculation Agent pursuant to Section 3.01 with respect to any series of Senior Debt Securities, any determination of the interest rate on, or other amounts in relation to, such series of Senior Debt Securities in accordance with the terms of such series of Senior Debt Securities by such Calculation Agent shall (in the absence of manifest error, bad faith or willful misconduct) be binding on the Company, the Guarantor, the Trustee and all Holders and (in the absence of manifest error, bad faith or willful misconduct) no liability to the Holders shall attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions.


ARTICLE 2
S ENIOR D EBT S ECURITY F ORMS

Section 2.01 . Forms Generally. The Senior Debt Securities of each series shall be issuable as registered securities without coupons and in such forms as shall be established by or pursuant to a Board Resolution, or in one or more indentures supplemental hereto, pursuant to Section 3.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Senior Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or Depositary therefor, or as may, consistently herewith, be determined by the officers executing such Senior Debt Securities, all as evidenced by any such execution.

The Trustee’s certificates of authentication shall be in substantially the form set forth in Section 2.02 or Section 6.14.

The Guarantee by the Guarantor to be endorsed on the Senior Debt Securities of each series (other than Senior Debt Securities issued by RBSG) shall be substantially in the form set forth in this Article, or as shall be established by or pursuant to a Board Resolution, or in one of more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Senior Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officer or officers executing such Guarantees, as evidences by the officer’s or officers’ execution (whether by facsimile or otherwise) of the Guarantees.
 


 
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The definitive Senior Debt Securities and Guarantees shall be printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Senior Debt Securities may be listed, all as determined by the officers executing such Senior Debt Securities, as evidenced by their execution thereof.

Section 2.02 . Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication shall be in substantially the following form:

CERTIFICATE OF AUTHENTICATION

This is one of the Senior Debt Securities of the series designated herein referred to in the within-mentioned Senior Debt Securities Indenture.


Dated:
 
 
     
THE BANK OF NEW YORK MELLON, LONDON BRANCH
 
     
     
as Trustee
 
     
     
By:
   
 
Authorized Signatory
 
     
 
 

 
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ARTICLE 3
T HE S ENIOR D EBT S ECURITIES

Section 3.01 . Amount Unlimited; Issuable in Series. The aggregate principal amount of Senior Debt Securities which may be authenticated and delivered under this Senior Debt Securities Indenture is unlimited. The Senior Debt Securities may be issued in one or more series.

There shall be established by or pursuant to Board Resolutions of the Company or established in one or more indentures supplemental hereto, prior to the initial issuance of Senior Debt Securities of any series:

(a)          the title of the Senior Debt Securities of the series (which shall distinguish the Senior Debt Securities of the series from all other Senior Debt Securities);

(b)          any limit upon the aggregate principal amount of the Senior Debt Securities of the series which may be authenticated and delivered under this Senior Debt Securities Indenture (except for Senior Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Senior Debt Securities of the series pursuant to Sections 3.04, 3.05, 3.06, 9.6 or 11.07 and except for any Senior Debt Securities which, pursuant to Section 3.03 are deemed never to have been authenticated and delivered hereunder);

(c)          the date or dates, if any, on which the principal of (and premium, if any, on) the Senior Debt Securities of the series is payable;

(d)          the rate or rates, if any, at which the Senior Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07, the terms applicable to deferred payments and, in the case of registered Senior Debt Securities, the Regular Record Date for the interest payable on any Interest Payment Date, the Special Record Date for the payment of any Deferred Interest and any dates required to be established pursuant to Section 7.01;

(e)          whether any premium, upon redemption or otherwise, shall be payable by the Company on Senior Debt Securities of the series;

(f)          the place or places where the principal of (and premium, if any) and any interest on Senior Debt Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and interest on Senior Debt Securities of such series, at least one of such Paying Agents having an office or agency in the Borough of Manhattan, The City of New York;
 


 
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(g)          other than with respect to any redemption of the Senior Debt Securities pursuant to Section 11.08, whether or not such series of Senior Debt Securities are to be redeemable, in whole or in part, at the Company’s option and, if so redeemable, the period or periods within which, the price or prices at which and the terms and conditions upon which, Senior Debt Securities of the series may be redeemed, including the date referred to in Section 11.08;

(h)          the obligation, if any, of the Company to redeem or purchase Senior Debt Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which Senior Debt Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

(i)         if other than denominations of $[      ] and any multiple thereof, the denominations in which Senior Debt Securities of the series in each applicable form shall be issuable;

(j)         if other than the principal amount thereof, the portion, or the manner of calculation of such portion, of the principal amount of Senior Debt Securities of the series which shall be payable upon a declaration of acceleration or acceleration of the Maturity thereof pursuant to Section 5.02, upon redemption of Senior Debt Securities of any series which are redeemable before their Stated Maturity, or which the Trustee shall be entitled to file and prove a claim pursuant to Section 5.04;
 
(k)         if Additional Amounts, pursuant to Section 10.04, will not be payable;

(l)         the terms, if any, on which such Senior Debt Securities may or shall be converted into or exchanged at the option of the Company or otherwise for stock or other securities of the Company or another entity or other entities, into a basket or baskets of such securities, into an index or indices of such securities, into the cash value therefor or into any combination of the foregoing, any specific terms relating to the adjustment thereof and the period during which such Senior Debt Securities may or shall be so converted or exchanged;

(m)           if other than Dollars, provisions, if any, for the Senior Debt Securities of the series to be denominated, and payments thereon to be made, in Foreign Currencies and specifying the manner and place of payment thereon and any other terms with respect thereto;
 


 
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(n)          if other than the coin or currency in which the Senior Debt Securities of that series are denominated, the coin or currency in which payment of the principal of (and premium, if any) or interest, if any, on the Senior Debt Securities of such series shall be payable;

(o)          if the principal of (and premium, if any) or interest, if any, on the Senior Debt Securities of such series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Senior Debt Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;

(p)          whether the Senior Debt Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and the initial Holder with respect to such Global Security or Senior Debt Securities;

(q)          if the Senior Debt Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Senior Debt Security of such series or otherwise) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;

(r)          if the amounts of payments of principal of (and premium, if any) or interest, if any, on the Senior Debt Securities of the series may be determined with reference to an index or are otherwise not fixed on the original issue date thereof, the manner in which such amounts shall be determined and the Calculation Agent, if any, who shall be appointed and authorized to calculate such amounts;

(s)          any other Events of Default or covenants with respect to the Senior Debt Securities of such series and, if other than as specified in this Senior Debt Securities Indenture, the terms thereof;

 
(t)
the forms of Senior Debt Securities of the series; and

(u)          any other terms of the series (which terms shall not be inconsistent with the provisions of this Senior Debt Securities Indenture, except as permitted by Section 9.01(d)).

All Senior Debt Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such action or in any such indenture supplemental hereto.

If the forms of Senior Debt Securities of any series, or any of the terms thereof, are established by action taken pursuant to a Board Resolution, a copy of the Board Resolution in respect thereof shall be delivered to the Trustee at or prior
 

 
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to the delivery of the Company Order pursuant to Section 3.03 for the authentication and delivery of such Senior Debt Securities.

Section 3.02 . Denominations. The Senior Debt Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specification with respect to Senior Debt Securities of any series, the Senior Debt Securities of each series shall be issuable in denominations of $[      ] each and any integral multiple thereof. Unless otherwise specified in accordance with Section 3.01, any Global Security issued and delivered to the Holder shall be issued in the form of units with each $[      ] principal amount of such Global Security constituting one unit.

Section 3.03 . Execution, Authentication, Delivery and Dating. The Senior Debt Securities shall be executed on behalf of the Company by any Executive Officer. The signature of any Executive Officer on the Senior Debt Securities may be manual or facsimile. Senior Debt Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officer of the Company shall bind the Company, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Senior Debt Securities.

At any time and from time to time after the execution and delivery of this Senior Debt Securities Indenture, the Company may deliver Senior Debt Securities of any series executed by the Company having endorsed thereon Guarantees by the Guarantor to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Senior Debt Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Senior Debt Securities. In authenticating such Senior Debt Securities and accepting the additional responsibilities under this Senior Debt Securities Indenture in relation to such Senior Debt Securities the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that (a) the form and terms thereof have been established in conformity with the provisions of this Senior Debt Securities Indenture and (b) that such Senior Debt Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company and the Guarantor enforceable in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditor's rights and by general principles of equity.

The Trustee shall not be required to authenticate such Senior Debt Securities if the issue of such Senior Debt Securities pursuant to this Senior Debt Securities Indenture will affect the Trustee’s own rights, duties or immunities
 


 
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under the Senior Debt Securities and this Senior Debt Securities Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

Each registered Senior Debt Security shall be dated the date of its authentication.

No Senior Debt Security appertaining thereto shall be entitled to any benefit under this Senior Debt Securities Indenture or be valid or obligatory for any purpose unless there appears on such Senior Debt Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual signature, and such certificate upon any Senior Debt Security shall be conclusive evidence, and the only evidence, that such Senior Debt Security has been duly authenticated and delivered hereunder and that such Senior Debt Security is entitled to the benefits of this Senior Debt Securities Indenture. Notwithstanding the foregoing, if any Senior Debt Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Senior Debt Security to the Trustee for cancellation as provided in Section 3.09, for all purposes of this Senior Debt Securities Indenture, such Senior Debt Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefit of this Senior Debt Securities Indenture.

Section 3.04 . Temporary Senior Debt Securities. Pending the preparation of definitive Senior Debt Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Senior Debt Securities substantially of the tenor of the definitive Senior Debt Securities in lieu of which they are issued, which Senior Debt Securities may be printed, lithographed, typewritten, photocopied or otherwise produced. Temporary Senior Debt Securities shall be issuable as registered Senior Debt Securities without coupons attached in any authorized denomination, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Senior Debt Securities may determine, all as evidenced by such execution.

If temporary Senior Debt Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Senior Debt Securities, definitive Senior Debt Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Senior Debt Securities of such series, the temporary Senior Debt Securities of such series shall be exchangeable for definitive Senior Debt Securities of such series containing identical terms and provisions upon surrender of the temporary Senior Debt Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Senior Debt Securities of any series the Company shall execute, the Guarantor shall endorse the Guarantee on, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate
 


 
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principal amount of definitive Senior Debt Securities of the same series of authorized denominations containing identical terms and provisions. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Senior Debt Securities of any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Senior Debt Securities Indenture as definitive Senior Debt Securities of such series.

Section 3.05 .  Registration, Registration of Transfer and Exchange.

(a)           Global Securities. This Section 3.05(a) shall apply to Global Securities unless otherwise specified, as contemplated by Section 3.01.

Except as otherwise specified, as contemplated by Section 3.01 hereof, the Senior Debt Securities shall be initially issued and represented by one or more Global Securities in registered form, without Coupons attached thereto, which shall be authenticated as contemplated by this Senior Debt Securities Indenture.

Each Global Security in registered form authenticated under this Senior Debt Securities Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Senior Debt Security for all purposes of this Senior Debt Securities Indenture. Except as otherwise specified, as contemplated by Section 3.01 hereof, each Global Security in registered form authenticated under this Senior Debt Securities Indenture shall be initially registered in the name of DTC only.

With respect to Global Securities in registered form, unless the Global Security is presented by an authorized representative of the Holder to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Holder and any payment is made to such nominee, any transfer, pledge or other use of the Global Security in registered form for value or otherwise shall be wrongful since the registered owner of such Global Security, the nominee of the Holder, has an interest in such Global Security.

Except as otherwise specified, as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Senior Debt Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary notifies the Trustee that it is unwilling or unable to continue to act as Depositary, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Senior Debt Securities when due, or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series
 


 
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should be exchanged for definitive Senior Debt Securities of that series in registered form. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Senior Debt Securities in registered form bearing interest (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which such interest shall accrue, the same Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Senior Debt Securities in registered form shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.

Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be exchangeable for Senior Debt Securities issuable in authorized denominations of a like aggregate principal amount and tenor.

No Global Security in registered form may be transferred except as a whole by the Holder to a nominee of the Holder or by the Holder or any such nominee to a successor of the Holder or a nominee of such successor. Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Senior Debt Securities in definitive form and will not be considered the holders thereof for any purpose under this Senior Debt Securities Indenture.

In the event that a Global Security is surrendered for redemption or exchange for stock or other securities of the Company or another entity or other entities in part pursuant to Section 11.07, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.

The Agent Members and any other beneficial owners shall have no rights under this Senior Debt Securities Indenture with respect to any Global Security held on their behalf by a Holder, and such Holder may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Holder or impair, as between any such Holder or other clearance service and its Agent Members and Holders, the operation of customary practices governing the exercise of the rights of a holder of any
 
 
 
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security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Senior Debt Securities Indenture.

In connection with any exchange of interests in a Global Security for definitive Senior Debt Securities of another authorized form, as provided in this Section 3.05(a), then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Senior Debt Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Senior Debt Securities without charge (unless the definitive Senior Debt Securities in registered form are to be issued to an Excepted Person (as defined in Section 13.10) in which case the Company or Trustee may require payment of any taxes or governmental charges arising) and the Trustee shall authenticate and deliver, in exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Senior Debt Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 3.05 shall be exchangeable for Senior Debt Securities issuable in the denominations specified as contemplated by Section 3.01 and registered in such names as the Holder of such Global Security shall direct. If a definitive Senior Debt Security in registered form is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant Interest Payment Date, interest will not be payable on such Interest Payment Date in respect of such definitive Senior Debt Security, but will be payable on such Interest Payment Date only to the person to whom payments of interest in respect of such portion of such Global Security are payable.

A Depositary may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Senior Debt Securities Indenture with respect to the Senior Debt Securities.

(b)          Except as otherwise specified pursuant to Section 3.01, registered Senior Debt Securities of any series may only be exchanged for a like aggregate principal amount of registered Senior Debt Securities of such series of other authorized denominations containing identical terms and provisions. Senior Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and if applicable, the Guarantor shall endorse the
 


 
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Guarantee thereon, and the Trustee shall authenticate and deliver, in exchange therefor the Senior Debt Security or Senior Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.

Except as otherwise specified pursuant to Section 3.01, the Company shall cause to be kept in the principal corporate trust office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “ Senior Debt Security Register ” provided , no such Senior Debt Security Register shall be maintained in any office or agency in the United Kingdom other than in Scotland) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of registered Senior Debt Securities and of transfers of such Senior Debt Securities. The Trustee is hereby appointed “ Senior Debt Security Registrar ” for the purpose of registering Senior Debt Securities in registered form and transfers of Senior Debt Securities in registered form as herein provided.

Registered Senior Debt Securities shall be transferable only on the Senior Debt Security Register. Upon surrender for registration of transfer of any registered Senior Debt Security of any series, together with the form of transfer endorsed on it, duly completed and executed at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and if applicable, the Guarantor shall endorse the Guarantee thereon, and the Trustee shall authenticate and deliver to the address specified in the formal transfer, within three Business Days, in the name of the designated transferee or transferees, one or more new registered Senior Debt Securities of the same series of any authorized denominations containing identical terms and provisions, of a like aggregate principal amount.

If only part of a registered Senior Debt Security is transferred, a new registered Senior Debt Security of an aggregate principal amount equal to the amount not being transferred shall be executed by the Company, and authenticated and delivered by the Trustee to the transferor, in the name of the transferor, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the registered Senior Debt Security. The new registered Senior Debt Security will be delivered to the transferor by uninsured post at the risk of the transferor to the address of the transferor appearing in the Senior Debt Security Register. A new registered Senior Debt Security of an aggregate principal amount equal to the amount being transferred shall be delivered by the Trustee to the transferee, in the name of the transferee, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the registered Senior Debt Security. The new registered Senior Debt Security will be delivered to the transferee by uninsured post at the risk of the transferee to the address of the transferee specified in the form of transfer.
 

 
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All Senior Debt Securities issued upon any registration of transfer or exchange of Senior Debt Securities shall be the valid obligations of the Company, and the Guarantor, respectively evidencing the same debt, and entitled to the same benefits under this Senior Debt Securities Indenture, as the Senior Debt Securities surrendered upon such registration of transfer or exchange.

Every registered Senior Debt Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed, by the registered Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Senior Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Senior Debt Securities, other than exchanges pursuant to Sections 3.04, 9.06 or 11.07 not involving any transfer.

The Company shall not be required (i) to issue, register the transfer of or exchange any Senior Debt Security of any series during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Senior Debt Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the day of the giving of such notice, or (ii) to register the transfer of or exchange any Senior Debt Security so selected for redemption in whole or in part, except the unredeemed portion of any Senior Debt Securities being redeemed in part.

Section 3.06 . Mutilated, Destroyed, Lost and Stolen Senior Debt Securities. If any mutilated Senior Debt Security (including any Global Security)   is surrendered to the Trustee, the Company may execute and the Trustee shall, in the case of a Senior Debt Security, authenticate and deliver in exchange therefor a new Senior Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company, the Guarantor and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Senior Debt Security (including any Global Security) and (ii) such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company, the Guarantor or the Trustee that such Senior Debt Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver in lieu of any such destroyed, lost or stolen Senior Debt
 


 
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Security a new Senior Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Senior Debt Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Senior Debt Security, pay such Senior Debt Security.

Upon the issuance of any new Senior Debt Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Senior Debt Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Senior Debt Security shall constitute an original additional contractual obligation of the Company and the Guarantor, whether or not the destroyed, lost or stolen Senior Debt Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Senior Debt Securities Indenture equally and proportionately with any and all other Senior Debt Securities of that series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Senior Debt Securities.

Section 3.07 . Payment; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Debt Securities, interest, if any, on any Senior Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid, in the case of registered Senior Debt Securities, to the Person in whose name that Senior Debt Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest or, in the case of Global Securities held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United Kingdom for collection by the Holder.

In the case of registered Senior Debt Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained by the payee with, a bank in The City of New York.


 
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In the case of registered Senior Debt Securities where payment is to be made in a Foreign Currency, payment will be made as established pursuant to Section 3.01.

Any interest on any Senior Debt Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “ Deferred Interest ”. Deferred Interest on any registered Senior Debt Security of any series shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue then of having been such Holder, and such Deferred Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

(a)          The Company may elect to make payment of any Deferred Interest to the Persons in whose names the registered Senior Debt Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Deferred Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Deferred Interest proposed to be paid on each Senior Debt Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Deferred Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Deferred Interest as in this clause provided. Thereupon the Company shall fix a Special Record Date for the payment of such Deferred Interest in respect of such registered Senior Debt Securities of such series which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after it delivers to the Trustee notice of the proposed payment. The Company shall promptly notify the Trustee of such Special Record Date and, in the name and at the expense of the Company, the Trustee shall cause notice of the proposed payment of such Deferred Interest and the Special Record Date therefor to be given in the manner and to the extent provided in Section 1.06, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Deferred Interest on the Senior Debt Securities of such series and the Special Record Date therefor having been so given, such Deferred Interest on the Senior Debt Securities of such series shall be paid in the case of registered Senior Debt Securities to the Persons in whose names such Senior Debt Securities (or their respective Predecessor Securities) are registered in the Senior Debt Security Register at the close of business on the Special Record Date, and such Deferred Interest shall no longer be payable pursuant to the following clause (b); or

(b)          The Company may make payment of any Deferred Interest on the Senior Debt Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Senior Debt
 

 
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Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Senior Debt Security delivered under this Senior Debt Securities Indenture upon registration of transfer of or in exchange for or in lieu of any other Senior Debt Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Senior Debt Security.

Section 3.08 . Persons Deemed Owners. Prior to due presentment of a registered Senior Debt Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Senior Debt Security is registered as the owner of such Senior Debt Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Senior Debt Security and for all other purposes whatsoever, whether or not such Senior Debt Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

Section 3.09 . Cancellation. All Senior Debt Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company or the Guarantor may at any time deliver to the Trustee for cancellation any Senior Debt Securities previously authenticated and delivered hereunder and all Senior Debt Securities so delivered shall be promptly cancelled by the Trustee. No Senior Debt Securities shall be authenticated in lieu of or in exchange for any Senior Debt Securities cancelled as provided in this Section, except as expressly permitted by the provisions of the Senior Debt Securities of any series or pursuant to the provisions of this Senior Debt Securities Indenture. The Trustee shall deliver to the Company all cancelled Senior Debt Securities held by the Trustee.

Section 3.10 . Computation of Interest. Except as otherwise specified pursuant to Section 3.01 for Senior Debt Securities of any series, payments of interest on the Senior Debt Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

Section 3.11 . CUSIP Numbers. The Company in issuing any series of the Senior Debt Securities may use “CUSIP”, “ISIN” and/or “Common Code” numbers (if then generally in use) or any successor to such numbers and thereafter with respect to such series, the Trustee shall use “CUSIP”, “ISIN” and/or “Common Code” numbers or successor numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no
 

 
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representation is made as to the correctness of such numbers either as printed on the Senior Debt Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Senior Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP”, “ISIN” and/or “Common Code” numbers or successor numbers.


ARTICLE 4

S ATISFACTION AND D ISCHARGE

Section 4.01 . Satisfaction and Discharge of Senior Debt Securities Indenture. This Senior Debt Securities Indenture shall upon Company Request   cease to be of further effect with respect to Senior Debt Securities of any series (except as to any surviving rights of registration of transfer or exchange of Senior Debt Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Senior Debt Securities Indenture with respect to the Senior Debt Securities of such series when

 
(a)
either

(i)         all Senior Debt Securities of such series theretofore authenticated and delivered (other than (A) Senior Debt Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Senior Debt Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

(ii)          all such Senior Debt Securities not theretofore delivered to the Trustee for cancellation

(A)           have become due and payable or will become due and payable at their Stated Maturity within one year, or

(B)           are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or

(C)           are to be exchanged for stock or other securities of the Company or another entity or other entities and notice of
 


 
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exchange of such Senior Debt Securities for stock or other securities of the Company or another entity or other entities shall have been given,

and the Company or the Guarantor has deposited or caused to be deposited with the Trustee, as trust funds in trust for the purpose, an amount in cash, or U.S. Government Obligations (with respect to Senior Debt Securities denominated in Dollars) or Foreign Government Securities (with respect to Senior Debt Securities denominated in the same Foreign Currency) maturing, in the case of (A) and (B) above, as to principal and interest, if any, and, in the case of (C) above, as to accrued interest, if any, in such amounts and at such times as will ensure the availability of cash sufficient to pay and discharge all claims with respect to such Senior Debt Securities not theretofore delivered to the Trustee for cancellation, in the case of (A) and (B) above, for principal (and premium, if any) and accrued interest, if any, and, in the case of (iii) above, as to accrued interest, if any, to the date of such deposit (in the case of Senior Debt Securities which have become due and payable) or to the Redemption Date;

(b)          the Company or the Guarantor has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Senior Debt Securities of such series; and

(c)          the Company or the Guarantor has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Senior Debt Securities Indenture with respect to the Senior Debt Securities of such series have been complied with.

Notwithstanding any satisfaction and discharge of this Senior Debt Securities Indenture, the obligations of the Company and the Guarantor to the Trustee under Section 6.07, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if cash, U.S. Government Obligations and/or Foreign Government Securities shall have been deposited with the Trustee pursuant to subclause 4.01(a)(ii) of clause 4.01(a) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive such satisfaction and discharge, including any termination under any bankruptcy law.

Section 4.02 . Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.03, all cash, U.S. Government Obligations and Foreign Government Securities deposited with the Trustee pursuant to Section 4.01 shall be held in trust and such cash and the proceeds from such U.S. Government Obligations and/or Foreign Government Securities shall be applied by it, in accordance with the provisions of the Senior Debt Securities of such series, and this Senior Debt Securities Indenture, to the payment, either directly or
 

 
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through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for the payment of which such cash, U.S. Government Obligations and/or Foreign Government Securities have been deposited with the Trustee.

Section 4.03 . Repayment to Company. The Trustee, the Calculation Agent and any Paying Agent promptly shall pay to the Company upon Company Request any excess money, U.S. Government Obligations and/or Foreign Government Securities held by them at any time with respect to any series of Senior Debt Securities.


ARTICLE 5
R EMEDIES

Section 5.01 . Events of Default. “ Event of Default ”, wherever used herein with respect to Senior Debt Securities of a particular series, means (i) that, whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body, except as otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Debt Securities, the Company and the Guarantor failed to pay any principal or any interest on any Senior Debt Securities of that series within 14 days from the due date for payment and the principal or interest has not been duly paid within a further 14 days following written notice from the Trustee to the Company and the Guarantor or to the Company, the Guarantor and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Senior Debt Securities of that series requiring the non- payment to be made good, (ii) the making of an order by an English court of competent jurisdiction which is not successfully appealed within 30 days of the making of such order, or the valid adoption by the shareholders of the Company or the Guarantor of an effective resolution, for the winding-up of the Company or the Guarantor as applicable (other than under or in connection with a scheme of reconstruction, merger or amalgamation not involving bankruptcy or insolvency), (iii) any other Event of Default provided with respect to Senior Debt Securities of such series pursuant to Section 3.01 or (iv) the default in the performance, or breach, of any covenant or warranty of the Company or the Guarantor in this Senior Debt Securities Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section 5.01 specifically dealt with) provided, that default or breach has not been remedied within 60 days of receipt by the Company, the Guarantor and the Trustee from the Holders of at least 25% aggregate principal amount of the Outstanding Senior Debt Securities of that series of a written notice requiring the breach to be remedied or written
 


 
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notice from the Trustee to the Company and the Guarantor certifying that in its opinion the default or breach is materially prejudicial to the interests of the Holders of the Senior Debt Securities of that series and requiring the breach to be remedied.

Section 5.02 . Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Senior Debt Securities of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Debt Securities of such series may declare the principal amount (or, in the case of Original Issue Discount Securities, the accreted face amount together with accrued interest, if any, on) of all the Senior Debt Securities of that series to be due and payable immediately, by a notice in writing to the Company and the Guarantor (and to the Trustee if given by the Holder or Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.

At any time after such a declaration of acceleration with respect to Senior Debt Securities of any series has been made but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holder or Holders of a majority in aggregate principal amount of the Outstanding Senior Debt Securities of such series, by written notice to the Company, the Guarantor and the Trustee, may rescind or annul such declaration of acceleration and its consequences (including any Event of Default under another series of Senior Debt Securities arising therefrom) but only if

(a)          the Company or the Guarantor have paid or deposited with the Trustee a sum sufficient to pay

(i)         the principal of (and premium, if any, on) any Senior Debt Securities of such series which have become due otherwise than by such declaration of acceleration and any due and payable interest, and overdue interest, if any, thereon at the rate or rates prescribed therefor in such Senior Debt Securities,

(ii)          all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(b)          all Events of Default with respect to Senior Debt Securities of such series have been cured or waived as provided by Section 5.13.

No such rescission or annulment shall affect any subsequent default or impair any right consequent thereon.

 
 
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Section 5.03 . Collection of Indebtedness and Suits for Enforcement by Trustee. The Company and the Guarantor covenant that, if the Company fails to   pay any principal or any interest on any Senior Debt Securities of that series within 14 days from the due date for payment and the principal or interest has not been duly paid within a further 14 days following written notice from the Trustee to the Company or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Senior Debt Securities of that series requiring the non-payment to be made good, the Company or the Guarantor will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Senior Debt Securities, the whole amount then due and payable on such Senior Debt Securities for principal (and premium, if any) and interest, if any, and interest on any overdue principal (and premium, if any), at the rate or rates prescribed therefor in such Senior Debt Securities; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If an Event of Default with respect to Senior Debt Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Senior Debt Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Senior Debt Securities Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy, including the institution of proceedings in Scotland (but not elsewhere) for the winding-up of the Company or the Guarantor.

The Holders of Senior Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off or counterclaim or combination of accounts with respect to the Senior Debt Securities or this Senior Debt Securities Indenture (or between the obligations under or in respect of any Senior Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company or the Guarantor, whether before or during a winding up of the Company.

Notwithstanding the foregoing, failure to make any payment in respect of a series of Senior Debt Securities shall not be a default in respect of such Senior Debt Securities if such payment is withheld or refused (i) in order to comply with any law or regulation or with the order of any court of competent jurisdiction, in each case applicable to such payment, or (ii) in case of doubt as to the validity or applicability of any such law, regulation or order, in accordance with advice given as to such validity or applicability at any time before the expiry of such period of 14 days by independent legal advisers acceptable to the Trustee, provided , however , that the Trustee may by notice to the Company require the Company to   take such action (including but not limited to proceedings for a declaration by a
 

 
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court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days after the Trustee gives written notice to the Company informing it of such resolution.

No recourse for the payment of the principal of (or premium, if any) or interest, if any, on any Senior Debt Security, or for any claim based thereon on the Guarantee endorsed thereon or otherwise in respect thereof or of the Guarantee and no recourse under or upon any obligation, covenant or agreement of the Company or the Guarantor in this Senior Debt Securities Indenture, or in any Senior Debt Security, in the Guarantee endorsed thereon, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder (other than the Guarantor under the terms of the Guarantees), officer or director, past, present or future, of the Company or any Guarantor of any successor corporation of either the Company, either directly or through the Company or the Guarantor or any successor corporation of either, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that to the extent lawful all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Senior Debt Securities Indenture and the issue of the Senior Debt Securities of a series, and the endorsement of the Guarantees thereon.

Notwithstanding any contrary provisions, nothing shall impair the right of a Holder, absent the Holder’s consent, to sue for any payments due but unpaid with respect to the Senior Debt Securities.

Section 5.04 . Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, winding-up or other judicial proceeding relative to the Company or the Guarantor or any other obligor upon the Senior Debt Securities of any series or to the property of the Company or the Guarantor or such other obligor or their creditors (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency), the Trustee (irrespective of whether the principal of the Senior Debt Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company or the Guarantor for the payment of overdue principal (and premium, if any) or interest, if any) shall be entitled and
 

 
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empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Senior Debt Security to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.07.

Subject to Article Eight and Section 9.02, nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of any Senior Debt Security any plan of reorganization, arrangement, adjustment, or composition affecting any Senior Debt Securities or the rights of any Holder of any Senior Debt Security or to authorize the Trustee to vote in respect of the claim of any such Holder or holder in any such proceeding.

Section 5.05 . Trustee May Enforce Claims Without Possession of Senior Debt Securities. All rights of action and claims under this Senior Debt Securities   Indenture or the Senior Debt Securities may be prosecuted and enforced by the Trustee without the possession of any of the Senior Debt Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel be for the ratable benefit of the Holders of the Senior Debt Securities in respect of which such judgment has been recovered.

Section 5.06 . Application of Money Collected. Any money collected by the Trustee pursuant to this Article in respect of any series of Senior Debt Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (and premium, if any) or interest, if any, upon presentation of such Senior Debt Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts applicable to such series of Senior Debt Securities due and owing to the Trustee under Section 6.07;

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest, if any, on such series of Senior Debt Securities in respect of which or for the benefit of which such money has
 


 
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been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Senior Debt Securities for principal (and premium, if any) and interest, if any, respectively; and

THIRD: To the payment of the balance, if any, to the Company or any other Person or Persons legally entitled thereto.

Section 5.07 . Limitation on Suits. No Holder of any Senior Debt Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Senior Debt Securities Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(a)          such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to Senior Debt Securities of the same series specifying such Event of Default and stating that such notice is a “ Notice of Default ” hereunder;

(b)          the Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Debt Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name, as Trustee hereunder;

(c)          such Holder of a Senior Debt Security has offered to the Trustee reasonable indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

(d)          the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(e)          no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Senior Debt Securities of such series;

it being understood and intended that no one or more Holders of Senior Debt Securities of a particular series shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Senior Debt Securities Indenture to affect, disturb or prejudice the rights of any other such Holders or holders, or to obtain or to seek to obtain priority or preference over any other such Holders or holders or to enforce any right under this Senior Debt Securities Indenture, except in the manner herein provided and for the equal and ratable benefit of all Holders of Senior Debt Securities of such series.

Section 5.08 . Unconditional Right of Holders to Receive Principal, Premium and Interest, If Any. Notwithstanding any other provision in this Senior   Debt Securities Indenture, the Holder of any Senior Debt Security shall have the
 


 
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right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Senior Debt Security on the respective Stated Maturities as expressed in such Senior Debt Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

Section 5.09 . Restoration of Rights and Remedies. If the Trustee or any Holder of any Senior Debt Security has instituted any proceeding to enforce any right or remedy under this Senior Debt Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantor, the Trustee and the Holders of Senior Debt Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Senior Debt Securities shall continue as though no such proceeding had been instituted.

Section 5.10 . Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Senior Debt Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Senior Debt Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 5.11 . Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Senior Debt Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Senior Debt Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Senior Debt Securities, as the case may be.

Section 5.12 . Control by Holders. The Holders of a majority in aggregate principal amount of the Outstanding Senior Debt Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Senior Debt Securities of such series, provided that
 


 
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(a)          such direction shall not be in conflict with any rule of law or with this Senior Debt Securities Indenture;

(b)          the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders of any Senior Debt Securities of any series not taking part in such direction with respect to which the Trustee is acting as the Trustee; and

(c)          the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

Section 5.13 . Waiver of Past Defaults. The Trustee may without prejudice to its rights in respect of any subsequent Event of Default from time to time and at any time waive any Event of Default or authorize any proposed Event of Default by the Company or the Guarantor, provided that in its opinion the interests of the Holders shall not be materially prejudiced thereby and, provided, further, that the Trustee shall not exercise any powers conferred on it by this clause in contravention of any notice in writing to the Company, the Guarantor and the Trustee made pursuant to Section 5.02 hereof but so that no such notice shall affect any waiver or authorization previously given or made. The Holders of not less than a majority in aggregate principal amount of the Outstanding Senior Debt Securities of any series may on behalf of the Holders of all the Senior Debt Securities of such series waive any past Event of Default hereunder with respect to such series and its consequences, except an Event of Default:

(a)          in the payment of the principal of (or premium, if any) or interest, if any, on any Senior Debt Security of such series, or

(b)          in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Senior Debt Security of such series affected.

Upon any such waiver, such Event of Default shall cease to exist, and any Event of Default with respect to any series arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Senior Debt Securities Indenture, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon.

Section 5.14 . Undertaking for Costs. All parties to this Senior Debt Securities Indenture agree, and each Holder of any Senior Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Senior Debt Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may
 

 
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in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Senior Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Senior Debt Security on or after the respective Stated Maturities expressed in such Senior Debt Security (or, in the case of redemption, on or after the Redemption Date).


ARTICLE 6
T HE T RUSTEE

Section 6.01 . Certain Duties and Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Senior Debt Securities Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Senior Debt Securities Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.

Section 6.02 . Notice of Defaults. Within 90 days after the occurrence of any Event of Default hereunder with respect to Senior Debt Securities of any series of which a Responsible Officer of the Trustee has written notice of such Event of Default the Trustee shall transmit in the manner and to the extent provided in Section 1.06 to Holders of Senior Debt Securities of such series notice of such Event of Default hereunder known to the Trustee, unless such Event of Default shall have been cured or waived; provided , however , that, the Trustee shall be protected in withholding such notice if it determines in good faith that the withholding of such notice is in the interest of the Holders of Senior Debt Securities of such series.

Section 6.03 . Certain Rights of Trustee. Subject to the provisions of Section 6.01:

(a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate, Guarantor’s Officer’s Certificate, or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or
 


 
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other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)          any request or direction of the Company or the Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or Company Order or a Guarantor’s Officer’s Certificate, as the case may be and any resolution of the Board of Directors of the Company or the Guarantor may be sufficiently evidenced by a Board Resolution;

(c)          whenever in the administration of this Senior Debt Securities Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

(d)          the Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e)          the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Senior Debt Securities Indenture at the request or direction of any of the Holders pursuant to this Senior Debt Securities Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f)          the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit at the reasonable expense of the Company and shall incur no liability by reason of such inquiry or investigation; provided that the Trustee shall not be entitled to such information which the Company is prevented from disclosing as a matter of law or contract;

(g)          the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent (other than an officer or employee of the Trustee) or attorney appointed with due care by it hereunder;

 

 
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(h)          the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Senior Debt Securities Indenture;

(i)         the Trustee shall not be deemed to have notice of any Event of Default unless a Responsible Officer of the Trustee has received written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee; and

(j)         the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder.

Section 6.04 . Not Responsible for Recitals or Issuance of Senior Debt Securities. The recitals contained herein and in the Senior Debt Securities, except   the Trustee’s certificates of authentication, shall be taken as the statements of the Company and the Guarantor, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Senior Debt Securities Indenture or of the Senior Debt Securities, except that the Trustee represents and warrants that it has duly authorized, executed and delivered this Senior Debt Securities Indenture. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Senior Debt Securities or the proceeds thereof.

Section 6.05 . May Hold Senior Debt Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Senior Debt Security Registrar and any Calculation Agent or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Senior Debt Securities and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company or the Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Senior Debt Security Registrar, Calculation Agent or such other agent.

Section 6.06 . Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

Section 6.07 .  Compensation and Reimbursement.

Each of the Company and the Guarantor agrees:
 


 
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(a)          to pay to the Trustee from time to time compensation for all services rendered by it hereunder as agreed upon in writing by the Company from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(b)          except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Senior Debt Securities Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and

(c)           to indemnify the Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or expense (including legal fees and expenses) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder but excluding any tax liabilities of the Trustee in respect of its net profits.

The Trustee shall notify the Company and the Guarantor in writing of the commencement of any action or claim in respect of which indemnification may be sought promptly after a Responsible Officer of the Trustee becomes aware of such commencement (provided that the failure to make such notification shall not affect the Trustee’s rights hereunder) and the Company shall be entitled to participate in, and to the extent it shall wish, to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Trustee. If the Company and the Trustee are being represented by the same counsel and the Company has assumed the defense of the claim, the Trustee shall not be authorized to settle a claim without the written consent of the Company, which consent shall not be unreasonably withheld. In the case where the Company has assumed the defense of a claim and the Trustee and the Company are represented by the same legal counsel, the Trustee should not settle such a claim without the written consent of the Company, which shall not be unreasonably withheld.

If the Trustee is represented by separate counsel due to a conflict of interest or its need for separate representation due to a need to assert defenses which are different from the Company’s, in the Trustee's sole discretion, the Trustee shall be entitled to enter into any settlement without the written consent of the Company and any and all fees, cost and expenses of such separate legal representation of the Trustee will be paid by the Company.


 
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As security for the performance of the obligations of the Company and the Guarantor under this Section, the Trustee shall have a senior lien to which the Senior Debt Securities are hereby made subordinate, upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (or premium, if any) or interest, if any, on the Senior Debt Securities.

Section 6.08 . Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Senior Debt Securities Indenture.

Section 6.09 . Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder with respect to each series which shall be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State or District of Columbia authority and, if there be such corporation willing and able to act as trustee on reasonable and customary terms, having its corporate trust office or agency in the Borough of Manhattan, The City of New York, New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 6.

Section 6.10 . Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

(b)          The Trustee may resign at any time with respect to the Senior Debt Securities of one or more series by giving written notice thereof to the Company and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Senior Debt Securities of such series.

(c)          The Trustee may be removed at any time with respect to the Senior Debt Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Senior Debt Securities of such series delivered to the
 

 
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Trustee and to the Company and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Senior Debt Securities of such series.

 
(d)
If at any time:

(i)         the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or the Guarantor or by any Holder who has been a bona fide Holder of a Senior Debt Security of the series as to which the Trustee has a conflicting interest for at least six months, or

(ii)        the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or the Guarantor or by any Holder who has been a bona fide Holder of a Senior Debt Security for at least six months, or

    (iii)       the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge, or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or

(iv)       the Trustee shall fail to perform its obligations to the Company or the Guarantor under the Senior Debt Securities Indenture in any material respect,

then, in any such case, (A) the Company or the Guarantor by a Board Resolution may remove the Trustee with respect to any or all series of Senior Debt Securities or (B) subject to Section 5.14 (and except in the case of subparagraph 6.10(d)(iv) above), any Holder who has been a bona fide Holder of a Senior Debt Security for at least six months (and, in the case of Section 6.10(d)(i) above, who is a Holder of a Senior Debt Security of the series as to which the Trustee has a conflicting interest) may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Senior Debt Securities and the appointment of a successor Trustee or Trustees.

(e)           If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Senior Debt Securities of one or more series, the Company and the Guarantor, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Senior Debt Securities of such series (it being
 


 
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understood that any successor Trustee may be appointed with respect to the Senior Debt Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Senior Debt Securities of any particular series), and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Senior Debt Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Senior Debt Securities of such series delivered to the Company, the Guarantor and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Senior Debt Securities of such series and to that extent supersede the successor Trustee appointed by the Company and the Guarantor. If no successor Trustee with respect to the Senior Debt Securities of any series shall have been so appointed by the Company or the Holders of Senior Debt Securities of such series and accepted appointment in the manner hereinafter required by Section 6.11, any Holder who has been a bona fide Holder of a Senior Debt Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Senior Debt Securities of such series.

(f)          The Company shall give notice of each resignation and each removal of the Trustee with respect to the Senior Debt Securities of any series and each appointment of a successor Trustee with respect to the Senior Debt Securities of any series in the manner and to the extent provided in Section 1.06. Each notice shall include the name of the successor Trustee with respect to the Senior Debt Securities of such series and the address of its Corporate Trust Office.

Section 6.11 .  Acceptance of Appointment by Successor.

(a)          In case of the appointment hereunder of a successor Trustee with respect to all Senior Debt Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company, the Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company, the Guarantor or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee, all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.
 


 
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(b)          In case of the appointment hereunder of a successor Trustee with respect to the Senior Debt Securities of one or more (but not all) series, the Company, the Guarantor, the retiring Trustee and each successor Trustee with respect to the Senior Debt Securities of such series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Debt Securities of such series to which the appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Senior Debt Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Debt Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Senior Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Debt Securities of such series to which the appointment of such successor Trustee relates; but, on request of the Company, the Guarantor or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Senior Debt Securities of such series to which the appointment of such successor Trustee relates.

(c)          Upon request of any such successor Trustee, the Company and the Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section 6.11, as the case may be.

(d)          No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 6.

Section 6.12 . Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or   with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the
 


 
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Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Senior Debt Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Senior Debt Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Senior Debt Securities.

Section 6.13 . Preferential Collection of Claims. If and when the Trustee shall be or become a creditor of the Company or the Guarantor (or any other obligor upon the Senior Debt Securities of a series), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company or the Guarantor (or any such other obligor).

Section 6.14 . Appointment of Authenticating Agent. The Trustee may at any time appoint an Authenticating Agent or Agents with respect to one or more series of Senior Debt Securities which shall be authorized to act on behalf of the Trustee to authenticate Senior Debt Securities of such series upon original issue, or issued upon exchange, registration of transfer or partial redemption thereof or in lieu of destroyed, lost or stolen Senior Debt Securities, and Senior Debt Securities so authenticated shall be entitled to the benefits of this Senior Debt Securities Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Senior Debt Securities Indenture to the authentication and delivery of Senior Debt Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and the Guarantor and shall at all times be a corporation or national banking association organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State or District of Columbia authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
 

 
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Any corporation or national banking association into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or national banking association resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation or national banking association succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation or national banking association shall be otherwise eligible under this Section 6.14, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee, the Company and the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent, the Company and the Guarantor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and the Guarantor and shall give notice to the Holders of Senior Debt Securities in the manner and to the extent provided in Section 1.06. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 6.14.

The Company and the Guarantor agree to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.14.

If an appointment with respect to one or more series is made pursuant to this Section, the Senior Debt Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:
 

 
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This is one of the Senior Debt Securities referred to in the within- mentioned Senior Debt Securities Indenture.
 
 
THE BANK OF NEW YORK MELLON, LONDON BRANCH  
   
as Trustee  
     
By:
   
 
as Authenticating Agent
 
     
     
By:
   
 
as Authenticating Agent
 
     


 
ARTICLE 7
H OLDERS L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY

Section 7.01 . Company and Guarantor to Furnish Trustee Names and Addresses of Holders. Each of the Company and the Guarantor, with respect to   any series of Senior Debt Securities in registered form, will furnish or cause to be furnished to the Trustee

(a)          quarterly, not more than 15 days after each Regular Record Date (or after each of the dates to be specified for such purpose for non-interest bearing Senior Debt Securities and Senior Debt Securities on which interest is paid less frequently than quarterly as contemplated by Section 3.01), a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of registered Senior Debt Securities as of such Regular Record Date or such specified date, and

(b)          at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.

The Company need not furnish or cause to be furnished to the Trustee pursuant to this Section 7.01 the names and addresses of Holders of registered Senior Debt Securities so long as the Trustee acts as Senior Debt Security Registrar with respect to such series of Senior Debt Securities.

Section 7.02 .  Preservation of Information; Communication to Holders.

(a)          The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders (i) contained in the most recent list furnished to the Trustee as provided in Section 7.01 and (ii) received by the Trustee in its capacity as Paying Agent or Senior Debt Security Registrar (if so acting). The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.

 
 
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(b)          The rights of the Holders of Senior Debt Securities of any series to communicate with other Holders with respect to their rights under this Senior Debt Securities Indenture or under the Senior Debt Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

(c)          Every Holder, by receiving and holding a Senior Debt Security, agrees with the Company, the Guarantor and the Trustee that neither the Company, the Guarantor nor the Trustee nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.02(b) or otherwise made pursuant to the Trust Indenture Act.

Section 7.03 .  Reports by Trustee.

(a)          On or before [May 15] in each year following the date hereof, so long as any Senior Debt Securities are Outstanding hereunder, the Trustee shall transmit to Holders as provided in the Trust Indenture Act a brief report dated as of a date required by and in compliance with the Trust Indenture Act.

(b)          A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each securities exchange upon which the Trustee has been notified that the Senior Debt Securities are listed, with the Commission and with the Company and the Guarantor. The Company will notify the Trustee when Senior Debt Securities are listed on any securities exchange.

(c)          The Company will furnish the Trustee with interim and annual reports and upon receipt thereof, the Trustee will mail such reports to all record holders of Senior Debt Securities. In addition, the Company will furnish the Trustee with all notices of meetings at which holders of Senior Debt Securities of a particular series are entitled to vote, and all other reports and communications that are made generally available to holders of Senior Debt Securities. The Trustee will, at the Company’s expense, make such notices, reports and communications available for inspection by holders of Senior Debt Securities in such manner as the Company may determine and, in the case of any notice received by the Trustee in respect of any meeting at which holders of Senior Debt Securities of a particular series are entitled to vote, will mail to all such record holders of Senior Debt Securities, at the Company’s expense, a notice containing a summary of the information set forth in such notice of meeting.

Section 7.04 . Reports by the Company and the Guarantor. The Company and the Guarantor shall:

(a)          file with the Trustee, within 15 days after the Company or the Guarantor, as the case may be, is required to file the same with the Commission,
 


 
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copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company or the Guarantor may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company or the Guarantor is not required to file information, documents or reports pursuant to either of such Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate);

(b)          file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Senior Debt Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate); and

(c)          transmit to Holders, in the manner and to the extent required by the Trust Indenture Act, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.


ARTICLE 8
C ONSOLIDATION , M ERGER , C ONVEYANCE OR T RANSFER

Section 8.01 . Company or Guarantor May Consolidate, Etc. Only on Certain Terms. The Company or the Guarantor may, without the consent of   Holders of any Senior Debt Securities of any series Outstanding under this Senior Debt Securities Indenture, consolidate or amalgamate with or merge into any other corporation or convey or transfer or lease its properties and assets substantially as an entirety to any Person, provided that :
 


 
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(a)          the corporation formed by such consolidation or amalgamation or into which the Company or the Guarantor is merged or the Person which acquires by conveyance or transfer the properties and assets of the Company or the Guarantor substantially as an entirety (i) shall be a company organized and existing under the laws of the United Kingdom or any political subdivision thereof, and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all the Senior Debt Securities in accordance with the provisions of such Senior Debt Securities and this Senior Debt Securities Indenture and the performance of every covenant of this Senior Debt Securities Indenture on the part of the Company or the Guarantor, as the case may be, to be performed or observed; and

(b)          the Company or the Guarantor, as the case may be, shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger, conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

Section 8.02 . Successor Corporation Substituted. Upon any consolidation by the Company or the Guarantor with, or amalgamation or merger by the Company or the Guarantor into any other corporation or any conveyance or transfer of the properties and assets of the Company or the Guarantor substantially as an entirety in accordance with Section 8.01, the successor corporation formed by such consolidation or amalgamation or into which the Company or the Guarantor is merged or to which such conveyance or transfer is made shall succeed to and be substituted for, and may exercise every right and power of, the Company or the Guarantor, as the case may be, under this Senior Debt Securities Indenture with the same effect as if such successor corporation had been named as the Company or the Guarantor, herein, and thereafter, the predecessor corporation shall be relieved of all obligations and covenants under the Senior Debt Securities Indenture and the Senior Debt Securities.

Section 8.03 . Assumption of Obligations. With respect to the Senior Debt Securities of any series, a wholly-owned Subsidiary of the Company (a “ successor entity ”) may without the consent of any Holder assume the obligations of the Company (or any corporation which shall have previously assumed the obligations of the Company) for the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on any series of Senior Debt Securities in accordance with the provisions of such Senior Debt Securities and this Senior Debt Securities Indenture and the performance of every covenant
 


 
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of this Senior Debt Security Indenture and such series of Senior Debt Securities on the part of the Company to be performed or observed, provided that :

(a)          the successor entity shall expressly assume such obligations by an amendment to the Senior Debt Securities Indenture, executed by the Company and such successor entity, if applicable, and delivered to the Trustee, in form satisfactory to the Trustee, and the Company shall, by amendment to the Senior Debt Securities Indenture, unconditionally guarantee (such guarantee shall be given on a Senior basis consistent with Article Twelve hereof) all of the obligations of such successor entity under the Senior Debt Securities of such series and the Senior Debt Securities Indenture as so modified by such amendment ( provided , however , that, for the purposes of the Company’s obligation to pay Additional Amounts, if any, payable pursuant to Section 10.04 in respect of the Senior Debt Securities, references to such successor entity’s country of organization will be added to references to the United Kingdom);

(b)          such successor entity shall confirm in such amendment to the Senior Debt Securities Indenture that such successor entity will pay all Additional Amounts, if any, payable pursuant to Section 10.04 in respect of all the Senior Debt Securities ( provided , however , that for these purposes such successor entity’s country of organization will be substituted for the references to the United Kingdom);

(c)          immediately after giving effect to such assumption of obligations, no Event of Default and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and

(d)          the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such assumption complies with this Article and that all conditions precedent herein provided for relating to such assumption have been complied with.

Upon any such assumption, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Senior Debt Securities Indenture with respect to any such Senior Debt Securities with the same effect as if such successor entity had been named as the Company in this Senior Debt Securities Indenture, and the Company or any legal and valid successor corporation which shall theretofore have become such in the manner prescribed herein, shall be released from all liability as obligor upon any such Senior Debt Securities except as provided in clause (a) of this Section 8.03.

In the event of any such assumption, any Additional Amounts, if any, payable pursuant to Section 10.04 will be payable in respect of taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“ Taxes ”) imposed by the jurisdiction in which the assuming corporation is incorporated (subject to
 

 
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exceptions equivalent to those that apply to any obligation to pay Additional Amounts in respect of Taxes imposed by any Taxing Jurisdiction) rather than Taxes imposed by any Taxing Jurisdiction; provided however , that if the Company makes payment under the guarantee, the Company shall be required to pay Additional Amounts related to Taxes (subject to the exceptions set forth in Section 10.04) imposed by any Taxing Jurisdiction by reason of such payments.


ARTICLE 9
S UPPLEMENTAL I NDENTURES

Section 9.01 .  Supplemental Indentures without Consent of Holders.

Without the consent of any Holders, the Company and the Guarantor, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(a)          to evidence the succession of another corporation to the Company or the Guarantor and the assumption by any such successor of the covenants of any the Company or the Guarantor herein and in the Senior Debt Securities;

(b)          to add to the covenants of the Company or the Guarantor for the benefit of the Holders of all or any series of Senior Debt Securities (and, if such covenants are to be for the benefit of less than all series of Senior Debt Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company or the Guarantor;

 
(c)
to add any additional Events of Default;

(d)          to add to, change or eliminate any of the provisions of this Senior Debt Securities Indenture, or any supplemental indenture, provided that any such change or elimination shall become effective only when there is no Senior Debt Security Outstanding of any series created prior to the execution of such supplemental indenture effecting such change or elimination which is entitled to the benefit of such provision, and adversely affected by such addition, change or elimination;

 
(e)
to secure the Senior Debt Securities;

(f)           to establish the form or terms of Senior Debt Securities of any series as permitted by Sections 2.01 or 3.01;

(g)          to change any Place of Payment, so long as the Place of Payment as required by Section 3.01 is maintained;
 


 
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(h)          to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein or in any supplemental indenture;

(i)            to make any other provisions with respect to matters or questions arising under this Senior Debt Securities Indenture, provided such action shall not adversely affect the interests of the Holders of Senior Debt Securities of any series in any material respect;

(j)           to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Senior Debt Securities of one or more series and to add to or change any of the provisions of this Senior Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11(b); or

(k)          to change or eliminate any provision of this Senior Debt Securities Indenture as permitted by Section 1.07.

Section 9.02 . Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Senior Debt Securities of each series affected by such supplemental Senior Debt Securities Indenture (voting as a class), by Act of said Holders delivered to the Company, the Guarantor and the Trustee, the Company and the Guarantor, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Senior Debt Securities Indenture or of modifying in any manner the rights of the Holders of Senior Debt Securities of such series under this Senior Debt Securities Indenture; provided, however , that no such supplemental indenture may, without the consent of the Holder of each Outstanding Senior Debt Security affected thereby,

(a)           change the Stated Maturity, if any, of any principal amount or any interest amounts in respect of any such Senior Debt Security, reduce the principal amount thereof or the rate of interest, if any, thereon, or any premium payable upon the redemption thereof, or reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the Maturity thereof pursuant to Section 5.02, or change the obligation of the Company (or its successor) to pay Additional Amounts pursuant to Section 10.04 (except as contemplated by Section 8.01(a) and permitted by Section 9.01(a)) on the Senior Debt Securities, or the currency of payment of the principal amount of, premium, if any, or interest on, any such Senior Debt Security, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or
 


 
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(b)          reduce the percentage in aggregate principal amount of the Outstanding Senior Debt Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Senior Debt Securities Indenture or of certain defaults hereunder and their consequences) provided for in this Senior Debt Securities Indenture, or

(c)          modify any of the provisions of this Section 9.02 or Section 5.13 except to increase any such percentage or to provide that certain other provisions of this Senior Debt Securities Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Senior Debt Security affected thereby; provided, however , that this clause shall not be deemed to require the consent of   any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 6.11(b) and 9.01(j), or

(d)           change in any manner adverse to the interests of the Holders of any Senior Debt Securities the terms and conditions of the obligations of the Company or any Guarantee in respect of the due and punctual payment of any amounts due and payable on the Senior Debt Securities.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

A supplemental indenture which changes or eliminates any covenant or other provision of this Senior Debt Securities Indenture which has expressly been included solely for the benefit of one or more particular series of Senior Debt Securities, or which modifies the rights of the Holders of Senior Debt Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Senior Debt Securities Indenture of the Holders of Senior Debt Securities of any other series.

Section 9.03 . Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Senior Debt Securities Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Senior Debt Securities Indenture and that such supplemental indenture constitutes the legal, valid and binding obligation of the Company and the Guarantor. The Trustee may, but shall not be obliged to, enter into any such
 


 
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supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Senior Debt Securities Indenture or otherwise.

Section 9.04 . Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Senior Debt Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Senior Debt Securities Indenture for all purposes; and every Holder of Senior Debt Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby, except as otherwise expressed therein.

Section 9.05 . Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.

Section 9.06 . Reference in Senior Debt Securities to Supplemental Indentures. Senior Debt Securities of any series authenticated and delivered after   the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company and the Guarantor shall so determine, new Senior Debt Securities of any series so modified as to conform, in the opinion of the Trustee, the Company and the Guarantor, to any such supplemental indenture may be prepared and executed by the Company, the Guarantees endorsed thereon may be executed by the Guarantor and such Senior Debt Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Senior Debt Securities of such series.


ARTICLE 10
C OVENANTS

Section 10.01 . Payment of Principal, Premium, and Interest. The Company covenants and agrees for the benefit of each series of Senior Debt Securities that it will duly and punctually pay the principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on the Senior Debt Securities of that series in accordance with the terms of the Senior Debt Securities and this Senior Debt Securities Indenture.

Section 10.02 . Maintenance of Office or Agency. The Company and the Guarantor will maintain in each Place of Payment for any series of Senior Debt Securities an office or agency where Senior Debt Securities of that series may be presented or surrendered for payment, where Senior Debt Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company or the Guarantor in respect of the Senior Debt Securities of that series and this Senior Debt Securities Indenture may be served;
 


 
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provided, however , that at the option of the Company in the case of registered   Senior Debt Securities of such series, payment of any interest thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Senior Debt Security Register. With respect to the Senior Debt Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be the Corporate Trust Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the Company and the Guarantor will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Company or the Guarantor in respect of Senior Debt Securities of any series and this Senior Debt Securities Indenture may be served. The Company and the Guarantor will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company and the Guarantor shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company and the Guarantor hereby appoints the Trustee as its agent to receive all presentations, surrenders, notices and demands.

The Company and the Guarantor may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, The City of New York) where the Senior Debt Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however , that no such designation or rescission shall in any manner relieve the Company and the Guarantor of any obligation to maintain an office or agency in each Place of Payment (except as otherwise indicated in this Section) for Senior Debt Securities of any series for such purposes. The Company and the Guarantor will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Section 10.03 . Money for Payments to be Held in Trust. If the Company or the Guarantor shall at any time act as Paying Agent with respect to the Senior Debt Securities of any series, it will, on or before each due date for payment of the principal of (and premium, if any) or interest, if any, if any, on any of the Senior Debt Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its failure so to act.

Whenever the Company and the Guarantor shall have one or more Paying Agents for any series of Senior Debt Securities, it will, prior to each due date for payment of the principal of (and premium, if any) or interest, if any, on any
 


 
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Senior Debt Securities of that series deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company or the Guarantor will promptly notify the Trustee of its action or its failure so to act. Unless otherwise specified as contemplated by Section 3.01, the Trustee shall be the Company’s and the Guarantor’s Paying Agent. The Company and the Guarantor will cause each Paying Agent for any series of Senior Debt Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

(a)          hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Senior Debt Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

(b)          give the Trustee notice of any default by the Company (or the Guarantor or any other obligor upon the Senior Debt Securities of that series) in the making of any payment, when due and payable, or principal of (and premium, if any) or interest, if any, on Senior Debt Securities of that series; and

(c)          at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

The Company may at the time, for the purpose of obtaining the satisfaction and discharge of this Senior Debt Securities Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company or the Guarantor, in trust for the payment of the principal of (and premium, if any) or interest, if any, on any Senior Debt Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest, if any, have become due and payable shall be paid to the Company or the Guarantor, as the case may be, on Company Request, or (if then held by the Company or the Guarantor) shall be discharged from such trust; and the Holder of such Senior Debt Security shall thereafter, as an unsecured general creditor, look only to the Company or the Guarantor for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of
 

 
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the Company or the Guarantor as trustee thereof, shall thereupon cease; provided , however , that the Trustee or such Paying Agent, before being required to make   any such repayment, may at the expense of the Company cause to be published at least once, in an Authorized Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be paid to the Company or the Guarantor, as the case may be.

Section 10.04 . Additional Amounts. Unless otherwise specified in any Board Resolution establishing the terms of Senior Debt Securities of a series in accordance with Section 3.01, all amounts of principal, and premium, if any, and interest, if any, on any series of Senior Debt Securities will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “ Taxing Jurisdiction ”), unless such deduction or withholding is required by law. If   deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, premium, if any, and interest, if any, on any series of Senior Debt Securities (“ Additional Amounts ”) as may be necessary in order that the net amounts paid to the Holders of Senior Debt Securities of the particular series, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, and interest, if any, which would have been payable in respect of such Senior Debt Securities had no such deduction or withholding been required; provided , however , that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

(i)         the Holder or the beneficial owner of the Senior Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Debt Security, or the collection of any payment of (or in respect of) principal of, premium, if any, or interest, if any, on any Senior Debt Security of the relevant series,
 
(ii)        except in the case of a winding-up of the Company in the United Kingdom, the relevant Senior Debt Security is presented (where presentation is required) for payment in the United Kingdom,
 


 
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(iii)           the relevant Senior Debt Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting (where presentation is required) the same for payment at the close of such 30 day period, or
 
(iv)           the Holder or the beneficial owner of the relevant Senior Debt Security or the beneficial owner of any payment of (or in respect of) principal of, or interest, if any, on such Senior Debt Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any information requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

(v)           the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directives;

(vi)           the relevant Senior Debt Security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting (where presentation is required) the relevant Senior Debt Security to another paying agent in a Member State of the European Union; or

 
(vii)
any combination of subclauses (i) through (vi) above;

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Senior Debt Securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.
 


 
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Whenever in this Senior Debt Securities Indenture there is mentioned, in any context, the payment of the principal of (and premium, if any) or interest, if any, on, or in respect of, any Senior Debt Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

Section 10.05 . Corporate Existence. Subject to Article Eight, the Company and the Guarantor will do or cause to be done all things necessary to preserve and keep in full force and effect its respective corporate existence.

Section 10.06 . Statement as to Compliance. The Company and the Guarantor will deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate in compliance with Section 314(a)(4) of the Trust Indenture Act.

Section 10.07 . Original Issue Document. The Company shall provide to the Trustee on a timely basis such information, if any, as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Senior Debt Securities relating to any original issue discount, including, without limitation, Form 1099-OID or any successor form.


ARTICLE 11
R EDEMPTION OF S ENIOR D EBT S ECURITIES

Section 11.01 . Applicability of Article. Senior Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Senior Debt Securities of any series) in accordance with this Article 11.

Section 11.02 . Election to Redeem; Notice to Trustee. The election of the Company to redeem any Senior Debt Securities shall be evidenced by a Board Resolution. The Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Senior Debt Securities of such series to be redeemed and, if applicable, the tenor of the Senior Debt Securities to be redeemed. In the case of any redemption of Senior Debt Securities of any series prior to the expiration of any provision restricting such redemption provided in the terms of such Senior Debt Securities or elsewhere in this Senior Debt Securities Indenture, the Company shall furnish the
 


 
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Trustee with respect to such Senior Debt Securities with an Officer’s Certificate evidencing compliance with or waiver of such provision.

Section 11.03 . Selection by Trustee of Senior Debt Securities to be Redeemed. If less than all the Senior Debt Securities of any series are to be   redeemed, the particular Senior Debt Securities to be redeemed shall be selected not more than 60 days nor less than 30 days prior to the Redemption Date by the Trustee, from the Outstanding Senior Debt Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for registered Senior Debt Securities of that series or any multiple thereof) of the principal amount of Senior Debt Securities of such series of a denomination larger than the minimum authorized denomination for Senior Debt Securities of that series.

The Trustee shall promptly notify the Company in writing of the Senior Debt Securities selected for redemption and, in the case of any Senior Debt Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Senior Debt Securities Indenture, unless the context otherwise requires, all provisions relating to the redemption of Senior Debt Securities shall relate in the case of any Senior Debt Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such registered Senior Debt Security which has been or is to be redeemed.

Section 11.04 . Notice of Redemption. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Debt Securities, notice of redemption shall be given not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Senior Debt Securities to be redeemed in the manner and to the extent provided in Section 1.06.

All notices of redemption shall state:

 
(a)
the Redemption Date,

 
(b)
the Redemption Price,

(c)          if less than all the Outstanding Senior Debt Securities of any series are to be redeemed, the principal amount of the Senior Debt Securities to be redeemed,

(d)          that on the Redemption Date the Redemption Price will become due and payable upon each such Senior Debt Security to be redeemed and, if applicable, that interest thereon will cease to accrue on or after the said date,
 

 
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(e)          the place or places where such Senior Debt Securities are to be surrendered for payment of the Redemption Price, and

(f)          the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to such Senior Debt Securities.

Notice of redemption of Senior Debt Securities to be redeemed at the selection of the Company shall be given by the Company or, at the Company’s Request, by the Trustee in the name and at the expense of the Company.

Section 11.05 . Deposit of Redemption Price. On or prior to any Redemption Date, the Company or the Guarantor shall deposit with the Trustee or with a Paying Agent (or, if the Company or the Guarantor is acting as Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued but unpaid interest on, all the Senior Debt Securities which are to be redeemed on that date.

Section 11.06 .  Senior Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Senior Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Senior Debt Securities shall cease to accrue interest. Upon surrender of any such Senior Debt Security for redemption in accordance with said notice, such Senior Debt Security shall be paid by the Company or the Guarantor at the Redemption Price, together with accrued but unpaid interest to the Redemption Date; provided, however , that with respect to any Senior Debt Securities in registered form, unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on a Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Senior Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Date or Special Record Date according to the terms of the Senior Debt Securities and the provisions of Section 3.07. Senior Debt Securities in definitive form shall be presented for redemption to the Paying Agent.

If any Senior Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Senior Debt Security shall, until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.

Section 11.07 . Senior Debt Securities Redeemed in Part. Any Senior Debt Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, only in the case of Senior Debt Securities in registered
 


 
66
 



form, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, the Guarantor shall endorse the Guarantee on, and the Trustee shall authenticate and deliver to the Holder of such Senior Debt Security without service charge, a new Senior Debt Security or Senior Debt Securities of the same series of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Senior Debt Security so surrendered.

Section 11.08 .  Optional Redemption Due to Changes in Tax Treatment. Unless otherwise provided in the Senior Debt Securities of any series, the Company and, if applicable, the Guarantor will have the option to redeem the Senior Debt Securities of any series in whole as contemplated by Section 3.01 with respect to any series of Senior Debt Securities, the Senior Debt Securities are redeemable, as a whole but not in part, on not less than 30 nor more than 60 days’ notice, on any Interest Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Senior Debt Securities to the date fixed for redemption (or, in the case of Original Issue Discount Securities, the accreted face amount thereof, together with accrued interest, if any), if, at any time, the Company (or, if applicable, the Guarantor) shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after a date included in the terms of such series of Senior Debt Securities pursuant to Section 3.01:

(a)          in making payment under the Senior Debt Securities in respect of principal or premium, if any, or interest, if any, it (or the Guarantor, if applicable) has or will or would on the next Interest Payment Date become obligated to pay Additional Amounts;

(b)          the payment of interest on the next Interest Payment Date in respect of any of the Senior Debt Securities would be treated as “ distributions ” within the meaning of Section 209 of the Income and Corporation Taxes Act 1988 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

(c)          on the next Interest Payment Date the Company (or the Guarantor, if applicable) would not be entitled to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).
 


 
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In any case where the Company (or, if applicable, the Guarantor) shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Debt Securities of any series, the Company (or, if applicable, the Guarantor) shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company) (or, if applicable, the Guarantor) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company (or, if applicable, the Guarantor) is entitled to exercise its right of redemption.

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.


ARTICLE 12
G UARANTEE A ND I NDEMNITY

Section 12.01 . The Guarantee. The Guarantor hereby unconditionally guarantees to each Holder of a Senior Debt Security the due and punctual payment of the principal of, any premium and interest on, and any additional amounts with respect to such Senior Debt Security and the due and punctual payment of the sinking fund payments (if any) provided for pursuant to the terms of such Senior Debt Security, when and as the same shall become due and payable, whether at maturity, by acceleration, redemption, repayment or otherwise, in accordance with the terms of such Senior Debt Security and of this Senior Debt Securities Indenture. In case of the failure of the Company punctually to pay any such principal, premium, interest, additional amounts or sinking fund payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity, upon acceleration, redemption, repayment or otherwise, and as if such payment were made by the Company.

Section 12.02 . Net Payments. All payments of principal of and premium, if any, interest and any other amounts on, or in respect of, the Senior Debt Securities of any series shall be made by the Guarantor without withholding or deduction at source for, or on account of, any present or future taxes, fees, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the United Kingdom, or the jurisdiction of residence or incorporation of any successor to the Guarantor, or any political subdivision or taxing authority thereof or therein (the “ Guarantor Taxing Jurisdiction ”), unless such taxes, fees, duties, assessments or governmental charges are required to be withheld or deducted by (i) the laws (or any regulations or ruling promulgated thereunder) of a Guarantor Taxing Jurisdiction or (ii) an official position regarding the
 

 
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application, administration, interpretation or enforcement of any such laws, regulations or rulings (including, without limitation, a holding by a court of competent jurisdiction or by a taxing authority in a Guarantor Taxing Jurisdiction). If a withholding or deduction at source is required, the Guarantor shall, subject to certain limitations and exceptions set forth below, pay to the Holder of any such Senior Debt Security such additional amounts as may be necessary so that every net payment of principal, premium, if any, interest or any other amount made to such Holder, after such withholding or deduction, shall not be less than the amount provided for in such Senior Debt Security and this Senior Debt Securities Indenture to be then due and payable; provided, however, that the Guarantor shall not be required to make payment of such additional amounts for or on account of:

(a)          any such tax, assessment or other governmental charge that would not have been so imposed but for (i) the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder, if such Holder is an estate, a trust, a partnership or a corporation) and the United Kingdom and its possessions or any other Guarantor Taxing Jurisdiction, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof, being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein or (ii) the presentation, where presentation is required, by the Holder of a Senior Debt Security for payment on a date more than 30 days after the date on which such payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

(b)          any capital gain, estate, inheritance, gift, sale, transfer, personal property or similar tax, assessment or other governmental charge;

(c)          any tax assessment or other governmental charge that is payable otherwise than by withholding from payments on or with respect to the Senior Debt Securities;

(d)          any tax assessment or other governmental charge that is imposed on a payment to an individual and that is required to be made pursuant to European Council Directive 2003/48/EC or any other directive implementing the conclusions of the ECOFIN council meeting of November 26 – 27, 2000 on the taxation of savings income, or any law implementing or complying with, or introduced in order to conform to, such directives;

(e)          any tax assessment or other governmental charge required to be withheld by any paying agent from any payment of principal or other amounts payable, or interest on the Senior Debt Securities, to the extent that such payment can be made without such withholding by presentation of the Senior Debt Securities to any other paying agent;
 


 
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(f)          any tax, assessment or other governmental charge that is imposed or withheld by reason of the failure by the Holder or the beneficial owner of such Senior Debt Security to comply with any reasonable request by the Company addressed to the Holder or, if different, the direct nominee of a beneficiary of the payment, within 90 days of such request (A) to provide information or certification concerning the nationality, residence or identity of the Holder or such beneficial owner or (B) to make any declaration or other similar claim or satisfy any information or reporting requirement, which, in the case of (A) or (B), is required or imposed by statute, treaty, regulation or administrative practice of the relevant Guarantor Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge; or

 
(g)
any combination of items (a), (b), (c), (d), (e) and (f);

nor shall additional amounts be paid with respect to any payment of the principal of, or premium, if any, interest or any other amounts on, any such Senior Debt Security to any Holder who is a fiduciary, a partnership or any other Person, other than the sole beneficial owner of such Senior Debt Security to the extent such payment would be required by the laws of the relevant Guarantor Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such additional amounts had it been the Holder of the Senior Debt Security.

Whenever in this Senior Debt Securities Indenture there is mentioned, in any context, the payment of the principal of or any premium, interest or any other amounts on, or in respect of, any Senior Debt Security of any series or the net proceeds received on the sale or exchange of any Senior Debt Security of any series, such mention shall be deemed to include mention of the payment of additional amounts provided by the terms of such series established hereby or pursuant hereto to the extent that, in such context, additional amounts are, were or would be payable in respect thereof pursuant to such terms, and express mention of the payment of additional amounts (if applicable) in any provision hereof shall not be construed as excluding the payment of additional amounts in those provisions hereof where such express mention is not made.

Except as otherwise provided in or pursuant to this Senior Debt Securities Indenture or the Senior Debt Securities of the applicable series, at least 10 days prior to the first interest payment date with respect to a series of Senior Debt Securities (or if the Senior Debt Securities of such series shall not bear interest prior to Maturity, the first day on which a payment of principal is made), and at least 10 days prior to each date of payment of principal or interest if there has been any change with respect to the matters set forth in the below-mentioned Guarantor’s Officer’s Certificate, the Guarantor shall furnish to the Trustee and the Paying Agent, a Guarantor’s Officer’s Certificate instructing the Trustee and
 


 
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such Paying Agent whether such payment of principal of and premium, if any, interest or any other amounts on the Senior Debt Securities of such series shall be made to Holders of Senior Debt Securities of such series without withholding for or on account of any tax, fee, duty, assessment or other governmental charge described in this Section 12.02. If any such withholding shall be required, then such Guarantor’s Officer’s Certificate shall specify by Guarantor Taxing Jurisdiction the amount, if any, required to be withheld on such payments to such Holders of Senior Debt Securities, and the Guarantor agrees to pay to the Trustee or such Paying Agent the additional amounts required by this Section 12.02. The Guarantor covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Guarantor’s Officer’s Certificate furnished pursuant to this Section 12.02.

Section 12.03 . Guarantee Unconditional, Etc. The Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute, irrevocable and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any Senior Debt Security or this Senior Debt Securities Indenture, any failure to enforce the provisions of any Senior Debt Security or this Senior Debt Securities Indenture, or any waiver, modification, consent or indulgence granted with respect thereto by the Holder of such Senior Debt Security or the Trustee, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any such Senior Debt Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of, any premium and interest on, and any additional amounts and sinking fund payments required with respect to, the Senior Debt Securities and the complete performance of all other obligations contained in the Senior Debt Securities. The Guarantor further agrees, to the fullest extent that it lawfully may do so, that, as between the Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in Section 5.02 hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or prohibition extant under any bankruptcy, insolvency, reorganization or other similar law of any jurisdiction preventing such acceleration in respect of the obligations guaranteed hereby.

Section 12.04 . Reinstatement. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time payment on any Senior Debt Security, in whole or in part, is rescinded or must otherwise be restored to the Company or the Guarantor upon the bankruptcy, liquidation or reorganization of the Company or otherwise.
 


 
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Section 12.05 . Subrogation. The Guarantor shall be subrogated to all rights of the Holder of any Senior Debt Security against the Company in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not be entitled to enforce, or to receive any payments arising out of or based upon, such right of subrogation until the principal of, any premium and interest on, and any additional amounts and sinking fund payments required with respect to, all Senior Debt Securities shall have been paid in full.

Section 12.06 . Indemnity. As a separate and alternative stipulation, the Guarantor unconditionally and irrevocably agrees that any sum expressed to be payable by the Company under this Senior Debt Securities Indenture or the Senior Debt Securities but which is for any reason (whether or not now known or becoming known to the Company, the Guarantor, the Trustee or any Holder of any Senior Debt Security) not recoverable from the Guarantor on the basis of a Guarantee will nevertheless be recoverable from it as if it were the sole principal debtor and will be paid by it to the Trustee on demand. This indemnity constitutes a separate and independent obligation from the other obligations in this Senior Debt Securities Indenture, gives rise to a separate and independent cause of action and will apply irrespective of any indulgence granted by the Trustee or any Holder of any Senior Debt Security.

Section 12.07 . Assumption By Guarantor. (a) The Guarantor may, without the consent of the Holders, assume all of the rights and obligations of the Company hereunder with respect to a series of Senior Debt Securities and under the Senior Debt Securities of such series if, after giving effect to such assumption, no Event of Default or event which with the giving of notice or lapse of time, or both, would become an Event of Default, shall have occurred and be continuing. Upon such an assumption, the Guarantor shall execute a supplemental indenture evidencing its assumption of all such rights and obligations of the Company and the Company shall be released from its liabilities hereunder and under such Senior Debt Securities as obligor on the Senior Debt Securities of such Series.

(b)          The Guarantor shall assume all of the rights and obligations of the Company hereunder with respect to a series of Senior Debt Securities and under the Senior Debt Securities of such series if, upon a default by the Company in the due and punctual payment of the principal, sinking fund payment, if any, premium, if any, or interest on such Senior Debt Securities, the Guarantor is prevented by any court order or judicial proceeding from fulfilling its obligations under Section 12.01 with respect to such series of Senior Debt Securities. Such assumption shall result in the Senior Debt Securities of such series becoming the direct obligations of the Guarantor and shall be effected without the consent of the
 


 
72
 



Holders of the Senior Debt Securities of any series. Upon such an assumption, the Guarantor shall execute a supplemental indenture evidencing its assumption of all such rights and obligations of the Company, and the Company shall be released from its liabilities hereunder and under such Senior Debt Securities as obligor on the Senior Debt Securities of such series.



This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

[SIGNATURE PAGE FOLLOWS]


 

 
73
 



IN WITNESS WHEREOF, the parties hereto have caused this Senior Debt Securities Indenture to be duly executed, all as of the day and year first above written.

THE ROYAL BANK OF SCOTLAND PLC
 
     
     
By:
   
 
Name:
 
 
Title:
 
     
     
     
     
     
THE ROYAL BANK OF SCOTLAND GROUP PLC
 
     
     
By:
   
 
Name:
 
 
Title:
 
     
     
     
     
     
THE BANK OF NEW YORK MELLON, LONDON BRANCH
 
     
     
By:
   
 
Name:
 
 
Title:
 
 

 
74  
 
Exhibit 4.2

THE ROYAL BANK OF SCOTLAND GROUP PLC
as Issuer
 
 

TO
 
 

THE BANK OF NEW YORK MELLON
acting through its London Branch
as Trustee
 


FORM OF INDENTURE

 


Subordinated Debt Securities






THE ROYAL BANK OF SCOTLAND GROUP plc

Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and Subordinated Debt Securities Indenture, dated as of [                     ].

Trust Indenture
Act Section
 
Subordinated Debt
Securities Indenture
Section
§310
(a)(1)
 
6.09
 
(a)(2)
 
6.09
 
(a)(3)
 
Not Applicable
 
(a)(4)
 
Not Applicable
 
(b)
 
6.08, 6.10
 
(c)
 
Not Applicable
§311
(a)
 
6.13
 
(b)
 
6.13
 
(b)(2)
 
7.03(a), 7.03(b)
 
(c)
 
Not Applicable
§312
(a)
 
7.01, 7.02(a)
 
(b)
 
7.02(b)
 
(c)
 
7.02(c)
§313
(a)
 
7.03(a)
 
(b)
 
7.03(a)
 
(c)
 
1.06, 7.03(a)
 
(d)
 
7.03(b)
§ 314
(a)
 
7.04, 10.06
 
(b)
 
Not Applicable
 
(c)(1)
 
1.02
 
(c)(2)
 
1.02
 
(c)(3)
 
Not Applicable
 
(d)
 
Not Applicable
 
(e)
 
1.02
 
(f)
 
Not Applicable
§315
(a)
 
6.01
 
(b)
 
6.02, 7.03(a)
 
(c)
 
6.01
 
(d)
 
6.01
 
(d)(1)
 
6.01
 
(d)(2)
 
6.01
 
(d)(3)
 
6.01
 
(e)
 
5.14


2


§316
(a)(1)(A)
5.02, 5.12
 
(a)(l)(B)
5.13
 
(a)(2)
Not Applicable
 
(a)(last sentence)
1.01
 
(b)
5.08
§317
(a)(1)
5.03
 
(a)(2)
5.04
 
(b)
10.03
§318
(a)
1.07


NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Subordinated Debt Securities Indenture.


3

 
TABLE OF CONTENTS
 
   
 
P AGE
ARTICLE 1
 
D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION
 
   
Section 1.01 .  Definitions
8
Section 1.02 .  Compliance Certificates and Opinions
17
Section 1.03 .  Form of Documents Delivered to Trustee
18
Section 1.04 .  Acts of Holders
18
Section 1.05 .  Notices, Etc. to Trustee and Company
19
Section 1.06 .  Notice to Holders; Waiver
19
Section 1.07 .  Conflict with Trust Indenture Act
20
Section 1.08 .  Effect of Headings and Table of Contents
21
Section 1.09 .  Successors and Assigns
21
Section 1.10 .  Separability Clause
21
Section 1.11 .  Benefits of Subordinated Debt Securities Indenture
21
Section 1.12 .  Governing Law
21
Section 1.13 .  Saturdays, Sundays and Legal Holidays
21
Section 1.14 .  Appointment of Agent for Service
22
Section 1.15 .  Calculation Agent
22
   
ARTICLE 2
 
S UBORDINATED D EBT S ECURITY F ORMS
 
   
Section 2.01 .  Forms Generally
22
Section 2.02 .  Form of Trustee’s Certificate of Authentication
23
   
ARTICLE 3
 
T HE S UBORDINATED D EBT S ECURITIES
 
   
Section 3.01 .  Amount Unlimited, Issuable in Series
24
Section 3.02 .  Denominations
27
Section 3.03 .  Execution, Authentication, Delivery and Dating
27
Section 3.04 .  Temporary Subordinated Debt Securities
28
Section 3.05 .  Registration, Registration of Transfer and Exchange
29
Section 3.06 .  Mutilated, Destroyed, Lost and Stolen Subordinated Debt Securities
33
Section 3.07 .  Payment; Interest Rights Preserved
34
Section 3.08 .  Persons Deemed Owners
36
Section 3.09 .  Cancellation
36
Section 3.10 .  Computation of Interest
36
Section 3.11 .  Cusip Numbers
36
 
 
4


ARTICLE 4
 
S ATISFACTION AND D ISCHARGE
 
   
Section 4.01 .  Satisfaction and Discharge of Subordinated Debt Securities Indenture
37
Section 4.02 .  Application of Trust Money
38
Section 4.03 .  Repayment to Company
38
   
ARTICLE 5
 
R EMEDIES
 
   
Section 5.01 .  Events of Default
39
Section 5.02 .  Acceleration of Maturity; Rescission and Annulment
39
Section 5.03 .  Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee
40
Section 5.04 .  Trustee May File Proofs of Claim
41
Section 5.05 .  Trustee May Enforce Claims Without Possession of  Subordinated Debt Securities
42
Section 5.06 .  Application of Money Collected
43
Section 5.07 .  Limitation on Suits
43
Section 5.08 .  Unconditional Right of Holders to Receive Principal, Premium and Interest, if any
44
Section 5.09 .  Restoration of Rights and Remedies
44
Section 5.10 .  Rights and Remedies Cumulative
44
Section 5.11 .  Delay or Omission Not Waiver
45
Section 5.12 .  Control by Holders
45
Section 5.13 .  Waiver of past Defaults
45
Section 5.14 .  Undertaking for Costs
46
   
ARTICLE 6
 
T HE T RUSTEE
 
   
Section 6.01 .  Certain Duties and Responsibilities
46
Section 6.02 .  Notice of Defaults
46
Section 6.03 .  Certain Rights of Trustee
47
Section 6.04.   Not Responsible for Recitals or Issuance of Subordinated Debt Securities
48
Section 6.05 .  May Hold Subordinated Debt Securities
48
Section 6.06 .  Money Held in Trust
49
Section 6.07 .  Compensation and Reimbursement
49
Section 6.08 .  Disqualification; Conflicting Interests
50
Section 6.09 .  Corporate Trustee Required; Eligibility
50
Section 6.10 .  Resignation and Removal; Appointment of Successor
50
Section 6.11 .  Acceptance of Appointment by Successor
52
Section 6.12 .  Merger, Conversion, Consolidation or Succession to Business
54
 
 
5
 
 
Section 6.13 .  Preferential Collection of Claims
54
Section 6.14 .  Appointment of Authenticating Agent
54
   
ARTICLE 7
 
H OLDERS L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY
 
   
Section 7.01 .  Company to Furnish Trustee Names and Addresses of Holders
56
Section 7.02 .  Preservation of Information; Communication to Holders
56
Section 7.03 .  Reports by Trustee
57
Section 7.04 .  Reports by Company
58
   
ARTICLE 8
 
C ONSOLIDATION , M ERGER , C ONVEYANCE OR T RANSFER
 
   
Section 8.01 .  Company May Consolidate, Etc., Only on Certain Terms
58
Section 8.02 .  Successor Corporation Substituted
59
Section 8.03 .  Assumption of Obligations
59
   
ARTICLE 9
 
S UPPLEMENTAL I NDENTURES
 
   
Section 9.01 .  Supplemental Indentures without Consent of Holders
61
Section 9.02 .  Supplemental Indentures with Consent of Holders
62
Section 9.03 .  Execution of Supplemental Indentures
64
Section 9.04 .  Effect of Supplemental Indentures
64
Section 9.05 .  Conformity with Trust Indenture Act
64
Section 9.06 .  Reference in Subordinated Debt Securities to Supplemental Indentures
64
   
ARTICLE 10
 
C OVENANTS
 
   
Section 10.01 .  Payment Of Principal, Premium, and Interest
64
Section 10.02 .  Maintenance of Office or Agency
65
Section 10.03 .  Money for Payments to be Held in Trust
65
Section 10.04 .  Additional Amounts
67
Section 10.05 .  Corporate Existence
69
Section 10.06 .  Statement as to Compliance
69
Section 10.07 .  Original Issue Document
69
   
ARTICLE 11
 
R EDEMPTION O F S UBORDINATED D EBT S ECURITIES
 
   
Section 11.01 .  Applicability of Article
69
Section 11.02 .  Election to Redeem; Notice to Trustee
69
 
 
6


Section 11.03 .  Selection by Trustee of Subordinated Debt Securities to Be Redeemed
70
Section 11.04 .  Notice of Redemption
70
Section 11.05 .  Deposit of Redemption Price
71
Section 11.06 .  Subordinated Debt Securities Payable on Redemption Date
71
Section 11.07 .  Subordinated Debt Securities Redeemed in Part
72
Section 11.08 .  Optional Redemption Due to Changes in Tax Treatment
72
Section 11.09 .    [Reserved ]
73
   
ARTICLE 12
 
S UBORDINATION OF S UBORDINATED D EBT S ECURITIES
 
   
Section 12.01 .  Subordinated Debt Securities Subordinate to Claims of Senior Creditors
73
Section 12.02 .  Provisions Solely to Define Relative Rights
74
Section 12.03 .  Trustee to Effectuate Subordination
74
Section 12.04 .  No Waiver of Subordination Provisions
74
Section 12.05 .  Notice to Trustee
74
Section 12.06 .  Reliance on Judicial Order or Certificate of Liquidating Agent
75
Section 12.07 .  Trustee Not Fiduciary for Senior Creditors
76
Section 12.08 .  Rights of Trustee as Senior Creditor; Preservation of  Trustee’s Rights
76
Section 12.09 .  Article Applicable to Paying Agents
76
Section 12.10 .  Exchanges Not Deemed Payment
76
   
ARTICLE 13
 
E XCHANGE OF S UBORDINATED D EBT S ECURITIES
 
   
Section 13.01 .  Applicability of Article
77
Section 13.02 .  Election to Exchange; Notice to Trustee
77
Section 13.03 .  Notice of Exchange
77
Section 13.04 .  Deposit of Interest
78
Section 13.05 .  Surrender of Subordinated Debt Securities
78
Section 13.06 .  Issuance of Dollar Preference Shares or Exchange Securities
78
Section 13.07 .  Effect of Exchange
79
Section 13.08 .  Validity of Dollar Preference Shares or Exchange Securities
80
Section 13.09 .  Legal and Regulatory Compliance
80
Section 13.10 .  Taxes and Charges
81
Section 13.11 .  Trustee Not Liable
81
   
TESTIMONIUM
82
SIGNATURES AND SEALS
83
 
 
7
 

SUBORDINATED DEBT SECURITIES INDENTURE, dated as of [                    ] between THE ROYAL BANK OF SCOTLAND GROUP plc, a company incorporated in Great Britain and registered in Scotland (the “ Company ”), having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK OF NEW YORK MELLON, (previously named The Bank of New York), acting through its London Branch, a banking corporation duly organized and existing under the laws of the State of New York as Trustee (the “ Trustee ”), having its Corporate Trust Office at One Canada Square, London E14 5AL.

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Subordinated Debt Securities Indenture to provide for the issuance from time to time of its Subordinated Debt Securities (the “ Subordinated Debt Securities ”), to be issued in one or more series, represented by one or more Global Securities in registered form without coupons for payments attached, or represented by definitive Subordinated Debt Securities in registered form without coupons for payments attached, the amount and terms of each such series to be determined as hereinafter provided.

All things necessary to make this Subordinated Debt Securities Indenture a valid and binding agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS SUBORDINATED DEBT SECURITIES INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Subordinated Debt Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of Subordinated Debt Securities as follows:
 
ARTICLE 1
D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION

Section 1.01 . Definitions. For all purposes of this Subordinated Debt Securities Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1)       the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;


8
 

(2)         all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3)         all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United Kingdom at the date of such computation and as applied by the Company;

(4)         the words “ herein, ” “ hereof ” and “ hereunder ” and other words of similar import refer to this Subordinated Debt Securities Indenture as a whole and not to any particular Article, Section or other subdivision; and

(5)         any reference to an “ Article ” or a “ Section ” refers to an Article or Section of this Subordinated Debt Securities Indenture.

Certain terms, used principally in Articles 6 and 13, are defined in those Articles.

“ Act ”, when used with respect to any Holder, has the meaning specified in Section 1.04.

“ Additional Amounts ” shall have the meaning set forth in Section 10.04, of this Agreement.

“ ADR Custodian ” means the custodian under the ADR Deposit Agreement.

“ ADR Deposit Agreement ” means the Deposit Agreement dated as of August 17, 1992, amended and restated as of February 8, 1999, as further amended and restated as of November 2, 2001, and as may be further amended from time to time between the Company and The Bank of New York Mellon (previously named The Bank of New York) and the holders from time to time of American Depositary Receipts issued thereunder.

“ ADR Depositary “ means the depositary under the ADR Deposit Agreement.

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “ control ” when used with respect to any specified Person means the power to direct the
 

9
 
 
management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled “ have meanings correlative to the foregoing.

“ Agent Member ” means a member of, or participant in, any Depositary.

“ Auditors ” means the Auditors from time to time of the Company or if there shall be joint Auditors of the Company any one or more of such joint Auditors.

“ Authenticating Agent ” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Subordinated Debt Securities.

“ Authorized Newspaper ” means a newspaper in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in the place in connection with which the term is used, which, in the United Kingdom, will be the Financial Times of London, if practicable, and which, in the United States, will be the Wall Street Journal , if practicable, and which, in Luxembourg, will be the Luxemburger Wort , if practicable and for so long as and only with respect to any Subordinated Debt Securities listed on the Luxembourg Stock Exchange, and if it shall be impracticable in the opinion of the Trustee to make any publication of any notice required hereby in any such newspaper, shall mean any publication or other notice in lieu thereof which is made or given with the approval of the Trustee.

“ Board of Directors ” means either the board of directors, or any committee of such board duly authorized to act with respect hereto, of the Company, which board of directors or committee may, to the extent permitted by applicable law, delegate its authority.

“ Board Resolution ” means a copy of a resolution certified by the Secretary or a Deputy or Assistant Secretary of the Company to have been duly adopted by the Board of Directors or an authorized committee thereof and to be in full force and effect on the date of such certification and delivered to the Trustee.

“ Business Day ” means, with respect to any Place of Payment, except as may otherwise be provided in the form of Subordinated Debt Securities of any particular series, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

“ Calculation Agent ” means the Person, if any, authorized by the Company to calculate the interest rate or other amounts from time to time in relation to any series of Subordinated Debt Securities.
 
 
10

 
“ Clearstream Luxembourg ” means, Clearstream Banking, société anonyme , or its nominee or its or their successor.

“ Commission ” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“ Company ” means the Person named as the “ Company ” in the first paragraph of this Subordinated Debt Securities Indenture until a successor corporation shall have become such pursuant to the applicable provisions of this Subordinated Debt Securities Indenture, and thereafter “ Company ” shall mean such successor corporation.

“ Company Request ” and “ Company Order ” mean, respectively, a written request or order signed in the name of the Company by an Executive Director or Director or the Secretary or a Deputy or Assistant Secretary, and delivered to the Trustee.

“ Corporate Trust Office ” means the office of the Trustee in which its corporate trust business is principally administered, located at One Canada Square, London E14 5AL (Attention: Corporate Trust Office, Facsimile: +44 20 7964 2536).

The term “ corporation ” includes corporations, associations, companies and business trusts.

“ Default ” has the meaning specified in Section 5.03.

“ Deferred Interest ” has the meaning specified in Section 3.07.

“ Deferred Payment Date ” has the meaning specified in Section 3.07.

“ Deferred Record Date ”, when used for the interest payable on any Deferred Payment Date on registered Subordinated Debt Securities of any series, means the date specified for the purpose pursuant to Section 3.01.

“ Depositary ” means, with respect to any series of Subordinated Debt Securities, a clearing agency that is designated to act as Depositary for the Global Securities evidencing all or part of such Subordinated Debt Securities as contemplated by Section 3.01.

“ Dollar ” or “ $ ” or any similar reference means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts.
 
 
11

 
“ Dollar Preference Shares ” means a designated series of non-cumulative dollar preference shares, nominal value of $.01 each, of the Company for which, if applicable to a particular series of Subordinated Debt Securities, the Company may exchange or convert any series of Subordinated Debt Securities.

“ DTC ” means the Depository Trust & Clearing Company or its nominee or its or their successor.

“ euro ” or “ € ” means the single currency of the participating member states in the Third Stage of European economic and monetary union pursuant to the Treaty establishing the European Community (as amended from time to time). “ participating member states ” means those member states of the European Union from time to time which adopt a single, shared currency in the Third Stage, as defined and identified in the EMU legislation.

“ Euroclear ” means, the Euroclear Bank S.A./N.V. as operator of the Euroclear System, or its nominee, or its or their successor.

“ Event of Default ” has the meaning specified in Section 5.01.

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

“ Exchange Date ”, when used with respect to any applicable series of Subordinated Debt Securities, has the meaning specified in Section 13.03.

“ Exchange Securities ” has the meaning specified in Section 3.01(l).

“ Foreign Currency ” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts

“ Foreign Government Securities ” means with respect to Subordinated Debt Securities of any series that are denominated in a Foreign Currency, non- callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.


12
 

“ Global Security ” means a global certificate evidencing all or part of a series of Subordinated Debt Securities, authenticated and delivered to the Holder and registered in the name of the Holder or its nominee.

“ Holder ” means a Person in whose name a Subordinated Debt Security in global or definitive form is registered in the Subordinated Debt Security Register.

The term “ interest ”, when used with respect to a Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

“ Interest Payment Date ”, when used with respect to any Subordinated Debt Security, means the Stated Maturity of any installment of interest on such Subordinated Debt Security.

“ Liquidator ” has the meaning specified in Section 12.06.

“ Maturity ”, when used with respect to any Subordinated Debt Security, means the date, if any, on which the principal of such Subordinated Debt Security becomes due and payable as therein or herein provided, whether by call for redemption, winding-up of the Company or otherwise.

“ Officer’s Certificate ” means a certificate delivered to the Trustee and signed by an Executive Director or an Assistant Director or the Secretary or a Deputy or Assistant Secretary of the Company.

“ Opinion of Counsel ” means a written opinion of legal advisors, who may be an employee of or legal advisors for the Company or other legal advisors.

“ Original Issue Discount Security ” means any Subordinated Debt Security which provides for an amount less than the principal amount to be due and payable upon a declaration of the Maturity thereof pursuant to Section 5.02.

“ Outstanding ”, when used with respect to Subordinated Debt Securities or any series of Subordinated Debt Securities means, as of the date of determination, all Subordinated Debt Securities or all Subordinated Debt Securities of such series, as the case may be, theretofore authenticated and delivered under this Subordinated Debt Securities Indenture, except :

(i)         Subordinated Debt Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii)       Subordinated Debt Securities, or portions thereof, for whose payment or redemption money, U.S. Government Obligations or Foreign Government Securities in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the
 
 
13

 
Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Subordinated Debt Securities; provided , that, if such Subordinated Debt Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Subordinated Debt Securities Indenture or provision therefor satisfactory to the Trustee has been made; and

(iii)      Subordinated Debt Securities which have been paid pursuant to Section 11.06 or in exchange for or in lieu of which other Subordinated Debt Securities have been authenticated and delivered pursuant to this Subordinated Debt Securities Indenture, other than any such Subordinated Debt Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Subordinated Debt Securities are held by a bona fide purchaser in whose hands such Subordinated Debt Securities are valid obligations of the Company;

provided, however , that in determining whether the Holders of the requisite   principal amount of the Outstanding Subordinated Debt Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of a Subordinated Debt Security denominated in a Foreign Currency shall be the Dollar equivalent, determined on the date of original issuance of such Subordinated Debt Security, of the principal amount of such Subordinated Debt Security; and (ii) Subordinated Debt Securities beneficially owned by the Company or any other obligor upon the Subordinated Debt Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Subordinated Debt Securities which a Responsible Officer of the Trustee actually knows to be so beneficially owned shall be so disregarded; provided, further, however , that Subordinated Debt Securities so beneficially owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Subordinated Debt Securities and that the pledgee is not the Company or any other obligor upon the Subordinated Debt Securities or any Affiliate of the Company or of such other obligor.

“ Paying Agent ” means any Person (which may include the Company) authorized by the Company to pay the principal of (and premium, if any) or interest, if any on any Subordinated Debt Securities on behalf of the Company.

“ Person ” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
 
 
14
 
 
“ Place of Payment ”, when used with respect to the Subordinated Debt Securities of any series, means the place or places where the principal of (and premium, if any) and interest, if any, on the Subordinated Debt Securities of that series are payable as specified pursuant to Section 3.01 or, if not so specified, as specified in Section 10.02.

“ Predecessor Security ” of any particular Subordinated Debt Security means every previous Subordinated Debt Security evidencing all or a portion of the same debt as that evidenced by such particular Subordinated Debt Security; and, for the purposes of this definition, any Subordinated Debt Security authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Subordinated Debt Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Subordinated Debt Security.

“ Redemption Date ”, when used with respect to any Subordinated Debt Security to be redeemed, means the date fixed for such redemption by or pursuant to this Subordinated Debt Securities Indenture.

“ Redemption Price ”, when used with respect to any Subordinated Debt Security to be redeemed, means the price at which it is to be redeemed pursuant to this Subordinated Debt Securities Indenture.

“ Regular Record Date ” for the interest payable on any Interest Payment Date on registered Subordinated Debt Securities of any series means the date specified for the purpose pursuant to Section 3.01.

“ Responsible Officer ”, when used with respect to the Trustee, means any officer of the Trustee assigned to or working in the corporate trust department of the Trustee or, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Subordinated Debt Securities Indenture.

“ Senior Creditors ” means creditors of the Company except creditors in respect of Subordinated Indebtedness.

“ Stated Maturity ”, when used with respect to any Subordinated Debt Security or any installment of principal thereof or interest thereon, means the date, if any, specified in, or determined in accordance with the terms of, such Subordinated Debt Security as the fixed date on which the principal of such Subordinated Debt Security is due and payable.

“ Subordinated Debt Securities ”, has the meaning set forth in the recitals of the Company herein and more particularly means any series of Subordinated Debt Securities issued, authenticated and delivered under this Subordinated Debt Securities Indenture.
 
 
15
 
 
 
“ Subordinated Debt Securities Indenture ” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Subordinated Debt Securities established pursuant to Section 3.01.

“ Subordinated Debt Security ” means one of the Subordinated Debt Securities.

“ Subordinated Debt Security Register ” and “ Subordinated Debt Security Registrar ” have the respective meanings specified in Section 3.05.

“ Subordinated Indebtedness ” means claims in respect of any liability of the Company however arising for the payment of money, the right to payment of which by the Company by the terms thereof that are or are expressed to be, subordinated (whether only in the event of a winding-up of the Company or otherwise) to the claims of all or any of the creditors of the Company.

“ Subsidiary ” has the meaning attributed thereto by Section 736 of the Companies Act 1985 of Great Britain as in force at the date as of which this instrument was executed.

“ Taxing Jurisdiction ” has the meaning specified in Section 10.04.

“ Trustee ” means the Person named as the “ Trustee ” in the first paragraph of this instrument until a successor trustee shall have become such pursuant to the applicable provisions of this Subordinated Debt Securities Indenture, and thereafter “ Trustee ” shall mean the Person who is then the Trustee hereunder, and if at any time there is more than one such Person, “ Trustee ” shall mean and include each such Person; and “ Trustee ” as used with respect to the Subordinated Debt Securities of any series shall mean the Trustee with respect to the Subordinated Debt Securities of such series.

“ Trust Indenture Act ” means the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at the date as of which this instrument was executed, except as provided in Section 9.05.

“ United Kingdom ” means the United Kingdom of Great Britain and Northern Ireland.

“ United States ” and “ U.S. ” mean the United States of America and, except in the case of Sections 6.09 and 6.14, its territories and possessions.
 
 
16

 
“ U.S. Government Obligations ” means noncallable (i) direct obligations of the United States for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.

Section 1.02 . Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Subordinated Debt Securities Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Subordinated Debt Securities Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of the legal advisor rendering such opinion all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Subordinated Debt Securities Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Subordinated Debt Securities Indenture shall include:

(a)         a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b)         a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c)         a statement that, in the opinion of each such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and


17
 
 
(d)       a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.

Section 1.03 . Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, legal advisors, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representations by, legal advisors may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such legal advisors know, or in the exercise of reasonable care should know, that the certificate or opinion or representation with respect to such matters is erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Subordinated Debt Securities Indenture, they may, but need not, be consolidated and form one instrument.

Section 1.04 . Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Subordinated Debt Securities Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “ Act ” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Subordinated Debt Securities Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.
 
 
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(b)         The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. When such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c)         The ownership of registered Subordinated Debt Securities shall be proved by the Subordinated Debt Security Register.

(d)         Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Subordinated Debt Security shall bind every future Holder of the same Subordinated Debt Security and the Holder of every Subordinated Debt Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of any thing done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Subordinated Debt Security or such other Subordinated Debt Security.

Section 1.05 . Notices, Etc. to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Subordinated Debt Securities Indenture to be made upon, given or furnished to, or filed with,

(a)         the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile) to the Trustee at its Corporate Trust Office, or

(b)         the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, in the case of the Company, first-class postage prepaid, addressed to it at the address of its principal office specified in the first paragraph of this Subordinated Debt Securities Indenture (unless another address has been previously furnished in writing to the Trustee by the Company, in which case at the last such address) marked “Attention: Company Secretary”.

Section 1.06 . Notice to Holders; Waiver. When this Subordinated Debt Securities Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if given in writing and mailed, first-class postage prepaid, to each Holder of a registered
 
 
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Subordinated Debt Security affected by such event in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act with respect to reports pursuant to Section 7.03(a).

For so long as the Subordinated Debt Securities of any series are represented by Global Securities, the Company will deliver a copy of all notices with respect to such series to the Holder (if the address of such Holder is known to the Company).

When notice to Holders of registered Subordinated Debt Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Subordinated Debt Securities Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

If the Subordinated Debt Securities are listed on the Luxembourg Stock Exchange, all notices to Holders, will be published in an Authorized Newspaper in Luxembourg.

Section 1.07 . Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Subordinated Debt Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. If at any future time any provision required to be included herein by the Trust Indenture Act as in force at the date as of which this Subordinated Debt Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Subordinated Debt Securities Indenture were executed at such future time, the Company and the Trustee may enter into one or more indentures supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole or in part) such provision or limitation of this Subordinated Debt Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article 9) no provision or limitation required to be included herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Subordinated Debt Securities Indenture was executed may be so changed or eliminated.
 
 
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Section 1.08 . Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 1.09 . Successors and Assigns. All covenants and agreements in this Subordinated Debt Securities Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 1.10 . Separability Clause. In case any provision in this Subordinated Debt Securities Indenture or in the Subordinated Debt Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 1.11 .  Benefits of Subordinated Debt Securities Indenture. Nothing in this Subordinated Debt Securities Indenture or in the Subordinated Debt Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Holders of Subordinated Debt Securities, any benefit or any legal or equitable right, remedy or claim under this Subordinated Debt Securities Indenture.

Section 1.12 . Governing Law. This Subordinated Debt Securities Indenture and the Subordinated Debt Securities shall be governed by and construed in accordance with the laws of the State of New York, except as stated in Section 2.01 and except for Section 12.01, which shall be governed by and construed in accordance with the laws of Scotland, and except that the authorization and execution of this Subordinated Debt Securities Indenture and the Subordinated Debt Securities shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.

Section 1.13 . Saturdays, Sundays and Legal Holidays. The terms of the Subordinated Debt Securities shall provide that, in any case where any Interest Payment Date, Redemption Date, Exchange Date, Maturity or Stated Maturity, of a Subordinated Debt Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Subordinated Debt Securities Indenture or the Subordinated Debt Securities other than a provision in the Subordinated Debt Securities that specifically states that such provision shall apply in lieu of this Section) payments of interest, if any (and premium, if any) or principal and the exchange of the Subordinated Debt Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment (or such other Business Day as shall be provided in such Subordinated Debt Security) with the same force and effect as if made on such Interest Payment Date, Redemption Date, Exchange Date, Maturity or Stated Maturity, provided that no interest shall accrue on such payment for the
 
 
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period from and after such Interest Payment Date, Redemption Date, Exchange Date, Maturity or Stated Maturity, as the case may be.

Section 1.14 . Appointment of Agent for Service. The Company has designated and appointed John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Subordinated Debt Securities or this Subordinated Debt Securities Indenture, but for that purpose only, and agrees that service of process upon said John Fawcett shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Subordinated Debt Securities remain Outstanding until the appointment of a successor by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said John Fawcett in full force and effect so long as any of the Subordinated Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

Section 1.15 . Calculation Agent. If the Company appoints a Calculation Agent pursuant to Section 3.01 with respect to any series of Subordinated Debt Securities, any determination of the interest rate on, or other amounts in relation to, such series of Subordinated Debt Securities in accordance with the terms of such series of Subordinated Debt Securities by such Calculation Agent shall (in the absence of manifest error, bad faith or willful misconduct) be binding on the Company, the Trustee and all Holders and (in the absence of manifest error, bad faith or willful misconduct) no liability to the Holders shall attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions.


ARTICLE 2
S UBORDINATED D EBT S ECURITY F ORMS

Section 2.01 . Forms Generally. The Subordinated Debt Securities of each series shall be issuable as registered securities without coupons and in such
 
 
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forms as shall be established by or pursuant to action of the Company’s Board of Directors, or in one or more indentures supplemental hereto, pursuant to Section 3.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Subordinated Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or Depositary therefor, or as may, consistently herewith, be determined by the officers executing such Subordinated Debt Securities, all as evidenced by any such execution; provided , however, that such Subordinated Debt Securities shall have endorsed thereon a statement in the following form or in substantially the following form:

“The rights of the holder of the Subordinated Debt Security are, to the extent and in the manner set forth in Section 12.01 of the Subordinated Debt Securities Indenture, subordinated to the claims of other creditors of the Company, and this Subordinated Debt Security is issued subject to the provisions of that Section 12.01, and the holder of this Subordinated Debt Security, by accepting the same, agrees to and shall be bound by such provisions. The provisions of Section 12.01 of the Subordinated Debt Securities Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with, the laws of Scotland.”

The Trustee’s certificates of authentication shall be in substantially the form set forth in Section 2.02 or Section 6.14.

The definitive Subordinated Debt Securities shall be printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Subordinated Debt Securities may be listed, all as determined by the officers executing such Subordinated Debt Securities, as evidenced by their execution thereof.

Section 2.02 . Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication shall be in substantially the following form:

CERTIFICATE OF AUTHENTICATION

This is one of the Subordinated Debt Securities of the series designated herein referred to in the within-mentioned Subordinated Debt Securities Indenture.

 
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Dated:
 
 
     
THE BANK OF NEW YORK MELLON,
LONDON BRANCH
 
as Trustee
 
     
     
By:
   
 
Authorized Signatory
 
     


ARTICLE 3
T HE S UBORDINATED D EBT S ECURITIES

Section 3.01 . Amount Unlimited, Issuable in Series. The aggregate principal amount of Subordinated Debt Securities which may be authenticated and delivered under this Subordinated Debt Securities Indenture is unlimited. The Subordinated Debt Securities may be issued in one or more series.

There shall be established by or pursuant to action of the Board of Directors of the Company or established in one or more indentures supplemental hereto, prior to the initial issuance of Subordinated Debt Securities of any series,

(a)         the title of the Subordinated Debt Securities of the series (which shall distinguish the Subordinated Debt Securities of the series from all other Subordinated Debt Securities);

(b)         any limit upon the aggregate principal amount of the Subordinated Debt Securities of the series which may be authenticated and delivered under this Subordinated Debt Securities Indenture (except for Subordinated Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Subordinated Debt Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07 and except for any Subordinated Debt Securities which, pursuant to Section 3.03 are deemed never to have been authenticated and delivered hereunder);

(c)         the date or dates, if any, on which the principal of (and premium, if any, on) the Subordinated Debt Securities of the series is payable;

(d)         the rate or rates, if any, at which the Subordinated Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07(a), the Deferred Payment Date(s) or other terms applicable to deferred payments and, in the case of registered Subordinated Debt Securities, the Regular Record Date for the interest payable on any Interest Payment Date, the Deferred Record Date for
 
 
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the interest payable on any Deferred Payment Date and any dates required to be established pursuant to Section 7.01;

(e)         whether any premium, upon redemption or otherwise, shall be payable by the Company on Subordinated Debt Securities of the series;

(f)         the place or places where the principal of (and premium, if any) and any interest on Subordinated Debt Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and interest on Subordinated Debt Securities of such series, at least one of such Paying Agents having offices or agencies in the Borough of Manhattan, The City of New York and if the Subordinated Debt Securities are listed on the Luxembourg Stock Exchange, in Luxembourg;

(g)         other than with respect to any redemption of the Subordinated Debt Securities pursuant to Section 11.08, whether or not such series of Subordinated Debt Securities are to be redeemable, in whole or in part, at the Company’s option and, if so redeemable, the period or periods within which, the price or prices at which and the terms and conditions upon which, Subordinated Debt Securities of the series may be redeemed, including the date referred to in Section 11.08;

(h)         the obligation, if any, of the Company to redeem or purchase Subordinated Debt Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which Subordinated Debt Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

(i)         if other than denominations of $25 and any multiple thereof, the denominations in which Subordinated Debt Securities of the series in each applicable form shall be issuable;

(j)         if other than the principal amount thereof, the portion, or the manner of calculation of such portion, of the principal amount of Subordinated Debt Securities of the series which shall be payable upon a declaration of acceleration or acceleration of the Maturity thereof pursuant to Section 5.02, upon redemption of Subordinated Debt Securities of any series which are redeemable before their Stated Maturity, or which the Trustee shall be entitled to file and prove a claim pursuant to Section 5.04;

(k)        if Additional Amounts, pursuant to Section 10.04, will not be payable;

(l)         whether the Subordinated Debt Securities of any series shall be exchangeable at the option of the Company into Dollar Preference Shares or other
 
 
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securities of the Company (“ Exchange Securities ”) pursuant to Article 13 and if so the terms of the Dollar Preference Shares or the nature and terms of the Exchange Securities into which such Subordinated Debt Securities are exchangeable and any additional or other provisions relating to such exchange;

(m)         if other than Dollars, provisions, if any, for the Subordinated Debt Securities of the series to be denominated, and payments thereon to be made, in Foreign Currencies and specifying the manner and place of payment thereon and any other terms with respect thereto;

(n)         if other than the coin or currency in which the Subordinated Debt Securities of that series are denominated, the coin or currency in which payment of the principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of such series shall be payable;

(o)         if the principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of such series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Subordinated Debt Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;

(p)         whether the Subordinated Debt Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and the initial Holder with respect to such Global Security or Subordinated Debt Securities;

(q)         if the Subordinated Debt Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Subordinated Debt Security of such series or otherwise) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;

(r)         if the amounts of payments of principal of (and premium, if any) or interest, if any, on the Subordinated Debt Securities of the series may be determined with reference to an index or are otherwise not fixed on the original issue date thereof, the manner in which such amounts shall be determined and the Calculation Agent, if any, who shall be appointed and authorized to calculate such amounts;

(s)         any other Events of Default, Defaults or covenants with respect to the Subordinated Debt Securities of such series and if other than as specified in Section 5.03, the terms of any Default;

(t)         if other than as provided in Section 12.01, the subordination terms with respect to the Subordinated Debt Securities of the series;
 
 
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(u)         the forms of Subordinated Debt Securities of the series; and

(v)       any other terms of the series (which terms shall not be inconsistent with the provisions of this Subordinated Debt Securities Indenture, except as permitted by Section 9.01(d)).

All Subordinated Debt Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such action or in any such indenture supplemental hereto.

If the forms of Subordinated Debt Securities of any series, or any of the terms thereof, are established by action taken by the Board of Directors of the Company, copies of the Board Resolutions in respect thereof shall be delivered to the Trustee at or prior to the delivery of the Company Order pursuant to Section 3.03 for the authentication and delivery of such Subordinated Debt Securities.

Section 3.02 . Denominations. The Subordinated Debt Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specification with respect to Subordinated Debt Securities of any series, the Subordinated Debt Securities of each series shall be issuable in denominations of $25 each and any integral multiple thereof. Unless otherwise specified in accordance with Section 3.01, any Global Security issued and delivered to the Holder shall be issued in the form of units with each $25 principal amount of such Global Security constituting one unit.

Section 3.03 . Execution, Authentication, Delivery and Dating. The Subordinated Debt Securities shall be executed on behalf of the Company by any two Directors or by one Director and a Deputy Secretary to the Company. The signature of any of these officers on the Subordinated Debt Securities may be manual or facsimile. Subordinated Debt Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Subordinated Debt Securities.

At any time and from time to time after the execution and delivery of this Subordinated Debt Securities Indenture, the Company may deliver Subordinated Debt Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Subordinated Debt Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Subordinated Debt Securities. In authenticating such Subordinated Debt Securities and accepting the additional responsibilities under this Subordinated Debt Securities Indenture in relation to such Subordinated Debt Securities the Trustee shall be entitled to receive, and
 
 
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(subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Subordinated Debt Securities Indenture.

The Trustee shall not be required to authenticate such Subordinated Debt Securities if the issue of such Subordinated Debt Securities pursuant to this Subordinated Debt Securities Indenture will affect the Trustee’s own rights, duties or immunities under the Subordinated Debt Securities and this Subordinated Debt Securities Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

Each registered Subordinated Debt Security shall be dated the date of its authentication.

No Subordinated Debt Security appertaining thereto shall be entitled to any benefit under this Subordinated Debt Securities Indenture or be valid or obligatory for any purpose unless there appears on such Subordinated Debt Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual signature, and such certificate upon any Subordinated Debt Security shall be conclusive evidence, and the only evidence, that such Subordinated Debt Security has been duly authenticated and delivered hereunder and that such Subordinated Debt Security is entitled to the benefits of this Subordinated Debt Securities Indenture. Notwithstanding the foregoing, if any Subordinated Debt Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Subordinated Debt Security to the Trustee for cancellation as provided in Section 3.09, for all purposes of this Subordinated Debt Securities Indenture, such Subordinated Debt Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefit of this Subordinated Debt Securities Indenture.

Section 3.04 . Temporary Subordinated Debt Securities. Pending the preparation of definitive Subordinated Debt Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Subordinated Debt Securities substantially of the tenor of the definitive Subordinated Debt Securities in lieu of which they are issued, which Subordinated Debt Securities may be printed, lithographed, typewritten, photocopied or otherwise produced. Temporary Subordinated Debt Securities shall be issuable as registered Subordinated Debt Securities without coupons attached in any authorized denomination, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Subordinated Debt Securities may determine, all as evidenced by such execution.

 
 
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If temporary Subordinated Debt Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Subordinated Debt Securities, definitive Subordinated Debt Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Subordinated Debt Securities of such series, the temporary Subordinated Debt Securities of such series shall be exchangeable for definitive Subordinated Debt Securities of such series containing identical terms and provisions upon surrender of the temporary Subordinated Debt Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Subordinated Debt Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate principal amount of definitive Subordinated Debt Securities of the same series of authorized denominations containing identical terms and provisions. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Subordinated Debt Securities of any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Subordinated Debt Securities Indenture as definitive Subordinated Debt Securities of such series.

Section 3.05 .  Registration, Registration of Transfer and Exchange.   (a)  Global Securities . This Section 3.05(a) shall apply to Global Securities unless   otherwise specified, as contemplated by Section 3.01.

Except as otherwise specified as contemplated by Section 3.01 hereof, the Subordinated Debt Securities shall be initially issued and represented by one or more Global Securities in registered form, without Coupons attached thereto, which shall be authenticated as contemplated by this Indenture.

Each Global Security in registered form authenticated under this Subordinated Debt Securities Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Subordinated Debt Security for all purposes of this Subordinated Debt Securities Indenture. Except as otherwise specified as contemplated by Section 3.01 hereof, each Global Security in registered form authenticated under this Indentures shall be initially registered in the name of DTC only.

With respect to Global Securities in registered form, unless the Global Security is presented by an authorized representative of the Holder to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Holder and any payment is made to such nominee, any transfer, pledge or other use of the Global Security in registered form for value or otherwise shall be wrongful since the registered owner of such Global Security, the nominee of the Holder, has an interest in such Global Security.
 
 
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Except as otherwise specified as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Subordinated Debt Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary notifies the Trustee that it is unwilling or unable to continue to act as Depositary and a successor depositary is not appointed by the Trustee within 120 days of such notification, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Subordinated Debt Securities when due, or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series should be exchanged for definitive Subordinated Debt Securities of that series in registered form. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Subordinated Debt Securities in registered form bearing interest (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which such interest shall accrue, the same Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Subordinated Debt Securities in registered form shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.
 
Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be exchangeable for Subordinated Debt Securities issuable in authorized denominations of a like aggregate principal amount and tenor.

No Global Security in registered form may be transferred except as a whole by the Holder to a nominee of the Holder or by the Holder or any such nominee to a successor of the Holder or a nominee of such successor. Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Subordinated Debt Securities in definitive form and will not be considered the holders thereof for any purpose under this Subordinated Debt Securities Indenture.

In the event that a Global Security is surrendered for redemption or exchange for Dollar Preference Shares or Exchange Securities in part pursuant to Section 11.07 or Section 13.05, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.
 
 
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The Agent Members and any other beneficial owners shall have no rights under this Subordinated Debt Securities Indenture with respect to any Global Security held on their behalf by a Holder, and such Holder may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Holder or impair, as between any such Holder or other clearance service and its Agent Members and Holders, the operation of customary practices governing the exercise of the rights of a holder of any security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Subordinated Debt Securities Indenture.

In connection with any exchange of interests in a Global Security for definitive Subordinated Debt Securities of another authorized form, as provided in this subsection 3.05(a), then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Subordinated Debt Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Subordinated Debt Securities without charge (unless the definitive Subordinated Debt Securities in registered form are to be issued to an Excepted Person (as defined in Section 13.10) in which case the Company or Trustee may require payment of any taxes or governmental charges arising) and the Trustee shall authenticate and deliver, in exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Subordinated Debt Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 3.05 shall be exchangeable for Subordinated Debt Securities issuable in the denominations specified as contemplated by Section 3.01 and registered in such names as the Holder of such Global Security shall direct. If a definitive Subordinated Debt Security in registered form is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant Interest Payment Date, interest will not be payable on such Interest Payment Date in respect of such definitive Subordinated Debt Security, but will be payable on such Interest Payment Date only to the person to whom payments of interest in respect of such portion of such Global Security are payable.
 
 
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A Depositary may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities.

(b)       Except as otherwise specified pursuant to Section 3.01, registered Subordinated Debt Securities of any series may only be exchanged for a like aggregate principal amount of registered Subordinated Debt Securities of such series of other authorized denominations containing identical terms and provisions. Subordinated Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Subordinated Debt Security or Subordinated Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.

Except as otherwise specified pursuant to Section 3.01, the Company shall cause to be kept in the principal corporate trust office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “ Subordinated Debt Security Register ” provided , no such Subordinated Debt Security Register shall be maintained in any office or agency in the United Kingdom other than in Scotland) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of registered Subordinated Debt Securities and of transfers of such Subordinated Debt Securities. The Trustee is hereby appointed “ Subordinated Debt Security Registrar ” for the purpose of registering Subordinated Debt Securities in   registered form and transfers of Subordinated Debt Securities in registered form as herein provided.

Registered Subordinated Debt Securities shall be transferable only on the Subordinated Debt Security Register. Upon surrender for registration of transfer of any registered Subordinated Debt Security of any series, together with the form of transfer endorsed on it, duly completed and executed at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver to the address specified in the form of transfer, within three Business Days, in the name of the designated transferee or transferees, one or more new registered Subordinated Debt Securities of the same series of any authorized denominations containing identical terms and provisions, of a like aggregate principal amount. If only part of a registered Subordinated Debt Security is transferred, a new registered Subordinated Debt Security of an aggregate principal amount equal to the amount not being transferred shall be executed by the Company, and authenticated and delivered by the Trustee to the transferor, in the name of the
 
 
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transferor, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 received the registered Subordinated Debt Security. The new registered Subordinated Debt Security will be delivered to the transferor by uninsured post at the risk of the transferor to the address of the transferor appearing in the Subordinated Debt Security Register.

All Subordinated Debt Securities issued upon any registration of transfer or exchange of Subordinated Debt Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Subordinated Debt Securities Indenture, as the Subordinated Debt Securities surrendered upon such registration of transfer or exchange.

Every registered Subordinated Debt Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Subordinated Debt Security Registrar duly executed, by the registered Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Subordinated Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Subordinated Debt Securities, other than exchanges pursuant to Section 3.04, 9.06 or 11.07 not involving any transfer.

The Company shall not be required (i) to issue, register the transfer of or exchange any Subordinated Debt Security of any series during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Subordinated Debt Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the day of the giving of such notice, or (ii) to register the transfer of or exchange any Subordinated Debt Security so selected for redemption in whole or in part, except the unredeemed portion of any Subordinated Debt Securities being redeemed in part.

Section 3.06 . Mutilated, Destroyed, Lost and Stolen Subordinated Debt Securities. If any mutilated Subordinated Debt Security (including any Global   Security) is surrendered to the Trustee, the Company may execute and the Trustee shall, in the case of a Subordinated Debt Security, authenticate and deliver in exchange therefor a new Subordinated Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

 
 
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If there shall be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Subordinated Debt Security (including any Global Security) and (ii) such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Trustee that such Subordinated Debt Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver in lieu of any such destroyed, lost or stolen Subordinated Debt Security a new Subordinated Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Subordinated Debt Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Subordinated Debt Security, pay such Subordinated Debt Security.

Upon the issuance of any new Subordinated Debt Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Subordinated Debt Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Subordinated Debt Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Subordinated Debt Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Subordinated Debt Securities Indenture equally and proportionately with any and all other Subordinated Debt Securities of that series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities.

Section 3.07 . Payment; Interest Rights Preserved. (a) Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, if the Company does not make a payment of principal of (and premium, if any, on) or interest, if any, with respect to any series of Subordinated Debt Securities on the original due date for payment, the obligation to make such payment shall be deferred until (i) in the case of a payment of interest, the date upon which a dividend is paid on any class of the Company’s share capital and (ii) in the case of a payment of principal, the first Business Day after the date that falls six months after the original due date for payment (a “ Deferred Payment Date ”). Failure by the Company to make any such payment prior to such Deferred Payment Date shall not constitute a Default by the Company or otherwise allow any Holder to sue the Company for such
 
 
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payment or take any other action. Each payment so deferred will accrue interest at the rate prevailing immediately before the original due date with respect to such payment. Any amount the due date of which is deferred pursuant to the above shall not be treated as due for any purpose (including, without limitation, for the purposes of ascertaining whether or not a Default has occurred) until the Deferred Payment Date.

(b)       Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, interest, if any, on any Subordinated Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid, in the case of registered Subordinated Debt Securities, to the Person in whose name that Subordinated Debt Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest or, in the case of Global Securities held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United Kingdom for collection by the Holder.

In the case of registered Subordinated Debt Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained by the payee with, a bank in The City of New York.

In the case of registered Subordinated Debt Securities where payment is to be made in a Foreign Currency, payment will be made as established pursuant to Section 3.01.

Any interest on any Subordinated Debt Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “ Deferred Interest ”. Deferred Interest on any registered Subordinated Debt Security of any series shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue then of having been such Holder, and such Deferred Interest may be paid, in the case of registered Subordinated Debt Securities, to the Person in whose name that Subordinated Debt Security (or one or more Predecessor Subordinated Debt Securities) is registered at the close of business on the Deferred Record Date for such interest or may be paid by the Company, at its election, to the person who is the Holder on the record date established by the Company for such purpose.

Subject to the foregoing provisions of this Section, each Subordinated Debt Security delivered under this Subordinated Debt Securities Indenture upon registration of transfer of or in exchange for or in lieu of any other Subordinated Debt Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Subordinated Debt Security.
 
 
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Section 3.08 . Persons Deemed Owners. Prior to due presentment of a registered Subordinated Debt Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Subordinated Debt Security is registered as the owner of such Subordinated Debt Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Subordinated Debt Security and for all other purposes whatsoever, whether or not such Subordinated Debt Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

Section 3.09 . Cancellation. All Subordinated Debt Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Subordinated Debt Securities previously authenticated and delivered hereunder and all Subordinated Debt Securities so delivered shall be promptly cancelled by the Trustee. No Subordinated Debt Securities shall be authenticated in lieu of or in exchange for any Subordinated Debt Securities cancelled as provided in this Section, except as expressly permitted by the provisions of the Subordinated Debt Securities of any series or pursuant to the provisions of this Subordinated Debt Securities Indenture. The Trustee shall deliver to the Company all cancelled Subordinated Debt Securities held by the Trustee.

Section 3.10 . Computation of Interest. Except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series, payments of interest on the Subordinated Debt Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

Section 3.11 . Cusip Numbers. The Company in issuing any series of the Subordinated Debt Securities may use CUSIP, “ISIN” and/or “Common Code” numbers (if then generally in use) or any successor to such numbers and thereafter with respect to such series, the Trustee shall use “CUSIP”, “ISIN” and/or “Common Code” numbers or successor numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Subordinated Debt Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Subordinated Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP”, “ISIN” and/or “Common Code” numbers or successor numbers.
 
 
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ARTICLE 4
S ATISFACTION AND D ISCHARGE

Section 4.01 . Satisfaction and Discharge of Subordinated Debt Securities Indenture. This Subordinated Debt Securities Indenture shall upon Company   Request cease to be of further effect with respect to Subordinated Debt Securities of any series (except as to any surviving rights of registration of transfer or exchange of Subordinated Debt Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series when

(a)  
either

(i)         all Subordinated Debt Securities of such series theretofore authenticated and delivered (other than (A) Subordinated Debt Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Subordinated Debt Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

(ii)       all such Subordinated Debt Securities not theretofore delivered to the Trustee for cancellation

(A)         have become due and payable or will become due and payable at their Stated Maturity within one year, or

(B)         are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or

(C)         are to be exchanged for Dollar Preference Shares or Exchange Securities and notice of exchange of such Subordinated Debt Securities for Dollar Preference Shares or Exchange Securities pursuant to Article 13 shall have been given,

and the Company has deposited or caused to be deposited with the Trustee, as trust funds in trust for the purpose, an amount in cash, or U.S. Government Obligations (with respect to Subordinated Debt Securities denominated in Dollars) or Foreign Government Securities (with respect to Subordinated Debt Securities denominated in the same Foreign
 
 
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Currency) maturing, in the case of (A) and (B) above, as to principal and interest, if any, and, in the case of (C) above, as to accrued interest, if any, in such amounts and at such times as will ensure the availability of cash sufficient to pay and discharge all claims with respect to such Subordinated Debt Securities not theretofore delivered to the Trustee for cancellation, in the case of (A) and (B) above, for principal (and premium, if any) and accrued interest, if any, and, in the case of (iii) above, as to accrued interest, if any, to the date of such deposit (in the case of Subordinated Debt Securities which have become due and payable) or to the Redemption Date or the Exchange Date, as the case may be;

(b)         the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Subordinated Debt Securities of such series; and

(c)         the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Subordinated Debt Securities Indenture with respect to the Subordinated Debt Securities of such series have been complied with.

Notwithstanding any satisfaction and discharge of this Subordinated Debt Securities Indenture, the obligations of the Company to the Trustee under Section 6.07, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if cash, U.S. Government Obligations and/or Foreign Government Securities shall have been deposited with the Trustee pursuant to subclause 4.01(a)(ii) of clause 4.01(a) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive such satisfaction and discharge.

Section 4.02 . Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.03, all cash, U.S. Government Obligations and Foreign Government Securities deposited with the Trustee pursuant to Section 4.01 shall be held in trust and such cash and the proceeds from such U.S. Government Obligations and/or Foreign Government Securities shall be applied by it, in accordance with the provisions of the Subordinated Debt Securities of such series, and this Subordinated Debt Securities Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for the payment of which such cash, U.S. Government Obligations and/or Foreign Government Securities have been deposited with the Trustee.

Section 4.03 . Repayment to Company. The Trustee, the Calculation Agent and any Paying Agent promptly shall pay to the Company upon Company
 
 
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Request any excess money, U.S. Government Obligations and/or Foreign Government Securities held by them at any time with respect to any series of Subordinated Debt Securities.


ARTICLE 5
R EMEDIES

Section 5.01 . Events of Default. “ Event of Default ”, wherever used herein with respect to Subordinated Debt Securities of a particular series, means (a) the making of an order by a court of competent jurisdiction which is not successfully appealed within 30 days of the making of such order, or valid adoption by the shareholders of the Company of an effective resolution, for the winding-up of the Company (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency) or (b) any other Event of Default provided with respect to Subordinated Debt Securities of such series pursuant to Section 3.01.

Section 5.02 . Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Subordinated Debt Securities of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series may declare the principal amount (or, in the case of Discount Securities, the accreted face amount together with accrued interest, if any, on) of all the Subordinated Debt Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.

At any time after such a declaration of acceleration with respect to Subordinated Debt Securities of any series has been made but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holder or Holders of a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series, by written notice to the Company and the Trustee, may rescind or annul such declaration of acceleration and its consequences (including any Event of Default under another series of Subordinated Debt Securities arising therefrom) but only if

(a)        the Company has paid or deposited with the Trustee a sum sufficient to pay

(i)       the principal of (and premium, if any, on) any Subordinated Debt Securities of such series which have become due otherwise than by such declaration of acceleration and any due and payable interest, and
 
 
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overdue interest, if any, thereon at the rate or rates prescribed therefor in such Subordinated Debt Securities,

(ii)      all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(b)       all Events of Default with respect to Subordinated Debt Securities of such series have been cured or waived as provided by Section 5.13.

No such rescission or annulment shall affect any subsequent default or impair any right consequent thereon.

Section 5.03 . Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee. Except as otherwise provided as contemplated by   Section 3.01 with respect to any series of Subordinated Debt Securities, “ Default ” wherever used herein with respect to Subordinated Debt Securities of a particular series, means any one of the following events (whatever the reason for such Default and whether it shall be voluntary or involuntary or be effected by operation of law pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a)         the Company fails to pay any installment of interest on any Subordinated Debt Security of such series on or before its Deferred Payment Date and such failure continues for 14 days; or

(b)         the Company fails to pay all or any part of the principal of (and premium, if any, on) any Subordinated Debt Security of such series on its Deferred Payment Date, or when such principal shall otherwise become due and payable, whether upon redemption or otherwise, and such failure continues for seven days;

If a Default occurs and is continuing, the Trustee may commence a proceeding in Scotland (but not elsewhere) for the winding-up of the Company, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding Subordinated Debt Securities to be due and payable.

The Trustee and Holders of Subordinated Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off or counterclaim or combination of accounts with respect to the Subordinated Debt Securities or this Subordinated Debt Securities Indenture (or between the obligations under or in respect of any Subordinated Debt Securities and any liability owed by a Holder or the Trustee to the Company) that they might otherwise have against the Company, whether before or during a winding up of the Company.
 
 
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Notwithstanding the foregoing, failure to make any payment in respect of a series of Subordinated Debt Securities shall not be a Default in respect of such Subordinated Debt Securities if such payment is withheld or refused (i) in order to comply with any fiscal or other law or regulation or with the order of any court of competent jurisdiction, in each case applicable to such payment, or (ii) in case of doubt as to the validity or applicability of any such law, regulation or order, in accordance with advice given as to such validity or applicability at any time before the expiry of such period of 14 days (in the case of payments under clause 5.03(a) above) or seven days (in the case of payments under clause 5.03(b) above) by independent legal advisers acceptable to the Trustee, provided, however, that the Trustee may by notice to the Company require the Company to take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days (in the case of payments under clause 5.03(a) above) or seven days (in the case of payments under clause 5.03(b) above) after the Trustee gives written notice to the Company informing it of such resolution.

No recourse for the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security, or for any claim based thereon or otherwise in respect thereof and no recourse under or upon any obligation, covenant or agreement of the Company in this Subordinated Debt Securities Indenture, or in any Subordinated Debt Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, past, present or future, of the Company or of any successor corporation of the Company, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that to the extent lawful all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Subordinated Debt Securities Indenture and the issue of the Subordinated Debt Securities.

Section 5.04 . Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
 
 
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reorganization, arrangement, adjustment, composition, winding-up or other judicial proceeding relative to the Company or any other obligor upon the Subordinated Debt Securities of any series or to the property of the Company or such other obligor or their creditors (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency), the Trustee (irrespective of whether the principal of the Subordinated Debt Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or interest, if any) shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Subordinated Debt Security to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.07.

Subject to Article 8 and Section 9.02, nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of any Subordinated Debt Security any plan of reorganization, arrangement, adjustment, or composition affecting any Subordinated Debt Securities or the rights of any Holder of any Subordinated Debt Security or to authorize the Trustee to vote in respect of the claim of any such Holder or holder in any such proceeding.

The provisions of this Section 5.04 are subject to the provisions of Section 12.01.

Section 5.05 . Trustee May Enforce Claims Without Possession of Subordinated Debt Securities. All rights of action and claims under this   Subordinated Debt Securities Indenture or the Subordinated Debt Securities may be prosecuted and enforced by the Trustee without the possession of any of the Subordinated Debt Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel (subject, with regard to the Company, to the provisions of Section 12.01) be for the ratable benefit of the Holders of the Subordinated Debt Securities in respect of which such judgment has been recovered.
 
 
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Section 5.06 . Application of Money Collected. Any money collected by the Trustee pursuant to this Article in respect of any series of Subordinated Debt Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (and premium, if any) or interest, if any, upon presentation of such Subordinated Debt Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts applicable to such series of Subordinated Debt Securities in respect of which or for the benefit of which such money has been collected due the Trustee under Section 6.07;

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest, if any, on such series of Subordinated Debt Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Subordinated Debt Securities for principal (and premium, if any) and interest, if any, respectively; and

THIRD: To the payment of the balance, if any, to the Company or any other Person or Persons legally entitled thereto.

Section 5.07 . Limitation on Suits. No Holder of any Subordinated Debt Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Subordinated Debt Securities Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(a)         such Holder has previously given written notice to the Trustee of a continuing Event of Default or Default with respect to Subordinated Debt Securities of the same series specifying such Event of Default or Default and stating that such notice is a “ Notice of Default ” hereunder;

(b)         the Holders of not less than 25% in aggregate principal amount of the Outstanding Subordinated Debt Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default or Default in its own name, as Trustee hereunder;

(c)         such Holder of a Subordinated Debt Security has offered to the Trustee reasonable indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;
 
 
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(d)         the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(e)         no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series;

it being understood and intended that no one or more Holders of Subordinated Debt Securities of a particular series shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Subordinated Debt Securities Indenture to affect, disturb or prejudice the rights of any other such Holders or holders, or to obtain or to seek to obtain priority or preference over any other such Holders or holders or to enforce any right under this Subordinated Debt Securities Indenture, except in the manner herein provided and for the equal and ratable benefit of all Holders of Subordinated Debt Securities of such series.

Section 5.08 . Unconditional Right of Holders to Receive Principal, Premium and Interest, if any. Notwithstanding any other provision in this   Subordinated Debt Securities Indenture, the Holder of any Subordinated Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Subordinated Debt Security on the respective Stated Maturities as expressed in such Subordinated Debt Security (or, in the case of redemption or exchange, on the Redemption Date or Exchange Date, as the case may be) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

Section 5.09 . Restoration of Rights and Remedies. If the Trustee or any Holder of any Subordinated Debt Security has instituted any proceeding to enforce any right or remedy under this Subordinated Debt Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders of Subordinated Debt Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Subordinated Debt Securities shall continue as though no such proceeding had been instituted.

Section 5.10 . Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Subordinated Debt Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Subordinated Debt Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or
 
 
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now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 5.11 . Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Subordinated Debt Security to exercise any right or remedy accruing upon any Event of Default or Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Subordinated Debt Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Subordinated Debt Securities, as the case may be.

Section 5.12 . Control by Holders. The Holders of a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Subordinated Debt Securities of such series, provided that

(a)         such direction shall not be in conflict with any rule of law or with this Subordinated Debt Securities Indenture;

(b)         the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders of any Subordinated Debt Securities of any series not taking part in such direction with respect to which the Trustee is acting as the Trustee; and

(c)         the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

Section 5.13 . Waiver of past Defaults. The Holders of not less than a majority in aggregate principal amount of the Outstanding Subordinated Debt Securities of any series may on behalf of the Holders of all the Subordinated Debt Securities of such series waive any past Event of Default or Default hereunder with respect to such series and its consequences, except an Event of Default or Default

(a)         in the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security of such series, or

(b)         in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Subordinated Debt Security of such series affected.
 
 
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Upon any such waiver, such Event of Default or Default shall cease to exist, and any Event of Default or Default with respect to any series arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Subordinated Debt Securities Indenture, but no such waiver shall extend to any subsequent or other Event of Default or Default or impair any right consequent thereon.

Section 5.14 . Undertaking for Costs. All parties to this Subordinated Debt Securities Indenture agree, and each Holder of any Subordinated Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Subordinated Debt Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Subordinated Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt Security on or after the respective Stated Maturities expressed in such Subordinated Debt Security (or, in the case of redemption or exchange, on or after the Redemption Date or the Exchange Date, as the case may be).


ARTICLE 6
T HE T RUSTEE

Section 6.01 . Certain Duties and Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Subordinated Debt Securities Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Subordinated Debt Securities Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.

Section 6.02 . Notice of Defaults. Within 90 days after the occurrence of any Event of Default or Default hereunder with respect to Subordinated Debt
 
 
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Securities of any series of which a Responsible Officer of the Trustee has actual knowledge the Trustee shall transmit in the manner and to the extent provided in Section 1.06 to Holders of Subordinated Debt Securities of such series notice of such Event of Default or Default hereunder known to the Trustee, unless such Event of Default or Default shall have been cured or waived; provided, however, that, the Trustee shall be protected in withholding such notice if it determines in good faith that the withholding of such notice is in the interest of the Holders of Subordinated Debt Securities of such series.

Section 6.03 . Certain Rights of Trustee. Subject to the provisions of Section 6.01:

(a)         the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)       any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution;

(c)      whenever in the administration of this Subordinated Debt Securities Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

(d)       the Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e)         the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Subordinated Debt Securities Indenture at the request or direction of any of the Holders pursuant to this Subordinated Debt Securities Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f)         the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion,
 
 
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report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit at the reasonable expense of the Company and shall incur no liability by reason of such inquiry or investigation; provided that the Trustee shall not be entitled to such information which the Company is prevented from disclosing as a matter of law or contract;

(g)         the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent (other than an officer or employee of the Trustee) or attorney appointed with due care by it hereunder;

(h)         the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Subordinated Debt Securities Indenture;

(i)         the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee; and

(j)         the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder.

Section 6.04. Not Responsible for Recitals or Issuance of Subordinated Debt Securities . The recitals contained herein and in the Subordinated Debt   Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Subordinated Debt Securities Indenture or of the Subordinated Debt Securities, except that the Trustee represents and warrants that it has duly authorized, executed and delivered this Subordinated Debt Securities Indenture. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Subordinated Debt Securities or the proceeds thereof.

Section 6.05 . May Hold Subordinated Debt Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Subordinated Debt Security Registrar and any Calculation Agent or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Subordinated Debt Securities and, subject to Sections 6.08 and 6.13, may
 
 
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otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Subordinated Debt Security Registrar, Calculation Agent or such other agent.

Section 6.06 . Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

Section 6.07 .  Compensation and Reimbursement.

The Company agrees

(a)         to pay to the Trustee from time to time compensation for all services rendered by it hereunder as agreed upon in writing by the Company from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(b)       except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Subordinated Debt Securities Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and

(c)       to indemnify the Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or expense (including legal fees and expenses) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder but excluding any tax liabilities of the Trustee in respect of its net profits.

The Trustee shall notify the Company in writing of the commencement of any action or claim in respect of which indemnification may be sought promptly after a Responsible Officer of the Trustee becomes aware of such commencement (provided that the failure to make such notification shall not affect the Trustee’s rights hereunder) and the Company shall be entitled to participate in, and to the extent it shall wish, to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Trustee. The Trustee shall not compromise or settle any such action or claim without the written consent of the Company, which consent shall not be unreasonably withheld.
 
 
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As security for the performance of the obligations of the Company under this Section, the Trustee shall have a senior claim to which the Subordinated Debt Securities are hereby made subordinate, upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (or premium, if any) or interest, if any, on the Subordinated Debt Securities.

Section 6.08 . Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Subordinated Debt Securities Indenture.

Section 6.09 . Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder with respect to each series which shall be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State or District of Columbia authority and, if there be such corporation willing and able to act as trustee on reasonable and customary terms, having its corporate trust office or agency in the Borough of Manhattan, The City of New York, New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 6.

Section 6.10 . Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

(b)      The Trustee may resign at any time with respect to the Subordinated Debt Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Subordinated Debt Securities of such series.
 
 
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(c)         The Trustee may be removed at any time with respect to the Subordinated Debt Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Subordinated Debt Securities of such series.

(d)         If at any time:

(i)         the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Subordinated Debt Security of the series as to which the Trustee has a conflicting interest for at least six months, or

(ii)         the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Subordinated Debt Security for at least six months, or

(iii)         the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge, or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or

(iv)         the Trustee shall fail to perform its obligations to the Company under the Subordinated Debt Securities Indenture in any material respect,

then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to any or all series of Subordinated Debt Securities or (B) subject to Section 5.14 (and except in the case of subparagraph 6.10(d)(iv) above), any Holder who has been a bona fide Holder of a Subordinated Debt Security for at least six months (and, in the case of Section 6.10(d)(i) above, who is a Holder of a Subordinated Debt Security of the series as to which the Trustee has a conflicting interest) may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Subordinated Debt Securities and the appointment of a successor Trustee or Trustees.

 
 
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(e)       If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Subordinated Debt Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Subordinated Debt Securities of such series (it being understood that any successor Trustee may be appointed with respect to the Subordinated Debt Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Subordinated Debt Securities of any particular series), and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Subordinated Debt Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Subordinated Debt Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Subordinated Debt Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Subordinated Debt Securities of any series shall have been so appointed by the Company or the Holders of Subordinated Debt Securities of such series and accepted appointment in the manner hereinafter required by Section 6.11, any Holder who has been a bona fide Holder of a Subordinated Debt Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Subordinated Debt Securities of such series.

(f)       The Company shall give notice of each resignation and each removal of the Trustee with respect to the Subordinated Debt Securities of any series and each appointment of a successor Trustee with respect to the Subordinated Debt Securities of any series in the manner and to the extent provided in Section 1.06. Each notice shall include the name of the successor Trustee with respect to the Subordinated Debt Securities of such series and the address of its Corporate Trust Office.

Section 6.11 .  Acceptance of Appointment by Successor.

(a)       In case of the appointment hereunder of a successor Trustee with respect to all Subordinated Debt Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee, all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.
 
 
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(b)         In case of the appointment hereunder of a successor Trustee with respect to the Subordinated Debt Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Subordinated Debt Securities of such series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Subordinated Debt Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Debt Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Subordinated Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Subordinated Debt Securities of such series to which the appointment of such successor Trustee relates.

(c)         Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section 6.11, as the case may be.

(d)         No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 6.
 
 
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Section 6.12 . Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or   with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Subordinated Debt Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Subordinated Debt Securities.

Section 6.13 . Preferential Collection of Claims. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Subordinated Debt Securities of a series), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

Section 6.14 . Appointment of Authenticating Agent. The Trustee may at any time appoint an Authenticating Agent or Agents with respect to one or more series of Subordinated Debt Securities which shall be authorized to act on behalf of the Trustee to authenticate Subordinated Debt Securities of such series upon original issue, or issued upon exchange, registration of transfer or partial redemption thereof or in lieu of destroyed, lost or stolen Subordinated Debt Securities, and Subordinated Debt Securities so authenticated shall be entitled to the benefits of this Subordinated Debt Securities Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Subordinated Debt Securities Indenture to the authentication and delivery of Subordinated Debt Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation or national banking association organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State or District of Columbia authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be
 
 
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its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation or national banking association into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or national banking association resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation or national banking association succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation or national banking association shall be otherwise eligible under this Section 6.14, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice to the Holders of Subordinated Debt Securities in the manner and to the extent provided in Section 1.06. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 6.14.

The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.14.

If an appointment with respect to one or more series is made pursuant to this Section, the Subordinated Debt Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

This is one of the Subordinated Debt Securities referred to in the within- mentioned Subordinated Debt Securities Indenture.
 
 
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THE BANK OF NEW YORK MELLON
LONDON BRANCH
 
as Trustee
 
     
     
By:
   
 
as Authenticating Agent
 
     
     
By:    
  Authorized Signatory  

 
 
ARTICLE 7
H OLDERS L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY

Section 7.01 . Company to Furnish Trustee Names and Addresses of Holders. The Company, with respect to any series of Subordinated Debt   Securities in registered form, will furnish or cause to be furnished to the Trustee

(a)         quarterly, not more than 15 days after each Regular Record Date (or after each of the dates to be specified for such purpose for non-interest bearing Subordinated Debt Securities and Subordinated Debt Securities on which interest is paid less frequently than quarterly as contemplated by Section 3.01), a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of registered Subordinated Debt Securities as of such Regular Record Date or such specified date, and

(b)         at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.

The Company need not furnish or cause to be furnished to the Trustee pursuant to this Section 7.01 the names and addresses of Holders of registered Subordinated Debt Securities so long as the Trustee acts as Subordinated Debt Security Registrar with respect to such series of Subordinated Debt Securities.

Section 7.02 .  Preservation of Information; Communication to Holders.

(a)       The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders (i) contained in the most recent list furnished to the Trustee as provided in Section 7.01 and (ii) received by the
 
 
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Trustee in its capacity as Paying Agent or Capital Security Registrar (if so acting). The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.

(b)         The rights of the Holders of Subordinated Debt Securities of any series to communicate with other Holders with respect to their rights under this Subordinated Debt Securities Indenture or under the Subordinated Debt Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

(c)         Every Holder, by receiving and holding a Subordinated Debt Security, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.02(b) or otherwise made pursuant to the Trust Indenture Act.

Section 7.03 .  Reports by Trustee.

(a)         On or before May 15 in each year following the date hereof, so long as any Subordinated Debt Securities are Outstanding hereunder, the Trustee shall transmit to Holders as provided in the Trust Indenture Act a brief report dated as of a date required by and in compliance with the Trust Indenture Act.

(b)         A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each securities exchange upon which the Trustee has been notified that the Subordinated Debt Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when Subordinated Debt Securities are listed on any securities exchange.

(c)         The Company will furnish the Trustee with interim and annual reports and upon receipt thereof, the Trustee will mail such reports to all record holders of Subordinated Debt Securities. In addition, the Company will furnish the Trustee with all notices of meetings at which holders of Subordinated Debt Securities of a particular series are entitled to vote, and all other reports and communications that are made generally available to holders of Subordinated Debt Securities. The Trustee will, at the Company’s expense, make such notices, reports and communications available for inspection by holders of Subordinated Debt Securities in such manner as the Company may determine and, in the case of any notice received by the Trustee in respect of any meeting at which holders of Subordinated Debt Securities of a particular series are entitled to vote, will mail to all such record holders of Subordinated Debt Securities, at the Company’s expense, a notice containing a summary of the information set forth in such notice of meeting.
 
 
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Section 7.04 .  Reports by Company.   The Company shall:

(a)         file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate);

(b)         file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Subordinated Debt Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate); and

(c)         transmit to Holders, in the manner and to the extent required by the Trust Indenture Act, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.


ARTICLE 8
C ONSOLIDATION , M ERGER , C ONVEYANCE OR T RANSFER

Section 8.01 .  Company May Consolidate, Etc., Only on Certain Terms.  The Company may, without the consent of Holders of any Subordinated Debt
 

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Securities of any series Outstanding under this Subordinated Debt Securities Indenture, consolidate or amalgamate with or merge into any other corporation or convey or transfer or lease its properties and assets substantially as an entirety to any Person, provided that:

(a)         the corporation formed by such consolidation or amalgamation or into which the Company is merged or the Person which acquires by conveyance or transfer the properties and assets of the Company substantially as an entirety (i) shall be a company organized and existing under the laws of the United Kingdom or any political subdivision thereof, and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all the Subordinated Debt Securities in accordance with the provisions of such Subordinated Debt Securities and this Subordinated Debt Securities Indenture and the performance of every covenant of this Subordinated Debt Securities Indenture on the part of the Company to be performed or observed; and

(b)         the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger, conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

Section 8.02 . Successor Corporation Substituted. Upon any consolidation, amalgamation or merger or any conveyance or transfer of the properties and assets of the Company substantially as an entirety in accordance with Section 8.01, the successor corporation formed by such consolidation or amalgamation or into which the Company is merged or to which such conveyance or transfer is made shall succeed to and be substituted for, and may exercise every right and power of, the Company under this Subordinated Debt Securities Indenture with the same effect as if such successor corporation had been named as the Company, herein, and thereafter, the predecessor corporation shall be relieved of all obligations and covenants under the Subordinated Debt Securities Indenture and the Subordinated Debt Securities.

Section 8.03 . Assumption of Obligations. With respect to the Subordinated Debt Securities of any series, a wholly-owned subsidiary of the Company (a “ successor entity ”) may without the consent of any Holder assume the obligations of the Company (or any corporation which shall have previously assumed the obligations of the Company) for the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on any series of Subordinated Debt Securities in accordance with the provisions of such Subordinated Debt Securities and this Subordinated Debt Securities Indenture and the performance of every covenant of this Subordinated Debt Security Indenture and such series of Subordinated Debt Securities on the part of the Company to be performed or observed provided , that:
 
 
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(a)         the successor entity shall expressly assume such obligations by an amendment to the Subordinated Debt Securities Indenture, executed by the Company and such successor entity, if applicable, and delivered to the Trustee, in form satisfactory to the Trustee, and the Company shall, by amendment to the Subordinated Debt Securities Indenture, unconditionally guarantee (such guarantee shall be given on a subordinated basis consistent with Article 12 hereof) all of the obligations of such successor entity under the Subordinated Debt Securities of such series and the Subordinated Debt Securities Indenture as so modified by such amendment ( provided, however , that, for the purposes of the Company’s obligation to pay Additional Amounts, if any, payable pursuant to Section 10.04 in respect of the Subordinated Debt Securities, references to such successor entity’s country of organization will be added to references to the United Kingdom);

(b)         such successor entity shall confirm in such amendment to the Subordinated Debt Securities Indenture that such successor entity will pay all Additional Amounts, if any, payable pursuant to Section 10.04 in respect of all the Subordinated Debt Securities ( provided, however , that for these purposes such successor entity’s country of organization will be substituted for the references to the United Kingdom);

(c)         immediately after giving effect to such assumption of obligations, no Event of Default or Default and no event which, after notice or lapse of time or both, would become an Event of Default or Default, shall have occurred and be continuing; and

(d)         the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such assumption complies with this Article and that all conditions precedent herein provided for relating to such assumption have been complied with.

Upon any such assumption, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Subordinated Debt Securities Indenture with respect to any such Subordinated Debt Securities with the same effect as if such successor entity had been named as the Company in this Subordinated Debt Securities Indenture, and the Company or any legal and valid successor corporation which shall theretofore have become such in the manner prescribed herein, shall be released from all liability as obligor upon any such Subordinated Debt Securities except as provided in clause (a) of this Section 8.03.


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In the event of any such assumption, any Additional Amounts, if any, payable pursuant to Section 10.04 will be payable in respect of taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“ Taxes ”) imposed by the jurisdiction in which the assuming corporation is incorporated (subject to exceptions equivalent to those that apply to any obligation to pay Additional Amounts in respect of Taxes imposed by any Taxing Jurisdiction) rather than Taxes imposed by any Taxing Jurisdiction; provided however , that if the Company makes payment under the guarantee, the Company shall be required to pay Additional Amounts related to Taxes (subject to the exceptions set forth in Section 10.04) imposed by any Taxing Jurisdiction by reason of such payments.


ARTICLE 9
S UPPLEMENTAL I NDENTURES

Section 9.01 .  Supplemental Indentures without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(a)       to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Subordinated Debt Securities;

(b)       to add to the covenants of the Company for the benefit of the Holders of all or any series of Subordinated Debt Securities (and, if such covenants are to be for the benefit of less than all series of Subordinated Debt Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company;

(c)       to add any additional Events of Default or Defaults;

(d)       to add to, change or eliminate any of the provisions of this Subordinated Debt Securities Indenture, or any supplemental indenture, provided that any such change or elimination shall become effective only when there is no Subordinated Debt Security Outstanding of any series created prior to the execution of such supplemental indenture effecting such change or elimination which is entitled to the benefit of such provision, and adversely affected by such addition, change or elimination;

(e)       to secure the Subordinated Debt Securities;
 
 
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(f)         to establish the form or terms of Subordinated Debt Securities of any series as permitted by Sections 2.01 or 3.01;

(g)       to change any Place of Payment, so long as the Place of Payment as required by Section 3.01 is maintained;

(h)       to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein or in any supplemental indenture;

(i)         to make any other provisions with respect to matters or questions arising under this Subordinated Debt Securities Indenture, provided such action shall not adversely affect the interests of the Holders of Subordinated Debt Securities of any series in any material respect;

(j)         to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Subordinated Debt Securities of one or more series and to add to or change any of the provisions of this Subordinated Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11(b); or

(k)       to change or eliminate any provision of this Subordinated Debt Securities Indenture as permitted by Section 1.07.

Section 9.02 . Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Outstanding Subordinated Debt Securities of each series affected by such supplemental Subordinated Debt Securities Indenture (voting as a class), by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Subordinated Debt Securities Indenture or of modifying in any manner the rights of the Holders of Subordinated Debt Securities of such series under this Subordinated Debt Securities Indenture; provided, however , that no such supplemental indenture may, without the consent of the Holder of each Outstanding Subordinated Debt Security affected thereby,

(a)      change the Stated Maturity, if any, of any principal amount or any interest amounts in respect of any such Subordinated Debt Security, reduce the principal amount thereof or the rate of interest, if any, thereon, or any premium payable upon the redemption thereof, or reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the Maturity thereof pursuant to Section 5.02, or change the
 
 
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obligation of the Company (or its successor) to pay Additional Amounts pursuant to Section 10.04 (except as contemplated by Section 8.01(a) and permitted by Section 9.01(a)) on the Subordinated Debt Securities, or the currency of payment of the principal amount of, premium, if any, or interest on, any such Subordinated Debt Security, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption or exchange, on or after the Redemption Date or the Exchange Date as the case may be); or

(b)       reduce the percentage in aggregate principal amount of the Outstanding Subordinated Debt Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Subordinated Debt Securities Indenture or of certain defaults hereunder and their consequences) provided for in this Subordinated Debt Securities Indenture, or

(c)         modify any of the provisions of this Section or Section 5.13 except to increase any such percentage or to provide that certain other provisions of this Subordinated Debt Securities Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Subordinated Debt Security affected thereby; provided, however , that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “ the Trustee ” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 6.11(b) and 9.01(j), or

(d)       change in any manner adverse to the interests of the Holders of any Subordinated Debt Securities, the subordination provisions of the Subordinated Debt Securities or the terms and conditions of the obligations of the Company in respect of the due and punctual payment of any amounts due and payable on the Subordinated Debt Securities.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

A supplemental indenture which changes or eliminates any covenant or other provision of this Subordinated Debt Securities Indenture which has expressly been included solely for the benefit of one or more particular series of Subordinated Debt Securities, or which modifies the rights of the Holders of Subordinated Debt Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Subordinated Debt Securities Indenture of the Holders of Subordinated Debt Securities of any other series.
 
 
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Section 9.03 . Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Subordinated Debt Securities Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Subordinated Debt Securities Indenture. The Trustee may, but shall not be obliged to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Subordinated Debt Securities Indenture or otherwise.

Section 9.04 . Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Subordinated Debt Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Subordinated Debt Securities Indenture for all purposes; and every Holder of Subordinated Debt Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby, except as otherwise expressed therein.

Section 9.05 . Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.

Section 9.06 . Reference in Subordinated Debt Securities to Supplemental Indentures. Subordinated Debt Securities of any series authenticated and   delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Subordinated Debt Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and such Subordinated Debt Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Subordinated Debt Securities of such series.


ARTICLE 10
C OVENANTS

Section 10.01 . Payment Of Principal, Premium, and Interest. The Company covenants and agrees for the benefit of each series of Subordinated Debt Securities that it will duly and punctually pay the principal of (and premium, if any) and (subject to Section 3.07) interest on, if any, the Subordinated Debt Securities of that series in accordance with the terms of the Subordinated Debt Securities and this Subordinated Debt Securities Indenture.
 
 
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Section 10.02 . Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Subordinated Debt Securities an office or agency where Subordinated Debt Securities of that series may be presented or surrendered for payment, where Subordinated Debt Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Subordinated Debt Securities of that series and this Subordinated Debt Securities Indenture may be served; provided, however , that at the option of the Company in the case of registered Subordinated Debt Securities of such series, payment of any interest thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Subordinated Debt Security Register. With respect to the Subordinated Debt Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be the Corporate Trust Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Company in respect of Subordinated Debt Securities of any series and this Subordinated Debt Securities Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company hereby appoints the Trustee as its agent to receive all presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, The City of New York) where the Subordinated Debt Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however , that no such designation or rescission shall in any manner relieve the Company of any obligation to maintain an office or agency in each Place of Payment (except as otherwise indicated in this Section) for Subordinated Debt Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Section 10.03 . Money for Payments to be Held in Trust. If the Company shall at any time act as Paying Agent with respect to the Subordinated Debt Securities of any series, it will, on or before each due date for payment of the principal of (and premium, if any) or interest, if any, if any, on any of the Subordinated Debt Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due until such sums shall be paid
 
 
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to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its failure so to act.

Whenever the Company shall have one or more Paying Agents for any series of Subordinated Debt Securities, it will, prior to each due date for payment of the principal of (and premium, if any) or interest, if any, on any Subordinated Debt Securities of that series deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or its failure so to act. Unless otherwise specified as contemplated by Section 3.01, the Trustee shall be the Company’s Paying Agent. The Company will cause each Paying Agent for any series of Subordinated Debt Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

(a)         hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Subordinated Debt Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

(b)       give the Trustee notice of any default by the Company (or any other obligor upon the Subordinated Debt Securities of that series) in the making of any payment, when due and payable, or principal of (and premium, if any) or interest, if any, on Subordinated Debt Securities of that series; and

(c)       at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

The Company may at the time, for the purpose of obtaining the satisfaction and discharge of this Subordinated Debt Securities Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest, if any, on any Subordinated Debt Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest, if any, have become due and payable shall be paid to the Company on Company
 
 
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Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Subordinated Debt Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however , that the Trustee or such Paying Agent, before being required to make   any such repayment, may at the expense of the Company cause to be published at least once, in an Authorized Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be paid to the Company.

Section 10.04 . Additional Amounts. Unless otherwise specified in any Board Resolution establishing the terms of Subordinated Debt Securities of a series in accordance with Section 3.01, all amounts of principal, and premium, if any, and interest, if any, on any series of Subordinated Debt Securities will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “ Taxing Jurisdiction ”), unless such deduction or withholding is required by law.

If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, premium, if any, and interest, if any, on any series of Subordinated Debt Securities (“ Additional Amounts ”) as may be necessary in order that the net amounts paid to the Holders of Subordinated Debt Securities of the particular series, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, and interest, if any, which would have been payable in respect of such Subordinated Debt Securities had no such deduction or withholding been required; provided , however, that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

(i)       the Holder or the beneficial owner of the Subordinated Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Subordinated Debt Security, or the collection of any payment of (or in respect of) principal of, premium, if any, or interest, if any, on any Subordinated Debt Security of the relevant series,
 
 
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(ii)         except in the case of a winding-up of the Company in the United Kingdom, the relevant Subordinated Debt Security is presented (where presentation is required) for payment in the United Kingdom,

(iii)         the relevant Subordinated Debt Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting (where presentation is required) the same for payment at the close of such 30 day period, or

(iv)         the Holder or the beneficial owner of the relevant Subordinated Debt Security or the beneficial owner of any payment of (or in respect of) principal of, or interest, if any, on such Subordinated Debt Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any information requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

(v)         the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to any European Union Directive on the taxation of savings implementing the proposal for a European Union Directive presented by the European Union Commission on July 18, 2001 or any law implementing or complying with, or introduced in order to conform to, such directive;

(vi)       the relevant Subordinated Debt Security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting (where presentation is required) the relevant Subordinated Debt Security to another paying agent in a Member State of the European Union; or

(vii)        any combination of subclauses (i) through (vi) above;

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Subordinated Debt Securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with
 
 
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respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

Whenever in this Subordinated Debt Securities Indenture there is mentioned, in any context, the payment of the principal of (and premium, if any) or interest, if any, on, or in respect of, any Subordinated Debt Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

Section 10.05 . Corporate Existence. Subject to Article 8, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

Section 10.06 . Statement as to Compliance. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate in compliance with Section 314(a)(4) of the Trust Indenture Act.

Section 10.07 . Original Issue Document. The Company shall provide to the Trustee on a timely basis such information, if any, as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Subordinated Debt Securities relating to any original issue discount, including, without limitation, Form 1099-OID or any successor form.


ARTICLE 11
R EDEMPTION O F S UBORDINATED D EBT S ECURITIES

Section 11.01 . Applicability of Article. Subordinated Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series) in accordance with this Article 11.

Section 11.02 . Election to Redeem; Notice to Trustee. The election of the Company to redeem any Subordinated Debt Securities shall be evidenced by a Board Resolution. The Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Subordinated Debt Securities of such series to be redeemed and, if applicable, the tenor of the Subordinated Debt Securities to be redeemed. In the case of any
 
 
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redemption of Subordinated Debt Securities of any series prior to the expiration of any provision restricting such redemption provided in the terms of such Subordinated Debt Securities or elsewhere in this Subordinated Debt Securities Indenture, the Company shall furnish the Trustee with respect to such Subordinated Debt Securities with an Officer’s Certificate evidencing compliance with or waiver of such provision.

Section 11.03 . Selection by Trustee of Subordinated Debt Securities to Be Redeemed. If less than all the Subordinated Debt Securities of any series are to be   redeemed, the particular Subordinated Debt Securities to be redeemed shall be selected not more than 60 days nor less than 30 days prior to the Redemption Date by the Trustee, from the Outstanding Subordinated Debt Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for registered Subordinated Debt Securities of that series or any multiple thereof) of the principal amount of Subordinated Debt Securities of such series of a denomination larger than the minimum authorized denomination for Subordinated Debt Securities of that series.

The Trustee shall promptly notify the Company in writing of the Subordinated Debt Securities selected for redemption and, in the case of any Subordinated Debt Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Subordinated Debt Securities Indenture, unless the context otherwise requires, all provisions relating to the redemption of Subordinated Debt Securities shall relate in the case of any Subordinated Debt Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such registered Subordinated Debt Security which has been or is to be redeemed.

Section 11.04 . Notice of Redemption. Notice of redemption shall be given not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Subordinated Debt Securities to be redeemed in the manner and to the extent provided in Section 1.06.

All notices of redemption shall state:

(a)          the Redemption Date,

(b)          the Redemption Price,


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(c)         if less than all the Outstanding Subordinated Debt Securities of any series are to be redeemed, the principal amount of the Subordinated Debt Securities to be redeemed,

(d)         that on the Redemption Date the Redemption Price will become due and payable upon each such Subordinated Debt Security to be redeemed and, if applicable, that interest thereon will cease to accrue on or after the said date,

(e)         the place or places where such Subordinated Debt Securities are to be surrendered for payment of the Redemption Price, and

(f)         the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to such Subordinated Debt Securities.

Notice of redemption of Subordinated Debt Securities to be redeemed at the selection of the Company shall be given by the Company or, at the Company’s Request, by the Trustee in the name and at the expense of the Company.

Section 11.05 . Deposit of Redemption Price. On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued but unpaid interest on, all the Subordinated Debt Securities which are to be redeemed on that date.

Section 11.06 . Subordinated Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Subordinated   Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Subordinated Debt Securities shall cease to accrue interest. Upon surrender of any such Subordinated Debt Security for redemption in accordance with said notice, such Subordinated Debt Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid interest to the Redemption Date; provided, however, that with respect to any Subordinated Debt Securities in registered form, unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on a Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Subordinated Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular or Deferred Record Date according to the terms of the Subordinated Debt Securities and the provisions of Section 3.07. Subordinated Debt Securities in definitive form shall be presented for redemption to the Paying Agent.
 
 
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If any Subordinated Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Subordinated Debt Security shall, until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.

Section 11.07 . Subordinated Debt Securities Redeemed in Part. Any Subordinated Debt Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, only in the case of Subordinated Debt Securities in registered form, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Subordinated Debt Security without service charge, a new Subordinated Debt Security or Subordinated Debt Securities of the same series of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Subordinated Debt Security so surrendered.

Section 11.08 .  Optional Redemption Due to Changes in Tax Treatment. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 nor more than 60 days’ notice, on any Interest Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Subordinated Debt Securities to the date fixed for redemption (or, in the case of Discount Securities, the accreted face amount thereof, together with accrued interest, if any), if, at any time, the Company shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after a date included in the terms of such series of Subordinated Debt Securities pursuant to Section 3.01:

(a)         in making payment under the Subordinated Debt Securities in respect of principal or premium, if any, or interest, if any, it has or will or would on the next Interest Payment Date become obligated to pay Additional Amounts;

(b)       the payment of interest on the next Interest Payment Date in respect of any of the Subordinated Debt Securities would be treated as “ distributions ” within the meaning of Section 209 of the Income and Corporation Taxes Act 1988 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or
 
 
72

 
(c)       on the next Interest Payment Date the Company would not be entitled to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).

In any case where the Company shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Subordinated Debt Securities of any series, the Company shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.

Section 11.09 .   [Reserved . ]

 
ARTICLE 12
S UBORDINATION OF S UBORDINATED D EBT S ECURITIES

Section 12.01 . Subordinated Debt Securities Subordinate to Claims of Senior Creditors.

(a)         Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company covenants and agrees, and each Holder of Subordinated Debt Securities of each series, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article Twelve, the Subordinated Debt Securities of such series and the payment of the principal of, premium, if any and interest, if any, on each and all of the Subordinated Debt Securities of such series are hereby expressly made in the event of a winding-up of the Company subordinate and subject in right of payment to the prior payment in full of all claims of the Senior Creditors.

(b)         The provisions of this Section shall apply only to the payment of principal, premium, if any, and interest, if any, in respect of the Subordinated Debt Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities or remuneration of the Trustee or the rights and remedies of the Trustee in respect thereof.

(c)         The provisions of this Section shall not be applicable to any amounts of principal, premium, if any, and interest, if any, in respect of any of the Subordinated Debt Securities of any series for the payment of which funds have been deposited in trust with the Trustee or any Paying Agent or have been set
 
 
73

 
aside by the Company in trust in accordance with the provisions of this Subordinated Debt Securities Indenture; provided, however , that at the time of such deposit or setting aside, and immediately thereafter, the foregoing provisions of this Section are complied with.

Section 12.02 . Provisions Solely to Define Relative Rights. The provisions of this Article Twelve are and are intended solely for the purpose of defining the relative rights of the Holders of the Subordinated Debt Securities of each series on the one hand and the Senior Creditors on the other hand. Nothing contained in this Article or elsewhere in this Subordinated Debt Securities Indenture or in such Subordinated Debt Securities is intended to or shall (a) impair, as among the Company and the Holders of the Subordinated Debt Securities, the obligation of the Company, which is absolute and unconditional, to pay to the holders of such claims the principal of, premium, if any, and interest, if any, on such Subordinated Debt Securities as and when the same shall become due and payable in accordance with their terms and this Subordinated Debt Securities Indenture; or (b) affect the relative rights against the Company of the Holders of such Subordinated Debt Securities; or (c) prevent the Trustee or the Holder of any Subordinated Debt Securities of the series from exercising all remedies otherwise permitted by applicable law upon default under this Subordinated Debt Securities Indenture, subject to the rights, if any, under this Article of the Senior Creditors to receive cash, property or securities otherwise payable or deliverable to the Trustee or such holder.

Section 12.03 . Trustee to Effectuate Subordination. Each Holder of a Subordinated Debt Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination of the Subordinated Debt Securities provided in this Article Twelve and appoints the Trustee his attorney-in-fact for any and all such purposes.

Section 12.04 . No Waiver of Subordination Provisions. No right of any present or future Senior Creditors to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such Senior Creditor or by any noncompliance by the Company with the terms, provisions and covenants of this Subordinated Debt Securities Indenture, regardless of any knowledge thereof any such Senior Creditor may have or be otherwise charged with.

Section 12.05 . Notice to Trustee. Upon the occurrence of any Event of Default or Default, the Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment when due to or by the Trustee in respect of the Subordinated Debt Securities of a series. Notwithstanding the provisions of this Article or any other
 
 
74
 
 
provisions of this Subordinated Debt Securities Indenture but subject to the provisions of Section 12.01, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment when due to or by the Trustee in respect of such Subordinated Debt Securities unless and until the Trustee shall have received written notice thereof from the Company or a Senior Creditor or from any trustee therefor; and, prior to the receipt of any such written notice by a Responsible Officer of the Trustee, the Trustee, subject to the provisions of Section 6.01, shall be entitled in all respects to assume that no such facts exist; provided, however , that if the Trustee shall not have received the notice provided for in this Section at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of and any premium and interest, if any, on any Subordinated Debt Security), then, subject to the provisions of Section 12.01, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date.

Subject to the provisions of Section 6.01, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a Senior Creditor or a trustee therefor, to establish that such notice has been given by a Senior Creditor, or a trustee therefor. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a Senior Creditor to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of claims held by such Person, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

Section 12.06 . Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in   this Article, the Trustee, subject to the provisions of Section 6.01, the Holders of the Subordinated Debt Securities of the series shall be entitled to rely upon (a) any order or decree entered by any court in Scotland (but not elsewhere) in which such winding-up of the Company or similar case or proceeding, including a proceeding for the suspension of payments under Scottish law, is pending, or (b) a certificate of the liquidator of the Company (the “ Liquidator ”), assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or the Holders of such Subordinated Debt Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the Senior Creditors and other claims against the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12.
 
 
75

 
Section 12.07 . Trustee Not Fiduciary for Senior Creditors. The Trustee shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Subordinated Debt Securities of the series or to the Company or to any other Person cash, property or securities to which any Senior Creditors shall be entitled by virtue of this Article or otherwise.

Section 12.08 . Rights of Trustee as Senior Creditor; Preservation of Trustee’s Rights. The Trustee in its individual capacity shall be entitled to all the   rights set forth in this Article with respect to any claims of Senior Creditors which may at any time be held by it, to the same extent as any other Senior Creditor, and nothing in this Subordinated Debt Securities Indenture shall deprive the Trustee of any of its rights as such holder.

Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.07.

Section 12.09 . Article Applicable to Paying Agents. At all times when a Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “ Trustee ” as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however , that Section 12.08 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.

Section 12.10 . Exchanges Not Deemed Payment. For the purposes of this Article Twelve only, delivery of Dollar Preference Shares or Exchange Securities upon exchange of Subordinated Debt Securities in accordance with Article Thirteen, if applicable to a particular series of Subordinated Debt Securities, shall not be deemed to constitute a payment or distribution on account of the principal of Subordinated Debt Securities or on account of the purchase or other acquisition of Subordinated Debt Securities. Nothing contained in this Article or elsewhere in this Subordinated Debt Securities Indenture or in the Subordinated Debt Securities is intended to or shall impair, as among the Company, its creditors and the Holders of the Subordinated Debt Securities, the right, which if applicable to a particular series of Subordinated Debt Securities is absolute and unconditional, of the Company to exchange the Subordinated Debt Securities in accordance with Article Thirteen.


76


ARTICLE 13
E XCHANGE OF S UBORDINATED D EBT S ECURITIES

Section 13.01 . Applicability of Article. If specified pursuant to Section 3.01 for Subordinated Debt Securities of any series, the Subordinated Debt Securities of any series shall be convertible (conversion being referred to herein as “ exchange ”) on any Interest Payment Date as a whole or in part, at the option of the Company, on the basis of the principal amount of each Subordinated Debt Security, into an equivalent amount in liquidation preference of the series of Dollar Preference Shares or Exchange Securities specified pursuant to Section 3.01 and (except as otherwise specified as contemplated by Section 3.01 for Subordinated Debt Securities of any series) in accordance with this Article 13.

Section 13.02 . Election to Exchange; Notice to Trustee. An election of the Company to exchange Subordinated Debt Securities shall be evidenced by an Officer’s Certificate furnished to the Trustee stating that the Company is entitled to effect such exchange and setting forth a statement of facts demonstrating the same.

Section 13.03 . Notice of Exchange. Not less than 45 days nor more than 60 days prior to any date fixed for exchange of Subordinated Debt Securities of a series (the “ Exchange Date ”), the Company shall notify the Trustee in writing of its election to exchange the Subordinated Debt Securities of such series. The Trustee shall within 15 days after receipt of notice from the Company, but in no event less than 30 days nor more than 60 days prior to the Exchange Date, cause notice of such election to be (i) mailed to the Holder (if the address of such Holder is known to the Trustee) if the affected Subordinated Debt Securities are in global form, or (ii) mailed to each Holder of registered Subordinated Debt Securities of such series to be exchanged in accordance with Section 1.06.

All notices of exchange shall state:

(a)     the Exchange Date;

(b)       that on the Exchange Date, the Subordinated Debt Securities to be exchanged will cease to exist for any purpose on or after such Exchange Date;

(c)       if less than all the Outstanding Subordinated Debt Securities of any series are to be exchanged, the identification of the particular Subordinated Debt Securities to be exchanged, which Subordinated Debt Securities shall be selected by the Trustee, from the Outstanding Subordinated Debt Securities of such series not previously called for exchange, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for exchange of portions (equal to the minimum authorized denomination for Subordinated Debt Securities of that series or any multiple thereof) of the principal amount of Subordinated
 
 
77

 
Debt Securities of such series of a denomination larger than the minimum authorized denomination for Subordinated Debt Securities of that series;

(d)       the place or places where such Subordinated Debt Securities are to be surrendered for exchange; and

(e)         the form in which the Company will issue the Dollar Preference Shares (if not as a single share warrant to bearer delivered to the ADR Depositary) or Exchange Securities.

Notice of any exchange of Subordinated Debt Securities at the election of the Company shall be given by the Company or, pursuant to a Company Request by the Trustee, in the name of and at the expense of the Company.

Section 13.04 . Deposit of Interest. Prior to any Exchange Date, the Company shall deposit with the Trustee an amount of money sufficient to pay accrued interest, if any, to the Exchange Date on all Subordinated Debt Securities of such series.

Section 13.05 . Surrender of Subordinated Debt Securities. Any Subordinated Debt Security which is to be exchanged shall be surrendered at an office or agency of the Company designated for that purpose pursuant to Section 10.02 not less than 10 days prior to the Exchange Date (with, only in the case of registered Subordinated Debt Securities and if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) accompanied by written notice specifying the Persons (a) in the case of Dollar Preference Shares, to whom ADRs should be issued by the ADR Depositary or, if the Company has notified the Trustee in accordance with Section 13.03 that it will issue Dollar Preference Shares in definitive form, any direction the Holder may wish to make as referred to in Section 13.06 or (b) in the case of Exchange Securities, to whom such Exchange Securities are to be issued. The Trustee will inform the Company of all such notices and the Company will, if applicable, direct the ADR Depositary accordingly under the terms of the ADR Deposit Agreement. Subordinated Debt Securities surrendered for exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee for delivery by it to the Company or, if delivered to the Trustee, shall be delivered by it to the Company.

Section 13.06 . Issuance of Dollar Preference Shares or Exchange Securities. On the Exchange Date with respect to Global Securities of a series,   and on or prior to the Exchange Date with respect to definitive Subordinated Debt Securities of a series, in each case surrendered for exchange as provided in Section 13.05, the Company shall (a) in the case of Dollar Preference Shares, unless the Company shall have notified the Trustee otherwise in accordance with
 
 
78

 
Section 13.03, deliver or procure the delivery of a single share warrant to bearer to the ADR Depositary representing all of the Dollar Preference Shares in respect of which such Subordinated Debt Securities are to be exchanged in accordance with the provisions of this Article Thirteen or (b) in the case of Securities, deliver or procure the delivery of the Exchange Securities to the Trustee or to such other Person as may be specified pursuant to Section 3.01.

In the event that the Company shall have notified the Trustee in accordance with Section 13.03 that it will not deliver or procure the delivery of a single share warrant to bearer in exchange for the Subordinated Debt Securities of a series surrendered for exchange as provided in Section 13.05, the Company shall, on or prior to the Exchange Date, with respect to definitive Subordinated Debt Securities, deliver or procure the delivery of individual certificates representing the Dollar Preference Shares (or the rights to receive such Dollar Preference Shares) of such series for which such Subordinated Debt Securities are to be exchanged in accordance with the provisions of this Article Thirteen, in the case of Dollar Preference Shares in registered form, to and registered in the names of the Holders of such Subordinated Debt Securities in definitive form as they appear on the Subordinated Debt Security Register or, at the direction of such Holder, in the name of the ADR Custodian for the account and benefit of the ADR Depositary who will issue ADRs evidencing ADSs representing the Dollar Preference Shares to such Holder and, in the case of Dollar Preference Shares in bearer form, to the bearer of the bearer Subordinated Debt Security in definitive form or, at the direction of such bearer, to the ADR Custodian for the account and benefit of the ADR Depositary who will issue ADRs evidencing ADSs representing Dollar Preference Shares to such Holder.

Any exchange pursuant to this Section 13.06 shall be deemed to have been made immediately prior to the close of business in New York on the Exchange Date.

Section 13.07 . Effect of Exchange. Notice of exchange having been given as aforesaid, the Subordinated Debt Securities so to be exchanged shall on the Exchange Date cease to exist for any purpose. Upon surrender of any such Subordinated Debt Security for exchange in accordance with the said notice and this Article Thirteen, accrued interest, if any, on such Subordinated Debt Security to the Exchange Date shall be paid by the Company to the Holder surrendering such Subordinated Debt Security. Such payment shall be a condition to the exchange and no exchange shall occur unless such payments are made.

On and after the Exchange Date for Subordinated Debt Securities of a particular series, each Subordinated Debt Security of the series to be exchanged, until surrendered shall be deemed to evidence rights to receive Dollar Preference Shares or Exchange Securities of the relevant series with a liquidation preference equivalent to the principal amount of such Subordinated Debt Security. Until a
 
 
79
 

Holder has surrendered such Subordinated Debt Security upon such exchange, such Holder shall be entitled to receive dividends, payments or other distributions in respect of such Dollar Preference Shares or Exchange Securities and shall have the same rights with respect to, and shall be deemed to be the Holder of, such Dollar Preference Shares or Exchange Securities into which such Subordinated Debt Security was exchanged as if it had so surrendered such Subordinated Debt Security.

Section 13.08 . Validity of Dollar Preference Shares or Exchange Securities. The Company will take all corporate and other action which may be   necessary in order that it may validly and legally issue Dollar Preference Shares or Exchange Securities upon each exchange of the Outstanding Subordinated Debt Securities. The Company covenants that the Dollar Preference Shares or Exchange Securities will when issued upon such exchange be duly authorized and validly issued, fully paid and not subject to calls for further funds.

Section 13.09 . Legal and Regulatory Compliance. Notwithstanding any provision of this Subordinated Debt Securities Indenture to the contrary, the right of the Company to cause any exchange of Subordinated Debt Securities of a series for Dollar Preference Shares or Exchange Securities on any proposed Exchange Date shall be subject to the fulfillment of the following conditions with respect to such Subordinated Debt Securities:

(a)       as of such Exchange Date, there is no accrued but unpaid interest (including amounts paid on the Exchange Date);

(b)       as of such Exchange Date, no Default or Event of Default shall have occurred and be continuing with respect to the particular series of Subordinated Debt Securities;

(c)         as of such Exchange Date, there has not been, in any one instance or in the aggregate, an adverse effect on the rights, powers, privileges, validity or enforceability of the Dollar Preference Shares or Exchange Securities;

(d)       the Dollar Preference Shares to be issued on such Exchange Date shall be duly authorized and reserved for issuance upon such exchange and, when issued upon such exchange, will be fully paid and not subject to calls for further funds;

(e)         no consents, authorizations, approvals or exemptions, except in each case such as shall have been obtained, will be required prior to such Exchange Date for the issuance and delivery of the Dollar Preference Shares or Exchange Securities to be issued upon such exchange;
 
 
80


(f)         the issuance and delivery of the Dollar Preference Shares or Exchange Securities to be issued on such Exchange Date shall not violate (x) the Articles of Association of the Company or (y) any law, rule or regulation applicable to the Company; and

(g)       there shall not have occurred any change in law in Scotland or in the jurisdiction of the governing law of any Exchange Securities, or any amendment of the Articles of Association of the Company, prior to such Exchange Date, materially and adversely affecting the rights and privileges attached to the Dollar Preference Shares or Exchange Securities (including, without limitation, the rights of the holders thereof in the event of a bankruptcy or other similar proceeding with respect to the Company) or such holders’ access to the courts of the United Kingdom and other applicable governmental authorities to enforce such rights.

Section 13.10 . Taxes and Charges. The issuance or delivery of Dollar Preference Shares or Exchange Securities upon exchange of Subordinated Debt Securities pursuant to this Article Thirteen shall be made without charge to the exchanging Holder of Subordinated Debt Securities for such Dollar Preference Shares or Exchange Securities or for any tax or other governmental charge (other than income or capital gains taxes) in respect of the issuance or delivery of such Dollar Preference Shares or Exchange Securities; provided, however, that the Company shall not be required to pay any tax or other governmental charge which may be payable in respect of (i) issuance or delivery of Dollar Preference Shares or Exchange Securities to any Person who is or is a nominee or agent for a Person whose business is or includes the provision of clearance services within the meaning of Section 96 or Section 70 of the Finance Act 1986 or whose business is or includes issuing depositary receipts within the meaning of Section 93 or Section 67 of the Finance Act 1986, other than the ADR Depositary or ADR Custodian, all such Persons (other than the ADR Depositary and the ADR Custodian) being “Excepted Persons” or (ii) a transfer involved in the issuance and delivery of any such Dollar Preference Share or Exchange Securities to any Person other than any Holder (not being an Excepted Person) of the Subordinated Debt Security to be exchanged, or in the case of Global Securities, the ADR Depositary or the ADR Custodian, and the Company shall not be required to issue or deliver or procure the delivery of such Dollar Preference Shares or Exchange Securities unless and until the Person requesting the issuance or delivery thereof shall have paid to the Company the amount of such tax or other governmental charge or shall have established to the satisfaction of the Company that such tax or other governmental charge has been paid.

Section 13.11 . Trustee Not Liable. The Trustee shall not be accountable with respect to the validity or value (or the kind or amount) of any Dollar Preference Shares or Exchange Securities which may be issued or delivered upon the exchange of any Subordinated Debt Security pursuant to this Article Thirteen, and makes no representation with respect thereto. The Trustee shall not be
 
 
81
 

responsible for any failure of the Company to issue, transfer or deliver or procure the delivery of any Dollar Preference Shares or Exchange Securities upon the surrender of any Subordinated Debt Security for the purpose of exchange pursuant to this Article Thirteen or to comply with any of the covenants of the Company or conditions contained in this Article Thirteen.

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.


82


IN WITNESS WHEREOF, the Company and the Trustee have caused this Subordinated Debt Securities Indenture to be duly executed, all as of the day and year first above written.

 


  THE ROYAL BANK OF SCOTLAND GROUP plc
       
       
 
By:
/s/
 
   
Name:
 
   
Title:
 
 

 
By:
/s/
 
   
Name:
 
   
Title:
 

 
 
THE BANK OF NEW YORK MELLON LONDON BRANCH
 
       
       
 
By:
/s/
 
   
Name:
 
   
Title:
 
 
 
83


 
UNITED KINGDOM OF GREAT BRITAIN   )  ss.:
   
CITY OF EDINBURGH, SCOTLAND  )
 

On the _________ day of ____________ 2009, before me, _____________________________, Notary Public of the City of Edinburgh, Scotland duly admitted and sworn, personally came _________________________, to me known, who, being by me duly sworn, did depose and say that he is ____________________ of THE ROYAL BANK OF SCOTLAND GROUP plc, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.



 
     
 
A Notary Public of Edinburgh, Scotland.
My Commission expires with life.
 
 
 
84

 
Exhibit 4.3
 
  THE ROYAL BANK OF SCOTLAND GROUP PLC
as Issuer



TO



THE BANK OF NEW YORK MELLON
 acting through its London Branch
  as Trustee




FORM OF INDENTURE









Capital Securities







THE ROYAL BANK OF SCOTLAND GROUP plc

Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and Capital Securities Indenture, dated as of [                         ].

Trust Indenture
 
Capital Securities
 
Act Section
 
Indenture Section
 
§310 (a)(1)
 
6.09
 
(a)(2)
 
6.09
 
(a)(3)
 
Not Applicable
 
(a)(4)
 
Not Applicable
 
(b)
 
6.08, 6.10
 
(c)
 
Not Applicable
 
§311(a)
 
6.13
 
(b)
 
6.13
 
(b)(2)
 
7.03(a)
 
   
7.03(b)
 
(c)
 
Not Applicable
 
§312(a)
 
7.01
 
   
7.02(a)
 
(b)
 
7.02(b)
 
(c)
 
7.02(c)
 
§313(a)
 
7.03(a)
 
(b)
 
7.03(a)
 
(c)
 
1.06, 7.03(a)
 
(d)
 
7.03(b)
 
§314(a)
 
7.04
 
(b)
 
Not Applicable
 
(c)(1)
 
1.02
 
(c)(2)
 
1.02
 
(c)(3)
 
Not Applicable
 
(d)
 
Not Applicable
 
(e)
 
1.02
 
(f)
 
Not Applicable
 
§315(a)
 
6.01
 
(b)
 
6.02
 
   
7.03(a)
 
(c)
 
6.01
 
(d)
 
6.01
 
(d)(1)
 
6.01
 
(d)(2)
 
6.01
 
(d)(3)
 
6.01
 
(e)
 
5.14
 
 
i
 
 
§316(a)(1)(A)
 
5.02, 5.12
 
(a)(l)(B)
 
5.13
 
(a)(2)
 
Not Applicable
 
(a)(last sentence)
 
1.01
 
(b)
 
5.08
 
§317(a)(1)
 
5.03
 
(a)(2)
 
5.04
 
(b)
 
10.03
 
§318(a)
 
1.07
 

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Capital Securities Indenture.
 

ii

TABLE OF CONTENTS

P AGE

ARTICLE 1
D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION
   
Section 1.01 .  Definitions
1
Section 1.02 .  Compliance Certificates and Opinions
11
Section 1.03 .  Form of Documents Delivered to Trustee
11
Section 1.04 .  Acts of Holders.
12
Section 1.05 .  Notices, Etc. to Trustee and Company
13
Section 1.06 .  Notice to Holders; Waiver
13
Section 1.07 .  Conflict with Trust Indenture Act
14
Section 1.08 .  Effect of Headings and Table of Contents
15
Section 1.09 .  Successors and Assigns
15
Section 1.10 .  Separability Clause
15
Section 1.11 .  Benefits of Capital Securities Indenture
15
Section 1.12 .  Governing Law
15
Section 1.13 .  Saturdays, Sundays and Legal Holidays
15
Section 1.14 .  Appointment of Agent for Service
16
Section 1.15 .  Calculation Agent
16


ARTICLE 2
C APITAL S ECURITY F ORMS

Section 2.01 .  Forms Generally
17
Section 2.02 .  Form of Trustee’s Certificate of Authentication
17


ARTICLE 3
T HE C APITAL S ECURITIES

Section 3.01 .  Amount Unlimited; Issuable in Series
18
Section 3.02 .  Denominations
21
Section 3.03 .  Execution, Authentication, Delivery and Dating
21
Section 3.04 .  Temporary Capital Securities
22
Section 3.05 .  Registration, Registration of Transfer and Exchange.
23
Section 3.06 .  Mutilated, Destroyed, Lost and Stolen Capital Securities
28
Section 3.07 .  Payments; Rights Preserved.
29
Section 3.08 .  Persons Deemed Owners
30
Section 3.09 .  Cancellation
31
Section 3.10 .  Computation of Payments
31
Section 3.11 .  Cusip Numbers
31

iii
 
ARTICLE 4
S ATISFACTION AND D ISCHARGE

Section 4.01 .  Satisfaction and Discharge of Capital Securities Indenture
31
Section 4.02 .  Application of Trust Money
33
Section 4.03 .  Repayment to Company
33

ARTICLE 5
R EMEDIES

Section 5.01 .  Events of Default
33
Section 5.02 .  Acceleration of Maturity; Rescission and Annulment
34
Section 5.03 .  Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee.
35
Section 5.04 .  Trustee May File Proofs of Claim
36
Section 5.05 .  Trustee May Enforce Claims Without Possession of Capital Securities
37
Section 5.06 .  Application of Money Collected
37
Section 5.07 .  Limitation on Suits
38
Section 5.08 .  Unconditional Right of Holders to Receive Principal, Premium and Payments, If Any
38
Section 5.09 .  Restoration of Rights and Remedies
39
Section 5.10 .  Rights and Remedies Cumulative
39
Section 5.11 .  Delay or Omission Not Waiver
39
Section 5.12 .  Control by Holders
39
Section 5.13 .  Waiver of Past Defaults
40
Section 5.14 .  Undertaking for Costs
40

ARTICLE 6
T HE T RUSTEE

Section 6.01 .  Certain Duties and Responsibilities
41
Section 6.02 .  Notice of Defaults
41
Section 6.03 .  Certain Rights of Trustee
41
Section 6.04 .  Not Responsible for Recitals or Issuance of Capital Securities
43
Section 6.05 .  May Hold Capital Securities
43
Section 6.06 .  Money Held in Trust
43
Section 6.07 .  Compensation and Reimbursement
43
Section 6.08 .  Disqualification; Conflicting Interests
44
Section 6.09 .  Corporate Trustee Required; Eligibility
44
Section 6.10 .  Resignation and Removal; Appointment of Successor.
45
Section 6.11 .  Acceptance of Appointment by Successor.
47
Section 6.12 .  Merger, Conversion, Consolidation or Succession to Business
48
Section 6.13 .  Preferential Collection of Claims
48
Section 6.14 .  Appointment of Authenticating Agent
48
 
 
ARTICLE 7
H OLDERS L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY

Section 7.01 .  Company to Furnish Trustee Names and Addresses of Holders
50
Section 7.02 .  Preservation of Information; Communication to Holders
51
Section 7.03 .  Reports by Trustee
51
Section 7.04 .  Reports by Company
52


ARTICLE 8
C ONSOLIDATION , M ERGER , C ONVEYANCE OR T RANSFER

Section 8.01 .  Company May Consolidate, Etc., Only on Certain Terms
53
Section 8.02 .  Successor Corporation Substituted
53
Section 8.03 .  Assumption of Obligations
54

ARTICLE 9
S UPPLEMENTAL I NDENTURES

Section 9.01 .  Supplemental Indenture without Consent of Holders
55
Section 9.02 .  Supplemental Indentures with Consent of Holders
56
Section 9.03 .  Execution of Supplemental Indentures
58
Section 9.04 .  Effect of Supplemental Indentures
58
Section 9.05 .  Conformity with Trust Indenture Act
58
Section 9.06 .  Reference in Capital Securities to Supplemental Indentures
58

ARTICLE 10
C OVENANTS

Section 10.01 .  Payment of Principal, Premium, Payments and Missed Payments
59
Section 10.02 .  Maintenance of Office or Agency
59
Section 10.03 .  Money for Payments to be Held in Trust
60
Section 10.04 .  Additional Amounts
61
Section 10.05 .  Corporate Existence
63
Section 10.06 .  Statement as to Compliance
63

ARTICLE 11
R EDEMPTION OF C APITAL S ECURITIES

Section 11.01 .  Applicability of Article
63
Section 11.02 .  Election to Redeem; Notice to Trustee
64
Section 11.03 .  Selection by Trustee of Capital Securities to be Redeemed
64
Section 11.04 .  Notice of Redemption
64
Section 11.05 .  Deposit of Redemption Price
65
Section 11.06 .  Capital Securities Payable on Redemption Date
65

 
   
Section 11.07 .  Capital Securities Redeemed In Part
66
Section 11.08 .  Optional Redemption Due To Changes In Tax Treatment
66

ARTICLE 12
S UBORDINATION O F C APITAL S ECURITIES

Section 12.01 .  Capital Securities Subordinate to Senior Claims.
67
Section 12.02 .  Provisions Solely to Define Relative Rights
69
Section 12.03 .  Trustee to Effectuate Subordination
69
Section 12.04 .  No Waiver of Subordination Provisions
69
Section 12.05 .  Notice to Trustee
69
Section 12.06 .  Reliance on Judicial Order or Certificate of Liquidating Agent
70
Section 12.07 .  Trustee Not Fiduciary for Senior Creditors
71
Section 12.08 .  Rights of Trustee as Senior Creditor; Preservation of Trustee’s Rights
  71
Section 12.09 .  Article Applicable to Paying Agents
71
Section 12.10 .  Exchanges Not Deemed Payment
71

ARTICLE 13
E XCHANGE O F C APITAL S ECURITIES

Section 13.01 .  Applicability of Article
72
Section 13.02 .  Election to Exchange; Notice to Trustee
72
Section 13.03 .  Notice of Exchange
72
Section 13.04 .  Deposit of Payments
73
Section 13.05 .  Surrender of Capital Securities
73
Section 13.06 .  Issuance of Dollar Preference Shares or Exchange Securities
73
Section 13.07 .  Effect of Exchange
74
Section 13.08 .  Validity of Dollar Preference Shares or Exchange Securities
75
Section 13.09 .  Legal and Regulatory Compliance
75
Section 13.10 .  Taxes and Charges
76
Section 13.11 .  Trustee Not Liable
76
   
TESTIMONIUM
77
SIGNATURES AND SEALS
78

 
CAPITAL SECURITIES INDENTURE, dated as of [                       ] between THE ROYAL BANK OF SCOTLAND GROUP plc, a company incorporated in Great Britain and registered in Scotland (herein called the “ Company ”), having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK OF NEW YORK MELLON (previously named The Bank of New York), acting through its London Branch, a banking corporation duly organized and existing under the laws of the State of New York as Trustee (herein called the “ Trustee ”), having its Corporate Trust Office at One Canada Square, London E14 5AL.

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Capital Securities Indenture to provide for the issuance from time to time of its Capital Securities (herein called the “ Capital Securities ”), to be issued in one or more series, represented by one or more Global Securities in registered or bearer form with or without coupons for payments attached, or represented by definitive Capital Securities in registered or bearer form with or without bearer coupons for payments attached, the amount and terms of each such series to be determined as hereinafter provided.

All things necessary to make this Capital Securities Indenture a valid and binding agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS CAPITAL SECURITIES INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Capital Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of Capital Securities and holders of Coupons, if any, as follows:


ARTICLE 1
D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION

Section 1.01 . Definitions. For all purposes of this Capital Securities Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(a)       the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

 
(b)         all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(c)         all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United Kingdom at the date of such computation and as applied by the Company;

(d)         the words “ herein, ” “ hereof ” and “ hereunder ” and other words of similar import refer to this Capital Securities Indenture as a whole and not to any particular Article, Section or other subdivision; and

(e)         unless the context requires, any reference to an “ Article ” or a “ Section ” refers to an Article or Section of this Agreement.

Certain terms, used principally in Articles 6 and 13, are defined in those Articles.

“ Act ”, when used with respect to any Holder, has the meaning specified in Section 1.04.

“ Additional Amounts ” shall have the meaning set forth in Section 10.04, of this Agreement.

“ ADR Custodian ” means the custodian under the ADR Deposit Agreement.

“ ADR Deposit Agreement ” means the Deposit Agreement dated as of August 17, 1992, amended and restated as of February 8, 1999, amended and restated on November 2, 2001, and as may be further amended from time to time between the Company and The Bank of New York Mellon (previously named The Bank of New York) and the holders from time to time of American Depositary Receipts issued thereunder.

“ ADR Depositary ” means the depositary under the ADR Deposit Agreement.

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “ control ” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through

 
the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

“ Agent Member ” means a member of, or participant in, any Depositary.

“ Auditors ” means the Auditors from time to time of the Company or if there shall be joint Auditors of the Company any one or more of such joint Auditors.

“ Authenticating Agent ” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Capital Securities.

“ Authorized Newspaper ” means a newspaper in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in the place in connection with which the term is used, which, in the United Kingdom, will be the Financial Times of London, if practicable, and which, in the United States, will be the Wall Street Journal , if practicable and the Luxemburger Wort , if practicable and for so long as any Capital Securities are listed on the Luxembourg Stock Exchange, and if it shall be impracticable in the opinion of the Trustee to make any publication of any notice required hereby in any such newspaper, shall mean any publication or other notice in lieu thereof which is made or given with the approval of the Trustee.

“ Board of Directors ” means either the board of directors, or any committee of such board duly authorized to act with respect hereto, of the Company, which board of directors or committee may, to the extent permitted by applicable law, delegate its authority.

“ Board Resolution ” means a copy of a resolution certified by the Secretary or a Deputy or Assistant Secretary of the Company to have been duly adopted by the Board of Directors or an authorized committee thereof and to be in full force and effect on the date of such certification and delivered to the Trustee.

“ Book-Entry Depositary ” means, with respect to Capital Securities issuable or issued in whole or in part in the form of one or more Global Securities in bearer form, the Person, if any, appointed as agent by the Company under the Capital Security Deposit Agreement dated October 28, 1996 for the purposes of maintaining records in which it shall record the ownership, transfer and increases and decreases in the principal amount of certificate less depositary interests in a Global Security (or a successor Book-Entry Depositary), and if at any time there is more than one such Person, “ Book-Entry Depositary ” as used with respect to the Capital Securities shall mean the respective Book-Entry Depositary with respect to particular Capital Securities.

 
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“ Business Day ” means, with respect to any Place of Payment, except as may otherwise be provided in the form of Capital Securities of any particular series, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

“ Calculation Agent ” means the Person, if any, authorized by the Company to calculate the interest rate or other amounts from time to time in relation to any series of Capital Securities.

“ Capital Securities ” has the meaning set forth in the recitals of the Company herein and more particularly means any series of Capital Securities issued, authenticated and delivered under this Capital Securities Indenture.

“ Capital Securities Indenture ” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Capital Securities established pursuant to Section 3.01.

“ Capital Security ” means one of the Capital Securities.

“ Capital Security Register ” and “ Capital Security Registrar ” have the respective meanings specified in Section 3.05.

“ Clearstream ” means, Clearstream Banking, société anonyme (formerly Cedelbank), or its nominee or its or their successor.

“ Commission ” means the United States Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“ Company ” means the Person named as the “ Company ” in the first paragraph of this Capital Securities Indenture until a successor corporation shall have become such pursuant to the applicable provisions of this Capital Securities Indenture, and thereafter “ Company ” shall mean such successor corporation.

“ Company Request ” and “ Company Order ” mean, respectively, a written request or order signed in the name of the Company by an Executive Director or Director or the Secretary or a Deputy or Assistant Secretary, and delivered to the Trustee.

“ Corporate Trust Office ” means the office of the Trustee in which its corporate trust business is principally administered, located at One Canada Square, London E14 5AL (Attention: Corporate Trust Office, Facsimile: +44 20 7964 2536).

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The term “ corporation ” includes corporations, associations, companies and business trusts.

“ Coupon ” or “ Coupons ” means any interest coupon or coupons, as the case may be, appertaining to any Capital Securities.

“ Default ” has the meaning specified in Section 5.03.

“ Depositary ” means, with respect to Capital Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities in registered form, a clearing agency that is designated to act as Depositary for such Global Securities as contemplated by Section 3.01.

“ Dollar ” or “ $ ” or any similar reference means the coin or currency of the United States of America which as at the time of payment is legal tender for the payment of public and private debts.

“ Dollar Preference Shares ” means a designated series of non-cumulative dollar preference shares, nominal value of $.01 each, of the Company for which, if applicable to a particular series of Capital Securities, the Company may exchange or convert any series of Capital Securities.

“ DTC ” means The Depository Trust Company or its nominee or its or their successor.

“ euro ” or “ € ” means the single currency of the participating member states in the Third Stage of European economic and monetary union pursuant to the Treaty establishing the European Community (as amended from time to time). “ Participating member states ” means those member states of the European Union from time to time which adopt a single, shared currency in the Third Stage, as defined and identified in the EMU legislation.

“ Euroclear ” means, the Euroclear Bank, as operator of the Euroclear System, or its nominee, or its or their successor.

“ Event of Default ” has the meaning specified in Section 5.01.

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

“ Exchange Date ”, when used with respect to any applicable series of Capital Securities, has the meaning specified in Section 13.03.

 
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“ Exchange Securities ” has the meaning specified in Section 3.01(l).

“ Foreign Currency ” means the euro or any currency issued by the government of any country (or a group of counties or participating member states) other than the United States of America which as at the time of payment is legal tender for the payment of public and private debts.

“ Foreign Government Securities ” means with respect to Capital Securities and Coupons, if any, of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

“ Global Security ” means (i) with respect to Capital Securities issued in bearer form, a global security in bearer form evidencing all or a part of a series of Capital Securities without coupons for payments attached, authenticated and delivered to the Holder for such series or such portion of such series, or any other Holder and, (ii) with respect to Capital Securities issued in registered form, a global certificate evidencing all or part of a series of Capital Securities, authenticated and delivered to the Holder and registered in the name of the Holder or its nominee.

“ Holder ” means a Person who shall at the time be the bearer of any bearer Capital Security in global or definitive form or in whose name a registered Capital Security in global or definitive form is registered in the Capital Security Register.

“ Indenture ” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Capital Securities established pursuant to Section 3.01.

“ Liquidator ” has the meaning specified in Section 12.06.

“ Maturity ”, when used with respect to any Capital Security, means the date, if any, on which the principal of such Capital Security becomes due and payable as therein or herein provided, whether by call for redemption, winding-up of the Company or otherwise.


“ Missed Payment ” has the meaning specified in Section 3.07(d).

“ Officer’s Certificate ” means a certificate delivered to the Trustee and signed by an Executive Director or an Assistant Director or the Secretary or a Deputy or Assistant Secretary of the Company.

“ Opinion of Counsel ” means a written opinion of legal advisors, who may be an employee of or legal advisors for the Company or other legal advisors.

“ Outstanding ”, when used with respect to Capital Securities or any series of Capital Securities means, as of the date of determination, all Capital Securities or all Capital Securities of such series, as the case may be, theretofore authenticated and delivered under this Capital Securities Indenture, except:

(i)         Capital Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii)       Capital Securities, or portions thereof, for whose payment or redemption money, U.S. Government Obligations or Foreign Government Securities in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Capital Securities; provided , that, if such Capital Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Capital Securities Indenture or provision therefor satisfactory to the Trustee has been made; and

(iii)        Capital Securities which have been paid pursuant to Section 11.6   or in exchange for or in lieu of which other Capital Securities have been authenticated and delivered pursuant to this Capital Securities Indenture, other than any such Capital Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Capital Securities are held by a bona fide purchaser in whose hands such Capital Securities are valid obligations of the Company;

provided, however , that in determining whether the Holders of the requisite   principal amount of the Outstanding Capital Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of a Capital Security denominated in a Foreign Currency shall be the Dollar equivalent, determined on the date of original issuance of such Capital Security, of the principal amount of such Capital Security; and (ii) Capital Securities beneficially owned by the Company or any other obligor upon the Capital Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding except that, in determining
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whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Capital Securities which a Responsible Officer of the Trustee actually knows to be so beneficially owned shall be so disregarded; provided, further, however, that Capital Securities so beneficially owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Capital Securities and that the pledgee is not the Company or any other obligor upon the Capital Securities or any Affiliate of the Company or of such other obligor.

“ Paying Agent ” means any Person (which may include the Company) authorized by the Company to pay the principal of (and premium, if any) and Payments (including Missed Payments, if any) on any Capital Securities on behalf of the Company.

“ Payment ” means, unless otherwise provided by Section 3.01 hereof, a payment made to Holders at a rate per annum of the principal amount of the Capital Securities of a series as determined by the Company and set forth in such Capital Securities or determinable pursuant to the terms of such Capital Securities.

“ Payment Date ”, when used with respect to any Capital Security, means the date for payment of any Payment on such Capital Security, as determined by the Company and set forth in such Capital Security.

“ Payment Event ” has the meaning specified in Section 5.03.

“ Payment Period ”, when used with respect to any series of Capital Securities, means the period beginning on the date of issue of the series of Capital Securities up to (but excluding) the first Payment Date and each successive period from (and including) a Payment Date up to (but excluding) the next succeeding Payment Date.

“ Person ” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“ Place of Payment ”, when used with respect to the Capital Securities of any series, means the place or places where the principal of (and premium, if any) Payments and Missed Payments, if any, on the Capital Securities of that series are payable as specified pursuant to Section 3.01 or, if not so specified, as specified in Section 10.02.

“ Predecessor Security ” of any particular Capital Security means every previous Capital Security evidencing all or a portion of the same debt as that evidenced by such particular Capital Security; and, for the purposes of this


definition, any Capital Security authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Capital Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Capital Security.

“ Redemption Date ”, when used with respect to any Capital Security to be redeemed, means the date fixed for such redemption by or pursuant to this Capital Securities Indenture.

“ Redemption Price ”, when used with respect to any Capital Security to be redeemed, means the price at which it is to be redeemed pursuant to this Capital Securities Indenture.

“ Regular Record Date ” for the Payment payable on any Payment Date on registered Capital Securities of any series means the date specified for the purpose pursuant to Section 3.01.

“ Responsible Officer ”, when used with respect to the Trustee, means any officer of the Trustee assigned to or working in the corporate trust department of the Trustee or, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“ Securities Act ” means the United States Securities Act of 1933, as amended.

“ Senior Claims ” in respect of any series of capital securities means (i) all claims of unsubordinated creditors of the Company admitted in the winding-up, (ii) all claims of creditors of the Company in respect of liabilities of the Company that are, or are expressed to be, subordinated (whether only in the event of the winding-up of the Company or otherwise) to the claims of unsubordinated creditors of the Company but not further or otherwise, (iii) all other claims except those which rank, or are expressed to rank, equally with or junior to the claims of Holders of any series of Capital Securities and (iv) any other Senior Claims provided with respect to Capital Securities of such series pursuant to Section 3.01.

“ Senior Creditors ” means the creditors of the Company holding the Senior Claims.

“ Solvency Condition ” means that, at the relevant time, the Company is solvent by virtue of (a) it being able to pay its debts as they fall due, and (b) the total non-consolidated assets of the Company exceed the Company’s total non- consolidated liabilities other than liabilities that do not constitute Senior Claims.
 

The determination of whether the Solvency Condition has been satisfied shall be made in accordance with Section 12.01(b).

“ Subsidiary ” has the meaning attributed thereto by Section 7.36 of the Companies Act 1985 of Great Britain as in force at the date as of which this instrument was executed.

“ successor entity ” has the meaning specified in Section 8.03.

“ Taxing Jurisdiction ” has the meaning specified in Section 10.04.

“ Trustee ” means the Person named as the “ Trustee ” in the first paragraph of this instrument until a successor trustee shall have become such pursuant to the applicable provisions of this Capital Securities Indenture, and thereafter “ Trustee ” shall mean the Person who is then the Trustee hereunder, and if at any time there is more than one such Person, “ Trustee ” shall mean and include each such Person; and “ Trustee ” as used with respect to the Capital Securities of any series shall mean the Trustee with respect to the Capital Securities of such series.

“ Trust Indenture Act ” means the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at the date as of which this instrument was executed, except as provided in Section 9.05.

“ United Kingdom ” means the United Kingdom of Great Britain and Northern Ireland.

“ United States ” and “ U.S. ” mean the United States of America and, except in the case of Sections 6.09 and 6.14, its territories and possessions.

“ U.S. Government Obligations ” means noncallable (i) direct obligations of the United States of America for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.

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Section 1.02 . Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Capital Securities Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Capital Securities Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of the legal advisor rendering such opinion all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Capital Securities Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Capital Securities Indenture shall include:

(a)         a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b)         a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c)         a statement that, in the opinion of each such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d)         a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.

Section 1.03 . Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, legal advisors, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representations by, legal
 

advisors may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such legal advisors know, or in the exercise of reasonable care should know, that the certificate or opinion or representation with respect to such matters is erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Capital Securities Indenture, they may, but need not, be consolidated and form one instrument.

Section 1.04 .  Acts of Holders.

(a)         Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Capital Securities Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “ Act ” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Capital Securities Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

(b)         The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. When such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c)        The ownership of registered Capital Securities shall be proved by the Capital Security Register.

(d)       The ownership of a bearer Capital Security or Coupon, and the principal amount and serial number of such Capital Security or Coupon and the date of holding the same, may be proved by the production of such Capital
 

Security or Coupon or by a certificate executed by any trust company, bank, banker or securities dealer satisfactory to the Trustee if such certificate shall be deemed by the Trustee to be satisfactory. Each such certificate shall be dated and shall state that on the date thereof a bearer Capital Security or Coupon of a particular series of a specified principal amount and bearing a specified serial number was deposited with or exhibited to such trust company, bank, banker or securities dealer by the Person named in such certificate. Any such certificate may be issued in respect of one or more Capital Securities or Coupons specified therein. The holding by the Person named in any such certificate of any Capital Security or Coupons specified therein shall be presumed to continue for a period of one year from the date of such certificate unless at the time of any determination of such holding (1) another certificate bearing the same or a later date issued in respect of the same Capital Security or Coupon shall be produced, or (2) the Capital Security or Coupon specified in such certificate shall be produced by some other Person, or (3) the Capital Security or Coupon specified in such certificate shall have ceased to be Outstanding.

(e)       Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Capital Security shall bind every future Holder of the same Capital Security and the Holder of every Capital Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of any thing done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Capital Security or such other Capital Security.

Section 1.05 . Notices, Etc. to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Capital Securities Indenture to be made upon, given or furnished to, or filed with,

(a)         the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile) to the Trustee at its Corporate Trust Office, or

(b)         the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, in the case of the Company, first-class postage prepaid, addressed to it at the address of its principal office specified in the first paragraph of this Capital Securities Indenture (unless another address has been previously furnished in writing to the Trustee by the Company, in which case at the last such address) marked “Attention: Company Secretary”.

Section 1.06 . Notice to Holders; Waiver. When this Capital Securities Indenture provides for notice to Holders of any event, such notice shall be

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sufficiently given (unless otherwise herein expressly provided) with respect to Global Securities in bearer form, if in writing and delivered or mailed and received, first-class postage prepaid, to the Holder affected by such event, at the address previously furnished in writing by the Holder to the Trustee and the Company and (i) if Outstanding bearer definitive Capital Securities are affected by such event, published at least once in an Authorized Newspaper in the Borough of Manhattan, The City of New York, and (ii) if Outstanding registered Capital Securities are affected, if given in writing and mailed, first-class postage prepaid, to each Holder of a registered Capital Security affected by such event in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act with respect to reports pursuant to Section 7.03(a).

Any notice published pursuant to clause (i) of the preceding paragraph shall be deemed to have been given on the date of such publication or, if published more than once, on the date of the first publication. If publication is not practicable, notice will be valid if given in such other manner, and shall be deemed to have been given on such date, as the Company shall determine. For so long as the Capital Securities of any series are represented by Global Securities, the Company will deliver a copy of all notices with respect to such series to the Holder (if the address of such Holder is known to the Company).

When notice to Holders of registered Capital Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Capital Securities Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Section 1.07 . Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Capital Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. If at any future time any provision required to be included herein by the Trust Indenture Act as in force at the date as of which this Capital Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Capital Securities Indenture were executed at such future time, the Company and the Trustee may enter into one or more indentures supplemental

 
hereto pursuant to Section 9.01 to change or eliminate (in whole or in part) such provision or limitation of this Capital Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article 9) no provision or limitation required to be included herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Capital Securities Indenture was executed may be so changed or eliminated.

Section 1.08 . Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 1.09 . Successors and Assigns. All covenants and agreements in this Capital Securities Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 1.10 . Separability Clause. In case any provision in this Capital Securities Indenture or in the Capital Securities or the Coupons shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 1.11 . Benefits of Capital Securities Indenture. Nothing in this Capital Securities Indenture or in the Capital Securities or the Coupons, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Holders of Capital Securities or the holders of Coupons, any benefit or any legal or equitable right, remedy or claim under this Capital Securities Indenture.

Section 1.12 . Governing Law. This Capital Securities Indenture and the Capital Securities and the Coupons, if any, shall be governed by and construed in accordance with the laws of the State of New York, except as stated in Section 2.01 and except for Section 12.01 which shall be governed by and construed in accordance with the laws of Scotland, and except that the authorization and execution of this Capital Securities Indenture, the Capital Securities and the Coupons shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of organization of the Company and the Trustee, as the case may be.

Section 1.13 . Saturdays, Sundays and Legal Holidays. The terms of the Capital Securities (and Coupons, if any) shall provide that, in any case where any Payment Date, Redemption Date or Exchange Date of a Capital Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Capital Securities Indenture or the Capital Securities or Coupons other than a provision in the Capital Securities or Coupons that specifically states

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that such provision shall apply in lieu of this Section) Payments and Missed Payments, if any (and premium, if any) or principal and the exchange of the Capital Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment (or such other Business Day as shall be provided in such Capital Security or Coupon) with the same force and effect as if made on such Payment Date, Redemption Date or Exchange Date, provided that no Payment shall accrue for the period from and after such Payment Date, Redemption Date or Exchange Date, as the case may be.

Section 1.14 . Appointment of Agent for Service. The Company has designated and appointed John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Capital Securities, the Coupons or this Capital Securities Indenture, but for that purpose only, and agrees that service of process upon said John Fawcett shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Capital Securities remain Outstanding until the appointment of a successor by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said John Fawcett in full force and effect so long as any of the Capital Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

Section 1.15 . Calculation Agent. If the Company appoints a Calculation Agent pursuant to Section 3.01 with respect to any series of Capital Securities, any determination of the interest rate on, or other amounts in relation to, such series of Capital Securities in accordance with the terms of such series of Capital Securities by such Calculation Agent shall (in the absence of manifest error, bad faith or willful misconduct) be binding on the Company, the Trustee and all Holders and (in the absence of manifest error, bad faith or willful misconduct) no liability to the Holders shall attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions.
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ARTICLE 2
C APITAL S ECURITY F ORMS

Section 2.01 . Forms Generally. The Capital Securities of each series and the Coupons, if any, to be attached thereto shall be in such forms as shall be established by or pursuant to action of the Company’s Board of Directors, or in one or more indentures supplemental hereto, pursuant to Section 9.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or Depositary therefor, or as may, consistently herewith, be determined by the officers executing such Capital Securities and Coupons, all as evidenced by any such execution; provided , however , that such Capital Securities and Coupons shall have endorsed   thereon a statement in the following form or in substantially the following form:

“The rights of the holder of the Capital Security/Coupon are, to the extent and in the manner set forth in Section 12.01 of the Capital Securities Indenture, subordinated to the claims of other creditors of the Company, and this Capital Security/Coupon is issued subject to the provisions of that Section 12.01, and the holder of this Capital Security/Coupon, by accepting the same, agrees to and shall be bound by such provisions. The provisions of Section 12.01 of the Capital Securities Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with, the laws of Scotland.”

The Trustee’s certificates of authentication shall be in substantially the form set forth in Section 2.02 or Section 6.14.

The definitive Capital Securities and Coupons shall be printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Capital Securities may be listed, all as determined by the officers executing such Capital Securities, as evidenced by their execution thereof.

Section 2.02 . Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication shall be in substantially the following form:


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CERTIFICATE OF AUTHENTICATION

This is one of the Capital Securities of the series designated herein referred to in the within-mentioned Capital Securities Indenture.
 
  Dated:    
     
 
THE BANK OF NEW YORK
MELLON, LONDON BRANCH
as Trustee
 
       
 
By:
   
    Authorized Signatory  
 


ARTICLE 3
T HE C APITAL S ECURITIES

Section 3.01 . Amount Unlimited; Issuable in Series. The aggregate principal amount of Capital Securities which may be authenticated and delivered under this Capital Securities Indenture is unlimited. The Capital Securities may be issued in one or more series.

There shall be established by or pursuant to action of the Board of Directors of the Company or established in one or more indentures supplemental hereto, prior to the initial issuance of Capital Securities of any series,

(a)         the title of the Capital Securities of the series (which shall distinguish the Capital Securities of the series from all other Capital Securities);

(b)         any limit upon the aggregate principal amount of the Capital Securities of the series which may be authenticated and delivered under this Capital Securities Indenture (except for Capital Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Capital Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06 or 11.07);

(c)         the date or dates, if any, on which the principal of (and premium, if any, on) the Capital Securities of the series is payable;

(d)         the rate or rates, if any, at which Payments on the Capital Securities of the series shall accrue or the manner of calculation of such rate or rates, if any, the issue date with respect to Capital Securities in bearer form, the date or dates from which such Payments shall accrue, the Payment Dates on which such

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Payments shall be payable or the manner of determination of such Payment Dates and, in the case of registered Capital Securities, the Regular Record Date for the interest payable on any Payment Date and any dates required to be established pursuant to Section 7.01;

(e)         whether any premium, upon redemption or otherwise, shall be payable by the Company on Capital Securities of the series;

(f)         the place or places where the principal of (and premium, if any) and any Payments or Missed Payments on Capital Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and any Payments or Missed Payments on Capital Securities of such series, at least one of such Paying Agents having an office or agency in the Borough of Manhattan, The City of New York (and none shall have any office or agency in the United Kingdom in the case of Payments on bearer Capital Securities);

(g)         other than with respect to any redemption of the Capital Securities pursuant to Section 11.08, whether or not such series of Capital Securities are to be redeemable, in whole or in part, at the Company’s option and, if so redeemable, the period or periods within which, the price or prices at which and the terms and conditions upon which, Capital Securities of the series may be redeemed, including the date referred to in Section 11.08;

(h)         the obligation, if any, of the Company to redeem or purchase Capital Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which Capital Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

(i)         if other than denominations of $25 and any multiple thereof, the denominations in which Capital Securities of the series in each applicable form shall be issuable and any provisions relating to redenomination of any Capital Securities;

(j)         if other than the principal amount thereof, the portion, or the manner of calculation of such portion, of the principal amount of Capital Securities of the series which shall be payable upon a declaration of acceleration or acceleration of the Maturity thereof pursuant to Section 5.02, upon redemption of Capital Securities of any series which are redeemable before their stated Maturity, or which the Trustee shall be entitled to file and prove a claim pursuant to Section 5.04;

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(k)        if Additional Amounts, pursuant to Section 10.04, will not be payable;

(l)         whether the Capital Securities of any series shall be exchangeable at the option of the Company into Dollar Preference Shares or other securities of the Company (“ Exchange Securities ”) pursuant to Article 13 and if so the terms of the Dollar Preference Shares or the nature and terms of the Exchange Securities into which such Capital Securities are exchangeable and any additional or other provisions relating to such exchange;

(m)       if other than Dollars, provisions, if any, for the Capital Securities of the series to be denominated, and payments thereon to be made, in Foreign Currencies and specifying the manner and place of payment thereon and any other terms with respect thereto;

(n)         if other than the coin or currency in which the Capital Securities of that series are denominated, the coin or currency in which payment of the principal of and premium and Payments and Missed Payments, if any, on the Capital Securities of such series shall be payable;

(o)         if the principal of and premium and Payments and Missed Payments, if any, on the Capital Securities of such series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Capital Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;

(p)         whether the Capital Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and the initial Holder with respect to such Global Security or Capital Securities;

(q)         if the Capital Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Capital Security of such series or otherwise) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;

(r)         if the amounts of payments of principal of (and premium, if any) or Payments or Missed Payments, if any, on the Capital Securities of the series may be determined with reference to an index or are otherwise not fixed on the original issue date thereof, the manner in which such amounts shall be determined and the Calculation Agent, if any, who shall be appointed and authorized to calculate such amounts;

(s)         any other Events of Default, Defaults or covenants with respect to the Capital Securities of such series;

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(t)         the forms of Capital Securities of the series and any Coupons appertaining thereto; and

(u)         any other terms of the series (which terms shall not be inconsistent with the provisions of this Capital Securities Indenture).

All Capital Securities of any one series shall be substantially identical except as to denomination and the fact that Capital Securities of any one series may be issuable in both bearer and registered form and except as may otherwise be provided in or pursuant to such action or in any such indenture supplemental hereto.

If the forms of Capital Securities of any series and any Coupons to be attached thereto, or any of the terms thereof, are established by action taken by the Board of Directors of the Company, copies of the Board Resolutions in respect thereof shall be delivered to the Trustee at or prior to the delivery of the Company Order pursuant to Section 3.03 for the authentication and delivery of such Capital Securities.

Section 3.02 . Denominations. The Capital Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specification with respect to Capital Securities of any series, the Capital Securities of each series shall be issuable in denominations of $25 each and any integral multiple thereof. Unless otherwise specified in accordance with Section 3.01, any Global Security issued and delivered to the Holder shall be issued in the form of units with each $25 principal amount of such Global Security constituting one unit.

Section 3.03 . Execution, Authentication, Delivery and Dating. The Capital Securities and any Coupon shall be executed on behalf of the Company by any two Directors or by one Director and Secretary to the Company. The signature of any of these officers on the Capital Securities may be manual or facsimile. Capital Securities or Coupons bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Capital Securities or Coupons, provided such officer was the holder of such office at the date of this Capital Securities Indenture.

At any time and from time to time after the execution and delivery of this Capital Securities Indenture, the Company may deliver Capital Securities of any series executed by the Company and, in the case of bearer Capital Securities other than a Global Security, having attached thereto appropriate Coupons, if any, to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Capital Securities, and the Trustee in accordance with the

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Company Order shall authenticate and deliver such Capital Securities. In authenticating such Capital Securities and accepting the additional responsibilities under this Capital Securities Indenture in relation to such Capital Securities the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Capital Securities Indenture.

The Trustee shall not be required to authenticate such Capital Securities if the issue of such Capital Securities pursuant to this Capital Securities Indenture will affect the Trustee’s own rights, duties or immunities under the Capital Securities or any Coupons and this Capital Securities Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

Each registered Capital Security shall be dated the date of its authentication.

Each bearer Capital Security shall be dated the date specified pursuant to Section 3.01.

No Capital Security or Coupon appertaining thereto shall be entitled to any benefit under this Capital Securities Indenture or be valid or obligatory for any purpose unless there appears on such Capital Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual signature, and such certificate upon any Capital Security shall be conclusive evidence, and the only evidence, that such Capital Security has been duly authenticated and delivered hereunder and that such Capital Security or Coupon is entitled to the benefits of this Capital Securities Indenture.

The Trustee shall not authenticate or deliver any bearer Capital Securities until any matured Coupons appertaining thereto shall have been detached and cancelled, except as otherwise provided in Section 3.04 or 3.05 or as permitted in Section 3.06.

Section 3.04 . Temporary Capital Securities. Pending the preparation of definitive Capital Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Capital Securities substantially of the tenor of the definitive Capital Securities in lieu of which they are issued, which Capital Securities may be printed, lithographed, typewritten, photocopied or otherwise produced. Temporary Capital Securities may be issued as bearer Capital Securities with or without Coupons attached thereto or as registered Capital Securities in any authorized denomination, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Capital Securities may determine, all as evidenced by such execution.
 
 
 

If temporary Capital Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Capital Securities, definitive Capital Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Capital Securities of such series, the temporary Capital Securities of such series shall be exchangeable for definitive Capital Securities of such series containing identical terms and provisions upon surrender of the temporary Capital Securities of such series (including any and all unmatured Coupons or matured Coupons in default attached thereto) at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Capital Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate principal amount of definitive Capital Securities of the same series of authorized denominations containing identical terms and provisions and, in the case of bearer Capital Securities, having attached thereto any appropriate Coupons. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Capital Securities of any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Capital Securities Indenture as definitive Capital Securities of such series.

The provisions of this Section 3.04 are subject to any restrictions or limitations on the issue and delivery of temporary bearer Capital Securities of any series that may be established pursuant to Section 3.01 (including any provision that bearer Capital Securities of such series initially be issued in the form of a Global Security to be delivered to a depositary of the Company located outside the United States of America and the procedures pursuant to which definitive bearer Capital Securities of such series would be issued in exchange for such Global Security).

Section 3.05 .  Registration, Registration of Transfer and Exchange.

(a)       Global Securities. This Section 3.05(a) shall apply to Global Securities unless otherwise specified, as contemplated by Section 3.01.

Except as otherwise specified as contemplated by Section 3.01 hereof, the Capital Securities shall be initially issued and represented by one or more Global Securities in registered form, without Coupons attached thereto, which shall be authenticated as contemplated by this Indenture.

Each Global Security in registered form authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee
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thereof or custodian therefor, and each such Global Security shall constitute a single Capital Security for all purposes of this Indenture. Except as otherwise specified as contemplated by Section 3.01 hereof, each Global Security in registered form authenticated under this Indenture shall be initially registered in the name of DTC only.

With respect to Global Securities in registered form, unless the Global Security is presented by an authorized representative of the Holder to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Holder and any payment is made to such nominee, any transfer, pledge or other use of the Global Security in registered form for value or otherwise shall be wrongful since the registered owner of such Global Security, the nominee of the Holder, has an interest in such Global Security.

Except as otherwise specified as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Capital Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary or Book-Entry Depositary, if any, notifies the Company that it is unwilling or unable to continue to act as Depositary or Book-Entry Depositary, as applicable, or the relevant Depositary or Book-Entry Depositary ceases to be a clearing agency registered under the Exchange Act and a successor depositary is not appointed by the Company within 120 days of such notification, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Capital Securities when due or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series should be exchanged for definitive Capital Securities of that series in registered form. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Capital Securities in registered form only bearing Payments (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which interest shall accrue, the same Payment Dates or manner of determination of such Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Capital Securities in registered form shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.

Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be exchangeable for Capital Securities issuable in authorized denominations of a like aggregate principal amount and tenor.
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No Global Security in registered form may be transferred except as a whole by the Holder to a nominee of the Holder or by the Holder or any such nominee to a successor of the Holder or a nominee of such successor. Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Capital Securities in definitive form and will not be considered the holders thereof for any purpose under this Capital Securities Indenture.

In the event that a Global Security is surrendered for redemption or exchange for Dollar Preference Shares or Exchange Securities in part pursuant to Section 11.07 or Section 13.05, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.

The Agent Members and any beneficial owners shall have no rights under this Capital Securities Indenture with respect to any Global Security held on their behalf by a Holder, and such Holder may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Holder or impair, as between any such Holder or other clearance service and its Agent Members and Holders the operation of customary practices governing the exercise of the rights of a holder of any security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Capital Securities Indenture.

In connection with any exchange of interests in a Global Security for definitive Capital Securities of another authorized form, as provided in this subsection Section 3.05(a), then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Capital Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Capital Securities without charge (unless the definitive Capital Securities in registered form are to be issued to an Excepted Person (as defined in Section 13.10) in which case the Company or Trustee may require payment of any taxes or governmental charges arising) and the Trustee shall authenticate and deliver, in

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exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Capital Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 3.05 shall be exchangeable for Capital Securities issuable in the denominations specified as contemplated by Section 3.01 and registered in such names as the Holder of such Global Security shall direct. If a definitive Capital Security in registered form is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant Payment Date, Payments will not be payable on such Payment Date in respect of such definitive Capital Security, but will be payable on such Payment Date only to the person to whom Payments in respect of such portion of such Global Security are payable.

A Depositary may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Capital Securities Indenture with respect to the Capital Securities.

(b)       Except as otherwise specified pursuant to Section 3.01, registered Capital Securities of any series may only be exchanged for a like aggregate principal amount of registered Capital Securities of such series of other authorized denominations containing identical terms and provisions, and, if bearer Capital Securities of any series are issued in more than one authorized denomination, such bearer Capital Securities may only be exchanged for a like aggregate principal amount of bearer Capital Securities of other authorized denominations containing identical terms and provisions. If Capital Securities of any series are issued in both registered and bearer form, bearer Capital Securities of such series may be exchanged for a like aggregate principal amount of registered Capital Securities of such series of authorized denominations containing identical terms and provisions and registered Capital Securities of such series may be exchanged for a like aggregate principal amount of bearer Capital Securities of such series of authorized denominations. Capital Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Capital Security or Capital Securities of the same series which the Holder making the exchange shall be entitled to receive. All bearer Capital Securities surrendered for exchange shall have attached all unmatured Coupons appertaining thereto, if any, and, in case at the time of any such exchange any Payment on such Capital Securities is in default, shall in addition have attached all matured Coupons in default appertaining thereto.


 
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Except as otherwise specified pursuant to Section 3.01, the Company shall cause to be kept in the principal corporate trust office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “ Capital Security Register ” provided , no such Capital Security Register shall be maintained in any office or agency in the United Kingdom) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of registered Capital Securities and of transfers of such Capital Securities. The Trustee is hereby appointed “ Capital Security Registrar ” for the purpose of registering Capital Securities in registered form and   transfers of Capital Securities in registered form as herein provided.

Registered Capital Securities shall be transferable only on the Capital Security Register. Upon surrender for registration of transfer of any registered Capital Security of any series, together with the form of transfer endorsed on it, duly completed and executed at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver to the address specified in the form of transfer, within three Business Days in the name of the designated transferee or transferees, one or more new registered Capital Securities of the same series of any authorized denominations containing identical terms and provisions, of a like aggregate principal amount. If only part of a registered Capital Security is transferred, a new registered Capital Security of an aggregate principal amount equal to the amount not being transferred shall be executed by the Company, and authenticated and delivered by the Trustee to the transferor, in the name of the transferor, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the registered Capital Security. The new registered Capital Security will be delivered to the transferor by uninsured post at the risk of the transferor to the address of the transferor appearing in the Capital Security Register. A new registered Capital Security of an aggregate principal amount equal to the amount being transferred shall be delivered by the Trustee to the transferee, in the name of the transferee, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the registered Capital Security. The new registered Capital Security will be delivered to the transferee by uninsured post at the risk of the transferee to the address of the transferee specified in the form of transfer.

Bearer Capital Securities and Coupons shall be transferable by delivery.

All Capital Securities and any Coupons issued upon any registration of transfer or exchange of Capital Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Capital Securities Indenture, as the Capital Securities and any Coupons surrendered upon such registration of transfer or exchange.


 
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Every registered Capital Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Capital Security Registrar duly executed, by the registered Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Capital Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Capital Securities, other than exchanges pursuant to Section 3.04, 9.06 or 11.07 not involving any transfer.

The Company shall not be required (i) to issue, register the transfer of or exchange any Capital Security of any series during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Capital Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the day of the giving of such notice, or (ii) to register the transfer of or exchange any Capital Security so selected for redemption in whole or in part, except the unredeemed portion of any Capital Securities being redeemed in part.

Notwithstanding anything herein or in the terms of any series of Capital Securities to the contrary, neither the Company nor the Trustee (which shall rely on an Officer’s Certificate and an Opinion of Counsel) shall be required to exchange any bearer Capital Security for a registered Capital Security or any registered Capital Security for a bearer Capital Security if such exchange would result in any adverse tax consequence to the Company under then applicable tax laws of the United States of America or the United Kingdom or any political subdivision thereof or therein.

Section 3.06 . Mutilated, Destroyed, Lost and Stolen Capital Securities. If any mutilated Capital Security or Coupon (including any Global Security) is surrendered to the Trustee, the Company may execute and the Trustee shall, in the case of a Capital Security, authenticate and deliver, or in the case of a Coupon deliver, in exchange therefor a new Capital Security or Coupon of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Capital Security (including any Global Security) or Coupon, if any, and (ii) such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Trustee that such Capital Security or Coupon, if any, has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, or in the case of a Coupon deliver, in lieu of any such
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destroyed, lost or stolen Capital Security or Coupon, if any, a new Capital Security or Coupon, if any, of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Capital Security or Coupon has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Capital Security or Coupon, if any, pay such Capital Security or Coupon.

Upon the issuance of any new Capital Security or any Coupon under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Capital Security or Coupon of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Capital Security or Coupon shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Capital Security or Coupon shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Capital Securities Indenture equally and proportionately with any and all other Capital Securities and Coupons, if any, of that series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Capital Securities or Coupons.

Section 3.07 .  Payments; Rights Preserved.

Except as otherwise provided in a supplemental indenture:

(a)         The Company has no obligation to make any Payments with respect to any series of Capital Securities except in the case of an Event of Default and then to the extent (but only to the extent) provided in Section 5.02 and in the case of a Default and then to the extent (but only to the extent) provided in Section 5.03.

(b)         Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Capital Securities, Payments or Missed Payments, if any, on any Capital Securities which are payable, and are paid or duly provided for, on any Payment Date shall be paid, in the case of registered Capital Securities, to the Person in whose name that Capital Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such Payments and, in the case of definitive Capital Securities in bearer form,
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upon presentation and surrender of the Coupon appertaining thereto to a Paying Agent of the Company outside the United Kingdom in respect of the Payment or Missed Payments to be paid on such Payment Date or, in the case of Global Securities held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United Kingdom for collection by the Holder. Any payment of Missed Payments on a registered Capital Security which is not made on a Payment Date or at Maturity shall be made to the person who is the Holder on the record date established by the Company for such purpose.

In the case of registered Capital Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained by the payee with, a bank in The City of New York.

In the case of registered Capital Securities where payment is to be made in a Foreign Currency, payment will be made as established pursuant to Section 3.01.

(c)         Subject to the foregoing provisions of this Section 3.07, each Capital Security delivered under this Capital Securities Indenture upon registration of transfer of or in exchange for or in lieu of any other Capital Security shall carry the rights to accrued and unpaid Payments and Missed Payments, if any, and to accrue Payments, which were carried by such other Capital Security.

(d)         “ Missed Payments ” means any Payments in respect of the Capital Securities of a series not paid on any applicable Payment Date, together with any other Payments in respect of the Capital Securities of such series not paid on any other Payment Date, so long as the same remain unpaid. Missed Payments shall accumulate until paid and shall not bear interest.

Section 3.08 . Persons Deemed Owners. Prior to due presentment of a registered Capital Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Capital Security is registered as the owner of such Capital Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.05 and Section 3.07) any Payment and Missed Payments, if any, on such Capital Security and for all other purposes whatsoever, whether or not such Capital Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

The Company, the Trustee and any agent of the Company or the Trustee may treat the bearer of any bearer Capital Security or any Coupon as the owner of such Capital Security or Coupon, as the case may be, for the purpose of receiving payment of principal of (and premium, if any) and any Payment and Missed
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Payments, if any, on such Capital Security or payment of such Coupon, as the case may be, and for all other purposes whatsoever, whether or not such Capital Security or Coupon be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

Section 3.09 . Cancellation. All Capital Securities and Coupons surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Capital Securities previously authenticated and delivered hereunder and Coupons which the Company may have acquired in any manner whatsoever, and all Capital Securities and Coupons so delivered shall be promptly cancelled by the Trustee. No Capital Securities shall be authenticated in lieu of or in exchange for any Capital Securities cancelled as provided in this Section, except as expressly permitted by the provisions of the Capital Securities of any series or pursuant to the provisions of this Capital Securities Indenture. The Trustee shall deliver to the Company all cancelled Capital Securities and Coupons held by the Trustee.

Section 3.10 . Computation of Payments. Except as otherwise specified pursuant to Section 3.01 for Capital Securities of any series, Payments on the Capital Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

Section 3.11 . Cusip Numbers. The Company in issuing Capital Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Capital Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Capital Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP” numbers.

ARTICLE 4
S ATISFACTION AND D ISCHARGE

Section 4.01 .  Satisfaction and Discharge of Capital Securities Indenture. This Capital Securities Indenture shall upon Company Request cease to be of further effect with respect to Capital Securities of any series (except as to any surviving rights of registration of transfer or exchange of Capital Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and
 

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discharge of this Capital Securities Indenture with respect to the Capital Securities of such series when

(a)         either

(i)         all Capital Securities of such series theretofore authenticated and delivered and all Coupons, if any, appertaining thereto (other than (i) Capital Securities and Coupons, if any, which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (ii) Capital Securities or Coupons for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

(ii)         all such Capital Securities and Coupons, if any, not theretofore delivered to the Trustee for cancellation

(A)         are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or

(B)         are to be exchanged for Dollar Preference Shares or Exchange Securities and notice of exchange of such Capital Securities for Dollar Preference Shares or Exchange Securities pursuant to Article 13 shall have been given,

and the Company has deposited or caused to be deposited with the Trustee, as trust funds in trust for the purpose, an amount in cash, or U.S. Government Obligations (with respect to Capital Securities denominated in Dollars) or Foreign Government Securities (with respect to Capital Securities denominated in the same Foreign Currency) maturing, in the case of (i) above, as to principal and any accrued Payments and Missed Payments, if any, and, in the case of (ii) above, as to any accrued Payments and Missed Payments, if any, in such amounts and at such times as will ensure the availability of cash sufficient to pay and discharge all claims with respect to such Capital Securities and Coupons not theretofore delivered to the Trustee for cancellation, in the case of (i) above, for principal (and premium, if any) and any accrued Payments and Missed Payments, if any, and, in the case of (ii) above, as to any accrued Payments and Missed Payments, if any, to the date of such deposit (in the case of Capital Securities and Coupons which have become due and payable) or to the Redemption Date or the Exchange Date, as the case may be;


(b)         the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Capital Securities of such series; and

(c)         the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Capital Securities Indenture with respect to the Capital Securities of such series have been complied with.

Notwithstanding any satisfaction and discharge of this Capital Securities Indenture, the obligations of the Company to the Trustee under Section 6.07, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if cash, U.S. Government Obligations and/or Foreign Government Securities shall have been deposited with the Trustee pursuant to subclause 4.01(a)(ii) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive such satisfaction and discharge.

Section 4.02 . Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.03, all cash, U.S. Government Obligations and Foreign Government Securities deposited with the Trustee pursuant to Section 4.01 shall be held in trust and such cash and the proceeds from such U.S. Government Obligations and/or Foreign Government Securities shall be applied by it, in accordance with the provisions of the Capital Securities of such series, any Coupons appertaining thereto and this Capital Securities Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and accrued but unpaid Payments, if any, and Missed Payments, if any, for the payment of which such cash, U.S. Government Obligations and/or Foreign Government Securities have been deposited with the Trustee.

Section 4.03 . Repayment to Company. The Trustee, the Calculation Agent and any Paying Agent promptly shall pay to the Company upon Company Request any excess money, U.S. Government Obligations and/or Foreign Government Securities held by them at any time with respect to any series of Capital Securities.


ARTICLE 5
R EMEDIES

Section 5.01 . Events of Default. “ Event of Default ”, wherever used herein with respect to Capital Securities of a particular series, means (i) the making of an order by a court of competent jurisdiction which is not successfully


appealed within 30 days of the making of such order, or valid adoption by the shareholders of the Company of an effective resolution, for the winding-up of the Company (other than under or in connection with a scheme of amalgamation, arrangement or reconstruction not involving bankruptcy or insolvency) or (ii) any other Event of Default provided with respect to Capital Securities of such series pursuant to Section 3.01.

Section 5.02 . Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Capital Securities of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Capital Securities of such series may declare the principal amount of, any accrued but unpaid Payments and any Missed Payments on, the Capital Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.

At any time after such a declaration of acceleration with respect to Capital Securities of any series has been made but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holder or Holders of a majority in aggregate principal amount of the Outstanding Capital Securities of such series, by written notice to the Company and the Trustee, may rescind or annul such declaration of acceleration and its consequences (including any Event of Default under another series of Capital Securities arising therefrom) but only if

(a)        the Company has paid or deposited with the Trustee a sum sufficient to pay

(i)         the principal of (and premium, if any, on) any Capital Securities of such series which have become due otherwise than by such declaration of acceleration and any Payments or Missed Payments, if any, thereon at the rate or rates prescribed therefor in such Capital Securities,

(ii)         to the extent that payment of such interest is lawful, interest upon overdue Payments at the rate or rates prescribed therefor in such Capital Securities, and

(iii)         all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(b)         all Events of Default with respect to Capital Securities of such series have been cured or waived as provided by Section 5.13.
 
 

No such rescission or annulment shall affect any subsequent default or impair any right consequent thereon.

Section 5.03 . Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee.

“ Default ” wherever used herein with respect to Capital Securities of a particular series, means any one of the following events (whatever the reason for such Default and whether it shall be voluntary or involuntary or be effected by operation of law pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a)         the Company fails to pay or to set aside a sum to provide for payment of any Missed Payments on or prior to the date upon which (i) a dividend is paid on any class of share capital of the Company, or (ii) any other Capital Securities of the particular series are redeemed or repurchased (other than a repurchase in connection with the dealing in securities), and such failure continues for 30 days; or

(b)         the Company fails to pay or to set aside a sum to provide for payment of the principal amount (and premium, if any), any accrued but unpaid Payments and any Missed Payments on the date fixed for redemption of Capital Securities of such series and such failure continues for seven days; or

(c)         any other Default or Payment Event (as defined below) provided with respect to Capital Securities of such series pursuant to Section 3.01;

provided that it shall not be a Default if the Company fails to make payment as   described in (a), (b) or (c) above and the Solvency Condition is not satisfied on the thirtieth day following such failure, in the case of (a) above or on the seventh day following such failure, in the case of (b) above and on the relevant day following such failure, in the case of (c) above. The failure of the Company to make a payment specified in clause (a), (b) or (c) above because of a failure to satisfy the Solvency Condition is referred to herein as a “ Payment Event ”.

If a Default occurs and is continuing, the Trustee may commence a judicial proceeding for the collection of the sums so due and unpaid or a proceeding for the winding-up in Scotland (but not elsewhere) of the Company, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding Capital Securities to be due and payable. The Trustee and Holders of Capital Securities by their acceptance of such Capital Securities will be deemed to have waived any right of set-off, counterclaim or combination of accounts with respect to such Capital Securities or this Indenture (or between the obligations under or in respect of any Capital


No recourse for the payment of the principal of (or premium, if any) or Payments or Missed Payments, if any, on any Capital Security, or for any claim based thereon or on any Coupon or otherwise in respect thereof or of such Coupon and no recourse under or upon any obligation, covenant or agreement of the Company in this Capital Securities Indenture, or in any Capital Security or in any Coupon, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, past, present or future, of the Company or of any successor corporation of the Company, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that to the extent lawful all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Capital Securities Indenture and the issue of the Capital Securities.

Section 5.04 . Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, winding-up or other judicial proceeding relative to the Company or any other obligor upon the Capital Securities of any series or to the property of the Company or such other obligor or their creditors (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency), the Trustee (irrespective of whether the principal of the Capital Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or Payments and Missed Payments, if any) shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Capital Security and each holder of a Coupon to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.07.

 
 
 

Subject to Article 8 and Section 9.02, nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of any Capital Security or any holder of any Coupon any plan of reorganization, arrangement, adjustment, or composition affecting any Capital Securities or Coupons or the rights of any Holder of any Capital Security or any holder of any Coupon or to authorize the Trustee to vote in respect of the claim of any such Holder or holder in any such proceeding.

The provisions of this Section 5.04 are subject to the provisions of Section 12.01.

Section 5.05 . Trustee May Enforce Claims Without Possession of Capital Securities. All rights of action and claims under this Capital Securities Indenture   or the Capital Securities or Coupons, if any, may be prosecuted and enforced by the Trustee without the possession of any of the Capital Securities or Coupons or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel (subject, with regard to the Company, to the provisions of Section 12.01) be for the ratable benefit of the Holders of the Capital Securities and any holders of any Coupons in respect of which such judgment has been recovered.

Section 5.06 . Application of Money Collected. Any money collected by the Trustee pursuant to this Article in respect of any series of Capital Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (and premium, if any) or Payments or Missed Payments, if any, upon presentation of such Capital Securities and any Coupons and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts applicable to such series of Capital Securities in respect of which or for the benefit of which such money has been collected due the Trustee under Section 6.07;

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and Payments or Missed Payments, if any, on such series of Capital Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Capital Securities for principal (and premium, if any) and Payments and Missed Payments, if any, respectively; and

THIRD: To the payment of the balance, if any, to the Company.

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Section 5.07 . Limitation on Suits. No Holder of any Capital Security of any series or holder of any Coupon shall have any right to institute any proceeding, judicial or otherwise, with respect to this Capital Securities Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(a)         such Holder has previously given written notice to the Trustee of a continuing Event of Default or Default with respect to Capital Securities of the same series specifying such Event of Default or Default and stating that such notice is a “ Notice of Default ” hereunder;

(b)         the Holders of not less than 25% in aggregate principal amount of the Outstanding Capital Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default or Default in its own name, as Trustee hereunder;

(c)         such Holder of a Capital Security or holder of a Coupon has offered to the Trustee reasonable indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

(d)         the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(e)         no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Capital Securities of such series;

it being understood and intended that no one or more Holders of Capital Securities of a particular series or holders of Coupons appertaining thereto, if any, shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Capital Securities Indenture to affect, disturb or prejudice the rights of any other such Holders or holders, or to obtain or to seek to obtain priority or preference over any other such Holders or holders or to enforce any right under this Capital Securities Indenture, except in the manner herein provided and for the equal and ratable benefit of all Holders of Capital Securities of such series or holders of such Coupons.

Section 5.08 . Unconditional Right of Holders to Receive Principal, Premium and Payments, If Any. Notwithstanding any other provision in this   Capital Securities Indenture, the Holder of any Capital Security or the holder of any Coupon appertaining thereto shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium or interest on, if any) and (subject to Section 3.07) any Payment or Missed Payments on, if any, such Capital Security when due and payable in accordance with the provisions of the Capital Securities Indenture and as expressed in such Capital Security or


Coupon (or, in the case of redemption or exchange, on the Redemption Date or Exchange Date, as the case may be) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

Section 5.09 . Restoration of Rights and Remedies. If the Trustee or any Holder of any Capital Security or the holder of any Coupon has instituted any proceeding to enforce any right or remedy under this Capital Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder or holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders of Capital Securities and the holders of any Coupons shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Capital Securities and the holders of any Coupons shall continue as though no such proceeding had been instituted.

Section 5.10 . Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Capital Securities or any Coupons in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Capital Securities or holders of any Coupons is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 5.11 . Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Capital Security or holder of any Coupon to exercise any right or remedy accruing upon any Event of Default or Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Capital Securities or holders of any Coupons may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Capital Securities or holders of any Coupons, as the case may be.

Section 5.12 . Control by Holders. The Holders of a majority in aggregate principal amount of the Outstanding Capital Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Capital Securities of such series, provided that


(a)        such direction shall not be in conflict with any rule of law or with this Capital Securities Indenture;

(b)         the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders of any Capital Securities of any series not taking part in such direction with respect to which the Trustee is acting as the Trustee; and

(c)         the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

Section 5.13 . Waiver of Past Defaults. The Holders of not less than a majority in aggregate principal amount of the Outstanding Capital Securities of any series may on behalf of the Holders of all the Capital Securities of such series and holders of any related Coupons waive any past Event of Default or Default or Payment Event hereunder with respect to such series and its consequences, except an Event of Default or Default

(a)         in the payment of the principal of (or premium, if any) or Payments (including Missed Payments, if any) on any Capital Security of such series, or

(b)         in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Capital Security of such series affected.

Upon any such waiver, such Event of Default, Default or Payment Event shall cease to exist, and any Event of Default or Default or Payment Event with respect to any series arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Capital Securities Indenture, but no such waiver shall extend to any subsequent or other Event of Default or Default or Payment Event or impair any right consequent thereon.

Section 5.14 . Undertaking for Costs. All parties to this Capital Securities Indenture agree, and each Holder of any Capital Security and each holder of any Coupon by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Capital Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Capital Securities of any
 
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series, or to any suit instituted by any Holder or holder of a Coupon for the enforcement of the payment of the principal of (or premium, if any) or Payments or Missed Payments, if any, on any Capital Security on or after the dates upon which such Payments or Missed Payments become due and payable pursuant to the terms hereof or the terms expressed in such Capital Security or Coupon (or, in the case of redemption or exchange, on or after the Redemption Date or the Exchange Date, as the case may be).


ARTICLE 6
T HE T RUSTEE

Section 6.01 . Certain Duties and Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Capital Securities Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Capital Securities Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

Section 6.02 . Notice of Defaults. Within 90 days after the occurrence of any Event of Default, Default or Payment Event hereunder with respect to Capital Securities of any series of which a Responsible Officer of the Trustee has actual knowledge the Trustee shall transmit in the manner and to the extent provided in Section 1.06 to Holders of Capital Securities of such series notice of such Event of Default, Default or Payment Event hereunder known to the Trustee, unless such Event of Default, Default or Payment Event shall have been cured or waived; provided, however , that, the Trustee shall be protected in withholding such notice   if it determines in good faith that the withholding of such notice is in the interest of the Holders of Capital Securities of such series.

Section 6.03 . Certain Rights of Trustee. Subject to the provisions of Section 6.01:

(a)       the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

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(b)         any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution;
 
(c)         whenever in the administration of this Capital Securities Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;

(d)         the Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e)         the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Capital Securities Indenture at the request or direction of any of the Holders pursuant to this Capital Securities Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f)         the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit at the reasonable expense of the Company and shall incur no liability by reason of such inquiry or investigation; provided that the Trustee shall not be entitled to such information which the Company is prevented from disclosing as a matter of law or contract;

(g)         the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent (other than an officer or employee of the Trustee) or attorney appointed with due care by it hereunder;

(h)         the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Capital Securities Indenture;

(i)         the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 
 
(j)         the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee; and

(k)         the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder.

Section 6.04 . Not Responsible for Recitals or Issuance of Capital Securities. The recitals contained herein and in the Capital Securities, except the   Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Capital Securities Indenture or of the Capital Securities or Coupons, except that the Trustee represents and warrants that it has duly authorized, executed and delivered this Capital Securities Indenture. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Capital Securities or the proceeds thereof.

Section 6.05 . May Hold Capital Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Capital Security Registrar and any Calculation Agent or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Capital Securities or Coupons and, subject to Section 6.08 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Capital Security Registrar, Calculation Agent or such other agent.

Section 6.06 . Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

Section 6.07 .  Compensation and Reimbursement.   The Company agrees

(a)       to pay to the Trustee from time to time compensation for all services rendered by it hereunder as agreed upon in writing by the Company from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(b)         except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Capital Securities Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and

(c)         to fully indemnify the Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or expense (including legal fees and expenses) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder but excluding any tax liabilities of the Trustee in respect of its net profits.

The Trustee shall notify the Company in writing of the commencement of any action or claim in respect of which indemnification may be sought promptly after a Responsible Officer of the Trustee becomes aware of such commencement (provided that the failure to make such notification shall not affect the Trustee’s rights hereunder) and the Company shall be entitled to participate in, and to the extent it shall wish, to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Trustee. The Trustee shall not compromise or settle any such action or claim without the written consent of the Company, which consent shall not be unreasonably withheld.

As security for the performance of the obligations of the Company under this Section, the Trustee shall have a senior claim to which the Capital Securities are hereby made subordinate, upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (or premium, if any) or Payments or Missed Payments, if any, on the Capital Securities.

Section 6.08 . Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Capital Securities Indenture.

Section 6.09 . Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder with respect to each series which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of

44
 
at least $50,000,000, subject to supervision or examination by Federal or State or District of Columbia authority and, if there be such corporation willing and able to act as trustee on reasonable and customary terms, having its corporate trust office or agency in the Borough of Manhattan, The City of New York, New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 6.

Section 6.10 .  Resignation and Removal; Appointment of Successor.

(a)         No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

(b)         The Trustee may resign at any time with respect to the Capital Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Capital Securities of such series.

(c)         The Trustee may be removed at any time with respect to the Capital Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Capital Securities of such series delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Capital Securities of such series.

(d)        If at any time:

(i)        the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Capital Security of the series as to which the Trustee has a conflicting interest for at least six months, or
 
 
(ii)         the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Capital Security for at least six months, or

(iii)         the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge, or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or

(iv)         the Trustee shall fail to perform its obligations to the Company under the Capital Securities Indenture in any material respect,

then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to any or all series of Capital Securities or (ii) subject to Section 5.14 (and except in the case of subparagraph 6.10(d)(iv) above), any Holder who has been a bona fide Holder of a Capital Security for at least six months (and, in the case of Section 6.10(d)(i) above, who is a Holder of a Capital Security of the series as to which the Trustee has a conflicting interest) may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Capital Securities and the appointment of a successor Trustee or Trustees.

(e)       If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Capital Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Capital Securities of such series (it being understood that any successor Trustee may be appointed with respect to the Capital Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Capital Securities of any particular series), and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Capital Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Capital Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Capital Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Capital Securities of any series shall have been so appointed by the Company or the Holders of Capital Securities of such series and accepted appointment in the manner hereinafter required by Section 6.11, any Holder who has been a bona fide Holder of a Capital Security of such

 
series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Capital Securities of such series.

(f)       The Company shall give notice of each resignation and each removal of the Trustee with respect to the Capital Securities of any series and each appointment of a successor Trustee with respect to the Capital Securities of any series in the manner and to the extent provided in Section 1.06. Each notice shall include the name of the successor Trustee with respect to the Capital Securities of such series and the address of its Corporate Trust Office.

Section 6.11 .  Acceptance of Appointment by Successor.

(a)         In case of the appointment hereunder of a successor Trustee with respect to all Capital Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee, all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

(b)         In case of the appointment hereunder of a successor Trustee with respect to the Capital Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Capital Securities of such series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1)   shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Capital Securities of such series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Capital Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Capital Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Capital Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any

47
 
trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Capital Securities of such series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Capital Securities of such series to which the appointment of such successor Trustee relates.

(c)         Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

(d)        No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 6.

Section 6.12 . Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or   with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Capital Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Capital Securities.

Section 6.13 . Preferential Collection of Claims. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Capital Securities of a series), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

Section 6.14 . Appointment of Authenticating Agent. The Trustee may at any time appoint an Authenticating Agent or Agents with respect to one or more series of Capital Securities which shall be authorized to act on behalf of the Trustee to authenticate Capital Securities of such series upon original issue, or

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issued upon exchange, registration of transfer or partial redemption thereof or in lieu of destroyed, lost or stolen Capital Securities, and Capital Securities so authenticated shall be entitled to the benefits of this Capital Securities Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Capital Securities Indenture to the authentication and delivery of Capital Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation or national banking association organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State or District of Columbia authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation or national banking association into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or national banking association resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation or national banking association succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation or national banking association shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice to the Holders of Capital Securities in the manner and to the extent provided in Section 1.06. Any successor Authenticating Agent upon acceptance of its appointment hereunder


shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.14.

If an appointment with respect to one or more series is made pursuant to this Section, the Capital Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

This is one of the Capital Securities referred to in the within-mentioned Capital Securities Indenture.
.
 
 
THE BANK OF NEW YORK MELLON,
LONDON BRANCH
as Trustee
 
       
       
 
By:
   
    as Authenticating Agent  
       
       
       
 
By:
   
    Authorized Signatory  
       


ARTICLE 7
H OLDERS L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY

Section 7.01 . Company to Furnish Trustee Names and Addresses of Holders. The Company, with respect to any series of Capital Securities in   registered form, will furnish or cause to be furnished to the Trustee

(a)       not more than 15 days after each Regular Record Date (or after each of the dates to be specified for such purpose for non-Payment bearing Capital Securities and Capital Securities on which Payment Dates occur less frequently than quarterly as contemplated by Section 3.01), a list, in such form as the Trustee


may reasonably require, of the names and addresses of the Holders of registered Capital Securities as of such Regular Record Date or such specified date, and

(b)       at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.

The Company need not furnish or cause to be furnished to the Trustee pursuant to this Section 7.01 the names and addresses of Holders of registered Capital Securities so long as the Trustee acts as Capital Security Registrar with respect to such series of Capital Securities.

Section 7.02 .  Preservation of Information; Communication to Holders.

(a)         The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders (i) contained in the most recent list furnished to the Trustee as provided in Section 7.01 and (ii) received by the Trustee in its capacity as Paying Agent or Capital Security Registrar (if so acting). The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.

(b)         The rights of the Holders of Capital Securities of any series to communicate with other Holders with respect to their rights under this Capital Securities Indenture or under the Capital Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

(c)         Every Holder, by receiving and holding a Capital Security, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.02(b) or otherwise made pursuant to the Trust Indenture Act.

Section 7.03 .  Reports by Trustee.

(a)         On or before May 15 in each year following the date hereof, so long as any Capital Securities are Outstanding hereunder, the Trustee shall transmit to Holders as provided in the Trust Indenture Act a brief report dated as of a date required by and in compliance with the Trust Indenture Act.

(b)         A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each securities exchange upon which the Trustee has been notified that the Capital Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when Capital Securities are listed on any securities exchange.


(c)       The Company will furnish the Trustee with interim and annual reports and upon receipt thereof, the Trustee will mail such reports to all record holders of Capital Securities. In addition, the Company will furnish the Trustee with all notices of meetings at which holders of Capital Securities of a particular series are entitled to vote, and all other reports and communications that are made generally available to holders of Capital Securities. The Trustee will, at the Company’s expense, make such notices, reports and communications available for inspection by holders of Capital Securities in such manner as the Company may determine and, in the case of any notice received by the Trustee in respect of any meeting at which holders of Capital Securities of a particular series are entitled to vote, will mail to all such record holders of Capital Securities, at the Company’s expense, a notice containing a summary of the information set forth in such notice of meeting.

Section 7.04 .  Reports by Company.

The Company shall:

(a)         file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate);

(b)         file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Capital Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein,

 
including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate); and

(c)       transmit to Holders, in the manner and to the extent required by the Trust Indenture Act, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs 7.04(a) and 7.04(b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.


ARTICLE 8
C ONSOLIDATION , M ERGER , C ONVEYANCE OR T RANSFER

Section 8.01 .  Company May Consolidate, Etc., Only on Certain Terms.

The Company may, without the consent of Holders of any Capital Securities of any series Outstanding under this Capital Securities Indenture, consolidate or amalgamate with or merge into any other corporation or convey or transfer or lease its properties and assets substantially as an entirety to any Person, provided that :

(a)         the corporation formed by such consolidation or amalgamation or into which the Company is merged or the Person which acquires by conveyance or transfer the properties and assets of the Company substantially as an entirety (i) shall be a company organized and existing under the laws of the United Kingdom or any political subdivision thereof, and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and Payments and Missed Payments, if any, on all the Capital Securities in accordance with the provisions of such Capital Securities and this Capital Securities Indenture and the performance of every covenant of this Capital Securities Indenture on the part of the Company to be performed or observed; and

(b)         the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger, conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

Section 8.02 . Successor Corporation Substituted. Upon any consolidation, amalgamation or merger or any conveyance or transfer of the properties and assets of the Company substantially as an entirety in accordance with Section 8.01, the successor corporation formed by such consolidation or amalgamation or into which the Company is merged or to which such conveyance or transfer is made shall succeed to and be substituted for, and may exercise every right and power of,
 

the Company under this Capital Securities Indenture with the same effect as if such successor corporation had been named as the Company, herein, and thereafter, the predecessor corporation shall be relieved of all obligations and covenants under the Capital Securities Indenture, the Capital Securities and the Coupons, if any.

Section 8.03 . Assumption of Obligations. With respect to the Capital Securities of any series, a wholly-owned subsidiary of the Company (a “ successor entity ”) may without the consent of any Holder assume the obligations of the   Company (or any corporation which shall have previously assumed the obligations of the Company) for the due and punctual payment of the principal of (and premium, if any, on) and Payments and Missed Payments, if any, on any series of Capital Securities in accordance with the provisions of such Capital Securities and this Capital Securities Indenture and the performance of every covenant of this Capital Security Indenture and such series of Capital Securities on the part of the Company to be performed or observed provided, that:

(a)         the successor entity shall expressly assume such obligations by an amendment to the Capital Securities Indenture, executed by the Company and such successor entity, if applicable, and delivered to the Trustee, in form satisfactory to the Trustee, and the Company shall, by amendment to the Capital Securities Indenture, unconditionally guarantee (such guarantee shall be given on a subordinated basis consistent with Article 12 hereof) all of the obligations of such successor entity under the Capital Securities of such series and the Capital Securities Indenture as so modified by such amendment ( provided, however , that, for the purposes of the Company’s obligation to pay Additional Amounts, if any, payable pursuant to Section 10.04 in respect of the Capital Securities and any related Coupons, references to such successor entity’s country of organization will be added to references to the United Kingdom);

(b)         such successor entity shall confirm in such amendment to the Capital Securities Indenture that such successor entity will pay all Additional Amounts, if any, payable pursuant to Section 10.04 in respect of all the Capital Securities and any related Coupons ( provided, however , that for these purposes such successor entity’s country of organization will be substituted for the references to the United Kingdom);

(c)         immediately after giving effect to such assumption of obligations, no Event of Default, Default or Payment Event and no event which, after notice or lapse of time or both, would become an Event of Default, Default or Payment Event, shall have occurred and be continuing; and

(d)         the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such assumption complies
 
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with this Article and that all conditions precedent herein provided for relating to such assumption have been complied with.

Upon any such assumption, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Capital Securities Indenture with respect to any such Capital Securities with the same effect as if such successor entity had been named as the Company in this Capital Securities Indenture, and the Company or any legal and valid successor corporation which shall theretofore have become such in the manner prescribed herein, shall be released from all liability as obligor upon any such Capital Securities except as provided in clause 8.03(a) of this Section.

In the event of any such assumption, any Additional Amounts, if any, payable pursuant to Section 10.04 will be payable in respect of taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“ Taxes ”) imposed by the jurisdiction in which the assuming corporation is incorporated (subject to exceptions equivalent to those that apply to any obligation to pay Additional Amounts in respect of Taxes imposed by any Taxing Jurisdiction) rather than Taxes imposed by any Taxing Jurisdiction; provided however , that if the Company makes payment under the guarantee, the Company shall be required to pay Additional Amounts related to Taxes (subject to the exceptions set forth in Section 10.04) imposed by any Taxing Jurisdiction by reason of such payments.

Notwithstanding the foregoing, the determination of whether the Solvency Condition has been satisfied in accordance with Section 12.01(b) shall, notwithstanding such assumption, continue to be made with reference to the Company, unless otherwise required by applicable law or regulation.


ARTICLE 9
S UPPLEMENTAL I NDENTURES

Section 9.01 .  Supplemental Indenture without Consent of Holders.  Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(a)         to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Capital Securities and Coupons;

(b)         to add to the covenants of the Company for the benefit of the Holders of all or any series of Capital Securities (and, if such covenants are to be for the benefit of less than all series of Capital Securities, stating that such
 
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covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company;

(c)         to add any additional Events of Default, Defaults or Payment Events;

(d)         to add to, change or eliminate any of the provisions of this Capital Securities Indenture, or any supplemental indenture, provided that any such change or elimination shall become effective only when there is no Capital Security Outstanding of any series created prior to the execution of such supplemental indenture effecting such change or elimination which is entitled to the benefit of such provision and adversely affected by such addition, change or elimination;

(e)         to secure the Capital Securities;

(f)         to establish the form or terms of Capital Securities of any series and any Coupons appertaining thereto as permitted by Sections 2.01 or 3.01;

(g)         to change any Place of Payment, so long as the Place of Payment as required by Section 3.01 is maintained;

(h)         to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein or in any supplemental indenture;

(i)         to make any other provisions with respect to matters or questions arising under this Capital Securities Indenture, provided such action shall not adversely affect the interests of the Holders of Capital Securities of any series in any material respect;

(j)         to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Capital Securities of one or more series and to add to or change any of the provisions of this Capital Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11(b); or

(k)         to change or eliminate any provision of this Capital Securities Indenture as permitted by Section 1.07.

Section 9.02 . Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Outstanding Capital Securities of each series affected by such supplemental Capital Securities Indenture (voting as a class), by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures

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supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Capital Securities Indenture or of modifying in any manner the rights of the Holders of Capital Securities of such series under this Capital Securities Indenture; provided, however , that no such supplemental indenture may, without the consent of the   Holder of each Outstanding Capital Security affected thereby,

(a)         change the terms of any Capital Security to include a stated maturity date of the principal amount of any such Capital Security, reduce the principal amount of, or any premium payable upon the redemption of, or the Payments or any Missed Payments payable on any Capital Security, or change the obligation of the Company (or its successor) to pay Additional Amounts pursuant to Section 10.4   (except as contemplated by Section 8.01(a) and permitted by Section 9.01(a)) on the Capital Securities, or the currency of payment of the principal amount of, premium, if any, or Payments or Missed Payments on, any such Capital Security or impair the right to institute suit for the enforcement of any such payment when due and payable on or with respect to any Capital Security, or

(b)         reduce the percentage in aggregate principal amount of the Outstanding Capital Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Capital Securities Indenture or of certain defaults hereunder and their consequences) provided for in this Capital Securities Indenture, or

(c)         modify any of the provisions of this Section 9.02 or Section 5.13 except to increase any such percentage or to provide that certain other provisions of this Capital Securities Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Capital Security affected thereby; provided, however , that this clause shall not be deemed to require the consent of   any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 6.11(b) and 9.01(j), or

(d)         change in any manner adverse to the interests of the Holders of any Capital Securities the subordination provisions of the Capital Securities or the terms and conditions of the obligations of the Company in respect of the due and punctual payment of any amounts due and payable on the Capital Securities.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

A supplemental indenture which changes or eliminates any covenant or other provision of this Capital Securities Indenture which has expressly been
 

included solely for the benefit of one or more particular series of Capital Securities, or which modifies the rights of the Holders of Capital Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Capital Securities Indenture of the Holders of Capital Securities of any other series.

Section 9.03 . Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Capital Securities Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Capital Securities Indenture. The Trustee may, but shall not be obliged to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Capital Securities Indenture or otherwise.

Section 9.04 . Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Capital Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Capital Securities Indenture for all purposes; and every Holder of Capital Securities theretofore or thereafter authenticated and delivered hereunder and every holder of Coupons, if any, shall be bound thereby, except as otherwise expressed therein.

Section 9.05 . Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.

Section 9.06 .  Reference in Capital Securities to Supplemental Indentures. Capital Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Capital Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and such Capital Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Capital Securities of such series.

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ARTICLE 10
C OVENANTS

Section 10.01 . Payment of Principal, Premium, Payments and Missed Payments. The Company covenants and agrees for the benefit of each series of   Capital Securities that it will duly and punctually pay the principal of (and premium or interest on, if any) and (subject to Section 3.07) Payments and Missed Payments on, if any, the Capital Securities of that series when due and payable in accordance with the terms of the Capital Securities, any Coupons appertaining thereto and this Capital Securities Indenture.

Section 10.02 . Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Capital Securities an office or agency where Capital Securities of that series and any Coupons appertaining thereto may be presented or surrendered for payment, where Capital Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Capital Securities of that series and any Coupons appertaining thereto and this Capital Securities Indenture may be served; provided, however , that at the option of the Company in the case of registered Capital Securities of such series, payment of any Payments or Missed Payments thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Capital Security Register. With respect to the Capital Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be the Corporate Trust Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Company in respect of Capital Securities of any series and any Coupons appertaining thereto and this Capital Securities Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company hereby appoints the Trustee as its agent to receive all presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, The City of New York) where the Capital Securities of one or more series and any Coupons appertaining thereto may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however , that no such designation or rescission shall in any manner relieve the Company of any obligation to maintain an office or agency in each Place of Payment (except as otherwise indicated in this Section) for Capital Securities of any series and any

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Coupons appertaining thereto for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Section 10.03 . Money for Payments to be Held in Trust. If the Company shall at any time act as Paying Agent with respect to the Capital Securities of any series and any Coupons appertaining thereto, it will, on or before each due date for payment of the principal of (and premium, if any) or Payments or Missed Payments, if any, on any of the Capital Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or Payments or Missed Payments so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its failure so to act.

Whenever the Company shall have one or more Paying Agents for any series of Capital Securities, it will, prior to each due date for payment of the principal of (and premium, if any) or Payments or Missed Payments on any Capital Securities of that series deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or Payments or Missed Payments so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or Payments or Missed Payments, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or its failure so to act. Unless otherwise specified as contemplated by Section 3.01, the Trustee shall be the Company’s Paying Agent. The Company will cause each Paying Agent for any series of Capital Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

(a)         hold all sums held by it for the payment of the principal of (and premium, if any) or Payments or Missed Payments on Capital Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

(b)         give the Trustee notice of any default by the Company (or any other obligor upon the Capital Securities of that series) in the making of any payment, when due and payable, or principal of (and premium, if any) or Payments or Missed Payments on Capital Securities of that series; and

(c)         at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

 
 
 
The Company may at the time, for the purpose of obtaining the satisfaction and discharge of this Capital Securities Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or Payments or Missed Payments on any Capital Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or Payments or Missed Payments have become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Capital Security and the holder of any Coupon appertaining thereto shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however , that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published at least once, in an Authorized Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be paid to the Company.

Section 10.04 . Additional Amounts. Unless otherwise specified in any Board Resolution establishing the terms of Capital Securities of a series in accordance with Section 3.01, all amounts of principal, and premium, if any, and Payments, including Missed Payments, if any, on any series of Capital Securities will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “ Taxing Jurisdiction ”), unless such deduction or withholding is required by law. If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts with respect to the principal amount of, premium, if any, Payments and Missed Payments, on any series of Capital Securities (“ Additional Amounts ”) as may be necessary in order that the net amounts paid to the Holders of Capital Securities of the particular series, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, and Payments and Missed Payments, if any, which would have been payable in respect of such Capital Securities had no such deduction or withholding been required; provided, however , that the foregoing

 
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will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

(i)         the Holder or the beneficial owner of the Capital Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Capital Security, or the collection of any payment of (or in respect of) principal of, premium, if any, or any Payments or Missed Payments on any Capital Security of the relevant series;

(ii)         except in the case of a winding-up of the Company in the United Kingdom, the relevant Capital Security is presented (where presentation is required) for payment in the United Kingdom;

(iii)       the relevant Capital Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting (where presentation is required) the same for payment at the close of such 30 day period; or

(iv)       the Holder or the beneficial owner of the relevant Capital Security or the beneficial owner of any payment of (or in respect of) principal of, or any Payments or Missed Payments on such Capital Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any information requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

(v)         the withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to any European Union Directive on the taxation of savings implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 or any law implementing or complying with, or introduced in order to conform to, such directive;

(vi)       the relevant Capital Security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by


presenting (where presentation is required) the relevant Capital Security to another paying agent in a Member State of the European Union; or

(vii)     any combination of subclauses (i) through (vi) above;

nor shall Additional Amounts be paid with respect to the principal of, and payments and Missed Payments on, the Capital Securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

Whenever in this Capital Securities Indenture there is mentioned, in any context, the payment of the principal of (and premium, if any) or any Payments, or Missed Payments, if any, on, or in respect of, any Capital Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

Section 10.05 . Corporate Existence. Subject to Article 8, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

Section 10.06 . Statement as to Compliance. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate in compliance with Section 314(a)(4) of the Trust Indenture Act.

ARTICLE 11
R EDEMPTION OF C APITAL S ECURITIES

Section 11.01 . Applicability of Article. Capital Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Capital Securities of any series) in accordance with this Article.


Section 11.02 . Election to Redeem; Notice to Trustee. The election of the Company to redeem any Capital Securities shall be evidenced by a Board Resolution. The Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Capital Securities of such series to be redeemed and, if applicable, the tenor of the Capital Securities to be redeemed. In the case of any redemption of Capital Securities of any series prior to the expiration of any provision restricting such redemption provided in the terms of such Capital Securities or elsewhere in this Capital Securities Indenture, the Company shall furnish the Trustee with respect to such Capital Securities with an Officer’s Certificate evidencing compliance with or waiver of such provision.

Section 11.03 .  Selection by Trustee of Capital Securities to be Redeemed. If less than all the Capital Securities of any series are to be redeemed, the particular Capital Securities to be redeemed shall be selected not more than 60 days nor less than 30 days prior to the Redemption Date by the Trustee, from the Outstanding Capital Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for registered Capital Securities of that series or any multiple thereof) of the principal amount of Capital Securities of such series of a denomination larger than the minimum authorized denomination for Capital Securities of that series.

The Trustee shall promptly notify the Company in writing of the Capital Securities selected for redemption and, in the case of any Capital Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Capital Securities Indenture, unless the context otherwise requires, all provisions relating to the redemption of Capital Securities shall relate in the case of any Capital Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such registered Capital Security which has been or is to be redeemed.

Section 11.04 . Notice of Redemption. Notice of redemption shall be given not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Capital Securities to be redeemed in the manner and to the extent provided in Section 1.06.

All notices of redemption shall state:

(a)       the Redemption Date,

(b)       the Redemption Price,


(c)         if less than all the Outstanding Capital Securities of any series are to be redeemed, the principal amount of the Capital Securities to be redeemed,

(d)         that on the Redemption Date the Redemption Price will, subject to the Solvency Condition, become due and payable upon each such Capital Security to be redeemed and, if applicable, that Payments thereon will cease to accrue on or after the said date,

(e)         the place or places where such Capital Securities are to be surrendered for payment of the Redemption Price and that, unless otherwise specified in such notice, bearer Capital Securities in definitive form (if any) surrendered for payment must be accompanied by all Coupons maturing subsequent to the Redemption Date, failing which the amount of any such missing Coupon or Coupons will be deducted from the sum due for payment, and

(f)         the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to such Capital Securities.

Notice of redemption of Capital Securities to be redeemed at the selection of the Company shall be given by the Company or, at the Company’s Request, by the Trustee in the name and at the expense of the Company.

Section 11.05 . Deposit of Redemption Price. On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be a Payment Date) accrued but unpaid Payments (and any Missed Payments accumulated to such Redemption Date) on, all the Capital Securities which are to be redeemed on that date.

Section 11.06 . Capital Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Capital Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and Payments and Missed Payments, if any) such Capital Securities shall cease to accrue Payments for the period following the Redemption Date. Upon surrender of any such Capital Security for redemption in accordance with said notice, such Capital Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid Payments to the Redemption Date and Missed Payments, if any, accumulated to the Redemption Date; provided, however , that with respect to any Capital Securities in registered form, unless otherwise specified as contemplated by Section 3.01, a Payment which is payable on a Payment Date which is the Redemption Date, shall be payable to the Holders of such Capital
 

Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Dates according to the terms of the Capital Securities and the provisions of Section 3.07. Capital Securities in definitive form shall be presented for redemption to the Paying Agent. The obligation of the Company to redeem Capital Securities of a series on a Redemption Date shall be subject to the Solvency Condition.

If any Capital Security called for redemption shall not be so paid upon surrender thereof for redemption, the Capital Security shall, until paid, continue to accrue Payments from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.

Section 11.07 . Capital Securities Redeemed In Part. Any Capital Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, only in the case of Capital Securities in registered form, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Capital Security without service charge, a new Capital Security or Capital Securities of the same series of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Capital Security so surrendered.

Section 11.08 .  Optional Redemption Due To Changes In Tax Treatment. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Capital Securities and subject to satisfaction of the Solvency Condition, the Capital Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 nor more than 60 days’ notice, on any Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid Payments and all Missed Payments, if any, in respect of such series of Capital Securities to the date fixed for redemption, if, at any time, the Company shall determine that, as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after a date included in the terms of such series of Capital Securities pursuant to Section 3.01:

(a)       in making payment under the Capital Securities in respect of principal or premium, if any, or Payments (including Missed Payments) it has or will or would on the next Payment Date become obligated to pay Additional Amounts;

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(b)         Payments (including Missed Payments) on the next Payment Date in respect of any of the Capital Securities would be treated as “distributions” within the meaning of Section 209 of the Income and Corporation Taxes Act 1988 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

(c)         on the next Payment Date the Company would not be entitled to claim a deduction in respect of such Payments in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).

In any case where the Company shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Capital Securities of any series the Company shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.


ARTICLE 12
S UBORDINATION O F C APITAL S ECURITIES

Section 12.01 .  Capital Securities Subordinate to Senior Claims.

(a)       The Company covenants and agrees, and each Holder of Capital Securities of each series and each holder of Coupons appertaining thereto, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article 12, the Capital Securities of such series and the payment of the principal of, premium, if any, and Payments, and Missed Payments, if any, on each and all of the Capital Securities of such series are hereby expressly made in the event of a winding up of the Company subordinate and subject in right of payment to the prior payment in full of all Senior Claims and, except in a winding-up, conditional upon the Solvency Condition being satisfied at the time of payment by the Company, and no principal, premium, if any, Payments or Missed Payments, if any, in respect of the Capital Securities of such series which under the terms of such series or the provisions of this Capital Securities Indenture would otherwise be due for payment when the Solvency Condition is not satisfied shall be due and payable (without prejudice to the provision of Section 5.03 with respect to a Payment Event), and instead such principal, premium, if any, Payments or Missed Payments, if any, will become due and payable only if and when and to the extent that the Company could make such payment in whole or in part and still satisfy the Solvency Condition
 
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immediately thereafter. In a winding-up, the amount payable in respect of the Capital Securities is determined in accordance with the provisions of Section 12.01(c).

(b)         No payment of principal, premium, if any, Payments or Missed Payments, if any, in respect of the Capital Securities of any series and no purchase of any Capital Securities of any series beneficially by or for the account of the Company or any of its Subsidiaries (other than a purchase in connection with dealing in securities) shall be made unless a director of the Company or (in the case of the optional redemption by the Company of all or some of the Capital Securities of the series or a purchase of any Capital Securities of the series as aforesaid or if a director of the Company has not reported as mentioned below) the Auditors shall have reported to the Trustee within 14 days before such payment or within 6 months before such purchase that in their opinion or, as the case may be, his opinion, the Solvency Condition would be satisfied both at the time of and immediately after such payment or purchase. Any such report shall, in the absence of manifest error, be treated and accepted by the Company, the Trustee, the Holders and holders of Coupons as correct and sufficient evidence of such satisfaction of the Solvency Condition.

(c)         If at any time an order is made or a shareholders’ resolution is passed for the winding-up of the Company, there shall be payable with respect to the Capital Securities of any series, such amounts, if any, as would have been payable in respect thereof as if, on the day immediately prior to the commencement of the winding-up and thereafter, the Holders of the Capital Securities were the holders of preference shares in the capital of the Company having a preferential right to a return of assets in a winding-up over the holders of all other issued shares (including all classes of preference shares of the Company) for the time being in the share capital of the Company, on the assumption that such preference shares were entitled (to the exclusion of all other rights or privileges) to receive as a return of capital in such winding up an amount equal to the principal amount of the Capital Securities of such series then Outstanding together with any premium, all Payments accrued to the date of repayment at the rate provided for in the Capital Securities of that series and any Missed Payments and subject in right of payment to the prior payment in full to all Senior Claims of the Company.

(d)         The provisions of this Section shall apply only to the payment of principal, premium, if any, Payments and Missed Payments, if any, in respect of the Capital Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges, expenses, liabilities or remuneration of the Trustee or the rights and remedies of the Trustee in respect thereof.


 
68
 
 
(e)         The provisions of this Section shall not be applicable to any amounts of principal, premium, if any, or Payments or Missed Payments, if any, in respect of the Capital Securities of any series for the payment of which funds have been deposited in trust with the Trustee or any Paying Agent or have been set aside by the Company in trust in accordance with the provisions of this Capital Securities Indenture; provided, however , that at the time of such deposit or setting aside, and immediately thereafter, the foregoing provisions of this Section are complied with.

Section 12.02 . Provisions Solely to Define Relative Rights. The provisions of this Article 12 are and are intended solely for the purpose of defining the relative rights of the Holders of the Capital Securities of each series and the holders of the Coupons appertaining thereto, if any, on the one hand and the Senior Creditors on the other hand. Nothing contained in this Article or elsewhere in this Capital Securities Indenture or in such Capital Securities is intended to or shall (a) impair, as among the Company and the Holders of the Capital Securities and any Coupons, the obligation of the Company, which is absolute and unconditional, to pay to the holders of such claims the principal of, premium, if any, and Payments, or Missed Payments, if any, on such Capital Securities as and when the same shall become due and payable in accordance with their terms and this Capital Securities Indenture; or (b) affect the relative rights against the Company of the Holders of such Capital Securities and of such Coupons; or (c) prevent the Trustee or the Holder of any Capital Securities of the series or the holder of any such Coupon from exercising all remedies otherwise permitted by applicable law upon default under this Capital Securities Indenture, subject to the rights, if any, under this Article of the Senior Creditors to receive cash, property or securities otherwise payable or deliverable to the Trustee or such holder.
 
Section 12.03 . Trustee to Effectuate Subordination. Each Holder of a Capital Security and each holder of any Coupon by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination of the Capital Securities provided in this Article 12 and appoints the Trustee his attorney-in-fact for any and all such purposes.

Section 12.04 . No Waiver of Subordination Provisions. No right of any present or future Senior Creditors to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such Senior Creditor or by any noncompliance by the Company with the terms, provisions and covenants of this Capital Securities Indenture, regardless of any knowledge thereof any such Senior Creditor may have or be otherwise charged with.

Section 12.05 . Notice to Trustee. Upon the occurrence of any Event of Default, Default or Payment Event, the Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the
 

making of any payment when due to or by the Trustee in respect of the Capital Securities of a series. Notwithstanding the provisions of this Article or any other provisions of this Capital Securities Indenture but subject to the provisions of Section 12.01, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment when due to or by the Trustee in respect of such Capital Securities unless and until the Trustee shall have received written notice thereof from the Company or a Senior Creditor or from any trustee therefor; and, prior to the receipt of any such written notice by a Responsible Officer of the Trustee, the Trustee, subject to the provisions of Section 6.01, shall be entitled in all respects to assume that no such facts exist; provided, however , that if the Trustee shall not have received the notice provided   for in this Section at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of and any premium and Payments, or Missed Payments, if any, on any Capital Security), then, subject to the provisions of Section 12.01, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date.

Subject to the provisions of Section 6.01, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a Senior Creditor or a trustee therefor, to establish that such notice has been given by a Senior Creditor, or a trustee therefor. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a Senior Creditor to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of claims held by such Person, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

Section 12.06 . Reliance on Judicial Order or Certificate of Liquidating Agent . Upon any payment or distribution of assets of the Company referred to in   this Article, the Trustee, subject to the provisions of Section 6.01, the Holders of the Capital Securities of the series and the holders of the Coupons appertaining thereto shall be entitled to rely upon (i) any order or decree entered by any court in Scotland (but not elsewhere) in which such winding-up of the Company or similar case or proceeding, including a proceeding for the suspension of payments under Scottish law, is pending, or (ii) a certificate of the liquidator of the Company (the “ Liquidator ”), assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee, the Holders of such Capital Securities or holders of such Coupons, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the Senior Creditors and other claims against the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12.

 
70


Section 12.07 . Trustee Not Fiduciary for Senior Creditors. The Trustee shall not be deemed to owe any fiduciary duty to the Senior Creditors and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Capital Securities of the series or holders of Coupons appertaining thereto or to the Company or to any other Person cash, property or securities to which any Senior Creditors shall be entitled by virtue of this Article or otherwise.

Section 12.08 . Rights of Trustee as Senior Creditor; Preservation of Trustee’s Rights. The Trustee in its individual capacity shall be entitled to all the   rights set forth in this Article with respect to any claims of Senior Creditors which may at any time be held by it, to the same extent as any other Senior Creditor, and nothing in this Capital Securities Indenture shall deprive the Trustee of any of its rights as such holder.

Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 6.07.

Section 12.09 . Article Applicable to Paying Agents. At all times when a Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “ Trustee ” as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however , that Section 12.08 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.

Section 12.10 . Exchanges Not Deemed Payment. For the purposes of this Article 12 only, delivery of Dollar Preference Shares or Exchange Securities upon exchange of Capital Securities in accordance with Article 13, if applicable to a particular series of Capital Securities, shall not be deemed to constitute a payment or distribution on account of the principal of Capital Securities or on account of the purchase or other acquisition of Capital Securities. Nothing contained in this Article or elsewhere in this Capital Securities Indenture or in the Capital Securities is intended to or shall impair, as among the Company, its creditors and the Holders of the Capital Securities and holders of Coupons, the right, which if applicable to a particular series of Capital Securities is absolute and unconditional, of the Company to exchange the Capital Securities in accordance with Article 13.


ARTICLE 13
E XCHANGE O F C APITAL S ECURITIES

Section 13.01 . Applicability of Article. If specified pursuant to Section 3.01 for Capital Securities of any series, the Capital Securities of any series shall be convertible (conversion being referred to herein as “ exchange ”) on any Payment Date as a whole or in part, at the option of the Company, on the basis of the principal amount of each Capital Security, into an equivalent amount in liquidation preference of the series of Dollar Preference Shares or Exchange Securities specified pursuant to Section 3.01 and (except as otherwise specified as contemplated by Section 3.01 for Capital Securities of any series) in accordance with this Article 13.

Section 13.02 . Election to Exchange; Notice to Trustee. An election of the Company to exchange Capital Securities shall be evidenced by an Officer’s Certificate furnished to the Trustee stating that the Company is entitled to effect such exchange and setting forth a statement of facts demonstrating the same.

Section 13.03 . Notice of Exchange. Not less than 45 days nor more than 60 days prior to any date fixed for exchange of Capital Securities of a series (the “ Exchange Date ”), the Company shall notify the Trustee in writing of its election to exchange the Capital Securities of such series. The Trustee shall within 15 days after receipt of notice from the Company, but in no event less than 30 days nor more than 60 days prior to the Exchange Date, cause notice of such election to be (i) published if Outstanding bearer definitive Capital Securities are affected, (ii) mailed to the Holder (if the address of such Holder is known to the Trustee) if the affected Capital Securities are in global form, or (iii) mailed to each Holder of registered Capital Securities of such series to be exchanged in accordance with Section 1.06.

All notices of exchange shall state:

(a)       the Exchange Date;

(b)       that on the Exchange Date, the Capital Securities to be exchanged will cease to exist for any purpose on or after such Exchange Date;

(c)         if less than all the Outstanding Capital Securities of any series are to be exchanged, the identification of the particular Capital Securities to be exchanged, which Capital Securities shall be selected by the Trustee, from the Outstanding Capital Securities of such series not previously called for exchange, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for exchange of portions (equal to the minimum authorized denomination for Capital Securities of that series or any multiple thereof) of the principal amount of Capital Securities of such series of a denomination larger than the minimum authorized denomination for Capital Securities of that series;
 



(d)         the place or places where such Capital Securities are to be surrendered for exchange; and

(e)         the form in which the Company will issue the Dollar Preference Shares (if not as a single share warrant to bearer delivered to the ADR Depositary) or Exchange Securities.

Notice of any exchange of Capital Securities at the election of the Company shall be given by the Company or, pursuant to a Company Request by the Trustee, in the name of and at the expense of the Company.

Section 13.04 . Deposit of Payments. Prior to any Exchange Date, the Company shall deposit with the Trustee an amount of money sufficient to pay accrued Payments to the Exchange Date plus Missed Payments, if any, accumulated to the Exchange Date on all Capital Securities of such series.

Section 13.05 . Surrender of Capital Securities. Any Capital Security which is to be exchanged shall be surrendered at an office or agency of the Company designated for that purpose pursuant to Section 10.02 not less than 10 days prior to the Exchange Date (with, only in the case of registered Capital Securities and if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) accompanied by written notice specifying the Persons (i) in the case of Dollar Preference Shares, to whom ADRs should be issued by the ADR Depositary or, if the Company has notified the Trustee in accordance with Section 13.03 that it will issue Dollar Preference Shares in definitive form, any direction the Holder may wish to make as referred to in Section 13.06 or (ii) in the case of Exchange Securities, to whom such Exchange Securities are to be issued. The Trustee will inform the Company of all such notices and the Company will, if applicable, direct the ADR Depositary accordingly under the terms of the ADR Deposit Agreement. Capital Securities surrendered for exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee for delivery by it to the Company or, if delivered to the Trustee, shall be delivered by it to the Company.

Section 13.06 . Issuance of Dollar Preference Shares or Exchange Securities. On the Exchange Date with respect to Global Securities of a series,   and on or prior to the Exchange Date with respect to definitive Capital Securities of a series, in each case surrendered for exchange as provided in Section 13.05, the Company shall (i) in the case of Dollar Preference Shares, unless the Company shall have notified the Trustee otherwise in accordance with Section

 
73

13.03, deliver or procure the delivery of a single share warrant to bearer to the ADR Depositary representing all of the Dollar Preference Shares in respect of which such Capital Securities are to be exchanged in accordance with the provisions of this Article 13 or (ii) in the case of Exchange Securities, deliver or procure the delivery of the Exchange Securities to the Trustee or to such other Person as may be specified pursuant to Section 3.01.

In the event that the Company shall have notified the Trustee in accordance with Section 13.03 that it will not deliver a single share warrant to bearer in exchange for the Capital Securities of a series surrendered for exchange as provided in Section 13.05, the Company shall, on or prior to the Exchange Date, with respect to definitive Capital Securities, deliver or procure the delivery of individual certificates representing the Dollar Preference Shares (or the rights to receive such Dollar Preference Shares) of such series for which such Capital Securities are to be exchanged in accordance with the provisions of this Article 13, in the case of Dollar Preference Shares in registered form, to and registered in the names of the Holders of such Capital Securities in definitive form as they appear on the Capital Security Register or, at the direction of such Holder, in the name of the ADR Custodian for the account and benefit of the ADR Depositary who will issue ADRs evidencing ADSs representing the Dollar Preference Shares to such Holder and, in the case of Dollar Preference Shares in bearer form, to the bearer of the bearer Capital Security in definitive form or, at the direction of such bearer, to the ADR Custodian for the account and benefit of the ADR Depositary who will issue ADRs evidencing ADSs representing Dollar Preference Shares to such Holder.

Any exchange pursuant to this Section 13.06 shall be deemed to have been made immediately prior to the close of business in New York on the Exchange Date.

Section 13.07 . Effect of Exchange. Notice of exchange having been given as aforesaid, the Capital Securities so to be exchanged shall on the Exchange Date cease to exist for any purpose. Upon surrender of any such Capital Security for exchange in accordance with the said notice and this Article 13, accrued Payments on such Capital Security to the Exchange Date plus Missed Payments, if any, accumulated to the Exchange Date shall be paid by the Company to the Holder surrendering such Capital Security including any such Coupons for Payments and Missed Payments. Such payment shall be a condition to the exchange and no exchange shall occur unless such payments are made.

On and after the Exchange Date for Capital Securities of a particular series, each Capital Security of the series to be exchanged, until surrendered shall be deemed to evidence rights to receive Dollar Preference Shares or Exchange Securities of the relevant series with a liquidation preference equivalent to the principal amount of such Capital Security. Until a Holder has surrendered such

 
74

Capital Security upon such exchange, such Holder shall be entitled to receive dividends, payments or other distributions in respect of such Dollar Preference Shares or Exchange Securities and shall have the same rights with respect to, and shall be deemed to be the Holder of, such Dollar Preference Shares or Exchange Securities into which such Capital Security was exchanged as if it had so surrendered such Capital Security.

Section 13.08 . Validity of Dollar Preference Shares or Exchange Securities. The Company will take all corporate and other action which may be   necessary in order that it may validly and legally issue Dollar Preference Shares or Exchange Securities upon each exchange of the Outstanding Capital Securities. The Company covenants that the Dollar Preference Shares or Exchange Securities will when issued upon such exchange be duly authorized and validly issued, fully paid and not subject to calls for further funds.

Section 13.09 . Legal and Regulatory Compliance. Notwithstanding any provision of this Capital Securities Indenture to the contrary, the right of the Company to cause any exchange of Capital Securities of a series for Dollar Preference Shares or Exchange Securities on any proposed Exchange Date shall be subject to the fulfillment of the following conditions with respect to such Capital Securities:

(a)         as of such Exchange Date, there are no accrued but unpaid Payments and there are no Missed Payments (including amounts paid on the Exchange Date);

(b)         as of such Exchange Date, no Default or Event of Default or Payment Event shall have occurred and be continuing with respect to the particular series of Capital Securities;

(c)         as of such Exchange Date, there has not been, in any one instance or in the aggregate, an adverse effect on the rights, powers, privileges, validity or enforceability of the Dollar Preference Shares or Exchange Securities;

(d)         the Dollar Preference Shares to be issued on such Exchange Date shall be duly authorized and reserved for issuance upon such exchange and, when issued upon such exchange, will be fully paid and not subject to calls for further funds;

(e)         no consents, authorizations, approvals or exemptions, except in each case such as shall have been obtained, will be required prior to such Exchange Date for the issuance and delivery of the Dollar Preference Shares or Exchange Securities to be issued upon such exchange;


(f)         the issuance and delivery of the Dollar Preference Shares or Exchange Securities to be issued on such Exchange Date shall not violate (x) the Articles of Association of the Company or (y) any law, rule or regulation applicable to the Company; and

(g)         there shall not have occurred any change in law in Scotland, or any amendment of the Articles of Association of the Company, prior to such Exchange Date, materially and adversely affecting the rights and privileges attached to the Dollar Preference Shares or Exchange Securities (including, without limitation, the rights of the holders thereof in the event of a bankruptcy or other similar proceeding with respect to the Company) or such holders’ access to the courts of the United Kingdom and other applicable governmental authorities to enforce such rights.

Section 13.10 . Taxes and Charges. The issuance or delivery of Dollar Preference Shares or Exchange Securities upon exchange of Capital Securities pursuant to this Article 13 shall be made without charge to the exchanging Holder of Capital Securities for such Dollar Preference Shares or Exchange Securities or for any tax or other governmental charge (other than income or capital gains taxes) in respect of the issuance or delivery of such Dollar Preference Shares or Exchange Securities; provided, however , that the Company shall not be required to pay any tax or other governmental charge which may be payable in respect of (i) issuance or delivery of Dollar Preference Shares or Exchange Securities to any Person who is or is a nominee or agent for a Person whose business is or includes the provision of clearance services within the meaning of Section 96 or Section 70 of the Finance Act 1986 or whose business is or includes issuing depositary receipts within the meaning of Section 93 or Section 67 of the Finance Act 1986, other than the ADR Depositary or ADR Custodian, all such Persons (other than the ADR Depositary and the ADR Custodian) being “ Excepted Persons ” or (ii) a transfer involved in the issuance and delivery of any such Dollar Preference Share or Exchange Securities to any Person other than any Holder (not being an Excepted Person) of the Capital Security to be exchanged, or in the case of Global Securities, the ADR Depositary or the ADR Custodian, and the Company shall not be required to issue or deliver or procure the delivery of such Dollar Preference Shares or Exchange Securities unless and until the Person requesting the issuance or delivery thereof shall have paid to the Company the amount of such tax or other governmental charge or shall have established to the satisfaction of the Company that such tax or other governmental charge has been paid.

Section 13.11 . Trustee Not Liable. The Trustee shall not be accountable with respect to the validity or value (or the kind or amount) of any Dollar Preference Shares or Exchange Securities which may be issued or delivered upon the exchange of any Capital Security pursuant to this Article 13, and makes no representation with respect thereto. The Trustee shall not be responsible for any failure of the Company to issue, transfer or deliver or procure the delivery of any


Dollar Preference Shares or Exchange Securities upon the surrender of any Capital Security for the purpose of exchange pursuant to this Article 13 or to comply with any of the covenants of the Company or conditions contained in this Article 13.






This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the Company and the Trustee have caused this Capital Securities Indenture to be duly executed, all as of the day and year first above written.
 
 
 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
         
         
 
By:
/s/   
    Name:     
    Title:     
         
 
 
THE BANK OF NEW YORK MELLON, LONDON BRANCH
 
         
         
 
By:
/s/   
    Name:     
    Title:     
         

 


 
UNITED KINGDOM OF GREAT BRITAIN       )   ss.:  
     
CITY OF EDINBURGH, SCOTLAND   )  

On the _________ day of _____________ 2009, before me,  ________________________________, Notary Public of the City of Edinburgh, Scotland duly admitted and sworn, personally came _______________________________, to me known, who, being by me duly sworn, did depose and say that he is ____________________ of THE ROYAL BANK OF SCOTLAND GROUP plc, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority.
 
       
 
 
   
   
A Notary Public of Edinburgh, Scotland.
My Commission expires with life.
 

 


 
 
Exhibit 4.4
 
 
THE ROYAL BANK OF SCOTLAND GROUP PLC
as Issuer
 
 
 
TO
 
 
 
THE BANK OF NEW YORK MELLON,
acting through its London Branch
as Trustee
 
 
 
INDENTURE
 
 
 
Senior Debt Securities
 
 

 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and Senior Debt Securities Indenture, dated ________ ___, ____.
 
Trust Indenture Act Section
 
Senior Debt Securities Indenture Section
§310
(a)(1)                                                                 
6.09
 
(a)(2)                                                                 
6.09
 
(a)(3)                                                                 
Not Applicable
 
(a)(4)                                                                 
Not Applicable
 
(b)                                                                 
6.08, 6.10
 
(c)                                                                 
Not Applicable
§311
(a)                                                                 
6.13
 
(b)                                                                 
6.13
 
(b)(2)                                                                 
7.03(a), 7.03(b)
 
(c)                                                                 
Not Applicable
§312
(a)                                                                 
7.01, 7.02(a)
 
(b)                                                                 
7.02(b)
 
(c)                                                                 
7.02(c)
§313
(a)                                                                 
7.03(a)
 
(b)                                                                 
7.03(a)
 
(c)                                                                 
1.06, 7.03(a)
 
(d)                                                                 
7.03(b)
§314
(a)                                                                 
7.04, 10.06
 
(b)                                                                 
Not Applicable
 
(c)(1)                                                                 
1.02
 
(c)(2)                                                                 
1.02
 
(c)(3)                                                                 
Not Applicable
 
(d)                                                                 
Not Applicable
 
(e)                                                                 
1.02
 
(f)                                                                 
Not Applicable
§315
(a)                                                                 
6.01
 
(b)                                                                 
6.02, 7.03(a)
 
(c)                                                                 
6.01
 
(d)                                                                 
6.01
 
(d)(1)                                                                 
6.01
 
(d)(2)                                                                 
6.01
 
(d)(3)                                                                 
6.01
 
(e)                                                                 
5.14
 
 
 
Trust Indenture Act Section
 
Senior Debt Securities Indenture Section
§316
(a)(1)(A)                                                                 
5.02, 5.12
 
(a)(l)(B)                                                                 
5.13
 
(a)(2)                                                                 
Not Applicable
 
(a)(last sentence)                                                                 
1.01
 
(b)                                                                 
5.08
§317
(a)(1)                                                                 
5.03
 
(a)(2)                                                                 
5.04
 
(b)                                                                 
10.03
§318
(a)                                                                 
1.07
 
NOTE:  This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Senior Debt Securities Indenture.
 
 

 
 
 
TABLE OF CONTENTS

Page
ARTICLE 1
Definitions and Other Provisions of General Application
   
Section 1.01 .  Definitions
2
Section 1.02 .   Compliance Certificates and Opinions
10
Section 1.03 .  Form of Documents Delivered to Trustee
11
Section 1.04 .  Acts of Holders
11
Section 1.05 .  Notices, Etc. to Trustee and Company
12
Section 1.06 .  Notice to Holders; Waiver
12
Section 1.07 .  Conflict with Trust Indenture Act
13
Section 1.08 .  Effect of Headings and Table of Contents
13
Section 1.09 .  Successors and Assigns
14
Section 1.10 .  Separability Clause
14
Section 1.11 .  Benefits of S enior Debt Securities Indenture
14
Section 1.12 .  Governing Law
14
Section 1.13 .  Saturdays, Sundays and Legal Holidays
14
Section 1.14 .  Appointment of Agent for Service
14
Section 1.15 .  Calculation Agent
15
 
ARTICLE 2
Senior Debt Security Forms
   
Section 2.01 .  Forms Generally
15
Section 2.02 .  Form of Trustee ’ s Certificate of Authentication
16
 
ARTICLE 3
The Senior Debt Securities
   
Section 3.01 .  Amount Unlimited; Issuable in Series
17
Section 3.02 .  Denominations
20
Section 3.03 .  Execution, Authentication, Delivery and Dating
20
Section 3.04 .  Temporary Senior Debt Securities
21
Section 3.05 .  Registration, Registration of Transfer and Exchange.
22
Section 3.06 .  Mutilated, Destroyed, Lost and Stolen Senior Debt Securities
26
Section 3.07 .  Payment; Interest Rights Preserved
27
Section 3.08 .  Persons Deemed Owners
29
Section 3.09 .  Cancellation
29
Section 3.10 .  Computation of Interest
29
Section 3.11 .  CUSIP Numbers
29
 
 
 
i
 
 
ARTICLE 4
Satisfaction and Discharge
   
Section 4.01 .  Satisfaction and Discharge of Senior Debt Securities Indenture
30
Section 4.02 .  Application of Trust Money
31
Section 4.03 .  Repayment to Company
31
 
ARTICLE 5
Remedies
   
Section 5.01 .  Events of Default
32
Section 5.02 .  Acceleration of Maturity; Rescission and Annulment
32
Section 5.03 .  Collection of Indebtedness and Suits for Enforcement by Trustee
33
Section 5.04 .  Trustee May File Proofs of Claim
35
Section 5.05 .  Trustee May Enforce Claims Without Possession of Senior Debt Securities
36
Section 5.06 .  Application of Money Collect ed
36
Section 5.07 .  Limitation on Suits
36
Section 5.08 .  Unconditional Right of Holders to Receive Principal, Premium and Inte rest, If Any
37
Section 5.09 .  Restoration of Rights and Remedies
37
Section 5.10 .  Rights and Remedies Cumulative
38
Section 5.11 .  Delay or Omission Not Waiver
38
Section 5.12 .  Control by Holders
38
Section 5.13 .  Waiver of Past Defaults
38
Section 5.14 .  Undertaking for Costs
39
 
ARTICLE 6
The Trustee
   
Section 6.01 .  Certain Duties and Responsibilities
40
Section 6.02 .  Notice of Defaults
40
Section 6.03 .  Ce rtain Rights of Trustee
40
Section 6.04 .  Not Responsible for Recitals or Issuance of Senior Debt Securities
42
Section 6.05 .  M ay Hold Senior Debt Securities
42
Section 6.06 .  Money Held in Trust
42
Section 6.07 .  Compensation and Reimbursement.
42
Section 6.08 .  Disqualification; Conflicting Interests
43
Section 6.09 .  Corporate Trustee Required; Eligibility
43
Section 6.10 .  Resignation and Removal; Appointment of Successor
44
Section 6.11 .  Acceptance of Appointment by Successor.
46
Section 6.12 .  Merger, Conversion, Consolidation or Succession to Business
47
Section 6.13 .  Preferential Collection of Claims
47
Section 6.14 .  Appointment of Authenticating Agent
47
 
 
 
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ARTICLE 7
Holders Lists and Reports by Trustee and Company
   
Section 7.01 .  Company to Furnish Trustee Names and Addresses of Holders
49
Section 7.02 .  Preservation of Information; Communication to Holders.
50
Section 7.03 .  Reports by Trustee.
50
Section 7.04 .  Reports by the Company
51
 
ARTICLE 8
Consolidation, Merger, Conveyance or Transfer
   
Section 8.01 .  Company May Consolidate, Etc. Only on Certain Terms
52
Section 8.02 .  Successor Corporation Substituted
52
Section 8.03 .  Assumption of Obligations
53
 
ARTICLE 9
Supplemental Indentures
   
Section 9.01 .  Suppleme ntal Indentures without Consent of Holders
54
Section 9.02 .  Supplemental Indentures with Consent of Holders
55
Section 9.03 .  E xecution of Supplemental Indentures
57
Section 9.04 .  Effect of Supplemental Indentures
57
Section 9.05 .  Conformity with Trust Indenture Act
57
Section 9.06 .  Reference in Senior Debt Securities to Supplemental Indentures
57
 
ARTICLE 10
Covenants
   
Section 10.01 .  Payment of Principal, Premium, and Interest
57
Section 10.02 .  Maintenance of Office or Agency
58
Section 10.03 .  Money for Payments to be Held in Trust
58
Section 10.04 .  Additional Amounts
60
Section 10.05 .  Corpo rate Existence
62
Section 10.06 .  Statement as to Compliance
62
Section 10.07 .  Original Issue Document
62
 
ARTICLE 11
Redemption of Senior Debt Securities
   
Section 11.01 .  Applicability of Article
62
Section 11.02 .  Electio n to Redeem; Notice to Trustee
62
 
 
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Section 11.03 .  Selection by Trustee of Senior Debt Securities to be Redeemed
63
Section 11.04 .  Notice of Redemption
63
Section 11.05 .  Deposit of Redemption Price
64
Section 11.06 .  Senior Debt Securities Payable on Rede mption Date
64
Section 11.07 .  Senior Debt Securities Redeemed in Part
65
Section 11.08 .  Optional Redemption Due to Changes in Tax Treatment
65
 
 
 
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SENIOR DEBT SECURITIES INDENTURE, dated as of _________ ___, 2009 between THE ROYAL BANK OF SCOTLAND GROUP PLC, a corporation incorporated in Scotland with registered number SC090312 (the “ Company ”), and THE BANK OF NEW YORK MELLON (previously named The Bank of New York), acting through its London Branch, a banking corporation duly organized and existing under the laws of the State of New York as Trustee (the “ Trustee ”), having its Corporate Trust Office at One Canada Square, London E14 5AL.

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Senior Debt Securities Indenture to provide for the issuance from time to time of its senior debt securities (the “ Senior Debt Securities ”), to be issued in one or more series, represented by one or more Global Securities in registered form without coupons for payments attached, or represented by definitive Senior Debt Securities in registered form without coupons for payments attached, the amount and terms of each such series to be determined as hereinafter provided.

All things necessary to make this Senior Debt Securities Indenture a valid and binding agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS SENIOR DEBT SECURITIES INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Senior Debt Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of Senior Debt Securities as follows:


ARTICLE 1
D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION

Section 1.01 . Definitions. For all purposes of this Senior Debt Securities Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1)        the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;




 
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(2)         all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3)         all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United Kingdom at the date of such computation and as applied by the Company;

(4)        the words “ herein ,” “ hereof ” and “ hereunder ” and other words of similar import refer to this Senior Debt Securities Indenture as a whole and not to any particular Article, Section or other subdivision; and

(5)         any reference to an “ Article ” or a “ Section ” refers to an Article or Section of this Senior Debt Securities Indenture.

Certain terms, used principally in Article 6, are defined in those Articles.

“ Act ”, when used with respect to any Holder, has the meaning specified in Section 1.04.

“ Additional Amounts ” shall have the meaning set forth in Section 10.04, of this Agreement.

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “ control ” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

“ Agent Member ” means a member of, or participant in, any Depositary.

“ Auditors ” means the Auditors from time to time of the Company or if there shall be joint Auditors of the Company any one or more of such joint Auditors.

“ Authenticating Agent ” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Senior Debt Securities. Initially the Trustee shall act as Authenticating Agent.


 
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“ Authorized Newspaper ” means a newspaper in an official language of the country of publication customarily published at least once a day for at least five days in each calendar week and of general circulation in the place in connection with which the term is used, which, in the United Kingdom, will be the Financial Times of London, if practicable, and which, in the United States, will be the Wall Street Journal , if practicable, and which, in Luxembourg, will be the Luxemburger Wort , if practicable and for so long as and only with respect to any Senior Debt Securities listed on the Luxembourg Stock Exchange, and if it shall be impracticable in the opinion of the Company to make any publication of any notice required hereby in any such newspaper, shall mean any publication or other notice in lieu thereof which is made or given with the approval of the Company which may include through the means of DTC, Euroclear and Clearstream.

“ Board of Directors ” means either the board of directors, or any committee of such board duly authorized to act with respect hereto, of the Company, which board of directors or committee may, to the extent permitted by applicable law, delegate its authority.

“ Board Resolution ” means a copy of a resolution certified by the Secretary or a Deputy or Assistant Secretary of the Company to have been duly adopted by the Board of Directors or duly authorized committee thereof and to be in full force and effect on the date of such certification and delivered to the Trustee.

“ Business Day ” means, with respect to any Place of Payment, except as may otherwise be provided in the form of Senior Debt Securities of any particular series, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.

“ Calculation Agent ” means the Person, if any, authorized by the Company, to calculate the interest rate or other amounts from time to time in relation to any series of Senior Debt Securities.

“ Commission ” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“ Company Request” and “ Company Order ” mean, respectively, a written request or order signed in the name of the Company by an Executive Director or Director or the Secretary of a Deputy or Assistant Secretary, and delivered to the Trustee.


 
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“ Corporate Trust Office ” means the office of the Trustee in which its corporate trust business is principally administered, located at One Canada Square, London E14 5AL (Attention: Corporate Trust Administration, facsimile: +44 20 7964 2536).

The term “ corporation ” includes corporations, associations, companies and business trusts.

“ Deferred Interest ” has the meaning specified in Section 3.07.

“ Depositary ” means, with respect to any series of Senior Debt Securities, a clearing agency that is designated to act as Depositary for the Global Securities evidencing all or part of such Senior Debt Securities as contemplated by Section 3.01.

“ Dollar ” or “ $ ” or any similar reference means the coin or currency of the United States which as at the time of payment is legal tender for the payment of public and private debts.

“ DTC ” means The Depository Trust Company or its nominee or its or their successor.

“ euro ” or “ € ” means the single currency of the participating member states in the Third Stage of European economic and monetary union pursuant to the Treaty establishing the European Community (as amended from time to time). “ participating member states ” means those member states of the European Union from time to time which adopt a single, shared currency in the Third Stage, as defined and identified in the EMU legislation.

“ Event of Default ” has the meaning specified in Section 5.01.

“ Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

“ Executive Officer ” means any executive officer or any Designated Signatory as defined in the minutes of a meeting of a committee of the Board of Directors held on [                   ], 2009, and, in each case, any other person authorized by a Board Resolution to carry out the functions such officer performs.

“ Foreign Currency ” means the euro or any currency issued by the government of any country (or a group of countries or participating member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts.

 

 
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“ Foreign Government Securities ” means with respect to Senior Debt Securities of any series that are denominated in a Foreign Currency, non-callable (i) direct obligations of the participating member state or government that issued such Foreign Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

“ Global Security ” means a global certificate evidencing all or part of a series of Senior Debt Securities, authenticated and delivered to the Holder and registered in the name of the Holder or its nominee.

“ Holder ” means a Person in whose name a Senior Debt Security in global or definitive form is registered in the Senior Debt Security Register.

The term “ interest ”, when used with respect to a Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

“ Interest Payment Date ”, when used with respect to any Senior Debt Security, means the Stated Maturity of any installment of interest on such Senior Debt Security.

“ Maturity ”, when used with respect to any Senior Debt Security, means the date, if any, on which the principal of such Senior Debt Security becomes due and payable as therein or herein provided, whether by call for redemption, winding-up of the Company or otherwise.

“ Officer’s Certificate ” means a certificate delivered to the Trustee and signed by an Executive Director or an Assistant Director or the Secretary or a Deputy or Assistant Secretary of the Company.

“ Opinion of Counsel ” means a written opinion of legal advisors, who may be an employee of or legal advisors for the Company or other legal advisors acceptable to the Trustee.

“ Original Issue Discount Security ” means any Senior Debt Security which provides for an amount less than the principal amount to be due and payable upon a declaration of the Maturity thereof pursuant to Section 5.02.

“ Outstanding ”, when used with respect to Senior Debt Securities or any series of Senior Debt Securities means (except as otherwise specified pursuant to Section 3.01), as of the date of determination, all Senior Debt Securities or all



 
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Senior Debt Securities of such series, as the case may be, theretofore authenticated and delivered under this Senior Debt Securities Indenture, except :

(i)          Senior Debt Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii)         Senior Debt Securities, or portions thereof, for whose payment or redemption money, U.S. Government Obligations or Foreign Government Securities in the necessary amount have been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Senior Debt Securities; provided , that, if such Senior Debt Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Senior Debt Securities Indenture or provision therefor satisfactory to the Trustee has been made; and

(iii)        Senior Debt Securities which have been paid pursuant to Section 11.06 or in exchange for or in lieu of which other Senior Debt Securities have been authenticated and delivered pursuant to this Senior Debt Securities Indenture, other than any such Senior Debt Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Senior Debt Securities are held by a bona fide purchaser in whose hands such Senior Debt Securities are valid obligations of the Company;

provided, however , that in determining whether the Holders of the requisite   principal amount of the Outstanding Senior Debt Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of a Senior Debt Security denominated in a Foreign Currency shall be the Dollar equivalent, determined on the date of original issuance of such Senior Debt Security, of the principal amount of such Senior Debt Security; and (ii) Senior Debt Securities beneficially owned by the Company, or any other obligor upon the Senior Debt Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Senior Debt Securities for which a Responsible Officer of the Trustee has received an Officer’s Certificate stating that such Senior Debt Securities are so beneficially owned shall be so disregarded; provided , further , however , that Senior Debt Securities so beneficially owned which have been   pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Senior Debt Securities and that the pledgee is not the Company, or any other obligor upon the Senior Debt Securities or any Affiliate of the Company or of such other obligor.


 
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“ Paying Agent ” means any Person (which may include the Company) authorized by the Company to pay the principal of (and premium, if any) or interest, if any on any Senior Debt Securities on behalf of the Company.

“ Person ” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“ Place of Payment ”, when used with respect to the Senior Debt Securities of any series, means the place or places where the principal of (and premium, if any) and interest, if any, on the Senior Debt Securities of that series are payable as specified pursuant to Section 3.01 or, if not so specified, as specified in Section 10.02.

“ Predecessor Security ” of any particular Senior Debt Security means every previous Senior Debt Security evidencing all or a portion of the same debt as that evidenced by such particular Senior Debt Security; and, for the purposes of this definition, any Senior Debt Security authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Senior Debt Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Senior Debt Security.

“ Redemption Date ”, when used with respect to any Senior Debt Security to be redeemed, means the date fixed for such redemption by or pursuant to this Senior Debt Securities Indenture.

“ Redemption Price ”, when used with respect to any Senior Debt Security to be redeemed, means the price at which it is to be redeemed pursuant to this Senior Debt Securities Indenture.

“ Regular Record Date ” for the interest payable on any Interest Payment Date on registered Senior Debt Securities of any series means the date specified for the purpose pursuant to Section 3.01.

“ Responsible Officer ”, when used with respect to the Trustee, means any officer of the Trustee assigned to or working in the corporate trust department of the Trustee or, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Senior Debt Securities Indenture.



 
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“ Senior Debt Securities ” has the meaning set forth in the recitals herein and more particularly means any series of Senior Debt Securities issued, authenticated and delivered under this Senior Debt Securities Indenture.

“ Senior Debt Securities Indenture ” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms and forms of particular series of Senior Debt Securities established pursuant to Section 3.01.

“ Senior Debt Security ” means one of the Senior Debt Securities.

“ Senior Debt Security Register ” and “ Senior Debt Security Registrar ” have the respective meanings specified in Section 3.05.

“ Special Record Date ”, when used for the payment of any Deferred Interest on registered Senior Debt Securities of any series, means the date specified by the Company for the purpose pursuant to Section 3.07.

“ Stated Maturity ”, when used with respect to any Senior Debt Security or any installment of principal thereof or interest thereon, means the date, if any, specified in, or determined in accordance with the terms of, such Senior Debt Security as the fixed date on which the principal of such Senior Debt Security is due and payable.

“ Subsidiary ” has the meaning attributed thereto by Section 736 of the Companies Act 1985 of Great Britain as in force at the date as of which this instrument was executed.

“ Taxing Jurisdiction ” has the meaning specified in Section 10.04.

“ Trustee ” means the Person named as the “ Trustee ” in the first paragraph of this instrument until a successor trustee shall have become such pursuant to the applicable provisions of this Senior Debt Securities Indenture, and thereafter “ Trustee ” shall mean the Person who is then the Trustee hereunder, and if at any time there is more than one such Person, “ Trustee ” shall mean and include each such Person; and “ Trustee ” as used with respect to the Senior Debt Securities of any series shall mean the Trustee with respect to the Senior Debt Securities of such series.

“ Trust Indenture Act ” means the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at the date as of which this instrument was executed, except as provided in Section 9.05.

“ United Kingdom ” means the United Kingdom of Great Britain and Northern Ireland.
 

 
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“ United States ” and “ U.S. ” mean the United States of America and, except in the case of Sections 6.09 and 6.14, its territories and possessions.

“ U.S. Government Obligations ” means noncallable (i) direct obligations of the United States for which its full faith and credit are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt.

Section 1.02 . Compliance Certificates and Opinions. Upon any application or request by the Company to the Trustee to take any action under any provision of this Senior Debt Securities Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Senior Debt Securities Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of the legal advisor rendering such opinion all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Senior Debt Securities Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Senior Debt Securities Indenture shall include:

(a)        a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b)        a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c)        a statement that, in the opinion of each such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and


 
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(d)       a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.

Section 1.03 . Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, legal advisors, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representations by, legal advisors may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such legal advisors know, or in the exercise of reasonable care should know, that the certificate or opinion or representation with respect to such matters is erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Senior Debt Securities Indenture, they may, but need not, be consolidated and form one instrument.

Section 1.04 . Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Senior Debt Securities Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, when it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “ Act ” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Senior Debt Securities Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.


 
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(b)        The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. When such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c)         The ownership of registered Senior Debt Securities shall be proved by the Senior Debt Security Register.

(d)        Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Senior Debt Security shall bind every future Holder of the same Senior Debt Security and the Holder of every Senior Debt Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Senior Debt Security or such other Senior Debt Security.

Section 1.05 . Notices, Etc. to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Senior Debt Securities Indenture to be made upon, given or furnished to, or filed with,

(a)         the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile) to the Trustee at its Corporate Trust Office, or

(b)        the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class air mail postage prepaid, to the Company, to RBS Gogarburn, P.O. Box 1000, Edinburgh EH12 1HQ (Attention: Group Secretariat) or at any other address previously furnished in writing to the Trustee by the Company.

Section 1.06 . Notice to Holders; Waiver. When this Senior Debt Securities Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if given in writing and mailed, first-class postage prepaid, to each Holder of a registered Senior Debt Security affected by such event in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act with respect to reports pursuant to Section 7.03(a).


 
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For so long as the Senior Debt Securities of any series are represented by Global Securities, the Company will deliver a copy of all notices with respect to such series to the Holder (if the address of such Holder is known to the Company).

When notice to Holders of registered Senior Debt Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Senior Debt Securities Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
 
Section 1.07 . Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Senior Debt Securities Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. If at any future time any provision required to be included herein by the Trust Indenture Act as in force at the date as of which this Senior Debt Securities Indenture was executed or any limitation imposed by the Trust Indenture Act at such date on any provision otherwise included herein would not be so required or imposed (in whole or in part) if this Senior Debt Securities Indenture were executed at such future time, the Company and the Trustee may enter into one or more indentures supplemental hereto pursuant to Section 9.01 to change or eliminate (in whole or in part) such provision or limitation of this Senior Debt Securities Indenture in conformity with the requirements of the Trust Indenture Act as then in force, except that (subject to Article Nine) no provision or limitation required to be included herein by Sections 310(a)(1) and (a)(2), 315(a), (c), (d)(l), (d)(2), (d)(3) and (e), 316(a)(1)(A), (a)(l)(B), (a)(2), (a) (last sentence) and (b) of the Trust Indenture Act as in force at the date as of which this Senior Debt Securities Indenture was executed may be so changed or eliminated.

Section 1.08 . Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.



 
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Section 1.09 . Successors and Assigns. All covenants and agreements in this Senior Debt Securities Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 1.10 . Separability Clause. In case any provision in this Senior Debt Securities Indenture or in the Senior Debt Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 1.11 . Benefits of Senior Debt Securities Indenture. Nothing in this Senior Debt Securities Indenture or in the Senior Debt Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Holders of Senior Debt Securities, any benefit or any legal or equitable right, remedy or claim under this Senior Debt Securities Indenture.

Section 1.12 . Governing Law. This Senior Debt Securities Indenture and the Senior Debt Securities shall be governed by and construed in accordance with the laws of the State of New York, except that the authorization and execution of the Senior Debt Securities Indenture and the Senior Debt Securities shall be governed by (in addition to the laws of the State of New York relevant to execution) by the respective jurisdictions of the Company and the Trustee, as the case may be.

Section 1.13 . Saturdays, Sundays and Legal Holidays. The terms of the Senior Debt Securities shall provide that, in any case where any Interest Payment Date, Redemption Date, Maturity or Stated Maturity, of a Senior Debt Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Senior Debt Securities Indenture or the Senior Debt Securities other than a provision in the Senior Debt Securities that specifically states that such provision shall apply in lieu of this Section) payments of interest, if any (and premium, if any) or principal and the exchange of the Senior Debt Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment (or such other Business Day as shall be provided in such Senior Debt Security) with the same force and effect as if made on such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, provided that no interest shall accrue on such payment for the period from and after such Interest Payment Date, Redemption Date, Maturity or Stated Maturity, as the case may be.

Section 1.14 . Appointment of Agent for Service. The Company has designated and appointed John Fawcett, Chief Financial Officer, Citizens Financial Group, Inc., 600 Washington Boulevard, Stamford, Connecticut, 06901, as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City


 
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of New York arising out of or relating to the Senior Debt Securities or this Senior Debt Securities Indenture, but for that purpose only, and agrees that service of process upon said John Fawcett shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Senior Debt Securities remain Outstanding until the appointment of a successor by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said John Fawcett in full force and effect so long as any of the Senior Debt Securities shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

Section 1.15 . Calculation Agent. If the Company appoints a Calculation Agent pursuant to Section 3.01 with respect to any series of Senior Debt Securities, any determination of the interest rate on, or other amounts in relation to, such series of Senior Debt Securities in accordance with the terms of such series of Senior Debt Securities by such Calculation Agent shall (in the absence of manifest error, bad faith or willful misconduct) be binding on the Company, the Trustee and all Holders and (in the absence of manifest error, bad faith or willful misconduct) no liability to the Holders shall attach to the Calculation Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions.


ARTICLE 2
S ENIOR D EBT S ECURITY F ORMS

Section 2.01 . Forms Generally. The Senior Debt Securities of each series shall be issuable as registered securities without coupons and in such forms as shall be established by or pursuant to a Board Resolution, or in one or more indentures supplemental hereto, pursuant to Section 3.01, in each case with such insertions, omissions, substitutions and other variations as are required or permitted by this Senior Debt Securities Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or rule or regulation made pursuant thereto or with the rules of any securities exchange or


 
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Depositary therefor, or as may, consistently herewith, be determined by the officers executing such Senior Debt Securities, all as evidenced by any such execution.

The Trustee’s certificates of authentication shall be in substantially the form set forth in Section 2.02 or Section 6.14.

The definitive Senior Debt Securities shall be printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Senior Debt Securities may be listed, all as determined by the officers executing such Senior Debt Securities, as evidenced by their execution thereof.

Section 2.02 . Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of authentication shall be in substantially the following form:

CERTIFICATE OF AUTHENTICATION

This is one of the Senior Debt Securities of the series designated herein referred to in the within-mentioned Senior Debt Securities Indenture.
 

 
 
Dated:    
 
     
     
THE BANK OF NEW YORK MELLON, LONDON BRANCH
 
     
     
as Trustee
 
     
     
By:
   
 
Authorized Signatory
 
     
 
 
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ARTICLE 3
T HE S ENIOR D EBT S ECURITIES

Section 3.01 . Amount Unlimited; Issuable in Series. The aggregate principal amount of Senior Debt Securities which may be authenticated and delivered under this Senior Debt Securities Indenture is unlimited. The Senior Debt Securities may be issued in one or more series.

There shall be established by or pursuant to Board Resolutions of the Company or established in one or more indentures supplemental hereto, prior to the initial issuance of Senior Debt Securities of any series:

(a)         the title of the Senior Debt Securities of the series (which shall distinguish the Senior Debt Securities of the series from all other Senior Debt Securities);

(b)        any limit upon the aggregate principal amount of the Senior Debt Securities of the series which may be authenticated and delivered under this Senior Debt Securities Indenture (except for Senior Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Senior Debt Securities of the series pursuant to Sections 3.04, 3.05, 3.06, 9.6   or 11.07 and except for any Senior Debt Securities which, pursuant to Section 3.03 are deemed never to have been authenticated and delivered hereunder);

(c)         the date or dates, if any, on which the principal of (and premium, if any, on) the Senior Debt Securities of the series is payable;

(d)       the rate or rates, if any, at which the Senior Debt Securities of the series shall accrue interest or the manner of calculation of such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07, the terms applicable to deferred payments and, in the case of registered Senior Debt Securities, the Regular Record Date for the interest payable on any Interest Payment Date, the Special Record Date for the payment of any Deferred Interest and any dates required to be established pursuant to Section 7.01;

(e)        whether any premium, upon redemption or otherwise, shall be payable by the Company on Senior Debt Securities of the series;

(f)         the place or places where the principal of (and premium, if any) and any interest on Senior Debt Securities of the series shall be payable, and the Paying Agent or Paying Agents who shall be authorized to pay principal of (and premium, if any) and interest on Senior Debt Securities of such series, at least one of such Paying Agents having an office or agency in the Borough of Manhattan, The City of New York;


 
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(g)        other than with respect to any redemption of the Senior Debt Securities pursuant to Section 11.08, whether or not such series of Senior Debt Securities are to be redeemable, in whole or in part, at the Company’s option and, if so redeemable, the period or periods within which, the price or prices at which and the terms and conditions upon which, Senior Debt Securities of the series may be redeemed, including the date referred to in Section 11.08;

(h)       the obligation, if any, of the Company to redeem or purchase Senior Debt Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which Senior Debt Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

(i)          if other than denominations of $[        ] and any multiple thereof, the denominations in which Senior Debt Securities of the series in each applicable form shall be issuable;

(j)          if other than the principal amount thereof, the portion, or the manner of calculation of such portion, of the principal amount of Senior Debt Securities of the series which shall be payable upon a declaration of acceleration or acceleration of the Maturity thereof pursuant to Section 5.02, upon redemption of Senior Debt Securities of any series which are redeemable before their Stated Maturity, or which the Trustee shall be entitled to file and prove a claim pursuant to Section 5.04;

(k)         if Additional Amounts, pursuant to Section 10.04, will not be payable;

(l)         the terms, if any, on which such Senior Debt Securities may or shall be converted into or exchanged at the option of the Company or otherwise for stock or other securities of the Company or another entity or other entities, into a basket or baskets of such securities, into an index or indices of such securities, into the cash value therefor or into any combination of the foregoing, any specific terms relating to the adjustment thereof and the period during which such Senior Debt Securities may or shall be so converted or exchanged;

(m)       if other than Dollars, provisions, if any, for the Senior Debt Securities of the series to be denominated, and payments thereon to be made, in Foreign Currencies and specifying the manner and place of payment thereon and any other terms with respect thereto;


 
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(n)        if other than the coin or currency in which the Senior Debt Securities of that series are denominated, the coin or currency in which payment of the principal of (and premium, if any) or interest, if any, on the Senior Debt Securities of such series shall be payable;

(o)        if the principal of (and premium, if any) or interest, if any, on the Senior Debt Securities of such series are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Senior Debt Securities are denominated, the period or periods within which, and the terms and conditions upon which, such election may be made;

(p)         whether the Senior Debt Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and the initial Holder with respect to such Global Security or Senior Debt Securities;

(q)        if the Senior Debt Securities of such series are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Senior Debt Security of such series or otherwise) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions;

(r)         if the amounts of payments of principal of (and premium, if any) or interest, if any, on the Senior Debt Securities of the series may be determined with reference to an index or are otherwise not fixed on the original issue date thereof, the manner in which such amounts shall be determined and the Calculation Agent, if any, who shall be appointed and authorized to calculate such amounts;

(s)        any other Events of Default or covenants with respect to the Senior Debt Securities of such series and if other than as specified in this Senior Debt Securities Indenture, the terms thereof;

(t)         the forms of Senior Debt Securities of the series; and

(u)        any other terms of the series (which terms shall not be inconsistent with the provisions of this Senior Debt Securities Indenture, except as permitted by Section 9.01(d)).

All Senior Debt Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such action or in any such indenture supplemental hereto.

If the forms of Senior Debt Securities of any series, or any of the terms thereof, are established by action taken pursuant to a Board Resolution, a copy of the Board Resolution in respect thereof shall be delivered to the Trustee at or prior to the delivery of the Company Order pursuant to Section 3.03 for the authentication and delivery of such Senior Debt Securities.



 
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Section 3.02 . Denominations. The Senior Debt Securities of each series shall be issuable in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specification with respect to Senior Debt Securities of any series, the Senior Debt Securities of each series shall be issuable in denominations of $[        ] each and any integral multiple thereof. Unless otherwise specified in accordance with Section 3.01, any Global Security issued and delivered to the Holder shall be issued in the form of units with each $[        ] principal amount of such Global Security constituting one unit.

Section 3.03 . Execution, Authentication, Delivery and Dating. The Senior Debt Securities shall be executed on behalf of the Company by any Executive Officer. The signature of any Executive Officer on the Senior Debt Securities may be manual or facsimile. Senior Debt Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officer of the Company shall bind the Company, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Senior Debt Securities.

At any time and from time to time after the execution and delivery of this Senior Debt Securities Indenture, the Company may deliver Senior Debt Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Senior Debt Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Senior Debt Securities. In authenticating such Senior Debt Securities and accepting the additional responsibilities under this Senior Debt Securities Indenture in relation to such Senior Debt Securities the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that (a) the form and terms thereof have been established in conformity with the provisions of this Senior Debt Securities Indenture and (b) that such Senior Debt Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company enforceable in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditor’s rights and by general principles of equity.

The Trustee shall not be required to authenticate such Senior Debt Securities if the issue of such Senior Debt Securities pursuant to this Senior Debt Securities Indenture will affect the Trustee’s own rights, duties or immunities under the Senior Debt Securities and this Senior Debt Securities Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.


 
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Each registered Senior Debt Security shall be dated the date of its authentication.

No Senior Debt Security appertaining thereto shall be entitled to any benefit under this Senior Debt Securities Indenture or be valid or obligatory for any purpose unless there appears on such Senior Debt Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual signature, and such certificate upon any Senior Debt Security shall be conclusive evidence, and the only evidence, that such Senior Debt Security has been duly authenticated and delivered hereunder and that such Senior Debt Security is entitled to the benefits of this Senior Debt Securities Indenture. Notwithstanding the foregoing, if any Senior Debt Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Senior Debt Security to the Trustee for cancellation as provided in Section 3.09, for all purposes of this Senior Debt Securities Indenture, such Senior Debt Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefit of this Senior Debt Securities Indenture.

Section 3.04 . Temporary Senior Debt Securities. Pending the preparation of definitive Senior Debt Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Senior Debt Securities substantially of the tenor of the definitive Senior Debt Securities in lieu of which they are issued, which Senior Debt Securities may be printed, lithographed, typewritten, photocopied or otherwise produced. Temporary Senior Debt Securities shall be issuable as registered Senior Debt Securities without coupons attached in any authorized denomination, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Senior Debt Securities may determine, all as evidenced by such execution.

If temporary Senior Debt Securities of any series are issued, the Company will cause, if so required by the terms of such temporary Senior Debt Securities, definitive Senior Debt Securities of such series to be prepared without unreasonable delay. After the preparation of definitive Senior Debt Securities of such series, the temporary Senior Debt Securities of such series shall be exchangeable for definitive Senior Debt Securities of such series containing identical terms and provisions upon surrender of the temporary Senior Debt Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Senior Debt Securities of any series the Company shall execute, and the Trustee shall authenticate and deliver in exchange therefor, a like aggregate principal amount of definitive Senior Debt Securities of the same series of authorized denominations containing identical terms and provisions. Until so exchanged, unless otherwise provided therein or in a supplemental indenture relating thereto, the temporary Senior Debt Securities of

 
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any series shall in all respects be entitled to the same benefits (but shall be subject to all the limitations of rights) under this Senior Debt Securities Indenture as definitive Senior Debt Securities of such series.

Section 3.05 .  Registration, Registration of Transfer and Exchange.

(a)         Global Securities. This Section 3.05(a) shall apply to Global Securities unless otherwise specified, as contemplated by Section 3.01.

Except as otherwise specified, as contemplated by Section 3.01 hereof, the Senior Debt Securities shall be initially issued and represented by one or more Global Securities in registered form, without Coupons attached thereto, which shall be authenticated as contemplated by this Senior Debt Securities Indenture.

Each Global Security in registered form authenticated under this Senior Debt Securities Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Senior Debt Security for all purposes of this Senior Debt Securities Indenture. Except as otherwise specified, as contemplated by Section 3.01 hereof, each Global Security in registered form authenticated under this Senior Debt Securities Indenture shall be initially registered in the name of DTC only.

With respect to Global Securities in registered form, unless the Global Security is presented by an authorized representative of the Holder to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Holder and any payment is made to such nominee, any transfer, pledge or other use of the Global Security in registered form for value or otherwise shall be wrongful since the registered owner of such Global Security, the nominee of the Holder, has an interest in such Global Security.

Except as otherwise specified, as contemplated by Section 3.01 hereof, any Global Security shall be exchangeable for definitive Senior Debt Securities only as provided in this paragraph. A Global Security shall be exchangeable pursuant to this Section only (i) if the relevant Depositary notifies the Trustee that it is unwilling or unable to continue to act as Depositary, (ii) if, in the event of a winding-up of the Company, the Company fails to make a payment on the Senior Debt Securities when due, or (iii) at any time if the Company at its option and in its sole discretion determines that the Global Securities of a particular series should be exchanged for definitive Senior Debt Securities of that series in registered form. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for, unless otherwise specified or contemplated by Section 3.01, definitive Senior Debt Securities in registered form


 
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bearing interest (if any) at the same rate or pursuant to the same formula, having the same date of issuance, the same date or dates from which such interest shall accrue, the same Interest Payment Dates on which such interest shall be payable or the manner of determination of such Interest Payment Dates, redemption provisions, if any, specified currency and other terms and of differing denominations aggregating a like amount as the Global Security so exchangeable. Definitive Senior Debt Securities in registered form shall be registered in the names of the owners of the beneficial interests in such Global Securities as such names are from time to time provided by the Holder to the Trustee.

Any Global Security that is exchangeable pursuant to the preceding paragraph, unless otherwise specified as contemplated by Section 3.01, shall be exchangeable for Senior Debt Securities issuable in authorized denominations of a like aggregate principal amount and tenor.

No Global Security in registered form may be transferred except as a whole by the Holder to a nominee of the Holder or by the Holder or any such nominee to a successor of the Holder or a nominee of such successor. Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Senior Debt Securities in definitive form and will not be considered the holders thereof for any purpose under this Senior Debt Securities Indenture.

In the event that a Global Security is surrendered for redemption or exchange for stock or other securities of the Company or another entity or other entities in part pursuant to Section 11.07, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global Security so surrendered.

The Agent Members and any other beneficial owners shall have no rights under this Senior Debt Securities Indenture with respect to any Global Security held on their behalf by a Holder, and such Holder may be treated by the Company, the Trustee, and any agent of the Company or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Holder or impair, as between any such Holder or other clearance service and its Agent Members and Holders, the operation of customary practices governing the exercise of the rights of a holder of any security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Senior Debt Securities Indenture.


 
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In connection with any exchange of interests in a Global Security for definitive Senior Debt Securities of another authorized form, as provided in this Section 3.05(a), then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Senior Debt Securities in aggregate principal amount equal to the principal amount of such Global Security or the portion to be exchanged executed by the Company. On or after the earliest date on which such interests may be so exchanged, such Global Security shall be surrendered by the Holder to the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole or from time to time in part, for definitive Senior Debt Securities without charge (unless the definitive Senior Debt Securities in registered form are to be issued to an Excepted Person (as defined in Section 13.10) in which case the Company or Trustee may require payment of any taxes or governmental charges arising) and the Trustee shall authenticate and deliver, in exchange for each portion of such Global Security, an equal aggregate principal amount of definitive Senior Debt Securities of authorized denominations as the portion of such Global Security to be exchanged. Any Global Security that is exchangeable pursuant to this Section 3.05 shall be exchangeable for Senior Debt Securities issuable in the denominations specified as contemplated by Section 3.01 and registered in such names as the Holder of such Global Security shall direct. If a definitive Senior Debt Security in registered form is issued in exchange for any portion of a Global Security after the close of business at the office or agency where such exchange occurs on any record date and before the opening of business at such office or agency on the relevant Interest Payment Date, interest will not be payable on such Interest Payment Date in respect of such definitive Senior Debt Security, but will be payable on such Interest Payment Date only to the person to whom payments of interest in respect of such portion of such Global Security are payable.

A Depositary may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Senior Debt Securities Indenture with respect to the Senior Debt Securities.

(b)       Except as otherwise specified pursuant to Section 3.01, registered Senior Debt Securities of any series may only be exchanged for a like aggregate principal amount of registered Senior Debt Securities of such series of other authorized denominations containing identical terms and provisions. Senior Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Senior Debt Security or Senior Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.

 

 
 
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Except as otherwise specified pursuant to Section 3.01, the Company shall cause to be kept in the principal corporate trust office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “ Senior Debt Security Register ” provided , no such Senior Debt Security Register shall be maintained in any office or agency in the United Kingdom other than in Scotland) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of registered Senior Debt Securities and of transfers of such Senior Debt Securities. The Trustee is hereby appointed “ Senior Debt Security Registrar ” for the purpose of registering Senior Debt Securities in registered form and transfers of Senior Debt Securities in registered form as herein provided.

Registered Senior Debt Securities shall be transferable only on the Senior Debt Security Register. Upon surrender for registration of transfer of any registered Senior Debt Security of any series, together with the form of transfer endorsed on it, duly completed and executed at an office or agency of the Company designated pursuant to Section 10.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver to the address specified in the formal transfer, within three Business Days, in the name of the designated transferee or transferees, one or more new registered Senior Debt Securities of the same series of any authorized denominations containing identical terms and provisions, of a like aggregate principal amount.

If only part of a registered Senior Debt Security is transferred, a new registered Senior Debt Security of an aggregate principal amount equal to the amount not being transferred shall be executed by the Company, and authenticated and delivered by the Trustee to the transferor, in the name of the transferor, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the registered Senior Debt Security. The new registered Senior Debt Security will be delivered to the transferor by uninsured post at the risk of the transferor to the address of the transferor appearing in the Senior Debt Security Register. A new registered Senior Debt Security of an aggregate principal amount equal to the amount being transferred shall be delivered by the Trustee to the transferee, in the name of the transferee, within three Business Days after the Trustee acting as Paying Agent pursuant to Section 10.02 receives the registered Senior Debt Security. The new registered Senior Debt Security will be delivered to the transferee by uninsured post at the risk of the transferee to the address of the transferee specified in the form of transfer.

All Senior Debt Securities issued upon any registration of transfer or exchange of Senior Debt Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Senior Debt Securities Indenture, as the Senior Debt Securities surrendered upon such registration of transfer or exchange.



 
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Every registered Senior Debt Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed, by the registered Holder thereof or his attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Senior Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Senior Debt Securities, other than exchanges pursuant to Sections 3.04, 9.06 or 11.07 not involving any transfer.

The Company shall not be required (i) to issue, register the transfer of or exchange any Senior Debt Security of any series during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of Senior Debt Securities of such series selected for redemption under Section 11.03 and ending at the close of business on the day of the giving of such notice, or (ii) to register the transfer of or exchange any Senior Debt Security so selected for redemption in whole or in part, except the unredeemed portion of any Senior Debt Securities being redeemed in part.

Section 3.06 . Mutilated, Destroyed, Lost and Stolen Senior Debt Securities. If any mutilated Senior Debt Security (including any Global Security)   is surrendered to the Trustee, the Company may execute and the Trustee shall, in the case of a Senior Debt Security, authenticate and deliver in exchange therefor a new Senior Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Senior Debt Security (including any Global Security) and (ii) such security or indemnity as may be required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Trustee that such Senior Debt Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver in lieu of any such destroyed, lost or stolen Senior Debt Security a new Senior Debt Security of the same series containing identical terms and provisions and of like amount, and bearing a number not contemporaneously outstanding.

 


 
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In case any such mutilated, destroyed, lost or stolen Senior Debt Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Senior Debt Security, pay such Senior Debt Security.

Upon the issuance of any new Senior Debt Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Senior Debt Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Senior Debt Security shall constitute an original additional contractual obligation of the Company whether or not the destroyed, lost or stolen Senior Debt Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Senior Debt Securities Indenture equally and proportionately with any and all other Senior Debt Securities of that series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Senior Debt Securities.

Section 3.07 . Payment; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Debt Securities, interest, if any, on any Senior Debt Securities which is payable, and is paid or duly provided for, on any Interest Payment Date shall be paid, in the case of registered Senior Debt Securities, to the Person in whose name that Senior Debt Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest or, in the case of Global Securities held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United Kingdom for collection by the Holder.

In the case of registered Senior Debt Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained by the payee with, a bank in The City of New York.

In the case of registered Senior Debt Securities where payment is to be made in a Foreign Currency, payment will be made as established pursuant to Section 3.01.

Any interest on any Senior Debt Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date is herein called “ Deferred Interest ”. Deferred Interest on any registered Senior Debt Security of any series shall forthwith cease to be payable to the Holder on


 
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the relevant Regular Record Date by virtue then of having been such Holder, and such Deferred Interest may be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

(a)         The Company may elect to make payment of any Deferred Interest to the Persons in whose names the registered Senior Debt Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Deferred Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Deferred Interest proposed to be paid on each Senior Debt Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Deferred Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Deferred Interest as in this clause provided. Thereupon the Company shall fix a Special Record Date for the payment of such Deferred Interest in respect of such registered Senior Debt Securities of such series which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after it delivers to the Trustee notice of the proposed payment. The Company shall promptly notify the Trustee of such Special Record Date and, in the name and at the expense of the Company, the Trustee shall cause notice of the proposed payment of such Deferred Interest and the Special Record Date therefor to be given in the manner and to the extent provided in Section 1.06, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Deferred Interest on the Senior Debt Securities of such series and the Special Record Date therefor having been so given, such Deferred Interest on the Senior Debt Securities of such series shall be paid in the case of registered Senior Debt Securities to the Persons in whose names such Senior Debt Securities (or their respective Predecessor Securities) are registered in the Senior Debt Security Register at the close of business on the Special Record Date, and such Deferred Interest shall no longer be payable pursuant to the following clause (b); or

(b)        The Company may make payment of any Deferred Interest on the Senior Debt Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Senior Debt Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Senior Debt Security delivered under this Senior Debt Securities Indenture upon registration of transfer of or in exchange for or in lieu of any other Senior Debt Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Senior Debt Security.


 
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Section 3.08 . Persons Deemed Owners. Prior to due presentment of a registered Senior Debt Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Senior Debt Security is registered as the owner of such Senior Debt Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Senior Debt Security and for all other purposes whatsoever, whether or not such Senior Debt Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

Section 3.09 . Cancellation. All Senior Debt Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Senior Debt Securities previously authenticated and delivered hereunder and all Senior Debt Securities so delivered shall be promptly cancelled by the Trustee. No Senior Debt Securities shall be authenticated in lieu of or in exchange for any Senior Debt Securities cancelled as provided in this Section, except as expressly permitted by the provisions of the Senior Debt Securities of any series or pursuant to the provisions of this Senior Debt Securities Indenture. The Trustee shall deliver to the Company all cancelled Senior Debt Securities held by the Trustee.

Section 3.10 . Computation of Interest. Except as otherwise specified pursuant to Section 3.01 for Senior Debt Securities of any series, payments of interest on the Senior Debt Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

Section 3.11 . CUSIP Numbers. The Company in issuing any series of the Senior Debt Securities may use “CUSIP”, “ISIN” and/or “Common Code” numbers (if then generally in use) or any successor to such numbers and thereafter with respect to such series, the Trustee shall use “CUSIP”, “ISIN” and/or “Common Code” numbers or successor numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Senior Debt Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Senior Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the “CUSIP”, “ISIN” and/or “Common Code” numbers or successor numbers.


 
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ARTICLE 4
S ATISFACTION AND D ISCHARGE

Section 4.01 . Satisfaction and Discharge of Senior Debt Securities Indenture. This Senior Debt Securities Indenture shall upon Company Request   cease to be of further effect with respect to Senior Debt Securities of any series (except as to any surviving rights of registration of transfer or exchange of Senior Debt Securities of such series herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Senior Debt Securities Indenture with respect to the Senior Debt Securities of such series when

(a)  
either

(i)           all Senior Debt Securities of such series theretofore authenticated and delivered (other than (A) Senior Debt Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Senior Debt Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or

(ii)          all such Senior Debt Securities not theretofore delivered to the Trustee for cancellation

(A)        have become due and payable or will become due and payable at their Stated Maturity within one year, or

(B)         are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or

(C)         are to be exchanged for stock or other securities of the Company or another entity or other entities and notice of exchange of such Senior Debt Securities for stock or other securities of the Company or another entity or other entities shall have been given,

and the Company has deposited or caused to be deposited with the Trustee, as trust funds in trust for the purpose, an amount in cash, or U.S. Government Obligations (with respect to Senior Debt Securities denominated in Dollars) or Foreign Government Securities (with respect to Senior Debt Securities denominated in the same Foreign Currency) maturing, in the case of (A) and (B)


 
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above, as to principal and interest, if any, and, in the case of (C) above, as to accrued interest, if any, in such amounts and at such times as will ensure the availability of cash sufficient to pay and discharge all claims with respect to such Senior Debt Securities not theretofore delivered to the Trustee for cancellation, in the case of (A) and (B) above, for principal (and premium, if any) and accrued interest, if any, and, in the case of (iii) above, as to accrued interest, if any, to the date of such deposit (in the case of Senior Debt Securities which have become due and payable) or to the Redemption Date;

(b)       the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Senior Debt Securities of such series; and

(c)       the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Senior Debt Securities Indenture with respect to the Senior Debt Securities of such series have been complied with.

Notwithstanding any satisfaction and discharge of this Senior Debt Securities Indenture, the obligations of the Company to the Trustee under Section 6.07, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if cash, U.S. Government Obligations and/or Foreign Government Securities shall have been deposited with the Trustee pursuant to subclause 4.01(a)(ii) of clause 4.01(a) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive such satisfaction and discharge, including any termination under any bankruptcy law.

Section 4.02 . Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.03, all cash, U.S. Government Obligations and Foreign Government Securities deposited with the Trustee pursuant to Section 4.01 shall be held in trust and such cash and the proceeds from such U.S. Government Obligations and/or Foreign Government Securities shall be applied by it, in accordance with the provisions of the Senior Debt Securities of such series, and this Senior Debt Securities Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for the payment of which such cash, U.S. Government Obligations and/or Foreign Government Securities have been deposited with the Trustee.

Section 4.03 . Repayment to Company. The Trustee, the Calculation Agent and any Paying Agent promptly shall pay to the Company upon Company Request any excess money, U.S. Government Obligations and/or Foreign Government Securities held by them at any time with respect to any series of Senior Debt Securities.


 
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ARTICLE 5
R EMEDIES

Section 5.01 . Events of Default. “ Event of Default ”, wherever used herein with respect to Senior Debt Securities of a particular series, means (i) that, whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body, except as otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Debt Securities, the Company failed to pay any principal or any interest on any Senior Debt Securities of that series within 14 days from the due date for payment and the principal or interest has not been duly paid within a further 14 days following written notice from the Trustee to the Company or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Senior Debt Securities of that series requiring the non-payment to be made good, (ii) the making of an order by an English court of competent jurisdiction which is not successfully appealed within 30 days of the making of such order, or the valid adoption by the shareholders of the Company of an effective resolution, for the winding-up of the Company (other than under or in connection with a scheme of reconstruction, merger or amalgamation not involving bankruptcy or insolvency), (iii) any other Event of Default provided with respect to Senior Debt Securities of such series pursuant to Section 3.01 or (iv) the default in the performance, or breach, of any covenant or warranty of the Company in this Senior Debt Securities Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section 5.01 specifically dealt with) provided, that default or breach has not been remedied within 60 days of receipt by the Company and the Trustee from the Holders of at least 25% aggregate principal amount of the Outstanding Senior Debt Securities of that series of a written notice requiring the breach to be remedied or written notice from the Trustee to the Company certifying that in its opinion the default or breach is materially prejudicial to the interests of the Holders of the Senior Debt Securities of that series and requiring the breach to be remedied.

Section 5.02 . Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Senior Debt Securities of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Debt Securities of such series may declare the principal amount (or, in the case of Original Issue Discount Securities, the accreted face amount together with


 
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accrued interest, if any, on) of all the Senior Debt Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.

At any time after such a declaration of acceleration with respect to Senior Debt Securities of any series has been made but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holder or Holders of a majority in aggregate principal amount of the Outstanding Senior Debt Securities of such series, by written notice to the Company and the Trustee, may rescind or annul such declaration of acceleration and its consequences (including any Event of Default under another series of Senior Debt Securities arising therefrom) but only if

(a)       the Company has paid or deposited with the Trustee a sum sufficient to pay

(i)           the principal of (and premium, if any, on) any Senior Debt Securities of such series which have become due otherwise than by such declaration of acceleration and any due and payable interest, and overdue interest, if any, thereon at the rate or rates prescribed therefor in such Senior Debt Securities,

(ii)          all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(b)        all Events of Default with respect to Senior Debt Securities of such series have been cured or waived as provided by Section 5.13.

No such rescission or annulment shall affect any subsequent default or impair any right consequent thereon.

Section 5.03 . Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that, if the Company fails to pay any principal   or any interest on any Senior Debt Securities of that series within 14 days from the due date for payment and the principal or interest has not been duly paid within a further 14 days following written notice from the Trustee to the Company or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Senior Debt Securities of that series requiring the non-payment to be made good, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Senior Debt Securities, the whole amount then due and payable on such Senior Debt Securities for principal (and premium, if any) and interest, if any, and interest on


 
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any overdue principal (and premium, if any), at the rate or rates prescribed therefor in such Senior Debt Securities; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If an Event of Default with respect to Senior Debt Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Senior Debt Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Senior Debt Securities Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy, including the institution of proceedings in Scotland (but not elsewhere) for the winding-up of the Company.

The Holders of Senior Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off or counterclaim or combination of accounts with respect to the Senior Debt Securities or this Senior Debt Securities Indenture (or between the obligations under or in respect of any Senior Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company, whether before or during a winding up of the Company.

Notwithstanding the foregoing, failure to make any payment in respect of a series of Senior Debt Securities shall not be a default in respect of such Senior Debt Securities if such payment is withheld or refused (i) in order to comply with any law or regulation or with the order of any court of competent jurisdiction, in each case applicable to such payment, or (ii) in case of doubt as to the validity or applicability of any such law, regulation or order, in accordance with advice given as to such validity or applicability at any time before the expiry of such period of 14 days by independent legal advisers acceptable to the Trustee, provided , however , that the Trustee may by notice to the Company require the Company to   take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease to have effect and the payment shall become due and payable on the expiration of 14 days after the Trustee gives written notice to the Company informing it of such resolution.


 
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No recourse for the payment of the principal of (or premium, if any) or interest, if any, on any Senior Debt Security, or for any claim based thereon and no recourse under or upon any obligation, covenant or agreement of the Company in this Senior Debt Securities Indenture, or in any Senior Debt Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, past, present or future, of the Company or of any successor corporation of the Company, either directly or through the Company or any successor corporation whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that to the extent lawful all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Senior Debt Securities Indenture and the issue of the Senior Debt Securities.

Notwithstanding any contrary provisions, nothing shall impair the right of a Holder, absent the Holder’s consent, to sue for any payments due but unpaid with respect to the Senior Debt Securities.

Section 5.04 . Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition, winding-up or other judicial proceeding relative to the Company or any other obligor upon the Senior Debt Securities of any series or to the property of the Company or such other obligor or their creditors (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency), the Trustee (irrespective of whether the principal of the Senior Debt Securities of such series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal (and premium, if any) or interest, if any) shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys and other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of a Senior Debt Security to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to such Holders or holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee under Section 6.07.



 
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Subject to Article Eight and Section 9.02, nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of any Senior Debt Security any plan of reorganization, arrangement, adjustment, or composition affecting any Senior Debt Securities or the rights of any Holder of any Senior Debt Security or to authorize the Trustee to vote in respect of the claim of any such Holder or holder in any such proceeding.

Section 5.05 . Trustee May Enforce Claims Without Possession of Senior Debt Securities. All rights of action and claims under this Senior Debt Securities   Indenture or the Senior Debt Securities may be prosecuted and enforced by the Trustee without the possession of any of the Senior Debt Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel be for the ratable benefit of the Holders of the Senior Debt Securities in respect of which such judgment has been recovered.

Section 5.06 . Application of Money Collected. Any money collected by the Trustee pursuant to this Article in respect of any series of Senior Debt Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (and premium, if any) or interest, if any, upon presentation of such Senior Debt Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts applicable to such series of Senior Debt Securities due and owing to the Trustee under Section 6.07;

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest, if any, on such series of Senior Debt Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Senior Debt Securities for principal (and premium, if any) and interest, if any, respectively; and

THIRD: To the payment of the balance, if any, to the Company or any other Person or Persons legally entitled thereto.

Section 5.07 . Limitation on Suits. No Holder of any Senior Debt Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Senior Debt Securities Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

(a)        such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to Senior Debt Securities of the same



 
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series specifying such Event of Default and stating that such notice is a “ Notice of Default ” hereunder;

(b)        the Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Debt Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name, as Trustee hereunder;

(c)       such Holder of a Senior Debt Security has offered to the Trustee reasonable indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

(d)        the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(e)         no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Senior Debt Securities of such series;

it being understood and intended that no one or more Holders of Senior Debt Securities of a particular series shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Senior Debt Securities Indenture to affect, disturb or prejudice the rights of any other such Holders or holders, or to obtain or to seek to obtain priority or preference over any other such Holders or holders or to enforce any right under this Senior Debt Securities Indenture, except in the manner herein provided and for the equal and ratable benefit of all Holders of Senior Debt Securities of such series.

Section 5.08 . Unconditional Right of Holders to Receive Principal, Premium and Interest, If Any. Notwithstanding any other provision in this Senior   Debt Securities Indenture, the Holder of any Senior Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 3.07) interest, if any, on such Senior Debt Security on the respective Stated Maturities as expressed in such Senior Debt Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder or holder.

Section 5.09 . Restoration of Rights and Remedies. If the Trustee or any Holder of any Senior Debt Security has instituted any proceeding to enforce any right or remedy under this Senior Debt Securities Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders of Senior Debt Securities shall be restored severally and respectively to their


 
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former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders of Senior Debt Securities shall continue as though no such proceeding had been instituted.

Section 5.10 . Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Senior Debt Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Senior Debt Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 5.11 . Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Senior Debt Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders of Senior Debt Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of Senior Debt Securities, as the case may be.

Section 5.12 . Control by Holders. The Holders of a majority in aggregate principal amount of the Outstanding Senior Debt Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Senior Debt Securities of such series, provided that

(a)         such direction shall not be in conflict with any rule of law or with this Senior Debt Securities Indenture;

(b)         the Trustee shall not determine that the action so directed would be unjustly prejudicial to the Holders of any Senior Debt Securities of any series not taking part in such direction with respect to which the Trustee is acting as the Trustee; and

(c)        the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

Section 5.13 . Waiver of Past Defaults. The Trustee may without prejudice to its rights in respect of any subsequent Event of Default from time to time and at any time waive any Event of Default or authorize any proposed Event


 
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of Default by the Company, provided that in its opinion the interests of the Holders shall not be materially prejudiced thereby and, provided further, that the Trustee shall not exercise any powers conferred on it by this clause in contravention of any notice in writing to the Company and the Trustee made pursuant to Section 5.02 hereof but so that no such notice shall affect any waiver or authorization previously given or made. The Holders of not less than a majority in aggregate principal amount of the Outstanding Senior Debt Securities of any series may on behalf of the Holders of all the Senior Debt Securities of such series waive any past Event of Default hereunder with respect to such series and its consequences, except an Event of Default:

(a)         in the payment of the principal of (or premium, if any) or interest, if any, on any Senior Debt Security of such series, or

(b)         in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Senior Debt Security of such series affected.

Upon any such waiver, such Event of Default shall cease to exist, and any Event of Default with respect to any series arising therefrom shall be deemed to have been cured and not to have occurred for every purpose of this Senior Debt Securities Indenture, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon.

Section 5.14 . Undertaking for Costs. All parties to this Senior Debt Securities Indenture agree, and each Holder of any Senior Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Senior Debt Securities Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding in the aggregate more than 10% in principal amount of the Outstanding Senior Debt Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Senior Debt Security on or after the respective Stated Maturities expressed in such Senior Debt Security (or, in the case of redemption, on or after the Redemption Date).




 
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ARTICLE 6
T HE T RUSTEE

Section 6.01 . Certain Duties and Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Senior Debt Securities Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Senior Debt Securities Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.01.

Section 6.02 . Notice of Defaults. Within 90 days after the occurrence of any Event of Default hereunder with respect to Senior Debt Securities of any series of which a Responsible Officer of the Trustee has written notice of such Event of Default the Trustee shall transmit in the manner and to the extent provided in Section 1.06 to Holders of Senior Debt Securities of such series notice of such Event of Default hereunder known to the Trustee, unless such Event of Default shall have been cured or waived; provided , however , that, the Trustee shall be protected in withholding such notice if it determines in good faith that the withholding of such notice is in the interest of the Holders of Senior Debt Securities of such series.

Section 6.03 . Certain Rights of Trustee. Subject to the provisions of Section 6.01:

(a)         the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate, or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)        any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution;

(c)        whenever in the administration of this Senior Debt Securities Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s Certificate;


 
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(d)       the Trustee may consult with counsel of its own selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e)         the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Senior Debt Securities Indenture at the request or direction of any of the Holders pursuant to this Senior Debt Securities Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f)         the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit at the reasonable expense of the Company and shall incur no liability by reason of such inquiry or investigation; provided that the Trustee shall not be entitled to such information which the Company is prevented from disclosing as a matter of law or contract;

(g)        the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent (other than an officer or employee of the Trustee) or attorney appointed with due care by it hereunder;

(h)       the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Senior Debt Securities Indenture;

(i)          the Trustee shall not be deemed to have notice of any Event of Default unless a Responsible Officer of the Trustee has received written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee; and

(j)          the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder.


 
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Section 6.04 . Not Responsible for Recitals or Issuance of Senior Debt Securities. The recitals contained herein and in the Senior Debt Securities, except   the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Senior Debt Securities Indenture or of the Senior Debt Securities, except that the Trustee represents and warrants that it has duly authorized, executed and delivered this Senior Debt Securities Indenture. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Senior Debt Securities or the proceeds thereof.

Section 6.05 . May Hold Senior Debt Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Senior Debt Security Registrar and any Calculation Agent or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Senior Debt Securities and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Senior Debt Security Registrar, Calculation Agent or such other agent.

Section 6.06 . Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.

Section 6.07 .  Compensation and Reimbursement.

The Company agrees:

(a)         to pay to the Trustee from time to time compensation for all services rendered by it hereunder as agreed upon in writing by the Company from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(b)        except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Senior Debt Securities Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as shall be determined by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and

(c)        to indemnify the Trustee for, and to hold it harmless against, any and all loss, liability, claim, damage or expense (including legal fees and expenses) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder including the


 
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costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder but excluding any tax liabilities of the Trustee in respect of its net profits.

The Trustee shall notify the Company in writing of the commencement of any action or claim in respect of which indemnification may be sought promptly after a Responsible Officer of the Trustee becomes aware of such commencement (provided that the failure to make such notification shall not affect the Trustee’s rights hereunder) and the Company shall be entitled to participate in, and to the extent it shall wish, to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Trustee. If the Company and the Trustee are being represented by the same counsel and the Company has assumed the defense of the claim, the Trustee shall not be authorized to settle a claim without the written consent of the Company, which consent shall not be unreasonably withheld. In the case where the Company has assumed the defense of a claim and the Trustee and the Company are represented by the same legal counsel, the Trustee should not settle such a claim without the written consent of the Company, which shall not be unreasonably withheld.

If the Trustee is represented by separate counsel due to a conflict of interest or its need for separate representation due to a need to assert defenses which are different from the Company’s in the Trustee’s sole discretion, the Trustee shall be entitled to enter into any settlement without the written consent of the Company and any and all fees, cost and expenses of such separate legal representation of the Trustee will be paid by the Company.

As security for the performance of the obligations of the Company under this Section, the Trustee shall have a senior lien to which the Senior Debt Securities are hereby made subordinate, upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (or premium, if any) or interest, if any, on the Senior Debt Securities.

Section 6.08 . Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Senior Debt Securities Indenture.

Section 6.09 . Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder with respect to each series which shall be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State or District of Columbia authority and, if there be such corporation willing and able to act as
 

 
 
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trustee on reasonable and customary terms, having its corporate trust office or agency in the Borough of Manhattan, The City of New York, New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 6.

Section 6.10 . Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.

(b)        The Trustee may resign at any time with respect to the Senior Debt Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Senior Debt Securities of such series.

(c)         The Trustee may be removed at any time with respect to the Senior Debt Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Senior Debt Securities of such series delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Senior Debt Securities of such series.

(d)        If at any time:

(i)           the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Senior Debt Security of the series as to which the Trustee has a conflicting interest for at least six months, or

(ii)          the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Senior Debt Security for at least six months, or


 
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(iii)         the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge, or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or

(iv)         the Trustee shall fail to perform its obligations to the Company under the Senior Debt Securities Indenture in any material respect,

then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to any or all series of Senior Debt Securities or (B) subject to Section 5.14 (and except in the case of subparagraph 6.10(d)(iv) above), any Holder who has been a bona fide Holder of a Senior Debt Security for at least six months (and, in the case of Section 6.10(d)(i) above, who is a Holder of a Senior Debt Security of the series as to which the Trustee has a conflicting interest) may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Senior Debt Securities and the appointment of a successor Trustee or Trustees.

(e)        If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Senior Debt Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Senior Debt Securities of such series (it being understood that any successor Trustee may be appointed with respect to the Senior Debt Securities of one or more or all of such series and at any time there shall be only one Trustee with respect to the Senior Debt Securities of any particular series), and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Senior Debt Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Senior Debt Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Senior Debt Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Senior Debt Securities of any series shall have been so appointed by the Company or the Holders of Senior Debt Securities of such series and accepted appointment in the manner hereinafter required by Section 6.11, any Holder who has been a bona fide Holder of a Senior Debt Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Senior Debt Securities of such series.


 
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(f)        The Company shall give notice of each resignation and each removal of the Trustee with respect to the Senior Debt Securities of any series and each appointment of a successor Trustee with respect to the Senior Debt Securities of any series in the manner and to the extent provided in Section 1.06. Each notice shall include the name of the successor Trustee with respect to the Senior Debt Securities of such series and the address of its Corporate Trust Office.

Section 6.11 .  Acceptance of Appointment by Successor.

(a)         In case of the appointment hereunder of a successor Trustee with respect to all Senior Debt Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee, all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

(b)         In case of the appointment hereunder of a successor Trustee with respect to the Senior Debt Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Senior Debt Securities of such series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (i) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Debt Securities of such series to which the appointment of such successor Trustee relates, (ii) if the retiring Trustee is not retiring with respect to all Senior Debt Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Debt Securities of such series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of this Senior Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or
 
 

 
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conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Senior Debt Securities of such series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Senior Debt Securities of such series to which the appointment of such successor Trustee relates.

(c)         Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section 6.11, as the case may be.

(d)       No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 6.

Section 6.12 . Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or   with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Senior Debt Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Senior Debt Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Senior Debt Securities.

Section 6.13 . Preferential Collection of Claims. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Senior Debt Securities of a series), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

Section 6.14 . Appointment of Authenticating Agent. The Trustee may at any time appoint an Authenticating Agent or Agents with respect to one or more series of Senior Debt Securities which shall be authorized to act on behalf of the Trustee to authenticate Senior Debt Securities of such series upon original issue, or issued upon exchange, registration of transfer or partial redemption thereof or in lieu of destroyed, lost or stolen Senior Debt Securities, and Senior Debt Securities so authenticated shall be entitled to the benefits of this Senior


 
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Debt Securities Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Senior Debt Securities Indenture to the authentication and delivery of Senior Debt Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation or national banking association organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State or District of Columbia authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation or national banking association into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or national banking association resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation or national banking association succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation or national banking association shall be otherwise eligible under this Section 6.14, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.14, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice to the Holders of Senior Debt Securities in the manner and to the extent provided in Section 1.06. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 6.14.


 
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The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.14.

If an appointment with respect to one or more series is made pursuant to this Section, the Senior Debt Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

This is one of the Senior Debt Securities referred to in the within- mentioned Senior Debt Securities Indenture.
 
 

THE BANK OF NEW YORK MELLON, LONDON BRANCH
 
   
   
as Trustee
 
     
     
By:
   
 
as Authenticating Agent
 
     
 
By:
   
 
as Authenticating Agent
 
     
 
 


ARTICLE 7
H OLDERS L ISTS AND R EPORTS BY T RUSTEE AND C OMPANY

Section 7.01 . Company to Furnish Trustee Names and Addresses of Holders. The Company, with respect to any series of Senior Debt Securities in   registered form, will furnish or cause to be furnished to the Trustee

(a)       quarterly, not more than 15 days after each Regular Record Date (or after each of the dates to be specified for such purpose for non-interest bearing Senior Debt Securities and Senior Debt Securities on which interest is paid less frequently than quarterly as contemplated by Section 3.01), a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of registered Senior Debt Securities as of such Regular Record Date or such specified date, and


 
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(b)       at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.

The Company need not furnish or cause to be furnished to the Trustee pursuant to this Section 7.01 the names and addresses of Holders of registered Senior Debt Securities so long as the Trustee acts as Senior Debt Security Registrar with respect to such series of Senior Debt Securities.

Section 7.02 .  Preservation of Information; Communication to Holders.

(a)         The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders (i) contained in the most recent list furnished to the Trustee as provided in Section 7.01 and (ii) received by the Trustee in its capacity as Paying Agent or Senior Debt Security Registrar (if so acting). The Trustee may destroy any list furnished to it as provided in Section 7.1  upon receipt of a new list so furnished.

(b)         The rights of the Holders of Senior Debt Securities of any series to communicate with other Holders with respect to their rights under this Senior Debt Securities Indenture or under the Senior Debt Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

(c)         Every Holder, by receiving and holding a Senior Debt Security, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 7.02(b) or otherwise made pursuant to the Trust Indenture Act.

Section 7.03 .  Reports by Trustee.

(a)         On or before [May 15] in each year following the date hereof, so long as any Senior Debt Securities are Outstanding hereunder, the Trustee shall transmit to Holders as provided in the Trust Indenture Act a brief report dated as of a date required by and in compliance with the Trust Indenture Act.

(b)        A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each securities exchange upon which the Trustee has been notified that the Senior Debt Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when Senior Debt Securities are listed on any securities exchange.


 
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(c)        The Company will furnish the Trustee with interim and annual reports and upon receipt thereof, the Trustee will mail such reports to all record holders of Senior Debt Securities. In addition, the Company will furnish the Trustee with all notices of meetings at which holders of Senior Debt Securities of a particular series are entitled to vote, and all other reports and communications that are made generally available to holders of Senior Debt Securities. The Trustee will, at the Company’s expense, make such notices, reports and communications available for inspection by holders of Senior Debt Securities in such manner as the Company may determine and, in the case of any notice received by the Trustee in respect of any meeting at which holders of Senior Debt Securities of a particular series are entitled to vote, will mail to all such record holders of Senior Debt Securities, at the Company’s expense, a notice containing a summary of the information set forth in such notice of meeting.

Section 7.04 .  Reports by the Company.   The Company shall:

(a)         file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate);

(b)        file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Senior Debt Securities Indenture as may be required from time to time by such rules and regulations. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officer’s Certificate); and


 
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(c)        transmit to Holders, in the manner and to the extent required by the Trust Indenture Act, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.


ARTICLE 8
C ONSOLIDATION , M ERGER , C ONVEYANCE OR T RANSFER

Section 8.01 .  Company May Consolidate, Etc. Only on Certain Terms. The Company may, without the consent of Holders of any Senior Debt Securities of any series Outstanding under this Senior Debt Securities Indenture, consolidate or amalgamate with or merge into any other corporation or convey or transfer or lease its properties and assets substantially as an entirety to any Person, provided that :

(a)        the corporation formed by such consolidation or amalgamation or into which the Company is merged or the Person which acquires by conveyance or transfer the properties and assets of the Company substantially as an entirety (i) shall be a company organized and existing under the laws of the United Kingdom or any political subdivision thereof, and (ii) shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all the Senior Debt Securities in accordance with the provisions of such Senior Debt Securities and this Senior Debt Securities Indenture and the performance of every covenant of this Senior Debt Securities Indenture on the part of the Company to be performed or observed; and

(b)       the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger, conveyance or transfer and such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

Section 8.02 . Successor Corporation Substituted. Upon any consolidation, amalgamation or merger by the Company into any other corporation or any conveyance or transfer of the properties and assets of the Company substantially as an entirety in accordance with Section 8.01, the successor corporation formed by such consolidation or amalgamation or into which the Company is merged or to which such conveyance or transfer is made shall succeed to and be substituted


 
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for, and may exercise every right and power of, the Company, under this Senior Debt Securities Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter, the predecessor corporation shall be relieved of all obligations and covenants under the Senior Debt Securities Indenture and the Senior Debt Securities.

Section 8.03 . Assumption of Obligations. With respect to the Senior Debt Securities of any series, a wholly-owned Subsidiary of the Company (a “ successor entity ”) may without the consent of any Holder assume the obligations of the Company (or any corporation which shall have previously assumed the obligations of the Company) for the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on any series of Senior Debt Securities in accordance with the provisions of such Senior Debt Securities and this Senior Debt Securities Indenture and the performance of every covenant of this Senior Debt Security Indenture and such series of Senior Debt Securities on the part of the Company to be performed or observed, provided that :

(a)        the successor entity shall expressly assume such obligations by an amendment to the Senior Debt Securities Indenture, executed by the Company and such successor entity, if applicable, and delivered to the Trustee, in form satisfactory to the Trustee, and the Company shall, by amendment to the Senior Debt Securities Indenture, unconditionally guarantee (such guarantee shall be given on a Senior basis consistent with Article Twelve hereof) all of the obligations of such successor entity under the Senior Debt Securities of such series and the Senior Debt Securities Indenture as so modified by such amendment ( provided , however , that, for the purposes of the Company’s obligation to pay Additional Amounts, if any, payable pursuant to Section 10.04 in respect of the Senior Debt Securities, references to such successor entity’s country of organization will be added to references to the United Kingdom);

(b)        such successor entity shall confirm in such amendment to the Senior Debt Securities Indenture that such successor entity will pay all Additional Amounts, if any, payable pursuant to Section 10.04 in respect of all the Senior Debt Securities ( provided , however , that for these purposes such successor entity’s country of organization will be substituted for the references to the United Kingdom);

(c)        immediately after giving effect to such assumption of obligations, no Event of Default and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and

(d)       the Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such assumption complies with this Article and that all conditions precedent herein provided for relating to such assumption have been complied with.

 
 
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Upon any such assumption, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Senior Debt Securities Indenture with respect to any such Senior Debt Securities with the same effect as if such successor entity had been named as the Company in this Senior Debt Securities Indenture, and the Company or any legal and valid successor corporation which shall theretofore have become such in the manner prescribed herein, shall be released from all liability as obligor upon any such Senior Debt Securities except as provided in clause (a) of this Section 8.03.

In the event of any such assumption, any Additional Amounts, if any, payable pursuant to Section 10.04 will be payable in respect of taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“ Taxes ”) imposed by the jurisdiction in which the assuming corporation is incorporated (subject to exceptions equivalent to those that apply to any obligation to pay Additional Amounts in respect of Taxes imposed by any Taxing Jurisdiction) rather than Taxes imposed by any Taxing Jurisdiction; provided however , that if the Company makes payment under the guarantee, the Company shall be required to pay Additional Amounts related to Taxes (subject to the exceptions set forth in Section 10.04) imposed by any Taxing Jurisdiction by reason of such payments.


ARTICLE 9
S UPPLEMENTAL I NDENTURES

Section 9.01 .  Supplemental Indentures without Consent of Holders. Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(a)         to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of any the Company herein and in the Senior Debt Securities;

(b)        to add to the covenants of the Company for the benefit of the Holders of all or any series of Senior Debt Securities (and, if such covenants are to be for the benefit of less than all series of Senior Debt Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company;

(c)        to add any additional Events of Default;

(d)        to add to, change or eliminate any of the provisions of this Senior Debt Securities Indenture, or any supplemental indenture, provided that any such change or elimination shall become effective only when there is no Senior Debt


 
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Security Outstanding of any series created prior to the execution of such supplemental indenture effecting such change or elimination which is entitled to the benefit of such provision, and adversely affected by such addition, change or elimination;

(e)        to secure the Senior Debt Securities;

(f)        to establish the form or terms of Senior Debt Securities of any series as permitted by Sections 2.01 or 3.01;

(g)        to change any Place of Payment, so long as the Place of Payment as required by Section 3.01 is maintained;

(h)        to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein or in any supplemental indenture;

(i)        to make any other provisions with respect to matters or questions arising under this Senior Debt Securities Indenture, provided such action shall not adversely affect the interests of the Holders of Senior Debt Securities of any series in any material respect;

(j)         to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Senior Debt Securities of one or more series and to add to or change any of the provisions of this Senior Debt Securities Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11(b); or

(k)        to change or eliminate any provision of this Senior Debt Securities Indenture as permitted by Section 1.07.

Section 9.02 . Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Senior Debt Securities of each series affected by such supplemental Senior Debt Securities Indenture (voting as a class), by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Senior Debt Securities Indenture or of modifying in any manner the rights of the Holders of Senior Debt Securities of such series under this Senior Debt Securities Indenture; provided, however , that no such supplemental indenture may, without the consent   of the Holder of each Outstanding Senior Debt Security affected thereby,



 
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(a)        change the Stated Maturity, if any, of any principal amount or any interest amounts in respect of any such Senior Debt Security, reduce the principal amount thereof or the rate of interest, if any, thereon, or any premium payable upon the redemption thereof, or reduce the amount of principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the Maturity thereof pursuant to Section 5.02, or change the obligation of the Company (or its successor) to pay Additional Amounts pursuant to Section 10.04 (except as contemplated by Section 8.01(a) and permitted by Section 9.01(a)) on the Senior Debt Securities, or the currency of payment of the principal amount of, premium, if any, or interest on, any such Senior Debt Security, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or

(b)        reduce the percentage in aggregate principal amount of the Outstanding Senior Debt Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Senior Debt Securities Indenture or of certain defaults hereunder and their consequences) provided for in this Senior Debt Securities Indenture, or

(c)        modify any of the provisions of this Section 9.02 or Section 5.13 except to increase any such percentage or to provide that certain other provisions of this Senior Debt Securities Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Senior Debt Security affected thereby; provided, however , that this clause shall not be deemed to require the consent of   any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 6.11(b) and 9.01(j), or

(d)        change in any manner adverse to the interests of the Holders of any Senior Debt Securities the terms and conditions of the obligations of the Company in respect of the due and punctual payment of any amounts due and payable on the Senior Debt Securities.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

A supplemental indenture which changes or eliminates any covenant or other provision of this Senior Debt Securities Indenture which has expressly been included solely for the benefit of one or more particular series of Senior Debt Securities, or which modifies the rights of the Holders of Senior Debt Securities of such series with respect to such covenant or other provision, shall be deemed


 
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not to affect the rights under this Senior Debt Securities Indenture of the Holders of Senior Debt Securities of any other series.

Section 9.03 . Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Senior Debt Securities Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Senior Debt Securities Indenture and that such supplemental indenture constitutes the legal, valid and binding obligation of the Company. The Trustee may, but shall not be obliged to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Senior Debt Securities Indenture or otherwise.

Section 9.04 . Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Senior Debt Securities Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Senior Debt Securities Indenture for all purposes; and every Holder of Senior Debt Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby, except as otherwise expressed therein.

Section 9.05 . Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.

Section 9.06 . Reference in Senior Debt Securities to Supplemental Indentures. Senior Debt Securities of any series authenticated and delivered after   the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Senior Debt Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and such Senior Debt Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Senior Debt Securities of such series.


ARTICLE 10
C OVENANTS

Section 10.01 . Payment of Principal, Premium, and Interest. The Company covenants and agrees for the benefit of each series of Senior Debt Securities that it will duly and punctually pay the principal of (and premium, if


 
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any) and (subject to Section 3.07) interest, if any, on the Senior Debt Securities of that series in accordance with the terms of the Senior Debt Securities and this Senior Debt Securities Indenture.

Section 10.02 . Maintenance of Office or Agency. The Company will maintain in each Place of Payment for any series of Senior Debt Securities an office or agency where Senior Debt Securities of that series may be presented or surrendered for payment, where Senior Debt Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Senior Debt Securities of that series and this Senior Debt Securities Indenture may be served; provided, however , that at the option of the Company in the case of registered Senior Debt Securities of such series, payment of any interest thereon may be made by check mailed to the address of the Person entitled herein as such address shall appear in the Senior Debt Security Register. With respect to the Senior Debt Securities of any series, such office or agency in each Place of Payment shall be specified as contemplated by Section 3.01, and if not so specified, initially shall be the Corporate Trust Office of the Trustee. Unless otherwise specified pursuant to Section 3.01, the Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where notices and demands to or upon the Company in respect of Senior Debt Securities of any series and this Senior Debt Securities Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company hereby appoints the Trustee as its agent to receive all presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies (in or outside the Borough of Manhattan, The City of New York) where the Senior Debt Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however , that no such designation or rescission shall in any manner relieve the Company of any obligation to maintain an office or agency in each Place of Payment (except as otherwise indicated in this Section) for Senior Debt Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Section 10.03 . Money for Payments to be Held in Trust. If the Company shall at any time act as Paying Agent with respect to the Senior Debt Securities of any series, it will, on or before each due date for payment of the principal of (and premium, if any) or interest, if any, if any, on any of the Senior Debt Securities of that series, segregate and hold in trust for the benefit of the Persons entitled


 
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thereto a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its failure so to act.

Whenever the Company shall have one or more Paying Agents for any series of Senior Debt Securities, it will, prior to each due date for payment of the principal of (and premium, if any) or interest, if any, on any Senior Debt Securities of that series deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or its failure so to act. Unless otherwise specified as contemplated by Section 3.01, the Trustee shall be the Company’s Paying Agent. The Company will cause each Paying Agent for any series of Senior Debt Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

(a)        hold all sums held by it for the payment of the principal of (and premium, if any) or interest, if any, on Senior Debt Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

(b)        give the Trustee notice of any default by the Company (or any other obligor upon the Senior Debt Securities of that series) in the making of any payment, when due and payable, or principal of (and premium, if any) or interest, if any, on Senior Debt Securities of that series; and

(c)         at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

The Company may at the time, for the purpose of obtaining the satisfaction and discharge of this Senior Debt Securities Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest, if any, on any Senior Debt Security of any series and remaining


 
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unclaimed for two years after such principal (and premium, if any) or interest, if any, have become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Senior Debt Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided , however , that the Trustee or such Paying Agent, before being required to make   any such repayment, may at the expense of the Company cause to be published at least once, in an Authorized Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be paid to the Company.

Section 10.04 . Additional Amounts. Unless otherwise specified in any Board Resolution establishing the terms of Senior Debt Securities of a series in accordance with Section 3.01, all amounts of principal, and premium, if any, and interest, if any, on any series of Senior Debt Securities will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, premium, if any, and interest, if any, on any series of Senior Debt Securities (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders of Senior Debt Securities of the particular series, after such deduction or withholding, shall equal the respective amounts of principal, premium, if any, and interest, if any, which would have been payable in respect of such Senior Debt Securities had no such deduction or withholding been required; provided , however , that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

(i)         the Holder or the beneficial owner of the Senior Debt Security is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Debt Security, or the collection of any payment of (or in respect of) principal of, premium, if any, or interest, if any, on any Senior Debt Security of the relevant series,


 
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(ii)         except in the case of a winding-up of the Company in the United Kingdom, the relevant Senior Debt Security is presented (where presentation is required) for payment in the United Kingdom,

(iii)        the relevant Senior Debt Security is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting (where presentation is required) the same for payment at the close of such 30 day period, or

(iv)        the Holder or the beneficial owner of the relevant Senior Debt Security or the beneficial owner of any payment of (or in respect of) principal of, or interest, if any, on such Senior Debt Security failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y)   to make any declaration or other similar claim to satisfy any information requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge;

(v)         the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such directives;

(vi)        the relevant Senior Debt Security is presented (where presentation is required) for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting (where presentation is required) the relevant Senior Debt Security to another paying agent in a Member State of the European Union; or

(vii)       any combination of subclauses (i) through (vi) above;

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Senior Debt Securities to any holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for


 
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tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

Whenever in this Senior Debt Securities Indenture there is mentioned, in any context, the payment of the principal of (and premium, if any) or interest, if any, on, or in respect of, any Senior Debt Security of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in this Section to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of this Section and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

Section 10.05 . Corporate Existence. Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

Section 10.06 . Statement as to Compliance. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate in compliance with Section 314(a)(4) of the Trust Indenture Act.

Section 10.07 . Original Issue Document. The Company shall provide to the Trustee on a timely basis such information, if any, as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Senior Debt Securities relating to any original issue discount, including, without limitation, Form 1099-OID or any successor form.


ARTICLE 11
R EDEMPTION OF S ENIOR D EBT S ECURITIES

Section 11.01 . Applicability of Article. Senior Debt Securities of any series shall be redeemable in accordance with their terms and (except as otherwise specified pursuant to Section 3.01 for Senior Debt Securities of any series) in accordance with this Article 11.

Section 11.02 . Election to Redeem; Notice to Trustee. The election of the Company to redeem any Senior Debt Securities shall be evidenced by a Board Resolution. The Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Senior Debt Securities of such series to be redeemed and, if applicable, the tenor of the Senior Debt Securities to be redeemed. In the case of any redemption of Senior


 
62
 



Debt Securities of any series prior to the expiration of any provision restricting such redemption provided in the terms of such Senior Debt Securities or elsewhere in this Senior Debt Securities Indenture, the Company shall furnish the Trustee with respect to such Senior Debt Securities with an Officer’s Certificate evidencing compliance with or waiver of such provision.

Section 11.03 . Selection by Trustee of Senior Debt Securities to be Redeemed. If less than all the Senior Debt Securities of any series are to be   redeemed, the particular Senior Debt Securities to be redeemed shall be selected not more than 60 days nor less than 30 days prior to the Redemption Date by the Trustee, from the Outstanding Senior Debt Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for registered Senior Debt Securities of that series or any multiple thereof) of the principal amount of Senior Debt Securities of such series of a denomination larger than the minimum authorized denomination for Senior Debt Securities of that series.

The Trustee shall promptly notify the Company in writing of the Senior Debt Securities selected for redemption and, in the case of any Senior Debt Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Senior Debt Securities Indenture, unless the context otherwise requires, all provisions relating to the redemption of Senior Debt Securities shall relate in the case of any Senior Debt Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such registered Senior Debt Security which has been or is to be redeemed.

Section 11.04 . Notice of Redemption. Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Senior Debt Securities, notice of redemption shall be given not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Senior Debt Securities to be redeemed in the manner and to the extent provided in Section 1.06.

All notices of redemption shall state:

(a)  
the Redemption Date,

(b)  
the Redemption Price,

(c)         if less than all the Outstanding Senior Debt Securities of any series are to be redeemed, the principal amount of the Senior Debt Securities to be redeemed,



 
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(d)        that on the Redemption Date the Redemption Price will become due and payable upon each such Senior Debt Security to be redeemed and, if applicable, that interest thereon will cease to accrue on or after the said date,

(e)        the place or places where such Senior Debt Securities are to be surrendered for payment of the Redemption Price, and

(f)         the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to such Senior Debt Securities.

Notice of redemption of Senior Debt Securities to be redeemed at the selection of the Company shall be given by the Company or, at the Company’s Request, by the Trustee in the name and at the expense of the Company.

Section 11.05 . Deposit of Redemption Price. On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued but unpaid interest on, all the Senior Debt Securities which are to be redeemed on that date.

Section 11.06 .  Senior Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Senior Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Senior Debt Securities shall cease to accrue interest. Upon surrender of any such Senior Debt Security for redemption in accordance with said notice, such Senior Debt Security shall be paid by the Company at the Redemption Price, together with accrued but unpaid interest to the Redemption Date; provided, however , that with respect to any Senior Debt Securities in registered form, unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on a Interest Payment Date which is the Redemption Date, shall be payable to the Holders of such Senior Debt Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Date or Special Record Date according to the terms of the Senior Debt Securities and the provisions of Section 3.07. Senior Debt Securities in definitive form shall be presented for redemption to the Paying Agent.

If any Senior Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Senior Debt Security shall, until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section 3.07.


 
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Section 11.07 . Senior Debt Securities Redeemed in Part. Any Senior Debt Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, only in the case of Senior Debt Securities in registered form, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Senior Debt Security without service charge, a new Senior Debt Security or Senior Debt Securities of the same series of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Senior Debt Security so surrendered.

Section 11.08 .  Optional Redemption Due to Changes in Tax Treatment. Unless otherwise provided in the Senior Debt Securities of any series, the Company will have the option to redeem the Senior Debt Securities of any series in whole as contemplated by Section 3.01 with respect to any series of Senior Debt Securities, the Senior Debt Securities are redeemable, as a whole but not in part, on not less than 30 nor more than 60 days’ notice, on any Interest Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Senior Debt Securities to the date fixed for redemption (or, in the case of Original Issue Discount Securities, the accreted face amount thereof, together with accrued interest, if any), if, at any time, the Company shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after a date included in the terms of such series of Senior Debt Securities pursuant to Section 3.01:

(a)         in making payment under the Senior Debt Securities in respect of principal or premium, if any, or interest, if any, it has or will or would on the next Interest Payment Date become obligated to pay Additional Amounts;

(b)        the payment of interest on the next Interest Payment Date in respect of any of the Senior Debt Securities would be treated as “distributions” within the meaning of Section 209 of the Income and Corporation Taxes Act 1988 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

(c)         on the next Interest Payment Date the Company would not be entitled to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).


 
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In any case where the Company shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Debt Securities of any series, the Company shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

[SIGNATURE PAGE FOLLOWS]



 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Senior Debt Securities Indenture to be duly executed, all as of the day and year first above written.
 

THE ROYAL BANK OF SCOTLAND GROUP PLC
 
     
     
By:
   
 
Name:
 
 
Title:
 
     
     
     
     
     
THE BANK OF NEW YORK MELLON, LONDON BRANCH
 
     
     
By:
   
 
Name:
 
 
Title:
 
 

 
 
 
67 
 
 
 
 
Exhibit 5.1
 
[LETTERHEAD OF DUNDAS & WILSON CS LLP]
 
OPINION OF DUNDAS & WILSON CS LLP
 
 
The Royal Bank of Scotland plc
36 St Andrew Square
Edinburgh
EH2 2YB
 
 
 
 
 
 
 
 
Dear Sirs
 
We have acted as solicitors in Scotland for The Royal Bank of Scotland Group plc (the Company ) and The Royal Bank of Scotland plc (the Bank ) in connection with the registration under the US Securities Act of 1933, as amended (the Securities Act ), of Capital Securities of the Company (the Capital Securities ), Senior Debt Securities of the Company and the Bank (the Senior Debt Securities ), Subordinated Debt Securities of the Company (the Subordinated Debt Securities ) and Category II Non-cumulative Dollar Preference Shares of $0.01 each in the Company (the Dollar Preference Shares ) pursuant to a registration statement on Form F3 (the Registration Statement ) filed under the Securities Act with the Securities and Exchange Commission.  The Capital Securities are to be issued under and pursuant to a Capital Securities Indenture (the Capital Securities Indenture ) between the Company and The Bank of New York Mellon, as Trustee.  The Senior Debt Securities are to be issued under and pursuant to a Senior Debt Securities Indenture between the Company or the Bank (as the case may be) and The Bank of New York Mellon, as Trustee.  The Subordinated Debt Securities are to be issued under and pursuant to a Subordinated Debt Securities Indenture (the Subordinated Debt Securities Indenture ) between the Company and The Bank of New York Mellon, as Trustee.

We have examined the Registration Statement, the prospectuses included therein, and resolutions adopted by the shareholders of the Company in general meeting on 23 April 2008 and the Board of Directors of the Company on 18 September 2009.  In addition, we have examined such other documents and have made such further examinations and enquiries as we have deemed necessary to enable us to express the opinions set forth herein.

Based upon the foregoing, we are of the opinion that so far as the law of Scotland at the date hereof is concerned:

(a)
the Company is duly incorporated and not in liquidation under the laws of Scotland; and

(b)
the Dollar Preference Shares, when issued by the Company, will, upon the passing of all necessary resolutions and the taking of all necessary corporate action in connection therewith (including the determining of the terms of issue of the Dollar Preference Shares in accordance with the Articles of Association of the Company), and assuming the issue price of the shares is not less than the nominal value thereof and is fully paid on issue, be duly authorised and validly issued and fully paid and will not be subject to further call or contribution under the laws of Scotland.
 
 
 
 
 
(c)
the subordination arrangements relating to the Capital Securities set out in Sections 2.01 and 12.01 of the Capital Securities Indenture would be effective to ensure that in a liquidation of the Company in accordance with Scottish insolvency rules the holders of the Capital Securities would not receive any amounts (whether by means of any claim in the liquidation, the operation of any set-off (by virtue of the operation of Section 5.03 of the Capital Securities Indenture) or otherwise) in respect of the Capital Securities until all Senior Creditors (as defined in the Capital Securities Indenture) of the Company had been paid in full;

(d)
the subordination arrangements relating to the Subordinated Debt Securities set out in Sections 2.01 and 12.01 of the Subordinated Debt Securities Indenture would be effective to ensure that in a liquidation of the Company in accordance with Scottish insolvency rules the holders of the Subordinated Debt Securities would not receive any amounts (whether by means of any claim in the liquidation, the operation of any set-off (by virtue of the operation of Section 5.03 of the Subordinated Debt Securities Indenture) or otherwise) in respect of the Subordinated Debt Securities until all Senior Creditors (as defined in the Subordinated Securities Indenture) of the Company had been paid in full; and

(e)
the choice of Scottish law to govern Sections 12.01 and as stated in Sections 2.01 of each of the Capital Securities Indenture and the Subordinated Debt Securities Indenture respectively would be recognised and upheld by the Scottish courts.

This opinion is limited to Scottish law as applied by the Scottish courts which is stated to be the law governing Sections 12.01 and as stated in Sections 2.01 of each of the Capital Securities Indenture and the Subordinated Debt Securities Indenture (together the Indentures ), and is given on the basis that these provisions, contained in each of the Indentures, will be governed by and construed in accordance with Scottish law.  We have made no investigation of the laws of any jurisdiction other than Scotland and neither express nor imply any opinion as to any other laws and in particular the laws of the laws of the State of New York and the laws of the United States of America and our opinion is subject to such laws including the matters stated in the opinion of Davis Polk & Wardwell LLP.  Our opinion in paragraphs (c) and (d) above is also subject to the provisions of the Banking Act 2009 and any secondary legislation, instruments or orders made, or which may be made, under it.

In providing this opinion we have assumed that each of the Indentures was duly authorised, executed and delivered by each of the parties thereto under all applicable laws, and constitutes legal, valid and binding obligations of each of the parties thereto enforceable under all applicable laws (other than, in the case of the Company, in respect of Sections 2.01 and 12.01 of each of the Indentures, the laws of Scotland).

This opinion is addressed to you solely for your own benefit in relation to the Registration Statement and, except with our prior written consent, is not to be transmitted or disclosed to or relied upon by any person.  We hereby consent (i) to the use of our name in the prospectuses forming a part of the Registration Statement in the forms and contexts in which it appears, (ii) to the filing of this opinion as an exhibit to the Registration Statement and (iii) to the incorporation of this opinion and consent in a registration statement filed pursuant to Rule 462(b) of the Securities Act.
 
Yours faithfully
 
/s/ Dundas & Wilson CS LLP
 
partner, for and on behalf of Dundas & Wilson CS LLP
 
 
2

 
 
 
 
Exhibit 5.2
 
[LETTERHEAD OF DAVIS POLK & WARDWELL LLP]
 
OPINION OF DAVIS POLK & WARDWELL LLP
 
September 30, 2009
 
The Royal Bank of Scotland Group plc
The Royal Bank of Scotland plc
RBS Gogarburn
PO Box 1000
Edinburgh EH12 1HQ
United Kingdom
 
Ladies and Gentlemen:
 
We are acting as special United States counsel to The Royal Bank of Scotland Group plc (the “ Group ”) and The Royal Bank of Scotland plc (the “ Bank ”) in connection with the Registration Statement on Form F-3 (the “ Registration Statement ”) filed with the United States Securities and Exchange Commission by the Group and the Bank for the purpose of registering under the United States Securities Act of 1933, as amended (the “ Act ”) an indeterminate amount of the following securities:  (i) senior debt securities to be issued by the Group (the “ Group Senior Debt Securities ”) pursuant to an indenture (the “ Group Senior Indenture ”) to be executed by the Group and The Bank of New York Mellon, as Trustee; (ii) capital securities to be issued by the Group (the “ Group Capital Securities ”) pursuant to an indenture (the “ Group Capital Securities Indenture ”) to be executed by the Group and The Bank of New York Mellon, as Trustee; (iii) subordinated debt securities to be issued by the Group (the “ Group Subordinated Debt Securities ” and, together with the Group Senior Debt Securities and the Group Capital Securities, the “ Group Debt Securities ”) pursuant to an indenture (the “ Group Subordinated Debt Indenture ” and, together with the Group Senior Indenture and the Group Capital Securities Indenture, the “ Group Indentures ”) to be executed by the Group and The Bank of New York Mellon, as Trustee; (iv) senior debt securities to be issued by the Bank (the “ Bank Senior Debt Securities ”) and guaranteed by the Group, pursuant to an indenture (the “ Bank Senior Indenture ”) to be executed by the Bank, the Group and The Bank of New York Mellon, as Trustee, and (v) Category II Non-cumulative Dollar Preference Shares of $0.01 each in the Group.
 
Capitalized terms used but not defined herein have the meaning assigned to them in the Group Senior Indenture, the Group Capital Securities Indenture, the Group Subordinated Debt Indenture and the Bank Senior Indenture, as applicable.
 
We have examined the originals or copies certified or otherwise identified to our satisfaction of such corporate records of the Group and the Bank and such other documents and certificates as we have deemed necessary as a basis for the opinions hereinafter expressed.
 
 
 
 
 
 
The Royal Bank of Scotland Group plc
   
The Royal Bank of Scotland plc
September 30, 2009
pg. 2
 
 
Based upon and subject to the foregoing, we are of the opinion that:
 
(1)           Assuming that the Group Indentures have been duly authorized, executed and delivered by the Group insofar as Scots law is concerned, the Group Indentures have been duly executed and delivered by the Group, and assuming due authorization, execution and delivery of the Group Indentures by the Trustee and that each of the Trustee and the Group has full power, authority and legal right to enter into and perform its obligations thereunder, the Group Indentures constitute valid and binding agreements of the Group, enforceable against the Group in accordance with their terms;
 
(2)           Assuming that the Bank Senior Indenture has been duly authorized, executed and delivered by the Bank and the Group insofar as Scots law is concerned, the Bank Senior Indenture has been duly executed and delivered by the Bank and the Group, and assuming due authorization, execution and delivery of the Bank Senior Indenture by the Trustee and that each of the Trustee, the Bank and the Group has full power, authority and legal right to enter into and perform its obligations thereunder, the Bank Senior Indenture constitutes a valid and binding agreement of the Bank and the Group, enforceable against the Bank and the Group in accordance with its terms;
 
(3)           Assuming that the Group Debt Securities have been duly authorized, executed and delivered by the Group insofar as Scots law is concerned, the Group Debt Securities, when the Group Debt Securities are authenticated in accordance with the terms of the applicable Group Indentures and the Group Debt Securities are delivered and paid for in accordance with the terms of the applicable underwriting agreement, will be valid and binding obligations of the Group entitled to the benefits of the applicable Group Indentures, enforceable against the Group in accordance with their terms; and
 
(4)           Assuming that the Bank Senior Debt Securities have been duly authorized, executed and delivered by the Bank and the Group insofar as Scots law is concerned, the Bank Senior Debt Securities, when the Bank Senior Debt Securities are authenticated in accordance with the terms of the Bank Senior Indenture and the Bank Senior Debt Securities are delivered and paid for in accordance with the terms of the applicable underwriting agreement, will be valid and binding obligations of the Bank and the Group entitled to the benefits of the Bank Senior Indenture, enforceable against the Bank and the Group in accordance with their terms.
 
The foregoing opinions are subject to the following qualification:
 
(a)           Our opinions in paragraphs 1, 2, 3 and 4 above are subject to the effects of applicable bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability.
 
We are members of the Bar of the State of New York, and we express no opinion as to the laws of any jurisdiction other than the laws of the State of New York and the federal laws of the United States.  Insofar as the foregoing opinion involves matters governed by Scots law, we have relied, without independent investigation, on the opinion of Dundas & Wilson CS LLP, special legal counsel in Scotland for the Group and the Bank, dated September 30, 2009, filed as Exhibit 5.1 to the Registration Statement.
 
We hereby consent to the use of our name under the caption “Legal Matters” in the Prospectuses forming a part of the Registration Statement and to the filing, as an exhibit to the Registration Statement, of this opinion.  In addition, we consent to the incorporation by reference of this opinion and consent into a registration statement filed pursuant to Rule 462(b) under the Act.
 
 
Very truly yours,
 
/s/ Davis Polk & Wardwell LLP

 
Exhibit 23.3
 
 
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 
We consent to the incorporation by reference in this Registration Statement on Form F-3 of our reports dated 25 February 2009 (30 September 2009 as to the retrospective restatements related to the adoption of IFRS 2 described in Note 1 of the Accounting Policies, the change in the composition of reportable segments described in Note 38 and the consolidating financial information included in Note 43) , relating to (1) the financial statements of The Royal Bank of Scotland Group p lc (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the restatement discussed in Note 1), and (2) the effectiveness of The Royal Bank of Scotland Group plc ’ s internal control over financial reporting, include d in the Form 6-K dated 30 September 2009 of The Royal Bank of Scotland Group plc . We also consent to the reference to us under the heading “ Experts” in the Prospectuses, which are part of this Registration Statement.
 


/s/ Deloitte LLP
Chartered Accountants and Registered Auditors
Edinburgh, United Kingdom
30 September 2009
 
 
 
Exhibit 25.1

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

FORM T-1
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
 
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)           |__|
___________________________
 
THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)
 
New York
(State of incorporation
if not a U.S. national bank)
13-5160382
(I.R.S. employer
identification no.)
   
One Wall Street, New York, N.Y.
(Address of principal executive offices)
10286
(Zip code)
___________________________
 
 
The Royal Bank of Scotland plc
(Exact name of obligor as specified in its charter)
 
United Kingdom
(State or other jurisdiction of
incorporation or organization)
Not Applicable
(I.R.S. employer
identification no.)
 
The Royal Bank of Scotland Group plc
(Exact name of obligor as specified in its charter)
 
United Kingdom
(State or other jurisdiction of
incorporation or organization)
Not Applicable
(I.R.S. employer
identification no.)
 
RBS Gogarburn, PO Box 1000
Edinburgh EH12 1HQ
United Kingdom
(Address of principal executive offices)
 
 
(Zip code)
___________________________
 
Senior Debt Securities
and Guarantees of Senior Debt Securities
(Title of the indenture securities)
 
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
 

 
1.
General information.  Furnish the following information as to the Trustee:
 
 
(a)
Name and address of each examining or supervising authority to which it is subject.
 
 
Name
 
Address
   
Superintendent of Banks of the State of New York
One State Street, New York, N.Y.  10004-1417, and Albany, N.Y. 12223
   
Federal Reserve Bank of New York
33 Liberty Street, New York, N.Y.  10045
   
Federal Deposit Insurance Corporation
Washington, D.C.  20429
   
New York Clearing House Association
New York, New York   10005
     
 
(b)
Whether it is authorized to exercise corporate trust powers.
 
Yes.
 
2.
Affiliations with Obligor.
 
If the obligor is an affiliate of the trustee, describe each such affiliation.
 
None.
 
16.
List of Exhibits.
 
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
 
 
1.
A copy of the Organization Certificate of The Bank of New York Mellon (formerly known as The Bank of New York, itself formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735).
 
 
- 2 -
 
 
 
4.
A copy of the existing By-laws of the Trustee.  (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-154173).
 
 
6.
The consent of the Trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152735).
 
 
7.
A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
 
 
- 3 -
 
SIGNATURE
 
Pursuant to the requirements of the Act, the Trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of September, 2009.
 
THE BANK OF NEW YORK MELLON
 
       
       
By:
/S/       CHERYL CLARKE
 
 
Name:
CHERYL CLARKE
 
 
Title:
VICE PRESIDENT
 
 

 
- 4 -
 
EXHIBIT 7
 
Consolidated Report of Condition of
 
THE BANK OF NEW YORK MELLON
 
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2009, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
 
ASSETS
 
 
Dollar Amounts In Thousands
 
Cash and balances due from depository institutions:
     
Noninterest-bearing balances and currency and coin
    3,228,000  
Interest-bearing balances
    56,028,000  
Securities:
       
Held-to-maturity securities
    6,782,000  
Available-for-sale securities
    39,436,000  
Federal funds sold and securities purchased under agreements to resell:
       
   Federal funds sold in domestic offices
    1,319,000  
   Securities purchased under agreements to  resell
    50,000  
Loans and lease financing receivables:
       
Loans and leases held for sale
    0  
Loans and leases, net of unearned income
    29,318,000  
LESS: Allowance for loan and lease losses
    414,000  
Loans and leases, net of unearned income and allowance
    28,904,000  
Trading assets
    6,282,000  
Premises and fixed assets (including capitalized leases)
    1,115,000  
Other real estate owned
    6,000  
Investments in unconsolidated subsidiaries and associated companies
    830,000  
Direct and indirect investments in real estate ventures
    0  
Intangible assets:
       
   Goodwill
    4,949,000  
   Other intangible assets
    1,514,000  
Other assets
    11,560,000  
Total assets
    162,003,000  
         
 
 
 
LIABILITIES
       
Deposits:
       
In domestic offices
    57,327,000  
Noninterest-bearing
    32,885,000  
Interest-bearing
    24,442,000  
In foreign offices, Edge and Agreement subsidiaries, and IBFs
    74,161,000  
Noninterest-bearing
    2,846,000  
Interest-bearing
    71,315,000  
Federal funds purchased and securities sold under agreements to repurchase:
       
   Federal funds purchased in domestic  offices
    414,000  
   Securities sold under agreements to  repurchase
    13,000  
Trading liabilities
    6,144,000  
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)
    2,695,000  
Not applicable
       
Not applicable
       
Subordinated notes and debentures
    3,490,000  
Other liabilities
    5,064,000  
Total liabilities
    149,308,000  
         
EQUITY CAPITAL
       
Perpetual preferred stock and related surplus
    0  
Common stock
    1,135,000  
Surplus (exclude all surplus related to preferred stock)
    8,297,000  
Retained earnings
    7,991,000  
Accumulated other comprehensive income
    -5,097,000  
Other equity capital components
    0  
Total bank equity capital
    12,326,000  
Noncontrolling (minority) interests in consolidated subsidiaries
    369,000  
Total equity capital
    12,695,000  
Total liabilities and equity capital
    162,003,000  
 
 
 
I, Thomas P. Gibbons, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
 
Thomas P. Gibbons,
Chief Financial Officer
 
 

 
We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
 
Gerald L. Hassell
Robert P. Kelly
Catherine A. Rein
 
Directors
 

 

 


 
 
Exhibit 25.2

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

FORM T-1
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
 
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)           |__|
___________________________
 
THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)
 
New York
(State of incorporation
if not a U.S. national bank)
13-5160382
(I.R.S. employer
identification no.)
   
One Wall Street, New York, N.Y.
(Address of principal executive offices)
10286
(Zip code)
___________________________
 
The Royal Bank of Scotland Group plc
(Exact name of obligor as specified in its charter)
 
United Kingdom
(State or other jurisdiction of
incorporation or organization)
Not Applicable
(I.R.S. employer
identification no.)
   
RBS Gogarburn, PO Box 1000
Edinburgh EH12 1HQ
United Kingdom
(Address of principal executive offices)
 
 
(Zip code)
___________________________
 
Subordinated Debt Securities
(Title of the indenture securities)
 
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
 

 
1.
General information.  Furnish the following information as to the Trustee:
 
 
(a)
Name and address of each examining or supervising authority to which it is subject.
 
 
Name
 
Address
   
Superintendent of Banks of the State of New York
One State Street, New York, N.Y.  10004-1417, and Albany, N.Y. 12223
   
Federal Reserve Bank of New York
33 Liberty Street, New York, N.Y.  10045
   
Federal Deposit Insurance Corporation
Washington, D.C.  20429
   
New York Clearing House Association
New York, New York   10005
     
 
(b)
Whether it is authorized to exercise corporate trust powers.
 
Yes.
 
2.
Affiliations with Obligor.
 
If the obligor is an affiliate of the trustee, describe each such affiliation.
 
None.
 
16.
List of Exhibits.
 
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
 
 
1.
A copy of the Organization Certificate of The Bank of New York Mellon (formerly known as The Bank of New York, itself formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735).
 
 
- 2 -
 
 
 
4.
A copy of the existing By-laws of the Trustee.  (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-154173).
 
 
6.
The consent of the Trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152735).
 
 
7.
A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
 
 
- 3 -
 
SIGNATURE
 
Pursuant to the requirements of the Act, the Trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of September, 2009.
 
THE BANK OF NEW YORK MELLON
 
       
       
By:
/S/       CHERYL CLARKE
 
 
Name:
CHERYL CLARKE
 
 
Title:
VICE PRESIDENT
 
 
 
 
- 4 -
 
EXHIBIT 7
 
Consolidated Report of Condition of
 
THE BANK OF NEW YORK MELLON
 
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2009, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
 
ASSETS
 
 
Dollar Amounts In Thousands
 
Cash and balances due from depository institutions:
     
Noninterest-bearing balances and currency and coin
    3,228,000  
Interest-bearing balances
    56,028,000  
Securities:
       
Held-to-maturity securities
    6,782,000  
Available-for-sale securities
    39,436,000  
Federal funds sold and securities purchased under agreements to resell:
       
   Federal funds sold in domestic offices
    1,319,000  
   Securities purchased under agreements to  resell
    50,000  
Loans and lease financing receivables:
       
Loans and leases held for sale
    0  
Loans and leases, net of unearned income
    29,318,000  
LESS: Allowance for loan and lease losses
    414,000  
Loans and leases, net of unearned income and allowance
    28,904,000  
Trading assets
    6,282,000  
Premises and fixed assets (including capitalized leases)
    1,115,000  
Other real estate owned
    6,000  
Investments in unconsolidated subsidiaries and associated companies
    830,000  
Direct and indirect investments in real estate ventures
    0  
Intangible assets:
       
   Goodwill
    4,949,000  
   Other intangible assets
    1,514,000  
Other assets
    11,560,000  
Total assets
    162,003,000  
         
 
 
 
LIABILITIES
       
Deposits:
       
In domestic offices
    57,327,000  
Noninterest-bearing
    32,885,000  
Interest-bearing
    24,442,000  
In foreign offices, Edge and Agreement subsidiaries, and IBFs
    74,161,000  
Noninterest-bearing
    2,846,000  
Interest-bearing
    71,315,000  
Federal funds purchased and securities sold under agreements to repurchase:
       
   Federal funds purchased in domestic  offices
    414,000  
   Securities sold under agreements to  repurchase
    13,000  
Trading liabilities
    6,144,000  
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)
    2,695,000  
Not applicable
       
Not applicable
       
Subordinated notes and debentures
    3,490,000  
Other liabilities
    5,064,000  
Total liabilities
    149,308,000  
         
EQUITY CAPITAL
       
Perpetual preferred stock and related surplus
    0  
Common stock
    1,135,000  
Surplus (exclude all surplus related to preferred stock)
    8,297,000  
Retained earnings
    7,991,000  
Accumulated other comprehensive income
    -5,097,000  
Other equity capital components
    0  
Total bank equity capital
    12,326,000  
Noncontrolling (minority) interests in consolidated subsidiaries
    369,000  
Total equity capital
    12,695,000  
Total liabilities and equity capital
    162,003,000  
 
 
 
I, Thomas P. Gibbons, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
 
Thomas P. Gibbons,
Chief Financial Officer
 
 

 
We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
 
Gerald L. Hassell
Robert P. Kelly
Catherine A. Rein
 
Directors
 

 

 


 
 
 
Exhibit 25.3

= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =

FORM T-1
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
 
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)           |__|
___________________________
 
THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)
 
New York
(State of incorporation
if not a U.S. national bank)
13-5160382
(I.R.S. employer
identification no.)
   
One Wall Street, New York, N.Y.
(Address of principal executive offices)
10286
(Zip code)
___________________________
 
The Royal Bank of Scotland Group plc
(Exact name of obligor as specified in its charter)
 
United Kingdom
(State or other jurisdiction of
incorporation or organization)
Not Applicable
(I.R.S. employer
identification no.)
   
RBS Gogarburn, PO Box 1000
Edinburgh EH12 1HQ
United Kingdom
(Address of principal executive offices)
 
 
(Zip code)
___________________________
 
Capital Securities
(Title of the indenture securities)
 
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
 

 
1.
General information.  Furnish the following information as to the Trustee:
 
 
(a)
Name and address of each examining or supervising authority to which it is subject.
 
 
Name
 
Address
   
Superintendent of Banks of the State of New York
One State Street, New York, N.Y.  10004-1417, and Albany, N.Y. 12223
   
Federal Reserve Bank of New York
33 Liberty Street, New York, N.Y.  10045
   
Federal Deposit Insurance Corporation
Washington, D.C.  20429
   
New York Clearing House Association
New York, New York   10005
     
 
(b)
Whether it is authorized to exercise corporate trust powers.
 
Yes.
 
2.
Affiliations with Obligor.
 
If the obligor is an affiliate of the trustee, describe each such affiliation.
 
None.
 
16.
List of Exhibits.
 
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
 
 
1.
A copy of the Organization Certificate of The Bank of New York Mellon (formerly known as The Bank of New York, itself formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735).
 
 
- 2 -
 
 
 
4.
A copy of the existing By-laws of the Trustee.  (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-154173).
 
 
6.
The consent of the Trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152735).
 
 
7.
A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
 
 
- 3 -
 
SIGNATURE
 
Pursuant to the requirements of the Act, the Trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of September, 2009.
 
 
THE BANK OF NEW YORK MELLON
 
       
       
By:
/S/       CHERYL CLARKE
 
 
Name:
CHERYL CLARKE
 
 
Title:
VICE PRESIDENT
 
 
 
 
- 4 -
 
EXHIBIT 7
 
Consolidated Report of Condition of
 
THE BANK OF NEW YORK MELLON
 
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2009, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
 
ASSETS
 
 
Dollar Amounts In Thousands
 
Cash and balances due from depository institutions:
     
Noninterest-bearing balances and currency and coin
    3,228,000  
Interest-bearing balances
    56,028,000  
Securities:
       
Held-to-maturity securities
    6,782,000  
Available-for-sale securities
    39,436,000  
Federal funds sold and securities purchased under agreements to resell:
       
   Federal funds sold in domestic offices
    1,319,000  
   Securities purchased under agreements to  resell
    50,000  
Loans and lease financing receivables:
       
Loans and leases held for sale
    0  
Loans and leases, net of unearned income
    29,318,000  
LESS: Allowance for loan and lease losses
    414,000  
Loans and leases, net of unearned income and allowance
    28,904,000  
Trading assets
    6,282,000  
Premises and fixed assets (including capitalized leases)
    1,115,000  
Other real estate owned
    6,000  
Investments in unconsolidated subsidiaries and associated companies
    830,000  
Direct and indirect investments in real estate ventures
    0  
Intangible assets:
       
   Goodwill
    4,949,000  
   Other intangible assets
    1,514,000  
Other assets
    11,560,000  
Total assets
    162,003,000  
         
 
 
 
LIABILITIES
       
Deposits:
       
In domestic offices
    57,327,000  
Noninterest-bearing
    32,885,000  
Interest-bearing
    24,442,000  
In foreign offices, Edge and Agreement subsidiaries, and IBFs
    74,161,000  
Noninterest-bearing
    2,846,000  
Interest-bearing
    71,315,000  
Federal funds purchased and securities sold under agreements to repurchase:
       
   Federal funds purchased in domestic  offices
    414,000  
   Securities sold under agreements to  repurchase
    13,000  
Trading liabilities
    6,144,000  
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)
    2,695,000  
Not applicable
       
Not applicable
       
Subordinated notes and debentures
    3,490,000  
Other liabilities
    5,064,000  
Total liabilities
    149,308,000  
         
EQUITY CAPITAL
       
Perpetual preferred stock and related surplus
    0  
Common stock
    1,135,000  
Surplus (exclude all surplus related to preferred stock)
    8,297,000  
Retained earnings
    7,991,000  
Accumulated other comprehensive income
    -5,097,000  
Other equity capital components
    0  
Total bank equity capital
    12,326,000  
Noncontrolling (minority) interests in consolidated subsidiaries
    369,000  
Total equity capital
    12,695,000  
Total liabilities and equity capital
    162,003,000  
 
 
 
I, Thomas P. Gibbons, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
 
Thomas P. Gibbons,
Chief Financial Officer
 
 

 
We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
 
Gerald L. Hassell
Robert P. Kelly
Catherine A. Rein
 
Directors
 

 

 


 
 
Exhibit 25.4

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FORM T-1
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
 
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)           |__|
___________________________
 
THE BANK OF NEW YORK MELLON
(Exact name of trustee as specified in its charter)
 
New York
(State of incorporation
if not a U.S. national bank)
13-5160382
(I.R.S. employer
identification no.)
   
One Wall Street, New York, N.Y.
(Address of principal executive offices)
10286
(Zip code)
___________________________
 
The Royal Bank of Scotland Group plc
(Exact name of obligor as specified in its charter)
 
United Kingdom
(State or other jurisdiction of
incorporation or organization)
Not Applicable
(I.R.S. employer
identification no.)
   
RBS Gogarburn, PO Box 1000
Edinburgh EH12 1HQ
United Kingdom
(Address of principal executive offices)
 
 
(Zip code)
___________________________
 
Senior Debt Securities
(Title of the indenture securities)
 
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1.
General information.  Furnish the following information as to the Trustee:
 
 
(a)
Name and address of each examining or supervising authority to which it is subject.
 
 
Name
 
Address
   
Superintendent of Banks of the State of New York
One State Street, New York, N.Y.  10004-1417, and Albany, N.Y. 12223
   
Federal Reserve Bank of New York
33 Liberty Street, New York, N.Y.  10045
   
Federal Deposit Insurance Corporation
Washington, D.C.  20429
   
New York Clearing House Association
New York, New York   10005
     
 
(b)
Whether it is authorized to exercise corporate trust powers.
 
Yes.
 
2.
Affiliations with Obligor.
 
If the obligor is an affiliate of the trustee, describe each such affiliation.
 
None.
 
16.
List of Exhibits.
 
Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
 
 
1.
A copy of the Organization Certificate of The Bank of New York Mellon (formerly known as The Bank of New York, itself formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637, Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-152735).
 
 
- 2 -
 
 
 
4.
A copy of the existing By-laws of the Trustee.  (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-154173).
 
 
6.
The consent of the Trustee required by Section 321(b) of the Act (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-152735).
 
 
7.
A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.
 
 
- 3 -
 
SIGNATURE
 
Pursuant to the requirements of the Act, the Trustee, The Bank of New York Mellon, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 25th day of September, 2009.
 
 
 
THE BANK OF NEW YORK MELLON
 
       
       
By:
/S/       CHERYL CLARKE
 
 
Name:
CHERYL CLARKE
 
 
Title:
VICE PRESIDENT
 
 
 
- 4 -
 
 
EXHIBIT 7
 
Consolidated Report of Condition of
 
THE BANK OF NEW YORK MELLON
 
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 2009, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
 
ASSETS
 
 
Dollar Amounts In Thousands
 
Cash and balances due from depository institutions:
     
Noninterest-bearing balances and currency and coin
    3,228,000  
Interest-bearing balances
    56,028,000  
Securities:
       
Held-to-maturity securities
    6,782,000  
Available-for-sale securities
    39,436,000  
Federal funds sold and securities purchased under agreements to resell:
       
   Federal funds sold in domestic offices
    1,319,000  
   Securities purchased under agreements to  resell
    50,000  
Loans and lease financing receivables:
       
Loans and leases held for sale
    0  
Loans and leases, net of unearned income
    29,318,000  
LESS: Allowance for loan and lease losses
    414,000  
Loans and leases, net of unearned income and allowance
    28,904,000  
Trading assets
    6,282,000  
Premises and fixed assets (including capitalized leases)
    1,115,000  
Other real estate owned
    6,000  
Investments in unconsolidated subsidiaries and associated companies
    830,000  
Direct and indirect investments in real estate ventures
    0  
Intangible assets:
       
   Goodwill
    4,949,000  
   Other intangible assets
    1,514,000  
Other assets
    11,560,000  
Total assets
    162,003,000  
         
 
 
 
LIABILITIES
       
Deposits:
       
In domestic offices
    57,327,000  
Noninterest-bearing
    32,885,000  
Interest-bearing
    24,442,000  
In foreign offices, Edge and Agreement subsidiaries, and IBFs
    74,161,000  
Noninterest-bearing
    2,846,000  
Interest-bearing
    71,315,000  
Federal funds purchased and securities sold under agreements to repurchase:
       
   Federal funds purchased in domestic  offices
    414,000  
   Securities sold under agreements to  repurchase
    13,000  
Trading liabilities
    6,144,000  
Other borrowed money:
(includes mortgage indebtedness and obligations under capitalized leases)
    2,695,000  
Not applicable
       
Not applicable
       
Subordinated notes and debentures
    3,490,000  
Other liabilities
    5,064,000  
Total liabilities
    149,308,000  
         
EQUITY CAPITAL
       
Perpetual preferred stock and related surplus
    0  
Common stock
    1,135,000  
Surplus (exclude all surplus related to preferred stock)
    8,297,000  
Retained earnings
    7,991,000  
Accumulated other comprehensive income
    -5,097,000  
Other equity capital components
    0  
Total bank equity capital
    12,326,000  
Noncontrolling (minority) interests in consolidated subsidiaries
    369,000  
Total equity capital
    12,695,000  
Total liabilities and equity capital
    162,003,000  
 
 
 
I, Thomas P. Gibbons, Chief Financial Officer of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.
 
Thomas P. Gibbons,
Chief Financial Officer
 
 

 
We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.
 
Gerald L. Hassell
Robert P. Kelly
Catherine A. Rein
 
Directors