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

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934

May 28, 2014

The Royal Bank of Scotland Group plc

RBS Gogarburn
PO Box 1000
Edinburgh  EH12 1HQ
United Kingdom
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F    ☒
Form 40-F    ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes    ☐
No    ☒

If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 12g3-2(b): 82-             

This report on Form 6-K shall be deemed incorporated by reference into the company’s Registration Statement on Form F-3 (File Nos. 333-184147 and 333-184147-01) and to be a part thereof from the date on which this report is filed, to the extent not superseded by documents or reports subsequently filed or furnished.

 
 
 
 
 
 
 


[Missing Graphic Reference]

Index of Exhibits


Exhibit No.   Description
1.1
 
Underwriting Agreement between The Royal Bank of Scotland Group plc and RBS Securities Inc. dated as of May 21, 2014.
1.2
 
Pricing Agreement between The Royal Bank of Scotland Group plc and RBS Securities Inc. dated as of May 21, 2014.
4.1
 
Subordinated Debt Securities Indenture between The Royal Bank of Scotland Group plc and The Bank of New York Mellon dated as of December 4, 2012 (incorporated herein by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 6-K (File No. 001-10306) filed with the Commission on December 4, 2012).
4.2
 
First Supplemental Indenture between The Royal Bank of Scotland Group plc and The Bank of New York Mellon dated as of December 4, 2012 (incorporated herein by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 6-K (File No. 001-10306) filed with the Commission on December 4, 2012).
4.3
 
Fourth Supplemental Indenture between The Royal Bank of Scotland Group plc and The Bank of New York Mellon dated as of May 28, 2014.
4.4
 
Form of Global Note for the 5.125% Subordinated Tier 2 Notes due 2024 (included in Exhibit 4.3 hereof).
5.1
 
Opinion of CMS Cameron McKenna LLP, Scottish legal advisors to The Royal Bank of Scotland Group plc as to the validity of the Subordinated Debt Securities of The Royal Bank of Scotland Group plc, to be issued on May 28, 2014, as to certain matters of Scots law.
5.2
 
Opinion of Davis Polk & Wardwell London LLP, U.S. legal advisors to The Royal Bank of Scotland Group plc as to the validity of the Subordinated Debt Securities of The Royal Bank of Scotland Group plc, to be issued on May 28, 2014, as to certain matters of New York law.

 
 
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SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned, thereunto duly authorized.
 

  The Royal Bank of Scotland Group plc
(Registrant)
     
Date:  May 28, 2014
By:
/s/ Alan Ewing Mills
 
Name:
Alan Ewing Mills
 
Title:
Assistant Secretary
 
 
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EXHIBIT 1.1
 
THE ROYAL BANK OF SCOTLAND GROUP PLC
 
 
 
Underwriting Agreement
 
Subordinated Debt Securities
 

 
May 21, 2014
 
RBS Securities Inc.

As Representative of the several
Underwriters (as defined below ) named in Schedule I
to the Pricing Agreement (as defined below)
 
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 “ Notes ”).
 
The terms of, and rights attached to, any particular issuance of Notes shall be as specified in the Pricing Agreement relating thereto and in or pursuant to the subordinated debt securities indenture dated as of December 4, 2012 (the “ Base Indenture ”) between the Company and The Bank of New York Mellon, acting through its London Branch, as trustee (the “ Trustee ”) as supplemented and amended by the first supplemental indenture dated as of December 4, 2012 (the “ First Supplemental Indenture ”), and the fourth supplemental indenture to be dated on or around May 28, 2014 (the “ Fourth Supplemental Indenture ” and, together with the Base Indenture and the First Supplemental Indenture, the “ Indenture ”).  The offering of the Notes 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 Notes may be made from time to time to the Underwriters of such Notes, or to purchasers procured by them, for whom the firms designated as representatives of the Underwriters of such Notes 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 Notes or as an obligation of any of the Underwriters to purchase, or procure purchasers for, the Notes.  The
 
 
 
 
 
obligation of the Company to issue and sell any of the Notes and the obligation of any of the Underwriters to purchase, or procure purchasers for, any of the Notes shall be evidenced by the Pricing Agreement with respect to the Notes specified therein.  Each Pricing Agreement shall specify the aggregate principal amount of such Notes, the initial public offering price of such Notes, the purchase price to the Underwriters of such Notes, the names of the Underwriters of such Notes, the names of the Representatives of such Underwriters and the principal amount of such Notes 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 Notes 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 Notes. 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. 333-184147) and related prospectus for the registration of, among other securities, certain debt securities of the Company, including the Notes, 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 Notes 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 Notes 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 Notes 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
 
 
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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.
 
“ Applicable Time ” means the time designated as such in the Pricing Agreement.
 
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. 333-184147) in respect of the Notes 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; and (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
 
 
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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.
 
(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 Notes, 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, 2013, 2012 and 2011 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 / (loss) and cash flows for the years then ended, and the unaudited consolidated financial statements of the Company for the three month period ended March 31, 2014 have been stated on a basis substantially consistent with that of the audited consolidated financial statements incorporated by reference into the Registration Statement.
 
(f)           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.
 
(g)           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 Notes, and, in each case, to perform its obligations hereunder and thereunder; (C) has the
 
 
 
4
 
 
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.
 
(h)           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.  RBS Holdings N.V. (“ RBS N.V. ”) 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.
 
(i)           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, concepts of reasonableness and equitable principles of general applicability, and may be subject to possible judicial actions giving effect to governmental actions or foreign laws affecting creditors’ rights.
 
(j)           The forms of Notes have been duly authorized and established in conformity with the provisions of the Indenture and, when the Notes 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 Notes 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 generally, concepts of reasonableness and equitable principles of general applicability, and may be subject to possible judicial actions giving effect to governmental actions or foreign laws affecting creditors’ rights.
 
 
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(k)           Each of the Indenture and the Notes will conform in all material respects to the descriptions thereof contained in the Disclosure Package and the Prospectus.
 
(l)           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 Notes 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 ”).
 
(m)           The execution, delivery and performance of this Agreement, the Pricing Agreement and Indenture, the allotment, issuance, authentication, sale and delivery of the Notes, 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.
 
(n)           The Company is not, and after giving effect to the offer and sales of the Notes 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.
 
(o)           No event has occurred or circumstances arisen which (after the issuance of the Notes) 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 Notes.
 
(p)           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).
 
(q)           (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 Notes 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
 
 
6
 
 
Rule 164(h)(2) under the 1933 Act) of the Notes, the Company was not an “ineligible issuer” as defined in Rule 405 under the 1933 Act.
 
(r)           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 an independent registered public accounting firm with respect to the Company as required by the 1933 Act and the rules and regulations of the Commission thereunder.
 
(s)           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.
 
(t)           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 Notes 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 Notes and authorization by the Representatives of the release of such Notes, the several Underwriters propose to offer such Notes for sale upon the terms and conditions set forth in the Prospectus (as amended or supplemented).
 
4.           The Notes 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 (as provided in the Pricing Agreement) by wire transfer of immediately available funds to an account designated by the Company as specified in the Pricing Agreement, all in the
 
 
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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 Notes.
 
5.           The Company agrees with each of the Underwriters of any Notes 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 Notes, 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 Notes, 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 Notes 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 Notes (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 Notes 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 Notes and the offering thereof, in a form approved by the
 
 
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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 Notes 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 Notes.
 
(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 Notes 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 Notes (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 Notes, amend or supplement the Prospectus in order to comply with applicable law or the requirements of the New York Stock Exchange and deliver to the Underwriters from time
 
 
 
9
 
 
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 Notes 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 Notes 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.
 
(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
 
 
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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 Notes 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 Notes (other than (i) the Notes, (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 Notes, the Notes 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 Notes on such recognised stock exchange.
 
(o)           The Company will apply the net proceeds from the sale of the Notes as set forth in the Prospectus.
 
(p)           The Company will cooperate with the Underwriters and use its best efforts to permit the Notes to be eligible for clearance and settlement through the facilities of The Depository Trust Company (“ DTC ”), Euroclear Bank SA/NV or Clearstream Banking, société anonyme , as the case may be.
 
(q)           Prior to the issuance of the Notes, 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 Notes and to permit the Company to make interest payments on the Notes in U.S. dollars.
 
6.           The Company will pay all expenses incidental to the performance of its obligations under this Agreement, any Pricing Agreement, the Indenture and the Notes 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 Notes to (or at the direction of) the Underwriters, including any transfer or other taxes or duties payable upon the delivery of the Notes to a custodian for DTC, Euroclear Bank SA/NV or Clearstream Banking, société anonyme , as the case may be, or the sale of the Notes to the Underwriters; (iv) the fees and disbursements of the Company’s counsel and accountants; (v) the qualification of the Notes 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 Notes and in connection with the preparation of any Blue Sky Survey and any Legal Investment Survey; (vi)
 
 
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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 Notes, if any, on any stock exchange and the clearance and settlement of the Notes through the facilities of DTC, Euroclear Bank SA/NV or Clearstream Banking, société anonyme , as the case may be; (ix) any fees charged by securities rating services for rating the Notes; (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 Notes, the initial delivery of the Notes, the deposit of the Notes with a custodian for DTC, Euroclear Bank SA/NV or Clearstream Banking, société anonyme , as the case may be, the purchase by the Underwriters of the Notes, the sale and delivery of the Notes 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 Notes; 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 $120,000).
 
7.           The obligations of the Underwriters of any Notes under the Pricing Agreement relating to such Notes shall be subject, at 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 Notes are, at and as of the Time of Delivery for such Notes, 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 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
 
 
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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 opinions and 10b-5 letter, each, dated as of the Time of Delivery, of Davis Polk & Wardwell London LLP, U.S. counsel and U.K. tax 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 CMS Cameron McKenna 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 (London) 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 registered public accounting firm with respect to 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 five 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 Notes on the New York 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 Company and its subsidiaries considered as one enterprise, and (2) the Representatives shall have received a certificate
 
 
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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 Notes 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 FINRA rules) of the Company is participating in the offering of the Notes, 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 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
 
 
 
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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).
 
(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
 
 
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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 Notes on the other from the offering of the Notes 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 Notes 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
 
 
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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 Notes 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 Notes in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Notes 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 Notes which it is or they are obligated to purchase under this Agreement and the Pricing Agreement (the “ Defaulted Notes ”), 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 underwriter, to purchase, or procure purchasers for, all, but not less than all, of the Defaulted Notes 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 Notes does not exceed 10% of the Notes 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 Notes bear to the underwriting obligations of all non-defaulting Underwriters, or
 
 
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(b)           if the number of Defaulted Notes exceeds 10% of the Notes which the Underwriters are obligated to purchase or procure purchasers for at the Time of Delivery, the Pricing Agreement relating to such Notes 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 Notes 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 Notes or enforce contracts for the sale of the Notes 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 Notes 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
 
 
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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 Notes 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, email, 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, email, 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, email, 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 Notes 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
 
 
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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 CT Corporation System, 111 Eight Avenue, 13 th Floor, New York, NY 10011, 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 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 Notes in circumstances in which section 21(1) of the FSMA does not apply to the Company;
 
(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 Notes in, from or otherwise involving the United Kingdom; and
 
 
20
 
 
(c) in connection with any issue of Notes designated as Tier 2 Notes (as defined below), such Underwriter will not indicate to initial investors as part of the marketing relating to the sale of such Notes that such Notes will or are likely to be redeemed, repurchased or repaid prior to their maturity date, provided that for the avoidance of doubt the undertaking in this Section 15(c) shall not preclude any Underwriter disclosing any terms of such Notes or information consistent with the Prospectus or any other additional information authorized by the Company to be disclosed. For the purposes of this Section 15(c) Tier 2 Notes shall mean any Note which is specified to be a Tier 2 Note in the applicable Term Sheet.
 
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 Notes which are the subject of the offering contemplated by the Prospectus to the public in that Relevant Member State other than (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; (b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the other Underwriters for any such offer; or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Notes shall require the Company or any Underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive or a supplemental prospectus pursuant to Article 16 of the Prospectus Directive. For the purposes of this Section 16 of this Agreement, the expression an “offer of Notes to the public” in relation to any Notes 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 Notes to be offered so as to enable an investor to decide to purchase or subscribe for the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “ Prospectus Directive ” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “ 2010 PD Amending Directive ” means Directive 2010/73/EU.
 
17.           The Company hereby acknowledges that (a) the purchase, or procurement of purchasers of, and sale of the Notes 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.
 
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22
 
 
If the foregoing is in accordance with your understanding, please sign and return to us one counterpart hereof.

Very truly yours,  
   
   
THE ROYAL BANK OF SCOTLAND GROUP PLC  
       
By: /s/ John Cummins  
  Name: John Cummins  
  Title: RBS Treasurer  

 
 
 
 
 
Accepted as of the date hereof:
 
RBS SECURITIES INC.
 
       
By: /s/ Timothy Blair  
  Name: Timothy Blair  
  Title: Vice President  
 
For itself and as Representative of the several Underwriters

 
 
 
 
 
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 ”) among 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 “ Notes ”).
 
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 Notes 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 Notes 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 Notes, 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
 
 
A-I-1
 
 
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 Notes set forth opposite the name of such Underwriter in Schedule I hereto.
 
If the foregoing is in accordance with your understanding, please sign and return to us one counterpart 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.
 
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A-I-2
 
 
Very truly yours,  
   
THE ROYAL BANK OF SCOTLAND GROUP plc  
       
By:    
  Name:    
  Title:    
 
 
[ The rest of this page is intentionally left blank ]
 
 
 
 
 
Accepted as of the date hereof:
[names of representatives]
 
By:
   
  Name:  
  Title:  
 
For themselves and as representatives of the several Underwriters
 
 
 
 
 
 
SCHEDULE I

   
Principal Amount of
Notes
to be Purchased
     
[Names of Representatives]
 
[          ]
[Names of other Underwriters]
 
[          ]
 
Total:
[          ]


 
A-I-3
 
 
SCHEDULE II
 
 

 
Capitalized terms used herein, unless otherwise stated, shall have the meaning set forth in the Underwriting Agreement.
 
Title of Notes:
 
[ ]% Notes due      (the “Notes”)
 
Aggregate principal amount of Notes:
 
$[ ] principal amount of the Notes
 
Price to Public:
 
[ ]% of the principal amount of the Notes
 
Purchase Price by Underwriters:
 
[ ]% of the principal amount of the Notes
 
Underwriting Commission:
 
[ ]% for the Notes
 
Form of Securities:
 
Book-entry only form represented by one or more global notes deposited with a custodian for DTC, Euroclear Bank SA/NV and Clearstream Banking, société anonyme , as the case may be.
 
Specified funds for payment of purchase price:
 
Wire transfer of immediately available funds
 
Applicable time:
 
[ ] a.m. (New York time), ________ __, ____
 
Time of Delivery:
 
9:30 a.m. (New York time), ________ __, ____
 
Indenture:
 
[ ]
 
Maturity Date: __________,
 
Interest Rate:
 
 
A-I-4
 
 
[ ]% for the Notes
 
Interest Payment Dates:
 
Interest will be paid on the Notes on ________ and ________ of each year, commencing on __________, ____.
 
Interest Record Dates:
 
Interest will be paid on the Notes to holders of record of each Note in respect of the principal amount thereof outstanding as of ________ and ________ of each year immediately preceding the Interest Payment Dates on ________and ________, respectively.
 
Redemption Provisions:
 
The Notes may be redeemed as described in the Prospectus.
 
Sinking Fund Provisions:
 
No sinking fund provisions.
 
Closing location for delivery of Notes:
 
Offices of Davis Polk & Wardwell London LLP, 99 Gresham Street
 
London EC2V 7NG, United Kingdom
 
Names and addresses of Representatives:
 
Designated Representatives:                   [  ]
 
Address for Notices:                                 [  ]
 
CUSIP:        [  ]
 
ISIN:            [  ]
 
Stock Exchange Listing:
 
The Company intends to apply to list the Notes on the New York Stock Exchange in accordance with its rules.
 
Other Terms:
 
The Notes will have additional terms as more fully described in the Disclosure Package and the Prospectus and shall be governed by the Indenture.
 
 
A-I-5
 

 
ANNEX II
 
 

Issuer Free Writing Prospectuses Included in Disclosure Package
 
 
 
 
A-II-1
 
 
 
 
 
Free Writing Prospectus dated May 21, 2014
(to Prospectus dated September 28, 2012 and
Preliminary Prospectus Supplement dated May 21, 2014)
Filed pursuant to Rule 433
Registration Statement No. 333-184147

The Royal Bank of Scotland Group plc
TERMS AND CONDITIONS
USD 2,250,000,000 5.125% Subordinated Tier 2 Notes due 2024
Issuer
The Royal Bank of Scotland Group plc
Securities
5.125% Subordinated Tier 2 Notes due 2024 (the “Notes”)
Ranking
Subordinated
Principal Amount
USD 2,250,000,000
Price to the Public
99.213%
Specified Currency
USD
Trade Date
May 21, 2014
Settlement Date
May 28, 2014 (T+4), in accordance with DTC’s procedures
Maturity
May 28, 2024
Coupon
5.125% per annum
Call Option
Not applicable
Interest Payment Dates
Semi-annually on the 28th day of each May and November, commencing on November 28, 2014, up to and including May 28, 2024.
Interest Payment Record Dates
On the 14th day of each May and November commencing on November 14, 2014.
Format
SEC-Registered
Benchmark
T 2.500% due May 15, 2024
Benchmark Yield
2.527%
Re-Offer Yield
5.227%
Re-Offer Spread to UST
T+270 bps
Day Count
30/360
Day Count Convention
Following unadjusted
Business Days
New York and London
Underwriting Discount
0.400%
Proceeds, before expenses, to the Issuer
98.813%; USD 2,223,292,500
Agreement with Respect to the Exercise of U.K. Bail-in Power
By its purchase of the Notes, each holder (including each beneficial holder) of the Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Notes into shares or other securities or other obligations of the Issuer or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Notes solely to give effect to the above. With respect to
 
 
 
 
  (i) and (ii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the Maturity Date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each holder (including each beneficial holder) of the Notes further acknowledges and agrees that the rights of the holders under the Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.
 
 
For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Issuer or other members of the Group (as defined herein), including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendment to the Banking Act 2009, as the same may be amended from time to time (whether pursuant to the U.K. Financial Services (Banking Reform) Act 2013 or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).”
 
 
“Group” means the Issuer together with its subsidiaries consolidated in accordance with International Financial Reporting Standards.
Redemption for Tax Reasons
Redemption at the principal amount of the Notes together with accrued but unpaid interest thereon, provided that, any such redemption will only apply to the extent not prohibited by CRD IV and will be subject to the conditions set forth under below under “Conditions to Redemption and Repurchases.”
Redemption due to Capital Disqualification Event
Redemption at par together with accrued but unpaid interest thereon, in the event a Capital Disqualification Event has occurred and is continuing, provided that, any such redemption will only apply to the extent not prohibited by CRD IV and will be subject to the conditions set forth under below under “Conditions to Redemption and Repurchases.”
 
A “Capital Disqualification Event” shall be deemed to have occurred if, as a result of any amendment to, or change in, the Capital Regulations (or official interpretation thereof) which are in effect at the Settlement Date, the Notes are fully excluded from Tier 2 capital (as defined in the Capital Regulations) of the Issuer and/or the Regulatory Group.
 
As used herein:
 
2
 
 
  “Capital Instruments Regulations” means any regulatory capital rules, regulations or standards which are in the future applicable to the Issuer (on a solo or consolidated basis and including any implementation thereof or supplement thereto by the PRA from time to time) and which lay down the requirements to be fulfilled by financial instruments for inclusion in its regulatory capital (on a solo or consolidated basis) as required by (i) the CRD IV Regulation and/or (ii) the CRD IV Directive and including (for the avoidance of doubt) any regulatory technical standards issued by the European Banking Authority and adopted by the European Commission.
 
 
“Capital Regulations” means, at any time, the regulations, requirements, guidelines and policies relating to capital adequacy of the PRA and/or of the European Parliament or of the Council of the European Union then in effect in the United Kingdom, including, without limitation to the generality of the foregoing, any Capital Instruments Regulations;
 
 
“CRD IV” means, taken together, (i) the CRD IV Directive, (ii) the CRD IV Regulation and (iii) the Capital Regulations;
 
“CRD IV Directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, and any successor directive;
 
 
“CRD IV Regulation” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms amending Regulation (EU) No 648/2012, and any successor regulation;
 
 
“PRA” means the Prudential Regulation Authority or such other governmental authority in the United Kingdom (or, if the Issuer becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory authority with respect to the prudential regulation of the Issuer’s business; and
 
 
“Regulatory Group” means the Issuer, its subsidiary undertakings, participations, participating interests and any subsidiary undertakings, participations or participating interests held (directly or indirectly) by any of its subsidiary undertakings from time to time and any other undertakings from time to time consolidated with it for regulatory purposes, in each case in accordance with the rules and guidance of the PRA then in effect.
Repurchases
Applicable, provided that purchases are only permitted to the extent not prohibited by CRD IV. Any such purchase will be subject to the conditions set forth under below under “Conditions to Redemption and Repurchases.”
Conditions to Redemption and Repurchases
Redemption or repurchase of the Notes prior to the Maturity Date, provided that (except to the extent that the PRA no longer so requires) the Issuer has notified the PRA of its intention to do so at least one month (or such other, longer or shorter period, as the PRA may then require or accept) before the Issuer becomes committed to the proposed redemption or repayment.
 
3
 
 
The PRA shall grant permission to a redemption or repurchase of the Notes in accordance with the provisions of the rules under CRD IV, upon a satisfactory finding that either of the following conditions is met, as applicable to the Notes:
 
1. on or before such redemption or repurchase of any of the Notes, the Issuer replaces such Notes with own funds instruments (as defined by the Capital Regulations) of an equal or higher quality on terms that are sustainable for its income capacity; or
 
2. the Issuer has demonstrated to the satisfaction of the PRA that its Tier 1 capital and Tier 2 capital (as defined by the Capital Regulations) would, following such redemption or repurchase, exceed the capital ratios required under the CRD IV Regulation and the combined buffer requirement defined in the CRD IV Directive by a margin that the PRA may consider necessary on the basis set out in the CRD IV Directive for it to determine the appropriate level of capital of an institution.
 
In addition, under the CRD IV rules, the Issuer may only redeem the Notes before five years after the date of issuance of the Notes, provided that (except to the extent that the PRA lo longer so requires) the following conditions are met:
 
a) the pre-conditions listed in paragraphs (1) or (2) above are met; and
 
b) in the case of redemption due to the occurrence of a Capital Disqualification Event, (i) the PRA considers such change to be sufficiently certain and (ii) the Issuer demonstrates to the satisfaction of the PRA that the Capital Disqualification Event was not reasonably foreseeable at the time of the issuance of the Notes; or
 
c) in the case of redemption due to a tax event, the Issuer demonstrates to the satisfaction of the PRA that the change in the applicable tax treatment relating to the Notes is material and was not reasonably foreseeable at the time of issuance of the Notes.
Global Co-ordinator and Structuring Advisor, Joint Bookrunner and Joint Lead Manager
RBS Securities Inc.
Joint Bookrunners and Joint Lead Managers
Citigroup Global Markets Inc.
Merrill Lynch, Pierce, Fenner & Smith
o Incorporated
Wells Fargo Securities, LLC
Co-Managers
ABN AMRO Securities (USA) LLC
BMO Capital Markets Corp.
BNY Mellon Capital Markets, LLC
Capital One Securities, Inc.
CIBC World Markets Corp.
Danske Markets Inc.
ING Financial Markets LLC
nabSecurities, LLC
National Bank of Canada Financial Inc.
TD Securities (USA) LLC
 
4
 
 
Denominations
$100,000 and integral multiples of USD $1,000 in excess thereof
Listing
An application will be made to list the Notes on the New York Stock Exchange
Expected Security Ratings*
BB+ / BBB- / Ba3 (S&P / Fitch / Moody’s)
Clearing and Settlement
DTC
CUSIP
780099 CH8
ISIN
US780099CH81
Governing Law
New York (subordination and waiver of the right to set off by holders governed by Scots Law)

* The security ratings above are not a recommendation to buy, sell or hold the securities offered hereby. The ratings may be subject to revision or withdrawal at any time by S&P, Fitch or Moody’s.
 
The Issuer has filed a registration statement (including a base prospectus) with the SEC for the offering to which this free writing prospectus relates. Before you invest in this offering, you should read the base prospectus in that registration statement and other documents the Issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov . Alternatively, RBS Securities Inc. will arrange to send you the base prospectus at no charge if you request it by calling 1-866-884-2071.
 
 
 
5
 
 
 
ANNEX III
 
FORM OF OPINIONS OF
DAVIS POLK & WARDWELL LONDON LLP, U.S. COUNSEL AND U.K. TAX
COUNSEL
FOR THE COMPANY
 
[ Form of U.S. Opinion ]

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 September 28, 2012 pursuant to Rule 461(e).

Based upon the foregoing, we are of the opinion that:
 
1.           Assuming that the Underwriting Agreement has been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Underwriting 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 by the Company, and the Indenture (other than the terms governed by Scots law as to which we express no opinion) 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, and may be subject to possible judicial actions giving effect to governmental actions or foreign laws affecting creditors’ rights.

3.           Assuming that the Notes have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Notes (other than the terms governed by Scots law as to which we express no opinion), when the Notes are executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to the Underwriting 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 may be subject to possible judicial actions giving effect to governmental actions or foreign laws affecting creditors’ rights, and will be entitled to the benefits of the Indenture (other than the terms governed by Scots law as to which we express no opinion) pursuant to which such Notes are to be issued.

4.           Assuming that each of the Underwriting Agreement and the Indenture 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 United States federal court located in the State of New York, Borough of Manhattan, the City of New York
 
 
A-III-1
 
 
(each a “ New York Court ”), in any action arising out of or relating to the Underwriting Agreement and the Indenture 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 CT Corporation System as its 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 to confer valid personal jurisdiction on the Company.

5.           The Company is not and, after giving effect to the offering and sale of the Notes 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.           The execution and delivery by the Company of, and the performance by the Company of its obligations under, the Underwriting Agreement, the Indenture and the Notes (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.

8.           The choice of Scots law as the proper law to govern the provisions contained in Section 2.01, Section 5.03 (in relation to waiver of the right to set-off by the holders and by the trustees on behalf of the holders) and Section 12.01 of the Base Indenture should be upheld as a valid choice of law by a New York Court and applied by such courts in proceedings relating to the obligations of the parties under the Indenture, unless the application of Scots law would contravene the public policy of the State of New York or U.S. federal law.  We are not aware of any public policy of the State of New York or of U.S. federal law that would be impugned by the enforcement of the express provisions of these provisions of the Base Indenture.  For the purposes of this paragraph, we have assumed that consent to the choice of law provision contained in Section 1.12 of the Base Indenture was not obtained from any party to the Indenture by improper means or mistake, that the legal questions as to Scots law at issue in any suit or proceeding with regard to the Indenture would be governed by principles that had been considered and decided under Scots law before initiation of such suit or proceeding, and thus would not be questions of first impression for a Scottish court and that a Scottish court would itself enforce the choice of law provision contained in Section 1.12 of the Indenture.
 
 
A-III-2
 

 
We have considered the statements included in the Prospectus under the caption “Description of Debt Securities” and in the Prospectus Supplement under the caption “Description of the Subordinated Notes” insofar as they summarize provisions of the Indenture and the Notes. In our opinion, such statements fairly summarize these provisions in all material respects. The statements included in the Prospectus Supplement under the caption “U.K. and U.S. Federal 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.

[ Form of U.K. Tax Opinion ]

On the basis of our examination of the documents listed in the Schedule to this opinion and the other matters referred to in this opinion, and subject to the assumptions set out in this opinion and any matters not disclosed to us, we are of the opinion that:
 
1.
Assuming that the Notes comprise loan capital falling within Section 79(4) and not within Sections 79(5) or (6) of the Finance Act 1986: (i) the statements in the Prospectus Supplement under the section headed “U.K. and U.S. Federal Tax Consequences”, insofar as such statements constitute a general summary of both current United Kingdom tax law and generally published practice of H.M. Revenue and Customs relevant to the issue of the Notes, fairly and accurately summarise the matters referred to therein; and (ii) no United Kingdom stamp duty or stamp duty reserve tax, capital duty, registration or other issue or documentary taxes (“ UK stamp taxes ”) should be payable on the creation, issue or delivery by, or on behalf of, the Company of the Notes, or on the execution and delivery of the Pricing Agreement or the Underwriting Agreement or the consummation of the transactions contemplated thereby in respect of such Notes.
 
2.
Even if the assumption in paragraph 1 above were not correct, no UK stamp taxes should be payable by the Underwriters on the creation or issue by the Company of the Notes provided that (i) the Notes comprise “regulatory capital securities” for the purposes of The Taxation of Regulatory Capital Securities Regulations 2013 (the “ Regulations ”) and there are no arrangements the main purpose, or one of the main purposes, of which is to obtain a tax advantage for any person as a result of the application of the Regulations in respect of any Note, as contemplated in regulation 8 of the Regulations, or (ii) no Underwriter is a person falling within any of Sections 93(2), 93(3) or 96(1) of the Finance Act 1986 and any other person falling within any of Sections 93(2), 93(3) or 96(1) of the Finance Act 1986 to whom the Notes are issued does not seek to pass on the cost of any UK stamp taxes falling on them to any Underwriter.
 
3.
No United Kingdom value added tax should be payable by the Underwriters on their underwriting commissions under the Underwriting Agreement.
 
4.
Payments of interest by the Company in respect of the Notes may be made without withholding or deduction for or on account of United Kingdom tax, provided that (i) the Notes comprise “regulatory capital securities” for the purposes of the Regulations and there are no arrangements the main purpose, or one of the main purposes, of which is to obtain a tax advantage for any person as a result of the application of the Regulations in

 
 
A-III-3
 
 
 
respect of any Note, as contemplated in regulation 8 of the Regulations, or (ii) the Notes are listed on a “recognised stock exchange” within the meaning of Section 1005 of the Income Tax Act 2007 at the time of payment. The main market of the New York Stock Exchange is a “recognised stock exchange” for the purposes of Section 1005.

 
 
A-III-4
 
 
FORM OF 10b-5 LETTER OF
DAVIS POLK & WARDWELL LONDON 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 stated:

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 Notes:

 
a.
on the date of the Underwriting Agreement, the 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 Applicable Time 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 contains any 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 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 is financial data.  In addition, we express no view as to the conveyance of the Disclosure Package or the information contained therein to investors.
 
 
A-III-5
 
 
ANNEX IV
 
FORM OF OPINION OF
 
CMS CAMERON MCKENNA 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 has been duly incorporated in Great Britain as a limited liability company and is validly registered under the law of Scotland, is not in liquidation, and has the corporate power and authority under such law to conduct its business as described in the Prospectus and/or the Prospectus Supplement.

(2)
The Notes (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 Pricing Agreement, the Underwriting Agreement and the Indenture) will have been duly issued and delivered, and they will constitute legally valid and binding and enforceable obligations of the Company.

(3)
The creation and issue of the Notes and the execution, delivery and performance by the Company of the Agreements are within the corporate power of the Company and have been duly authorised by all necessary corporate action of the Company.

(4)
The obligations on the part of the Company under the Indenture and the Notes (including under the subordination provisions) are legally valid and binding and enforceable against the Company.

(5)
No authorisations, approvals, consents or licences of governmental, judicial or public bodies or authorities of or in Scotland (together consents ) are required by the Company as a result of the Company being a Scottish registered company for the valid execution, issue and delivery of the Notes.

(6)
Neither the execution, delivery and performance by the Company of the Agreements, nor the execution, issue and delivery of the Notes, will of itself result in any violation in any material respect of:

 
(a)
the Memorandum or Articles of Association of the Company; or

 
(b)
any existing applicable mandatory provision of Scots law or regulation; or

 
(c)
any existing judgment, order or decree of any Scottish court.
 
 
A-IV-1
 

 
(7)
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 courts of the United States of America or State of New York specified therein (each a New York Court )) be permitted to commence proceedings in the Scottish courts for enforcement of the Underwriting Agreement and the Pricing Agreement, and the Scottish courts would accept jurisdiction in any proceedings for so long as the Company remains 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 governing law of the Underwriting Agreement would be upheld as a valid choice of law by that court.

(8)
The Agreements 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.

(9)
The submission by the Company in Section 14 of the Underwriting Agreement to the jurisdiction of the New York Courts, 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 governing law, a judgment of the New York Courts 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 (1) the court which issued the judgment had jurisdiction and acted judicially with no element of unfairness, (2) 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 (3) enforcement of the judgment is not contrary to Scottish public policy.

(11)
Each holder of a Note is (if and when a valid cause of action which is enforceable by a Holder (as defined in the Indenture) arises under the Notes), entitled to sue as claimant in the Scottish courts for the enforcement of its rights against the Company, and such entitlement will not be subject to any conditions which are not applicable to residents of Scotland, save that a Scottish court may require a person who is not resident in Scotland to provide security for costs.

(12)
In the event of a winding up of the Company in accordance with Scottish insolvency rules or a Qualifying Administration (as defined in the Indenture), the subordination provisions will, in respect of the Notes, be given effect by the courts in Scotland in accordance with their terms.

(13)
The choice of the laws of Scotland to govern the subordination provisions would be recognised and upheld by the Scottish courts.

(14)
The choice of the law of the State of New York to govern the contractual rights of the Trustee under the last paragraph of Section 6.07 of the Indenture would be recognised and upheld by the Scottish courts, unless the application of the law of the State of New

 
A-IV-2
 


 
York would be incompatible with the principles of public policy applied by the Scottish courts.
 
 
A-IV-3
 
 
ANNEX V
 
FORM OF OPINION OF LINKLATERS LLP
ENGLISH SOLICITORS TO THE COMPANY
 
Based on the documents referred to, and assumptions made, in this opinion and subject to the qualifications in this opinion and to any matters not disclosed to us, we are of the following opinion:
 
1.           It is not necessary for the Company either to ensure the validity of the Notes, the Underwriting Agreement, the Pricing Agreement or the Indenture or to ensure the compliance by the Underwriters with any mandatory provision of English law, for the Company to obtain any approval, consent, order or permission of, or to effect any filing, recording or registration with, any public authority or governmental agency in England or to obtain authorisation from any regulatory authority, government department or court in England (other than any approvals, consents, orders, permissions, filings, recordings, registrations 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 you are relying upon an opinion of CMS Cameron McKenna LLP)) in respect of the execution, delivery or performance of the Notes, the Underwriting Agreement, the Pricing Agreement or the Indenture.
 
2.           There are no registration, filing or similar formalities imposed in the United Kingdom upon the Company or the Underwriters in relation to the issue or offering of the Notes or the performance by the Company of its obligations under them, provided that no public offer by the Company or the Underwriters (or any person acting on their behalf) is made in the United Kingdom, other than in the circumstances set out in Section 86 of the FSMA.
 
3.           If and when a valid cause of action which is enforceable against the Company by a holder of a Note in the English courts arises under the Notes, each holder of such a Note may, in certain limited circumstances as set out in, and subject always to the terms of, the Indenture, bring a claim on the basis of such cause of action as a claimant in the English courts for the enforcement of its rights against the Company. A claim on the basis of such cause of action will not be subject to any material procedural rules which are not applicable to claims made by residents of England, save that an English court may take into account when considering the procedural rules and/or legal principles in relation to security for costs and/or forum non conveniens the residency or domicile of a claimant, any submission to the jurisdiction of another court and any pending proceedings in another court.
 
4.           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-V-1
 
 
(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)           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;
 
(c)           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;
 
(d)           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;
 
(e)           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;
 
(f)           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;
 
(g)           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;
 
(h)           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
 
(i)           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.
 
For the purposes of the opinion contained in paragraph 4 above we have interpreted the effect of the Underwriting Agreement, the Pricing Agreement, the Indenture and the Notes 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.
 
 
A-V-2
 
 
ANNEX VI
 
FORM OF OPINION OF SHEARMAN & STERLING (LONDON) 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 Notes 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 Notes 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 CT Corporation System 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 under the caption “U.K. and U.S. Federal Tax Consequences” purport to describe certain U.S. federal income tax laws as they relate to U.S. Holders (as defined therein), such statements fairly and accurately summarize in all material respects the matters referred to therein.
 
 
A-VI-1
 

 
7.           Insofar as the statements in the Disclosure Package and the Prospectus under the captions “Description of the Subordinated Notes” and “Description of Debt Securities” constitute summaries of documents referred to therein, fairly summarize in all material respects the documents referred to therein.
 
 
A-VI-2
 
 
FORM OF 10b-5 LETTER OF
SHEARMAN & STERLING (LONDON) 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 caused us 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 Applicable Time, 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 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.
 
 
A-VI-3
 
EXHIBIT 1.2
 
 
Pricing Agreement

 
RBS Securities Inc.
 
As Representative of the several
Underwriters named in Schedule I hereto,
May 21, 2014

 
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 May 21, 2014 (the “ Underwriting Agreement ”) among 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 “ Notes ”).
 
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 Notes 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 Notes 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 Notes, 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
 
 
1
 
 
Underwriters set forth in Schedule II hereto, the principal amount of Notes set forth opposite the name of such Underwriter in Schedule I hereto.
 
If the foregoing is in accordance with your understanding, please sign and return to us one counterpart 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. ]
 
 
2
 
 
 
Very truly yours,
 
   
THE ROYAL BANK OF SCOTLAND GROUP plc
 
       
By: /s/ John Cummins  
  Name: John Cummins  
  Title: RBS Treasurer  
 
[ The rest of this page is intentionally left blank ]
 
 
 
 
 
Accepted as of the date hereof:

 
RBS Securities Inc.
 
By:
/s/ Timothy Blair
  Name:Timothy Blair
  Title:Vice President
 
For itself and as representative of the several Underwriters
 
 
 

 
SCHEDULE I

   
Principal Amount of
Notes
to be Purchased
     
RBS Securities Inc.
 
1,170,000,000
Citigroup Global Markets Inc.
 
281,250,000
Merrill Lynch, Pierce, Fenner & Smith
                     Incorporated
 
281,250,000
Wells Fargo Securities, LLC
 
180,000,000
ABN AMRO Securities (USA) LLC
 
33,750,000
BMO Capital Markets Corp.
 
33,750,000
BNY Mellon Capital Markets, LLC
 
33,750,000
Capital One Securities, Inc.
 
33,750,000
CIBC World Markets Corp.
 
33,750,000
Danske Markets Inc.
 
33,750,000
ING Financial Markets LLC
 
33,750,000
nabSecurities, LLC
 
33,750,000
National Bank of Canada Financial Inc.
 
33,750,000
TD Securities (USA) LLC
 
33,750,000
 
Total:
2,250,000,000
 
 
3
 

 
SCHEDULE II
 
Capitalized terms used herein, unless otherwise stated, shall have the meaning set forth in the Underwriting Agreement.
 
Title of Notes:
 
5.125% Notes due 2024 (the “Notes”)
 
Aggregate principal amount of Notes:
 
$2,250,000,000 principal amount of the Notes
 
Price to Public:
 
99.213% of the principal amount of the Notes
 
Purchase Price by Underwriters:
 
98.813% of the principal amount of the Notes
 
Underwriting Commission:
 
0.400% for the Notes
 
Form of Securities:
 
Book-entry only form represented by one or more global notes deposited with a custodian for DTC, Euroclear Bank SA/NV and Clearstream Banking, société anonyme , as the case may be.
 
Specified funds for payment of purchase price:
 
Wire transfer of immediately available funds
 
Applicable time:
 
5.00 p.m. (New York time), May 21, 2014
 
Time of Delivery:
 
9:30 a.m. (New York time), May 28, 2014
 
Indenture:
 
Subordinated Debt Security Indenture Dated as of December 4, 2012 between the
Company and The Bank of New York Mellon, as Trustee, as supplemented and
amended by the First Supplemental Indenture dated as of December 4, 2012 and
 
 
 
4
 
the Fourth Supplemental Indenture to be dated on or around May 28, 2014
(together, the “ Indenture ”).
 
Maturity Date:
 
May 28, 2024
 
Interest Rate:
 
5.125% for the Notes
 
Interest Payment Dates:
 
Interest will be paid on the Notes on May 28 th and November 28 th of each year, commencing on November 28, 2014.
 
Interest Record Dates:
 
Interest will be paid on the Notes to holders of record of each Note in respect of the principal amount thereof outstanding as of May 14 th and November 14 th of each year immediately preceding the Interest Payment Dates on May 28 th and November 28 th , respectively.
 
Redemption Provisions:
 
The Notes may be redeemed as described in the Prospectus.
 
Sinking Fund Provisions:
 
No sinking fund provisions.
 
Closing location for delivery of Notes:
 
Offices of Davis Polk & Wardwell London LLP, 99 Gresham Street
London EC2V 7NG, United Kingdom
 
Names and addresses of Representative:
 
 
Designated Representatives: 
RBS Securities Inc.
 
 
Address for Notices: 
600 Washington Boulevard
Stamford, CT 06901
 
CUSIP: 780099CH8
 
ISIN:  US780099CH81
 
 
5
 

 
Stock Exchange Listing:
 
The Company intends to apply to list the Notes on the New York Stock Exchange in accordance with its rules.
 
Other Terms:
 
The Notes will have additional terms as more fully described in the Disclosure Package and the Prospectus and shall be governed by the Indenture.
 
6

 
Exhibit 4.3
 
THE ROYAL BANK OF SCOTLAND GROUP PLC
 
as Company
 
and
 
THE BANK OF NEW YORK MELLON, ACTING THROUGH ITS LONDON BRANCH
 
as Trustee

 
FOURTH SUPPLEMENTAL INDENTURE
 
dated as of May 28, 2014
 
to the
 
SUBORDINATED DEBT SECURITIES INDENTURE
 
dated as of December 4, 2012

and the

FIRST SUPPLEMENTAL INDENTURE
 
dated as of December 4, 2012

$2,250,000,000 5.125% SUBORDINATED TIER 2 NOTES DUE 2024
 
 
 
 

This FOURTH SUPPLEMENTAL INDENTURE dated as of May 28, 2014, among THE ROYAL BANK OF SCOTLAND GROUP PLC, a corporation incorporated in Scotland with registered number SC045551, as issuer (the “ Company ”) and THE BANK OF NEW YORK MELLON, 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.
 
WITNESSETH:
 
WHEREAS, the Company and the Trustee have executed and delivered a Subordinated Debt Securities Indenture dated as of December 4, 2012, as amended and supplemented by the First Supplemental Indenture dated as of December 4, 2012 (collectively, the “ Base Indenture ”) to provide for the issuance of the Company’s Subordinated Debt Securities from time to time;
 
WHEREAS, Section 9.01(f) of the Base Indenture provides that the Company and the Trustee may enter into a supplemental indenture to establish the forms or terms of the Subordinated Debt Securities of any series without the consent of Holders as permitted under Sections 2.01 and 3.01 of the Base Indenture;
 
WHEREAS, the Company desires to issue, as a further series of Subordinated Debt Securities under the Base Indenture, $2,250,000,000 5.125% Subordinated Tier 2 Notes due 2024 (the “ Notes ”) to be issued pursuant to this Fourth Supplemental Indenture dated as of May 28, 2014 (the “ Fourth Supplemental Indenture ” and, together with the Base Indenture, the “ Indenture ”);
 
WHEREAS, this Fourth Supplemental Indenture shall amend and supplement the Base Indenture; to the extent that the terms of the Base Indenture are inconsistent with such provisions of this Fourth Supplemental Indenture, the terms of this Fourth Supplemental Indenture shall govern;
 
WHEREAS, the entry into of this Fourth Supplemental Indenture has been authorized pursuant to a Board Resolution as required by Section 9.01 of the Base Indenture;
 
WHEREAS, the Company has requested that the Trustee execute and deliver this Fourth Supplemental Indenture and whereas all actions required by it to be taken in order to make this Fourth Supplemental Indenture a valid, binding and enforceable instrument in accordance with its terms, have been taken and performed, and the execution and delivery of this Fourth Supplemental Indenture has been duly authorized in all respects; and
 
 
2
 
NOW, THEREFORE, the Company and the Trustee mutually covenant and agree as follows:
 
ARTICLE 1
DEFINITIONS
 
Section 1.01.     Definition of Terms . For all purposes of this Fourth Supplemental Indenture:
 
(a)     a term defined anywhere in this Fourth Supplemental Indenture has the same meaning throughout;
 
(b)     capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Base Indenture;
 
(c)     the singular includes the plural and vice versa;
 
(d)     headings are for convenience of reference only and do not affect interpretation; and
 
(e)     for purposes of this Fourth Supplemental Indenture and the Base Indenture, the term “series” shall mean the series of securities designated as the Notes.
 
ARTICLE 2
THE NOTES
 
Section 2.01.     Terms of the Notes . The following terms relating to the Notes are hereby established pursuant to Section 3.01 of the Base Indenture:
 
(a)     The title of the Notes shall be “5.125% Subordinated Tier 2 Notes due 2024”;
 
(b)     The aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture shall not initially exceed $2,250,000,000 (except as otherwise provided in the Indenture);
 
(c)     Principal on the Notes shall be payable on May 28, 2024;
 
(d)     The Notes shall be issued in global registered form on May 28, 2014; and shall bear interest from May 28, 2014 at an annual rate of 5.125%, payable semi-annually in arrears on May 28 and November 28 in each year commencing on November 28, 2014 (each, an “Interest Payment Date”).  Interest on the Notes will be calculated on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days
 
 
3
 
elapsed in such period.  The Regular Record Dates for the Notes will be the 14 th day of each May and November, whether or not a Business Day, immediately preceding the relevant Interest Payment Date. The Company’s obligation to pay the principal of and any interest on the Notes shall not be deferrable.
 
(e)     No premium, upon redemption or otherwise, shall be payable by the Company on the Notes;
 
(f)     Principal of and any interest on the Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom;
 
(g)     The Notes shall not be redeemable except as provided in Article 11 of the Base Indenture, as amended by Section 3.15 of this Fourth Supplemental Indenture.  In connection with any redemption of Notes pursuant to Section 11.08 of the Base Indenture, as amended by Section 3.15 of this Fourth Supplemental Indenture, the date referenced therein shall be May 21, 2014;
 
(h)     The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision;
 
(i)     The Notes shall be issued only in denominations of $100,000 and integral multiples of $1,000 in excess thereof;
 
(j)     The principal amount of, and any accrued interest on, the Notes shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Base Indenture as amended by Section 3.10 of the First Supplemental Indenture;
 
(k)     Additional Amounts shall only be payable on the Notes pursuant to Section 10.04 of the Base Indenture as amended by Section 3.30 of the First Supplemental Indenture;
 
(l)     The Notes shall not be converted into or exchanged at the option of the Company for stock or other securities of the Company;
 
(m)     The Notes shall be denominated in U.S. Dollars;
 
(n)     The payment of principal of and interest, if any, on the Notes shall be payable in U.S. Dollars;
 
(o)     The payment of principal of and interest, if any, on the Notes shall be payable only in the coin or currency in which the Notes are denominated which, pursuant to (n) above, shall be U.S. Dollars;
 
 
4
 
(p)     The Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and the initial Holder with respect to each such global security shall be Cede & Co., as nominee of The Depository Trust Company;
 
(q)     Except in limited circumstances, the Notes will not be issued in definitive form;
 
(r)     There is no Calculation Agent for the Notes;
 
(s)     The Events of Default on the Notes are as set forth in Section 5.01 of the Base Indenture and Defaults are set forth in Section 5.03 of the Base Indenture as amended by Section 3.08 of this Fourth Supplemental Indenture;
 
(t)     The subordination terms of the Notes are as set forth in Article 12 of the Base Indenture as amended by Sections 3.32 to 3.35 (inclusive) of the First Supplemental Indenture; and
 
(u)     The form of the Note shall be evidenced by one or more global notes in registered form (each, a “ Global Note ”) substantially in the form of Exhibit A to this Fourth Supplemental Indenture.
 
ARTICLE 3
SUPPLEMENTAL TERMS APPLICABLE TO THE NOTES ONLY
 
Section 3.01.     Definitions .  The following definitions shall apply to the Notes only:
 
“ Beneficial Owners ” shall mean (a) if the Notes are in global form, the beneficial owners of the Notes (and any interest therein) and (b) if the Notes are held in definitive form, the holders in whose names the Notes are registered in the Subordinated Debt Security Register and any beneficial owners holding an interest in such Notes held in definitive form.
 
“ Capital Disqualification Event ” shall be deemed to have occurred if, as a result of any amendment to, or change in, the Capital Regulations (or official interpretation thereof) which are in effect at the Issue Date, the Notes are fully excluded from Tier 2 capital (as defined in the Capital Regulations) of the Company and/or the Regulatory Group.
 
“ Capital Instruments Regulations ” means any regulatory capital rules, regulations or standards which are in the future applicable to the Company (on a solo or consolidated basis and
 
 
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including any implementation thereof or supplement thereto by the PRA from time to time) and which lay down the requirements to be fulfilled by financial instruments for inclusion in the Company’s regulatory capital (on a solo or consolidated basis) as required by (i) the CRD IV Regulation and/or (ii) the CRD IV Directive, including (for the avoidance of doubt) any regulatory technical standards issued by the European Banking Authority and adopted by the European Commission.
 
“ Capital Regulations ” means, at any time, the regulations, requirements, guidelines and policies relating to capital adequacy of the PRA or of the European Parliament or of the Council of the European Union then in effect in the United Kingdom, including, without limitation to the generality of the foregoing, any Capital Instruments Regulations.
 
“ CRD IV ” means, taken together, (i) the CRD IV Directive, (ii) the CRD IV Regulation and (iii) the Capital Regulations.
 
“ CRD IV Directive ” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, and any successor directive.
 
“ CRD IV Regulation ” means Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms amending Regulation (EU) No 648/2012, and any successor regulation.
 
“ Issue Date ” means May 28, 2014, being the date of the initial issue of the Notes.
 
“ Maturity Date ” means May 28, 2024.
 
“ PRA ” means the Prudential Regulation Authority or such other governmental authority in the United Kingdom (or, if the Company becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory authority with respect to the prudential regulation of the Company’s business.
 
 
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“ Regulatory Group ” means the Company, its subsidiary undertakings, participations, participating interests and any subsidiary undertakings, participations or participating interests held (directly or indirectly) by any of its subsidiary undertakings from time to time and any other undertakings from time to time consolidated with it for regulatory purposes, in each case in accordance with the rules and guidance of the PRA then in effect.
 
“ relevant U.K. resolution authority ” means any authority with the ability to exercise a U.K. bail-in power.
 
“ U.K. bail-in power ” means any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendments to the Banking Act 2009, as the same may be amended from time to time (whether pursuant to the U.K. Financial Services (Banking Reform) Act 2013 (the “ Banking Reform Act 2013 ”) or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person.
 
Section 3.02.     Amendment of Definition. With respect to the Notes only, the following definition shall be amended in its entirety in Section 1.01 of the Base Indenture:
 
“ 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 or the interest thereon is due and payable.
 
 
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Section 3.03.     Deletion of Definitions .  With respect to the Notes only, the following definitions shall be deleted in their entirety in Section 1.01 of the Base Indenture:
 
“ 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.
 
“ Clearstream Luxembourg ” means, Clearstream Banking, société anonyme , or its nominee or its or their successor.
 
“ 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 Subordinated Debt Securities of any series, means the date specified for the purpose pursuant to Section 3.01.
 
“ 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.
 
“ 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).
 
 
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“ 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.
 
Section 3.04.     Deletion of Deferred Payment Provisions .  With respect to the Notes only, the following Sections of the Base Indenture are amended and restated in their entirety and shall read as follows:
 
Section 3.01 Amount Unlimited, Issuable in Series.
 
…
 
(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, and, in the case of registered Subordinated Debt Securities, the Regular Record Date for the interest payable on any Interest Payment Date, and any dates required to be established pursuant to Section 7.01;
 
…
 
Section 3.07.   Payment; Interest Rights Preserved .  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
 
 
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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.
 
…
 
Section 4.01.     Satisfaction and Discharge of Subordinated Debt Securities Indenture .  This Subordinated Debt Securities Indenture shall upon Company Request (subject to Section 4.04) 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)    all Subordinated Debt Securities of such series theretofore authenticated and delivered (other than (i) Subordinated Debt Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (ii) 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
 
(b)    all such Subordinated Debt Securities not theretofore delivered to the Trustee for cancellation:
 
 
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(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,
 
and (1) 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 maturing, in the case of (A) and (B) above, as to principal and 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, to the date of such deposit (in the case of Subordinated Debt Securities which have become due and payable) or to the Redemption Date as the case may be, and (2) 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; or
 
(c)    the Company has paid or caused to be paid all other sums payable hereunder (including any accrued but unpaid interest) by the Company with respect to the Subordinated Debt Securities of such series and 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 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 shall have been deposited with
 
 
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the Trustee pursuant to clause 4.01(b) 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 and U.S. Government Obligations 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 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 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 and/or U.S. Government Obligations held by them at any time with respect to any series of Subordinated Debt Securities.
 
…
 
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 an 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
 
 
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relevant Regular 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.
 
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 3.05.     Deletion of Exchange Provisions .  With respect to the Notes only, (i) Section 1.13 of the Base Indenture is amended by deleting the reference to “Exchange Date” therein, (ii) Section 3.01(l) of the Base Indenture is amended and restated in its entirety and shall read as follows:
 
(l) [Reserved];
 
and (iii) Section 3.05 of the Base Indenture is amended by deleting the following paragraph:
 
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.
 
Section 3.06.     Correction of Minor Defects in or Amendment of Subordinated Debt Securities .  With respect to the Notes only, Article 3 of the Base Indenture is amended by adding Section 3.13, which shall read as follows:
 
Section 3. 13 .     Correction of Minor Defects in or Amendment of Subordinated Debt Securities.   If the Company or the Trustee shall become aware of any ambiguity, defect or inconsistency in any term of a Subordinated Debt Security or Global Security, as the case may be, or, with respect to any Subordinated Debt Security (including any Global Security) issued on or after the date hereof, the Company and the Trustee may amend such Subordinated Debt Security (including any Global Security) as contemplated by ‎Section 9.01(l) (subject to Section 9.07) and the parties hereto shall provide for the execution, authentication, delivery and dating of one or more replacement
 
 
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Subordinated Debt Securities or Global Securities, as the case may be, pursua nt to ‎Section 3.03 hereto , provided , however , that such amendment is not materially adverse to Holders of any Outstanding Subordinated Debt Securities.
 
Section 3.07.     PRA.   With respect to the Notes only, Article 4 of the Base Indenture is amended by adding Section 4.04, which shall read as follows:
 
Section 4.04.     PRA .  The Company may only make a Company Request as provided under Article 4 of this Subordinated Debt Securities Indenture provided that (a) such right shall only apply to the extent not prohibited by CRD IV, (b) the Company (except to the extent that the PRA no longer so requires) has notified the PRA of its intention to do so at least one month (or such other, longer or shorter period, as the PRA may then require or accept) before the Company makes such Company Request and no objection thereto has been raised by the PRA or (if required) the PRA has provided its consent thereto and (c) the Company has complied with any other requirement of the PRA applicable at the time.
 
Section 3.08.     Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee .  With respect to the Notes only, Section 5.03(a) and (b) of the Base Indenture is amended and restated in its entirety, which shall read as follows:
 
(a)    the Company fails to pay any installment of interest on any Subordinated Debt Security of such series on or before its Interest Payment Date and such failure continues for 14 days; or
 
(b)    the Company fails to pay all or any part of the principal of any Subordinated Debt Security of such series on any date on which such principal shall otherwise have become due and payable, whether upon redemption or otherwise, and such failure continues for seven days.
 
Section 3.09.     Unconditional Right of Holders to Receive Principal, Premium and Interest, if any .  With respect to the Notes only, Section 5.08 of the Base Indenture is amended and restated in its entirety, which shall read as follows:
 
Section 5.08.   Unconditional Right of Holders to Receive Principal, Premium and Interest, if any .  Subject to Article 12 in relation to subordination of Subordinated Debt Securities, and notwithstanding any other provision in this Subordinated Debt Securities Indenture, the Holder of any Subordinated Debt Security
 
 
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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, on the Redemption Date) and, subject to Section 5.07, 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 3.10.     Undertaking for Costs .  With respect to the Notes only, Section 5.14 of the Base Indenture is amended and restated in its entirety, which shall read as follows:
 
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, on or after the Redemption Date).
 
Section 3.11.     Notification of Assumption or Substitution to the PRA .  With respect to the Notes only, Article 8 of the Base Indenture is amended by adding Section 8.04, which shall read as follows:
 
Section 8.04.     Notification of Assumption or Substitution to the PRA .  No such assumption or substitution as is referred to in Sections 8.01, 8.02 and 8.03 shall be effected in relation to any series of Subordinated Debt Securities, unless (except to the extent that the PRA no longer so requires) the Company has notified the
 
 
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PRA of its intention to do so at least one month (or such other, longer or shorter period, as the PRA may then require or accept) before the date scheduled therefor and no objection thereto has been raised by the PRA or (if required) the PRA has provided its consent thereto.
 
Section 3.12.     Compensation and Reimbursement.   With respect to the Notes only, Section 6.07 of the Base Indenture is amended in part to amend and restate the last two paragraphs therein, with the following paragraphs:
 
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, however, 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.
 
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, costs 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 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. The provisions of this Section shall survive the termination of this Indenture or the earlier resignation or removal of the Trustee and any exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Notes.
 
 
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Section 3.13.     Notification of Modification or Supplemental Indenture .  With respect to the Notes only, Article 9 of the Base Indenture is amended by adding Section 9.07, which shall read as follows:
 
Section 9.07.     Notification of Modification or Supplemental Indenture .  No such modification shall be effected in relation to any series of Subordinated Debt Securities or the Fourth Supplemental Indenture pursuant to this Article or Section 3.13 herein, unless (except to the extent that the PRA no longer so requires) the Company has notified the PRA of its intention to do so at least 30 days (or such other, longer or shorter period, as the PRA may then require or accept) before the proposed modification and no objection thereto has been raised by the PRA or (if required) the PRA has provided its consent thereto.
 
Section 3.14.     Additional Amounts .  With respect to the Notes only, Section 10.04 of the Base Indenture, as amended by Section 3.30 of the First Supplemental Indenture, is amended in part to amend and restate paragraph (v) therein, with the following paragraph:
 
(v) th e withholding or deduction is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any Directive amending, supplementing or replacing such Directive, or any law implementing or complying with, or introduced in order to conform to, such Directive or Directives,
 
Section 3.15.     Redemption and Repurchases of Subordinated Debt Securities .  With respect to the Notes only, Article 11 of the Base Indenture is amended by amending and restating Sections 11.01, 11.08 and 11.09 in their entirety, and by adding Sections 11.10 and 11.11, each of which shall read as follows:
 
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.  Subordinated Debt Securities of any series may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the Capital Regulations and Section 11.11 below. The Subordinated Debt Securities of any series may not be redeemed in whole or in part at the option of the Holder thereof.
 
…
 
 
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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 and subject to the conditions set out in Section 11.11 below, the Subordinated Debt Securities of any series are redeemable, as a whole but not in part, at the option of the Company on not less than 30 calendar days nor more than 60 calendar days’ notice, at any time, 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, 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 an official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective or applicable 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 interest, if any, the Company 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 a “distribution” within the meaning of Section 1000 of the Corporation Tax Act 2010 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 the 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 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
 
 
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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.     Optional Redemption Due to a Capital Disqualification Event . Unless otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities and subject to the conditions set out in Section 11.11 below, the Subordinated Debt Securities are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 calendar days nor more than 60 calendar days’ notice, at any time, 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 if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has occurred and is continuing.
 
Section 11.10.     Repurchases .  Subject to the conditions set out in Section 11.11 below, the Company may from time to time purchase Subordinated Debt Securities in the open market or by tender or by private agreement, in any manner and at any price or at differing prices.
 
Section 11.11.     Early Redemption or Repurchases – PRA .  Subordinated Debt Securities may be redeemed or purchased by the Company prior to the Maturity Date as provided under Article 11 of this Subordinated Debt Securities Indenture, only to the extent permitted by the applicable Capital Regulations at the time and provided that:
 
(a) the Company (except to the extent that the PRA no longer so requires) has notified the PRA of its intention to do so at least one month (or such other, longer or shorter period, as the PRA may then require or accept) before the Company becomes committed to the proposed redemption or repurchase; and
 
(b) (except to the extent that the PRA no longer so requires) the PRA has authorized such redemption or repurchase upon a satisfactory finding that either, as applicable to the Subordinated Debt Securities:
 
 
(i)     on or before such redemption or repurchase of any of the Subordinated Debt Securities, the Company will have replaced such Subordinated Debt Securities with own funds instruments (each as defined by the Capital Regulations) of
 
 
 
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an equal or higher quality on terms that are sustainable for the Company’s income capacity; or
 
 
(ii)    the Company has demonstrated to the satisfaction of the PRA that its Tier 1 capital and Tier 2 capital (as defined by the Capital Regulations) would, following such redemption or repurchase, exceed the requirements laid down in Article 92(1) of the CRD IV Regulation and the combined buffer requirement as defined in point (6) of Article 128 of the CRD IV Directive by a margin that the PRA may consider necessary on the basis of Article 104(3) of the CRD IV Directive; and
 
(c) with respect to Sections 11.08 and 11.09 only, and except to the extent that the PRA no longer so requires, the Company may only redeem the Subordinated Debt Securities before five years after the date of issuance of the Subordinated Debt Securities if, in addition to the conditions set out in (a) and (b) above, the following conditions are met:
 
 
(i)     in the case of an optional redemption due to changes in tax treatment pursuant to Section 11.08, the Company demonstrates to the satisfaction of the PRA that the change in the applicable tax treatment relating to the Subordinated Debt Securities is material and was not reasonably foreseeable at the time of issuance of the Subordinated Debt Securities; or
 
 
(ii)     in the case of an optional redemption due to the occurrence of a Capital Disqualification Event pursuant to Section 11.09, (i) the PRA considers such change to be sufficiently certain and (ii) the Company demonstrates to the satisfaction of the PRA that the Capital Disqualification Event was not reasonably foreseeable at the time of the issuance of the Subordinated Debt Securities; and
 
(d) the Company has complied with any alternative or additional preconditions required by the PRA as a prerequisite to its consent to such redemptions or repurchases, at the time.
 
Section 3.16.     Exchanges Not Deemed Payment.   With respect to the Notes only, Section 12.10 of the Base Indenture is deleted in its entirety.
 
Section 3.17.     Exchange of Subordinated Debt Securities .  With respect to the Notes only, Article 13 of the Base Indenture is deleted in its entirety.
 
 
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ARTICLE 4
 
Section 4.01.     Agreement with Respect to Exercise of U.K. Bail-In Power
 
(a)     By purchasing the Notes, each Holder and Beneficial Owner of the Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Notes solely to give effect to the above.  With respect to (i) and (ii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the Maturity Date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial Owner of the Notes further acknowledges and agrees that the rights of the holders under the Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.
 
(b)     By its purchase of the Notes each Holder and Beneficial Owner of the Notes:
 
(i)     acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Notes shall not give rise to a Default or Event of Default for purposes of Section 315(b) ( Notice of Default ) and Section 315(c) ( Duties of the Trustee in Case of Default ) of the Trust Indenture Act;
 
(ii)     to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Notes; and
 
(iii)     acknowledges and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from holders of the Notes under Section 5.12 of the Base Indenture, and (b) none of the Base Indenture or this Fourth Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.  Notwithstanding the foregoing, if, following the completion of the
 
 
21
 
exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Notes following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to this Fourth Supplemental Indenture.
 
(c)     Each Holder or Beneficial Owner that acquires its Notes in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Notes that acquire the Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Notes related to the U.K. bail-in power.
 
(d)     By its purchase of the Notes, each Holder and Beneficial Owner shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Notes to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Notes as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner.
 
(e)     No repayment of the principal amount of the Notes or payment of interest on the Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. resolution authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company or other members of the Group.
 
(f)     Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Notes, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.
 
ARTICLE 5
AMENDMENTS TO THE BASE INDENTURE APPLICABLE TO SUBORDINATED DEBT SECURITIES GENERALLY AND THE NOTES
 
 
22
 
Section 5.01.     Appointment of Agent for Service. With respect to any series of Subordinated Debt Securities issued under the Base Indenture, including the Notes, Section 1.14 of the Base Indenture is amended and restated in its entirety and shall read as follows:
 
Section 1.14 . Appointment of Agent for Service. The Company has designated and appointed CT Corporation System, 111 Eight Avenue, 13 th Floor, New York, NY 10011, United States, 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 Notes or this Fourth Supplemental Indenture, but for that purpose only, and agrees that service of process upon said CT Corporation System 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 Notes 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 CT Corporation System in full force and effect so long as any of the Notes 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.
 
ARTICLE 6
MISCELLANEOUS
 
Section 6.01.     Effect of Supplemental Indenture . Article 3 of this Fourth Supplemental Indenture amends and restates certain provisions of the Base Indenture but only with respect to the Notes, and such amended and restated provisions of the Base Indenture shall not be applicable to any series of Subordinated Debt Securities issued under the Indenture, except as expressly set forth in a future supplemental indenture.  Upon the execution and delivery of this Fourth Supplemental Indenture by the Company and the Trustee, and the delivery of the documents referred to in ‎ Section 6.02 herein, the Base Indenture shall be amended and supplemented in accordance herewith, and this Fourth Supplemental Indenture shall form a part of the Base Indenture, as amended, for all purposes in
 
 
23
 
respect of the Notes.  Article 4 of this Fourth Supplemental Indenture shall apply to the Notes only and shall not be applicable to any other series of Subordinated Debt Securities issued under the Indenture, except as expressly set forth in a future supplemental indenture.
 
Section 6.02.     Other Documents to Be Given to the Trustee . As specified in Section 9.03 of the Base Indenture and subject to the provisions of Section 6.03 of the Base Indenture, the Trustee shall be entitled to receive an Officer’s Certificate and an Opinion of Counsel stating the recitals contained in Section 1.02 of the Base Indenture, and in the case of such Opinion of Counsel, that this Fourth Supplemental Indenture is permitted by the Base Indenture, conforms to the requirements of the Trust Indenture Act, and (subject to Section 1.03 of the Base Indenture) constitutes 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, as conclusive evidence that this Fourth Supplemental Indenture complies with the applicable provisions of the Base Indenture.
 
Section 6.03.     Notices to, and Consents Required from, the PRA to Be Provided to the Trustee. The Company shall provide to the Trustee all notifications provided to, and all prior consents obtained from the PRA pursuant to Sections ‎ 3.07, ‎ 3.11, ‎ 3.13 and ‎ 3.14 of this Fourth Supplemental Indenture.
 
Section 6.04.     Confirmation of Indenture . The Base Indenture, as further amended and supplemented by this Fourth Supplemental Indenture with respect to the Notes, is in all respects ratified and confirmed, and the Base Indenture, this Fourth Supplemental Indenture and all indentures supplemental thereto shall, in respect of the Notes, be read, taken and construed as one and the same instrument. This Fourth Supplemental Indenture constitutes an integral part of the Base Indenture with respect to the Notes. In the event of a conflict between the terms and conditions of the Base Indenture and the terms and conditions of this Fourth Supplemental Indenture, the terms and conditions of this Fourth Supplemental Indenture shall prevail with respect to the Notes.
 
Section 6.05.     Concerning the Trustee . The Trustee does not make any representations as to the validity or sufficiency of this Fourth Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and not the Trustee. In entering into this Fourth Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Base Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.
 
Section 6.06.     Governing Law . This Fourth Supplemental Indenture and the Notes shall be governed by and construed in accordance with the laws of the
 
 
24
 
State of New York, irrespective of conflicts of laws principles, except as stated in Section 1.12 of the Base Indenture (as amended and restated in Section 3.03 of the First Supplemental Indenture), and except that the authorization and execution by the Company of this Fourth Supplemental Indenture and the Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of the Company and the Trustee, as the case may be.
 
Section 6.07.     Reparability . In case any provision contained in this Fourth Supplemental Indenture 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 6.08.     Counterparts . This Fourth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
 
 [Signature Page Follows]
 
 
25
 
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed as of the date first written above.
 
THE ROYAL BANK OF SCOTLAND GROUP PLC, as Company
 
 
By:
/s/ John Cummins
 
Name:
John Cummins
 
Title:
RBS Treasurer



THE BANK OF NEW YORK MELLON, LONDON BRANCH, as Trustee
 
 
By:
/s/ Beth Klee
 
Name:
Beth Klee
 
Title:
Vice President



 

 

 
[Signature Page to Fourth Supplemental Indenture]
 
 
26
 
 
EXHIBIT A
 
FORM OF GLOBAL NOTE
 

THIS SUBORDINATED NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SUBORDINATED NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SUBORDINATED NOTE REGISTERED, AND NO TRANSFER OF THIS SUBORDINATED NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
 
THE RIGHTS OF THE HOLDER OF THIS SUBORDINATED NOTE ARE, TO THE EXTENT AND IN THE MANNER SET FORTH IN SECTION 12.01 OF THE INDENTURE, SUBORDINATED TO THE CLAIMS OF OTHER CREDITORS OF THE COMPANY, AND THIS SUBORDINATED NOTE IS ISSUED SUBJECT TO THE PROVISIONS OF THAT SECTION 12.01, AND THE HOLDER OF THIS SUBORDINATED NOTE, BY ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTION 12.01 OF THE INDENTURE AND THE TERMS OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF SCOTLAND.
 

 
CUSIP No. []
ISIN No. []

 
THE ROYAL BANK OF SCOTLAND GROUP plc
 
[] % SUBORDINATED TIER 2 NOTES DUE []
 
No. [] $[]
 
THE ROYAL BANK OF SCOTLAND GROUP plc (herein called the “ Company ,” which term includes any successor person under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assignees, the principal sum of $[] ([] dollars) on [] or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrears on the [] th day of each [] and [] of each year, commencing on [], up to and including [] (each,
 
 
A-1
 
an “ Interest Payment Date ”).  Interest so payable on any Interest Payment Date shall be paid to the holder in whose name this Subordinated Note is registered on the [] day of each [] and [] of each year (each a “ Regular Record Date ”), commencing on [],  If (i) the Company fails to pay any installment of interest on this Subordinated Note on or before an Interest Payment Date and such failure continues for 14 days or (ii) the Company fails to pay all or any part of the principal of this Subordinated Note on any date on which such principal shall otherwise have become due and payable, whether upon redemption or otherwise, and such failure continues for seven days (each of (i) and (ii), a “ Default ”), 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 Notes to be due and payable.
 
Interest shall accrue on this Subordinated Note from day to day from the date of issuance hereof or from the most recent Interest Payment Date at the rate of []% per annum, until the principal amount hereof is paid or made available for payment.
 
Payments of interest on this Subordinated Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such period.
 
Payment of the principal amount of, and any interest on, this Subordinated Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Such payment shall be made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder.  If the date for payment of the principal amount hereof or interest thereon is not a Business Day , then (subject as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment and without any interest or other payment in respect of such delay.

Prior to due presentment of this Subordinated Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Subordinated Note is registered as the owner of such Subordinated Note for the purpose of receiving payment of principal of and (subject to Section 3.07 of the Indenture) interest, if any, on such Subordinated Note and for all other purposes whatsoever, whether or not such Subordinated Note 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.
 
 
A-2
 
Reference is hereby made to the further provisions of this Subordinated Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
 
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Subordinated Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
 
The exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Subordinated Notes solely to give effect to the above.  With respect to (i) and (ii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the Maturity Date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial Owner of the Subordinated Notes further acknowledges and agrees that the rights of the holders under the Subordinated Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.
 
For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendment to the Banking Act 2009, as the same may be amended from time to time (whether pursuant to the U.K. Financial Services (Banking Reform) Act 2013 (the “ Banking Reform Act 2013 ”) or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).
 
 
A-3
 
 
IN WITNESS WHEREOF, the Company has caused this Subordinated Note to be duly executed.

 
Dated: []
 
 
THE ROYAL BANK OF SCOTLAND GROUP PLC
 
 
 
By:
 
   
Name:
[]
   
Title:
[]
 
 

 
 
A-4
 
CERTIFICATE OF AUTHENTICATION
 
This is one of the Subordinated Notes of the series designated herein referred to in the within-mentioned Indenture.
 
Dated: []
 
THE BANK OF NEW YORK,
 
MELLON, LONDON BRANCH
   
 
as Trustee
 
 
 
By:
 
   
Authorized Signatory

 
A-5
 

[Reverse of Note]
 
This Subordinated Note is one of a duly authorized issue of securities of the Company (herein called the “ Subordinated Notes ”) issued and to be issued in one or more series under a Subordinated Debt Securities Indenture dated as of December 4, 2012   (herein called the “ Base Indenture ”), as supplemented by the First Supplemental Indenture dated as of December 4, 2012 (the “ First Supplemental Indenture ”) and the Fourth Supplemental Indenture dated as of May 28, 2014 (the “ Fourth Supplemental Indenture ” and, together with the Base Indenture, the First Supplemental Indenture, the “ Indenture ”), in each case among the Company, as issuer, and The Bank of New York Mellon acting through its London Branch, as Trustee (herein called the “ Trustee ” which term includes any successor trustee under the Indenture).  Reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Subordinated Notes and of the terms upon which the Subordinated Notes are, and are to be, authenticated and delivered.
 
This Subordinated Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[].  The Company may, from time to time, without the consent of the Holders of the Subordinated Notes of this series, issue Additional Subordinated Notes having the same ranking and same interest rate, Maturity, redemption terms and other terms, except for the price to the public and issue date and first Interest Payment Date, as the Subordinated Notes of this series. Any such Additional Subordinated Notes, together with the Subordinated Notes of this series, may constitute a single series of Subordinated Notes under the Indenture and shall be included in the definition of “Subordinated Debt Securities” in the Indenture where the context requires; provided , however , that if the original Subordinated Notes of this series are determined by the Company to be debt for U.S. federal income tax purposes and the Additional Subordinated Notes are not fungible with the Outstanding Subordinated Notes of this series for U.S. federal income tax purposes, the Additional Subordinated Notes must have a CUSIP, ISIN and/or other identifying number different from those used for the Outstanding Subordinated Notes of this series.
 
The Subordinated Notes of this series will constitute direct unconditional, unsecured and subordinated obligations of the Company, as described herein, and will rank pari passu without any preference among themselves and rank junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness of the Company.
 
The rights of the Holders of the Subordinated Notes of this series are, to the extent and in the manner set forth in Section 12.01 of the Indenture, subordinated to the claims of all Senior Creditors of the Company, and this series
 
 
A-1
 
of Subordinated Notes is issued subject to the provisions of that Section 12.01, and the holders of this series of Subordinated Notes, by accepting the same, agree to and shall be bound by such provisions.  The provisions of Section 12.01 of the Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with, the laws of Scotland.
 
If an Event of Default with respect to the Subordinated Notes of this series shall have occurred and be 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 Notes of this series may declare the principal amount together with accrued interest, if any, and Additional Amounts (if any), of all the Subordinated Notes of this 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 amount shall become immediately due and payable.
 
If a Default with respect to the Subordinated Notes of this series shall have occurred and be 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 Notes of this series to be due and payable.
 
The Holders of Subordinated Notes 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 Notes or the Indenture (or between the obligations under or in respect of any Subordinated Notes and any liability owed by a Holder to the Company) that they (or the Trustee acting on their behalf) might otherwise have against the Company, whether before or during a winding up, administration or liquidation of the Company or otherwise.  Notwithstanding the above, if any such rights and claims of any such Holder (or the Trustee acting on behalf of such Holder) against the Company are discharged by set-off, such Holder (or the Trustee acting on behalf of such Holder) will immediately pay an amount equal to the amount of such discharge to the Company or, in the event of the winding up or administration of the Company, the liquidator or administrator (or other relevant insolvency official), as the case may be, to be held on trust for Senior Creditors, and until such time as payment is made will hold a sum equal to such amount in trust for the Senior Creditors, and accordingly such discharge shall be deemed not to have taken place.  The terms of this paragraph are governed by, and shall be construed in accordance with, the laws of Scotland.
 
Subject to the provisions of this paragraph, all amounts of principal and interest, if any, on any Subordinated, Notes of this series 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,
 
 
A-2
 
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 and interest, if any, on the Subordinated Notes of this series (“ Additional Amounts ”) as may be necessary in order that the net amounts paid to the Holders of Subordinated Notes of this series, after such deduction or withholding, shall equal the respective amounts of principal and interest, if any, which would have been payable in respect of such Subordinated Notes 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 Note 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 mere holding or ownership of a Subordinated Note, or the collection of any payment of (or in respect of) principal of, or interest, if any, on any Subordinated Note,
 
(ii)    except in the case of a winding up of the Company in the United Kingdom, the relevant Subordinated Note is presented (where presentation is required) for payment in the United Kingdom,
 
(iii)    the relevant Subordinated Note 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,
 
(iv)    the Holder or the beneficial owner of the relevant Subordinated Note or the beneficial owner of any payment of (or in respect of) principal of, or interest, if any, on such Subordinated Note 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 requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the
 
 
A-3
 
Taxing Jurisdiction as a precondition to exemption or relief from all or part of such deduction or withholding,
 
(v)    th e withholding or deduction is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any Directive amending, supplementing or replacing such Directive, or any law implementing or complying with, or introduced in order to conform to, such Directive or Directives ,
 
(vi)    the relevant Subordinated Note 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 Note 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 payment of principal of, or interest on, the Subordinated Notes to any Holder who is a fiduciary or partnership or Person 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 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 the Indenture there is mentioned, in any context, the payment of the principal or interest, if any, on, or in respect of, any Subordinated Note of this series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of the foregoing paragraph 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.
 
The Subordinated Notes of this series may not be redeemed by the Company except as provided in the Indenture.  The Subordinated Notes of this series may not be redeemed in whole or in part at the option of the Holder thereof.
 
Subject to the conditions set forth below, the Subordinated Notes of this series are redeemable, as a whole but not in part, at the option of the Company on not less than 30 calendar days nor more than 60 calendar days’ notice, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of this series of Subordinated Notes
 
 
A-4
 
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 an official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective or applicable on or after []:
 
 
(a)
in making payment under the Subordinated Notes in respect of principal or interest, if any, the Company 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 Notes would be treated as a “distribution” within the meaning of Section 1000 of the Corporation Tax Act 2010 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 the 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 application or interpretation of any laws or regulations it is entitled to redeem the Subordinated Notes of this 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 application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.
 
Subject to the conditions set forth below, the Subordinated Notes are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 calendar days nor more than 60 calendar days’ notice, at any time, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, if any, in respect of this series of Subordinated Notes to the date fixed for redemption if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has occurred and is continuing.
 
Subject to the conditions set forth below, the Company may also from time to time purchase Subordinated Notes in the open market or by tender or by private agreement, in any manner and at any price or at differing prices.
 
 
A-5
 
Subordinated Notes may be redeemed or purchased by the Company prior to the Maturity Date as provided in the foregoing paragraphs only to the extent permitted by the applicable Capital Regulations at the time and provided that:
 
 
(a)
the Company (except to the extent that the PRA no longer so requires) has notified the PRA of its intention to do so at least one month (or such other, longer or shorter period, as the PRA may then require or accept) before the Company becomes committed to the proposed redemption or repurchase; and
 
 
(b)
(except to the extent the PRA no longer so requires) the PRA has authorized such redemption or repurchase upon a satisfactory finding that either, as applicable to the Subordinated Notes:
 
 
(i)
on or before such redemption or repurchase of any of the Subordinated Notes, the Company will have replaced such Subordinated Notes with own funds instruments (each as defined by the Capital Regulations) of an equal or higher quality on terms that are sustainable for the Company’s income capacity; or
 
 
(ii)
the Company has demonstrated to the satisfaction of the PRA that its Tier 1 capital and Tier 2 capital (as defined by the Capital Regulations) would, following such redemption or repurchase, exceed the requirements laid down in Article 92(1) of the CRD IV Regulation and the combined buffer requirements as defined in point (6) of Article 128 of the CRD IV Directive by a margin that the PRA may consider necessary on the basis of Article 104(3) of the CRD IV Directive; and
 
 
(c)
with respect to redemption of the Subordinated Notes only, and except to the extent the PRA no longer so requires, the Company may only redeem the Subordinated Notes before five years after the date of issuance of the Subordinated Notes if, in addition to the conditions set out in (a) and (b) above, the following conditions are met:
 
 
(i)
in the case of an optional redemption due to changes in tax treatment, the Company demonstrates to the satisfaction of the PRA that the change in the applicable tax treatment relating to the Subordinated Notes is material and was not reasonably foreseeable at the time of issuance of the Subordinated Notes; or
 
 
 
A-6
 
 
 
(ii)
in the case of an optional redemption due to the occurrence of a Capital Disqualification Event, (i) the PRA considers such change to be sufficiently certain and (ii) the Company demonstrates to the satisfaction of the PRA that the Capital Disqualification Event was not reasonably foreseeable at the time of the issuance of the Subordinated Notes; and
 
(d)       the Company has complied with any alternative or additional preconditions required by the PRA as a prerequisite to its consent to such redemptions or repurchases at the time.
 
If the Company elects to redeem the Subordinated Notes of this series, the Subordinated Notes will cease to accrue interest from the date of redemption, provided the redemption price has been paid in accordance with the Indenture.
 
Upon payment of (i) the amount of principal and (ii) accrued and unpaid interest, all of the Company’s obligations in respect of the payment of the principal of, and accrued and unpaid interest on, the Subordinated Notes of this series shall terminate.
 
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Subordinated Notes of each series to be affected thereby by the Company and the Trustee with the consent of the Holders of not less than 66⅔% in principal amount of the Subordinated Notes at the time outstanding of each such series provided, however, no such amendment or modification shall be effected in relation to any Subordinated Note, unless (except to the extent that the PRA no longer so requires) the Company has notified the PRA of its intention to do so at least 30 days (or such other, longer or shorter period , as the PRA may then require or accept) before the proposed modification and no objection thereto has been raised by the PRA or (if required) the PRA has provided its consent thereto.  The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the outstanding Subordinated Notes of each series, on behalf of the Holders of all Subordinated Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past Events of Default and Defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Subordinated Note shall be conclusive and binding upon such Holder and upon all future Holders of this Subordinated Note and of any Subordinated Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Subordinated Note.
 
No reference herein to the Indenture and no provision of this Subordinated Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay to the Holder of the Subordinated
 
 
A-7
 
Notes, the principal of, and interest, if any, on this Subordinated Note as and when the same shall become due and payable at the times, place and rate, and in the coin or currency, herein prescribed.
 
As set forth in, and subject to, the provisions of the Indenture, no Holder of any Subordinated Note of this series will have the right to institute any proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder fulfils the requirements of Section 5.07 of the Indenture.
 
Subject to the subordination provisions herein, no provision of this Subordinated Note or of the Indenture shall alter or impair the right of the Holder of this Subordinated Note, which is absolute and unconditional, to receive payment of the principal of, and interest on, this Subordinated Note when due and payable in accordance with the provisions of this Subordinated Note and the Indenture and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
 
By purchasing the Subordinated Notes, each Holder and Beneficial Owner of the Subordinated Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Subordinated Notes solely to give effect to the above.  With respect to (i) and (ii) above, references to principal and interest shall include payments of principal and interest that have become due and payable (including principal that has become due and payable at the Maturity Date), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial Owner of the Subordinated Notes acknowledges and agrees that the rights of the holders under the Subordinated Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.
 
For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the
 
 
A-8
 
Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendment to the Banking Act 2009, as the same may be amended from time to time (whether pursuant to the U.K. Financial Services (Banking Reform) Act 2013 (the “ Banking Reform Act 2013 ”) or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).
 

By its purchase of the Subordinated Notes, each Holder and Beneficial Owner of the Subordinated Notes: (i) acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Notes shall not give rise to a Default or Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act; (ii) to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Notes; and (iii) acknowledges and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from holders of the Subordinated Notes under Section 5.12 of the Indenture, and the Indenture shall not impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.  Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Subordinated Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Subordinated Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Subordinated Notes following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Indenture.
 
Each Holder or Beneficial Owner that acquires its Subordinated Notes in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Subordinated Notes that acquire the Subordinated Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Subordinated Notes related to the U.K. bail-in power.
 
 
A-9
 
By its purchase of the Subordinated Notes, each Holder and Beneficial Owner shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Subordinated Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Subordinated Notes to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Subordinated Notes as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner.
 
This Subordinated Note will be governed by the laws of the State of New York except that the subordination provisions and the waiver of the right to set-off by the Holders and by the Trustee acting on behalf of Holders contained herein will be governed by the laws of Scotland.
 
Unless otherwise defined herein, all terms used in this Subordinated Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
 


 

 
 
 
 
 
A-10
Exhibit 5.1
 
 
 
CMS Cameron McKenna LLP
 
Saltire Court
20 Castle Terrace
Edinburgh
EH1 2EN
 
DX ED 194 EDINBURGH
T +44 131 200 8000
F +44 131 200 8888
 
www.cms-cmck.com
 
 
 
The Royal Bank of Scotland Group plc
36 St Andrew Square
Edinburgh
EH2 2YB
 
 
 
   
28 May 2014
Your ref
   
Our ref
DOCS/EDN/RBG001.00232
 
 
 
Dear Sirs
 
We have acted as solicitors in Scotland for The Royal Bank of Scotland Group plc (the Company ) in connection with (i) the Underwriting Agreement dated as of 21 May 2014 (the Base Underwriting Agreement ) between you and certain underwriters (the Underwriters ) under which the Underwriters have severally agreed to purchase from the Company US$2 ,250 ,000,000 aggregate principal amount of the Company’s 5.125% Subordinated Tier 2 Notes due 2024 (the Notes ), and (ii) the Pricing Agreement dated as of 21 May 2014 (the Pricing Agreement and, together with the Base Underwriting Agreement, the Underwriting Agreement ).
 
The Notes are to be issued pursuant to a subordinated debt securities indenture dated as of 4 December 2012 (the Base Subordinated Indenture ), as supplemented and amended by a first supplemental subordinated debt securities indenture dated as of 4 December 2012 and a fourth supplemental subordinated debt securities indenture dated as of 28 May 2014, in each case between the Company and The Bank of New York Mellon, London Branch, as trustee.  The Base Subordinated Indenture, as so supplemented and amended, is herein referred to as the Indenture .
 
We, as your solicitors, have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary for the purposes of rendering this opinion.
 
On the basis of the foregoing, we advise you that, in our opinion, the Notes have been duly authorized in accordance with the Indenture, and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to, and paid for, by the Underwriters in accordance with the terms of the Underwriting Agreement, will constitute valid and binding obligations of the Company, enforceable
UK - 130587145.1
UK - 130587145.2
 
CMS Cameron McKenna LLP is a limited liability partnership registered in England and Wales with registration number OC310335. It is a body corporate which uses the word “partner” to refer to a member, or an employee or consultant with equivalent standing and qualifications. It is authorised and regulated by the Solicitors Regulation Authority of England and Wales with SRA number 423370. A list of members and their professional qualifications is open to inspection at the registered office, Mitre House, 160 Aldersgate Street, London EC1A 4DD. Members are either solicitors or registered foreign lawyers. VAT registration number: 974 899 925. Further information about the firm can be found at www.cms-cmck.com
CMS Cameron McKenna LLP is a member of CMS Legal Services EEIG (CMS EEIG), a European Economic Interest Grouping that coordinates an organisation of independent law firms. CMS EEIG provides no client services. Such services are solely provided by CMS EEIG’s member firms in their respective jurisdictions. CMS EEIG and each of its member firms are separate and legally distinct entities, and no such entity has any authority to bind any other. CMS EEIG and each member firm are liable only for their own acts or omissions and not those of each other. The brand name “CMS” and the term “firm” are used to refer to some or all of the member firms or their offices. Further information can be found at www.cmslegal.com
Notice: the firm does not accept service by e-mail of court proceedings, other processes or formal notices of any kind without specific prior written agreement.
 
 
 
 

 
against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally (including the Banking Act 2009 and any secondary legislation, instruments or orders made, or which may be made, under it) and equitable principles of general applicability.
 
The foregoing opinion is limited to the present laws of Scotland.  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 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 London LLP dated 28 May 2014, to be filed on Form 6-K concurrently with this opinion.  Subject to the exceptions specified in Section 1.12 of the Indenture, the laws of the State of New York are the chosen governing law of the Notes, and we have assumed that the Notes (other than the terms governed by Scots law in accordance with those exceptions) constitute valid, binding and enforceable obligations of the Company, enforceable against the Company in accordance with their terms, under such laws.
 
We hereby consent to the filing of this opinion as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof.  In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the US Securities Act of 1933, as amended.
 
Yours faithfully
 
/s/ Donald Cumming
 

Partner, for and on behalf of CMS Cameron McKenna LLP
 
 
2
Exhibit 5.2
 
 
New York
Menlo Park
Washington DC
São Paulo
London
Paris
Madrid
Tokyo
Beijing
Hong Kong
 
 
   
Davis Polk & Wardwell London LLP
99 Gresham Street
London EC2V 7NG
020 7418 1300 tel
020 7418 1400 fax
 
 
 
 
 
 
May 28, 2014
 
The Royal Bank of Scotland Group plc
RBS Gogarburn
PO Box 1000
Edinburgh EH12 1HQ
United Kingdom
 
Ladies and Gentlemen:
 
We have acted as special United States counsel for The Royal Bank of Scotland Group plc (the “ Company ”), a public limited company organized under the laws of Scotland, in connection with (i) the Underwriting Agreement dated as of May 21, 2014 (the “ Base Underwriting Agreement ”) among the Company and the several underwriters listed in Schedule 1 to the Pricing Agreement (collectively, the “ Underwriters ”) under which the Underwriters have severally agreed to purchase from the Company $2,250,000,000 aggregate principal amount of the Company’s 5.125% Subordinated Tier 2 Notes due 2024 (the “ Notes ”) and (ii) the Pricing Agreement dated as of May 21, 2014 (the “ Pricing Agreement ” and, together with the Base Underwriting Agreement, the “ Underwriting Agreement ”).  The Notes are to be issued pursuant to the provisions of the Subordinated Debt Securities Indenture dated as of December 4, 2012 (the “ Base Indenture ”) as supplemented by the First Supplemental Indenture dated as of December 4, 2012 (the “ First Supplemental Indenture ”) and the Fourth Supplemental Indenture dated as of May 28, 2014 (the “ Fourth Supplemental Indenture ”), and together with the Base Indenture and the First Supplemental Indenture, the “ Indenture ”), in each case between the Company and The Bank of New York Mellon, London Branch, as trustee (the “ Trustee ”).
 
We, as your counsel, have examined originals or copies of such documents, corporate records and certificates of public officials and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion .
 

 
Davis Polk & Wardwell London LLP is a limited liability partnership formed under the laws of the State of New York, USA, and is authorised and regulated by the Solicitors Regulation Authority with registration number 566321.
Davis Polk includes Davis Polk & Wardwell LLP and its associated entities.
 
 
 
The Royal Bank of Scotland Group plc
2
May 28, 2014
 
Based upon and subject to the foregoing, we are of the opinion that, assuming that the Notes have been duly authorized, executed and delivered by the Company insofar as Scots law is concerned, the Notes (other than the terms governed by Scots law as to which we express no opinion), when authenticated in accordance with the terms of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of the Underwriting Agreement, will be valid and binding obligations of the Company entitled to the benefits of the Indenture, enforceable against the Company in accordance with their terms.
 
Our opinion is subject to (i) 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 and (ii) possible judicial actions giving effect to governmental actions or foreign laws affecting creditors’ rights .
 
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 CMS Cameron McKenna LLP, special legal counsel in Scotland for the Company, dated as of May 28, 2014, to be filed on Form 6-K concurrently with this opinion.
 
We hereby consent to the filing of this opinion as an exhibit to a report on Form 6-K to be filed by the Company on the date hereof. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended.
 
Very truly yours,
 
 
/s/ Davis Polk & Wardwell London LLP