Exhibit
4.25

       

       

      DATED 23
November 2009

       

      THE
COMMISSIONERS OF HER MAJESTY’S TREASURY

       

      and

       

      THE ROYAL
BANK OF SCOTLAND GROUP PLC

       

      
        


         

          
            

          

        

        


      

      STATE AID
COSTS

      REIMBURSEMENT
DEED

       

      
        
          
            

          



         

        


      

      


       

      Slaughter
and May

      One
Bunhill Row

      London
EC1Y 8YY

      (TP/JGZW)

       

      


       

      CA093240071

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      CONTENTS

       

       

      
        
          	
                  1.

                	
                  DEFINITIONS
      AND INTERPRETATION

                	
                  4

                
	 	 	 
	
                  2.

                	
                  FEES,
      COSTS AND EXPENSES

                	
                  5

                
	 	 	 
	
                  3.

                	
                  WARRANTIES

                	
                  6

                
	 	 	 
	
                  4.

                	
                  TAX
      MATTERS

                	
                  6

                
	 	 	 
	
                  5.

                	
                  ANNOUNCEMENTS
      AND PUBLICITY

                	
                  7

                
	 	 	 
	
                  6.

                	
                  REMEDIES

                	
                  7

                
	 	 	 
	
                  7.

                	
                  NOTICES

                	
                  7

                
	 	 	 
	
                  8.

                	
                  MISCELLANEOUS

                	
                  8

                
	 	 	 
	
                  9.

                	
                  GOVERNING
      LAW

                	
                  9

                


        

      

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

       

       

      
        THIS STATE AID COSTS REIMBURSEMENT
DEED is made on 23 November 2009

      

       

      
        BETWEEN:

      

       

      
        	
                (1)

              	
                THE COMMISSIONERS OF HER
      MAJESTY’S TREASURY of 1 Horse Guards Road, London SW1A 2HQ (the
      “Treasury”); and

              


      

       

      
        	
                (2)

              	
                THE ROYAL BANK OF SCOTLAND
      GROUP PLC, a public company incorporated in Scotland with
      registered number SC045551 and whose registered office is at 36 St Andrew
      Square, Edinburgh, Scotland EH2 2YB (“RBSG”).

              


      

       

      
        WHEREAS:

      

       

      
        	
                (A)

              	
                On
      19 January 2009, Her Majesty’s “ Government of the United Kingdom (the
      “Government”)
      announced its intention to offer the Asset Protection Scheme (the “Scheme”) to protect
      certain eligible financial institutions against exceptional future credit
      losses on certain portfolios of assets and exposures. The Scheme
      constitutes “financial assistance” for the purpose of section 257 of the
      Banking Act 2009.

              


      

       

      
        	
                (B)

              	
                On
      26 February 2009, RBSG announced its intention to participate in the
      Scheme and entered into discussions with the Treasury regarding the terms
      of the Scheme and the accession of The Royal Bank of Scotland plc (the
      “Participant”) to
      it.

              


      

       

      
        	
                (C)

              	
                On
      3 November 2009, RBSG announced the proposed terms attaching to the
      intended participation of the Participant in the Scheme and, on or about
      the date of this Deed, RBSG and the Participant are expected to enter into
      an accession agreement with the Treasury pursuant to which the Participant
      will participate in the Scheme on and subject to (i) the terms and
      conditions set out therein (the “Accession Agreement”)
      and (ii) the terms and conditions of the Scheme (as amended, modified,
      supplemented or replaced from time to time, the “Conditions”).

              


      

       

      
        	
                (D)

              	
                In
      addition to the Participant’s intended participation in the Scheme, it is
      intended that the Treasury will subscribe for £25.5 billion of ‘B’ shares
      in RBSG (the “Subscription”) and
      commit to subscribe in certain circumstances for an additional £8 billion
      of ‘B’ shares (the “Contingent
      Capital”).

              


      

       

      
        	
                (E)

              	
                RBSG
      is a participant in: (i) the recapitalisation scheme (the “Recapitalisation
      Scheme”); and (ii) the credit guarantee scheme, the terms of which
      were announced by the Government on 8 October
  2008.

              


      

       

      
        	
                (F)

              	
                The
      participation of the Participant in the Scheme, and RBSG’s participation
      in the Scheme, the Recapitalisation Scheme, and the Subscription and the
      Contingent Capital, are each subject to approval from the European
      Commission (either on a temporary or final basis) as aid compatible with
      article 87 of the EC Treaty.

              


      

       

      
        	
                (G)

              	
                It
      is proposed that RBSG will enter into certain commitments and undertakings
      as set out in a deed (the “State Aid Commitment
      Deed”) designed to ensure that the Treasury is able to comply with
      the commitments or conditions subject to which the European Commission has
      granted (or it is anticipated will grant) the State
  Aid

              


      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

       

      
        	
                 
      

              	
                Approvals
      in respect of the aid provided by the Treasury referred to in Recital (F)
      (the “State
      Aid”).

              


      

       

      
        	
                (H)

              	
                In
      connection with its accession to the Scheme and its obligations under the
      State Aid Commitment Deed, RBSG undertakes on the terms set out below to
      reimburse the Treasury for certain fees, costs and expenses associated
      with the State Aid and the State Aid
Approvals.

              


      

       

      
        	
                 
      

              	
                NOW
      THIS DEED WITNESSES AS FOLLOWS:

              


      

       

      
        	
                1.

              	
                DEFINITIONS
      AND INTERPRETATION

              


      

       

      
        	
                1.1

              	
                In
      this Deed (including the Recitals):

              


      

       

      
        	
                 
      

              	
                “Accession Agreement” has
      the meaning given in Recital (C);

              


      

       

      
        	
                 
      

              	
                “Conditions” has the
      meaning given in Recital (C) and “Condition” shall be
      construed accordingly;

              


      

       

      
        	
                 
      

              	
                “State Aid” has the
      meaning given in Recital (G);

              


      

       

      
        	
                 
      

              	
                “State Aid Approvals”
      means any state aid approval for the State Aid in their original terms, as
      supplemented, modified or replaced subject to and in accordance with the
      State Aid Commitment Deed; and

              


      

       

      
        	
                 
      

              	
                “State Aid Commitment
      Deed” has the meaning given in Recital
  (G).

              


      

       

      
        	
                1.2

              	
                Capitalised
      terms used but not defined in this Deed shall have the respective meanings
      given to them in Condition 56.

              


      

       

      
        	
                1.3

              	
                In
      this Deed, unless otherwise
specified:

              


      

       

      
        	
                 
      

              	
                (A)

              	
                references
      to clauses and sub-clauses are to clauses and sub-clauses of this
      Deed;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                the
      words “include”
      and “including”
      shall be deemed to be followed by the phrase “without
      limitation”;

              


      

       

      
        	
                 
      

              	
                (C)

              	
                headings
      and sub-headings in this Deed are included for ease of reference only and
      shall not affect the interpretation of this
  Deed;

              


      

       

      
        	
                 
      

              	
                (D)

              	
                any
      reference to a “person” shall be
      construed so as to include any individual, firm, company, corporation,
      body corporate, government, state or agency of a state, local or municipal
      authority or governmental body or any joint venture, association or
      partnership (whether or not having separate legal
      personality);

              


      

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

       

      
        	
                 
      

              	
                (E)

              	
                any
      reference to any statute, statutory provision or rules or regulations made
      thereunder shall be construed as a reference to the same as it may have
      been, or may from time to time be, amended, modified, re-enacted or
      replaced; and

              


      

       

      
        	
                 
      

              	
                (F)

              	
                a
      reference to any other document is a reference to that other document as
      amended, varied or supplemented at any
time.

              


      

       

      
        	
                1.4

              	
                This
      Deed is a “Scheme
      Document” for the purposes of the
  Conditions.

              


      

       

      
        	
                2.

              	
                FEES,
      COSTS AND EXPENSES

              


      

       

      
        	
                2.1

              	
                RBSG
      shall bear all costs and expenses incurred by it and the other members of
      its Group arising out of or in connection with the performance of its
      duties and obligations under this Deed and the State Aid Commitment
      Deed.

              


      

       

      
        	
                2.2

              	
                RBSG
      shall pay to the Treasury the costs and expenses calculated by the
      Treasury as being incurred by the Treasury and the Treasury Solicitor in
      connection with:

              


      

       

      
        	
                 
      

              	
                (A)

              	
                discussions
      or negotiations with the European Commission in relation to the State Aid
      Approvals; and

              


      

       

      
        	
                 
      

              	
                (B)

              	
                the
      exercise of the Treasury’s rights and powers under, and the performance of
      its duties and obligations in connection with the matters contemplated by,
      this Deed and the State Aid Commitment Deed (including with respect to:
      (i) the preparation, negotiation, execution and carrying into effect of
      this Deed and the State Aid Commitment Deed; (ii) the Treasury’s
      compliance with the State Aid Approvals; and (iii) monitoring and ensuring
      RBSG’s compliance with its obligations under, or contemplated by, this
      Deed and the State Aid Commitment
Deed),

              


      

       

      regardless
of whether or not such costs and expenses are incurred before or after the date
of this Deed (“State Aid
Costs”).

       

      
        	
                2.3

              	
                The
      Treasury may deliver an invoice to RBSG in respect of State Aid Costs at
      any time following the date of this Deed, but shall not deliver more than
      one invoice for State Aid Costs to RBSG in anyone calendar
      month.

              


      

       

      
        	
                2.4

              	
                RBSG
      shall pay all invoices delivered to it in respect of State Aid Costs
      pursuant to clause 2.3 within 30 days of the date on which such invoice is
      delivered.

              


      

       

      
        	
                2.5

              	
                The
      Treasury shall provide with any invoice delivered pursuant to clause 2.3 a
      breakdown of the costs and expenses covered by such invoice, provided that
      such breakdown need not contain any more information than the Treasury
      intends at that time to disclose to the public in respect of such costs
      and expenses.

              


      

       

      
        	
                2.6

              	
                Any
      payment of State Aid Costs shall be made in pounds sterling to such
      account as may be notified to RBSG in writing by the Treasury from time to
      time; all such payments

              


      

       

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

       

      shall be
made in full, free and clear of any right of set-off and from any restriction,
condition or deduction because of any counterclaim.

       

      
        	
                2.7

              	
                For
      the purposes of this clause 2, “costs and expenses” has the meaning given
      to that expression in Condition
9.2.

              


      

       

      
        	
                2.8

              	
                RBSG’s
      obligations to reimburse costs and expenses pursuant to clauses 2.2 to 2.6
      (inclusive) shall be limited to such amount as is equal to *** of the
      aggregate value of all of the ordinary shares (excluding treasury shares)
      of RBSG as at market close on the date of this
  Deed.

              


      

       

      
        	
                2.9

              	
                The
      Treasury shall not be entitled to recover costs or expenses under this
      clause 2 if and to the extent that it has already recovered such costs or
      expenses under the Conditions or any other Scheme
  Document.

              


      

       

      
        	
                3.

              	
                WARRANTIES

              


      

       

      RBSG
represents and warrants to the Treasury on the date of this Deed
that:

       

      
        	
                 
      

              	
                (A)

              	
                it
      is duly organised and validly existing  under the laws of its
      jurisdiction of organisation;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                it
      has the corporate power and the authority to execute and deliver this Deed
      and to perform its obligations under this Deed, and no additional act or
      proceeding, corporate or otherwise, on its part is necessary to authorise
      the execution and delivery of this Deed or the performance of any of its
      obligations under this Deed;

              


      

       

      
        	
                 
      

              	
                (C)

              	
                subject
      to any principles of law affecting the rights of creditors generally and
      the provisions of section 117 of the Stamp Act 1891, the obligations
      expressed to be assumed by LBG under this Deed are legal, valid, binding
      and enforceable obligations;

              


      

       

      
        	
                 
      

              	
                (D)

              	
                it
      has duly executed and delivered this Deed;
and

              


      

       

      
        	
                 
      

              	
                (E)

              	
                the
      only applicable “percentage ratio” (as that term is used in Chapters 10
      and 11 of the listing rules made by the Financial Services Authority
      pursuant to Part VI of the Financial Services and Markets Act 2000 (the
      “Listing Rules”))
      which is relevant to the matters contained in this Deed, is the
      “consideration test” (as that term is used in Chapters 10 and 11 of the
      Listing Rules).

              


      

       

      
        	
                4.

              	
                TAX
      MATTERS

              


      

       

      Without
prejudice to the application of Conditions 38.1 to 38.6 (inclusive) and
Condition 41.6 regardless of this clause 4, those Conditions shall also apply in
relation to this Deed, with any necessary modifications, as they would apply if
any reference therein to the “Participant” were instead a reference to
RBSG.

       

      
        

      

      
        	
                ***

              	
                Indicates omission
      of material, which has been separately filed, pursuant to a request
      for confidential
treatment.

              


      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

       

      
        	
                5.

              	
                ANNOUNCEMENTS
      AND PUBLICITY

              


      

       

      Any
announcement or public statement proposed to be made, published, issued or
released by RBSG or any member of its Group (or any of their respective
Representatives) in relation to, or which refers to: (i) this Deed; (ii) the
State Aid Commitment Deed (or any ancillary matter); (iii) the Treasury in
connection with this Deed; or (iv) the State Aid Approvals or the State Aid,
each constitutes a “Scheme
Statement” for the purposes of the Conditions and will therefore be
subject to the restrictions imposed by the Conditions on such announcements and
public statements.

       

      
        	
                6.

              	
                REMEDIES

              


      

       

      
        	
                6.1

              	
                No
      delay or omission by the Treasury or RBSG (as the case may be) in
      exercising any right, power or remedy provided by law or under or pursuant
      to the Deed shall: (i) affect that right, power or remedy; or (ii) operate
      as a waiver of it.

              


      

       

      
        	
                6.2

              	
                The
      single or partial exercise by the Treasury of any right, power or remedy
      provided by law or under or pursuant to this Deed shall not, unless
      otherwise expressly stated, preclude any other or further exercise of it
      or the exercise of any other right, power or
  remedy.

              


      

       

      
        	
                6.3

              	
                Any
      right of the Treasury is cumulative and not exclusive of any other right
      (whether provided by law or
otherwise).

              


      

       

      
        	
                6.4

              	
                RBSG
      acknowledges and agrees that damages may not be an adequate remedy for any
      breach of any of this Deed, and further acknowledges and agrees that,
      without prejudice to any other rights or remedies which the Treasury may
      have, whether pursuant to a provision of this Deed or otherwise equitable
      relief (including specific performance and injunction) for any such breach
      (or potential breach) will normally be appropriate. RBSG agrees not to
      raise any objection to any application by the Treasury for any such
      remedies.

              


      

       

      
        	
                7.

              	
                NOTICES

              


      

       

      
        	
                7.1

              	
                Except
      as otherwise provided in this Deed, a notice under this Deed shall only be
      effective if it is in writing. Facsimile transmissions are permitted but
      email is not.

              


      

       

      
        	
                7.2

              	
                Notices
      under this Deed shall be sent to a party to this Deed at its address or
      number and for the attention of the individual set out
    below:

              


      

       

      
        	
                Party and title
      of

                individual

              	
                Address

              	
                Facsimile
      no.

              
	 	 	 
	
                RBSG

              	
                Gogarburn,
      Edinburgh,

                EH12
      1HQ

              	
                0131
      626 3081

              
	 	 	 
	 
    	
                Attention:
      Group General Counsel

              	 
    


      

      


       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

       

       

       

      
        	 
    	
                and
      Group Secretary

              	 
    
	 	 	 
	
                Treasury

              	
                1
      Horse Guards Road

                London
      SW1A 2HQ

              	
                020
      7270 4844

              
	 	 	 
	 
    	
                Attention:
      Team Leader, Financial Stability

              	 
    


      

       

      provided
that a party may change its notice details on giving notice to the other party
of the change in accordance with this clause 7. That notice shall only be
effective on the day falling five clear Business Days after the notification has
been received or such later date as may be specified in the notice.

       

      
        	
                7.3

              	
                Any
      notice given under this Deed shall, in the absence of earlier receipt, be
      deemed to have been duly given as
follows:

              


      

       

      
        	
                 
      

              	
                (A)

              	
                if
      delivered personally, on delivery;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                if
      sent by first class post, two clear Business Days after the date of
      posting; and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                if
      sent by facsimile, when despatched.

              


      

       

      
        	
                7.4

              	
                Any
      notice given under this Deed outside Working Hours in the place to which
      it is addressed shall be deemed not to have been given until the start of
      the next period of Working Hours in such
place.

              


      

       

      
        	
                7.5

              	
                The
      provisions of this clause 7 shall not apply in relation to the service of
      Service Documents.

              


      

       

      
        	
                8.

              	
                MISCELLANEOUS

              


      

       

      
        	
                8.1

              	
                RBSG
      shall at its own cost, and so far as it is able to do so in accordance
      with Applicable Law, from time to time on request, do or procure the doing
      of all acts and/or execute or procure the execution of all documents in a
      form satisfactory to the Treasury which the Treasury may (acting
      reasonably) consider necessary for giving full effect to this Deed and
      securing to the Treasury the full benefit of the rights, powers and
      remedies conferred upon the Treasury under or pursuant to this
      Deed.

              


      

       

      
        	
                8.2

              	
                If
      any provision of this Deed shall be held to be illegal, invalid or
      unenforceable, in whole or in part, under any enactment or rule of law,
      such provision or part shall to that extent be deemed not to form part of
      this Deed but the legality, validity and enforceability of the remainder
      of this Deed shall not be affected.

              


      

       

      
        	
                8.3

              	
                The
      parties to this Deed do not intend that any term of this Deed should be
      enforceable, by virtue of the Contracts (Rights of Third Parties) Act
      1999, by any person who is not a party to this
  Deed.

              


      

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

       

       

      
        	
                8.4

              	
                This
      Deed may be executed in any number of counterparts, and by the parties on
      separate counterparts, but shall not be effective until each party has
      executed at least one counterpart. Each counterpart shall constitute an
      original of this Deed, but all the counterparts together shall constitute
      one and the same instrument.

              


      

       

      
        	
                8.5

              	
                Any
      term of this Deed may be amended, and the observance of any term of this
      Deed may be waived (either generally or in a particular instance and
      either retroactively or prospectively), only with the written consent of
      the Treasury.

              


      

       

      
        	
                9.

              	
                GOVERNING
      LAW

              


      

       

      Any
matter, claim or dispute arising out of or in connection with this Deed, whether
such matter, claim or dispute is contractual or non-contractual, shall be
governed by and determined in accordance with the laws of England.

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

       

      IN
WITNESS WHEREOF this document has been executed and delivered as a deed the day
and year first before written.

      
 

      
        
          	
                  Executed
      as a deed by two of

                	
                  )

                	 
      	 
      
	
                  THE
      COMMISSIONERS OF HER

                	
                  )

                	 
      	 
      
	
                  MAJESTY’S
      TREASURY

                	
                  )

                	
                  By:

                	
                  .................................................

                
	 
      	
                  )

                	 
      	 
      
	 
      	
                  )

                	 
      	 
      
	 
      	
                  )

                	 
      	 
      
	 
      	
                  )

                	
                  By:

                	
                  .................................................

                


        

         

         

         

         

        
          	
                  Executed
      as a deed by

                	
                  )

                	 
      	 
      
	
                  THE
      ROYAL BANK OF SCOTLAND

                	
                  )

                	 
      	 
      
	
                  GROUP
      PLC

                	
                  )

                	
                  By:

                	
                  ..................................................

                
	
                  acting
      by a director and its secretary/two

                	
                  )

                	 
      	 
      
	
                  directors:

                	
                  )

                	 
      	
                  Director

                
	 
      	
                  )

                	 
      	 
      
	 
      	
                  )

                	 
      	 
      
	 
      	
                  )

                	
                  By:

                	
                  ..................................................

                
	 
      	
                  )

                	 
      	 
      
	 
      	
                  )

                	 
      	
                  Director/Secretary