Exhibit
4.19

     

    
       

      


       

      Dated                      November
2009

       

      


       

      


       

      


       

      


       

      THE
ROYAL BANK OF SCOTLAND GROUP PLC

       

      and

       

      THE
COMMISSIONERS OF HER MAJESTY’S TREASURY

       

      


       

      


       

      


       

      
        	 	
                 

                 ACQUISITION AND
      CONTINGENT CAPITAL AGREEMENT

                 

              	 


      

       

       

       

      


       

      


       

      Slaughter and
May

      One Bunhill
Row

      London EC1Y
8YY

      (NV/PIRD)

      CD092930118

       

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        Contents

         

        Page

      

       

      
        
          	
                  1.

                	
                  DEFINITIONS AND
      INTERPRETATION 

                	
                  1

                
	 	 	 
	
                  2.

                	
                  ACQUISITION
      CONDITIONS

                	
                  24

                
	 	 	 
	
                  3.

                	
                  ACQUISITION

                	
                  27

                
	 	 	 
	
                  4.

                	
                  USE
      OF ACQUISITION AMOUNT

                	
                  29

                
	 	 	 
	
                  5.

                	
                  CONTINGENT
      CAPITAL

                	
                  29

                
	 	 	 
	
                  6.

                	
                  ANNUAL
      PREMIUM

                	
                  35

                
	 	 	 
	
                  7.

                	
                  COSTS,
      EXPENSES AND TAX

                	
                  43

                
	 	 	 
	
                  8.

                	
                  GENERAL
      UNDERTAKINGS

                	
                  48

                
	 	 	 
	
                  9.

                	
                  REPRESENTATIONS
      AND WARRANTIES

                	
                  63

                
	 	 	 
	
                  10.

                	
                  INDEMNITY

                	
                  65

                
	 	 	 
	
                  11.

                	
                  CONTRIBUTION

                	
                  68

                
	 	 	 
	
                  12.

                	
                  TERMINATION

                	
                  69

                
	 	 	 
	
                  13.

                	
                  EXCLUSIONS
      OF LIABILITY

                	
                  70

                
	 	 	 
	
                  14.

                	
                  MISCELLANEOUS

                	
                  70

                
	 	 	 
	
                  15.

                	
                  GOVERNING
      LAW AND SUBMISSION TO JURISDICTION

                	
                  74

                


        

      

    

     

    
      SCHEDULES

       

      
        	SCHEDULE
      1 	
                CERTIFICATES
      TO BE DELIVERED

              	
                
                  76

                

              
	 	 	 
	SCHEDULE
      2 	
                DOCUMENTS
      TO BE DELIVERED

              	
                79

              
	 	 	 
	SCHEDULE
      3 	
                WARRANTIES
      IN RELATION TO THE ACQUISITION

              	
                81

              
	 	 	 
	SCHEDULE
      4 	
                CONTINGENT
      CAPITAL WARRANTIES

              	
                93

              
	 	 	 
	SCHEDULE
      5 	
                PRO
      FORMA NOVATION AGREEMENT

              	
                104

              
	 	 	 
	SCHEDULE
      6 	
                B
      SHARE TERMS

              	
                109

              
	 	 	 
	SCHEDULE
      7 	
                DIVIDEND
      ACCESS SHARE TERMS

              	
                144

              
	 	 	 


      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      
        	SCHEDULE
      8 	
                TERMINATION
      EVENT

              	
                160

              
	 	 	 
	SCHEDULE
      9 	
                FORM
      OF PAYMENT PROPOSAL NOTICE

              	
                161

              
	 	 	 
	SCHEDULE
      10 	
                NON-VOTING
      DEFERRED SHARE TERMS

              	
                163

              


      

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

    

     

    
      THIS AGREEMENT is
dated                November
2009 between:

       

      
        	
                (1)

              	
                THE ROYAL BANK OF SCOTLAND
      GROUP PLC, a company incorporated in Scotland with registered
      number 45551 and whose registered office is at 36 St Andrew Square,
      Edinburgh EH2 2YB (the “Company”);
      and

              


      

       

      
        	
                (2)

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

              


      

       

      
        	
                 
      

              	
                WHEREAS:

              


      

       

      
        	
                (A)

              	
                HM Treasury
      has agreed to acquire, and the Company has agreed to allot and issue to HM
      Treasury, the Acquisition Shares (as defined in this Agreement) on the
      terms and subject to the conditions set out in this
    Agreement.

              


      

       

      
        
          	
                  (B)

                	
                  HM Treasury
      has agreed to subscribe for, and the Company has agreed to allot and issue
      to HM Treasury, the Contingent Capital Shares (as defined in this
      Agreement) on the terms and subject to the conditions set out in this
      Agreement.

                


        

      

       

      NOW THEREFORE IT IS AGREED as
follows:

       

      
        
          	
                  1.

                	
                  DEFINITIONS
      AND INTERPRETATION

                


        

      

       

      
        
          	
                  1.1

                	
                  Definitions

                


        

      

       

      In
this Agreement (including the Recitals):

       

      
        	 	
                “ABN
      AMRO”

              	
                means ABN
      AMRO Holding N.V.;

              
	 	 	 
	 	
                “ABN
      AMRO Accounts”

              	
                means the
      audited consolidated accounts of ABN AMRO and its subsidiary undertakings
      for the three financial years ended 31 December the last of which occurs
      immediately preceding the date of this Agreement (including, without
      limitation, the related directors’ and auditors’ reports, the consolidated
      income statement, the consolidated balance sheet, the consolidated
      cashflow statement, the consolidated statement of changes in equity and
      all related notes);

              
	 	 	 
	 	
                “ABN
      AMRO Group”

              	
                means ABN
      AMRO Holding N.V. (which will be renamed RBS Holdings N.V. on or around
      separation, being the transfer of the Dutch State acquired businesses in
      the ABN AMRO Group out of the ABN AMRO Group) and its direct and indirect
      subsidiaries and subsidiary undertakings;

              
	 	 	 
	 	
                “ABN
      Securities”

              	
                means:

                 

                (i)  
      the 50,000,000 5.9 per cent. non-cumulative 

              
	 	 	 


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	 	 	
                guaranteed trust preferred
      securities issued by ABN AMRO Capital Funding Trust V;

                 

                (ii)  
      the 8,000,000 6.25 per cent. non-cumulative guaranteed trust preferred
      securities issued by ABN AMRO Capital Funding Trust VI; and

                 

                (iii) 
      the 66,000,000 6.08 per cent. non-cumulative guaranteed trust preferred
      securities issued by ABN AMRO Capital Funding Trust VII, 

                 

                and any other
      security issued by any subsidiary of RFS Holdings BV to the extent any
      deferral of any dividend or other distribution, interest or coupon payment
      or payment of a similar nature (whether in cash or otherwise) would
      prevent the payment of any dividend or other distribution, interest or
      coupon payment or payment of a similar nature (whether in cash or
      otherwise) to the extent required (in the reasonable opinion of the
      Company) to achieve segregation, separation (being the transfer of the
      Dutch State acquired businesses in the ABN AMRO Group out of the ABN AMRO
      Group) and the capital restructuring of RFS Holdings
BV;

              
	 	 	 
	 	
                “Accession
      Agreement”

              	
                means the
      accession agreement between HM Treasury and RBS in respect of RBS’s
      participation in HM Treasury’s Asset Protection Scheme, dated on or about
      the date of this Agreement;

              
	 	 	 
	 	
                “Accession
      Date”

              	
                has the
      meaning given in the Accession Agreement;

              
	 	 	 
	 	
                “Accession
      Documents”

              	
                means the
      Accession Agreement and the Tax Assets Agreement;

              
	 	 	 
	 	
                “Accounts”

              	
                means the
      audited consolidated accounts of the Group for each of the three financial
      years ended 31 December the last of which occurs immediately preceding the
      date of this Agreement (in the case of the Acquisition) or the relevant
      Contingent Capital Warranty Date (in the case of any Contingent Capital
      Subscription) (including, without limitation, the related directors’ and
      auditors’ reports, the consolidated income statement, the consolidated
      balance sheet, the consolidated cashflow statement, the consolidated
      statement of recognised income and expense and


              


      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	 	 	all related
      notes);
	 	 	 
	 	
                “Accounts
      Date”

              	
                means (in the
      case of the Acquisition) 31 December 2008 and (in the case of any
      Contingent Capital Subscription) the last date prior to the relevant
      Contingent Capital Warranty Date in respect of which audited accounts for
      the Group were published;

              
	 	 	 
	 	
                “Accounting
      Period”

              	
                has the
      meaning given in the Tax Assets Agreement;

              
	 	 	 
	 	 	 
	 	
                “Acquisition”

              	
                means the
      acquisition by HM Treasury of the Acquisition Shares on the terms and
      subject to the conditions of this Agreement;

              
	 	 	 
	 	
                “Acquisition
      Announcement”

              	
                has the
      meaning given in clause 8.2(B)(i);

              
	 	 	 
	 	
                “Acquisition
      B Shares”

              	
                means
      51,000,000,000 B Shares;

              
	 	 	 
	 	
                “Acquisition
      Date”

              	
                means the
      date on which the Acquisition occurs, being the fifth Business Day
      following the Condition Precedent Date or such other date as HM Treasury
      and the Company may agree;

              
	 	 	 
	 	
                “Acquisition
      Price”

              	
                means the sum
      of £25,500,000,000.50;

              
	 	 	 
	 	
                “Acquisition
      Shares”

              	
                means the
      Acquisition B Shares and the Dividend Access Share;

              
	 	 	 
	 	 	 
	 	
                “Acquisition
      Warranty Date”

              	
                means the
      Condition Precedent Date and the Acquisition Date;

              
	 	 	 
	 	
                “Adjusted
      First Payment Date”

              	
                means 31
      March 2010 (or, if such date is not a Business Day, the next preceding
      Business Day);

              
	 	 	 
	 	
                “Adverse
      Interest”

              	
                means any
      option, lien, mortgage, charge, equity, trust, any other right or interest
      of any third party and any other encumbrance of any
  kind;

              
	 	 	 
	 	
                “Affiliate”

              	
                has the
      meaning given in the APS Conditions;

              
	 	 	 
	 	
                “Agreed
      B Shares Amount”

              	
                has the
      meaning given in clause 6.2 or 6.3 (as the case may
be);

              
	 	 	 
	 	
                “Agreed
      Tax Assets Amount”

              	
                has the
      meaning given in clause 6.2 or 6.3 (as the case may
  be);

              


      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Alternative
      Coupon Satisfaction Mechanism”

              	
                means a
      mechanism in the terms of issue of any security issued by a Group Company
      pursuant to  which the Group Company is obliged to issue
      ordinary shares, preference shares or an instrument that is treated as
      forming part of the relevant Group Company’s innovative tier 1 capital (as
      interpreted in accordance with GENPRU) if the Group Company does not pay a
      coupon on such security in cash;

              
	 	 	 
	 	
                “Annual
      Premium”

              	
                has the
      meaning given in clause 6.1(A);

              
	 	 	 
	 	
                “Applicable
      Law”

              	
                has the
      meaning given in the APS Conditions;

              
	 	 	 
	 	
                “Appropriate
      Person”

              	
                means the
      Auditors or such other firm of accountants of international standing with
      experience of the calculation of regulatory capital ratios under the FSA
      Rules as may be appointed by the Company with the consent of HM Treasury
      (such consent not to be unreasonably withheld or
  delayed);

              
	 	 	 
	 	
                “APS”

              	
                means the UK
      Government’s asset protection scheme on the terms and conditions set out
      in the APS Conditions;

              
	 	 	 
	 	
                “APS
      Conditions”

              	
                has the
      meaning given to the term “Conditions” in the Accession
      Agreement;

              
	 	 	 
	 	
                “Articles”

              	
                means the
      articles of association of the Company;

              
	 	 	 
	 	
                “Auditors”

              	
                means
      Deloitte LLP;

              
	 	 	 
	 	
                “Authority”

              	
                has the
      meaning given in the APS Conditions;

              
	 	 	 
	 	
                “BIPRU”

              	
                means the
      Prudential Sourcebook for Banks, Building Societies and Investment Firms,
      forming part of the FSA Rules;

              
	 	 	 
	 	
                “Board”

              	
                means the
      Board of Directors of the Company or a duly authorised committee
      thereof;

              
	 	 	 
	 	 	 
	 	
                “Bonus
      Issue”

              	
                has the
      meaning given in the Dividend Access Share Terms;

              
	 	 	 
	 	
                “B
      Share Terms”

              	
                means the
      terms of the B Shares set out in Schedule
6;

              


      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “B
      Shares”

              	
                means the
      Series 1 Class B Shares of 1 penny each in the capital of the
      Company;

              
	 	 	 
	 	
                “B
      Shares Determination Date”

              	
                means:

                 

                (i)   
      in relation to the First Payment Date, the First B Shares Determination
      Date; and

                 

                (ii)   in
      relation to any other Payment Date, the 14 December which immediately
      precedes such Payment Date (or, if such date is not a Business Day, the
      immediately preceding Business Day);

              
	 	 	 
	 	
                “B
      Shares Shortfall Amount”

              	
                has the
      meaning given in clause 6.2 or 6.3 (as the case may
be);

              
	 	 	 
	 	
                “Business
      Day”

              	
                means any day
      (other than a Saturday or Sunday) on which clearing banks are open for a
      full range of banking transactions in London;

              
	 	 	 
	 	
                “CA
      1985”

              	
                means the
      Companies Act 1985;

              
	 	 	 
	 	
                “CA
      2006”

              	
                means the
      Companies Act 2006;

              
	 	 	 
	 	
                “Capital
      Resources Requirement”

              	
                has the
      meaning given in the FSA Rules;

              
	 	 	 
	 	
                “CashboxCo”

              	
                means Aonach
      Mor Limited, a company incorporated in England with registered number
      7079298 and having its registered office at 1 Princes Street, London EC2R
      8BP;

              
	 	 	 
	 	
                “Cashbox
      Documents”

              	
                mean the
      Subscription and Transfer Agreement and the Cashbox Option
      Agreement;

              
	 	 	 
	 	
                “Cashbox
      Option Agreement”

              	
                means the
      option agreement, in a form acceptable to HM Treasury, acting reasonably,
      to be entered into between CashboxCo, HM Treasury and the Company
      providing a put option in relation to the CashboxCo Ordinary Shares
      granted by the Company in favour of HM Treasury and a call option in
      relation to the CashboxCo Ordinary Shares granted by HM Treasury in favour
      of the Company;

              
	 	 	 
	 	
                “CashboxCo
      Ordinary Shares”

              	
                means the
      ordinary shares in the capital of CashboxCo to be issued to HM Treasury in
      terms of the Cashbox Option
Agreement;

              


      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “CashboxCo
      Preference Shares”

              	 	
                means the
      redeemable preference shares in the capital of CashboxCo to be issued to
      HM Treasury in terms of the Subscription and Transfer
      Agreement;

              
	 	 	 	 
	 	
                “Circular”

              	 	
                means the
      circular, in a form acceptable to HM Treasury, to be sent to Shareholders
      giving details of the APS, the Acquisition and the Contingent Capital
      Commitment and containing notice of the GM;

              
	 	 	 	 
	 	
                “Claims”

              	 	
                means any and
      all claims, actions, liabilities, demands, proceedings, investigations,
      judgments or awards whatsoever (and in each case whether or not
      successful, compromised or settled and whether joint or several)
      threatened, asserted, established or instituted against any Indemnified
      Person and “Claim”
      shall be construed accordingly;

              
	 	 	 	 
	 	
                “Companies
      Acts”

              	 	
                means the CA
      1985 and/or the CA 2006 as the context requires;

              
	 	 	 	 
	 	
                “Condition
      Precedent Date”

              	 	
                means the
      first date on which all of the conditions set out in clause 2.1 are
      satisfied, waived or treated as waived in accordance with clause
      2;

              
	 	 	 	 
	 	
                “Consideration
      Shares”

              	 	
                means the
      CashboxCo Ordinary Shares and the CashboxCo Preference
    Shares;

              
	 	 	 	 
	 	
                “Contingent
      Capital Amount”

              	 	
                means, in
      respect of each Contingent Capital Subscription, the Contingent Capital
      Price multiplied by the Relevant Contingent Capital
  Number;

              
	 	 	 	 
	 	
                “Contingent
      Capital Commitment”

              	 	
                has the
      meaning given in clause 5.1;

              
	 	 	 	 
	 	
                “Contingent
      Capital Completion Date”

              	 	
                has the
      meaning given in clause 5.5(B)(ii)(b);

              
	 	 	 	 
	 	
                “Contingent
      Capital Expiry Date”

              	 	
                means the
      date on which the Contingent Capital Period ends;

              
	 	 	 	 
	 	
                “Contingent
      Capital Notice”

              	 	
                has the
      meaning given in clause 5.5(A)(i);

              
	 	 	 	 
	 	
                “Contingent
      Capital Notice Date”

              	 	
                means the
      date on which each Contingent Capital Notice is delivered to HM
      Treasury;

              


      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Contingent
      Capital Period”

              	 	
                means the
      period commencing on the Acquisition Date and ending on the earliest of
      (i) the Scheduled End Date, (ii) the Final Contingent Capital Termination
      Date and (iii) the occurrence of a Termination Event;

              
	 	 	 	 
	 	
                “Contingent
      Capital Price”

              	 	
                means the
      price of 50 pence per Contingent Capital Share, as the same may be
      adjusted in accordance with paragraph 4(l) of the B Share
      Terms;

              
	 	 	 	 
	 	
                “Contingent
      Capital Shares”

              	 	
                means,
      subject to clause 5.10(B), up to 16,000,000,000 B
  Shares;

              
	 	 	 	 
	 	
                “Contingent
      Capital Subscription”

              	 	
                means a
      subscription for Contingent Capital Shares by HM Treasury pursuant to the
      Contingent Capital Commitment;

              
	 	 	 	 
	 	
                “Contingent
      Capital Termination Notice”

              	 	
                has the
      meaning given in clause 5.10(A);

              
	 	 	 	 
	 	
                “Contingent
      Capital Termination Shares”

              	 	
                has the
      meaning given in clause 5.10(A);

              
	 	 	 	 
	 	
                “Contingent
      Capital Warranties”

              	 	
                means the
      representations, warranties and undertakings contained in Schedule
      4;

              
	 	 	 	 
	 	
                “Contingent
      Capital Warranty Date”

              	 	
                means each
      Contingent Capital Notice Date and each Contingent Capital Completion
      Date;

              
	 	 	 	 
	 	
                “Convertible
      Preference Shares”

              	 	
                means (i) the
      US$1,000,000,000 Non-cumulative Convertible Dollar Preference Shares and
      (ii) the £200,000,000 Non-cumulative Convertible Sterling Preference
      Shares (as such terms are defined in the Articles as at the date of this
      Agreement);

              
	 	 	 	 
	 	
                “Core
      Tier 1 Capital”

              	 	
                means the
      core tier 1 capital of the Regulatory Group calculated in accordance with
      Chapter 2 of GENPRU and Chapter 8 of BIPRU, in each case so far as
      relevant and as supplemented by the guidance set out in the letter of 1
      May 2009 from the FSA to the British Bankers’ Association on the
      definition of core tier 1 capital or any subsequent letter issued in
      replacement thereof or in replacement of any replacement letter;

              
	 	 	 	 
	 	
                “Core
      Tier 1 Ratio”

              	 	means the
      ratio of (i) Core Tier 1 Capital to (ii) Risk Weighted Assets determined
      on a consolidated basis and calculated consistently with any requirements
      of the FSA from time to 


      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	 	
                 

              	
                time,
      expressed as a percentage, and as published in the most recent annual or
      semi-annual consolidated financial statements prepared by the Group or as
      otherwise disclosed to HM Treasury by the Company or any member of the
      Group (and, where disclosed to HM Treasury, such percentage having been
      verified by an Appropriate Person to a standard equivalent to that used in
      connection with the Accounts);

              
	 	 	 
	 	
                “CREST”

              	
                means the
      relevant system (as defined in the Regulations) in respect of which
      Euroclear UK and Ireland Limited is the Operator (as defined in the
      Regulations);

              
	 	 	 
	 	
                “CSA”

              	
                means the
      consortium and shareholders’ agreement entered into on 28 May 2007 between
      the Company, Banco Santander, SA, Fortis NV and Fortis SA/NV and RFS
      Holdings BV as supplemented and amended by the Supplemental Consortium and
      Shareholders’ agreement dated 17 September 2007 (between the same parties)
      and the amendment agreement dated 26 August 2008 (between the same
      parties) and the deed of accession executed by The State of the
      Netherlands (amongst others) on 24 December 2008;

              
	 	 	 
	 	
                “Deductions
      from Tier 1 Capital”

              	
                means the
      deductions from Tier 1 Capital required to made in accordance with GENPRU
      (as more particularly set out in the table in GENPRU 2 Annex 2) and as
      applied on a consolidated basis in accordance with
  BIPRU;

              
	 	 	 
	 	
                “Deductions
      from Total Capital”

              	
                means all
      deductions from total capital required to made in accordance with GENPRU
      (as more particularly set out in the table in GENPRU 2 Annex 2) and as
      applied on a consolidated basis in accordance with
  BIPRU;

              
	 	 	 
	 	
                “Directors”

              	
                means the
      directors of the Company from time to time;

              
	 	 	 
	 	
                “Disputes”

              	
                has the
      meaning given in clause 15.2(A);

              
	 	 	 
	 	
                “Dividend
      Access Share”

              	
                means the
      Series 1 Dividend Access Share of 1 penny in the capital of the
      Company;

              


      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Dividend
      Access Share Terms”

              	 	
                means the
      terms of the Dividend Access Share set out in Schedule
  7;

              
	 	 	 	 
	 	
                “DTRs”

              	 	
                means the
      Disclosure and Transparency Rules, as amended from time to time, made by
      the FSA pursuant to Part VI of FSMA;

              
	 	 	 	 
	 	
                “EC
      Treaty”

              	 	
                means the
      consolidated version of the Treaty establishing the European
      Community;

              
	 	 	 	 
	 	
                “End
      Date”

              	 	
                means the
      last day of the Contingent Capital Period;

              
	 	 	 	 
	 	
                “Fallback
      B Shares Amount”

              	 	
                has the
      meaning given in clause 6.2 or 6.3 (as the case may
be);

              
	 	 	 	 
	 	
                “Fallback
      B Shares Subscription Amount”

              	 	
                has the
      meaning given in clause 6.2 or 6.3 (as the case may
be);

              
	 	 	 	 
	 	
                “Final
      Contingent Capital Termination Date”

              	 	
                has the
      meaning given in clause 5.10(A);

              
	 	 	 	 
	 	
                “First
      Annual Premium”

              	 	
                has the
      meaning given in clause 6.2;

              
	 	 	 	 
	 	
                “First
      B Shares Determination Date”

              	 	
                means the
      date falling two Business Days after the First Reference
    Date;

              
	 	 	 	 
	 	
                “First
      Contingent Capital Subscription”

              	 	
                means the
      first occasion of the issue of Contingent Capital Shares to HM Treasury on
      a Contingent Capital Completion Date pursuant to a Contingent Capital
      Notice delivered by the Company to HM Treasury in accordance with clause
      5.5;

              
	 	 	 	 
	 	
                “First
      Payment Date”

              	 	
                has the
      meaning given in clause 6.1(B)(i);

              
	 	 	 	 
	 	
                “First
      Premium Period”

              	 	
                has the
      meaning given in the definition of “Premium Period” in this clause
      1.1;

              
	 	 	 	 
	 	
                “First
      Reference Date”

              	 	
                means the
      later of:

                 

                (i)     
      14 December 2009 (or, if such date is not a Business Day, the immediately
      preceding Business Day); and 

                 

                (ii)    
       the date falling two Business Days after the date of this
      Agreement;

              
	 	 	 	 
	 	
                “Foreign
      Jurisdiction”

              	 	
                has the
      meaning given in clause 15.2(B);

              


      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Foreign
      Proceedings”

              	 	
                has the
      meaning given in clause 15.2(B);

              
	 	 	 	 
	 	
                “Form
      of Proxy”

              	 	
                means the
      form of proxy, in a form acceptable to HM Treasury, acting reasonably, to
      be sent to Shareholders in connection with the GM;

              
	 	 	 	 
	 	
                “FSA”

              	 	
                means the
      Financial Services Authority as established under FSMA and any Successor
      Regulatory Body;

              
	 	 	 	 
	 	
                “FSA
      Rules”

              	 	
                means the
      rules and guidance made by the FSA under FSMA and set out in the Handbook,
      and includes any rules and guidance made by any Successor Regulatory
      Body;

              
	 	 	 	 
	 	
                “FSMA”

              	 	
                means the
      Financial Services and Markets Act 2000, including any regulations made
      pursuant thereto;

              
	 	 	 	 
	 	
                “GENPRU”

              	 	
                means the
      General Prudential Sourcebook for Banks, Building Societies, Insurers and
      Investment Firms forming part of the FSA Rules;

              
	 	 	 	 
	 	
                “GM”

              	 	
                means the
      general meeting of the Company to be convened at which the Resolutions are
      to be proposed, or any adjournment of it;

              
	 	 	 	 
	 	
                “Group”

              	 	
                means the
      Company and its subsidiary undertakings from time to time and “Group Company” means any
      of them (and, for the avoidance of doubt, references in this Agreement to
      the “Group”, “Group Companies” and “members of the Group” include, without
      limitation ABN AMRO and each of its subsidiary
    undertakings);

              
	 	 	 	 
	 	
                “Guide
      to Banking Supervisory Policy”

              	 	
                means the
      Guide to Banking Supervisory Policy published by the
  FSA;

              
	 	 	 	 
	 	
                “Handbook”

              	 	
                means the
      FSA’s handbook of rules and guidance, as amended and updated from time to
      time;

              
	 	 	 	 
	 	
                “HMRC”

              	 	
                means Her
      Majesty’s Revenue and Customs;

              
	 	 	 	 
	 	
                “IFRS”

              	 	
                means
      International Financial Reporting Standards as adopted by the European
      Union;

              
	 	 	 	 


      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Indemnified
      Persons”

              	
                means:

                 

                (i)     
      The Commissioners of Her Majesty’s Treasury;

                 

                (ii)     
      HM Treasury;

                 

                (iii)     the
      Treasury Solicitor;

                 

                (iv)     any
      entity to which HM Treasury novates its rights and obligations under this
      Agreement pursuant to clause 14.10; and

                 

                (v)      any
      person who is, on or at any time after the date of this Agreement, a
      director, officer, official, agent or employee of or under any person
      specified in paragraph (i), (ii), (iii) or (iv) above, and “Indemnified Person”
      shall be construed accordingly;

              
	 	 	 
	 	
                “Innovative
      Tier 1 Instrument”

              	
                means an
      instrument that is treated as forming part of the Company’s innovative
      tier 1 capital and shall be interpreted in accordance with GENPRU or, in
      the case of any instruments issued prior to 31 December 2006, IPRU (Bank)
      or the Guide to Banking Supervisory Policy as in force at the time when
      the relevant Innovative Tier 1 Instrument was issued;

              
	 	 	 
	 	
                “Intellectual
      Property Rights”

              	
                means
      patents, trade marks, service marks, logos, get-up, trade names, rights in
      designs, copyright (including rights in computer software), internet
      domain names, moral rights, utility models, rights in know how, rights in
      databases and other intellectual property rights, in each case whether
      registered or unregistered and including applications for the grant of any
      such rights and all rights or forms of protection having equivalent or
      similar effect anywhere in the world;

              
	 	 	 
	 	
                “Interest
      Rate”

              	
                has the
      meaning given in the Tax Assets Agreement;

              
	 	 	 
	 	
                “Interim
      Accounts”

              	
                means the
      unaudited consolidated financial information for the Group in respect of
      the six month period ended 30 June 2009 (in the case of the Acquisition)
      or (in the case of any Contingent Capital Subscription) any unaudited
      consolidated 

              


      

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      
        	 	 	financial information for the
      Group in respect of any six month period which has been published since
      the last Accounts Date;
	 	 	 
	 	
                “IPRU
      (Bank)”

              	
                means the
      Interim Prudential Sourcebook for Banks which forms or formed part of the
      Handbook;

              
	 	 	 
	 	
                “Listing
      Rules”

              	
                means the
      Listing Rules made by the FSA pursuant to section 73A of the FSMA, as
      amended from time to time;

              
	 	 	 
	 	
                “Losses”

              	
                means any and
      all loss, damage, cost, liability, demand, charge or expense (including
      legal fees), in each case whether joint or several, which any Indemnified
      Person may suffer or incur (including, but not limited to, all Losses
      suffered or incurred in investigating, preparing for or disputing or
      defending or settling any Claim and/or in establishing its right to be
      indemnified pursuant to clause 10 and/or in seeking advice regarding any
      Claim or in any way related to or in connection with the indemnity
      contained in clause 10) and “Loss” shall be construed
      accordingly;

              
	 	 	 
	 	
                “LSE”

              	
                means London
      Stock Exchange plc;

              
	 	 	 
	 	
                “Mandatory
      Securities”

              	
                means any
      securities issued by the Company or by any other Group Company (i) the
      terms of which do not provide for the Board or the board of directors of
      such other Group Company as the case may be to be able to elect not to pay
      a dividend or other distribution or make any interest or coupon payment or
      payment of a similar nature (whether in cash or otherwise, including
      pursuant to any Alternative Coupon Settlement Mechanism), or on which the
      Board may not, on or before the date on which payment falls to be made,
      elect not to pay such dividend or other distribution or make such interest
      or coupon payment or payment of a similar nature (whether in cash or
      otherwise, including pursuant to any Alternative Coupon Settlement
      Mechanism) or (ii) under which the Company or such Group Company is not
      legally permitted to stop paying dividends or distributions or making
      interest or coupon payments or payments of a similar nature (whether in
      cash or otherwise);

              


      

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Material
      Adverse Effect”

              	 	
                means an
      event has occurred or is reasonably likely to occur which has resulted in
      or may result in a material adverse change in or affecting the condition
      (financial, operational, legal or otherwise), profitability, prospects,
      solvency, business affairs or operations of the Group, taken as a whole,
      whether or not arising in the ordinary course of
  business;

              
	 	 	 	 
	 	
                “Material
      Subsidiaries”

              	 	
                means RBS,
      National Westminster Bank plc, Ulster Bank Limited, Citizens Financial
      Group, Inc., RBS Securities, Inc., RBS Insurance Group Limited and ABN
      AMRO Bank N.V. and such other subsidiary undertakings which, as at the
      relevant date, individually account for not less than ten per cent. of the
      net income (being net interest income and all other income net of fees
      payable) or net assets of the Group (each being a “Material
      Subsidiary”);

              
	 	 	 	 
	 	
                “NFSA”

              	 	
                means the
      Netherlands Financial Supervision Act (Wet Op Het Financieel
      Toezicht);

              
	 	 	 	 
	 	
                “Non-Voting
      Deferred Shares”

              	 	
                means the
      non-voting deferred shares series B of 1 penny in the capital of the
      Company created or to be created on the Non-Voting Deferred Share
      Terms;

              
	 	 	 	 
	 	
                “Non-Voting
      Deferred Share Terms”

              	 	
                means the
      terms of the Non-Voting Deferred Shares set out in Schedule
      10;

              
	 	 	 	 
	 	
                “Official
      List”

              	 	
                means the
      Official List maintained by the FSA in its capacity as UK Listing
      Authority;

              
	 	 	 	 
	 	
                “Ordinary
      Shares”

              	 	
                means
      ordinary shares of 25 pence each in the capital of the
      Company;

              
	 	 	 	 
	 	
                “Overall
      Financial Adequacy Rule”

              	 	
                has the
      meaning given in the FSA Rules;

              
	 	 	 	 
	 	
                “Parity
      Value”

              	 	
                has the
      meaning given in the Dividend Access Share Terms;

              
	 	 	 	 
	 	
                “Partial
      Contingent Capital Termination Date”

              	 	
                has the
      meaning given in clause 5.10(A);

              
	 	 	 	 
	 	
                “Payee”

              	 	
                has the
      meaning given in clause 7.3(C);

              
	 	 	 	 
	 	
                “Payer”

              	 	
                has the
      meaning given in clause 7.3(C);

              


      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Payment
      Date”

              	 	
                has the
      meaning given in clause 6.1(B);

              
	 	 	 	 
	 	
                “Payment
      Proposal Notice”

              	 	
                means a
      notice in the form set out in Schedule 9;

              
	 	 	 	 
	 	
                “Permitted
      Oral Statement”

              	 	
                has the
      meaning given in clause 8.2(B)(iii);

              
	 	 	 	 
	 	
                “Permitted
      Statement”

              	 	
                has the
      meaning given in clause 8.2(B)(ii);

              
	 	 	 	 
	 	
                “Placing
      and Open Offer”

              	 	
                means the
      placing and open offer by the Company of 16,909,716,385 Ordinary Shares at
      31.75 pence per Ordinary Share announced on 19 January
    2009;

              
	 	 	 	 
	 	
                “Posting
      Date”

              	 	
                means the
      date on which the Company despatches the Circular to Shareholders and the
      date on which the Company despatches any Replacement Circular to
      Shareholders;

              
	 	 	 	 
	 	
                “Premium
      Amount”

              	 	
                has the
      meaning given in clause 6.1(C);

              
	 	 	 	 
	 	
                “Premium
      Period”

              	 	
                means:

                 

                (i)     
      the period of time which begins on (and includes) the Acquisition Date and
      ends on (but excludes) the first anniversary of the Acquisition Date (the
      “First Premium
      Period”); and

                 

                (ii)    
      each subsequent period of time which begins on (and includes) an
      anniversary of the Acquisition Date falling before the End Date and which
      ends on (but excludes) the next succeeding anniversary of the Acquisition
      Date;

              
	 	 	 	 
	 	
                “Previous
      Announcements”

              	 	
                means all
      documents issued and announcements made by or on behalf of the Company or
      any member of the Group through a Regulatory Information Service
      (including by way of a public regulatory filing) (i) since the relevant
      Accounts Date and on or before the date of this Agreement (in the case of
      clause 2.1(K) and in the case of the Warranties given on the date of this
      Agreement) or (ii) since the relevant Accounts Date and on or before the
      relevant Acquisition Warranty Date (in the case of the Warranties given on
      an Acquisition Warranty Date) or (iii) since the date of this Agreement
      and on or before the relevant Contingent Capital Notice Date (in the case
      of the Warranties given on a Contingent Capital Notice
  

              


      

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      
        	 	 	Date) or (iv) since the date
      of this Agreement and on or before the relevant Contingent Capital
      Completion Date (in the case of the Warranties given on a Contingent
      Capital Completion Date);
	 	 	 
	 	
                “Proceedings”

              	
                has the
      meaning given in clause 15.2(A);

              
	 	 	 
	 	
                “Prospectus
      Rules”

              	
                means the
      Prospectus Rules published by the FSA pursuant to section 73A of the FSMA,
      as amended from time to time;

              
	 	 	 
	 	
                “RBS”

              	
                means The
      Royal Bank of Scotland plc, a company incorporated in Scotland with
      registered number 90312 and having its registered office at 36 St Andrew
      Square, Edinburgh EH2 2YB;

              
	 	 	 
	 	
                “Reference
      Date”

              	
                means:

                 

                (i)      in
      relation to the First Payment Date, the First Reference Date;
      and

                 

                (ii)     in
      relation to any other Payment Date, the 14 September which immediately
      precedes such Payment Date (or, if such date is not a Business Day, the
      immediately preceding Business Day);

              
	 	 	 
	 	
                “Registrar”

              	
                means
      Computershare Investor Services PLC;

              
	 	 	 
	 	
                “Regulations”

              	
                means the
      Uncertificated Securities Regulations 2001;

              
	 	 	 
	 	
                “Regulatory
      Group”

              	
                means the
      Company, its subsidiary undertakings, participations, participating
      interests and any subsidiary undertakings, participations or participating
      interest 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 under Chapter 8 of BIPRU and “Regulatory Group Company” means any
      of them;

              
	 	 	 
	 	
                “Regulatory
      Information Service”

              	
                has the
      meaning given in the Listing Rules;

              
	 	 	 
	 	
                “Relevant
      Annual Premium”

              	
                has the
      meaning given in clause 6.3;

              


      

      
         

        
          	 	
                  “Relevant Contingent
      Capital Number”

                	
                  means:

                   

                  (i)     
      in respect of the First Contingent Capital


                


        

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      
        	 	
                 

              	
                Subscription,
      12,000,000,000 B Shares;

                 

                (ii)     
      in respect of the Second Contingent Capital Subscription, 4,000,000,000 B
      Shares;

                 

                (iii)    
      in respect of any Subsequent Contingent Capital Subscription, such number
      of B Shares as may be specified in accordance with clause 5.5(B), provided
      that it is not less than the greater of (i) 500,000,000 B Shares and (ii)
      the total number of Contingent Capital Shares in respect of which the
      Contingent Capital Commitment remains outstanding, and, together with the
      aggregate number of B Shares issued to HM Treasury pursuant to each
      previous Contingent Capital Subscription, is not more than the number of
      Contingent Capital Shares, 

                 

                in each case
      subject to clauses 5.2(B) and 5.10(B);

              
	 	 	 
	 	
                “Relevant
      Cost”

              	
                has the
      meaning given in clause 7.3(D);

              
	 	 	 
	 	
                “Relevant
      Documents”

              	
                means the
      Circular, the Form of Proxy, and any announcement(s) made by any member of
      the Group in relation to the Acquisition or the Contingent Capital
      Commitment;

              
	 	 	 
	 	
                “Relevant
      Payment Date”

              	
                has the
      meaning given in clause 6.3;

              
	 	 	 
	 	
                “Replacement
      Circular”

              	
                means any
      circular, in a form acceptable to HM Treasury, produced as a replacement
      of the Circular or any Replacement Circular pursuant to Listing Rule
      LR10.5.2R;

              
	 	 	 
	 	
                “Representatives”

              	
                has the
      meaning given in the APS
Conditions;

              


      

      
         

        
          	 	
                  “Resolutions”

                	
                  means the
      resolutions, in a form acceptable to HM Treasury, acting
      reasonably:

                
	 	 	 
	 	 
      	
                  (i)     
      to amend the Articles to remove the Company’s authorised share capital and
      create the B Shares, the Dividend Access Share and Non-Voting Deferred
      Shares;

                   

                  (ii)    
      to authorise the Directors to allot under Section 551 of CA 2006 (a) the
      Acquisition B Shares, the Contingent Capital Shares and the Dividend
      Access Share and such further


                


        

      

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      
        	 	 
      	
                nominal
      amount of B Shares as the Company, having consulted with HM Treasury,
      considers sufficient to allow for the issue of further such B Shares under
      the B Share Terms, the Dividend Access Share Terms and, to the extent the
      Contingent Capital Premium is settled in B Shares, to allow for the issue
      of such further B Shares and (b) the Ordinary Shares which may be issued
      on a conversion of the B Shares into Ordinary Shares and Non-Voting
      Deferred Shares;

                 

                (iii)    
      to approve the entry into and performance by the Company of this Agreement
      for the purposes of Chapter 11 of the Listing Rules; and

                 

                (iv)    
      to authorise the Directors to (a) apply such amount as the Directors may
      determine of the sums standing to the credit of any of the Company's
      distributable reserves, share premium account, merger reserve, capital
      redemption reserve or any reserve available for the purpose at the
      relevant time for the purposes of allotting B shares in connection with
      converting B shares into Ordinary Shares and/or allotting to the holders
      of the Dividend Access Share and/or B Shares additional B Shares in lieu
      of any dividend declared or proposed, in each case with authority to deal
      with fractional entitlements as the Directors think fit and (b) sub-divide
      and consolidate such amount of the Company’s share capital as the
      Directors may determine (whether into shares of the same class and/or
      different classes) for the purposes of, or in connection with, converting
      the B Shares into Ordinary Shares and/or Non-Voting Deferred
      Shares,

                 

                 to be
      proposed at the GM;

              
	 	 	 
	 	
                “Risk
      Weighted Assets”

              	
                means the
      risk weighted assets of the Regulatory Group calculated on a consolidated
      basis in accordance with (i) the FSA Rules and, as appropriate, equivalent
      rules in other jurisdictions as assessed by the FSA from time to time and
      (ii) advanced prudential calculation approaches as permitted by the FSA by
      way of a waiver or measure taken by the FSA under regulations 2 and 3 of
      the Capital Requirements Regulations 2006 (SI
  2006/3221);

              


      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Scheduled
      End Date”

              	 	
                means the
      fifth anniversary of the Acquisition Date;

              
	 	 	 	 
	 	
                “SDRT”

              	 	
                means stamp
      duty reserve tax;

              
	 	 	 	 
	 	
                “Second
      Contingent Capital Subscription”

              	 	
                means the
      second occasion of the issue of Contingent Capital Shares to HM Treasury
      on a Contingent Capital Completion Date pursuant to a Contingent Capital
      Notice delivered by the Company to HM Treasury in accordance with clause
      5.5;

              
	 	 	 	 
	 	
                “Securities
      Act”

              	 	
                has the
      meaning given in clause 14.12;

              
	 	 	 	 
	 	
                “Shareholders”

              	 	
                means holders
      of Ordinary Shares whose names are on the register of members of the
      Company as at the date of posting of the Circular;

              
	 	 	 	 
	 	
                “Signing
      Announcement”

              	 	
                has the
      meaning given in clause 8.2(B)(i);

              
	 	 	 	 
	 	
                “Specified
      Event”

              	 	
                means an
      event occurring or fact, matter or circumstance arising on or after the
      date of this Agreement and before the Acquisition Date (in the case of the
      Acquisition) or on or after a Contingent Capital Notice Date and before
      the related Contingent Capital Completion Date (in the case of any
      Contingent Capital Subscription), which:

              
	 	 	 	 
	 	 
      	 	
                (i)     
      if it had occurred or arisen before or at the date of this Agreement or
      before or at an Acquisition Warranty Date (in the case of the Acquisition)
      or before or at a Contingent Capital Warranty Date (in the case of any
      Contingent Capital Subscription); or

                 

                (ii)     if
      it had been known by the Directors before or at the date of this Agreement
      or before or at an Acquisition Warranty Date (in the case of the
      Acquisition) or before or at a Contingent Capital Warranty Date (in the
      case of any Contingent Capital Subscription),

              
	 	 	 	 
	 	 
      	 	
                would have
      rendered any of the Warranties given on the date of this Agreement or to
      be given on an Acquisition Warranty Date (in the case of the Acquisition)
      or to be given on a Contingent Capital Warranty Date (in the case of any
      Contingent Capital Subscription) untrue, inaccurate or
  

              


      

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

         

      

       

      
        	 	 	 	
                misleading in any respect on
      such date;

              
	 	 	 	 
	 	
                “Stamp
      Tax”

              	 	
                means any
      stamp, documentary, registration or capital duty or tax (including,
      without limitation, stamp duty, SDRT and any other similar duty or similar
      tax) and any fines, penalties and/or interest relating
      thereto;

              
	 	 	 	 
	 	
                “State
      Aid Commitment Deed”

              	 	
                means the
      State Aid commitment deed between HM Treasury and the Company dated on or
      around the date of this Agreement;

              
	 	 	 	 
	 	
                “Subscription
      and Transfer Agreement”

              	 	
                means the
      share subscription and transfer agreement, in a form acceptable to HM
      Treasury, acting reasonably, between CashboxCo, HM Treasury and the
      Company providing, amongst other things, for the transfer to the Company
      by HM Treasury (in its capacity as subscriber for the Consideration
      Shares) of the Consideration Shares;

              
	 	 	 	 
	 	
                “Subsequent
      Contingent Capital Subscription”

              	 	
                means the
      occasion of each issue of Contingent Capital Shares to HM Treasury on a
      Contingent Capital Completion Date pursuant to a Contingent Capital Notice
      delivered by the Company to HM Treasury in accordance with clause 5.5 following any Second Contingent Capital
      Subscription;

              
	 	 	 	 
	 	
                “Substantial
      Shareholder”

              	 	
                has the
      meaning given in the Listing Rules;

              
	 	 	 	 
	 	
                “Successor
      Regulatory Body”

              	 	
                means any
      statutory or other regulatory body that replaces the FSA as prudential
      regulator in the United Kingdom of the Regulatory
Group;

              
	 	 	 	 
	 	
                “SUP”

              	 	
                means the
      Supervision sourcebook forming part of the FSA Rules;

              
	 	 	 	 
	 	
                “Tax” or
    “Taxation”

              	 	
                means all
      forms of taxation and statutory, governmental, state, provincial, local
      governmental or municipal impositions, duties, contributions and levies
      (including, for the avoidance of doubt, Stamp Tax), in each case in the
      nature of taxation, duty, contribution or levy, whether of the United
      Kingdom or elsewhere in the world whenever imposed and whether chargeable
      directly or primarily against or attributable directly or primarily to a
      Group Company or any other person and all penalties, charges, costs and
      interest relating thereto;

              


      

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      
        	 	
                “Tax
      Asset”

              	
                has the
      meaning given in the Tax Assets Agreement;

              
	 	 	 
	 	
                “Tax
      Assets Agreement”

              	
                means the
      agreement entitled “Agreement to Forego Tax Reliefs in connection with an
      Acquisition and Contingent Capital Agreement” entered into between, inter
      alia, HM Treasury, The Commissioners for Her Majesty’s Revenue and
      Customs, RBS, ABN AMRO Bank N.V. and the Company, dated on or about the
      date of this Agreement;

              
	 	 	 
	 	
                “Tax
      Assets Shortfall Amount”

              	
                has the
      meaning given in clause 6.2 or 6.3 (as the case may
be);

              
	 	 	 
	 	
                “Tax
      Authority”

              	
                means any
      government, state, municipal, local, federal or other fiscal, revenue,
      customs or excise authority, body or official anywhere in the world having
      the power to impose, collect or administer any Tax or exercising a fiscal,
      revenue, customs or excise function with respect to Tax (including,
      without limitation, HMRC);

              
	 	 	 
	 	
                “Termination
      Event”

              	
                has the
      meaning given in Schedule 8;

              
	 	 	 
	 	
                “Tier
      1 Capital”

              	
                means the
      tier 1 capital of the Regulatory Group calculated in accordance with
      Chapter 2 of GENPRU and Chapter 8 of BIPRU, in each case so far as
      relevant and as supplemented by any public written statement or guidance
      given by the FSA from time to time;

              
	 	 	 
	 	
                “Tier
      1 Capital Ratio”

              	
                means the
      ratio of (i) Tier 1 Capital, less Deductions from Tier 1 Capital, to (ii)
      Risk Weighted Assets determined on a consolidated basis and calculated
      consistently with any requirements of the FSA from time to time, expressed
      as a percentage;

              
	 	 	 
	 	
                “Tier
      2 Capital

              	
                means the
      tier 2 capital of the Regulatory Group calculated in accordance with
      Chapter 2 of GENPRU and Chapter 8 of BIPRU, in each case so far as
      relevant and as supplemented by any public written statement or guidance
      given by the FSA from time to time;

              
	 	 	 
	 	
                “Tier
      3 Capital”

              	
                means the
      tier 3 capital of the Regulatory Group calculated in accordance with
      Chapter 2 of GENPRU and Chapter 8 of BIPRU, in each case so far as
      relevant and as supplemented by any


              


      

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

         

         

      

      
        	 	 	
                public written statement or
      guidance given by the FSA from time to time;

              
	 	 	 
	 	
                “Total
      Capital”

              	
                means the sum
      of Tier 1 Capital, Tier 2 Capital and Tier 3 Capital less Deductions from
      Total Capital calculated in accordance with GENPRU 2.2;

              
	 	 	 
	 	
                “Total
      Capital Ratio”

              	
                means the
      ratio of (i) Total Capital to (ii) Risk Weighted Assets determined on a
      consolidated basis and calculated consistently with any requirements of
      the FSA from time to time, expressed as a percentage;

              
	 	 	 
	 	
                “Treasury
      Solicitor”

              	
                has the same
      meaning as in the Treasury Solicitor Act 1876;

              
	 	 	 
	 	
                “Trigger
      Event”

              	
                means the
      Core Tier 1 Ratio falling below the Trigger Core Tier 1
    Ratio;

              
	 	 	 
	 	
                “Trigger
      Core Tier 1 Ratio”

              	
                means five
      per cent.;

              
	 	 	 
	 	
                “UK
      Listing Authority”

              	
                means the
      Financial Services Authority acting in its capacity as the competent
      authority for the purposes of Part VI of the FSMA and in the exercise of
      its functions in respect of the admission of securities to the Official
      List otherwise than in accordance with Part VI of the
  FSMA;

              
	 	 	 
	 	
                “United
      States”

              	
                means the
      United States of America, its territories and possessions, any state of
      the United States and the District of Columbia;

              
	 	 	 
	 	
                “Upper
      Tier 2 Instrument”

              	
                means an
      instrument that is treated as forming part of the Company’s upper tier 2
      capital and shall be interpreted in accordance with GENPRU or, in the case
      of any instruments issued prior to 31 December 2006, IPRU (Bank), the
      Guide to Banking Supervisory Policy or, if relevant, any rules or guidance
      published by the Bank of England in force at the time when the relevant
      upper tier 2 instrument was issued;

              
	 	 	 
	 	
                “VAT”

              	
                means:

              
	 	 	 
	 	 
      	
                (i)     
      any tax imposed in conformity with the council directive of 28 November
      2006 on the common system of value added tax (EC Directive 2006/112)
      (including, in relation to

              


      

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

         

      

      
        	 	 
      	
                         the
      United Kingdom, value added tax imposed by the VATA and any legislation
      and/or regulations supplemental thereto); and

                 

                (ii)     any
      other tax of a similar nature (whether imposed in a member state of the
      European Union in substitution for or in addition to the tax referred to
      in sub-paragraph (i) or imposed
elsewhere);

              


      

       

      
        	 	 	 
	 	
                “VATA”

              	
                means the
      Value Added Tax Act 1994;

              
	 	 	 
	 	
                “Warranties”

              	
                means the
      representations, warranties and undertakings given in this
      Agreement;

              
	 	 	 
	 	
                “Wholly
      Owned Entity”

              	
                has the
      meaning given in clause 14.10(A); and

              
	 	 	 
	 	
                “Working
      Hours”

              	
                means 9.30 am
      to 5.30 pm on a Business Day.

              


      

       

       

      
        	
                 
      

              	
                1.2

              	
                Interpretation

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Any reference
      to a document being “in
      the agreed form” means in the form of the draft thereof signed or
      initialled for the purpose of identification by Linklaters LLP (on behalf
      of the Company) and Slaughter and May (on behalf of HM
      Treasury).

              


      

       

      
        	
                 
      

              	
                (B)

              	
                The
      Interpretation Act 1978 shall apply to this Agreement in the same way as
      it applies to an enactment.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                References to
      a statutory provision include any subordinate legislation made from time
      to time under that provision.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                References to
      a statutory provision or to any part of the FSA Rules include that
      provision or part of the FSA Rules as from time to time modified,
      supplemented, replaced or re-enacted so far as such modification,
      supplement, replacement or re-enactment applies or is capable of applying
      to any transactions entered into in accordance with this
      Agreement.

              


      

       

      
        	
                 
      

              	
                (E)

              	
                In this
      Agreement:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                a reference
      to a “subsidiary
      undertaking” or “parent undertaking” is
      to be construed in accordance with section 1162 (and Schedule 7) of the CA
      2006;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                a reference
      to a “subsidiary”
      or “holding
      company” is to be construed in accordance with section 1159 of the
      CA 2006;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                a reference
      to a “participation” is to be
      construed in accordance with the Handbook;
and

              


      

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (iv)

              	
                a reference
      to a “participating
      interest” is to be construed in accordance with section 421A of
      FSMA.

              


      

       

      
        	
                 
      

              	
                (F)

              	
                References to
      this Agreement include its Schedules and references in this Agreement to
      clauses and Schedules are to clauses of and Schedules to this
      Agreement.

              


      

       

      
        	
                 
      

              	
                (G)

              	
                Headings
      shall be ignored in construing this
Agreement.

              


      

       

      
        	
                 
      

              	
                (H)

              	
                References to
      time of day are to London time unless otherwise
  stated.

              


      

       

      
        	
                 
      

              	
                (I)

              	
                When
      construing any provision relating to VAT, any reference in this Agreement
      to any person shall (where appropriate) be deemed, at any time when such
      person is a member of a group of companies for VAT purposes, to include a
      reference to the representative member of such group at such
      time.

              


      

       

      
        	
                 
      

              	
                (J)

              	
                Any reference
      to any indemnity, covenant to pay or payment (a “Payment Obligation”) being given
      or made on an “after-Tax
      basis” or expressed to be calculated on an “after-Tax basis” means
      that, in calculating the amount payable pursuant to such Payment
      Obligation (the “Payment”), there shall
      be taken into account (if and to the extent that the same has not already
      been taken into account in the calculation of the
  Payment):

              


      

       

      
        	
                 
      

              	
                (i)

              	
                any Tax
      suffered by the person entitled to receive the Payment to the extent that
      it arises as a result of the matter giving rise to the Payment Obligation
      or as a result of receiving, or being entitled to receive, the Payment;
      and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any relief,
      exemption, allowance or credit which is available to set against any Tax
      otherwise payable or against any income, profits or gains for Tax
      purposes, and any right to any refund or reimbursement of any Tax, which
      in each case is available to the person entitled to receive the Payment if
      and to the extent that the same arises as a result of the matter giving
      rise to the Payment Obligation or as a result of receiving, or being
      entitled to receive, the Payment,

              


      

       

      such that the
person entitled to receive the Payment is in the same economic position after
Tax that it would have been in if the matter giving rise to the Payment
Obligation had not occurred.

       

      
        	
                 
      

              	
                (K)

              	
                Any reference
      to HM Treasury approving or agreeing the form of a Relevant Document,
      shall be a reference to such approval or agreement being given solely for
      the purposes of this Agreement.

              


      

       

      
        	
                 
      

              	
                (L)

              	
                A reference
      to “certificated”
      or “certificated
      form” in relation to a share or other security is a reference to a
      share or other security title to which is recorded on the relevant
      register of the share or other security as being held in certificated
      form.

              


      

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (M)

              	
                A reference
      to “uncertificated” or
      “uncertificated
      form” in relation to a share or other security is a reference to a
      share or other security title to which is recorded on the relevant
      register of the share or other security as being held in uncertificated
      form, and title to which, by virtue of the Regulations, may be transferred
      by means of CREST.

              


      

       

      
        	
                 
      

              	
                (N)

              	
                Words and
      expressions defined in the CA 2006 shall bear the same
      meaning.

              


      

       

      
        
          	
                  2.

                	
                  ACQUISITION
      CONDITIONS

                


        

      

       

      
        
          	
                  2.1

                	
                  Conditions
      to Acquisition

                


        

      

       

      The obligation of
HM Treasury to acquire the Acquisition Shares on the terms of this Agreement is
conditional on:

       

      
        	
                 
      

              	
                (A)

              	
                the
      conditions to which RBS’s participation in the APS is subject being
      satisfied in accordance with the APS Conditions or, if capable of waiver,
      being waived in accordance with the APS Conditions or Accession
      Agreement;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                there having
      occurred, as at the Condition Precedent Date and at the Acquisition Date,
      no material default or material
breach:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                by the
      Company of the obligations applicable to it under this Agreement or the
      Tax Assets Agreement; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                by RBS of the
      terms of the Accession Agreement;

              


      

       

      
        	
                 
      

              	
                (C)

              	
                the European
      Commission having decided that all State aid received by the Group to
      date, and any State aid that may be provided to the Group under the APS
      and under this Agreement, including as a consequence of HM Treasury’s
      acquisition of:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the
      Acquisition Shares; and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      Contingent Capital Shares,

              


      

       

      is
aid compatible with article 87 of the EC Treaty (subject to the commitments
given in respect thereof by HM Treasury);

       

      
        	
                 
      

              	
                (D)

              	
                the Company
      having obtained such approvals, authorisations, permits and consents as
      may be required by any government, state or other regulatory body and all
      necessary filings having been made and all necessary waiting periods
      having expired, in each case in any part of the world and as a consequence
      of the issue of the Acquisition
Shares;

              


      

       

      
        	
                 
      

              	
                (E)

              	
                HM Treasury
      having obtained such approvals, authorisations, permits and consents as
      may be required by any governmental, state or other regulatory body in any
      part of the world and all necessary filings having been made and all
      necessary waiting periods having expired, in each case as a consequence of
      the issue of the Acquisition
Shares;

              


      

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (F)

              	
                each Warranty
      in Part I of Schedule 3 of this Agreement being true and accurate in all
      material respects and not misleading in any material respect as at the
      date of this Agreement and each Warranty in Parts I and II of Schedule 3
      of this Agreement being true and accurate in all material respects and not
      misleading in any material respect on each Acquisition Warranty Date in
      each case by reference to the facts and circumstances then
      existing;

              


      

       

      
        	
                 
      

              	
                (G)

              	
                there being,
      in the opinion of HM Treasury (acting in good faith) no Material Adverse
      Effect between the date of this Agreement and the Condition Precedent Date
      or the Acquisition Date;

              


      

       

      
        	
                 
      

              	
                (H)

              	
                the delivery
      to HM Treasury, simultaneously with the execution of this Agreement, of a
      certified copy of an extract of the minutes of a meeting of the Board (or
      of the duly authorised committee of such Board), at which the execution of
      this Agreement was approved and authorised (and, if the resolution is of a
      committee, a certified copy of the resolution of the Board appointing such
      committee);

              


      

       

      
        	
                 
      

              	
                (I)

              	
                the delivery
      to HM Treasury on the Acquisition Date of those documents listed in Part 1
      of Schedule 2;

              


      

       

      
        	
                 
      

              	
                (J)

              	
                the Circular
      being approved by the FSA in accordance with the Listing Rules and
      FSMA;

              


      

       

      
        	
                 
      

              	
                (K)

              	
                the Circular
      not containing disclosure of any fact, matter or circumstance material in
      the context of the Group, the Acquisition or the Contingent Capital
      Commitment which has not previously been fairly disclosed, whether in any
      of the Previous Announcements or otherwise in writing to HM Treasury
      before the signing of this Agreement (including in any drafts of the
      Circular provided to HM Treasury on or after 8 November 2009 but on or
      before the signing of this Agreement), provided that disclosure in the
      Circular of any decision of the Supreme Court in relation to the ongoing
      case in respect of unarranged overdraft charges shall not constitute a
      fact, matter or circumstance material in the context of the Group, the
      Acquisition or the Contingent Capital Commitment for this
      purpose;

              


      

       

      
        	
                 
      

              	
                (L)

              	
                the GM being
      duly convened and held by 21 December
2009;

              


      

       

      
        	
                 
      

              	
                (M)

              	
                subject to
      applicable law (including directors’ fiduciary duties), the Directors
      recommending (without qualification and maintaining such recommendation)
      that the Shareholders vote in favour of the
  Resolutions;

              


      

       

      
        	
                 
      

              	
                (N)

              	
                subject to
      applicable law, the Directors voting all Ordinary Shares held by them in
      favour of the Resolutions;

              


      

       

      
        	
                 
      

              	
                (O)

              	
                the
      Shareholders passing the Resolutions (without amendment) at the GM and,
      having been so passed, the Resolutions not having been amended or revoked
      at any time prior to the Acquisition Date;
and

              


      

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (P)

              	
                HM Treasury,
      having consulted with the Company, being satisfied, as at the Condition
      Precedent Date and at the Acquisition Date that the Acquisition continues
      to be proportionate and appropriate for the maintenance of the financial
      stability of the Company, each in the context of the general economic and
      market conditions then prevailing.

              


      

       

      
        	
                2.2

              	
                Satisfaction
      and waiver of conditions to
Acquisition

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      the fiduciary duties of the Directors, the Company shall use all
      reasonable endeavours to procure the fulfilment of the conditions set out
      in clause 2.1 which are to be fulfilled by the Company and, where
      applicable, by the times and dates stated therein (or such later times
      and/or dates as HM Treasury may agree) and shall notify HM Treasury
      forthwith in the event that the Company or any of the Directors becomes
      aware that any of the conditions set out in clause 2.1 has become or might
      reasonably be expected to become incapable of fulfilment by the time
      and/or date stated in such condition (or such later time and/or date as HM
      Treasury may agree) or at all.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                Subject to
      clause 2.2(D), HM Treasury shall be entitled, in its absolute discretion
      and upon such terms as it shall think fit, to waive fulfilment of all or
      any of the conditions set out in clause 2.1 (other than clauses 2.1(C),
      2.1(D), 2.1(J) and 2.1(O)) or to extend the time provided for fulfilment
      of any of the conditions set out in clause 2.1 in respect of all or any
      part of the performance thereof.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                If the
      condition set out in clause 2.1(D) is not satisfied at the Condition
      Precedent Date, the parties shall treat such condition as waived if the
      relevant matter in respect of which the condition has not been satisfied
      is not likely to lead to material consequences for the Company or the
      Directors or for HM Treasury and is not material in the context of the
      Acquisition and, in all cases taking account of the financial
      circumstances of the Company.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                If:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                any of the
      conditions set out in clause 2.1 (other than the condition set out in
      clause 2.1(P)) are not fulfilled or, if capable of waiver pursuant to
      clause 2.2(B), waived or treated as waived pursuant to clause 2.2(C), by
      the date and/or time specified therein (or such later time and/or date as
      HM Treasury may agree); and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                HM Treasury
      does not consider it necessary that the Acquisition proceed to completion
      in order to maintain the financial stability of the United
      Kingdom,

              


      

       

      
        	
                 
      

              	
                or

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                the condition
      set out in clause 2.1(P) is not fulfilled in respect of the Acquisition as
      at the Acquisition Date,

              


      

       

      then on notice from
HM Treasury to the Company, this Agreement shall cease and determine and no
party to this Agreement shall have any claim against any 

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

       

      
        	 	 	
                other party
      to this Agreement for costs, damages, compensation or otherwise except as
      provided in clause 2.2(F).

              
	 	 	 
	
                 
      

              	
                (E)

              	
                Without
      prejudice to the rights of HM Treasury under clause 12, if any of the
      conditions set out in clause 2.1 are not fulfilled or, if capable of
      waiver pursuant to clause 2.2(B), waived, or treated as waived
      pursuant to clause 2.2(C), by the date and/or time specified herein (or
      such later time as HM Treasury may agree) and if HM Treasury does consider
      it necessary that the Acquisition and the other arrangements contemplated
      by this Agreement proceed to completion in order to maintain the financial
      stability of the United Kingdom, then on notice to the Company from HM
      Treasury, HM Treasury shall treat as waived such outstanding conditions in
      clause 2.1 (other than any condition referred to as not being waivable by
      HM Treasury).

              


      

       

      
        	
                 
      

              	
                (F)

              	
                Where this
      Agreement has terminated pursuant to clause
  2.2(D):

              


      

       

      
        	
                 
      

              	
                (i)

              	
                such
      termination shall be without prejudice to any accrued rights or
      obligations under this Agreement;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                the Company
      shall pay any fees and expenses that are payable in such circumstance
      under and in accordance with clause
7.1;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                for as long
      as HM Treasury holds any Ordinary Shares, the provisions of clauses 8.2,
      8.3, 8.4 and 8.14 shall remain in full force and effect;
    and

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                the
      provisions of this clause 2.2(F) and clauses 1, 7, , 8.8, 9, 10, 11, 13,
      14 and 15 shall remain in full force and
      effect.

              


      

       

      
        	
                3.

              	
                ACQUISITION

              


      

       

      
        	
                3.1

              	
                Acquisition
      Date

              


      

       

      
        	
                 
      

              	
                (A)

              	
                The
      consideration for the allotment and issue of the Acquisition Shares to HM
      Treasury shall be the transfer by HM Treasury of the Consideration Shares
      to the Company pursuant to the Subscription and Transfer
      Agreement.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                ***

              
	 	 	 
	 	 	

                      
                  
      *** indicates omission of material, which has been sepatarely filed,
      pursuant to a request for confidential
  treatment.

              


      

      
         

        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

       

      
        	
                3.2

              	
                Undertakings

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      obtaining the approval of the Circular by the FSA, the Company shall
      procure that:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the Circular
      and Forms of Proxy are posted to all Shareholders;
  and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                a copy of the
      Circular is forwarded to the FSA in accordance with the Listing
      Rules.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                Subject
      always to the fiduciary duties of the Directors, the Company shall procure
      that the GM is duly convened and that the Resolutions are proposed at
      it.

              


      

       

      
        
          	
                  3.3

                	
                  Board
      meetings

                


        

      

       

      The Company
confirms to HM Treasury that a meeting or meetings of the Board has or have been
held (and/or, in the case of (B), (C), (D) and (E) below, undertakes to hold
such a meeting or meetings) which has, have (or will have, as the case may
be):

       

      
        	
                 
      

              	
                (A)

              	
                authorised
      the Company to enter into and perform its obligations under this
      Agreement;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                approved the
      form of the Circular and the Form of Proxy and authorised and approved the
      publication of the Circular and the Form of
  Proxy;

              


      

       

      
        	
                 
      

              	
                (C)

              	
                authorised
      the Company to enter into and perform its obligations under the Cashbox
      Documents;

              


      

       

      
        	
                 
      

              	
                (D)

              	
                approved the
      allotment and issue of the Acquisition Shares pursuant to the Acquisition;
      and

              


      

       

      
        	
                 
      

              	
                (E)

              	
                authorised
      all necessary steps to be taken by the Company in connection with each of
      the above matters.

              


      

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      
        	
                4.

              	
                USE
      OF ACQUISITION AMOUNT

              


      

       

      
        
          	 	***	 


        

        
           

        

      

      
        	
                5.

              	
                CONTINGENT
      CAPITAL

              


      

       

      
        	
                5.1

              	
                Contingent
      Capital Commitment

              


      

       

      HM
Treasury hereby undertakes to subscribe for the Contingent Capital Shares (at
the Contingent Capital Price) (the “Contingent Capital
Commitment”) on and subject to the terms of this
Agreement.  References in this Agreement to the Contingent Capital
Commitment shall be deemed to include a reference to any Contingent Capital
Subscription pursuant to the Contingent Capital Commitment.

       

      
        	
                5.2

              	
                Contingent
      Capital Subscription

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      the other provisions of this clause 5, a Contingent Capital Subscription
      shall take place:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                at any time
      before the Contingent Capital Expiry
Date;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                in respect of
      the Relevant Contingent Capital Number of B Shares on the occasion of each
      such Contingent Capital Subscription;
and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                together with
      all other Contingent Capital Subscriptions, in respect of no more than the
      number of Contingent Capital
Shares.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                The Company
      and HM Treasury may, following consultation with the FSA, agree to
      substitute for the Relevant Contingent Capital Number of B Shares
      applicable to the First Contingent Capital Subscription and/or the Second
      Contingent Capital Subscription a lower number of B Shares, in which case
      such lower number shall be the Relevant Contingent Capital Number of B
      Shares for the purposes of such Contingent Capital
      Subscription.

              


      

       

      
        
          	
                  5.3

                	
                  Conditions
      precedent to Contingent Capital
Subscription

                


        

      

       

      The obligation of
HM Treasury to subscribe for the Contingent Capital Shares on a Contingent
Capital Completion Date pursuant to the Contingent Capital Commitment shall be
conditional on:

       

      
        	
                 
      

              	
                (A)

              	
                the
      Acquisition having taken place in accordance with the terms of this
      Agreement;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                the
      Resolutions not having been amended or revoked at any time prior to the
      relevant Contingent Capital Completion
Date;

              


      

       

      
        	 	

                      
                  
      *** indicates omission of material, which has been sepatarely filed,
      pursuant to a request for confidential
  treatment.

              


      

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (C)

              	
                at the
      relevant Contingent Capital Completion Date, the European Commission’s
      approval referred to in clause 2.1(C) continuing to be in force and not
      having been withdrawn, and the European Commission not having opened a
      formal investigation under Article 88(2) of the EC Treaty in relation to
      the possible misuse of aid;

              


      

       

      
        	
                 
      

              	
                (D)

              	
                the Company
      having obtained such approvals, authorisations, permits and consents as
      may be required by any government, state or other regulatory body and all
      necessary filings having been made and all necessary waiting periods
      having expired, in each case in any part of the world and as a consequence
      of the Contingent Capital Commitment and any issue of Contingent Capital
      Shares;

              


      

       

      
        	
                 
      

              	
                (E)

              	
                HM Treasury
      having obtained such approvals, authorisations, permits and consents as
      may be required by any governmental, state or other regulatory body in any
      part of the world and all necessary filings having been made and all
      necessary waiting periods having expired, in each case as a consequence of
      the Contingent Capital Commitment and any issue of Contingent Capital
      Shares;

              


      

       

      
        	
                 
      

              	
                (F)

              	
                there having
      occurred, at the relevant Contingent Capital Completion Date, no breach by
      the Company of the State Aid Commitment
Deed;

              


      

       

      
        	
                 
      

              	
                (G)

              	
                there having
      occurred no Termination Event as at the relevant Contingent Capital
      Completion Date;

              


      

       

      
        	
                 
      

              	
                (H)

              	
                there having
      occurred a Trigger Event since the later of the date of this Agreement and
      the most recent Contingent Capital Completion Date (if
    any);

              


      

       

      
        	
                 
      

              	
                (I)

              	
                the delivery
      to HM Treasury of a certificate of the Company, verified by an Appropriate
      Person, confirming that a Trigger Event has occurred and the date on which
      such Trigger Event occurred;

              


      

       

      
        	
                 
      

              	
                (J)

              	
                the aggregate
      number of B Shares subscribed or to be subscribed for by HM Treasury on
      the relevant Contingent Capital Completion Date pursuant to the relevant
      Contingent Capital Subscription not exceeding the number of Contingent
      Capital Shares (taking account of prior Contingent Capital
      Subscriptions);

              


      

       

      
        	
                 
      

              	
                (K)

              	
                HM Treasury
      continuing to hold the Dividend Access Share on the relevant Contingent
      Capital Completion Date;

              


      

       

      
        	
                 
      

              	
                (L)

              	
                the Company
      having paid in full the Annual Premium in respect of the Premium Period in
      which the Contingent Capital Notice is served and in respect of all prior
      Premium Periods, in each case in accordance with clauses 6.1, 6.2 and
      6.3;
      and

              


      

       

      
        	
                 
      

              	
                (M)

              	
                the delivery
      to HM Treasury on the relevant Contingent Capital Completion Date of those
      documents listed in Part II of Schedule
2.

              


      

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      
        	
                5.4

              	
                Waiver
      of conditions precedent to Contingent Capital
  Subscription

              


      

       

      HM
Treasury shall be entitled, in its absolute discretion and upon such terms as it
shall think fit, to waive fulfilment of all or any of the conditions set out in
clause 5.3.

       

      
        
          	
                  5.5

                	
                  Procedure
      for Contingent Capital
Subscription

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      clause 5.5(B)(iii), if at any time a Trigger Event occurs, the Company
      shall, forthwith on becoming aware of the occurrence of such Trigger
      Event, send a notice (a “Contingent Capital
      Notice”) in writing to HM Treasury setting
  out:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                in respect of
      the First Contingent Capital Subscription and the Second Contingent
      Capital Subscription, the Relevant Contingent Capital
    Number;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                fair disclosure
      as at the Contingent Capital Notice Date of anything which is or is likely
      to constitute a breach of any of the Contingent Capital Warranties (other
      than the Warranties set out at paragraphs 1 (except
      paragraphs 1.2, 1.4 and
      1.10), 2, 3 (except
      paragraph 3.4) and 6 of
      Schedule 4) as given at such Contingent Capital Notice Date pursuant to
      clause 9.1(C) by
      reference to the facts and circumstances then existing, such disclosure
      being identified as having been made for the purposes of this
      Agreement;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                the amount
      standing to the credit of the Company’s share premium account as at the
      date of the Contingent Capital Notice;
and

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                confirmation
      that, in the Company’s good faith opinion, all conditions to the
      Contingent Capital Subscription set out in clause 5.3 will be satisfied as
      at the relevant Contingent Capital Completion Date or if, in the Company’s
      good faith opinion, any conditions set out in clause 5.3 will not be so
      satisfied, notice to HM Treasury of such
  conditions.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                Following
      delivery of a Contingent Capital
Notice:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                such notice
      shall not be capable of being
withdrawn;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                HM Treasury
      shall:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                where the
      Contingent Capital Notice is delivered in respect of a Subsequent
      Contingent Capital Subscription, having consulted with the Company, inform
      it of the Relevant Contingent Capital Number in respect of such Subsequent
      Contingent Capital Subscription;
and

              


      

       

      
        	
                 
      

              	
                (b)

              	
                inform the
      Company of the date on which HM Treasury shall, subject to clause 5.3,
      subscribe for the relevant Contingent Capital Shares, being not more than
      30 Business Days following the date on which HM Treasury receives the
      

              


      

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      
         

        
          	
                   
      

                	
                   

                	
                  Contingent
      Capital Notice unless HM Treasury and the Company otherwise agree (the
      “Contingent Capital
      Completion Date”); and

                


        

         

      

      
        	
                 
      

              	
                (iii)

              	
                the Company
      may not, without the prior written consent of HM Treasury, send any
      further Contingent Capital Notices to HM Treasury pursuant to clause
      5.5(A) until the day following  the Contingent Capital
      Completion Date occurring in respect of the outstanding Contingent Capital
      Notice.

              


      

       

      
        	
                5.6

              	
                Contingent
      Capital Completion

              


      

       

      Subject to clause
5.2, to the Contingent Capital Notice not being withdrawn and to any alternative
arrangements by which the subscription for the Contingent Capital Shares is to
be effected which may be agreed between the Company and HM Treasury, on each
Contingent Capital Completion Date:

       

      
        	
                 
      

              	
                (A)

              	
                HM Treasury
      shall ensure that payment in cash (within the meaning given by section 583
      of CA 2006), in pounds sterling and in a manner which is not prohibited by
      section 587 of CA 2006, is made of an amount equal to the relevant
      Contingent Capital Amount, which shall constitute a complete discharge of
      HM Treasury’s obligations to make payments in respect of the relevant
      Contingent Capital Shares; and

              


      

       

      
        	
                 
      

              	
                (B)

              	
                against
      compliance by HM Treasury with its obligations under clause 5.6(A), the
      Company shall:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                allot and
      issue the relevant Contingent Capital Shares to HM Treasury as fully
      paid;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                procure that
      the Registrar enters HM Treasury, or its nominee, in the register of
      members of the Company as the holder of the relevant Contingent Capital
      Shares; and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                procure that
      the Registrar delivers a share certificate to HM Treasury or its nominee
      in respect of the relevant Contingent Capital
  Shares.

              


      

       

      
        
          	
                  5.7

                	
                  Use
      of proceeds of Contingent Capital
Subscription

                


        

      

       

      The Company agrees
that it shall, promptly after each Contingent Capital Completion Date, apply the
proceeds of the relevant issue of Contingent Capital Shares (or, as the case may
be, promptly after any redemption of any shares transferred in consideration of
the issue of the relevant Contingent Capital Shares, apply the proceeds arising
from such redemption) in such manner, in such form and for such purposes as may
be agreed with HM Treasury, the FSA and the Bank of England.

       

      
        	
                5.8

              	
                Issue
      of Contingent Capital Shares

              


      

       

      
        	
                 
      

              	
                (A)

              	
                The
      Contingent Capital Shares shall be allotted and issued free from all
      Adverse Interests.

              


      

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (B)

              	
                The Company
      undertakes that it shall at all times keep available for issue, free from
      pre-emption rights:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                sufficient B
      Shares to permit each Contingent Capital Subscription and issue of
      Contingent Capital Shares in accordance with the terms of this Agreement
      and any issue of B Shares pursuant to clauses 6.2 or 6.3;
      and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                sufficient
      Ordinary Shares to permit the conversion of all B Shares in issue from
      time to time in accordance with their
terms.

              


      

       

      
        
          	
                  5.9

                	
                  Board
      Meetings

                


        

      

       

      The Company
undertakes to HM Treasury to hold a meeting or meetings of the Board which
will:

       

      
        	
                 
      

              	
                (A)

              	
                approve the
      allotment and issue of Contingent Capital Shares pursuant to each
      Contingent Capital Subscription;
and

              


      

       

      
        	
                 
      

              	
                (B)

              	
                authorise all
      necessary steps to be taken by the Company in connection
      therewith,

              


      

       

      in
each case prior to the relevant Contingent Capital Completion Date.

       

      
        
          	
                  5.10

                	
                  Termination
      of Contingent Capital
Commitment

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                The Company
      may at any time between the Acquisition Date and the Contingent Capital
      Expiry Date terminate the Contingent Capital Commitment in whole or in
      part (with the consent of the FSA) by notice in writing to HM Treasury (a
      “Contingent Capital
      Termination Notice”). The Contingent Capital Termination Notice
      will set out the number of Contingent Capital Shares in respect of which
      the Contingent Capital Commitment is to be terminated (the “Contingent Capital Termination
      Shares”) and the date with effect from which the Contingent Capital
      Commitment will so terminate, being no earlier than the day falling ten
      Business Days after the date on which HM Treasury receives the Contingent
      Capital Termination Notice (being, in the case of a partial termination of
      the Contingent Capital Commitment, the “Partial Contingent Capital
      Termination Date” and, in the case of the complete termination of
      the Contingent Capital Commitment, the “Final Contingent Capital
      Termination Date”), and shall have attached to it written consent
      from the FSA to such termination of the Contingent Capital Commitment with
      effect from the Partial Contingent Capital Termination Date or Final
      Contingent Capital Termination Date (as the case may
  be).

              


      

       

      
        	
                 
      

              	
                (B)

              	
                If the
      Company serves a Contingent Capital Termination Notice in accordance with
      clause 5.10(A) in respect of some but not all of the
      Contingent Capital Shares which have not already been the subject of a
      Contingent Capital Subscription, the number of Contingent Capital Shares
      shall be reduced by the number of Contingent Capital Termination Shares
      with effect from the Partial Contingent Capital Termination Date and HM
      Treasury and the Company shall 

              


      

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      
         

        
          	
                   
      

                	
                   

                	
                  agree in good
      faith any consequent reduction of the Relevant Contingent Capital Number,
      provided always that:

                


        

         

      

      
        	
                 
      

              	
                (i)

              	
                such
      termination shall be without prejudice to any accrued rights or
      obligations under this Agreement;
and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                such
      termination shall be conditional on the Company
  paying:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                any fees and
      expenses that are payable in such circumstance under and in accordance
      with clause 7.1; and

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any amount of
      the Annual Premium which has not been paid on the First Payment Date
      and/or any Relevant Payment Date (as the case may be) and which remains
      outstanding, together with any interest accrued
  thereon.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                If the
      Company serves a Contingent Capital Termination Notice in accordance with
      clause 5.10(A) in respect of
      all Contingent Capital Shares which have not already been the subject of a
      Contingent Capital Subscription, this Agreement shall cease and determine
      with effect from the Final Contingent Capital Termination Date and no
      party to this Agreement shall have any claim against any other party to
      this Agreement for costs, damages, compensation or otherwise (including
      for the repayment of any amount representing any pre-payment of the Annual
      Premium in respect of any period following the Final Contingent Capital
      Termination Date), provided always
that:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                such
      termination shall be without prejudice to any accrued rights or
      obligations under this Agreement;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                such
      termination shall be conditional on the Company
  paying:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                any fees and
      expenses that are payable in such circumstance under and in accordance
      with clause 7.1; and

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any amount of
      the Annual Premium which remains outstanding together with any interest
      accrued thereon;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                for as long
      as HM Treasury holds any Ordinary Shares, the provisions of clauses 8.2,
      8.3, 8.4 and 8.14 shall remain in full force and
  effect;

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                for as long
      as HM Treasury holds any B Shares, the provisions of clauses 8.2, 8.3,
      8.4, 8.5, 8.6, 8.7, 8.13(A) and 8.15 shall remain in full force and
      effect; and

              


      

       

      
        	
                 
      

              	
                (v)

              	
                the provisions
      of this clause 5.10(B) and
      clauses 1, 6, 7, 8.8, 9, 10, 11, 13, 14 and
      15 shall
      remain in full force and
effect.

              


      

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

       

      
        	
                5.11

              	
                Regulatory
      changes

              


      

       

      HM
Treasury and the Company agree that they will negotiate in good faith with a
view to agreeing any amendments to the terms of the Contingent Capital
Commitment which may be necessary as a result of future legislative or
regulatory changes so as to preserve the effect of the Contingent Capital
Commitment as at the date of this Agreement.

       

      
        	
                6.

              	
                ANNUAL
      PREMIUM

              


      

       

      
        	
                6.1

              	
                Amount
      of Annual Premium

              


      

       

      
        	
                 
      

              	
                (A)

              	
                In
      consideration of HM Treasury agreeing to (i) acquire the Acquisition
      Shares and (ii) enter into the Contingent Capital Commitment, the Company
      hereby agrees to pay to HM Treasury, in respect of each Premium Period, a
      sum equal to the Premium Amount, which shall be paid (or deemed to be
      discharged) in accordance with this clause 6.1 and clauses 6.2 and 6.3
      (the “Annual
      Premium”).

              


      

       

      
        	
                 
      

              	
                (B)

              	
                Subject to
      clauses 6.2 and 6.3:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the Annual
      Premium payable in respect of the First Premium Period shall be due and
      payable on the Acquisition Date (the “First Payment Date”);
      and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                each
      subsequent Annual Premium shall be due and payable on the first day of the
      relevant Premium Period (or, if such day is not a Business Day, the
      Business Day which immediately precedes that
  date),

              


      

       

      (each referred to
in this Agreement as a “Payment
Date”).

       

      
        	
                 
      

              	
                (C)

              	
                Subject to
      clause 6.2, the amount of the Annual Premium due and payable on each
      Payment Date, in respect of the Premium Period to which such Payment Date
      relates, shall be as follows:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                in respect of
      the First Premium Period, an amount equal to £320,000,000;
    and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                in respect of
      each subsequent Premium Period, an amount equal to the product
      of:

              


      

       

      £320,000,000
- (x x
4%)

       

      where x is the aggregate Contingent
Capital Price of:

       

      
        	
                 
      

              	
                (a)

              	
                all
      Contingent Capital Shares which have been issued to HM Treasury pursuant
      to clause 5 as at the first day of such Premium Period;
  and

              


      

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (b)

              	
                all
      Contingent Capital Termination Shares (if
any),

              


      

       

      
        	
                 
      

              	
                provided that
      the Annual Premium shall never be less than
  zero,

              


      

       

      (in each case, the
“Premium
Amount”).

       

      
        	
                 
      

              	
                (D)

              	
                If the
      Company defaults on the payment of any Annual Premium when due under this
      Agreement, the amount of such Annual Premium shall remain due and payable
      and shall be increased to include interest on such amount of such Annual
      Premium as remains outstanding from the date on which such payment was
      first due until the actual date of payment at a rate of five per cent.
      above the base rate from time to time of the Bank of England. Such
      interest shall accrue from day to day and shall be compounded
      annually.

              


      

       

      
        
          	
                  6.2

                	
                  First
      Annual Premium - Form of
payment

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                If, on or
      before the First Reference Date, the Company serves on HM Treasury a
      Payment Proposal Notice relating to the Annual Premium payable on the
      First Payment Date (the “First Annual Premium”),
      setting out the information prescribed in Schedule
  9:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                in any case
      where the amount set out in paragraph 2(a) of such Payment Proposal Notice
      is more than nil, such amount of the First Annual Premium shall be paid in
      cash on the First Payment Date;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                in any case
      where the amount set out in paragraph 2(b) of such Payment Proposal Notice
      is more than nil and the Dividend Access Share remains in issue on the
      First Payment Date:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                the Company
      and HM Treasury shall, during the period between the receipt by HM
      Treasury of such Payment Proposal Notice and the First B Shares
      Determination Date, discuss the proposal set out in paragraph 2(b) of such
      Payment Proposal Notice;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                if and to the
      extent that HM Treasury and the Company agree on or before the First B
      Shares Determination Date that any amount of the First Annual Premium is
      to be payable in cash and that HM Treasury is to apply the same amount in
      acquiring further B Shares (such amount being referred to in this clause
      6.2(A)(ii)(b) as the “Agreed B Shares Amount”
      and, if HM Treasury and the Company do not so agree, the Agreed B Shares
      Amount shall be deemed to be nil), then, subject to clause
      6.4:

              


      

       

      
        	
                 
      

              	
                (1)

              	
                such amount
      of the First Annual Premium as is equal to the Agreed B Shares Amount
      shall be payable in cash  on the First Payment
    Date;

              


      

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (2)

              	
                on or before
      the First Payment Date HM Treasury shall apply a sum equal to the Agreed B
      Shares Amount in subscribing for further B Shares from the Company at a
      price of £0.50 per B Share (as the same may be adjusted in accordance with
      paragraph 4(l) of the B Share
Terms);

              


      

       

      
        	
                 
      

              	
                (3)

              	
                the Company’s
      liability to pay the amount of the First Annual Premium referred to in
      clause 6.2(A)(ii)(b)(1) and HM Treasury’s liability to pay the sum
      described in clause 6.2(A)(ii)(b)(2) shall be discharged by way of set
      off; and

              


      

       

      
        	
                 
      

              	
                (4)

              	
                the Company
      shall, on the First Payment Date:

              


      

       

      
        	
                 
      

              	
                (A)

              	
                allot and
      issue the relevant B Shares to HM
Treasury;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                procure that
      the Registrar enters HM Treasury in the register of members of the Company
      as the holder of the relevant B Shares;
and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                procure that
      the Registrar delivers a share certificate to HM Treasury or its nominee
      in respect of the relevant B Shares;
and

              


      

       

      
        	
                 
      

              	
                (c)

              	
                if and to the
      extent that the Agreed B Shares Amount is lower than the amount set out in
      paragraph 2(b) of such Payment Proposal Notice (such difference being
      referred to in this clause 6.2(A)(ii)(c) as the “B Shares Shortfall
      Amount”), such amount of the First Annual Premium as is equal to
      the B Shares Shortfall Amount shall be paid in cash on the First Payment
      Date;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                in any case
      where the amount set out in paragraph 2(b) of the Payment Proposal Notice
      is more than nil and the Dividend Access Share does not remain in issue on
      the First Payment Date, such amount of the First Annual Premium shall be
      payable in cash on the First Payment Date;
and

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                in any case
      where the amount set out in paragraph 2(c) of such Payment Proposal Notice
      is more than nil:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                to the extent
      of such amount, the First Annual Premium shall be due and payable on the
      date referred to in clause 6.2(A)(iv)(c) and/or clause
      6.2(A)(iv)(d) as the case may be (and not, for the avoidance of
      doubt, on the First Payment Date);

              


      

       

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (b)

              	
                a “Tax Assets
      Notice” shall be deemed to have been served in respect of the First
      Payment Date for the purposes of the Tax Assets
  Agreement;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                if and to the
      extent that the Tax Assets Agreement provides that the amount of the First
      Annual Premium is to be treated as discharged by an amount of tax relief
      foregone (such amount being referred to in this clause 6.2(A)(iv) as the
      “Agreed Tax Assets
      Amount”), the First Annual
Premium:

              


      

       

      
        	
                 
      

              	
                (1)

              	
                shall be due
      for payment on, and shall be treated as having been discharged in an
      amount equal to the Agreed Tax Assets Amount on, the date provided for in
      the Tax Assets Agreement; and

              


      

       

      
        	
                 
      

              	
                (2)

              	
                for the
      avoidance of doubt, shall not be payable in cash to the extent of the
      Agreed Tax Assets Amount; and

              


      

       

      
        	
                 
      

              	
                (d)

              	
                if and to the
      extent that the Agreed Tax Assets Amount is lower than the amount set out
      in paragraph 2(c) of such Payment Proposal Notice (such difference being
      referred to in this clause 6.2(A)(iv)(d) as the “Tax Assets Shortfall
      Amount”):

              


      

       

      
        	
                 
      

              	
                (1)

              	
                subject to
      clauses 6.2(A)(iv)(d)(2) and 6.2(A)(iv)(d)(3) below, such amount of the
      First Annual Premium as is equal to the Tax Assets Shortfall Amount shall
      be paid in cash on the Adjusted First Payment Date;
  and

              


      

       

      
        	
                 
      

              	
                (2)

              	
                the amount of
      the First Annual Premium which is payable in cash on the Adjusted First
      Payment Date (as described in clause 6.2(A)(iv)(d)(1)) shall be increased
      by an amount equal to interest on the Tax Assets Shortfall Amount in
      respect of the period from (and including) the First Payment Date to (but
      excluding) the Adjusted First Payment Date at the Interest Rate;
      and

              


      

       

      
        	
                 
      

              	
                (3)

              	
                if and to the
      extent that the Company and HM Treasury agree on or before the Adjusted
      First Payment Date that HM Treasury is to apply an amount (such amount
      being referred to in this clause 6.2(A)(iv)(d)(3) as the “Fallback B Shares
      Amount”) representative of all or part of the amount referred to in
      clause 6.2(A)(iv)(d)(1) or 6.2(A)(iv)(d)(2) above in acquiring further B
      Shares and provided the Dividend Access Share remains in issue on the
      Adjusted First Payment Date then, subject to clause
  6.4:

              


      

       

      
        	
                 
      

              	
                (A)

              	
                on the
      Adjusted First Payment Date, HM Treasury shall apply a sum equal to the
      Fallback B Shares Amount in subscribing for


              


      

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

      
         

        
          	
                   
      

                	
                   

                	
                  further B
      Shares at a price of £0.50 per B Share (as the same may be adjusted in
      accordance with paragraph 4(l) of the B Share Terms) (such amount being
      referred to in this clause 6.2(A)(iv)(d)(3) as the “Fallback B Shares Subscription
      Amount”);

                


        

         

      

      
        	
                 
      

              	
                (B)

              	
                HM Treasury’s
      liability to pay the Fallback B Shares Subscription Amount and, to the
      extent of the Fallback B Shares Amount, the Company’s liability to pay the
      First Annual Premium referred to in clause 6.2(A)(iv)(d)(1) above shall be
      discharged by way of set off; and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                the Company
      shall, on the Adjusted First Payment
Date:

              


      

       

      
        	
                 
      

              	
                (1)

              	
                allot and
      issue the relevant B Shares to HM
Treasury;

              


      

       

      
        	
                 
      

              	
                (2)

              	
                procure that
      the Registrar enters HM Treasury in the register of members of the Company
      as the holder of the relevant B Shares;
and

              


      

       

      
        	
                 
      

              	
                (3)

              	
                procure that
      the Registrar delivers a share certificate to HM Treasury or its nominee
      in respect of the relevant B
Shares.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                For the
      avoidance of doubt, in any case where clause 6.2(A) does not apply, the
      First Annual Premium shall be paid in
cash.

              


      

       

      
        	
                6.3

              	
                Other
      Annual Premia - Form of payment

              


      

       

      
        	
                 
      

              	
                (A)

              	
                If, on or
      before the Reference Date relating to any Payment Date other than the
      First Payment Date (referred to in this clause 6.3(A) as the “Relevant Payment Date”),
      the Company serves on HM Treasury a Payment Proposal Notice relating to
      the Annual Premium payable on the Relevant Payment Date (referred to in
      this clause 6.3(A) as the “Relevant Annual
      Premium”), setting out the information prescribed in Schedule
      9:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                in any case
      where the amount set out in paragraph 2(a) of such Payment Proposal Notice
      is more than nil, such amount of the Relevant Annual Premium shall be paid
      in cash on the Relevant Payment
Date;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                in any case
      where the amount set out in paragraph 2(b) of such Payment Proposal Notice
      is more than nil and the Dividend Access Share remains in issue on the
      Relevant Payment Date:

              


      

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (a)

              	
                the Company
      and HM Treasury shall, during the period between the receipt by HM
      Treasury of such Payment Proposal Notice and the relevant B Shares
      Determination Date, discuss the proposal set out in paragraph 2(b) of such
      Payment Proposal Notice;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                if and to the
      extent that HM Treasury and the Company agree on or before the relevant B
      Shares Determination Date that any amount of the Relevant Annual Premium
      is to be payable in cash and that HM Treasury is to apply the same amount
      in acquiring further B Shares (such amount being referred to in this
      clause 6.3(A)(ii)(b) as the “Agreed B Shares Amount”
      and, if HM Treasury and the Company do not so agree, the Agreed B Shares
      Amount shall be deemed to be nil) then, subject to clause
    6.4:

              


      

       

      
        	
                 
      

              	
                (1)

              	
                such amount
      of the Relevant Annual Premium as is equal to the Agreed B Shares Amount
      shall be payable in cash on the Relevant Payment
  Date;

              


      

       

      
        	
                 
      

              	
                (2)

              	
                on or before
      the Relevant Payment Date HM Treasury shall apply a sum equal to the
      Agreed B Shares Amount in subscribing for further B Shares at a price of
      £0.50 per B Share (as the same may be adjusted in accordance with
      paragraph 4(l) of the B Share
Terms);

              


      

       

      
        	
                 
      

              	
                (3)

              	
                the Company’s
      liability to pay the amount of the Relevant Annual Premium referred to in
      clause 6.3(A)(ii)(b)(1) and HM Treasury’s liability to pay the sum
      described in clause 6.3(A)(ii)(b)(2) shall be discharged by way of set
      off; and

              


      

       

      
        	
                 
      

              	
                (4)

              	
                the Company
      shall, on the Relevant Payment
Date:

              


      

       

      
        	
                 
      

              	
                (A)

              	
                allot and
      issue the relevant B Shares to HM
Treasury;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                procure that
      the Registrar enters HM Treasury in the register of members of the Company
      as the holder of the relevant B Shares;
and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                procure that
      the Registrar delivers a share certificate to HM Treasury or its nominee
      in respect of the relevant B Shares;
and

              


      

       

      
        	
                 
      

              	
                (c)

              	
                if and to the
      extent that the Agreed B Shares Amount is lower than the amount set out in
      paragraph 2(b) of such Payment Proposal Notice (such difference being
      referred to in this clause 6.3(A)(ii)(c) as the “B Shares Shortfall
      Amount”), such amount of the Relevant Annual Premium as is equal to
      the B Shares 

              


      

       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

      
         

        
          	
                   
      

                	
                   

                	
                  Shortfall
      Amount shall be paid in cash (for the avoidance of doubt, on the Relevant
      Payment Date); and

                


        

         

      

      
        	
                 
      

              	
                (iii)

              	
                in any case
      where the amount set out in paragraph 2(b) of the Payment Proposal Notice
      is more than nil and the Dividend Access Share does not remain in issue on
      the Relevant Payment Date, such amount of the Relevant Annual Premium
      shall be payable in cash on the Relevant Payment Date;
  and

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                in any case
      where the amount set out in paragraph 2(c) of such Payment Proposal Notice
      is more than nil:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                to the extent
      of such amount, the Relevant Annual Premium shall be due and payable on
      the date referred to in clause 6.3(A)(iv)(c) and/or clause 6.3(A)(iv)(d)
      as the case may be;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                a “Tax Assets
      Notice” shall be deemed to have been served in respect of the Relevant
      Payment Date for the purposes of the Tax Assets
  Agreement;

              


      

       

      
        	
                 
      

              	
                (c)

              	
                if and to the
      extent that the Tax Assets Agreement provides that the amount of the
      Relevant Annual Premium is to be treated as discharged by an amount of tax
      relief foregone (such amount being referred to in this clause 6.3(A)(iv)
      as the “Agreed Tax Assets
      Amount”), the Relevant Annual
Premium:

              


      

       

      
        	
                 
      

              	
                (1)

              	
                shall be due
      for payment on, and shall be treated as having been discharged in an
      amount equal to the Agreed Tax Assets Amount on, the date provided for in
      the Tax Assets Agreement; and

              


      

       

      
        	
                 
      

              	
                (2)

              	
                for the
      avoidance of doubt, shall not be payable in cash to the extent of the
      Agreed Tax Assets Amount; and

              


      

       

      
        	
                 
      

              	
                (d)

              	
                if and to the
      extent that the Agreed Tax Assets Amount is lower than the amount set out
      in paragraph 2(c) of such Payment Proposal Notice (such difference being
      referred to in this clause 6.3(A)(iv)(d) as the “Tax Assets Shortfall
      Amount”):

              


      

       

      
        	
                 
      

              	
                (1)

              	
                subject to
      clause 6.3(A)(iv)(d)(2), such amount of the Relevant Annual Premium as is
      equal to the Tax Assets Shortfall Amount shall be paid in cash on the
      Relevant Payment Date; and

              


      

       

      
        	
                 
      

              	
                (2)

              	
                if and to the
      extent that the Company and HM Treasury agree on or before the Relevant
      Payment Date that HM Treasury is to apply an amount (such amount being
      referred to in this clause 6.3(A)(iv)(d)(2) as the “Fallback B Shares
      Amount”) representative of all or any part of the amount referred
      to in clause 

              


      

       

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

      
         

        
          	
                   
      

                	
                   

                	
                  6.3(A)(iv)(d)(1)
      above in acquiring further B Shares and providing the Dividend Access
      Share remains in issue on the Relevant Payment Date then, subject to
      clause 6.4:

                


        

         

      

      
        	
                 
      

              	
                (A)

              	
                on or before
      the Relevant Payment Date, HM Treasury shall apply a sum equal to the
      Fallback B Shares Amount in subscribing for further B Shares at a price of
      £0.50 per B Share (as the same may be adjusted in accordance with
      paragraph 4(l) of the B Share Terms) (such amount being referred to in
      this clause 6.3(A)(iv)(d)(2) as the “Fallback B Shares Subscription
      Amount”);

              


      

       

      
        	
                 
      

              	
                (B)

              	
                HM Treasury’s
      liability to pay the Fallback B Shares Subscription Amount and, to the
      extent of the Fallback B Shares Amount, the Company’s liability to pay the
      Relevant Annual Premium referred to in clause 6.3(A)(iv)(d)(1) above shall
      be discharged by way of set off;
and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                the Company
      shall, on the Relevant Payment
Date:

              


      

       

      
        	
                 
      

              	
                (1)

              	
                allot and
      issue the relevant B Shares to HM
Treasury;

              


      

       

      
        	
                 
      

              	
                (2)

              	
                procure that
      the Registrar enters HM Treasury in the register of members of the Company
      as the holder of the relevant B Shares;
and

              


      

       

      
        	
                 
      

              	
                (3)

              	
                procure that
      the Registrar delivers a share certificate to HM Treasury or its nominee
      in respect of the relevant B
Shares.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                For the
      avoidance of doubt, in any case where clause 6.3(A) does not apply, each
      Annual Premium payable on any Payment Date other than the First Payment
      Date shall be paid in cash.

              


      

       

      
        	
                6.4

              	
                Alternative
      settlement arrangements

              


      

       

      If, on or before
the First Payment Date or the Relevant Payment Date (as the case may be), HM
Treasury and the Company agree that any acquisition of B Shares by HM Treasury
pursuant to the operation of clause 6.2 or 6.3 is to be implemented by means of
a cashbox structure, the provisions of clauses 6.2(A)(ii)(b), 6.2(A)(iv)(d)(3),
6.3(A)(ii)(b) and/or  6.3(A)(iv)(d)(2) (as the case may be) shall be
substituted by such 

       

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

         

      

      other settlement arrangements as HM Treasury and the Company may
agree, consistent with the arrangements reflected at clause 3.1(B) in respect of
the Acquisition.

       

      
        
          	
                  6.5

                	
                  Discretion

                


        

      

       

      For the avoidance
of doubt, HM Treasury shall be entitled to exercise its absolute discretion in
relation to any consent or agreement which this clause 6 contemplates may be
given or made by it and, without limitation of the foregoing, shall be under no
obligation to consent or agree to any method of payment set out in a Payment
Proposal Notice (provided that, if HM Treasury exercises any such discretion in
any particular way upon any application of any provision of this clause 6 and
notifies the Company of such exercise of such discretion, such exercise of such
discretion shall be irrevocable unless HM Treasury and the Company agree
otherwise and, if any such agreement is made, such agreement shall be
irrevocable unless HM Treasury and the Company agree otherwise).

       

      
        
          	
                  6.6

                	
                  Continuing
      obligations

                


        

      

       

      For the avoidance
of doubt, the Company’s obligations pursuant to this clause 6 in respect of any
Annual Premium which has become due for payment before the End Date shall not,
unless the parties otherwise agree, be affected by the occurrence of the End
Date during any Premium Period and, without limitation of the foregoing, HM
Treasury shall not be obliged to repay all or any part of such Annual Premium
notwithstanding the occurrence of the End Date during any Premium
Period.

       

      
        
          	
                  6.7

                	
                  Payments
      in cash

                


        

      

       

      If
and to the extent that any Annual Premium is to be paid in cash pursuant to this
clause 5, such payment shall be made:

       

      
        	
                 
      

              	
                (A)

              	
                in
      immediately available and transferable
funds;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                in sterling,
      unless HM Treasury and the Company agree otherwise;
  and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                to such bank
      account as may be nominated by HM Treasury from time to
    time.

              


      

       

      
        
          	
                  7.

                	
                  COSTS,
      EXPENSES AND TAX

                


        

      

       

      
        	
                7.1

              	
                Payment
      of HM Treasury’s costs and expenses

              


      

       

      
        	
                 
      

              	
                (A)

              	
                In
      consideration of HM Treasury agreeing to acquire the Acquisition Shares
      and enter into the Contingent Capital Commitment under this Agreement, the
      Company shall pay HM Treasury’s legal and other costs and expenses and the
      costs and expenses of HM Treasury’s financial advisers, in each case
      incurred for the purpose of or in connection
  with:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the
      Acquisition, the Contingent Capital Commitment and the Cashbox Documents
      and all arrangements relating thereto;
and

              


      

       

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (ii)

              	
                the matters
      referred to in clauses 7.3(G), 8.2, 8.3, 8.7, 8.9, 8.12, 8.13 and
      8.15.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                The costs and
      expenses referred to in this clause 7.1 shall be payable whether or not
      this Agreement becomes unconditional or is terminated for any reason and
      shall be payable:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                in respect of
      any costs and expenses referred to in clause
  7.1(A)(i):

              


      

       

      
        	
                 
      

              	
                (a)

              	
                relating to
      the Acquisition, the entry into the Contingent Capital Commitment, the
      Cashbox Documents or any related arrangements, on the Acquisition
      Date;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                relating to
      each Contingent Capital Subscription or any related arrangements, the
      earlier of the relevant Contingent Capital Completion Date and the date
      falling twenty one days after the Contingent Capital Completion Date
      specified by HM Treasury or otherwise agreed pursuant to clause
      5.5(B)(ii)(b);

              


      

       

      or, if
earlier,

       

      
        	
                 
      

              	
                (c)

              	
                the day on
      which this Agreement is terminated;
and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                in respect of
      any costs and expenses referred to in clause 7.1(A)(ii), within 14 days of
      demand therefor from HM Treasury.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                HM Treasury
      may deduct the amount of the expenses payable under this clause 7.1
      together with an amount in respect of any VAT chargeable thereon, from any
      payment to be made by HM Treasury pursuant to clause
    5.6(A).

              


      

       

      
        
          	
                  7.2

                	
                  Costs
      and expenses generally

                


        

      

       

      Notwithstanding the
provisions of clause 7.1, the Company shall bear all of its costs and expenses
of or incidental to the Acquisition, the Cashbox Documents, the Contingent
Capital Commitment and the matters contemplated by this Agreement (including,
for the avoidance of doubt, any applicable amounts in respect of VAT thereon, in
accordance with clause 7.3(D)), such expenses including, without limitation, the
fees and expenses of its professional advisers, the cost of preparing, printing
and distributing the Circular and all other documents connected with the
Acquisition, the Cashbox Documents and the Contingent Capital Commitment and the
Registrar’s fees. This clause 7.2 shall not apply to any Tax (provision for
which is, for the avoidance of doubt, made in clause 7.3) except to the extent
provided for in clause 7.3. 

       

      
        	
                7.3

              	
                Tax

              


      

       

      
        	
                 
      

              	
                (A)

              	
                The Company
      shall pay and bear any Stamp Tax which is payable or paid in connection
      with:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the allotment
      and issue of the Acquisition Shares or the Contingent Capital Shares or
      the delivery of the Acquisition Shares or the


              


      

       

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

       

      
        	 	 	Contingent Capital Shares in
      the manner contemplated by this Agreement or the execution, delivery,
      performance or enforcement of this Agreement (including, without
      limitation, the Contingent Capital Commitment); or
	 	 	 
	
                 
      

              	
                (ii)

              	
                without
      limitation of the foregoing, any matters contemplated in the Cashbox
      Documents (including, without limitation, in connection with any delivery,
      issue or transfer of any Cashbox Ordinary Shares or Cashbox Preference
      Shares as contemplated in the Cashbox Documents);
  or

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                without
      limitation of the foregoing, any matters contemplated in any documentation
      relating to any cashbox structure by which the allotment and issue of the
      relevant Contingent Capital Shares may be implemented (including, without
      limitation, in connection with any delivery, issue or transfer of any
      shares in the capital of any company similar to CashboxCo involved in such
      structure); or

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                without
      limitation of the foregoing, any matters contemplated in any documentation
      relating to any cashbox structure implemented pursuant to clause 6.4
      (including, without limitation, in connection with any delivery, issue or
      transfer of any shares in the capital of any company similar to CashboxCo
      involved in such structure),

              


      

       

      provided that this
clause 7.3(A) shall not apply to:

       

      
        	
                 
      

              	
                (a)

              	
                any Stamp Tax
      payable in respect of transfers of, or agreements to transfer, Acquisition
      Shares, Contingent Capital Shares or B Shares subscribed or acquired
      pursuant to clause 6.2 or 6.3 subsequent to any such Acquisition Shares
      having been acquired, or any such Contingent Capital Shares or B Shares
      having been acquired or subscribed for, by HM Treasury in the manner
      contemplated by this Agreement, the Cashbox Documents or such other
      documentation; or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any stamp
      duty chargeable at a rate determined under section 67 or 70 of the Finance
      Act 1986 or SDRT chargeable under section 93 or 96 of the Finance Act
      1986.

              


      

       

      References in this
clause 7.3(A) to Acquisition Shares, Contingent Capital Shares or B Shares
include any interest in or rights to allotment of Acquisition Shares, Contingent
Capital Shares or B Shares respectively.

       

      
        	
                 
      

              	
                (B)

              	
                If HM
      Treasury or any other Indemnified Person is subject to Tax in respect of
      any sum payable under this Agreement, or if any such sum is taken into
      account in computing the taxable profits or income of HM Treasury or such
      other Indemnified Person, the sum payable shall be increased to such
      amount as will ensure that (after payment of such Tax, including, for the
      avoidance of doubt, any additional Tax payable as a result of such
      increase) HM Treasury or the 

              


      

       

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

         

      

      relevant Indemnified Person (as the case may be) retains a sum
equal to the sum that it would have received and retained in the absence of such
Tax.

       

      
        	
                 
      

              	
                (C)

              	
                All sums
      payable by the Company (the “Payer”) to HM Treasury
      or to any other Indemnified Person (the “Payee”) pursuant to this
      Agreement are expressed exclusive of any amount in respect of VAT which is
      chargeable on the supply or supplies for which such sums (or any part
      thereof) is or are the whole or part of the consideration for VAT
      purposes. If any Payee makes (or is deemed for VAT purposes to make) any
      supply to the Payer pursuant to this Agreement and VAT is or becomes
      chargeable in respect of such supply, the Payer shall pay to the Payee
      (within 14 days of the receipt of a valid VAT invoice) an additional sum
      equal to the amount of such VAT.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                In any case
      where the Company is obliged to pay a sum to HM Treasury or to any other
      Indemnified Person under this Agreement by way of indemnity,
      reimbursement, damages or compensation for or in respect of any fee,
      liability, cost, charge or expense (the “Relevant Cost”), the Company
      shall pay to HM Treasury or to any other Indemnified Person (as the case
      may be) at the same time an additional amount determined as
      follows:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                if the
      Relevant Cost is for VAT purposes the consideration for a supply of goods
      or services made to HM Treasury or to any other Indemnified Person
      (including, for the avoidance of doubt, where such supply is made to HM
      Treasury or any other Indemnified Person acting as agent for the Company
      within the terms of section 47 VATA), such additional amount shall be
      equal to any input VAT which was incurred by HM Treasury or by any other
      Indemnified Person (as the case may be) in respect of that supply and
      which it is not able to recover from the relevant Tax Authority;
      and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                if the
      Relevant Cost is for VAT purposes a disbursement incurred by HM Treasury
      or any other Indemnified Person as agent on behalf of the Company and the
      relevant supply is made to the Company for VAT purposes, such additional
      amount shall be equal to any amount in respect of VAT which was paid in
      respect of the Relevant Cost by HM Treasury or by any other Indemnified
      Person, and HM Treasury or the relevant other Indemnified Person shall use
      reasonable endeavours to procure that the relevant third party issues a
      valid VAT invoice in respect of the Relevant Cost to the
      Company.

              


      

       

      
        	
                 
      

              	
                (E)

              	
                All payments
      by the Company under this Agreement, shall be paid without set-off or
      counterclaim, and free and clear of and without deduction or withholding
      for or on account of Tax, unless required by law. If any Tax is required
      by law to be deducted or withheld from or in connection with any such
      payment, the Company will:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                promptly upon
      becoming aware thereof, notify HM Treasury and, if different, the payee
      thereof;

              


      

       

      
        
          
          

        

        
          46

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (ii)

              	
                make that
      deduction or withholding and any payment of Tax required in connection
      with that deduction or withholding within the time allowed and in the
      minimum amount required by law;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                deliver to
      the payee such receipts, statements or other documents as the payee may
      reasonably request by way of evidence that the deduction or withholding
      has been made and any appropriate payment of Tax made to the relevant Tax
      Authority; and

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                increase the
      amount payable so that the amount received by the payee (after such
      deduction or withholding, including for the avoidance of doubt any
      additional deduction or withholding required as a result of such increase)
      is equal to the amount which the payee would have received if no such
      deduction or withholding had been
made.

              


      

       

      
        	
                 
      

              	
                (F)

              	
                If the
      Company makes an increased payment to HM Treasury or any other Indemnified
      Person in accordance with clause 7.3(B) or 7.3(E) and HM Treasury or such
      other Indemnified Person (as the case may be) determines in good faith
      that it has obtained, utilised and retained a relief from Tax or a refund
      of Tax which is attributable to such increased payment made by the
      Company, then HM Treasury or such other Indemnified Person (as the case
      may be) shall reimburse to the Company as soon as reasonably practicable
      an amount equal to such proportion of the Tax so saved or refunded as will
      leave HM Treasury or the relevant other Indemnified Person (as the case
      may be), after such reimbursement, in the same after-Tax position (having
      regard to the time value of money) that it would have been in if the
      circumstances giving rise to such additional payment had not arisen. For
      the avoidance of doubt, nothing in this Agreement shall require HM
      Treasury or any other Indemnified Person to disclose any information in
      relation to its Tax affairs to the Company or any person acting for or on
      behalf of the Company.

              


      

       

      
        	
                 
      

              	
                (G)

              	
                The Company
      shall (and shall, to the extent possible, procure that each other Group
      Company will) prepare its Tax returns and any related claims, elections,
      notices and other correspondence, and conduct any related claims, appeals
      or proceedings, if and to the extent that they relate to the Tax treatment
      or Tax implications of the allotment and issue of the Acquisition Shares
      or the Contingent Capital Shares or any other matter contemplated by this
      Agreement (including, without limitation, the Contingent Capital
      Subscription), on a basis which is consistent with any principles agreed
      between any Group Company and HM Treasury and/or HMRC, or set out by HM
      Treasury or HMRC in each case in response to any request or inquiry on the
      relevant subject by any Group Company (or any of its advisers), in
      connection with (whether prior to, at the time of or following) RBS’s
      accession to the APS except to the extent that the relevant Group Company
      is prevented from doing so as a result of any change in Applicable Law or
      IFRS (or other relevant generally accepted accounting principles) taking
      effect after the Accession Date.

              


      

       

      
        	
                 
      

              	
                (H)

              	
                The Company
      shall promptly notify HM Treasury if it is or becomes aware at any time
      that any deduction or withholding for or on account of Tax is or is likely
      to be required to be made in respect of any dividend or other sum payable
      on 

              


      

       

      
        
          
          

        

        
          47

          
            

          

        

        
          
          

        

      

      
         

        
          	
                   
      

                	
                   

                	
                  the
      Acquisition Shares or the Contingent Capital Shares.  The
      Company shall co-operate with HM Treasury in completing any treaty forms
      or other procedural formalities reasonably requested by HM Treasury for
      the purpose of enabling the Company to pay any such dividends or other
      sums without any such deduction or
withholding.

                


        

         

      

      
        	
                8.

              	
                GENERAL
      UNDERTAKINGS

              


      

       

      
        	
                8.1

              	
                Compliance
      by the Company

              


      

       

      The Company shall
comply in all material respects with the CA 2006, FSMA, the Listing Rules and
the DTRs and all other applicable laws and regulations, in each case insofar as
they are relevant to the performance of this Agreement, the Acquisition, the
Contingent Capital Commitment (including the allotment and issue of the
Acquisition Shares and the Contingent Capital Shares) and the conversion of the
B Shares into Ordinary Shares.

       

      
        
          	
                  8.2

                	
                  Announcements
      and communications by the
Company

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      this clause 8.2, the Company shall ensure that no member of the Group nor
      any of their respective Representatives shall make, publish, issue or
      release any announcement or public statement in relation to, or which
      refers to:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the
      Acquisition, the Contingent Capital Commitment, the B Shares, the Dividend
      Access Share or this Agreement; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                HM Treasury
      in connection with the Acquisition, the Contingent Capital Commitment, the
      B Shares, the Dividend Access Share or this Agreement or otherwise in
      relation to HM Treasury as a shareholder in the
  Company,

              


      

       

      (including in any
annual report and accounts or other documents issued or made available to
holders of securities, whether in electronic or paper written form, or in any
oral announcement or statement) (each a “Relevant
Statement”).

       

      
        	
                 
      

              	
                (B)

              	
                Notwithstanding
      clause 8.2(A):

              


      

       

      
        	
                 
      

              	
                (i)

              	
                each member
      of the Group may (and each such member’s Representatives may on its
      behalf) make, publish, issue or release a Relevant Statement in connection
      with (and at or around the time of) the Company’s entry into of this
      Agreement (each a “Signing Announcement”)
      and at the time of the Acquisition (each an “Acquisition
      Announcement”), provided that any such Signing Announcement or
      Acquisition Announcement is in form and substance satisfactory to HM
      Treasury (acting reasonably);

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                each member
      of the Group may (and each such member’s Representatives may on its
      behalf)  make, publish, issue or release any Relevant Statement
      if and to the extent required by:

              


      

       

      
        
          
          

        

        
          48

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (a)

              	
                Applicable
      Law; or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                the rules of
      the Bank of England or of any securities exchange, clearing system or
      Authority (including the FSA) to which it is subject or
      submits,

              


      

       

      (each, a “Permitted Statement”) provided
that any such Permitted Statement is made, published or issued in compliance
with clauses 8.2(D) to 8.2(F) (inclusive); and

       

      
        	
                 
      

              	
                (iii)

              	
                the
      Representatives of each member of the Group may make on behalf of that
      member Relevant Statements which are unscripted oral statements (each, a
      “Permitted Oral
      Statement”), provided that the Company shall use all reasonable
      endeavours to ensure that processes are in place with a view to ensuring
      that any such unscripted oral statements are consistent with any other
      Relevant Statements made in accordance with this clause 8.2 by or on
      behalf of the Company or any other member of the
  Group.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                Any Relevant
      Statement which does not constitute a Signing Announcement, an Acquisition
      Announcement, a Permitted Statement or a Permitted Oral Statement may be
      made, issued, published or released only if it is in form and substance
      satisfactory to HM Treasury.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                Any Permitted
      Statement:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                must be (in
      the honestly held opinion of any director or officer of the company making
      or authorising the Permitted Statement) accurate and not
      misleading;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                subject to
      clause 8.2(F), must be made, published, issued or released only after
      giving as much prior notification as is reasonably practicable to, and
      consulting to the fullest extent reasonably practicable with, HM Treasury
      with a view to giving HM Treasury as much time as is reasonably
      practicable, in all the circumstances, to review and comment on such
      Permitted Statement; and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                subject to
      clause 8.2(F), must reflect any amendments which HM Treasury (acting
      reasonably) proposes to be made, including in respect of references to HM
      Treasury, the Acquisition, the Contingent Capital Commitment, the B
      Shares, the Dividend Access Share and this Agreement and any other matter
      in relation to HM Treasury as a shareholder in the Company, save to the
      extent that any such proposed
amendment:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                is not
      permitted by Applicable Law;

              


      

       

      
        	
                 
      

              	
                (b)

              	
                conflicts
      with the fiduciary duties of any director or officer of the company making
      or authorising the Permitted
Statement;

              


      

       

      
        
          
          

        

        
          49

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (c)

              	
                (in the
      honestly held opinion of any director or officer of the company making or
      authorising the Permitted Statement) is not accurate or is misleading;
      or

              


      

       

      
        	
                 
      

              	
                (d)

              	
                reflects a
      disagreement between the Company and HM Treasury as to the interpretation
      of this Agreement, the Contingent Capital Commitment, the B Share Terms or
      the Dividend Access Share Terms (or any provision of them) or any other
      matters, and the Company’s interpretation of this Agreement, the
      Contingent Capital Commitment, the B Share Terms or the Dividend Access
      Share Terms or other matters is honestly believed by the director(s) or
      officer(s) of the company making or authorising the Permitted Statement to
      be accurate and not misleading.

              


      

       

      
        	
                 
      

              	
                (E)

              	
                If in respect
      of any Permitted Statement, any member of the Group or any of its
      Representatives proposes, pursuant to clause 8.2(D)(iii), not to adopt, or
      does not adopt, any amendment proposed by HM Treasury, the Company shall
      procure that such member of the Group or Representative shall (to the
      extent reasonably practicable, prior to the making, publication, issuance
      or release of the relevant Permitted Statement or, if not reasonably
      practicable, promptly thereafter) provide to HM Treasury, in writing,
      reasons explaining why such amendments are not proposed to be, or were
      not, adopted.

              


      

       

      
        	
                 
      

              	
                (F)

              	
                If any member
      of the Group, or any of its Representatives, proposes to make a Permitted
      Statement and either:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                notification
      to, and consultation with, HM Treasury prior to the making, publication,
      issuance or release of such Permitted Statement is not permissible
      under:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                Applicable
      Law; or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                the rules of
      the Bank of England or of any securities exchange, clearing system or
      Authority (including the FSA) to which it is subject or submits;
      or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                the Permitted
      Statement must be made urgently such that prior notification to or
      consultation with HM Treasury is not reasonably
    practicable,

              


      

       

      then the Company
shall, as soon as permissible by Applicable Law or the relevant rules (as
applicable) and as soon as is reasonably practicable, provide a copy of such
Permitted Statement to HM Treasury, together with a notification providing
reasonable details of the circumstances giving rise to the Permitted Statement,
the nature of the relevant Permitted Statement and the basis upon which that
member of the Group or Representative was prevented from complying with clause
8.2(D)(ii).

       

      
        
          
          

        

        
          50

          
            

          

        

        
          
          

        

         

      

      
        	
                 
      

              	
                (G)

              	
                The Company
      shall ensure that any Relevant Statement that is submitted to HM Treasury
      pursuant to clause 8.2(C) or
      8.2(D) for HM Treasury’s
      review, comment or approval is identified as a Relevant Statement or a
      Permitted Statement to which clause 8.2(C) or 8.2(D) (respectively)
      applies.

              


      

       

      
        	
                 
      

              	
                (H)

              	
                The Company
      shall provide to HM Treasury, as early as reasonably practicable prior to
      its proposed issue, publication or release, an advanced draft of any
      material announcement to be made by any member of the Group in relation to
      the financial position of any member of the Group or the Group as a whole,
      even where such announcement does not constitute (in whole or in part) a
      Relevant Statement.

              


      

       

      
        	
                 
      

              	
                (I)

              	
                HM Treasury
      and its Representatives may make, publish, issue or release any
      announcement or statement in relation to this Agreement, the Acquisition,
      the Contingent Capital Commitment, the B Shares or the Dividend Access
      Shares or any other matter pertaining to this Agreement that HM Treasury
      considers to be necessary, desirable or appropriate (acting reasonably),
      provided that the making, publication, issuance or release does not breach
      clause 8.4(C).

              


      

       

      
        	
                8.3

              	
                Regulatory
      filings

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Where any
      Group Company is to make any filing with, or is required to take any
      action by, a regulator which relates (directly or (to the extent known or
      which ought reasonably to be known by such Group Company) indirectly) to
      HM Treasury or its interest in Ordinary Shares, B Shares, Contingent
      Capital Shares or the Dividend Access Share, the Company shall, to the
      extent lawful to do so, use all reasonable endeavours to provide HM
      Treasury or to procure that HM Treasury is provided, in each case as early
      as practicable, with a copy of all communications with such regulator
      relating to such filing or action.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                Where, in
      consequence of any Group Company carrying on business in any jurisdiction,
      a Group Company is required to take any regulatory action or make any
      regulatory filing, the Company shall and shall procure that each Group
      Company shall:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                use all
      reasonable endeavours to determine at the earliest opportunity whether any
      similar action requires to be taken or filing requires to be made by HM
      Treasury in consequence of HM Treasury’s interest in Ordinary Shares, B
      Shares, Contingent Capital Shares or the Dividend Access
      Share;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                if it is
      determined that any such action requires to be taken or filing requires to
      be made by HM Treasury, inform HM Treasury of such requirement as soon as
      practicable following such determination, following which the Company and
      HM Treasury shall discuss in good faith the nature of, and agree an
      approach to, the actions or filings that require to be taken or made;
      and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                if requested
      by HM Treasury, take steps to coordinate any such action that requires to
      be taken or filing that requires to be made by HM
  

              


      

       

      
        
          
          

        

        
          51

          
            

          

        

        
          
          

        

         

      

      Treasury with
any action or filing that any Group Company is required to take or make, so as
to ensure that actions are taken, and filings are made, on a uniform and
consistent basis to the extent reasonably practicable.

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      undertakes:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                to provide to
      HM Treasury within 14 days of the date of this Agreement a schedule
      setting out the dates on which it anticipates making any regulatory
      filings within the following three calendar months and which relate or are
      likely to relate (directly or indirectly) to HM Treasury or to its
      interest in Ordinary Shares, B Shares, Contingent Capital Shares or the
      Dividend Access Share; and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                for as long
      as HM Treasury has an interest in Ordinary Shares, B Shares, Contingent
      Capital Shares or the Dividend Access Share, to update such schedule at
      the end of each calendar month so as to include relevant regulatory
      filings which are anticipated to be made during the following three
      calendar months.

              


      

       

      
        	
                8.4

              	
                Provision
      of information

              


      

       

      
        	
                 
      

              	
                (A)

              	
                The Company
      undertakes to provide such:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                publications,
      reports and other information with respect to the Company and each Group
      Company and their businesses; and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                access to the
      books and records and management and other employees of the Company and
      each Group Company and their
businesses,

              


      

       

      as
HM Treasury may reasonably request in order to allow HM Treasury (including any
agent or nominee of HM Treasury) to comply fully with all legal and regulatory
and other requirements under the laws and regulations of any jurisdiction
applicable to HM Treasury (and/or any such agent or nominee of HM Treasury) and
allow HM Treasury (and/or any such agent or nominee of HM Treasury) to fulfil
its obligations to Parliament and to the National Audit Office, in each case as
a direct or indirect consequence of its shareholdings in the Company, including
as a result of or in connection with its acquisition of Acquisition Shares, the
Contingent Capital Commitment and any Contingent Capital Subscription provided
that the Company will not be required to comply with requests from HM Treasury
only to the extent that the Company (acting reasonably) determines that
compliance with such requests would have a materially detrimental effect on the
Company’s commercial operations.

       

      
        	
                 
      

              	
                (B)

              	
                Without
      prejudice to clause 8.4(A), the Company shall and shall procure that each
      Group Company shall, from the date of this Agreement to the Acquisition
      Date provide HM Treasury or its representatives with such information,
      data and assistance as HM Treasury may reasonably require to enable it to
      ascertain whether the condition set out in clause 2.1(P) has been
      satisfied.

              


      

       

      
        
          
          

        

        
          52

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (C)

              	
                Confidential
      information provided to HM Treasury (and/or any agent or nominee of HM
      Treasury) pursuant to clause 8.4(A) or 8.4(B) will be subject to the
      provisions of Condition 42 of the APS Conditions as if such information
      were Participant Confidential Information within the meaning of such
      condition, and such condition shall be deemed incorporated herein save
      that:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                references to
      the “Participant” shall be deemed to be references to the
      Company;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                references to
      the “Scheme Documents” in such Condition shall be deemed to be references
      to this Agreement and the Cashbox
Documents;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                Conditions
      42.11(B), 42.11(G), 42.29 and 42.30 shall be excluded;
  and

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                the reference
      in Condition 42.23 to the “the cessation of the Participant’s
      participation in the Scheme” shall be deemed to be a reference to “HM
      Treasury ceasing to hold any Ordinary Shares, B Shares or the Dividend
      Access Share”.

              


      

       

      
        	
                8.5

              	
                Waiver
      of pre-emption rights

              


      

       

      HM
Treasury agrees that, if and to the extent they arise but without prejudice to
any adjustments arising under the B Share Terms or the Dividend Access Share
Terms:

       

      
        	
                 
      

              	
                (A)

              	
                it shall, and
      shall direct its nominee(s) to, waive and exercise such voting rights as
      it may have to waive any pre-emption rights it may have in respect of any
      future issue of equity securities (other than B Shares or Dividend Access
      Shares) by the Company under section 561(1) of CA 2006 as a result of its
      holding of B Shares and/or the Dividend Access Share;
  and

              


      

       

      
        	
                 
      

              	
                (B)

              	
                it shall vote
      the Dividend Access Share and any B Shares held by it, and shall direct
      its nominee(s) to vote the Dividend Access Share and any B Shares held by
      such nominee, in each case to the extent that such Dividend Access Share
      and B Shares have voting rights, in favour of any special resolution
      proposed by the Board pursuant to section 570(2) of CA 2006 in respect of
      the disapplication of any such pre-emption rights in respect of any future
      issue of equity securities (other than B Shares and further Dividend
      Access Shares) by the Company.

              


      

       

      
        
          	
                  8.6

                	
                  Restriction
      on conversion and voting of B
Shares

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                HM Treasury
      agrees that it shall not convert, or cause to be converted into Ordinary
      Shares any B Shares held by it or by its nominee if and to the extent that
      the Ordinary Shares arising on the conversion of such B Shares would
      result in HM Treasury holding directly or indirectly more than 75 per
      cent. of the total issued Ordinary
Shares.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                HM Treasury
      agrees that it shall not vote, nor shall it direct its nominee(s) to vote,
      whether on a show of hands or on a poll, in respect of B Shares or the
      Dividend Access Share held by it but only if and to the extent that votes
      cast on 

              


      

       

      
        
          
          

        

        
          53

          
            

          

        

        
          
          

        

         

      

      such B Shares
and the Dividend Access Share, together with any other votes that HM Treasury
and its nominee(s) are entitled to cast in respect of any Ordinary Shares held
by or on behalf of it, would exceed 75 per cent. of the total votes eligible to
be cast on a resolution presented at a general meeting of the Company. The
restriction set out in this clause 8.6(B) is without prejudice to, and does not
affect or limit, any voting rights that HM Treasury and its nominee(s) may have
at any class meeting of the holders of B Shares or Dividend Access Share or in
respect of any other class or classes of share in the Company.

       

      
        
          	
                  8.7

                	
                  B
      Share Terms and Dividend Access Share
Terms

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                In the event
      that the B Shares or Dividend Access Share cease to be eligible as Core
      Tier 1 Capital then, if and to the extent that B Shares or the Dividend
      Access Share are held by or on behalf of HM Treasury and/or the Contingent
      Capital Commitment remains outstanding in respect of any Contingent
      Capital Shares at such time, HM Treasury and the Company shall negotiate
      in good faith with a view to agreeing such amendments to the B Share Terms
      and/or the Dividend Access Share Terms as may be necessary, after
      consultation with the FSA, to enable the B Shares and Dividend Access
      Share to be eligible as Core Tier 1 Capital.  The Company shall
      (with the consent of HM Treasury, such consent not to be unreasonably
      withheld or delayed) make such public announcements as may be necessary or
      appropriate as a result of any such
changes.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                Until the
      later of the end of the Contingent Capital Period and HM Treasury ceasing
      to hold any B Shares, the Company undertakes that, notwithstanding any
      provision of the B Share Terms and the Dividend Access Share Terms, it
      will not amend or seek to amend the B Share Terms or the Dividend Access
      Share Terms without the prior written consent of HM
    Treasury.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      agrees that it shall pay any dividend on the B Shares and on the Dividend
      Access Share by a direct transfer of funds to HM Treasury’s bank account
      in accordance with the B Share Terms and the Dividend Access Share Terms
      (as the case may be) notwithstanding the right under the B Share Terms and
      the Dividend Access Share Terms to effect payment by other
      means.

              


      

       

      
        	
                8.8

              	
                Nature
      of relationship

              


      

       

      The Company
acknowledges and agrees that HM Treasury is acting solely pursuant to a
contractual relationship with the Company on an arm’s length basis with respect
to the Acquisition, the Cashbox Documents and the Contingent Capital Commitment
(including in connection with determining the terms of the Acquisition and the
Contingent Capital Commitment) and not, in relation to the Acquisition, the
Cashbox Documents or the Contingent Capital Commitment as financial advisers or
fiduciaries to the Company or any other person. Additionally, the Company
acknowledges that HM Treasury is not advising the Company or any other person as
to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors concerning such
matters and shall be responsible for making its own independent investigation
and appraisal of the transactions contemplated hereby and 

       

      
        
          
          

        

        
          54

          
            

          

        

        
          
          

        

      

       

      HM
Treasury shall not have any responsibility or liability to the Company with
respect thereto. The Company further acknowledges and agrees that any review by
HM Treasury (or its advisers and agents) of the Company, the Relevant Documents
and other matters relating thereto will be performed solely for the benefit of
HM Treasury and shall not be on behalf of the Company or any other
person.

       

      
        
          	
                  8.9

                	
                  Co-operation
      in relation to approvals, authorisations and
  consents

                


        

      

       

      HM
Treasury and the Company shall use all reasonable endeavours to procure that all
approvals, authorisations and consents as may be required from any government,
state or other regulatory body shall have been obtained in order that the
conditions set out in clauses 2.1(D) and 2.1(E) as soon as practicably
possible.  The Company and HM Treasury shall co-operate with each
other (at the cost of the Company) in order that the conditions set out in
clauses 2.1(D) and 2.1(E) may be satisfied, which co-operation shall include the
Company:

       

      
        	
                 
      

              	
                (A)

              	
                promptly
      providing to HM Treasury and to HM Treasury’s lawyers and other advisers
      where appropriate, any necessary information and documents reasonably
      requested by HM Treasury for the purpose of obtaining such approvals,
      authorisations, permits and consents and making such necessary
      filings;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                promptly
      notifying HM Treasury or HM Treasury’s lawyers and other advisers where
      appropriate, of any material communications received in the course of
      obtaining such approvals, authorisations, permits and consents and making
      such necessary filings; and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                generally
      supporting HM Treasury in obtaining such approvals, authorisations,
      permits and consents and making such necessary filings when reasonably
      requested by HM Treasury.

              


      

       

      
        
          	
                  8.10

                	
                  Issue
      of shares into clearing or depositary
system

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                The Company
      undertakes to HM Treasury that it shall not issue any Acquisition Shares
      or Contingent Capital Shares pursuant to this Agreement to any person
      referred to in section 67 or 70 of the Finance Act 1986 or section 93 or
      96 of the Finance Act 1986 (such that stamp duty or SDRT would apply at
      the rate determined under any such section) unless HM Treasury requests
      that such Acquisition Shares or Contingent Capital Shares are to be so
      issued.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                The Company
      undertakes to HM Treasury that no Cashbox Ordinary Shares or Cashbox
      Preference Shares shall be issued or transferred to any person referred to
      in section 67 or 70 of the Finance Act 1986 or section 93 or 96 of the
      Finance Act 1986, and that no agreement to issue or transfer any Cashbox
      Ordinary Shares or Cashbox Preference Shares to any person referred to in
      section 67 or 70 of the Finance Act 1986 or section 93 or 96 of the
      Finance Act 1986 shall be entered into or made, unless HM Treasury
      requests that such Cashbox Ordinary Shares or Cashbox Preference Shares
      are to be so issued or transferred or requests that such an agreement is
      to be entered into or made.

              


      

       

      
        
          
          

        

        
          55

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      undertakes to HM Treasury that, if any cashbox or similar structure is
      used to implement the acquisition of any Contingent Capital Shares, no
      shares in any cashbox or similar company involved in such structure shall
      be issued or transferred to any person referred to in section 67 or 70 of
      the Finance Act 1986 or section 93 or 96 of the Finance Act 1986, and no
      agreement to issue or transfer any such shares to any person referred to
      in section 67 or 70 of the Finance Act 1986 or section 93 or 96 of the
      Finance Act 1986 shall be entered into or made, unless HM Treasury
      requests that such shares are to be so issued or transferred or requests
      that such an agreement is to be entered into or
  made.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                The Company
      undertakes to HM Treasury that, if any cashbox or similar structure is
      used to implement the acquisition of any B Shares as contemplated in
      clause 6.4, no shares in any cashbox or
      similar company involved in such structure shall be issued or transferred
      to any person referred to in section 67 or 70 of the Finance Act 1986 or
      section 93 or 96 of the Finance Act 1986, and no agreement to issue or
      transfer any such shares to any person referred to in section 67 or 70 of
      the Finance Act 1986 or section 93 or 96 of the Finance Act 1986 shall be
      entered into or made, unless HM Treasury requests that such shares are to
      be so issued or transferred or requests that such an agreement is to be
      entered into or made.

              


      

       

      
        	
                 
      

              	
                8.11

              	
                Restriction
      on cash distributions

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      clause 8.11(B), the Company undertakes that it shall not, and shall
      procure that no Group Company shall, at any time before the Contingent
      Capital Expiry Date:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                pay or make
      any dividends or other distributions or make any interest or coupon
      payment or payment of a similar nature (in each case whether in cash or
      otherwise) on any shares, Innovative Tier 1 Instruments or Upper Tier 2
      Instruments issued by the Company or by any other Group Company (other
      than Mandatory Securities) and that it shall not, and shall procure that
      no Group Company shall, set aside any sum for the payment of any such
      dividends or amounts; and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                redeem,
      purchase or otherwise acquire for any consideration any shares, Innovative
      Tier 1 Instruments or Upper Tier 2 Instruments issued by the Company or by
      any Group Company or any depository or other receipts or certificates
      representing such securities or instruments, or set aside any sum, or
      establish any sinking fund for the redemption, purchase or other
      acquisition of such securities or instruments or any depository or other
      receipts or certificates representing such securities or
      instruments,

              


      

       

      the result or
consequence of which, in any case, would be that following such occurrence the
Core Tier 1 Ratio would remain or fall below six per cent.

       

      
        	
                 
      

              	
                (B)

              	
                The
      restrictions set out in clause 8.11(A) shall not apply
  to:

              


      

       

      
        
          
          

        

        
          56

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (i)

              	
                the payment
      or making of any dividends or other distributions or the setting aside of
      any sum for the payment of such dividends or
  distributions:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                by any wholly
      owned Group Company to any other wholly owned Group Company;
      and

              


      

       

      
        	
                 
      

              	
                (b)

              	
                by any
      non-wholly owned Group Company to any person which is not a wholly owned
      Group Company to the extent the payment or making of such dividends or
      other distributions or the setting aside of any sum for the payment of
      such dividends or distributions is required by the terms of any legally
      binding obligation in existence at the date of this
    Agreement;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      redemption or purchase or acquisition for consideration by any wholly
      owned Group Company of any securities or instruments issued by any other
      wholly owned Group Company or of any depository or other receipts or
      certificates representing such securities or instruments, or the setting
      aside of any sum, or the establishment of any sinking fund for the
      redemption, purchase or other acquisition of such securities or
      instruments or any depository or other receipts or certificates
      representing such securities or
instruments;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                the
      redemption or purchase or acquisition for consideration by any Group
      Company of any securities or instruments issued by any non-wholly owned
      Group Company or of any depository or other receipts or certificates
      representing such securities or instruments, or the setting aside of any
      sum, or the establishment of any sinking fund for the redemption, purchase
      or other acquisition of such securities or instruments or any depository
      or other receipts or certificates representing such securities or
      instruments where such redemption, purchase or acquisition is required to
      be made by the terms of any legally binding obligation in existence at the
      date of this Agreement;

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                the payment
      of coupons on the ABN Securities for so long as permitted under the State
      Aid Commitment Deed;

              


      

       

      
        	
                 
      

              	
                (v)

              	
                the payment
      or making of dividends or other distributions (whether in cash or in kind)
      or return of capital in any other
form:

              


      

       

      
        	
                 
      

              	
                (a)

              	
                by
      subsidiaries and/or subsidiary undertakings of RFS Holdings BV to their
      shareholders and ultimately to RFS Holdings BV;
  and

              


      

       

      
        	
                 
      

              	
                (b)

              	
                by RFS
      Holdings BV to shareholders of RFS Holdings
BV,

              


      

       

      in
each case to the extent required (in the reasonable opinion of the Company) to
achieve segregation, separation (being the transfer of the Dutch State acquired
businesses in the ABN AMRO Group out of the ABN AMRO Group) and the capital
restructuring of RFS Holdings BV;

       

      
        
          
          

        

        
          57

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (vi)

              	
                the purchase
      of Ordinary Shares in connection with any employee share scheme of the
      Company or any member of the Group;

              


      

       

      
        	
                 
      

              	
                (vii)

              	
                any action
      taken by the Company or any member of the Group pursuant to any liability
      management exercise, which exercise has been approved in advance by HM
      Treasury;

              


      

       

      
        	
                 
      

              	
                (viii)

              	
                any action
      taken in accordance with the B Share Terms or the terms of the Convertible
      Preference Shares in respect of their conversion to Ordinary
      Shares;

              


      

       

      
        	
                 
      

              	
                (ix)

              	
                any action
      which has no effect on, or has the effect of increasing, the Core Tier 1
      Ratio; and

              


      

       

      
        	
                 
      

              	
                (x)

              	
                any other
      action taken by the Company or any member of the Group with the prior
      approval of HM Treasury.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      undertakes that it shall not, and shall procure that no Group Company
      shall, without the prior written consent of HM Treasury, at any time after
      the date of this Agreement and before the Contingent Capital Expiry Date,
      create any legally binding obligations pursuant to
  which:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                any
      non-wholly owned Group Company shall be liable to pay or make any
      dividends or other distributions or set aside any sum for the payment of
      such dividends or distributions to any person which is not a wholly owned
      Group Company; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any Group
      Company shall be required to redeem, purchase or acquire for consideration
      any securities or instruments issued by any non-wholly owned Group Company
      or any depository or other receipts or certificates representing such
      securities or instruments, or to set aside of any sum, or to establish any
      sinking fund for the redemption, purchase or other acquisition of such
      securities or instruments or any depository or other receipts or
      certificates representing such securities or
  instruments,

              


      

       

      if
the result or consequence of which, in each case, would be that following such
occurrence the Core Tier 1 Ratio would remain or fall below six per
cent.

       

      
        
          	
                  8.12

                	
                  Fall
      in Core Tier 1 Ratio

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                If, at any
      time before the Contingent Capital Expiry Date the Core Tier 1 Ratio
      falls, or is expected by the Directors to fall at any time over the
      following six month period, below six per cent. the Company
      shall:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                cause such
      directors, employees, representatives and advisers of any member of its
      Group as HM Treasury may reasonably require to attend meetings with HM
      Treasury, its employees, representatives and advisers (in conjunction with
      UK Financial Investments Limited, where HM Treasury considers appropriate)
      on such notice as HM Treasury 

              


      

       

      
        
          
          

        

        
          58

          
            

          

        

        
          
          

        

         

      

      may consider
appropriate in the circumstances to discuss the regulatory capital position of
the Group and proposals to increase the Core Tier 1 Ratio to above six per
cent.;

       

      
        	
                 
      

              	
                (ii)

              	
                forthwith
      submit to HM Treasury a forecast showing the expected changes to the Core
      Tier 1 Ratio, Tier 1 Capital Ratio, Total Capital Ratio and Risk Weighted
      Assets over the 24 month period following the date on which the Core Tier
      1 Ratio so fell, or is expected to fall, below six per cent. and provide
      HM Treasury with updates to such forecast on a weekly
    basis;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                if any Core
      Tier 1 Ratio which has been verified by an Appropriate Person is below
      5.25 per cent. and is forecast to fall below the Trigger Core Tier 1 Ratio
      within two calendar months of the date of such verification, then HM
      Treasury shall be entitled to require the Company to procure a full audit
      of the capital figures underlying the Core Tier 1
  Ratio;

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                prepare a
      draft strategy to restore the Core Tier 1 Ratio to above six per cent.
      including, to the extent practicable in light of market conditions at the
      time, a realistic plan to raise capital from third parties, within such
      reasonable timescale as HM Treasury may notify to the Company, and consult
      with and take account of any representations that may be made by HM
      Treasury on such strategy prior to its finalisation;
  and

              


      

       

      
        	
                 
      

              	
                (v)

              	
                use its best
      endeavours to raise additional capital other than through a Contingent
      Capital Subscription so as to increase the Core Tier 1 Ratio to six per
      cent. or higher.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                If at any
      time the Directors reasonably believe that the Core Tier 1 Ratio has
      fallen below the Trigger Core Tier 1 Ratio, the Company shall forthwith
      determine the Core Tier 1 Ratio and shall have such percentage verified by
      an Appropriate Person to a standard equivalent to that used in connection
      with the Accounts as soon as practicable and shall immediately thereafter
      disclose the Core Tier 1 Ratio to HM
Treasury.

              


      

       

      
        
          	
                  8.13

                	
                  Repurchase
      and further issuances

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                HM Treasury
      and the Company acknowledge it is their current expectation that in
      relevant circumstances, and acknowledging the conversion feature
      applicable to the B Shares set out in the B Share Terms, the Company will
      repurchase the B Shares if it is prudent and practicable. Such repurchase
      would be subject to FSA approval and take account of the Regulatory
      Group’s capital position at the time of the proposed repurchase and
      prevailing market conditions. The B Shares can be repurchased using
      replacement Tier 1 Capital, retained earnings, the proceeds of disposals
      (up to an amount equivalent to the Core Tier 1 benefit arising from such
      disposals), gross reductions in Risk Weighted Assets or as otherwise
      permitted by the FSA.

              


      

       

      
        
          
          

        

        
          59

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (B)

              	
                If during the
      Contingent Capital Period the Company or another member of the Group
      issues any security or grants any option containing provisions which
      enable conversion into capital or the ability to call for capital on the
      occurrence of specified contingencies, the Company agrees, and agrees to
      procure, that:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the ability
      to effect the conversion or to make the call will not require any prior
      Contingent Capital Subscription(s) to take, or have taken, place in
      respect of some or all of the Contingent Capital Shares;
    and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                if any
      ability to effect the conversion or make the call is subject to a
      requirement that the Core Tier 1 Ratio falls below a certain level, such
      level is higher than the Trigger Core Tier 1
  Ratio.

              


      

       

      
        
          	
                  8.14

                	
                  Related
      party transactions

                


        

      

       

      HM
Treasury undertakes that, for as long as it is a Substantial Shareholder of the
Company, it shall not vote any Ordinary Shares it holds, and shall direct that
its nominee(s) shall not vote any Ordinary Shares held on its behalf, on any
resolution proposed at a general meeting of the Company to approve a related
party transaction for the purposes of Chapter 11 of the Listing Rules if HM
Treasury is the related party for the purposes of such transaction.

       

      
        	
                8.15

              	
                Conversion
      of B Shares

              


      

       

      
        	
                 
      

              	
                (A)

              	
                The Company
      represents, warrants and undertakes to HM Treasury on the date of this
      Agreement and on each Acquisition Warranty Date
  that:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                as at 30
      September 2009, the amount standing to the credit of its share premium
      account is ***

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                as at 30
      September 2009 no amount standing to the credit of the share premium
      account would require to be capitalised to effect the conversion of all of
      the Convertible Preference Shares in accordance with their terms of
      issue;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                there has
      been no change to the amount specified in clause 8.15(A)(i) since 30
      September 2009 as would adversely affect the ability of the Company to
      convert the Acquisition B Shares and the Contingent Capital Shares into
      ordinary shares in accordance with the B Share Terms if such conversion
      were affected on the date of this Agreement or on each Acquisition
      Warranty Date; and

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                no sum
      proposed to be capitalised pursuant to any of the Resolutions is required
      for the purpose of Article 148A of the Articles to pay any dividends on
      any shares carrying a fixed cumulative preferential
    dividend.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                The Company
      undertakes to HM Treasury that, until the later of the end of the
      Contingent Capital Period and the date on which HM Treasury ceases to hold
      any B Shares:

              


      

       

      
        
          	 	

                        
                    
      *** indicates omission of material, which has been sepatarely filed,
      pursuant to a request for confidential
  treatment.

                


        

         

      

      
        
          
          

        

        
          60

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (i)

              	
                the only
      reductions liable to be made to its share premium account (other than in
      respect of (i) a capitalisation issue of B Shares made in connection with
      any conversion of B Shares in accordance with the B Share Terms, (ii) a
      Bonus Issue in accordance with the Dividend Access Share Terms or (iii) a
      scrip issue of B Shares made in accordance with Articles and the B Share
      Terms) will be in respect of the conversion of the Convertible Preference
      Shares in accordance with their terms of issue and the Articles and in
      respect of the writing-off of any commission paid on any future issue of
      shares against the share premium generated on such issue in accordance
      with section 610(2)(b) of CA 2006;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                it shall not,
      without the prior written consent of HM Treasury, issue any convertible
      securities, the conversion of which would require the capitalisation of
      any amount standing to the credit of the Company’s share premium account
      or which would otherwise prejudice or adversely affect any conversion of
      the B Shares;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                it shall not,
      without the prior written consent of HM Treasury, issue any shares
      carrying a fixed cumulative preferential dividend the payment of any
      dividend on which shares would or might give rise to any need to
      capitalise any of the Company’s reserves in accordance with Article 148(A)
      of the Articles;

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                it shall on a
      regular basis (being no less than semi-annually) provide HM Treasury with
      reasonable details of the amount then standing to the credit of its share
      premium account;

              


      

       

      
        	
                 
      

              	
                (v)

              	
                notwithstanding
      the provisions of the B Share Terms and, in particular the exceptions to
      the undertakings contained therein, except as required by law and
      otherwise in connection with (i) the conversion of the B Shares and the
      Convertible Preference Shares in accordance with their respective terms of
      issue and the Articles, (ii) a Bonus Issue in accordance with the Dividend
      Access Share Terms, (iii) a scrip issue of B Shares made in accordance
      with the Articles and the B Share Terms and (iv) the writing-off of any
      commission paid on any future issue of shares against the share premium
      generated on such issue in accordance with section 610(2)(b) of CA 2006,
      it shall not, directly or indirectly take or omit to take any action
      designed to or which results in or which might reasonably be expected to
      cause or result in, the amount standing to the credit of its share premium
      account, capital redemption reserve or merger reserve being
      reduced.

              


      

       

      
        	
                 
      

              	
                (vi)

              	
                it shall not,
      directly or indirectly take or omit to take any action designed to or
      which results in or which might reasonably be expected to cause or result
      in any increase in the nominal value of the Ordinary Shares without the
      prior written consent of HM
Treasury;

              


      

       

      
        	
                 
      

              	
                (vii)

              	
                the
      non-payment or deferral of payment of any dividends or other distributions
      or any interest or coupon payment or payment of a similar
  

              


      

       

      
        
          
          

        

        
          61

          
            

          

        

        
          
          

        

      

       

      
        
          	
                   
      

                	
                   

                	
                  nature
      (whether in cash or otherwise) on any securities issued by the Company or
      any other Group Company (whether pursuant to the State Aid Commitment Deed
      or otherwise) will not, and the Company shall not, directly or indirectly,
      take or omit to take any action designed to or which will or which might
      reasonably be expected to, prevent the conversion of the B Shares in
      accordance with the B Share Terms;
and

                


        

         

      

      
        	
                 
      

              	
                (viii)

              	
                if at any
      time HM Treasury reasonably believes that the Company has or will have
      insufficient reserves to permit the conversion of all B Shares held by it
      from time to time, it shall, promptly following receipt of notice to such
      effect from HM Treasury and at the option of the Company,
      either:

              


      

       

      
        	
                 
      

              	
                (a)

              


      

       

      
        	
                 
      

              	
                (1)

              	
                allot and
      issue to HM Treasury, fully-paid by way of capitalisation of its share
      premium account and/or such other reserves as may be available for that
      purpose, such number of B Shares as shall bring the total nominal value of
      all of the B Shares held by HM Treasury to at least the total nominal
      value of the Ordinary Shares into which such B Shares may be converted in
      accordance with the B Share Terms;

              


      

       

      
        	
                 
      

              	
                (2)

              	
                consolidate
      into one B Share all of the B Shares held by HM Treasury following such
      allotment and issue; and

              


      

       

      
        	
                 
      

              	
                (3)

              	
                sub-divide
      such consolidated B Share into B Shares each having a nominal value equal
      to the nominal value of the Ordinary
Shares;

              


      

       

      or

       

      
        	
                 
      

              	
                (b)

              	
                take such
      actions and steps as may be required by HM Treasury to sub-divide each
      Ordinary Share into an ordinary share with a nominal value equal to or
      less than the nominal value of a B Share and having the same rights (save
      as relates to the nominal amount paid up thereon) as one Ordinary Share
      had prior to such sub-division (a “New Ordinary Share”) and
      such number of Non-Voting Deferred Shares as have the same aggregate
      nominal value as the difference between the nominal value of one Ordinary
      Share and one New Ordinary Share pursuant to the authorities obtained at
      the GM, provided always that the Company shall not otherwise take any such
      actions or steps without the prior consent of HM Treasury for as long as
      HM Treasury continues to hold any B
Shares

              


      

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      agrees that, if and to the extent HM Treasury is converting any B Shares
      into ordinary shares in accordance with the B Share Terms, and
      notwithstanding the B Share Terms, it shall effect such conversion in a
      manner 

              


      

       

      
        
          
          

        

        
          62

          
            

          

        

        
          
          

        

         

      

      specifically
described in the B Share Terms and shall not exercise its discretion to apply
any other method of effecting such conversion without the prior consent of HM
Treasury.

       

      
        
          	
                  8.16

                	
                  Enforcement
      of rights

                


        

      

       

      If
the Company is or may be entitled to enforce any claim against, or make any
recovery from, the Auditors in connection with the report(s) prepared by the
Auditors in relation to the Acquisition and the Contingent Capital Commitment
referred to at paragraph 11 of Part I of Schedule 2 or paragraph 5 of Part II of
Schedule 2 (if any), the Company undertakes to HM Treasury that it shall inform
HM Treasury promptly upon becoming aware of its entitlement or potential
entitlement and shall, or shall procure that the relevant Group Company shall,
on the reasonable request of HM Treasury and subject to the Company having
received advice from a leading firm of solicitors or a leading Queen’s Counsel,
in each case acceptable to HM Treasury (in respect of which advice HM Treasury
shall be entitled to participate in the preparation of any instructions and in
any discussions and meetings with such firm of solicitors or Queen’s Counsel
relating thereto) that such claim or attempted recovery would stand a reasonable
prospect of success, use all reasonable endeavours to enforce such claim or
right of recovery (keeping HM Treasury informed of any action so
taken).

       

      
        	
                9.

              	
                REPRESENTATIONS
      AND WARRANTIES 

              


      

       

      
        
          	
                  9.1

                	
                  Representations
      and Warranties

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                The Company
      represents, warrants and undertakes to HM Treasury that the
      representations, warranties and undertakings set out in Part I of Schedule
      3 are true, accurate and not misleading as at the date of this
      Agreement.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                The Company
      agrees with HM Treasury that each statement set out in Parts I and II of
      Schedule 3 will be true and accurate and not misleading on the Posting
      Date and on each Acquisition Warranty Date, in each case by reference to
      the facts and circumstances then existing and will be treated as
      Warranties given and/or repeated on such
dates.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      agrees with HM Treasury that, subject to clause 9.2(B), each statement set
      out in Schedule 4 will be true and accurate and not misleading on each
      Contingent Capital Warranty Date, in each case by reference to the facts
      and circumstances then existing and will be treated as Warranties given
      and/or repeated on such dates.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                Warranties
      shall be deemed to be repeated under this clause in relation to the
      relevant document, announcement or event on the basis that any reference
      in any such Warranty to something being done or something being the case
      in relation to such document, announcement or event which is expressed in
      the future tense shall be regarded as being expressed in the present
      tense.

              


      

       

      
        
          
          

        

        
          63

          
            

          

        

        
          
          

        

      

       

      
        	
                9.2

              	
                Breach
      of Warranty, Specified Events and
disclosure

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      clause 9.2(B), the Company will notify HM Treasury as soon as reasonably
      practicable if it comes to the knowledge of the Company or any of the
      Directors that any of the Warranties was breached or untrue or inaccurate
      when made and/or that any of the Warranties is or would be breached or
      untrue or inaccurate if it were to be repeated by reference to the facts
      and circumstances or the knowledge, opinions, intentions or expectations
      of any of the Directors subsisting at any time between the date of this
      Agreement and the Acquisition Date or between each Contingent Capital
      Notice Date and each Contingent Capital Completion Date, as the case may
      be. The Company will make all reasonable enquiries to ascertain whether
      any of the Warranties was, or if so repeated would be, breached or untrue
      or inaccurate.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                Any fact,
      matter or circumstance that causes any of the Contingent Capital
      Warranties (other than the Contingent Capital Warranties set out at
      paragraphs 1 (except paragraphs 1.2, 1.4 and
      1.10, 2, 3 (except paragraph 3.4) and 6 of Schedule 4) to be breached or
      untrue, inaccurate or misleading shall not constitute or give rise to a
      breach of such Contingent Capital Warranty if such fact, matter or
      circumstance has been fairly disclosed to HM Treasury on the Contingent
      Capital Notice Date or prior to the Contingent Capital Completion Date (as
      the case may be), such disclosure to be identified as being made for the
      purposes of this Agreement.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      undertakes to HM Treasury:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                promptly to
      give notice to HM Treasury of the occurrence of any Specified Event or the
      occurrence of any event or the arising of any fact, matter or circumstance
      that is likely to constitute a Specified Event, which shall come to the
      knowledge of the Company between the date of this Agreement and the
      Acquisition Date;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                promptly to
      give notice to HM Treasury of and to disclose fairly to HM Treasury any
      fact, matter or circumstance which constitutes or is likely to constitute
      a Specified Event and which shall come to the knowledge of the Company
      between each Contingent Capital Notice Date and the relevant Contingent
      Capital Completion Date, such disclosure to be identified as being made
      for the purposes of this Agreement;
and

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                not to cause
      and to use all reasonable endeavours not to permit, and to procure that
      each Group Company and the Directors do not cause and use all reasonable
      endeavours not to permit, any Specified Event to occur between the date of
      this Agreement and the Acquisition Date and between each Contingent
      Capital Notice Date and the related Contingent Capital Completion Date,
      provided that any breach of the covenant in this clause 9.2(C)(iii) will
      not give rise to a remedy in damages against the Company in respect of
      such breach in circumstances where this Agreement has been terminated
      pursuant to clause 12 as a result of such breach being, in HM Treasury’s
      sole 

              


      

       

      
        
          
          

        

        
          64

          
            

          

        

        
          
          

        

      

       

      judgement,
material in the context of the Group and/or the context of the Acquisition or
the Contingent Capital Commitment.

       

      
        	
                 
      

              	
                (D)

              	
                For the
      purpose of clause 9.2(C), each of the Warranties and the undertakings
      contained in this clause 9 shall take effect with the exclusion of any
      qualification contained therein with respect to the knowledge,
      information, awareness or belief of the Company or any of the Directors or
      any other person.

              


      

       

      
        	
                9.3

              	
                Continuing
      nature of Warranties

              


      

       

      The Warranties
shall remain in full force and effect notwithstanding completion of the
Acquisition, each and any Contingent Capital Subscription and all other matters
and arrangements referred to in or contemplated by this Agreement.

       

      
        	
                9.4

              	
                Reliance
      on Warranties

              


      

       

      The Company
acknowledges that HM Treasury is entering into this Agreement in reliance on the
Warranties and each such representation, warranty and undertaking shall not be
limited by reference (express or implied) to the terms of any other
representation, warranty or undertaking or any other provision of this
Agreement.

       

      
        
          	
                  9.5

                	
                  Construction
      of Warranties

                


        

      

       

      For the purposes of
this clause 9, Schedule 3 and Schedule 4, references to the knowledge, awareness
or belief of the Directors or the Company in respect of matters relating to the
Group shall be read and construed as references to such knowledge, awareness or
belief after due and careful enquiry.

       

      
        
          	
                  10.

                	
                  INDEMNITY

                


        

      

       

      
        
          	
                  10.1

                	
                  Indemnity

                


        

      

       

      The Company agrees
to fully and effectively indemnify and hold harmless each Indemnified Person on
an after-Tax basis from and against any and all Losses or Claims, whatsoever, as
incurred (and whether or not the relevant Loss or Claim is suffered or incurred
or arises in respect of circumstances or events existing or occurring before, on
or after the date of this Agreement and regardless of the jurisdiction in which
such Loss or Claim is suffered or incurred) if such Losses or Claims, arise,
directly or indirectly, out of, or are attributable to, or connected with,
anything done or omitted to be done by any person (including by the relevant
Indemnified Person) in connection with the Acquisition, the Cashbox Documents,
the Contingent Capital Commitment or the Circular (to the extent it relates to
the Acquisition or the Contingent Capital Commitment), or this Agreement or any
other agreement, in each case to the extent relating to the Acquisition, the
Cashbox Documents or the Contingent Capital Commitment, including but not
limited to:

       

      
        	
                 
      

              	
                (A)

              	
                any and all
      Losses or Claims whatsoever, as incurred, arising out of the Relevant
      Documents, or any of them (or any amendment or supplement to any of them)
      not containing or fairly presenting, or being alleged not to contain or
      not to fairly present, all information required to be contained therein,
      or arising 

              


      

       

      
        
          
          

        

        
          65

          
            

          

        

        
          
          

        

         

      

       

      
        	 	 	
                out of any
      untrue or inaccurate statement or alleged untrue or inaccurate statement
      of a material fact contained in the Relevant Documents, or any of them (or
      any amendment or supplement to any of them), or the omission or alleged
      omission therefrom of a fact necessary in order to make the statements
      therein not misleading in any material respect, or any statement therein
      being or being alleged to be in any respect not based on reasonable
      grounds, in the light of the circumstances in which they were made;
      and/or

              
	 	 	 
	
                 
      

              	
                (B)

              	
                any and all
      Losses or Claims whatsoever, as incurred, arising out of any breach or
      alleged breach by the Company or CashboxCo of any of their respective
      obligations, including any of the Warranties, or the representations,
      covenants and undertakings set out in this Agreement, or out of any
      disclosure by the Company to HM Treasury against any Warranties given in
      terms of this Agreement being inaccurate, incomplete or misleading, or out
      of the arrangements contemplated by the Relevant Documents or any of them
      (or any amendment or supplement to any of them), in each case to the
      extent relating to the Acquisition or the Contingent Capital Commitment,
      or this Agreement, to the extent relating to the Acquisition or the
      Contingent Capital Commitment, or any other agreement relating to the
      Acquisition or the Contingent Capital Commitment (including, without
      limitation, the Cashbox Documents);
and/or

              


      

       

      
        	
                 
      

              	
                (C)

              	
                any and all
      Losses or Claims whatsoever, as incurred, in connection with or arising
      out of the issue, publication or distribution of the Relevant Documents,
      or any of them (or any amendment or supplement to any of them);
      and/or

              


      

       

      
        	
                 
      

              	
                (D)

              	
                any and all
      Losses or Claims whatsoever, as incurred, in connection with or arising
      out of any failure or alleged failure by the Company or any of the
      Directors or any of its or his agents, employees or advisers to comply
      with the CA 2006, FSMA, the FSA Rules, the Listing Rules, the Prospectus
      Rules, the DTRs, the rules and regulations of the LSE or any other
      requirement or statute or regulation in any jurisdiction in relation to
      the Acquisition or the Contingent Capital Commitment, or the arrangements
      contemplated by the Relevant Documents (including, without limitation, the
      issue and allotment of the Acquisition Shares and the Contingent Capital
      Shares), or any of them (or any amendment or supplement to any of them),
      or this Agreement, in each case to the extent relating to the Acquisition
      or the Contingent Capital Commitment, or any other agreement relating to
      the Acquisition or the Contingent Capital Commitment (including, without
      limitation, the Cashbox Documents),

              


      

       

      PROVIDED THAT, the
indemnity contained in this clause 10.1 shall not apply to any Losses or Claims
(i) (otherwise than in connection with the matters referred to in clauses
10.1(A), (B), (C) and
(D)) to the extent finally and judicially determined to
have arisen as a result of the fraud, bad faith or wilful default of that
Indemnified Person or (ii) if and to the extent arising out of a decline in
market value of the Acquisition Shares or the Contingent Capital Shares (or any
Ordinary Shares arising on the conversion of such Acquisition Shares or
Contingent Capital Shares) suffered or incurred by HM Treasury as a result of it
having acquired the Acquisition Shares or the Contingent Capital Shares pursuant
to the terms of this Agreement, save to the extent such decline is caused by or
results from or is attributable to or would not have arisen but for (in each
case directly or indirectly) the neglect or default of the Company in relation
to the 

       

      
        
          
          

        

        
          66

          
            

          

        

        
          
          

        

      

       

       

      
        
          	 	
                  content,
      publication, issue or distribution of the Relevant Documents or any breach
      by the Company of any of its obligations under this Agreement, including
      any of the Warranties, representations, undertakings or covenants. This
      clause 10.1 shall not apply to any Loss or Claim in respect of Tax which
      is covered by clause 7.3 (or which would have been so covered but for any
      exclusion contained therein).

                
	 	 
	
                  10.2

                	
                  Claims

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                Each
      Indemnified Person shall and shall procure that its Indemnified Persons
      shall:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                give notice
      as promptly as reasonably practicable to the Company of any action
      commenced against it after receipt of a written notice of any Claim or the
      commencement of any action, claim, suit, investigation or proceeding in
      respect of which a Claim for indemnification may be sought under this
      clause 10; and

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                as promptly
      as reasonably practicable notify the Company after any such action is
      formally commenced (by way of service with a summons or other legal
      process giving information as to the nature and basis of the
      claim),

              


      

       

      and shall keep the
Company informed of, and, to the extent reasonably practicable, consult with the
Company in relation to, all material developments in respect thereof, but in
each case, only insofar as may be consistent with the terms of any relevant
insurance policy and provided (in each case) that to do so would not, in such
Indemnified Person’s view (acting in good faith), be prejudicial to it (or to
any Indemnified Person connected to it) or to any obligation of confidentiality
or other legal or regulatory obligation which that Indemnified Person owes to
any third party or to any regulatory request that has been made of it. However,
the failure to so notify the Company and keep the Company informed shall not
relieve the Company from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve the
Company from any liability which it may have otherwise than on account of the
indemnity set out in this clause 10.

       

      
        	
                 
      

              	
                (B)

              	
                Legal
      advisers for Indemnified Persons shall be selected by HM Treasury. The
      Company may participate at its own expense in the defence of any action
      commenced against it provided however that legal advisers for the Company
      shall not (except with the consent of the relevant Indemnified Person)
      also be legal advisers for the Indemnified
  Person.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      shall not, without the prior written consent of HM Treasury (acting in
      good faith), settle or compromise or consent to the entry of any judgment
      with respect to any litigation, or any investigation or proceeding by any
      governmental agency or body, commenced or threatened, or any claim
      whatsoever in respect of which indemnification or contribution could be
      sought under this clause 10 or clause 11 (whether or not the Indemnified
      Persons are actual or potential parties thereto), unless such settlement,
      compromise or consent:

              


      

       

      
        
          
          

        

        
          67

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (i)

              	
                includes an
      unconditional release of each Indemnified Person from all liability
      arising out of such litigation, investigation, proceeding 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
  Person.

              


      

       

      
        
          	
                  10.3

                	
                  Continuing
      effect

                


        

      

       

      The provisions of
this clause 10 will remain in full force and effect notwithstanding the
completion of all matters and arrangements referred to in or contemplated by
this Agreement.

       

      
        
          	
                  11.

                	
                  CONTRIBUTION

                


        

      

       

      
        
          	
                  11.1

                	
                  Indemnification
      unavailable or insufficient

                


        

      

       

      If
and to the extent that the indemnification provided for in clause 10 is
unavailable to or insufficient to hold harmless (to the extent specified in
clause 10) an Indemnified Person in respect of any Loss or Claim referred to
therein, then the Company, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such Loss or Claim in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and HM Treasury on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. 

       

      
        
          	
                  11.2

                	
                  No
      over-recovery

                


        

      

       

      Notwithstanding the
provisions of this clause 11, HM Treasury will not be entitled to recover from
the Company by way of contribution under clause 11.1 any amount in excess of the
amount that the Company would have been liable to pay to HM Treasury (as the
case may be) had the indemnification provided for in clause 10 been available to
the extent provided in that clause in respect of the relevant Loss or
Claim.

       

      
        	
                11.3

              	
                Determination
      of contribution

              


      

       

      The parties hereto
agree that it would not be just and equitable if contribution pursuant to this
clause 11 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in clause 11.1. The amount paid or payable by an Indemnified Person as a
result of the Loss or Claim referred to in clause 11.1 shall be deemed to
include, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or
claim.

       

      
        
          	
                  11.4

                	
                  Construction
      of contribution agreements

                


        

      

       

      The contribution
agreements contained in this clause 11 are in addition to and shall not be
construed to limit, affect or prejudice any liability which the Company may
otherwise 

       

      
        
          
          

        

        
          68

          
            

          

        

        
          
          

        

      

       

      have to the
Indemnified Persons referred to above or any other right or remedy in law or
otherwise available to any Indemnified Person.

       

      
        
          	
                  12.

                	
                  TERMINATION

                


        

      

       

      
        
          	
                  12.1

                	
                  HM
      Treasury’s entitlement to
terminate

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                If at any
      time a Termination Event occurs, HM Treasury may, in its sole discretion,
      give notice to the Company to the effect that this Agreement shall
      terminate and cease to have effect.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                If between
      the date of this Agreement and the Acquisition Date it shall come to the
      notice of HM Treasury that there has been a breach of any of the
      Warranties or of any other provision of this Agreement or any of the
      Cashbox Agreements, which, in any case, in HM Treasury’s sole judgement,
      is material in the context of the Group and/or the context of the
      Acquisition or the Contingent Capital Commitment, HM Treasury may
      forthwith give notice thereof to the Company in which case clause 12.1(C)
      shall apply.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                Where this
      clause applies and notice has been given to the Company pursuant to clause
      12.1(B) by HM Treasury, HM Treasury may in its sole
      discretion:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                allow the
      Acquisition to proceed; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                if, having
      consulted with the Company, it does not consider it necessary that the
      arrangements contemplated by this Agreement which have not already
      proceeded to completion proceed to completion in order to maintain the
      financial stability of the United Kingdom, give notice to the Company at
      any time prior to the Acquisition Date to the effect that this Agreement
      shall terminate and cease to have
effect.

              


      

       

      
        	
                12.2

              	
                Consequences
      of termination

              


      

       

      In
the event that this Agreement is terminated by HM Treasury pursuant to the
provisions of this clause 12, no party to this Agreement will have any claim
against any other party to this Agreement for fees, costs, damages, compensation
or otherwise except that:

       

      
        	
                 
      

              	
                (A)

              	
                such
      termination shall be without prejudice to any accrued rights or
      obligations under this Agreement;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                the Company
      shall pay the costs and expenses as are payable in such circumstance under
      and in accordance with clause 7.1;

              


      

       

      
        	
                 
      

              	
                (C)

              	
                for as long
      as HM Treasury holds any Ordinary Shares, the provisions of clauses 8.2, 8.3, 8.4 and 8.14 shall remain in full force and
      effect; and

              


      

       

      
        	
                 
      

              	
                (D)

              	
                the
      provisions of this clause 12.2 and
      of clauses 1, 7, 8.8, 9, 10, 11, 13, 14 and 15 shall remain in full force and
      effect.

              


      

       

      
        
          
          

        

        
          69

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  13.

                	
                  EXCLUSIONS
      OF LIABILITY

                


        

      

       

      No
claim shall be made by the Company or any of its subsidiary undertakings,
affiliates, associates, directors, officers or employees in any jurisdiction
against any Indemnified Person to recover any Loss or Claim suffered or incurred
by any person and which arises out of the carrying out by any Indemnified Person
of obligations in connection with this Agreement, the Acquisition or the
Contingent Capital Commitment except (otherwise than in connection with the
matters referred to in clauses 10.1(A), 10.1(B), 10.1(C) and
10.1(D) or any consequent application of clause 11 in
relation thereto or otherwise than as a result of a payment made or an
obligation or liability to make payment arising under clauses 10 or 11 in respect of such matters) to the extent
only that the Loss or Claim is determined in a final judgement by a court of
competent jurisdiction to have resulted from the fraud, bad faith or wilful
default of such Indemnified Person.

       

      
        	
                14.

              	
                MISCELLANEOUS

              


      

       

      
        
          	
                  14.1

                	
                  Release
      of liability

                


        

      

       

      Any liability to
any party under this Agreement may in whole or in part be released, compounded
or compromised and time or indulgence may be given by any party in its absolute
discretion as regards any other person under such liability without in any way
prejudicing or affecting the first party’s rights against such other person
under the same or a similar liability, whether joint and several or
otherwise.

       

      
        	
                14.2

              	
                No
      waiver

              


      

       

      No
failure of any party to exercise, and no delay by it in exercising, any right,
power or remedy in connection with this Agreement will operate as a waiver
thereof, nor will any single or partial exercise of any such right preclude any
other or further exercise of such right or the exercise of any other right. The
rights provided in this Agreement are cumulative and not exclusive of any other
rights (whether provided by law or otherwise). Any express waiver of any breach
of this Agreement shall not be deemed a waiver of any subsequent
breach.

       

      
        
          	
                  14.3

                	
                  Warranties
      and indemnity

                


        

      

       

      Each of the parties
hereto acknowledges that the Warranties given by the Company and the indemnity
contained in clause 10 are, subject as provided in
clause 14.9, given to HM Treasury and the
Indemnified Persons (as the case may be) for themselves and not to them as agent
of, trustee for or otherwise for the benefit of any other person.

       

      
        
          	
                  14.4

                	
                  Time
      of essence

                


        

      

       

      Time shall be of
the essence of this Agreement, both as regards any dates, times or periods
mentioned and as regards any dates, times or periods which may be substituted
for them in accordance with this Agreement or by agreement in writing between
the parties.

       

      
        
          
          

        

        
          70

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  14.5

                	
                  Counterparts

                


        

      

       

      This Agreement may
be entered into in any number of counterparts and by the parties to it on
separate counterparts, each of which when so executed and delivered shall be an
original, but all the counterparts shall together constitute one and the same
instrument.

       

      
        
          	
                  14.6

                	
                  Entire
      agreement

                


        

      

       

      This Agreement, the
Tax Assets Agreement and the Cashbox Documents constitute the whole agreement
and understanding between the parties in relation to the Acquisition and the
Contingent Capital Commitment.  All previous agreements,
understandings, undertakings, representations, warranties and arrangements of
any nature whatsoever between the parties or any of them with any bearing on the
Acquisition and the Contingent Capital Commitment are superseded and
extinguished (and all rights and liabilities arising by reason of them, whether
accrued or not at the date of this Agreement, are cancelled) to the extent they
have such a bearing.

       

      
        
          	
                  14.7

                	
                  No
      variation

                


        

      

       

      No
variation of this Agreement shall be effective unless in writing and signed by
or on behalf of each of the parties.

       

      
        
          	
                  14.8

                	
                  Illegality

                


        

      

       

      If
any provision in this Agreement 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
Agreement but the legality, validity and enforceability of the remainder of this
Agreement shall not be affected.

       

      
        
          	
                  14.9

                	
                  Contracts
      (Rights of Third Parties) Act
1999

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                The Contracts
      (Rights of Third Parties) Act 1999 shall apply to this Agreement only to
      the extent provided in this clause
14.9.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                RBS shall
      have the right under the Contracts (Rights of Third Parties) Act 1999 to
      enforce the provisions of clause 5.6 against the Company and against HM
      Treasury.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                Each
      Indemnified Person shall have the right under the Contracts (Rights of
      Third Parties) Act 1999 to enforce its rights against the Company under
      clause 10, clause 11, this clause 14.9 or clause 15.2(B), provided that HM
      Treasury will have the sole conduct of any action to enforce such rights
      on behalf of the Indemnified
Persons.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                Except as
      provided above, a person who is not a party to this Agreement has no right
      under the Contracts (Rights of Third Parties) Act 1999 to enforce any term
      of this Agreement. HM Treasury and the Company may agree to terminate this
      Agreement or vary any of its terms without the consent of any Indemnified
      Person, RBS or any other third party. HM Treasury will have no
      responsibility to any Indemnified Person under or as a result of this
      Agreement.

              


      

       

      
        
          
          

        

        
          71

          
            

          

        

        
          
          

        

      

       

      
        	
                14.10

              	
                Assignment
      or novation

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      clause 14.10(B), HM Treasury shall be permitted to novate its rights and
      obligations under this Agreement (including any obligation to acquire
      B Shares), to any entity which is wholly owned, directly or
      indirectly, by HM Treasury (a “Wholly Owned Entity”)
      and the Company agrees to consent to, and to execute and deliver all such
      documentation as may be necessary to effect, any such novation provided
      that such novation is effected on substantially the same terms as are
      contained in the pro
      forma novation agreement set out in Schedule 5 to this
      Agreement.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                In the event
      that HM Treasury novates its rights and obligations under this Agreement
      pursuant to clause 14.10(A), HM Treasury shall procure that, immediately
      prior to any such Wholly Owned Entity ceasing to be wholly-owned directly
      or indirectly by HM Treasury, such rights and obligations under this
      Agreement shall be novated to HM Treasury or any other Wholly Owned
      Entity.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                If HM
      Treasury novates its rights and obligations under this Agreement pursuant
      to clause 14.10(A), the Company shall not incur any greater liability
      under clause 7.3 than would have been the case but for such
      novation.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                Subject to
      clause 14.10(A), neither party to this Agreement shall be permitted to
      assign, novate or declare itself trustee of, or purport to assign, novate
      or declare itself trustee of, all or any part of the benefit of, or its
      rights or benefits under, this Agreement to any other person without the
      prior written consent of the other
party.

              


      

       

      
        	
                14.11

              	
                Notices

              


      

       

      
        	
                 
      

              	
                (A)

              	
                Any notice,
      claim, demand or other communication in connection with this Agreement
      shall be in writing and shall be sufficiently given or served if delivered
      or sent:

              


      

       

      
        
          	
                  
                  

                	
                  (i)

                	
                  in the case
      of the Company to:

                


        

      

       

      
        
          	
                  
                  

                	
                  (a)

                	
                  RBS Gogarburn
      

                    Edinburgh


                      EH12 1HQ    

                       

                      Attention: Group General
      Counsel

                       

                      Email
      address: Miller.Mclean@rbs.com

                      With a
      copy email to FM-001960@rbos.co.uk

                    

                  

                
	 	 	 
	 	and 	 
	 	 	 
	 	
                  (b)

                	
                  RBS Gogarburn 

                    Edinburgh 

                      EH12
      1HQ

                    

                  

                


        

      

       

      
        
          
          

        

        
          72

          
            

          

        

        
          
          

        

      

       

      Attention: Deputy
General Counsel and Director, Group Legal

       

      Email address:
Chris.Campbell@rbs.com

      With a copy email
to FM-001960@rbos.co.uk

       

      
        	
                 
      

              	
                (ii)

              	
                in the case
      of HM Treasury to:

              


      

       

      1
Horse Guards Road

      London SW1A
2HQ

       

      Attention: Stephen
Evans, Financial Stability – RBS Team Leader

       

      Email address:
RBS.Notifications@hmtreasury.gsi.gov.uk

       

      
        	
                 
      

              	
                (B)

              	
                A copy of
      each notice delivered by email shall be sent by hand to the recipient in
      accordance with clause 14.11(A), but failure to send such a copy shall not
      render any notice ineffective.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                Any such
      notice or other communication shall be delivered by hand or by email. In
      the absence of evidence of earlier receipt, a notice or other
      communication is deemed given:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                If sent by
      email, when sent (provided that an email shall be deemed not to have to
      been sent if the sender receives a delivery failure notification);
      or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                if delivered
      by hand, at the time of actual
delivery.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                Any notice
      given 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.

              


      

       

      
        	
                 
      

              	
                (E)

              	
                Any party may
      change its notice details for the purposes of clause 14.11(A) by notifying
      the other of such change, provided that such notification shall only be
      effective on:

              


      

       

      
        	
                 
      

              	
                (i)

              	
                the date
      specified in the notification as the date on which the change is to take
      place, being not less than five Business Days after the date of such
      notice; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                if no date is
      specified or the date specified is less than five Business Days after the
      date on which notice is given, the date falling five Business Days after
      notice of any such change has been
given.

              


      

       

      
        	
                14.12

              	
                Securities
      Act

              


      

       

      Each party hereto
acknowledges and agrees that the B Shares (and any Ordinary Shares into which
they are convertible) and the Dividend Access Share have not been and will not
be registered under the United States Securities Act of 1933 (the “Securities Act”) or under any
securities laws of any state or other jurisdiction of the 

       

      
        
          
          

        

        
          73

          
            

          

        

        
          
          

        

      

       

      United States and
may not be offered, sold, resold, transferred or delivered, directly or
indirectly, within the United States except pursuant to an applicable exemption
from the registration requirements of the Securities Act or in a transaction
that is registered in accordance with the Securities Act.

       

      
        
          	
                  15.

                	
                  GOVERNING
      LAW AND SUBMISSION TO
JURISDICTION

                


        

      

       

      
        
          	
                  15.1

                	
                  Governing
      law

                


        

      

       

      This Agreement and
any non-contractual obligations arising out of or in connection with it shall be
governed by and construed in accordance with English law.

       

      
        
          	
                  15.2

                	
                  Jurisdiction

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                Subject to
      clauses 15.2(B) and 15.2(C), the courts of England have exclusive
      jurisdiction to hear and decide any suit, action or proceedings, and to
      settle any disputes (including claims for set-off and counterclaims),
      which may arise out of or in connection with this Agreement (respectively,
      “Proceedings” and
      “Disputes”) and,
      for these purposes, the Company irrevocably submits to the jurisdiction of
      the courts of England.

              


      

       

      
        	
                 
      

              	
                (B)

              	
                Notwithstanding
      the provisions of clause 15.2(A), in the event that any Indemnified Person
      becomes subject to proceedings brought by a third party (the “Foreign Proceedings”) in
      the courts of any country other than England (including, without prejudice
      to the generality of the foregoing, in any court of competent jurisdiction
      in the United States) (the “Foreign Jurisdiction”),
      such Indemnified Person shall be entitled, without objection by the
      Company, to take such steps as are available in the Foreign Jurisdiction,
      in the circumstances of the Foreign Proceedings, including (if reasonably
      necessary) the issuing of separate proceedings, to ensure that any issues
      between any such Indemnified Person and the Company are determined in the
      Foreign Jurisdiction as part of, or as closely connected (as the procedure
      of the Foreign Jurisdiction will permit) with, the Foreign Proceedings and
      the Company hereby submits to the jurisdiction of the Foreign Jurisdiction
      for this purpose.

              


      

       

      
        	
                 
      

              	
                (C)

              	
                The Company
      irrevocably waives any objection to the jurisdiction of any courts
      referred to in this clause 15.

              


      

       

      
        	
                 
      

              	
                (D)

              	
                The Company
      irrevocably agrees that a judgment and/or order of any court referred to
      in this clause 15 based on any matter arising out of or in connection with
      this Agreement (including but not limited to the enforcement of any
      indemnity) shall be conclusive and binding on it and may be enforced
      against it in any other jurisdiction, whether or not (subject to due
      process having been served on it) it participates in the relevant
      proceedings.

              


      

       

      
        
          	
                  15.3

                	
                  Agent
      for service of process

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                The Company
      agrees to appoint an agent for service of process in any Foreign
      Jurisdiction other than England in which any other party is subject to
      legal suit, action or proceedings based on or arising under this Agreement
      within 14 days 

              


      

       

      
        
          
          

        

        
          74

          
            

          

        

        
          
          

        

      

       

      of receiving
written notice of such legal suit, action or proceedings and the request to
appoint such agent for service. In the event that the Company does not appoint
such an agent within 14 days of the notice requesting it to so, such other party
may appoint a commercial agent for service for the Company on the Company's
behalf and at the Company's expense and the Company agrees that subject to being
notified of such appointment in writing, service upon such commercial agent will
constitute service upon the Company.

       

      
        	
                 
      

              	
                (B)

              	
                Process by
      which any Proceedings are begun in England may be served on a party by
      being delivered in accordance with clause 14. Nothing contained in this
      clause 15.3(B) affects the right to serve process in another manner
      permitted by law.

              


      

       

      
        
          
          

        

        
          75

          
            

          

        

        
          
          

        

      

      


       

      SCHEDULE
1

       

      CERTIFICATES
TO BE DELIVERED

       

      Part
I

       

      Certificate
to be delivered pursuant to clause 2.1(I) and Part I of Schedule 2

      prior
to and with effect immediately before the Acquisition

       

      [Company
Letterhead]

       

      
        	
                To:

              	
                The
      Commissioners of Her Majesty’s
Treasury

              


      

      
        	
                 
      

              	
                1 Horse
      Guards Road

              


      

      
        	
                 
      

              	
                London SW1A
      2HQ

              


      

       

      
        	
                 
      

              	
                Attention of:
      [●]

              


      

       

      [date]

       

      Dear
Sirs

       

      Acquisition
of 51,000,000,000 Series 1 Class B Shares of 1 penny each and the Series 1
Dividend Access Share of 1 penny (the “Acquisition”)

       

      Further to the
acquisition and contingent capital agreement between us dated [●] 2009 (the
“Agreement”), we confirm
that:

       

      
        	
                (a)

              	
                after due and
      careful enquiry it has not come to the notice of any Director that there
      is any fact or circumstance which constitutes a breach of any of the
      Warranties given under the Agreement on the date of the Agreement or which
      has caused or would or might cause any of the Warranties given pursuant to
      the Agreement to become untrue, inaccurate or misleading, in each case by
      reference to the facts or circumstances existing on the date of this
      letter;

              


      

       

      
        	
                (b)

              	
                it has not
      come to the notice of any Director that the Company is in breach of any of
      its obligations under the
Agreement;

              


      

       

      
        	
                (c)

              	
                the
      Resolutions have been passed without amendment at the GM;
    and

              


      

       

      
        	
                (d)

              	
                insofar as
      the Directors are aware (subject only to the giving of this letter and
      excluding any conditions set out in clause 2.1 of the Agreement the
      satisfaction of which has been waived by HM Treasury pursuant to clause
      2.2(B) of the Agreement or which is treated as waived pursuant to clause
      2.2(C) or clause 2.2(E) of the Agreement), the conditions set out in
      clause 2.1 of the Agreement have all been
  fulfilled.

              


      

       

      For the purpose of
this letter, where in a representation, warranty or undertaking there is an
express or implied reference to the “date of this Agreement”, that reference is
to be construed as a reference to “immediately prior to
Acquisition”.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Words and
expressions defined in the Agreement have the same meaning where used in this
letter.

       

      Yours
faithfully

       

      


       

      Director

       

      for and on behalf
of

      The Royal Bank of
Scotland Group plc

       

      


      
        
          
          

        

        
          77

          
            

          

        

        
          
          

        

      

       

      Part
II

       

      Certificate
to be delivered pursuant to clause 5.3(I) and Part 2 of Schedule 2

      prior to and with effect immediately
before each issue of
Contingent Capital Shares

       

      


      
         

        
          	
                  To:

                	
                  The
      Commissioners of Her Majesty’s
Treasury

                


        

        
          	
                   
      

                	
                  1 Horse
      Guards Road

                


        

        
          	
                   
      

                	
                  London SW1A
      2HQ

                


        

         

        
          	
                   
      

                	
                  Attention of:
      [●]

                


        

         

      

      [date]

       

      Dear
Sirs

       

      Subscription for [●] Class B
shares of 1 penny each (the
“Contingent Capital Subscription”)

       

      Further to the
acquisition and contingent capital agreement between us dated [●] 2009 (the
“Agreement”), we confirm
that:

       

      
        	
                (a)

              	
                after due and
      careful enquiry it has not come to the notice of any Director that there
      is any fact, matter or circumstance which constitutes a breach of any of
      the Warranties given under the Agreement on each Contingent Capital
      Warranty Date relating to the Contingent Capital Subscription or which has
      caused or would or might cause any such Warranties to become untrue,
      inaccurate or misleading by reference to the facts or circumstances
      existing on the date of this letter in each case save as has already been
      fairly disclosed to HM Treasury in terms of the Agreement, such disclosure
      having been identified as being made for the purposes of the
      Agreement;

              


      

       

      
        	
                (b)

              	
                the
      Resolutions have not been revoked or amended such that the Contingent
      Capital Shares cannot be allotted and issued pursuant to the Contingent
      Capital Subscription;

              


      

       

      
        	
                (c)

              	
                a Trigger
      Event has occurred and continues to exist;
and

              


      

       

      
        	
                (d)

              	
                no
      Termination Event has occurred.

              


      

       

      Words and
expressions defined in the Agreement but not in this letter have the same
meaning where used in this letter.

       

      Yours
faithfully

       

      


       

      Director

      for and on behalf
of

      The Royal Bank of
Scotland Group plc

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

       

      SCHEDULE
2

      DOCUMENTS
TO BE DELIVERED

       

      Part
I

       

      Documents
to be delivered on the Acquisition Date

       

      The following
documents are to be delivered by the Company to HM Treasury on the Acquisition
Date as referred to in clause 2.1(I):

       

      
        
          	
                  1.

                	
                  a written
      English opinion in a form acceptable to HM Treasury, acting reasonably,
      from Linklaters LLP (as English counsel for the
  Company):

                


        

      

       

      
        
          	
                  2.

                	
                  a certified
      copy of the Memorandum and Articles of Association of the
      Company;

                


        

      

       

      
        
          	
                  3.

                	
                  a written
      Scottish opinion in a form acceptable to HM Treasury, acting reasonably,
      from Dundas & Wilson CS LLP (as Scottish counsel for the
      Company);

                


        

         

        
          	
                  4.

                	
                  a certified
      copy of the Resolutions;

                


        

      

       

      
        
          	
                  5.

                	
                  a certified
      copy of the resolutions of the Board (or of the duly authorised committee
      of the Board) referred to at clause 3.3 (and,
      if the said resolution is of such a committee, a certified copy of the
      resolution of the Board appointing such committee (if not previously
      delivered to the HM
Treasury));

                


        

      

       

      
        
          	
                  6.

                	
                  a letter
      addressed to HM Treasury in the form set out in Part I of Schedule 1 dated
      as of the Acquisition Date;

                


        

      

       

      
        
          	
                  7.

                	
                  an original
      copy of the Tax Assets Agreement duly executed by the Company, RBS and ABN
      AMRO;

                


        

      

       

      
        
          	
                  8.

                	
                  an original
      copy of the State Aid Commitment Deed, duly executed by the
      Company;

                


        

      

       

      
        
          	
                  9.

                	
                  an original
      copy of each of the Cashbox Documents duly executed by the Company and by
      CashboxCo; 

                


        

      

       

      
        
          	
                  10.

                	
                  a certified
      copy of the resolution of the board of directors of CashboxCo approving
      and authorising the execution of the Cashbox
  Documents;

                


        

      

       

      
        
          	
                  11.

                	
                  a letter from
      the Auditors addressed to the Company in a form acceptable to HM Treasury,
      acting reasonably, confirming (i) the effect on the distributable reserves
      of the Company of implementing the Acquisition and (ii) the accounting
      treatment of the Annual Premium, such letter to state expressly that a
      copy of such letter may be provided to HM Treasury on a non-recourse
      basis; and

                


        

      

       

      
        
          	
                  12.

                	
                  such other
      documents as may be reasonably required by HM
  Treasury.

                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      PART
II

       

      Documents to be delivered on each
Contingent Capital Completion Date

       

      The following
documents are to be delivered by the Company to HM Treasury on each date on
which Contingent Capital Shares are to be issued as referred to in clause
5.3(M).

       

      
        
          	
                  1.

                	
                  a certified
      copy of the Memorandum and Articles of Association of the
      Company;

                


        

      

       

      
        
          	
                  2.

                	
                  a written
      Scottish opinion in a form acceptable to HM Treasury, acting reasonably,
      from Dundas & Wilson CS LLP (as Scottish counsel for the
      Company);

                


        

      

       

      
        
          	
                  3.

                	
                  a certified
      copy of the resolution of the Board (or of the duly authorised committee
      of the Board) allotting the relevant Contingent Capital Shares (and, if
      the said resolution is of such a committee, a certified copy of the
      resolution of the Board appointing such committee (if not previously
      delivered to the HM Treasury));


                


        

      

       

      
        	
                4.

              	
                a letter
      addressed to HM Treasury in the form set out in Part II of Schedule 1
      dated as of the relevant Contingent Capital Completion Date;
      and

              


      

       

      
        
          	
                  5.

                	
                  such other
      documents as may be reasonably required by HM Treasury including, as
      appropriate, documents relating to any cashbox arrangements by which the
      issue of Contingent Capital Shares pursuant to the relevant Contingent
      Capital Subscription may be structured (on a basis consistent with the
      documents referred to in Part 1 of this Schedule
  2).

                


        

      

       

      
        
          
          

        

        
          80

          
            

          

        

        
          
          

        

      

      


       

      SCHEDULE
3

      WARRANTIES
IN RELATION TO THE ACQUISITION

       

      PART
I

       

      Representations,
warranties and undertakings given on the date of this Agreement, on the Posting
Date and on each Acquisition Warranty Date

       

      
        
          	
                  1.

                	
                  Compliance

                


        

      

       

      
        
          	
                  1.1

                	
                  Each Group
      Company and CashboxCo has been duly incorporated and is validly existing
      as a company with limited or unlimited liability under the laws of the
      country of its incorporation with full corporate power and authority to
      own, lease and operate the properties which it owns, leases and operates
      and to own its other assets and carry on its business as presently carried
      on and as intended to be carried on as described in the latest report and
      accounts published by the
Group.

                


        

      

       

      
        
          	
                  1.2

                	
                  This
      Agreement and the other agreements to be entered into by the Company in
      connection with the Acquisition and the Contingent Capital Commitment and
      the allotment and issue of the Acquisition Shares and the Contingent
      Capital Shares have been or will be duly authorised, executed and
      delivered on behalf of the Company and assuming due authorisation,
      execution and delivery by the other parties thereto, do or will constitute
      valid and binding obligations of the Company enforceable against it in
      accordance with their terms (subject to mandatory rules of law relating to
      insolvency).

                


        

      

       

      
        
          	
                  1.3

                	
                  Other than
      pursuant to (i) this Agreement, (ii) options or other rights granted under
      the Group’s share schemes or deferred bonus scheme, (iii) the terms of the
      Convertible Preference Shares and (iv) any Alternative Coupon Settlement
      Mechanism, and save as otherwise would not (singly or in the aggregate) be
      material in the context of the Acquisition or the Contingent Capital
      Commitment, there are no rights (conditional or otherwise) (i) to require
      the issue of any shares or other securities (including without limitation,
      any loan capital) or securities convertible into or exchangeable for, or
      warrants, rights or options to purchase, or obligations, commitments or
      intentions to create the same or (ii) to sell or otherwise dispose of any
      shares or other securities of a Group Company (other than to another Group
      Company, as the case may be) which are outstanding and in
      force.

                


        

      

       

      
        
          	
                  1.4

                	
                  All sums due
      in respect of the issued share capital of the Company at the date of this
      Agreement have been paid to and received by the Company. No owner or
      holder of any of the share capital of the Company has any right, in his
      capacity as such, in relation to the Group other than as set out in the
      memorandum and articles of association of the
  Company.

                


        

      

       

      
        
          	
                  1.5

                	
                  The Company
      is the beneficial owner free from all Adverse Interests of the shares it
      holds in each Material
Subsidiary.

                


        

      

       

      
        
          	
                  1.6

                	
                  The Company
      and the Directors have at all times complied with the provisions of the
      Company’s memorandum and articles of association and the Companies Acts
      and, subject to the passing of the Resolutions, have or will have the
      right, power and authority under the memorandum and articles of
      association of the Company and the


                


        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      Companies Acts,
to enter into and perform this Agreement (including, without limitation, the
power to pay the fees, costs and expenses provided for in this Agreement), to
allot and issue the Acquisition Shares and the Contingent Capital Shares in
certificated form, to issue the Relevant Documents in the manner proposed
without any sanction or consent by members of the Company or any class of them
and, there are no other consents, authorisations or approvals required by the
Company in connection with the entering into and the performance of this
Agreement or any of the Cashbox Documents and the actions referred to in this
paragraph 1.6 which have not been irrevocably and unconditionally
obtained.

       

      
        
          	
                  1.7

                	
                  The allotment
      and issue of the Acquisition Shares, the Acquisition and the issue and
      distribution of the Relevant Documents and any other document by or on
      behalf of the Company in connection with the Acquisition or the allotment
      and issue of the Acquisition Shares and the performance of this Agreement
      will comply in all material respects with all agreements to which any
      Group Company is a party or by which any such Group Company is bound and
      will comply with: (a) all applicable laws and regulations of the United
      Kingdom (including, without limitation, the Companies Acts, FSMA, the FSA
      Rules, the Listing Rules, the Prospectus Rules, the DTRs and the Admission
      and Disclosure Standards) and (in all material respects) with, all
      applicable laws and regulations of any relevant jurisdiction; and (b) the
      memorandum and articles of association of the Company; and will not exceed
      or infringe any restrictions or the terms of any contract, indenture,
      security, obligation, commitment or arrangement by or binding upon the
      board of directors of any Group Company or their respective properties,
      revenues or assets or result in the implementation of any right of pre
      emption or any other material provision thereof, or result in the
      imposition or variation of any material rights or obligations of any Group
      Company.

                


        

      

       

      
        
          	
                  1.8

                	
                  The
      Acquisition Shares and the Contingent Capital Shares will, upon allotment,
      be free from all Adverse Interests, the Acquisition B Shares will have the
      rights and be subject to the restrictions as set out in Schedule 6 of this
      Agreement, the Dividend Access Share will have the rights and be subject
      to the restrictions as set out in Schedule 7 of this Agreement and the
      Contingent Capital Shares will, if issued pursuant to the Contingent
      Capital Subscription, be issued on the B Share
  Terms.

                


        

      

       

      
        
          	
                  1.9

                	
                  No member of
      the Group or any person acting on its behalf has taken, directly or
      indirectly, any action designed to or which has constituted or which might
      reasonably be expected to cause or result in the manipulation of the price
      of any security of the
Company.

                


        

      

       

      
        
          	
                  1.10

                	
                  Subject to
      the passing of the Resolutions, the Company will have authority to effect
      the conversion of the B Shares as provided in the B Share Terms, including
      by way of sub-dividing Ordinary Shares into ordinary shares and Non-Voting
      Deferred Shares.

                


        

      

       

      
        
          	
                  2. 

                	
                  Announcements

                


        

      

       

      With respect to all
Previous Announcements, all statements of fact contained therein were at the
date of the relevant Previous Announcement and, save to the extent corrected,
amended or supplemented in any document or announcement issued or made by or on
behalf of the Company or any member of the Group subsequent thereto and prior to
the date of this Agreement (in the case of Warranties given on the date of


       

      
        
          
          

        

        
          82

          
            

          

        

        
          
          

        

      

       

      this Agreement) or
prior to the relevant Acquisition Warranty Date (in respect of Warranties given
on such date), remain true and accurate in all material respects and not
misleading in any material respect and all estimates, expressions of opinion or
intention or expectation of the Directors contained therein were made on
reasonable grounds and were honestly held by the Directors and were fairly based
and there were no facts known (or which could on reasonable enquiry have been
known by the Directors) the omission of which would make any statement of fact
or estimate or statement or expression of opinion, intention or expectation in
any of the Previous Announcements misleading and all Previous Announcements
complied with the memorandum and articles of association of the Company, the
Listing Rules, the DTRs, the Prospectus Rules, the Companies Acts, FSMA, all
applicable rules and requirements of the LSE, the FSA and Euronext, the NFSA and
all applicable US and Dutch laws and regulations and (in all material respects)
all other applicable requirements of statute, statutory regulation or any
regulatory body. There is no existing profit forecast outstanding in respect of
the Company, the Group taken as a whole, or any member thereof.

       

      
        
          	
                  3.

                	
                  Accounts

                


        

      

       

      
        
          	
                  3.1

                	
                  The
      Accounts:

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                have been
      prepared in accordance, and comply, with IFRS, the Companies Acts and all
      applicable laws and regulations and have been audited in accordance with
      International Standards on Auditing (UK and
  Ireland);

              


      

       

      
        	
                 
      

              	
                (B)

              	
                give a true
      and fair view of the financial condition and of the state of affairs of
      the Company and the Group as at the end of the relevant financial periods
      and of the profit, loss, cash flow and changes in equity of the Company
      and the Group for the year then ended;
and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                either made
      proper provision for, or, where appropriate, in accordance with IFRS,
      include a note in respect of all liabilities or commitments, whether
      actual, deferred, contingent or disputed, of the
  Group.

              


      

       

      
        
          	
                  3.2

                	
                  The Interim
      Accounts (if any):

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                have been
      prepared in accordance with, and comply with, IFRS and all applicable laws
      and regulations;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                give a true
      and fair view of the financial position of the Group as at the date to
      which they were prepared and the profit or loss of the Group for the
      financial period ended on such date;
and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                either made
      proper provision for, or, where appropriate, in accordance with IFRS,
      include a note in respect of all liabilities or commitments, whether
      actual, deferred, contingent or disputed, of the
  Group.

              


      

       

      
        
          	
                  3.3

                	
                  The ABN AMRO
      Accounts:

                


        

      

       

      
        
          
          

        

        
          83

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (A)

              	
                have been
      prepared and audited in accordance and comply with IFRS, applicable Dutch
      law and all applicable laws and
regulations;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                give a true
      and fair view of the financial condition and of the state of affairs of
      ABN AMRO and its subsidiary undertakings as at the end of each of the
      relevant financial periods and of the profit, loss, cash flow and changes
      in equity of ABN AMRO and its subsidiary undertakings for such periods;
      and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                either made
      proper provision for, or, where appropriate, in accordance with IFRS,
      include a note in respect of all liabilities or commitments, whether
      actual, deferred, contingent or disputed of ABN AMRO and its subsidiary
      undertakings.

              


      

       

      
        
          	
                  3.4

                	
                  The Directors
      have established procedures which provide a reasonable basis for them to
      make proper judgements on an ongoing basis as to the financial position
      and prospects of the Company and each Group
  Company.

                


        

      

       

      
        
          	
                  3.5

                	
                  There are no,
      and during the past five years have been no: (i) material weaknesses in
      the Company’s internal controls over financial reporting (whether or not
      remediated) of the Company or the Group; (ii) changes in the Company’s
      internal controls over financial reporting of the Company or the Group
      that have materially adversely affected, or would be reasonably likely to
      materially adversely affect, the Company’s internal controls over
      financial reporting of the Company or the Group; or (iii) fraud that
      involves any current member of management of the Company or (so far as the
      Company is aware) of any member of the Group and no material fraud that
      involves any employee of the Company or (so far as the Company is aware)
      of any member of the Group.

                


        

      

       

      
        
          	
                  4.

                	
                  Guarantees,
      indemnities, borrowings and
default

                


        

      

       

      
        
          	
                  4.1

                	
                  Save
      for:

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                guarantees or
      indemnities given by any Group Company in the ordinary course of business;
      and

              


      

       

      
        	
                 
      

              	
                (B)

              	
                any
      indemnities given by the Company to HM
Treasury,

              


      

       

      no
Group Company has given or has agreed to give any guarantee or indemnity or
similar obligation in favour of a third party (other than in favour of another
Group Company) and no Group Company has any current or known future liability,
howsoever arising which, in any of the foregoing cases, would, or would be
reasonably likely to, be (singly or in the aggregate) material in the context of
the Acquisition or the Contingent Capital Commitment.

       

      
        
          	
                  4.2

                	
                  No event has
      occurred nor have any circumstances arisen (and the Acquisition, the
      Contingent Capital Commitment and the allotment and issue of B Shares and
      Dividend Access Share will not give rise to any such event or
      circumstance) so that any person is or would be entitled, or could, with
      the giving of notice or lapse of time or the fulfilment of any condition
      or the making of any determination, become entitled, to require repayment
      before its stated maturity of, or to take any step to enforce any security
      for, any indebtedness of any member of the Group and no person to whom any
      indebtedness of any member of the Group which is payable on demand is owed
      has 

                


        

         

        
          
            
            

          

          
            84

            
              

            

          

          
            
            

          

        

         

        demanded or
threatened to demand repayment of, or taken or threatened to take any step to
enforce any guarantee, indemnity or other security for, the same, which, in any
of the foregoing cases, would, or would be reasonably likely to, be (singly or
in the aggregate) material or have material consequences in each case in the
context of the Acquisition or the Contingent Capital Commitment or the business
of the Group.

      

       

      
        
          	
                  4.3

                	
                  There are no
      companies, undertakings, partnerships or joint ventures in existence in
      which any Group Company has an ownership interest but whose results are
      not consolidated with the results of the Group, but whose default would
      affect the indebtedness or increase the contingent liabilities of the
      Group to an extent which would, or would be reasonably likely to, be
      (singly or in the aggregate) material in the context of the Acquisition or
      the Contingent Capital
Commitment.

                


        

      

       

      
        
          	
                  5.

                	
                  Taxation

                


        

      

       

      No
stamp duty, SDRT or other issuance or transfer taxes or similar duties are
payable in connection with the allotment, issue and delivery of the Acquisition
Shares or the Contingent Capital Shares by the Company in accordance with the
terms of this Agreement, save for (i) any stamp duty or SDRT payable under
sections 67, 70, 93 or 96 of the Finance Act 1986 and (ii) for the avoidance of
doubt, any stamp duty, SDRT or other issuance or transfer taxes or similar
duties payable in connection with the delivery or transfer of the Cashbox
Ordinary Shares or the Cashbox Preference Shares or any shares in any cashbox or
similar company involved in any cashbox or similar structure used to implement
the acquisition of any Contingent Capital Shares.

       

      
        
          	
                  6.

                	
                  Insolvency

                


        

      

       

      
        
          	
                  6.1

                	
                  No Group
      Company is unable to pay its debts within the meaning of section 123 of
      the Insolvency Act 1986 or is otherwise
  insolvent.

                


        

      

       

      
        
          	
                  6.2

                	
                  Save in the
      context of a solvent voluntary winding up or otherwise as would not
      (singly or in the aggregate) be material in the context of the Acquisition
      or the Contingent Capital Commitment, no order has been made, petition
      presented or resolutions passed for the winding up of any Group Company
      and no meeting has been convened for the purpose of winding up any Group
      Company. No Group Company has been a party to any transaction which could
      be avoided in a winding up.

                


        

      

       

      
        
          	
                  6.3

                	
                  No steps have
      been taken for the appointment of an administrator or receiver (including
      an administrative receiver) of all or any part of the assets of any Group
      Company.

                


        

      

       

      
        
          	
                  6.4

                	
                  By reason of
      actual or anticipated financial difficulties, no Group Company has
      commenced negotiations with its creditors or any class of its creditors
      with a view to rescheduling any of its indebtedness or has made or
      proposed any arrangement or composition with its creditors or any class of
      its creditors save, in any of the foregoing cases, to an extent which
      would not (singly or in the aggregate) be material in the context of the
      Acquisition or the Contingent Capital
  Commitment.

                


        

      

       

      
        
          
          

        

        
          85

          
            

          

        

        
          
          

        

      

       

      
        	
                7.

              	
                Regulatory

              


      

       

      None of the
Company, any other member of the Group or, to the knowledge of the Company, any
director, officer, agent, employee or Affiliate of the Company is currently
subject to any sanctions administered by the U.S. Department of the Treasury
(“OFAC”) or any similar
sanctions imposed by the European Union, the United Nations or any other body,
governmental or other, to which the Company or any of its Affiliates is subject
(collectively, “other economic sanctions”); and the Company will not directly or
indirectly use the proceeds of the Acquisition or any Contingent Capital
Subscription, or lend, contribute or otherwise make available such proceeds to
any other member of the Group, joint venture partner or other person or entity,
for the purpose of financing the activities of any person currently subject to
any sanctions administered by OFAC or any other economic sanctions.

       

      
        
          
          

        

        
          86

          
            

          

        

        
          
          

        

         

      

      PART
II

       

      Representations,
warranties and undertakings given on the Posting Date and on each Acquisition
Warranty Date

       

      All Warranties in
paragraphs 1 and 3 to 7 of this Part II of Schedule 3 are qualified by reference
to matters which are fairly disclosed in the Circular and the Form of Proxy or,
if given on or after the posting of any Replacement Circular, by reference to
matters which are fairly disclosed in the Replacement Circular.

       

      
        
          	
                  1.

                	
                  Regulatory
      and compliance

                


        

      

       

      
        
          	
                  1.1

                	
                  No Group
      Company nor any of its officers has failed to comply with any statutory
      provision or any rules, regulations, directions, requirements, notices and
      provisions of the FSA or any other regulatory body applying to such Group
      Company in relation to its business including (without limitation) in
      respect of the maintenance of its Capital Resources Requirement and
      satisfaction of the Overall Financial Adequacy Rule and any equivalent
      capital requirements in any other jurisdiction that are applicable to any
      Group Company; no obligation has arisen in respect of the general
      notification requirements under Chapter 15.3 of SUP, save in any of the
      foregoing cases to an extent which would not (singly or in the aggregate)
      be material in the context of the Acquisition or the Contingent Capital
      Commitment.

                


        

      

       

      
        
          	
                  1.2

                	
                  Save as
      disclosed in any Previous Announcements, the Accounts or the Interim
      Accounts or as otherwise would not (singly or in the aggregate) be
      material in the context of the Acquisition or the Contingent Capital
      Commitment, no Group Company is the subject of any investigation,
      enforcement action (including, without limitation to vary the terms of any
      permission of licence) or disciplinary proceeding by the FSA or any other
      regulatory body having jurisdiction over such Group Company, and no such
      investigation, enforcement action or disciplinary proceeding is threatened
      or pending.

                


        

      

       

      
        
          	
                  1.3

                	
                  Save as
      disclosed in any Previous Announcements, the Accounts or the Interim
      Accounts or as otherwise as would not (singly or in the aggregate) be
      material in the context of the Acquisition or the Contingent Capital
      Commitment, the Company is not subject to any special or additional
      surveillance or supervision by the FSA or to any special or additional
      reporting requirements in relation to its assets, liquidity position,
      funding position or otherwise and the Company has not been subject to any
      visits, beyond customary visits, by the
FSA.

                


        

      

       

      
        
          	
                  1.4

                	
                  The
      operations of each Group Company are and have been conducted at all times
      in material compliance with the money laundering statutes of all
      jurisdictions, the rules and regulations thereunder and any related or
      similar rules, regulations or guidelines, issued, administered or enforced
      by any governmental agency (collectively, the “Money Laundering Laws”) and
      no action, suit or proceeding by or before any court or governmental
      agency, authority or body or any arbitrator involving any Group Company
      with respect to Money Laundering Laws is pending or, to the best knowledge
      of the Company, threatened.

                


        

      

       

      
        
          	
                  1.5

                	
                  All licences,
      permissions, authorisations and consents which are material for carrying
      on the business of the Group have been obtained and are in full force and
      effect and, so far 

                


        

      

       

      
        
          
          

        

        
          87

          
            

          

        

        
          
          

        

         

      

      as the Company
is aware, there are no circumstances which might lead to any of such licences,
permissions, authorisations and consents being revoked, suspended, varied or
refused renewal to an extent which would, or would be reasonably likely to, be
(singly or in the aggregate) material in the context of the Acquisition or the
Contingent Capital Commitment (as the case may be).

       

      
        
          	
                  1.6

                	
                  Each Group
      Company required to be licensed (as a bank or otherwise) is duly licensed
      in its jurisdiction of incorporation and domicile and, except as would not
      reasonably be expected to be material in the context of the Acquisition or
      the Contingent Capital Commitment, is duly licensed or authorised in each
      other jurisdiction where it is required to be licensed or authorised to
      conduct its business.

                


        

      

       

      
        
          	
                  1.7

                	
                  None of the
      Company, any other member of the Group or, to the knowledge of the
      Company, any director, officer, agent, employee or Affiliate of the
      Company, is aware of or has taken any action, directly or indirectly, that
      could result in a violation by such persons of the U.S. Foreign Corrupt
      Practices Act of 1977, as amended, or the rules and regulations thereunder
      (the FCPA) (including, without limitation, making use of the mail or any
      means or instrument of interstate commerce corruptly in furtherance of an
      offer, payment, promise to pay or authorisation of the payment of any
      money, or other property, gift, promise to give, or authorisation of the
      giving of anything of value to any “foreign official” (as such term is
      defined in the FCPA) or any foreign political office, in contravention of
      the FCPA), the OECD Convention on Bribery of Foreign Public Officials in
      International Business Transactions (the OECD Convention) or any similar
      law or regulation, to which the Company, any other member of the Group,
      any director, officer, agent, employee of any member of the Group or, to
      the knowledge of the Company, any Affiliate is subject; and the Company,
      each member of the Group and, to the knowledge of the Company, its
      Affiliates have conducted their businesses in compliance with the FCPA,
      the OECD Convention and any applicable similar law or
      regulation.

                


        

      

       

      
        
          	
                  1.8

                	
                  No event or
      circumstance exists, has occurred or arisen or, so far as the Company is
      aware, is about to occur which constitutes or results in, or would with
      the giving of notice and/or lapse of time and/or the making of a relevant
      determination, constitute, or result in, termination of or a default or
      the acceleration or breach of any obligation under any agreement,
      instrument or arrangement to which any Group Company is a party or by
      which any such Group Company or any of its properties, revenues or assets
      are bound, in any of the foregoing cases to an extent which would, or
      would be reasonably likely to, be (singly or in the aggregate) material in
      the context of the Acquisition or the Contingent Capital
      Commitment.

                


        

      

       

      
        
          	
                  2.

                	
                  Disclosure

                


        

      

       

      The Company has
complied, and is continuing to comply, in all respects with Principle 4 set out
in Listing Rule 7.2.1R and with DTR 2.2.1 and the Circular complies in all
respects with Listing Rules 13.3.1R(1), 13.3.1R(3) and 13.6.1R(3).

       

      
        
          	
                  3.

                	
                  The
      Relevant Documents

                


        

      

       

      
        
          	
                  3.1

                	
                  The Relevant
      Documents contain all particulars and information required by, and comply
      in all respects with the memorandum and articles of association of the
      Company, the Companies Acts, FSMA, the FSA Rules, the Listing Rules
      (including, without limitation,


                


        

      

       

      
        
          
          

        

        
          88

          
            

          

        

        
          
          

        

         

      

      Chapters 10, 11
and 13 of the Listing Rules (as applicable)), the DTRs, the NFSA, all applicable
rules and requirements of the LSE and the FSA and all other applicable
requirements of statute, statutory regulation or any regulatory
body.

       

      
        
          	
                  3.2

                	
                  All
      expressions of opinion, intention or expectation contained in any Relevant
      Document are, and were on the respective dates of such Relevant Document,
      honestly held by the Directors and are fairly based and have been made on
      reasonable grounds after due and careful consideration and
      enquiry.

                


        

      

       

      
        
          	
                  3.3

                	
                  There are no
      facts or matters known, or which could on reasonable enquiry have been
      known, to the Company or any of the Directors omitted from any Relevant
      Document, the omission of which would make any statement of fact or
      expression of opinion, intention or expectation contained in a Relevant
      Document misleading.

                


        

      

       

      
        
          	
                  4.

                	
                  Position
      since Accounts Date

                


        

      

       

      Since the Accounts
Date and save as disclosed in any Previous Announcements, the Interim Accounts
or any other written agreement which is entered into between the Company and HM
Treasury on or before the date of this Agreement and which is stated
specifically to be a disclosure against any of the following
Warranties:

       

      
        	
                 
      

              	
                (A)

              	
                each Group
      Company has carried on its respective business in the ordinary course in
      all material respects, and there has been no Material Adverse
      Effect;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                save as
      fairly disclosed to HM Treasury, there has been no material impairment to
      charges in respect of any assets of the Company or of any Group Company,
      and there has been no increase in the provisions in respect of losses in
      relation to any mortgage, loans or other assets of the Company or of any
      Group Company that, in any of the foregoing cases, would, or would be
      reasonably likely to, be (singly or in the aggregate) material in the
      context of the Acquisition or the Contingent Capital
      Commitment;

              


      

       

      
        	
                 
      

              	
                (C)

              	
                save for this
      Agreement and the Accession Documents, any agreements entered into in
      connection with the Placing and Open Offer and any utilisation by the
      Company of the liquidity measures being made available by the Bank of
      England (in the form notified by HM Government to the European Commission
      on 12 October 2008), no Group Company has, otherwise than in the ordinary
      course of business, entered into or assumed or incurred any contract,
      commitment (whether in respect of capital expenditure or otherwise),
      borrowing, indebtedness in the nature of borrowing, guarantee, liability
      (including contingent liability) or any other agreement or obligation
      that, in any of the foregoing cases, would, or would be reasonably likely
      to, be (singly or in the aggregate) material in the context of the
      Acquisition or the Contingent Capital
  Commitment;

              


      

       

      
        	
                 
      

              	
                (D)

              	
                other than in
      the ordinary course of business, no debtor has been released by the
      Company to an extent which (singly or in the aggregate) is material in the
      context of the Acquisition or the Contingent Capital Commitment on terms
      that he pays less than the book value of his debt and no debt of such
      material 

              


      

       

      
        
          
          

        

        
          89

          
            

          

        

        
          
          

        

         

      

      amount owing to
the Company or any Group Company has been deferred, subordinated or written off
or has proven irrecoverable to any material extent;

       

      
        	
                 
      

              	
                (E)

              	
                no Group
      Company has been involved in any transaction (other than any transaction
      provided for in this Agreement or the Accession Documents) which has
      resulted or would be reasonably likely to result (singly or in the
      aggregate) in any liability for Tax on the Company or any Group Company,
      which, in any of the foregoing cases, would, or would be reasonably likely
      to, be (singly or in the aggregate) material in the context of the
      Acquisition or the Contingent Capital Commitment other than a transaction
      in the ordinary course of business;
and

              


      

       

      
        	
                 
      

              	
                (F)

              	
                no Group
      Company has been in default in any material respect under any agreement or
      arrangement to which any Group Company is a party and which is or is
      reasonably likely to be material and there are no circumstances likely to
      give rise to such default, to an extent which (singly or in the aggregate)
      would, or would be reasonably likely to, be material in the context of the
      Acquisition or the Contingent Capital
  Commitment.

              


      

       

      
        
          	
                  5.

                	
                  Litigation

                


        

      

       

      
        
          	
                  5.1

                	
                  Save as
      disclosed in any Previous Announcements, the Accounts or the Interim
      Accounts, no Group Company nor any of its officers or agents or employees
      is involved, or has during the recent past (being not less than 12 months
      ending on the date of this Agreement) been involved in any civil,
      criminal, arbitration, administrative, governmental or other proceedings
      or governmental regulatory or similar investigation or enquiry, whether as
      plaintiff, defendant or otherwise which, by itself or with other
      proceedings, would be, or is reasonably likely to be, material in the
      context of the Acquisition or the Contingent Capital
      Commitment.

                


        

      

       

      
        
          	
                  5.2

                	
                  Save as
      disclosed in any Previous Announcements, the Accounts or the Interim
      Accounts, no litigation or arbitration, administrative, governmental,
      civil, criminal or other proceedings nor governmental, regulatory or
      similar investigation or enquiry are pending or have been threatened by or
      against any Group Company or any of their respective officers, agents or
      employees in relation to the affairs of any Group Company and, to the best
      of the knowledge, information and belief of the Company and the Directors,
      there are no facts or circumstances likely to give rise to any such
      litigation or arbitration, administrative, criminal, governmental, civil,
      or other proceedings or governmental, regulatory or similar investigation
      or enquiry, in each case, to an extent which, by itself or with other
      proceedings, would be, or is reasonably likely to be, material in the
      context of the Acquisition or the Contingent Capital
      Commitment.

                


        

      

       

      
        
          	
                  5.3

                	
                  Save as
      disclosed in any Previous Announcements, the Accounts or the Interim
      Accounts, no Group Company nor any of its officers or agents or employees
      in relation to the affairs of any Group Company has been a party to any
      undertaking or assurance given to any court or governmental agency or the
      subject of any injunction which in any of the foregoing cases is still in
      force and which, by itself or with other proceedings, which would be, or
      is reasonably likely to be, material in the context of the Acquisition or
      the Contingent Capital
Commitment.

                


        

      

       

      
        
          
          

        

        
          90

          
            

          

        

        
          
          

        

         

      

      
        
          	
                  5.4

                	
                  For the
      purpose of this paragraph 5, proceedings includes any action by any
      governmental, public or regulatory authority (including any investment
      exchange or any authority or body which regulates investment business or
      takeovers or which is concerned with regulatory, licensing, competition,
      taxation matters or matters concerning Intellectual Property
      Rights).

                


        

      

       

      
        
          	
                  6.

                	
                  Arrangements
      with directors and
shareholders

                


        

      

       

      
        
          	
                  6.1

                	
                  Save for the
      articles of association of the Company, any service agreement with a
      Director and any contracts entered into in the ordinary course of
      business, there are no existing contracts or engagements or other
      arrangements to which any Group Company is a party and in which any of the
      directors of any Group Company and/or any associate of any of them is
      interested which would be material in the context of the Acquisition or
      the Contingent Capital Commitment; and to the extent that any such
      contracts, engagements or other arrangements exist they comply with the
      related party requirements of the Listing Rules of the UK Listing
      Authority (or other relevant
regulator).

                


        

      

       

      
        
          	
                  6.2

                	
                  No
      Shareholder has any rights, in his capacity as such, in relation to any
      Group Company other than as set out in the articles of association of the
      Company.

                


        

      

       

      
        
          	
                  6.3

                	
                  The Company
      is not aware of any claim, demand or right of action against any Group
      Company otherwise than for accrued remuneration in accordance with their
      contracts of employment by any officer or employee (or former officer or
      employee) of the Group and/or any associate of them in any of the
      foregoing cases to an extent that (singly or in the aggregate) would, or
      would be reasonably likely to, be material in the context of the
      Acquisition or the Contingent Capital
  Commitment.

                


        

      

       

      
        
          	
                  6.4

                	
                  So far as the
      Company is aware, no Director nor any person connected with such Director
      nor any of the employees of the Group nor any person connected with any
      such employee is in breach of any restrictive covenant, employment
      agreement or contract for services which would, or would be reasonably
      likely to, affect the Company or any other Group Company and so far as the
      Company is aware, there are no circumstances which might give rise to any
      claim of such a breach or any other dispute with any employer, former
      employer or other person for whom any Director or employee of the Group
      provides or has provided services, in any of the foregoing cases to an
      extent that (singly or in the aggregate) would, or would be reasonably
      likely to, be material in the context of the Acquisition or the Contingent
      Capital Commitment.

                


        

      

       

      
        
          	
                  6.5

                	
                  For the
      purpose of this paragraph 6, associate has the
  meaning:

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                in the case
      of an individual, given to “connected person” under section 96B(2) of
      FSMA; and

              


      

       

      
        	
                 
      

              	
                (B)

              	
                in the case
      of a body corporate, given to “associated company” in sections 416 et seq.
      of the Income and Corporation Taxes Act
1988.

              


      

       

      
        
          
          

        

        
          91

          
            

          

        

        
          
          

        

      

       

      
        	
                7.

              	
                Agreements

              


      

       

      Save as
contemplated by this Agreement or in respect of the Convertible Preference
Shares or any Alternative Coupon Satisfaction Mechanism or as would not (singly
or in the aggregate) be material in the context of the Acquisition or the
Contingent Capital Commitment, there is no agreement, undertaking, instrument or
arrangement requiring the creation, allotment, issue, redemption or repayment,
or the grant to any person of the right (whether conditional or not) to require
the allotment, issue, redemption or repayment, of any shares in the capital of
the Company or a Material Subsidiary (including, without limitation, an option
or right of pre-emption or conversion).

       

      
        
          	
                  8.

                	
                  Cash
      box

                


        

      

       

      
        
          	
                  8.1

                	
                  CashboxCo has
      not undertaken any obligations or liabilities except pursuant to, or as
      contemplated by, the Cashbox Documents or otherwise agreed in writing by
      HM Treasury.

                


        

      

       

      
        
          	
                  8.2

                	
                  CashboxCo is
      and will remain resident in the United Kingdom and nowhere else for United
      Kingdom tax purposes.

                


        

         

        
          
            
            

          

          
            92

            
              

            

          

          
            
            

          

        

      

       

      SCHEDULE
4

       

      CONTINGENT
CAPITAL WARRANTIES

       

      Representations, warranties and
undertakings given on each Contingent Capital Warranty Date

      
         

        
          	
                  1.

                	
                  Compliance

                
	 	 
	
                  1.1

                	
                  Each Group
      Company and to the extent the relevant Contingent Capital Subscription is
      being implemented by way of a cashbox structure, the cashbox company has
      been duly incorporated and is validly existing as a company with limited
      or unlimited liability under the laws of the country of its incorporation
      with full corporate power and authority to own, lease and operate the
      properties which it owns, leases and operates and to own its other assets
      and carry on its business as presently carried on and as intended to be
      carried on as described in the latest report and accounts published by the
      Group.

                
	 	 
	
                  1.2

                	
                  All licences,
      permissions, authorisations and consents which are material for carrying
      on the business of the Group have been obtained and are in full force and
      effect and, so far as the Company is aware, there are no circumstances
      which might lead to any of such licences, permissions, authorisations and
      consents being revoked, suspended, varied or refused renewal to an extent
      which would, or would be reasonably likely to, be (singly or in the
      aggregate) material in the context of the relevant Contingent Capital
      Subscription (as the case may be).

                
	 	 
	
                  1.3

                	
                  All sums due
      in respect of the issued share capital of the Company at the Contingent
      Capital Notice Date have been paid to and received by the Company. No
      owner or holder of any of the share capital of the Company has any right,
      in his capacity as such, in relation to the Group other than as set out in
      the memorandum and articles of association of the
  Company.

                
	 	 
	
                  1.4

                	
                  The Company
      is the beneficial owner free from all Adverse Interests of the shares it
      holds in each Material Subsidiary.

                
	 	 
	
                  1.5

                	
                  The Company
      and the Directors have at all times complied with the provisions of the
      Company’s memorandum and articles of association and the Companies Acts
      and have or will have the right, power and authority under the memorandum
      and articles of association of the Company to allot and issue the relevant
      Contingent Capital Shares in certificated form, and there are no other
      consents, authorisations or approvals required by the Company in
      connection with any of the documents relating to any Contingent Capital
      Subscription implementation by way of a cashbox structure and the actions
      referred to in this paragraph 1.5 which have
      not been irrevocably and unconditionally obtained.

                
	 	 
	
                  1.6

                	
                  The allotment
      and issue of the relevant Contingent Capital Shares, the relevant
      Contingent Capital Subscription and the issue and distribution of any
      document by or on behalf of the Company in connection with the relevant
      Contingent Capital Subscription or the allotment and issue of the relevant
      Contingent Capital Shares will comply in all material respects with all
      agreements to which any Group Company is a party or by which any such
      Group Company is bound and will comply with: (a) all applicable laws and
      regulations of the United Kingdom (including, without limitation, the
      Companies 

                


        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	Acts, FSMA, the FSA Rules, the
      Listing Rules, the Prospectus Rules, the DTRs and the Admission and
      Disclosure Standards) and (in all material respects) with, all applicable
      laws and regulations of any relevant jurisdiction; and (b) the memorandum
      and articles of association of the Company; and will not exceed or
      infringe any restrictions or the terms of any contract, indenture,
      security, obligation, commitment or arrangement by or binding upon the
      board of directors of any Group Company or their respective properties,
      revenues or assets or result in the implementation of any right of pre
      emption or any other material provision thereof, or result in the
      imposition or variation of any material rights or obligations of any Group
      Company.
	 	 
	
                  1.7

                	
                  The relevant
      Contingent Capital Shares will, upon allotment, be free from all Adverse
      Interests and will be issued on the B Share Terms.

                
	 	 
	
                  1.8

                	
                  No member of
      the Group or any person acting on its behalf has taken, directly or
      indirectly, any action designed to or which has constituted or which might
      reasonably be expected to cause or result in the manipulation of the price
      of any security of the Company.

                
	 	 
	
                  1.9

                	
                  The
      agreements (if any) to be entered into by the Company in connection with
      the relevant Contingent Capital Subscription and the allotment and issue
      of the relevant Contingent Capital Shares have been or will be, by the
      relevant Contingent Capital Completion Date, duly authorised, executed and
      delivered on behalf of the Company and assuming due authorisation,
      execution and delivery by the other parties thereto, do or will, by the
      relevant Contingent Capital Completion Date, constitute valid and binding
      obligations of the Company enforceable against it in accordance with their
      terms (subject to mandatory rules of law relating to
      insolvency).

                
	 	 
	
                  1.10

                	
                  Other than
      pursuant to (i) this Agreement, (ii) options or other rights granted under
      the Group’s share schemes or deferred bonus schemes and (iii) the terms of
      the Convertible Preference Shares and (iv) any Alternative Coupon
      Satisfaction Mechanism, and save as otherwise would not (singly or in the
      aggregate) be material in the context of the relevant Contingent Capital
      Subscription, there are no rights (conditional or otherwise) (i) to
      require the issue of any shares or other securities (including without
      limitation, any loan capital) or securities convertible into or
      exchangeable for, or warrants, rights or options to purchase, or
      obligations, commitments or intentions to create the same or (ii) to sell
      or otherwise dispose of any shares or other securities of a Group Company
      (other than to another Group Company, as the case may be) which are
      outstanding and in force.

                
	 	 
	
                  1.11

                	
                  The Company
      has power to effect the conversion of the B Shares as provided in the B
      Share Terms, including by way of sub-dividing Ordinary Shares into
      ordinary shares and Non-Voting Deferred Shares.

                
	 	 
	
                  1.12

                	
                  The amount
      standing to the credit of the Company’s share premium account as at the
      date of the relevant Contingent Capital Notice is as set out in the
      relevant Contingent Capital Notice.

                


        

         

        
          
            
            

          

          
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                  2.

                	
                  Announcements

                
	 	 
	 
      	
                  With respect
      to all Previous Announcements, all statements of fact contained therein
      were at the date of the relevant Previous Announcement and, save to the
      extent corrected, amended or supplemented in any document or announcement
      issued or made by or on behalf of the Company or any member of the Group
      subsequent thereto and prior to the relevant Contingent Capital Notice
      Date (in the case of Warranties given on such date) or the relevant
      Contingent Capital Completion Date (in the case of Warranties given on
      such date), remain true and accurate in all material respects and not
      misleading in any material respect and all estimates, expressions of
      opinion or intention or expectation of the Directors contained therein
      were made on reasonable grounds and were honestly held by the Directors
      and were fairly based and there were no facts known (or which could on
      reasonable enquiry have been known by the Directors) the omission of which
      would make any statement of fact or estimate or statement or expression of
      opinion, intention or expectation in any of the Previous Announcements
      misleading and all Previous Announcements complied with the memorandum and
      articles of association of the Company, the Listing Rules, the DTRs, the
      Prospectus Rules, the Companies Acts, FSMA, all applicable rules and
      requirements of the LSE, the FSA and Euronext, the NFSA and all applicable
      US and Dutch laws and regulations and (in all material respects) all other
      applicable requirements of statute, statutory regulation or any regulatory
      body. There is no existing profit forecast outstanding in respect of the
      Company, the Group taken as a whole, or any member
  thereof.

                
	 	 
	
                  3.

                	
                  Accounts

                
	 	 
	
                  3.1

                	
                  The
      Accounts:

                


        

         

        
          	 
      	
                  (A)

                	
                  have been
      prepared in accordance, and comply, with IFRS, the Companies Acts and all
      applicable laws and regulations and have been audited in accordance with
      International Standards on Auditing (UK and Ireland);

                
	 	 	 
	 
      	
                  (B)

                	
                  give a true
      and fair view of the financial condition and of the state of affairs of
      the Company and the Group as at the end of the relevant financial periods
      and of the profit, loss, cash flow and changes in equity of the Company
      and the Group for the year then ended; and

                
	 	 	 
	 
      	
                  (C)

                	
                  either made
      proper provision for, or, where appropriate, in accordance with IFRS,
      include a note in respect of all liabilities or commitments, whether
      actual, deferred, contingent or disputed, of the
  Group.

                


        

         

        
          	
                  3.2

                	The Interim
      Accounts (if any):
	 	 	 
	 
      	
                  (A)

                	
                  have been
      prepared in accordance with, and comply with, IFRS and all applicable laws
      and regulations;

                
	 	 	 
	 
      	
                  (B)

                	
                  give a true
      and fair view of the financial position of the Group as at the date to
      which they were prepared and the profit or loss of the Group for the
      financial period ended on such date;
and

                


        

         

        
          
            
            

          

          
            95

            
              

            

          

          
            
            

          

        

         

        
          	 
      	
                  (C)

                	
                  either made
      proper provision for, or, where appropriate, in accordance with IFRS,
      include a note in respect of all liabilities or commitments, whether
      actual, deferred, contingent or disputed, of the Group.

                
	 	 
	
                  3.3

                	The Directors
      have established procedures which provide a reasonable basis for them to
      make proper judgements on an ongoing basis as to the financial position
      and prospects of the Company and each Group Company.
	 	 
	
                  3.4

                	There are no,
      and during the past five years have been no: (i) material weaknesses in
      the Company’s internal controls over financial reporting (whether or not
      remediated) of the Company or the Group; (ii) changes in the Company’s
      internal controls over financial reporting of the Company or the Group
      that have materially adversely affected, or would be reasonably likely to
      materially adversely affect, the Company’s internal controls over
      financial reporting of the Company or the Group; or (iii) fraud that
      involves any current member of management of the Company or (so far as the
      Company is aware) of any member of the Group and no material fraud that
      involves any employee of the Company or (so far as the Company is aware)
      of any member of the Group.
	 	 	 
	
                  4.

                	Guarantees,
      indemnities, borrowings and default
	 	 	 
	
                  4.1

                	Save
      for:
	 	 	 
	 
      	
                  (A)

                	
                  guarantees or
      indemnities given by any Group Company in the ordinary course of business;
      and

                
	 	 	 
	 
      	
                  (B)

                	
                  any
      indemnities given by the Company to HM Treasury,

                
	 	 	 
	 
      	no Group
      Company has given or has agreed to give any guarantee or indemnity or
      similar obligation in favour of a third party (other than in favour of
      another Group Company) and no Group Company has any current or known
      future liability, howsoever arising which, in any of the foregoing cases,
      would, or would be reasonably likely to, be (singly or in the aggregate)
      material in the context of the relevant Contingent Capital
      Subscription.
	 	 	 
	
                  4.2

                	No event has
      occurred nor have any circumstances arisen (and the relevant Contingent
      Capital Subscription and the allotment and issue of the relevant
      Contingent Capital Shares will not give rise to any such event or
      circumstance) so that any person is or would be entitled, or could, with
      the giving of notice or lapse of time or the fulfilment of any condition
      or the making of any determination, become entitled, to require repayment
      before its stated maturity of, or to take any step to enforce any security
      for, any indebtedness of any member of the Group and no person to whom any
      indebtedness of any member of the Group which is payable on demand is owed
      has demanded or threatened to demand repayment of, or taken or threatened
      to take any step to enforce any guarantee, indemnity or other security
      for, the same, which, in any of the foregoing cases, would, or would be
      reasonably likely to, be (singly or in the aggregate) material or have
      material consequences in each case in the context of the relevant
      Contingent Capital Subscription or the business of the
  Group.


        

        
           

          
            	
                    4.3

                  	
                    There are no
      companies, undertakings, partnerships or joint ventures in existence in
      which any Group Company has an ownership interest but whose results are
      not 

                  


          

        

        
          
            
            

          

          
            96

            
              

            

          

          
            
            

          

        

         

        
          	
                	
                  consolidated
      with the results of the Group, but whose default would affect the
      indebtedness or increase the contingent liabilities of the Group to an
      extent which would, or would be reasonably likely to, be (singly or in the
      aggregate) material in the context of the relevant Contingent Capital
      Subscription.

                
	 	 
	
                  4.4

                	
                  No event or
      circumstance exists, has occurred or arisen or, so far as the Company is
      aware, is about to occur which constitutes or results in, or would with
      the giving of notice and/or lapse of time and/or the making of a relevant
      determination, constitute, or result in, termination of or a default or
      the acceleration or breach of any obligation under any agreement,
      instrument or arrangement to which any Group Company is a party or by
      which any such Group Company or any of its properties, revenues or assets
      are bound, in any of the foregoing cases to an extent which would, or
      would be reasonably likely to, be (singly or in the aggregate) material in
      the context of the relevant Contingent Capital
    Subscription.

                
	 	 
	
                  5.

                	
                  Taxation

                
	 	 
	 
      	
                  No stamp
      duty, SDRT or other issuance or transfer taxes or similar duties are
      payable in connection with the allotment, issue and delivery of the
      relevant Contingent Capital Shares by the Company in accordance with the
      terms of this Agreement, save for (i) any stamp duty or SDRT payable under
      sections 67, 70, 93 or 96 of the Finance Act 1986 and (ii) for the
      avoidance of doubt, any stamp duty, SDRT or other issuance or transfer
      taxes or similar duties payable in connection with the delivery or
      transfer to the Company of any shares in the capital of any company
      similar to CashboxCo pursuant to any cashbox structure by which the
      allotment and issue of the relevant Contingent Capital Shares may be
      implemented.

                
	 	 
	
                  6.

                	
                  Insolvency

                
	 	 
	
                  6.1

                	
                  No Group
      Company is unable to pay its debts within the meaning of section 123 of
      the Insolvency Act 1986 or is otherwise insolvent.

                
	 	 
	
                  6.2

                	
                  Save in the
      context of a solvent voluntary winding up or otherwise as would not
      (singly or in the aggregate) be material in the context of the relevant
      Contingent Capital Subscription, no order has been made, petition
      presented or resolutions passed for the winding up of any Group Company
      and no meeting has been convened for the purpose of winding up any Group
      Company. No Group Company has been a party to any transaction which could
      be avoided in a winding up.

                
	 	 
	
                  6.3

                	
                  No steps have
      been taken for the appointment of an administrator or receiver (including
      an administrative receiver) of all or any part of the assets of any Group
      Company.

                
	 	 
	
                  6.4

                	
                  By reason of
      actual or anticipated financial difficulties, no Group Company has
      commenced negotiations with its creditors or any class of its creditors
      with a view to rescheduling any of its indebtedness or has made or
      proposed any arrangement or composition with its creditors or any class of
      its creditors save, in any of the foregoing cases, to an extent which
      would not (singly or in the aggregate) be material in the context of the
      relevant Contingent Capital
Subscription.

                


        

         

        
          
            
            

          

          
            97

            
              

            

          

          
            
            

          

        

         

        
          	
                  7.

                	
                  Regulatory

                
	 	 
	
                  7.1

                	
                  Each Group
      Company required to be licensed (as a bank or otherwise) is duly licensed
      in its jurisdiction of incorporation and domicile and, except as would not
      reasonably be expected to be material in the context of the relevant
      Contingent Capital Subscription, is duly licensed or authorised in each
      other jurisdiction where it is required to be licensed or authorised to
      conduct its business.

                
	 	 
	
                  7.2

                	
                  Save as
      disclosed in the Relevant Documents on or prior to the relevant Contingent
      Capital Notice Date (in the case of Warranties given on such date) or the
      relevant Contingent Capital Completion Date (in the case of Warranties
      given on such date), any Previous Announcements, the Accounts or the
      Interim Accounts or as otherwise as would not (singly or in the aggregate)
      be material in the context of the relevant Contingent Capital
      Subscription, the Company is not subject to any special or additional
      surveillance or supervision by the FSA or to any special or additional
      reporting requirements in relation to its assets, liquidity position,
      funding position or otherwise and the Company has not been subject to any
      visits, beyond customary visits, by the FSA.

                
	 	 
	
                  7.3

                	
                  No Group
      Company nor any of its officers has failed to comply with any statutory
      provision or any rules, regulations, directions, requirements, notices and
      provisions of the FSA or any other regulatory body applying to such Group
      Company in relation to its business including (without limitation) in
      respect of the maintenance of its Capital Resources Requirement and
      satisfaction of the Overall Financial Adequacy Rule and any equivalent
      capital requirements in any other jurisdiction that are applicable to any
      Group Company; no obligation has arisen in respect of the general
      notification requirements under Chapter 15.3 of SUP, save in any of the
      foregoing cases to an extent which would not (singly or in the aggregate)
      be material in the context of the relevant Contingent Capital
      Subscription.

                
	 	 
	
                  7.4

                	
                  Save as
      disclosed in the Relevant Documents on or prior to the relevant Contingent
      Capital Notice Date (in the case of Warranties given on such date) or the
      relevant Contingent Capital Completion Date (in the case of Warranties
      given on such date), any Previous Announcements, the Accounts or the
      Interim Accounts or as otherwise would not (singly or in the aggregate) be
      material in the context of the relevant Contingent Capital Subscription,
      no Group Company is the subject o f any investigation, enforcement action
      (including, without limitation to vary the terms of any permission of
      licence) or disciplinary proceeding by the FSA or any other regulatory
      body having jurisdiction over such Group Company, and no such
      investigation, enforcement action or disciplinary proceeding is threatened
      or pending.

                
	 	 
	
                  7.5

                	
                  The
      operations of each Group Company are and have been conducted at all times
      in material compliance with the money laundering statutes of all
      jurisdictions, the rules and regulations thereunder and any related or
      similar rules, regulations or guidelines, issued, administered or enforced
      by any governmental agency (collectively, the “Money Laundering Laws”)
      and no action, suit or proceeding by or before any court or governmental
      agency, authority or body or any arbitrator involving any Group Company
      with respect to Money Laundering Laws is pending or, to the best knowledge
      of the Company, threatened.

                


        

         

        
          
            
            

          

          
            98

            
              

            

          

          
            
            

          

        

         

        
          	
                  7.6

                	
                  None of the
      Company, any other member of the Group or, to the knowledge of the
      Company, any director, officer, agent, employee or Affiliate of the
      Company is currently subject to any sanctions administered by the U.S.
      Department of the Treasury (“OFAC”) or any similar
      sanctions imposed by the European Union, the United Nations or any other
      body, governmental or other, to which the Company or any of its Affiliates
      is subject (collectively, “other economic
      sanctions”); and the Company will not directly or indirectly use
      the proceeds of the relevant Contingent Capital Subscription, or lend,
      contribute or otherwise make available such proceeds to any other member
      of the Group, joint venture partner or other person or entity, for the
      purpose of financing the activities of any person currently subject to any
      sanctions administered by OFAC or any other economic
      sanctions.

                
	 	 
	
                  7.7

                	
                  None of the
      Company, any other member of the Group or, to the knowledge of the
      Company, any director, officer, agent, employee or Affiliate of the
      Company, is aware of or has taken any action, directly or indirectly, that
      could result in a violation by such persons of the U.S. Foreign Corrupt
      Practices Act of 1977, as amended, or the rules and regulations thereunder
      (the FCPA) (including, without limitation, making use of the mail or any
      means or instrument of interstate commerce corruptly in furtherance of an
      offer, payment, promise to pay or authorisation of the payment of any
      money, or other property, gift, promise to give, or authorisation of the
      giving of anything of value to any “foreign official” (as such term is
      defined in the FCPA) or any foreign political office, in contravention of
      the FCPA), the OECD Convention on Bribery of Foreign Public Officials in
      International Business Transactions (the OECD Convention) or any similar
      law or regulation, to which the Company, any other member of the Group,
      any director, officer, agent, employee of any member of the Group or, to
      the knowledge of the Company, any Affiliate is subject; and the Company,
      each member of the Group and, to the knowledge of the Company, its
      Affiliates have conducted their businesses in compliance with the FCPA,
      the OECD Convention and any applicable similar law or regulation and have
      instituted and maintain policies and procedures designed to ensure, and
      which are reasonably expected to continue to ensure, continued compliance
      therewith.

                
	 	 
	
                  8.

                	
                  Disclosure

                
	 	 
	 
      	
                  The Company
      has complied, and is continuing to comply, in all respects with Principle
      4 set out in Listing Rule 7.2.1R and with DTR 2.2.1

                
	 	 
	
                  9.

                	
                  Position
      since Accounts Date

                
	 	 
	 
      	
                  Since the
      Accounts Date and save as disclosed in the Relevant Documents on or prior
      to the relevant Contingent Capital Notice Date (in the case of Warranties
      given on such date) or the relevant Contingent Capital Completion Date (in
      the case of Warranties given on such date), any Previous Announcements,
      the Interim Accounts or any other written agreement which is entered into
      between the Company and HM Treasury on or before the date of this
      Agreement and which is stated specifically to be a disclosure against any
      of the following Warranties:

                
	 
      	 
      


        

        
          
            	 
      	
                    (A)

                  	
                    each Group
      Company has carried on its respective business in the ordinary course in
      all material respects, and there has been no Material Adverse
      Effect;

                  


          

           

          
            
              
              

            

            
              99

              
                

              

            

            
              
              

            

          

           

          
            	 
      	
                    (B)

                  	
                    there has
      been no material impairment to charges in respect of any assets of the
      Company or of any Group Company, and there has been no increase in the
      provisions in respect of losses in relation to any mortgage, loans or
      other assets of the Company or of any Group Company that, in any of the
      foregoing cases, would, or would be reasonably likely to, be (singly or in
      the aggregate) material in the context of the relevant Contingent Capital
      Subscription;

                  
	 	 	 
	 
      	
                    (C)

                  	
                    save for this
      Agreement, the Accession Documents, any agreements entered into in
      connection with the Placing and Open Offer and any utilisation by the
      Company of the liquidity measures being made available by the Bank of
      England (in the form notified by HM Government to the European Commission
      on 12 October 2008), no Group Company has, otherwise than in the ordinary
      course of business, entered into or assumed or incurred any contract,
      commitment (whether in respect of capital expenditure or otherwise),
      borrowing, indebtedness in the nature of borrowing, guarantee, liability
      (including contingent liability) or any other agreement or obligation
      that, in any of the foregoing cases, would, or would be reasonably likely
      to, be (singly or in the aggregate) material in the context of the
      relevant Contingent Capital Subscription;

                  
	 	 	 
	 
      	
                    (D)

                  	
                    other than in
      the ordinary course of business, no debtor has been released by the
      Company to an extent which (singly or in the aggregate) is material in the
      context of the relevant Contingent Capital Subscription on terms that he
      pays less than the book value of his debt and no debt of such material
      amount owing to the Company or any Group Company has been deferred,
      subordinated or written off or has proven irrecoverable to any material
      extent;

                  
	 	 	 
	 
      	
                    (E)

                  	
                    no Group
      Company has been involved in any transaction (other than any transaction
      provided for in this Agreement or the Accession Documents) which has
      resulted or would be reasonably likely to result (singly or in the
      aggregate) in any liability for Tax on the Company or any Group Company,
      which, in any of the foregoing cases, would, or would be reasonably likely
      to, be (singly or in the aggregate) material in the context of the
      relevant Contingent Capital Subscription other than a transaction in the
      ordinary course of business; and

                  
	 	 	 
	 
      	
                    (F)

                  	
                    no Group
      Company has been in default in any material respect under any agreement or
      arrangement to which any Group Company is a party and which is or is
      reasonably likely to be material and there are no circumstances likely to
      give rise to such default, to an extent which (singly or in the aggregate)
      would, or would be reasonably likely to, be material in the context of the
      relevant Contingent Capital
Subscription.

                  


          

           

          
            	
                    10.

                  	
                    Litigation

                  
	 	 
	
                    10.1

                  	
                    Save as
      disclosed in the Relevant Documents on or prior to the relevant Contingent
      Capital Notice Date (in the case of Warranties given on such date) or the
      relevant Contingent Capital Completion Date (in the case of Warranties
      given on such date), any Previous Announcements, the Accounts or the
      Interim Accounts, no Group Company nor any of its officers or agents or
      employees is involved, or has during the recent past (being not less than
      12 months ending on the date of this Agreement) been involved in
      

                  


          

           

          
            
              
              

            

            
              100

              
                

              

            

            
              
              

            

          

           

          
            	 	any civil, criminal,
      arbitration, administrative, governmental or other proceedings or
      governmental regulatory or similar investigation or enquiry, whether as
      plaintiff, defendant or otherwise which, by itself or with other
      proceedings, would be, or is reasonably likely to be, material in the
      context of the relevant Contingent Capital
  Subscription.
	 	 
	
                    10.2

                  	
                    Save as
      disclosed in the Relevant Documents on or prior to the relevant Contingent
      Capital Notice Date (in the case of Warranties given on such date) or the
      relevant Contingent Capital Completion Date (in the case of Warranties
      given on such date), any Previous Announcements, the Accounts or the
      Interim Accounts, no litigation or arbitration, administrative,
      governmental, civil, criminal or other proceedings nor governmental,
      regulatory or similar investigation or enquiry are pending or have been
      threatened by or against any Group Company or any of their respective
      officers, agents or employees in relation to the affairs of any Group
      Company and, to the best of the knowledge, information and belief of the
      Company and the Directors, there are no facts or circumstances likely to
      give rise to any such litigation or arbitration, administrative, criminal,
      governmental, civil, or other proceedings or governmental, regulatory or
      similar investigation or enquiry, in each case, to an extent which, by
      itself or with other proceedings, would be, or is reasonably likely to be,
      material in the context of the relevant Contingent Capital
      Subscription.

                  
	 	 
	
                    10.3

                  	
                    Save as
      disclosed in the Relevant Documents on or prior to the relevant Contingent
      Capital Notice Date (in the case of Warranties given on such date) or the
      relevant Contingent Capital Completion Date (in the case of Warranties
      given on such date), any Previous Announcements, the Accounts or the
      Interim Accounts, no Group Company nor any of its officers or agents or
      employees in relation to the affairs of any Group Company has been a party
      to any undertaking or assurance given to any court or governmental agency
      or the subject of any injunction which in any of the foregoing cases is
      still in force and which, by itself or with other proceedings, which would
      be, or is reasonably likely to be, material in the context of the relevant
      Contingent Capital Subscription.

                  
	 	 
	
                    10.4

                  	
                    For the
      purpose of this paragraph 10, proceedings includes any action by any
      governmental, public or regulatory authority (including any investment
      exchange or any authority or body which regulates investment business or
      takeovers or which is concerned with regulatory, licensing, competition,
      taxation matters or matters concerning Intellectual Property
      Rights).

                  
	 	 
	
                    11.

                  	
                    Arrangements
      with directors and shareholders

                  
	 	 
	
                    11.1

                  	
                    Save for the
      articles of association of the Company, any service agreement with a
      Director and any contracts entered into in the ordinary course of
      business, there are no existing contracts or engagements or other
      arrangements to which any Group Company is a party and in which any of the
      directors of any Group Company and/or any associate of any of them is
      interested which would be material in the context of the relevant
      Contingent Capital Subscription; and to the extent that any such
      contracts, engagements or other arrangements exist they comply with the
      related party requirements of the Listing Rules of the UK Listing
      Authority (or other relevant
regulator).

                  


          

           

          
            
              
              

            

            
              101

              
                

              

            

            
              
              

            

          

           

          
            	
                    11.2

                  	
                    No
      Shareholder has any rights, in his capacity as such, in relation to any
      Group Company other than as set out in the articles of association of the
      Company.

                  
	 	 
	
                    11.3

                  	
                    The Company
      is not aware of any claim, demand or right of action against any Group
      Company otherwise than for accrued remuneration in accordance with their
      contracts of employment by any officer or employee (or former officer or
      employee) of the Group and/or any associate of them in any of the
      foregoing cases to an extent that (singly or in the aggregate) would, or
      would be reasonably likely to, be material in the context of the relevant
      Contingent Capital Subscription.

                  
	 	 
	
                    11.4

                  	
                    So far as the
      Company is aware, no Director nor any person connected with such Director
      nor any of the employees of the Group nor any person connected with any
      such employee is in breach of any restrictive covenant, employment
      agreement or contract for services which would, or would be reasonably
      likely to, affect the Company or any other Group Company and so far as the
      Company is aware, there are no circumstances which might give rise to any
      claim of such a breach or any other dispute with any employer, former
      employer or other person for whom any Director or employee of the Group
      provides or has provided services, in any of the foregoing cases to an
      extent that (singly or in the aggregate) would, or would be reasonably
      likely to, be material in the context of the relevant Contingent Capital
      Subscription.

                  
	 	 
	
                    11.5

                  	
                    For the
      purpose of this paragraph 11, associate has the
  meaning:

                  


          

           

          
            	 
      	
                    (A)

                  	
                    in the case
      of an individual, given to “connected person” under section 96B(2) of
      FSMA; and

                  
	 	 	 
	 
      	
                    (B)

                  	
                    in the case
      of a body corporate, given to “associated company” in sections 416 et seq. of the Income
      and Corporation Taxes Act 1988.

                  


          

           

          
            	
                    12.

                  	
                    Agreements

                  
	 	 
	 
      	
                    Save as
      contemplated by this Agreement or in respect of the Convertible Preference
      Shares or any Alternative Coupon Satisfaction Mechanism or as would not
      (singly or in the aggregate) be material in the context of the relevant
      Contingent Capital Subscription, there is no agreement, undertaking,
      instrument or arrangement requiring the creation, allotment, issue,
      redemption or repayment, or the grant to any person of the right (whether
      conditional or not) to require the allotment, issue, redemption or
      repayment, of any shares in the capital of the Company or a Material
      Subsidiary (including, without limitation, an option or right of
      pre-emption or conversion).

                  
	 	 
	
                    13.

                  	
                    Cash
      box

                  
	 	 
	 
      	
                    If and to the
      extent the relevant Contingent Capital Subscription is structured by means
      of any arrangement whereby the consideration for the issue of the
      Contingent Capital Shares is to be satisfied by the transfer to the
      Company by HM Treasury of shares in another
  company:

                  


          

          
             

            
              	 
      	
                      (A)

                    	
                      the relevant
      cashbox company has not undertaken any obligations or liabilities except
      pursuant to, or as contemplated by, the documents equivalent to the
      

                    


            



           

          
            
              
              

            

            
              102

              
                

              

            

            
              
              

            

             

          

          
            	 
      	
                     

                  	
                    Cashbox
      Documents entered into in connection with such structure or otherwise
      agreed in writing with HM Treasury; and

                  
	 	 	 
	 
      	
                    (B)

                  	
                    the relevant
      cashbox company is and will remain resident in the United Kingdom and
      nowhere else for United Kingdom tax
purposes.

                  


          



         

      

      
        
          
          

        

        
          103

          
            

          

        

        
          
          

        

         

      

      SCHEDULE
5

       

      PRO
FORMA NOVATION AGREEMENT

       

      
        THIS NOVATION
AGREEMENT is made the [●] day of [●], 20[●]

      

       

      BETWEEN:

       

      
        	
                1.

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

              


      

       

      
        	
                2.

              	
                THE ROYAL BANK OF SCOTLAND
      GROUP PLC, a company
      incorporated in Scotland with registered number 45551 whose registered
      office is at 36 St Andrew Square, Edinburgh EH2 2YB (“RBS”)

              


      

       

      
        AND

      

       

      
        	
                3.

              	
                [             ]
      of
      [                                    ]
      (registered in England No.
      [             ])
      (the “Company”)

              


      

       

      
        WHEREAS:

      

       

      
        	
                (A)

              	
                HM Treasury
      and RBS have entered into the Acquisition and Contingent Capital Agreement
      (as defined in this agreement).

              


      

       

      
        	
                (B)

              	
                Pursuant to
      clause 14.10 of the Acquisition and Contingent Capital Agreement, HM
      Treasury wishes to be released and discharged from the Acquisition and
      Contingent Capital Agreement and RBS has agreed to release and discharge
      HM Treasury from the Acquisition and Contingent Capital Agreement upon the
      terms of the Company’s undertaking to perform the Acquisition and
      Contingent Capital Agreement and be bound by its terms in the place of HM
      Treasury and HM Treasury agreeing to guarantee the Company’s obligations
      in respect of the Acquisition and Contingent Capital
      Agreement.

              


      

       

      
        NOW IT IS AGREED as
follows:-

      

       

      
        
          	
                  1.

                	
                  INTERPRETATION

                


        

      

       

      
        
          	
                  1.1

                	
                  In this
      agreement:

                


        

      

       

      
        	
                “Acquisition and
      

                Contingent Capital
      

                Agreement”

              	
                means the
      acquisition and contingent capital agreement dated [●] November 2009
      between HM Treasury and RBS relating to the acquisition by HM Treasury of
      51,000,000,000 Series 1 Class B Shares of 1 penny each in the capital of
      RBS and of a Series 1 Dividend Access Share of 1 penny and to a commitment
      by HM Treasury to acquire further Series 1 Class B
  Shares.

              


      

       

      
        
          	
                  1.2

                	
                  In this
      agreement, unless otherwise
specified:

                


        

      

       

      
        	
                 
      

              	
                (A)

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

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (B)

              	
                headings to
      clauses and schedules are for convenience only and do not affect the
      interpretation of this agreement.

              


      

       

      
        
          	
                  2.

                	
                  COMPANY’S
      UNDERTAKING

                


        

      

       

      With effect from
the date of this agreement and in consideration of the undertakings given by RBS
in clause 3, the Company hereby undertakes to
observe, perform, discharge and be bound by the Acquisition and Contingent
Capital Agreement as if the Company were a party to that agreement in the place
of HM Treasury. Notwithstanding this undertaking, nothing in this agreement
shall:

       

      
        	
                 
      

              	
                (A)

              	
                require the
      Company to perform any obligation created by or arising under the
      Acquisition and Contingent Capital Agreement falling due for performance,
      or which should have been performed, before the date of this
      agreement;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                make the
      Company liable for any act, neglect, default or omission in respect of the
      Acquisition and Contingent Capital Agreement committed by HM Treasury or
      occurring before the date of this agreement;
or

              


      

       

      
        	
                 
      

              	
                (C)

              	
                impose any
      obligation on the Company for or in respect of any obligation performed by
      HM Treasury under the Acquisition and Contingent Capital Agreement before
      the date of this agreement.

              


      

       

      
        
          	
                  3.

                	
                  RBS
      UNDERTAKING AND RELEASE OF HM
TREASURY

                


        

      

       

      
        
          	
                  3.1

                	
                  With effect
      from the date of this agreement and in consideration of the undertakings
      given by the Company in clause 2 and the
      undertakings and guarantee given by HM Treasury in clauses 4 and 5
      respectively, RBS hereby:

                


        

      

       

      
        	
                 
      

              	
                (A)

              	
                releases and
      discharges HM Treasury from all obligations to observe, perform, discharge
      and be bound by the Acquisition and Contingent Capital
      Agreement;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                accepts the
      Company’s undertaking to observe, perform, discharge and be bound by the
      Acquisition and Contingent Capital Agreement (such undertaking being set
      out in clause 2); and

              


      

       

      
        	
                 
      

              	
                (C)

              	
                agrees to
      observe, perform, discharge and be bound by the Acquisition and Contingent
      Capital Agreement as if the Company were a party to the Acquisition and
      Contingent Capital Agreement in the place of HM
  Treasury.

              


      

       

      
        
          	
                  3.2

                	
                  Notwithstanding
      the provisions of clause 3.1(B), nothing in this agreement shall affect or
      prejudice any claim or demand whatsoever which RBS may have against HM
      Treasury in relation to the Acquisition and Contingent Capital Agreement
      and arising out of matters prior to the date of this
      agreement.

                


        

      

       

      
        
          	
                  4.

                	
                  HM
      TREASURY’S UNDERTAKING AND RELEASE OF
RBS

                


        

      

       

      With effect from
the date of this agreement and in consideration of the undertakings given by RBS
in clause 3, HM Treasury hereby releases and
discharges RBS from all obligations to observe, perform, discharge and be bound
by the Acquisition and 

       

      
        
          
          

        

        
          105

          
            

          

        

        
          
          

        

      

       

      
        
          	 
      	
                  Contingent
      Capital Agreement. Notwithstanding this undertaking and release, nothing
      in this agreement shall affect or prejudice any claim or demand whatsoever
      which HM Treasury may have against RBS in relation to the Acquisition and
      Contingent Capital Agreement and arising out of matters prior to the date
      of this agreement.

                
	 	 
	
                  5.

                	
                  GUARANTEE
      AND INDEMNITY

                
	 	 
	
                  5.1

                	
                  In
      consideration of the undertakings given by RBS in clause 3, HM Treasury
      hereby unconditionally and irrevocably guarantees to RBS the due and
      punctual performance and observance by the Company of all its obligations,
      commitments and undertakings under or pursuant to this agreement and
      agrees to indemnify RBS on an after-Tax basis against all loss, damage,
      costs and breach by the Company of its obligations, commitments or
      undertakings under or pursuant to this agreement. The liability of HM
      Treasury under this agreement shall not be released or diminished by any
      variation of the terms of this agreement or the Acquisition and Contingent
      Capital Agreement as novated by this agreement (whether or not agreed by
      HM Treasury), any forbearance, neglect or delay in seeking performance of
      the obligations hereby imposed or any granting of time for such
      performance.

                
	 	 
	
                  5.2

                	
                  If and
      whenever the Company defaults for any reason whatsoever in the performance
      of any obligation or liability undertaken or expressed to be undertaken by
      the Company under or pursuant to this agreement, HM Treasury shall
      forthwith upon demand unconditionally perform (or procure performance of)
      and satisfy (or procure the satisfaction of) the obligation or liability
      in regard to which such default has been made and so that the same
      benefits shall be conferred on RBS as such party would have received if
      such obligation or liability had been duly performed and satisfied by the
      Company.

                
	 	 
	
                  5.3

                	
                  This
      guarantee is to be a continuing guarantee and accordingly is to remain in
      force until all the obligations, commitments and undertakings of the
      Company referred to in sub-clause 5.1 shall have been performed or
      satisfied. This guarantee is in addition to and without prejudice to and
      not in substitution for any rights or security which RBS may now or
      hereafter have or hold for the performance and observance of the
      obligations, commitments and undertakings of the Company under or in
      connection with this agreement.

                
	 	 
	
                  5.4

                	
                  As a separate
      and independent stipulation HM Treasury agrees that any obligation
      expressed to be undertaken by the Company (including, without limitation,
      any moneys expressed to be payable under this agreement or the Acquisition
      and Contingent Capital Agreement as novated by this agreement) which may
      not be enforceable against or recoverable from the Company by reason of
      any legal limitation, disability or incapacity on or of the Company or any
      other fact or circumstance (other than any limitation imposed by this
      agreement or the Acquisition and Contingent Capital Agreement as novated
      by this agreement) shall nevertheless be enforceable against and
      recoverable from HM Treasury as though the same had been incurred by HM
      Treasury and HM Treasury were the sole or principal obligor in respect
      thereof.

                


        

         

        
          
            
            

          

          
            106

            
              

            

          

          
            
            

          

        

         

        
          	
                  6.

                	
                  COMPANY
      CEASES TO BE WHOLLY OWNED BY HM TREASURY

                
	 	 
	 
      	
                  In the event
      that the Company at any time after the date of this agreement ceases to be
      directly or indirectly wholly-owned by HM Treasury, the Company shall, and
      HM Treasury will procure that the Company shall, enter into a novation
      agreement upon substantially the same terms as this agreement such that
      the rights and obligations assumed by the Company under this agreement are
      novated either to HM Treasury or to an entity which is, directly or
      indirectly, wholly owned by HM Treasury. RBS agrees to consent to, and to
      execute and deliver all such documentation as may be necessary to effect,
      such novation.

                
	 	 
	
                  7.

                	
                  NOTICES

                
	 	 
	 
      	
                  For the
      purposes of all provisions in the Acquisition and Contingent Capital
      Agreement concerning the service of notices, the address of the Company is
      its registered office as shown above from time to time and its fax number
      is [●]. All notices served on the Company under the Acquisition and
      Contingent Capital Agreement should be marked for the attention of
      [●].

                
	 	 
	
                  8.

                	
                  COUNTERPARTS

                
	 	 
	
                  8.1

                	
                  This
      agreement 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.

                
	 	 
	
                  8.2

                	
                  Each
      counterpart shall constitute an original of this agreement, but all the
      counterparts shall together constitute but one and the same
      instrument.

                
	 	 
	
                  9.

                	
                  GOVERNING
      LAW

                
	 	 
	 
      	
                  The parties
      hereto agree that this agreement and any non-contractual obligations
      arising out of or in connection with it shall be governed by and construed
      in accordance with English law and that the courts of England and Wales
      are to have exclusive jurisdiction to settle any matter, claim or dispute
      arising hereunder and submit to the jurisdiction of the English
      Courts.

                
	 	 
	 
      	
                  [To be included if the Company
      is not a company incorporated in England:

                
	 	 
	
                  10.

                	
                  AGENT
      FOR SERVICE OF PROCESS

                
	 	 
	 
      	
                  The Company shall at all times
      maintain an agent for service of process and for service of any other
      documents and proceedings in England, or any other proceedings in
      connection with this Agreement. Such agent shall be [agent with address in
      England] and any writ, judgment or other notice of legal process shall be
      sufficiently served on the Company if delivered to such agent at its
      address for the time being. The Company irrevocably undertakes not to
      revoke the authority of the above agent and if, for any reason, the agent
      ceases to act as such, the Company shall appoint a replacement agent
      having an address for service in England and shall notify RBS of the name
      and address of such replacement agent. If the Company fails to appoint
      another agent, RBS 

                


        

         

        
          
            
            

          

          
            107

            
              

            

          

          
            
            

          

        

         

      

      shall be entitled to appoint one on
the Company’s behalf and at the Company’s expense.]

       

       

      IN
WITNESS of which this Agreement has been executed on the date which first
appears on page 1 of this Agreement.

       

      


       

      
        
          	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                   

                	 	 	
                   

                	 
	
                  For and on
      behalf of

                	 	 	
                   

                	 
	
                  THE COMMISSIONERS OF HER
      MAJESTY’S TREASURY

                	 	 	
                   

                	 


        

      

       

       

      
        	
              	 	 	 	 
	
                 

              	 	 	
                 

              	 
	
                For and on
      behalf of

              	 	 	
                 

              	 
	
                THE ROYAL BANK OF SCOTLAND
      GROUP PLC

              	 	 	
                 

              	 


         

      

       

      
        	
              	 	 	 	 
	
                 

              	 	 	
                 

              	 
	
                For and on
      behalf of

              	 	 	
                 

              	 
	
                [Insert
      name of the Company]

              	 	 	
                 

              	 


         

        
          
            
            

          

          
            108

            
              

            

          

          
            
            

          

        

      

       

      SCHEDULE
6

       

      B
SHARE TERMS

      
        


         

      

       

      Terms
of Issue of the RBSG Series 1 Class B Shares

       

       

      
        	
                1

              	
                General

              


      

       

      Each Series 1 Class
B Share will have a nominal value of £0.01 and will be fully paid up at issue.
The Series 1 Class B Shares will be issued in registered form and may be held in
either certificated form or uncertificated in CREST. Temporary documents of
title in relation to the Series 1 Class B Shares in certificated form will not
be issued pending despatch by post of definitive certificates. Capitalised terms
used and not otherwise defined herein shall have the respective meanings
ascribed thereto in paragraph 14 below.

       

      
        	
                2

              	
                Series
      1 Class B Dividends

              


      

       

      
        	
                2.1

              	
                For so long
      as a Series 1 Class B Dividend Trigger Event has not occurred in respect
      of any Series 1 Class B Shares, the Series 1 Class B Shares shall rank
      pari passu with
      the holders of the Company’s Ordinary Shares in respect of any cash
      dividends paid on the Ordinary Shares. Each Series 1 Class B Share shall
      entitle its holder to the same cash dividend (the “Series 1 Class B
      Dividend”) as is (or may, at the election of a holder of an
      Ordinary Share, be) payable to the holder of one (as adjusted from time to
      time as provided below, the “Pay-out
      Ratio”)  Ordinary
Share.

              


      

       

      If a Series 1 Class
B Dividend Trigger Event has occurred in respect of any Series 1 Class B Shares,
the Series 1 Class B Shares in respect of which the Series 1 Class B Dividend
Trigger Event has occurred shall rank pari passu with the holders
of the Company’s Ordinary Shares in respect of any dividends paid on the
Ordinary Shares. Each Series 1 Class B Share shall entitle its holder to the
same dividend as is (or may, at the election of a holder of an Ordinary Share,
be) payable to the holder of one (as adjusted from time to time as provided
below, the “Pay-out
Ratio”) Ordinary Share. If an Ordinary Share Bonus Issue is made, a
holder of a Series 1 Class B Share in respect of which the Series 1 Class B
Dividend Trigger Event has occurred shall be entitled to receive the same number
of Ordinary Shares as is payable to the holder of one (as adjusted from time to
time as provided below) Ordinary Share, save that if the issue of such Ordinary
Share(s) to such holder would result in it holding directly or indirectly more
than 75 per cent. of the total issued Ordinary Shares then such holder shall
instead receive further Series 1 Class B Shares. The number of such further
Series 1 Class B Shares to be issued to such holder shall be such number of
Series 1 Class B Shares as shall be certified by the Independent Financial
Adviser (acting as an expert) to be as nearly as possible equal to (but not
greater than) the Fair Market Value (disregarding any tax credit) of the number
of Ordinary Shares to be issued to the holder of one Ordinary Share (as adjusted
from time to time as provided below) in such Ordinary Share Bonus Issue, based
on the Fair Market Value of a Series 1 Class B Share at the time of such
determination. A written opinion of the Independent Financial Adviser in respect
thereof shall be conclusive and binding on all parties, save in the case of
manifest error.

       

      
        
          
          

        

        
          109

          
            

          

        

        
          
          

        

         

      

      If and whenever
there shall be a consolidation, redesignation or subdivision in relation
to:

       

      (i) the Ordinary
Shares, the Pay-out Ratio shall be adjusted by multiplying the Pay-out Ratio in
force immediately prior to such consolidation, redesignation or subdivision by
the following fraction:

       

      A

      B

       

      where:

       

      A      is
the aggregate number of Ordinary Shares in issue immediately after, and as a
result of, such consolidation, redesignation or subdivision, as the case may be;
and

       

      B      is
the aggregate number of the Ordinary Shares in issue immediately before such
consolidation, redesignation or subdivision, as the case may be.

       

      Such adjustment
shall become effective on the date the consolidation, redesignation or
subdivision, as the case may be, takes effect.

       

      (ii) the Series 1
Class B Shares, the Pay-out Ratio shall be adjusted by dividing the Pay-out
Ratio in force immediately prior to such consolidation, redesignation or
subdivision by the following fraction: 

         

        A

        B

         

      

      where:

       

      A      is
the aggregate number of Series 1 Class B Shares in issue immediately after, and
as a result of, such consolidation, redesignation or subdivision, as the case
may be; and

       

      B      is
the aggregate number of the Series 1 Class B Shares in issue immediately before
such consolidation, redesignation or subdivision, as the case may
be.

       

      Such adjustment
shall become effective on the date the consolidation, redesignation or
subdivision, as the case may be, takes effect.

       

      
        	
                2.2

              	
                The record
      date for any such dividend payment on the Series 1 Class B Shares and the
      date on which such payment is to be made shall be the same such dates for
      the corresponding payment under the Dividend Access
  Share.

              


      

       

      
        	
                2.3

              	
                The Company
      shall, upon determining any dividend pursuant to this paragraph 2, cause
      the amount thereof to be notified to the holders of Series 1 Class B
      Shares in accordance with paragraph 9 and, if and for so long as the
      Series 1 Class B Shares are listed on the London Stock Exchange and such
      exchange so requires, to such exchange as soon as possible after
      determination of the rate but in no event later than the fourth Business
      Day thereafter.

              


      

       

      
        	
                2.4

              	
                Subject to
      these terms of issue, the Company will, if to be paid, pay Series 1 Class
      B Dividends out of its distributable profits in
      sterling.  Series 1 Class B Dividends may be paid by the Company
      by crediting any account which the holder of the Series 1 Class B
      

              


      

       

      
        
          
          

        

        
          110

          
            

          

        

        
          
          

        

         

        Shares, or in the case of joint
holders, the holder whose name stands first in the register in respect of the
Series 1 Class B Shares, has with the Company, whether in the sole name of such
holder or the joint names of such holder and another person or persons, unless
the Company has received not less than one month’s notice in writing from such
holder or joint holders directing that payment be made in another manner
permitted by the Articles

      

       

      Any Series 1 Class
B dividend, if to be paid, may also be paid by cheque sent by post addressed to
the holder of the Series 1 Class B Shares at his registered address or, in the
case of joint holders, addressed to the holder whose name stands first in the
register in respect of the Series 1 Class B Shares at his address as appearing
in such register or addressed to such person at such address as the holder or
joint holders may in writing direct and despatched so as to be received by the
holder of the Series 1 Class B Shares on or before the date for payment of such
Series 1 Class B dividend. The Company shall not be liable to the holders of the
Series 1 Class B Shares in any way if such cheque is received late due to postal
delays or strikes.

       

      Any such Series 1
Class B dividend may be paid by any bank or other funds transfer system or, if
agreed by the Company, such other means and to or through such person, in each
case as the holder or joint holders may in writing direct.

       

      If payment in
respect of the Series 1 Class B Shares into any such bank account is to be made
on a Class B dividend payment date which is not a Business Day, then payment of
such amount will be made on the next succeeding Business Day, without any
interest or payment in respect of such delay.

       

      Payments in respect
of amounts payable by way of Class B dividend will be subject in all cases to
any applicable fiscal or other laws and other regulations.

       

      The Board of
Directors may undertake and do such acts and things as they may consider
necessary or expedient for the purpose of giving effect to the provisions of
this paragraph 2.

       

      
        	
                3

              	
                Rights
      upon Liquidation

              


      

       

      On a winding-up or
liquidation, voluntary or otherwise, holders of Series 1 Class B Shares will
rank in the application of the assets of the Company available to shareholders:
(1) equally in all respects with holders of the Dividend Access Share and the
Ordinary Shares and any other class of shares or securities of the Company in
issue or which may be issued by the Company which rank or are expressed to rank
equally with the Series 1 Class B Shares, the Dividend Access Share or the
Ordinary Shares on a winding-up or liquidation and (2) junior to all other
shareholders and all creditors of the Company.

       

      In such event a
holder of a Series 1 Class B Share will be deemed to hold one (as adjusted from
time to time as provided below, the “Winding Up Ratio”) Ordinary
Share for each Series 1 Class B Share held by him and will be entitled to
receive out of the surplus assets of the Company remaining after payment of all
prior-ranking claims, a sum equal to that payable to a holder of one (as
adjusted) Ordinary Share in such event for each Series 1 Class B Share held by
him.

       

      The initial Winding
Up Ratio is one. Upon the happening of any of the
events in respect of which the Conversion Price shall be adjusted as provided
in:

       

      
        
          
          

        

        
          111

          
            

          

        

        
          
          

        

         

      

      (i) sub-paragraphs
4(b)(i) to (x)
(inclusive) below, the Winding Up Ratio shall also be adjusted at the same time
as follows:

      
         

        
          	 	 NWUR = OWUR
      	
                  X

                	
                  OCP

                  NCP

                


        

         

      

      and

       

      (ii) paragraph 4(l) below, the Winding Up Ratio shall also be
adjusted at the same time as follows:

       

      
        	 	 NWUR = OWUR 	
                X

              	
                NRA

                ORA

              


      

       

      where:

       

      NWUR means the new
Winding Up Ratio, following such adjustment;

       

      OWUR means the old
Winding Up Ratio, immediately prior to such adjustment;

       

      NCP means the new
Conversion Price, following such adjustment;

       

      OCP means the old
Conversion Price, immediately prior to such adjustment;

       

      NRA means the new
Relevant Amount, following such adjustment; ad

       

      ORA means the old
Relevant Amount, immediately prior to such adjustment

       

      
        	
                4

              	
                Conversion

              


      

       

      
        	
                 
      

              	
                (a)

              	
                Conversion
      Period and Conversion Price

              


      

       

      Subject as provided
herein, each Series 1 Class B Share shall entitle the holder to convert such
Series 1 Class B Share into new and/or existing Ordinary Shares as determined by
the Company, credited as fully paid (a “Conversion
Right”).

       

      The number of
Ordinary Shares to be created, issued or transferred and delivered per Series 1
Class B Share on exercise of a Conversion Right shall be determined by dividing
the Relevant Amount in effect on the relevant Conversion Date (as defined below)
of the Series 1 Class B Shares to be converted by the Conversion Price in effect
on the relevant Conversion Date.

       

      A holder of Series
1 Class B Shares may exercise the Conversion Right in respect of a Series 1
Class B Share by delivering such Series 1 Class B Share to the specified office
of the Registrar in accordance with paragraph 4(h) whereupon the Company
shall (subject as provided herein) procure the delivery to, or as directed by,
the relevant holder of Series 1 Class B Shares of Ordinary Shares credited as
paid up in full as provided in this paragraph 4. A holder of a Series 1 Class B
Share in uncertificated form shall exercise the Conversion Right attached to
such Series 1 Class B Share by complying with the rules from time to time laid
down by the Company in a manner consistent with the Regulations.

       

      Subject to and as
provided herein, the Conversion Right in respect of a Series 1 Class B Share may
be exercised, at the option of the holder thereof, at any time 

       

      
        
          
          

        

        
          112

          
            

          

        

        
          
          

        

      

       

      (subject to any
applicable fiscal or other laws or regulations and as hereinafter provided) from
the Issue Date.

       

      The period during
which Conversion Rights may (subject as provided below) be exercised by a holder
of Series 1 Class B Shares is referred to as the “Conversion
Period”.

       

      Fractions of
Ordinary Shares will not be created, issued or transferred and delivered on
conversion or pursuant to paragraph 4(c) and no cash payment or other adjustment
will be made in lieu thereof. However, if the Conversion Right in respect of
more than one Series 1 Class B Share is exercised at any one time such that
Ordinary Shares to be delivered on conversion or pursuant to paragraph 4(c) are
to be registered in the same name, the number of such Ordinary Shares to be
delivered in respect thereof shall be calculated on the basis of the aggregate
Relevant Amount (as in effect on the relevant Conversion Date) of such Series 1
Class B Shares being so converted and rounded down to the nearest whole number
of Ordinary Shares.

       

      The Company will
procure that Ordinary Shares to be created, issued or transferred and delivered
on conversion will be created, issued or transferred and delivered to the holder
of the Series 1 Class B Shares completing the relevant Conversion Notice or his
nominee. Such Ordinary Shares will be deemed to be created, issued or
transferred and delivered as of the relevant Conversion Date. Any Additional
Ordinary Shares to be created, issued or transferred and delivered pursuant to
paragraph 4(c) will be deemed to be created, issued or transferred and delivered
as of the relevant Reference Date.

       

      Conversion of the
Relevant Shares may be effected in such manner as the Board of Directors shall
in its sole discretion from time to time determine, whether in accordance with
the following provisions of this paragraph 4(a) or the provisions of the
Articles, or as may otherwise be permitted by applicable law (and by the
Regulations in the case of shares in uncertificated form).

       

      The Board of
Directors may, subject as herein provided, elect to redeem the Relevant Shares
(or any of them) at the Relevant Amount on any Conversion Date out of the
profits of the Company which would otherwise be available for distribution to
the holders of any class of shares. The Series 1 Class B Shares shall confer
upon the holders thereof the right and the obligation (in the event that the
Series 1 Class B Shares held by them respectively become Relevant Shares and the
Board of Directors determine to redeem the same at the Relevant Amount out of
profits as aforesaid) to subscribe for or acquire, simultaneously with such
redemption, the appropriate number of Ordinary Shares (calculated at the
applicable Conversion Price) at such premium (if any) as shall represent the
amount by which the redemption moneys exceed the nominal amount of the Ordinary
Shares to which the holders are so entitled. In any such case, the Conversion
Notice given by a holder of Relevant Shares shall be deemed irrevocably to
authorise and instruct the Secretary of the Company (or any other person
appointed for the purpose by the Board of Directors) to apply the redemption
moneys payable to him, simultaneously with such redemption, in subscribing for
or acquiring such Ordinary Shares at such premium (if any) as
aforesaid.

       

      
        
          
          

        

        
          113

          
            

          

        

        
          
          

        

         

      

      The Board of
Directors may, subject as herein provided, elect to redeem the Relevant Shares
(or any of them) on any Conversion Date at the Relevant Amount out of the
proceeds of a fresh issue of Ordinary Shares. The Series 1 Class B Shares shall
confer upon the holders thereof the right and the obligation (in the event that
the Series 1 Class B Shares held by them respectively become Relevant Shares and
the Board of Directors determines to redeem the same at the Relevant Amount out
of the proceeds of a fresh issue as aforesaid) to subscribe, and the holders
shall be deemed irrevocably to authorise and instruct the Secretary of the
Company (or any other person appointed for the purpose by the Board of
Directors) to subscribe, as agent on the holders’ behalf, simultaneously with
such redemption, for the appropriate number of Ordinary Shares (which authority
shall include the right to borrow money) (calculated at the applicable
Conversion Price) at such premium (if any) as shall represent the amount by
which the redemption moneys exceed the nominal amount of the Ordinary Shares to
which the holders are so entitled. In any such case, the Conversion Notice given
by or relating to a holder of Relevant Shares shall be deemed irrevocably to
authorise and instruct the Board of Directors to apply the redemption moneys
payable to him, simultaneously with such redemption, in payment to his said
agent.

       

      The Board of
Directors may determine to effect conversion by means of consolidation and
sub-division. In such case the requisite consolidation and sub-division shall be
effected pursuant to the shareholder authority given by the passing in General
Meeting of a resolution at the same General Meeting at which the initial
resolution was passed creating the Class B Share Capital and authorising the
Board of Directors to set the terms of the Series 1 Class B Shares, by (i)
consolidating into one share all the Relevant Shares at any Conversion Date held
by any holder or joint holders (treating holdings of the same holder or joint
holders in certificated form and uncertificated form as separate holdings,
unless the Board of Directors otherwise determines) and (ii) sub-dividing such
consolidated share into shares of £0.25 each (or such other amount as may be
appropriate as a result of any consolidation, sub-division, repayment or
reduction of capital or other event giving rise to an adjustment of the nominal
amount of the Ordinary Shares) of which such number of shares as may be
appropriate shall be Ordinary Shares and the balance of such shares (including
any fractions) shall be Non-voting Deferred Shares Series B (in certificated
form, unless the Board of Directors otherwise determines) (each a “Non-Voting Deferred Share Series
B”) which shall have the rights and be subject to the restrictions set
out in the Articles.

       

      The Board of
Directors may determine to effect conversion by means of capitalisation issue
under Article 148, consolidation and sub-division. In such case the requisite
capitalisation issue, consolidation and sub-division shall be effected pursuant
to the shareholder authority given by the passing in General Meeting of a
resolution at the same General Meeting at which the initial resolution was
passed creating the Class B Share Capital and authorising the Board of Directors
to set the terms of the Series 1 Class B Shares, by capitalising from profits or
reserves (including any share premium account, capital redemption reserve,
merger reserve, revaluation reserve or any other reserve, including
distributable reserves) such number of new Series 1 Class B Shares (the “Capitalisation Issue Shares”)
as shall bring the total nominal 

       

      
        
          
          

        

        
          114

          
            

          

        

        
          
          

        

      

       

      amount of the
Relevant Shares and the Capitalisation Issue Shares to at least the total
nominal amount of the Ordinary Shares to which the holders of the Relevant
Shares are entitled on conversion, consolidating into one share all the Relevant
Shares at any Conversion Date held by any holder or joint holders (treating
holdings of the same holder or joint holders in certificated form and
uncertificated form as separate holdings, unless the Board of Directors
otherwise determines) and such number of the relevant Capitalisation Issue
Shares as may be determined by the Board of Directors and sub-dividing such
consolidated share into shares of £0.25 each (or such other amount as may be
appropriate as a result of any consolidation, sub-division, repayment or
reduction of capital or other event giving rise to an adjustment of the nominal
amount of the Ordinary Shares) of which such number of shares as may be
appropriate shall be Ordinary Shares and the balance of such shares (including
any fractions) shall be Non-Voting Deferred Shares Series B (in certificated
form, unless the Board of Directors otherwise determines) which shall have the
rights and be subject to the restrictions set out in the Articles.

       

      Any conversion
effected pursuant to this paragraph 4(a) which gives rise to
Non-Voting Deferred Shares Series B being held by holders of Relevant Shares
shall be deemed irrevocably to authorise and instruct the Secretary of the
Company (or any other person appointed for the purpose by the Board of
Directors) as agent for the holders of the Non-Voting Deferred Shares Series B
to surrender the Non-Voting Deferred Shares Series B to the Company for no
consideration and to execute on behalf of such holders such documents as are
necessary in connection with such surrender without obtaining the sanction of
the holder or holders thereof, and pending such surrender to retain the
certificate for such Non-Voting Deferred Shares Series B.

       

      No adjustments
shall be made to the Conversion Price, Relevant Amount or Winding Up Ratio as a
result of any steps taken by the Company as described in this paragraph 4(a) in order to effect
conversion of the Relevant Shares.

       

      
        	
                 
      

              	
                (b)

              	
                Adjustment of
      Conversion Price

              


      

       

      Upon the happening
of any of the events described below, the Conversion Price shall be adjusted as
follows:

       

      
        	
                 
      

              	
                (i)

              	
                If and
      whenever there shall be a consolidation, redesignation or subdivision in
      relation to the Ordinary Shares, the Conversion Price shall be adjusted by
      multiplying the Conversion Price in force immediately prior to such
      consolidation, redesignation or subdivision by the following
      fraction:

              


      

       

      A

      B

       

      where:

       

      
        
          	
                  
                  

                	
                  A

                	
                  is the
      aggregate number of Ordinary Shares in issue immediately before such
      consolidation, redesignation or subdivision, as the case may be;
      and

                


        

         

         

        
          
            
            

          

          
            115

            
              

            

          

          
            
            

          

        

         

         

        
          
          

        

        
          	 	
                  B 

                	
                  is the
      aggregate number of Ordinary Shares in issue immediately after, and as a
      result of, such consolidation, redesignation or subdivision, as the case
      may be. 

                
	 	 	 


        

      

      Such adjustment
shall become effective on the date the consolidation, redesignation or
subdivision, as the case may be, takes effect.

       

      
        	
                
                

              	
                (ii)

              	
                If and
      whenever the Company shall issue any Ordinary Shares credited as fully
      paid to the Shareholders by way of capitalisation of profits or reserves
      (including but not limited to any share premium account, capital
      redemption reserve, merger reserve or revaluation reserve) other than (1)
      where any such Ordinary Shares are or are to be issued instead of the
      whole or part of a Dividend in cash which the Shareholders would or could
      otherwise have elected to receive, (2) where the Shareholders may elect to
      receive a Dividend in cash in lieu of such Ordinary Shares or (3) where
      any such Ordinary Shares are issued by way of an Ordinary Share Bonus
      Issue, the Conversion Price shall be adjusted by multiplying the
      Conversion Price in force immediately prior to such issue by the following
      fraction:

              


      

       

      
        A

        B

      

       

      where:

       

      
        	
              	
                A

              	
                is the
      aggregate number of Ordinary Shares in issue immediately before such
      issue; and

              
	 	 	 
	 	
                B 

              	is the
      aggregate number of Ordinary Shares in issue immediately after such
      issue.


      

       

      
        
          
          

        

      

      Such adjustment
shall become effective on the date of issue of such Ordinary
Shares.

       

      
        
          	
                  
                  

                	
                  (iii)

                	
                  If and
      whenever the Company shall pay or make any Capital Distribution to the
      Shareholders, the Conversion Price shall be adjusted by multiplying the
      Conversion Price in force immediately prior to the Effective Date by the
      following fraction:

                


        

      

       

      
        
          A-B

           
A

        

      

       

      where:

      
         

        
          	
                	
                  A

                	
                  
                    is the
      Current Market Price of one Ordinary Share on the Effective Date;
      and

                  

                
	 	 	 
	 	
                  B 

                	
                  is the
      portion of the Fair Market Value of the aggregate Capital Distribution
      attributable to one Ordinary Share, with such portion being determined by
      dividing the Fair Market Value of the aggregate Capital Distribution by
      the number of Ordinary Shares entitled to receive the relevant Capital
      Distribution.

                


        

         

        
          
            
            

          

          
            116

            
              

            

          

          
            
            

          

           

        

      

      Such adjustment
shall become effective on the Effective Date or, if later, the first date upon
which the Fair Market Value of the relevant Capital Distribution is capable of
being determined as provided herein.

       

      “Effective Date” means, in
respect of this sub-paragraph (b)(iii), the first date on
which the Ordinary Shares are traded ex- the relevant Dividend on the Relevant
Stock Exchange or in the case of a Spin-Off, the first date on which the
Ordinary Shares are traded ex- the relevant Spin-Off on the Relevant Stock
Exchange.

       

      “Capital Distribution” means
any Non-Cash Dividend.

       

      “Non-Cash Dividend” means any
Dividend which is not a Dividend to be declared or paid in cash, and shall
include a Spin-Off.

       

      
        	
                
                

              	
                (iv)

              	
                if and
      whenever the Company shall issue Ordinary Shares to Shareholders as a
      class by way of rights, or shall issue or grant to Shareholders as a class
      by way of rights, any options, warrants or other rights to subscribe for
      or purchase any Ordinary Shares, or any Securities which by their terms of
      issue carry (directly or indirectly) rights of conversion into, or
      exchange or subscription for, any Ordinary Shares (or shall grant any such
      rights in respect of existing securities so issued), in each case at a
      price per Ordinary Share which is less than 95 per cent. of the Current
      Market Price per Ordinary Share on the Effective Date, the Conversion
      Price shall be adjusted by multiplying the Conversion Price in force
      immediately prior to the Effective Date by the following
      fraction:

              


      

      
         

        
          
            A+B

            A+C

          

        

      

       

      where:

       

      
        
          	
                  
                  

                	
                  A

                	
                  is the number
      of Ordinary Shares in issue on the Effective
  Date;

                


        

      

       

      
        
          	
                  
                  

                	
                  B

                	
                  is the number
      of Ordinary Shares which the aggregate consideration (if any) receivable
      for the Ordinary Shares issued by way of rights, or for the Securities
      issued by way of rights, or for the options or warrants or other rights
      issued by way of rights and for the total number of Ordinary Shares
      deliverable on the exercise thereof, would purchase at such Current Market
      Price per Ordinary Share; and

                


        

      

       

      
        
          	
                  
                  

                	
                  C

                	
                  is the number
      of Ordinary Shares to be issued or, as the case may be, the maximum number
      of Ordinary Shares which may be issued upon exercise of such options,
      warrants or rights calculated as at the date of issue of such options,
      warrants or rights or upon conversion or exchange or exercise of rights of
      subscription or purchase in respect thereof at the initial conversion,
      exchange, subscription or purchase price or
  rate,

                


        

      

       

      provided that if at
the time of issue or grant (as used in this sub-paragraph (b)(iv), the “Specified Date”), such number
or maximum number of Ordinary Shares which could be issued is to be determined
by 

       

      
        
          
          

        

        
          117

          
            

          

        

        
          
          

        

      

       

      reference to the
application of a formula or other variable feature or the occurrence of any
event at some subsequent time, then for the purposes of this sub-paragraph
(b)(iv), ‘C’ shall be
determined by the application of such formula or variable feature or as if the
relevant event occurs or had occurred as at the Specified Date and as if such
subscription, purchase, conversion or exchange had taken place on the Specified
Date.

       

      Such adjustment
shall become effective on the Effective Date.

       

      “Effective Date” means, in
respect of this sub-paragraph (b)(iv), the first date on
which the Ordinary Shares are traded ex-rights, ex-options or ex-warrants on the
Relevant Stock Exchange.

       

      
        
          	
                  
                  

                	
                  (v)

                	
                  If and
      whenever the Company shall issue any Securities (other than the Series 1
      Class B Shares, Ordinary Shares or options, warrants or other rights to
      subscribe for or purchase any Ordinary Shares or any Securities which by
      their terms of issue carry (directly or indirectly) rights of conversion
      into, or exchange or subscription for, any Ordinary Shares) to
      Shareholders as a class by way of rights or grant to Shareholders as a
      class by way of rights any options, warrants or other rights to subscribe
      for or purchase any Securities (other than the Series 1 Class B Shares,
      Ordinary Shares or options, warrants or other rights to subscribe for or
      purchase Ordinary Shares or any Securities which by their terms of issue
      carry (directly or indirectly) rights of conversion into, or exchange or
      subscription for, any Ordinary Shares), the Conversion Price shall be
      adjusted by multiplying the Conversion Price in force immediately prior to
      the Effective Date by the following
fraction:

                


        

      

       

      
        
          
            A-B

             
A

          

        

      

       

      where:

       

      
        
          	
                  
                  

                	
                  A

                	
                  is the
      Current Market Price of one Ordinary Share on the Effective Date;
      and

                


        

      

       

      
        
          	
                  
                  

                	
                  B

                	
                  is the Fair
      Market Value on the Effective Date of the portion of the rights
      attributable to one Ordinary
Share.

                


        

      

       

      Such adjustment
shall become effective on the Effective Date.

       

      “Effective Date” means, in
respect of this sub-paragraph (b)(v), the first date on
which the Ordinary Shares are traded ex- the relevant Securities or ex-rights,
ex-option or ex-warrants on the Relevant Stock Exchange

       

      
        
          	
                  
                  

                	
                  (vi)

                	
                  If and
      whenever the Company shall issue (otherwise than as mentioned in
      sub-paragraph (b)(iv) above) wholly
      for cash or for no consideration any Ordinary Shares (other than Ordinary
      Shares issued on conversion of the Series 1 Class B Shares or on the
      exercise of any rights of conversion into, or exchange or subscription for
      or purchase of, Ordinary Shares) or issue or grant (otherwise than as
      mentioned in sub-paragraph (b)(iv) above) wholly
      for cash or for no consideration any options, warrants or other rights to
      subscribe for or purchase any Ordinary Shares (other than the Series 1
      Class B Shares), in each case at a price per Ordinary Share which is less
      than 95 per cent. of the Current Market Price


                


        

         

        
          
            
            

          

          
            118

            
              

            

          

          
            
            

          

           

        

      

      per Ordinary
Share on the date of the first public announcement of the terms of such issue or
grant, the Conversion Price shall be adjusted by multiplying the Conversion
Price in force immediately prior to the Effective Date by the following
fraction:

      
         

        
          
            A+B

            A+C

             

          

        

      

      where:

       

      
        
          	
                   

                	
                  A

                	
                  is the number
      of Ordinary Shares in issue immediately before the issue of such Ordinary
      Shares or the grant of such options, warrants or
  rights;

                


        

      

       

      
        
          	
                  
                  

                	
                  B

                	
                  is the number
      of Ordinary Shares which the aggregate consideration (if any) receivable
      for the issue of such Ordinary Shares or, as the case may be, for the
      Ordinary Shares to be issued or otherwise made available upon the exercise
      of any such options, warrants or rights, would purchase at such Current
      Market Price per Ordinary Share;
and

                


        

      

       

      
        
          	
                  
                  

                	
                  C

                	
                  is the number
      of Ordinary Shares to be issued pursuant to such issue of such Ordinary
      Shares or, as the case may be, the maximum number of Ordinary Shares which
      may be issued upon exercise of such options, warrants or rights calculated
      as at the date of issue of such options, warrants or
    rights,

                


        

      

       

      provided that if,
on the Effective Date, such number or maximum number of Ordinary Shares which
could be issued is to be determined by reference to the application of a formula
or other variable feature or the occurrence of any event at some subsequent time
then, for the purposes of this sub-paragraph (b)(vi), ‘C’ shall be
determined by the application of such formula or variable feature or as if the
relevant event occurs or had occurred as at the Effective Date and as if such
subscription or purchase had taken place on the Effective Date.

       

      Such adjustment
shall become effective on the Effective Date.

       

      “Effective Date” means, in
respect of this sub-paragraph(b)(vi), the date of issue of
such Ordinary Shares or, as the case may be, the grant of such options, warrants
or rights.

       

      
        
          	
                  
                  

                	
                  (vii)

                	
                  If and
      whenever the Company or any Subsidiary of the Company or (at the direction
      or request of or pursuant to any arrangements with the Company or any
      Subsidiary of the Company) any other company, person or entity (otherwise
      than as mentioned in sub-paragraphs (b)(iv), (b)(v) or (b)(vi) above) shall
      issue wholly for cash or for no consideration any Securities (other than
      the Series 1 Class B Shares) which by their terms of issue carry (directly
      or indirectly) rights of conversion into, or exchange or subscription for,
      Ordinary Shares (or shall grant any such rights in respect of existing
      Securities so issued) or Securities which by their terms might be
      redesignated as Ordinary Shares, and the consideration per Ordinary Share
      receivable upon conversion, 

                


        

      

       

      
        
          
          

        

        
          119

          
            

          

        

        
          
          

        

      

       

      exchange,
subscription or redesignation is less than 95 per cent. of the Current Market
Price per Ordinary Share on the date of the first public announcement of the
terms of issue of such Securities (or the terms of such grant), the Conversion
Price shall be adjusted by multiplying the Conversion Price in force immediately
prior to the Effective Date by the following fraction:

       

      
        A+B

        A+C

      

       

      where:

       

      
        	
                 
      

              	
                 A

              	
                is the number
      of Ordinary Shares in issue immediately before such issue or grant (but
      where the relevant Securities carry rights of conversion into or rights of
      exchange or subscription for Ordinary Shares which have been issued,
      purchased or acquired by the Company or any Subsidiary of the Company (or
      at the direction or request or pursuant to any arrangements with the
      Company or any Subsidiary of the Company) for the purposes of or in
      connection with such issue, less the number of such Ordinary Shares so
      issued, purchased or acquired);

              


      

       

      
        	
                 
      

              	
                 B

              	
                is the number
      of Ordinary Shares which the aggregate consideration (if any) receivable
      for the Ordinary Shares to be issued or otherwise made available upon
      conversion or exchange or upon exercise of the right of subscription
      attached to such Securities or, as the case may be, for the Ordinary
      Shares to be issued or to arise from any such redesignation would purchase
      at such Current Market Price per Ordinary Share;
  and

              


      

       

      
        	
                 
      

              	
                 C

              	
                is the
      maximum number of Ordinary Shares to be issued or otherwise made available
      upon conversion or exchange of such Securities or upon the exercise of
      such right of subscription attached thereto at the initial conversion,
      exchange or subscription price or rate or, as the case may be, the maximum
      number of Ordinary Shares which may be issued or arise from any such
      redesignation,

              


      

       

      provided that if at
the time of issue of the relevant Securities or date of grant of such rights (as
used in this sub-paragraph (b)(vii), the “Specified Date”) such number
or maximum number of Ordinary Shares is to be determined by reference to the
application of a formula or other variable feature or the occurrence of any
event at some subsequent time (which may be when such Securities are converted
or exchanged or rights of subscription are exercised or, as the case may be,
such Securities are redesignated or at such other time as may be provided), then
for the purposes of this sub-paragraph (b)(vii), “C” shall be
determined by the application of such formula or variable feature or as if the
relevant event occurs or had occurred as at the Specified Date and as if such
conversion, exchange, subscription, purchase or acquisition 

       

      
        
          
          

        

        
          120

          
            

          

        

        
          
          

        

      

       

      or, as the case may
be, redesignation had taken place on the Specified Date.

       

      Such adjustment
shall become effective on the Effective Date.

       

      “Effective Date” means, in
respect of this sub-paragraph (b)(vii), the date of issue of
such Securities or, as the case may be, the grant of such rights.

       

      
        
          	
                  
                  

                	
                  (viii)

                	
                  If and
      whenever there shall be any modification of the rights of conversion,
      exchange, subscription, purchase or acquisition attaching to any such
      Securities (other than the Series 1 Class B Shares) as are mentioned in
      sub-paragraph (b)(vii) above (other
      than in accordance with the terms (including terms as to adjustment)
      applicable to such Securities upon issue) so that following such
      modification the consideration per Ordinary Share receivable has been
      reduced and is less than 95 per cent. of the Current Market Price per
      Ordinary Share on the date of the first public announcement of the
      proposals for such modification, the Conversion Price shall be adjusted by
      multiplying the Conversion Price in force immediately prior to the
      Effective Date by the following
fraction:

                


        

      

       

      
        A+B

        A+C

      

       

      where:

       

      
        	
                 
      

              	
                 
      A

              	
                is the number
      of Ordinary Shares in issue on the dealing day immediately before such
      modification (but where the relevant Securities carry rights of conversion
      into or rights of exchange or subscription for, or purchase or acquisition
      of, Ordinary Shares which have been issued, purchased or acquired by the
      Company or any Subsidiary of the Company (or at the direction or request
      or pursuant to any arrangements with the Company or any Subsidiary of the
      Company) for the purposes of or in connection with such Securities, less
      the number of such Ordinary Shares so issued, purchased or
      acquired);

              


      

       

      
        	
                 
      

              	
                 
      B

              	
                is the number
      of Ordinary Shares which the aggregate consideration (if any) receivable
      for the Ordinary Shares to be issued or otherwise made available upon
      conversion or exchange or upon exercise of the right of subscription,
      purchase or acquisition attached to the Securities so modified would
      purchase at such Current Market Price per Ordinary Share or, if lower, the
      existing conversion, exchange, subscription, purchase or acquisition price
      or rate of such Securities; and

              


      

       

      
        	
                 
      

              	
                 
      C

              	
                is the
      maximum number of Ordinary Shares which may be issued or otherwise made
      available upon conversion or exchange of such Securities or upon the
      exercise of such rights of subscription, purchase or acquisition attached
      thereto at the modified conversion, exchange, subscription, purchase or
      acquisition price or rate but giving credit in such manner as an
      

              


      

       

      
        
          
          

        

        
          121

          
            

          

        

        
          
          

        

         

        Independent Financial Adviser
(acting as an expert) shall consider appropriate for any previous adjustment
under this sub-paragraph (b)(viii)
or sub-paragraph (b)(vii)
above,

      

       

      provided that if at
the time of such modification (as used in this sub-paragraph (b)(viii), the “Specified Date”) such number
of Ordinary Shares is to be determined by reference to the application of a
formula or other variable feature or the occurrence of any event at some
subsequent time (which may be when such Securities are converted or exchanged or
rights of subscription, purchase or acquisition are exercised or at such other
time as may be provided), then, for the purposes of this sub-paragraph (b)(viii), “C” shall be
determined by the application of such formula or variable feature or as if the
relevant event occurs or had occurred as at the Specified Date and as if such
conversion, exchange, subscription, purchase or acquisition had taken place on
the Specified Date.

       

      Such adjustment
shall become effective on the Effective Date.

       

      “Effective Date” means, in
respect of this sub-paragraph (b)(viii), the date of
modification of the rights of conversion, exchange, subscription, purchase or
acquisition attaching to such Securities.

       

      
        	
                 
      

              	
                (ix)

              	
                If and
      whenever the Company or any Subsidiary of the Company or (at the direction
      or request of or pursuant to any arrangements with the Company or any
      Subsidiary of the Company) any other company, person or entity shall offer
      any Securities, in connection with which offer Shareholders as a class are
      entitled to participate in arrangements whereby such Securities may be
      acquired by them (except where the Conversion Price falls to be adjusted
      under sub-paragraphs (b)(ii), (b)(iii), (b)(iv), (b)(vi) or (b)(vii) above (or would
      fall to be so adjusted if the relevant issue or grant was at less than 95
      per cent. of the Current Market Price per Ordinary Share on the relevant
      day) or under sub-paragraph (b)(v) above), the
      Conversion Price shall be adjusted by multiplying the Conversion Price in
      force immediately before the Effective Date by the following
      fraction:

              


      

       

      
        A-B

         
A

         

      

      where:

       

      
        	
                 
      

              	
                 
      A

              	
                is the
      Current Market Price of one Ordinary Share on the Effective Date;
      and

              


      

       

      
        	
                 
      

              	
                 
      B

              	
                is the Fair
      Market Value on the Effective Date of the portion of the relevant offer
      attributable to one Ordinary Share.

              


      

       

      Such adjustment
shall become effective on the Effective Date.

       

      “Effective Date” means, in
respect of this sub-paragraph (b)(ix), the first date on which
the Ordinary Shares are traded ex-rights on the Relevant Stock
Exchange.

       

      
        
          
          

        

        
          122

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  
                  

                	
                  (x)

                	
                  If the
      Company determines that, or is requested by the holders of at least 75 per
      cent. of the outstanding Series 1 Class B Shares to determine whether, an
      adjustment should be made to the Conversion Price as a result of one or
      more circumstances not referred to above in this paragraph 4(b) or in paragraph
      4(l) (even if the
      relevant circumstance is specifically excluded from the operation of
      sub-paragraphs (b)(i) to (ix) above),
      the Company shall, at its own expense and acting reasonably, request an
      Independent Financial Adviser (acting as an expert) to determine as soon
      as practicable what adjustment (if any) to the Conversion Price is fair
      and reasonable to take account thereof and the date on which such
      adjustment (if any) should take effect and upon such determination such
      adjustment (if any) shall be made and shall take effect in accordance with
      such determination, provided that an adjustment shall only be made
      pursuant to this sub-paragraph (b)(x) if such
      Independent Financial Adviser is so requested to make such a determination
      not more than 21 days after the date on which the relevant circumstance
      arises.

                


        

      

       

      Notwithstanding the
foregoing provisions,

       

      
        	
                 
      

              	
                 
      (a)

              	
                where the
      events or circumstances giving rise to any adjustment pursuant to this
      paragraph 4(b) or
      paragraph 4(l)
      have already resulted or will result in an adjustment to the Conversion
      Price or where the events or circumstances giving rise to any adjustment
      arise by virtue of any other events or circumstances which have already
      given or will give rise to an adjustment to the Conversion Price or where
      more than one event which gives rise to an adjustment to the Conversion
      Price occurs within such a short period of time that, in the opinion of
      the Company, a modification to the operation of the adjustment provisions
      is required to give the intended result, such modification shall be made
      to the operation of the adjustment provisions as may be advised by an
      Independent Financial Adviser (acting as an expert) to be in its opinion
      appropriate to give the intended result;
and

              


      

       

      
        	
                 
      

              	
                 
      (b)

              	
                such
      modification shall be made to the operation of the provisions of this
      paragraph 4(b) or
      paragraph 4(l) as
      may be advised by an Independent Financial Adviser (acting as an expert)
      to be in its opinion appropriate to ensure that (i) an adjustment to the
      Conversion Price or the economic effect thereof shall not be taken into
      account more than once and (ii) the economic effect of a Dividend shall
      not be taken into account more than
once.

              


      

       

      For the purpose of
any calculation of the consideration receivable or price pursuant to
sub-paragraphs (b)(iv),
(b)(vi), (b)(vii) and (b)(viii), the following
provisions shall apply:

       

      
        	
                 
      

              	
                 (a)

              	
                the aggregate
      consideration receivable or price for Ordinary Shares issued for cash
      shall be the amount of such cash;

              


      

       

      
        	
                 
      

              	
                 (b)

              	
                (x) the
      aggregate consideration receivable or price for Ordinary Shares to be
      issued or otherwise made available upon the conversion or exchange of any
      Securities shall be deemed to be the consideration or
  

              


      

       

      
        
          
          

        

        
          123

          
            

          

        

        
          
          

        

      

       

      price received
or receivable for any such Securities and (y) the aggregate consideration
receivable or price for Ordinary Shares to be issued or otherwise made available
upon the exercise of rights of subscription attached to any Securities or upon
the exercise of any options, warrants or rights shall be deemed to be that part
(which may be the whole) of the consideration or price received or receivable
for such Securities or, as the case may be, for such options, warrants or rights
which are attributed by the Company to such rights of subscription or, as the
case may be, such options, warrants or rights or, if no part of such
consideration or price is so attributed, the Fair Market Value of such rights of
subscription or, as the case may be, such options, warrants or rights as at the
relevant Effective Date as referred to in sub-paragraph 4(b)(iv)
or the date of the first public announcement of the terms of issue of such
Securities or, as the case may be, such options, warrants or rights as referred
to in sub-paragraphs 4(b)(vi),
(b)(vii)
and (b)(viii)
plus, in the case of each of (x) and (y) above, the additional minimum
consideration receivable or price (if any) upon the conversion or exchange of
such Securities, or upon the exercise of such rights or subscription attached
thereto or, as the case may be, upon exercise of such options, warrants or
rights and (z) the consideration receivable or price per Ordinary Share upon the
conversion or exchange of, or upon the exercise of such rights of subscription
attached to, such Securities or, as the case may be, upon the exercise of such
options, warrants or rights shall be the aggregate consideration or price
referred to in (x) or (y) above (as the case may be) divided by the number of
Ordinary Shares to be issued upon such conversion or exchange or exercise at the
initial conversion, exchange or subscription price or rate;

       

      
        
          	
                  
                  

                	
                  (c)

                	
                  if the
      consideration or price determined pursuant to (a) or (b) above (or any
      component thereof) shall be expressed in a currency other than the
      Relevant Currency, it shall be converted into the Relevant Currency at the
      Prevailing Rate on the relevant Effective Date (in the case of (a) above
      and sub-paragraph 4(b)(iv) and (ix)) or the
      relevant date of the first public announcement of the terms of issue of
      such Securities or, as the case may be, such options, warrants or rights
      (as the case may be) (in the case of sub-paragraphs 4(b)(vi), (vii) and
      (viii)) (or, if a rate cannot be determined at such time, the rate
      prevailing at the close of business on the immediately preceding day on
      which such rate can be so
determined);

                


        

      

       

      
        
          	
                  
                  

                	
                  (d)

                	
                  in
      determining the consideration or price pursuant to the above, no deduction
      shall be made for any commissions or fees (howsoever described) or any
      expenses paid or incurred for any underwriting, placing or management of
      the issue of the relevant Ordinary Shares or Securities or options,
      warrants or rights, or otherwise in connection therewith;
    and

                


        

      

       

      
        
          	
                  
                  

                	
                  (e)

                	
                  the
      consideration or price shall be determined as provided above on the basis
      of the consideration or price received, receivable, paid or payable
      regardless of whether all or part thereof is received, receivable, paid or
      payable by or to the Company or another entity on its
    behalf.

                


        

      

       

      
        
          
          

        

        
          124

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  
                  

                	
                  (c)

                	
                  Retroactive
      Adjustments

                


        

      

       

      If the Conversion
Date in relation to the conversion of any Series 1 Class B Share shall be after
the record date in respect of any consolidation, redesignation or sub-division
as is mentioned in sub-paragraph 4(b)(i) or paragraph 4(l), or after the record
date or other due date for the establishment of entitlement for any such issue,
distribution, grant or offer (as the case may be) as is mentioned in
sub-paragraphs 4(b)(ii), (iii), (iv), (v) or
(ix), or after the date of the first public announcement of the terms of any
such issue or grant as is mentioned in sub-paragraphs 4(b)(vi) and (vii) or of the
terms of any such modification as is mentioned in sub-paragraph 4(b)(viii), but before the
relevant adjustment to the Conversion Price becomes effective under paragraph
4(b) or, as the case
may be, the relevant adjustment to the Relevant Amount becomes effective under
paragraph 4(l) (such
adjustment, a “Retroactive
Adjustment”), then the Company shall (conditional upon the relevant
adjustment becoming effective) procure that there shall be created, issued or
transferred and delivered to the converting holder of Series 1 Class B Shares,
in accordance with the instructions contained in the Conversion Notice, such
additional number of Ordinary Shares (if any) (the “Additional Ordinary Shares”)
as, together with the Ordinary Shares issued or to be transferred and delivered
on conversion of the relevant Series 1 Class B Share (together with any fraction
of an Ordinary Share not so issued), is equal to the number of Ordinary Shares
which would have been required to be issued or delivered on conversion of such
Series 1 Class B Share as if the relevant adjustment to the Conversion Price or
Relevant Amount (as the case may be) had been made and become effective
immediately prior to the relevant Conversion Date.

       

      
        	
                 
      

              	
                (d)

              	
                Decision of
      an Independent Financial Adviser

              


      

       

      If any doubt shall
arise as to whether an adjustment falls to be made to the Relevant Amount,
Conversion Price or Winding-up Ratio or as to the appropriate adjustment to the
Relevant Amount, Conversion Price or Winding-up Ratio, and following
consultation between the Company and an Independent Financial Adviser, a written
opinion of such Independent Financial Adviser in respect thereof shall be
conclusive and binding on all parties, save in the case of manifest or proven
error.

       

      
        	
                 
      

              	
                (e)

              	
                Share or
      Option Schemes

              


      

       

      No adjustment will
be made to the Conversion Price where Ordinary Shares or other Securities
(including rights, warrants and options) are issued, offered, exercised,
allotted, appropriated, modified or granted to, or for the benefit of, employees
or former employees (including Directors holding or formerly holding executive
office or the personal service company of any such person) or their spouses or
relatives, in each case, of the Company or any of its Subsidiaries or any
associated company (including ABN AMRO Holding N.V. and its subsidiaries from
time to time) or to a trustee or trustees to be held for the benefit of any such
person, in any such case pursuant to any Employee Share Scheme.

       

      
        	
                 
      

              	
                (f)

              	
                Rounding Down
      and Notice of Adjustment to the Conversion
Price

              


      

       

      On any adjustment,
the resultant Conversion Price, if not an integral multiple of £0.01, shall be
rounded down to the nearest whole multiple of £0.01. No adjustment shall be made
to the Conversion Price where such adjustment 

       

      
        
          
          

        

        
          125

          
            

          

        

        
          
          

        

      

       

      (rounded down if
applicable) would be less than one per cent. of the Conversion Price then in
effect. Any adjustment not required to be made and/or any amount by which the
Conversion Price has been rounded down, shall be carried forward and taken into
account in any subsequent adjustment, and such subsequent adjustment shall be
made on the basis that the adjustment not required to be made had been made at
the relevant time and/or, as the case may be, that the relevant rounding down
had not been made.

       

      Notice of any
adjustments to the Conversion Price (and resulting Winding Up Ratio) shall be
given by the Company to holders of Series 1 Class B Shares in accordance with
paragraph 9 promptly after the determination thereof.

       

      
        	
                 
      

              	
                (g)

              	
                Minimum
      Conversion Price

              


      

       

      The Conversion
Price shall not in any event be reduced to below the nominal value of the
Ordinary Shares. The Company undertakes that it shall not take any action, and
shall procure that no action is taken, that would result in an adjustment to the
Conversion Price to below such nominal value or any minimum level permitted by
law and regulation.

       

      
        	
                 
      

              	
                (h)

              	
                Procedure for
      exercise of Conversion Rights

              


      

       

      Conversion Rights
may be exercised by a Series 1 Class B Shareholder during the Conversion Period
by:

       

      
        	
                 
      

              	
                 (i)

              	
                in the case
      of Series 1 Class B Shares in certificated form, delivering the
      certificate representing the relevant Series 1 Class B Share to the
      specified office of the Registrar, during its usual business hours,
      accompanied by a duly completed and signed notice of conversion in the
      form (for the time being current) obtainable from the Registrar.
      Conversion Rights shall be exercised subject in each case to any
      applicable fiscal or other laws or regulations applicable;
    and

              


      

       

      
        	
                 
      

              	
                 (ii)

              	
                in the case
      of Series 1 Class B Shares in uncertificated form, sending to the Company
      or its agent at any time during the Conversion Period a properly
      authenticated dematerialised instruction (or other notification specified
      by the Company) in such form and subject to such terms and conditions as
      may (subject to the facilities and requirements of the relevant system
      concerned) from time to time be prescribed by the Board of Directors, who
      may require that the instruction be such as to divest the holder of the
      Series 1 Class B Shares concerned of the power to transfer such Series 1
      Class B Shares to another person,

              


      

       

      each such notice or
instruction being hereinafter called a “Conversion Notice”. A
Conversion Notice once given may not be withdrawn without consent in writing of
the Company.

       

      If such delivery is
made after the end of normal business hours or on a day which is not a business
day in the place of the specified office of the Registrar, such delivery shall
be deemed for all purposes hereof to have been made on the next following such
business day.

       

      Any determination
as to whether any Conversion Notice has been duly completed and properly
delivered shall be made by the Registrar and shall, save 

       

      
        
          
          

        

        
          126

          
            

          

        

        
          
          

        

      

       

      in the case of
manifest or proven error, be conclusive and binding on the Company, the
Registrar and the relevant holder of Series 1 Class B Shares.

       

      The conversion date
in respect of a Series 1 Class B Share (the “Conversion Date”) shall be the
business day in London immediately following the date of the delivery of the
certificate representing the relevant Series 1 Class B Share (unless in
uncertificated form) and the Conversion Notice as provided in this paragraph
4(h).

       

      A Series 1 Class B
Shareholder exercising a Conversion Right must pay directly to the relevant
authorities any taxes and capital, stamp, issue and registration and transfer
taxes and duties arising on conversion (other than any taxes or capital, stamp,
issue and registration and transfer taxes and duties payable in the United
Kingdom in respect of the issue or transfer and delivery of any Ordinary Shares
on such conversion (including any Additional Ordinary Shares), which shall be
paid by the Company).

       

      Such Series 1 Class
B Shareholder must also pay all, if any, taxes imposed on it and arising by
reference to any disposal or deemed disposal of a Series 1 Class B Share or
interest therein in connection with the exercise of Conversion Rights by
it).

       

      The Company shall
pay any expenses of obtaining a listing for any Ordinary Shares arising on the
exercise of a Conversion Right on the Relevant Stock Exchange.


       

      
        	
                 
      

              	
                (i)

              	
                Delivery of
      Ordinary Shares

              


      

       

      The Ordinary Shares
to be created, issued or transferred and delivered following the exercise of a
Conversion Right will not be available for issue (i) to, or to a nominee or
agent for, Euroclear Bank S.A./N.V. or Clearstream Banking, société anonyme or
any other person providing a clearance service within the meaning of Section 96
of the Finance Act 1986 of the United Kingdom or (ii) to a person, or nominee or
agent for a person, whose business is or includes issuing depositary receipts
within the meaning of Section 93 of the Finance Act 1986 of the United Kingdom,
in each case at any time prior to the "abolition day" as defined in Section
111(1) of the Finance Act 1990 of the United Kingdom.

       

      Ordinary Shares to
be created, issued or transferred and delivered following the exercise of a
Conversion Right will be delivered in uncertificated form through CREST, unless
at the relevant time the Ordinary Shares are not a participating security in
CREST or the relevant holder elects to receive the Ordinary Shares in
certificated registered form. Where Ordinary Shares are to be delivered through
CREST, they will be delivered to the account specified by the relevant holder of
Series 1 Class B Shares in the relevant Conversion Notice by not later than
seven London business days following the relevant Conversion Date (or, in the
case of any Additional Ordinary Shares not later than seven London business days
following the relevant Reference Date). Where Ordinary Shares are to be
delivered in certificated form, a certificate in respect thereof will be
dispatched by mail free of charge (but uninsured and at the risk of the
recipient) to the relevant holder of Series 1 Class B Shares or as it may direct
in the relevant Conversion 

       

      
        
          
          

        

        
          127

          
            

          

        

        
          
          

        

      

       

      Notice within 14
days following (i) the relevant Conversion Date or (ii) (in the case of
Additional Ordinary Shares) the Reference Date.

       

      
        	
                 
      

              	
                (j)

              	
                Ordinary
      Shares

              


      

       

      Ordinary Shares
created, issued or transferred and delivered upon conversion of the Series 1
Class B Shares will be fully paid and will in all respects rank pari passu with the fully
paid Ordinary Shares in issue on the relevant Conversion Date or, in the case of
Additional Ordinary Shares , on the relevant Reference Date, except in any such
case for any right excluded by mandatory provisions of applicable law and except
that such Ordinary Shares or, as the case may be, Additional Ordinary Shares
will not rank for (or, as the case may be, the relevant holder shall not be
entitled to receive) any rights, distributions or payments the record date or
other due date for the establishment of entitlement for which falls prior to the
relevant Conversion Date or relevant Reference Date. If Ordinary Shares are
created, issued or transferred and delivered upon conversion of the Series 1
Class B Shares and the relevant Conversion Date or, in the case of Additional
Ordinary Shares, the relevant Reference Date is a record date for the
establishment of entitlement to any rights, distributions or payments under both
the Series 1 Class B Shares and the Ordinary Shares, the holders of the Series 1
Class B Shares which are being converted will be entitled to such rights,
distributions or payments as holders of Ordinary Shares but not as holders of
Series 1 Class B Shares.

       

      
        	
                 
      

              	
                (k)

              	
                Undertakings

              


      

       

      Whilst any
Conversion Right remains exercisable, the Company will, save with the consent in
writing of the holders of three-fourths of the issued Series 1 Class B Shares or
with the sanction of a special resolution passed at a separate General Meeting
of the holders of the Series 1 Class B Shares (to which the provisions of the
Articles, including Article 6, shall apply):

       

      
        
          	
                  
                  

                	
                  (i)

                	
                  not make any
      issue, grant or distribution or take or omit to take any other action if
      the effect thereof would be that, on the exercise of Conversion Rights,
      Ordinary Shares could not, under any applicable law then in effect, be
      legally issued as fully paid;

                


        

      

       

      
        
          	
                  
                  

                	
                  (ii)

                	
                  use all
      reasonable endeavours to ensure that the Ordinary Shares issued upon
      exercise of Conversion Rights will, as soon as is practicable, be admitted
      to listing and to trading on the Relevant Stock Exchange and will be
      listed, quoted or dealt in, as soon as is practicable, on any other stock
      exchange or securities market on which the Ordinary Shares may then be
      listed or quoted or dealt in;

                


        

      

       

      
        
          	
                  
                  

                	
                  (iii)

                	
                  for so long
      as any Series 1 Class B Share remains outstanding, use all reasonable
      endeavours to ensure that its issued and outstanding Ordinary Shares shall
      be admitted to listing on the Relevant Stock
  Exchange;

                


        

      

       

      
        
          	
                  
                  

                	
                  (iv)

                	
                  at all times
      keep available for issue, free from pre-emptive rights, sufficient
      Ordinary Shares to enable the exercise of Conversion Rights, and all other
      rights of subscription and exchange for, and conversion into, Ordinary
      Shares, to be satisfied in full at the current subscription, purchase or
      other acquisition prices or
rates;

                


        

      

       

      
        
          
          

        

        
          128

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  
                  

                	
                  (v)

                	
                  in the event
      of a Newco Scheme, take (or shall procure that there is taken) all
      necessary action to ensure that immediately after completion of the Scheme
      of Arrangement, such amendments are made to the terms of the Series 1
      Class B Shares as are necessary or desirable to enable the Series 1 Class
      B Shares to be converted or exchanged into ordinary shares or units or the
      equivalent in Newco mutatis mutandis in
      accordance with and subject to these provisions of the Articles, with such
      modification as an Independent Financial Adviser (acting as an expert)
      shall consider to be appropriate. The Company shall give notice of any
      such amendments in accordance with paragraph 9 and such amendments shall
      have effect from the date specified therefor in such notice and without
      the need for any further consent or approval from the holders of the
      Series 1 Class B Shares for such
amendments;

                


        

      

       

      
        
          	
                  
                  

                	
                  (vi)

                	
                  if an offer
      is made to all (or as nearly as may be practicable all) Shareholders other
      than the offeror and/or any associates of the offeror (as defined in
      section 988 of the Companies Act) to acquire all or a majority of the
      issued ordinary share capital of the Company, or if a scheme (other than a
      Newco Scheme) is proposed with regard to such acquisition, give notice in
      writing of such offer or scheme to the holders of the Series 1 Class B
      Shares in accordance with paragraph 9 at the same time as any notice
      thereof is sent to its Shareholders (or as soon as reasonably practicable
      thereafter) that details concerning such offer or scheme may be obtained
      from the specified offices of the
Registrar;

                


        

      

       

      
        
          	
                  
                  

                	
                  (vii)

                	
                  give notice
      in writing to the holders of the Series 1 Class B Shares in accordance
      with paragraph 9 if, an offer having been made to all (or as nearly as may
      be practicable all) Shareholders (or all (or as nearly as may be
      practicable all) Shareholders other than the offeror and/or any associate
      of the offeror (as defined in section 988 of the Companies Act)) to
      acquire all or a majority of the issued ordinary share capital of the
      Company or if any person proposes a scheme with regard to such acquisition
      and such offer or scheme having become or been declared unconditional in
      all respects, the right to cast more than 50 per cent. of the votes which
      may ordinarily be cast on a poll at a general meeting of the Company has
      or will become unconditionally vested in the offeror and/or such associate
      as aforesaid.  Such notice shall specify all information
      relevant to holders of Series 1 Class B Shares concerning such offer or
      scheme;

                


        

      

       

      
        
          	
                  
                  

                	
                  (viii)

                	
                  other than in
      connection with a Newco Scheme, not issue or pay up any Securities, in
      either case by way of capitalisation of profits or reserves, other
      than:

                


        

      

       

      
        
          	
                  
                  

                	
                  (i)

                	
                  by the issue
      of fully paid Ordinary Shares or other Securities to Shareholders and
      other holders of shares in the capital of the Company which by their terms
      entitle the holders thereof to receive Ordinary Shares or other shares or
      Securities on a capitalisation of profits or reserves;
  or

                


        

      

       

      
        
          	
                  
                  

                	
                  (ii)

                	
                  by the issue
      of Ordinary Shares paid up in full out of profits or reserves (in
      accordance with applicable law) and issued wholly,
  

                


        

      

       

      
        
          
          

        

        
          129

          
            

          

        

        
          
          

        

         

      

      ignoring
fractional entitlements, in lieu of the whole or part of a cash dividend;
or

       

      
        
          	
                  
                  

                	
                  (iii)

                	
                  by the issue
      of fully paid equity share capital (other than Ordinary Shares) to the
      holders of equity share capital of the same class and other holders of
      shares in the capital of the Company which by their terms entitle the
      holders thereof to receive equity share capital (other than Ordinary
      Shares); or

                


        

      

       

      
        
          	
                  
                  

                	
                  (iv)

                	
                  by the issue
      of Ordinary Shares or any equity share capital to, or for the benefit of,
      any employee or former employee or director or former director of the
      Company or any of its Subsidiaries or any associated company (including
      ABN AMRO Holding N.V. and its subsidiaries from time to time) or to
      trustees or nominees to be held for the exclusive benefit of any such
      person, in any such case pursuant to any Employee Share Scheme;
      or

                


        

      

       

      
        
          	
                  
                  

                	
                  (v)

                	
                  in connection
      with the conversion of Relevant Shares as envisaged under paragraph
      4(a),

                


        

      

       

      unless, in any such
case, the same constitutes a Dividend or gives rise (or would, but for the
provisions of paragraph 4(f) relating to roundings and
minimum adjustments or the carry forward of adjustments, give rise) to an
adjustment to the Conversion Price;

       

      
        
          
            	
                    
                    

                  	
                    (ix)

                  	
                    not in any
      way modify the rights attaching to the Ordinary Shares with respect to
      voting, dividends or liquidation nor issue any other class of equity share
      capital carrying any rights which are more favourable than such rights but
      so that nothing in this paragraph 4(k)(ix) shall
      prevent:

                  


          

        

      

       

      
        	
                 
      

              	
                (i)

              	
                the issue of
      any equity share capital to employees or directors (or the spouse or
      relative of any such person) whether of the Company or any of the
      Company’s Subsidiaries or associated companies (including ABN AMRO Holding
      N.V. and its subsidiaries from time to time) pursuant to any Employee
      Share Scheme; or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      consolidation, subdivision or redesignation of the Ordinary Shares or the
      conversion of any Ordinary Shares into stock or vice versa;
    or

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                any
      modification of such rights which is not, in the opinion of an Independent
      Financial Adviser (acting as an expert), materially prejudicial to the
      interests of the holders of Series 1 Class B Shares;
  or

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                any
      alteration to the Articles made in connection with the matters described
      in this paragraph 4 or which is supplemental or incidental to any of the
      foregoing (including any amendment made to enable or facilitate procedures
      relating to such matters and any amendment dealing with the rights and
      obligations of holders of Securities, including Ordinary Shares, dealt
      with under such procedures); or

              
	 	 	 
	 	
                (v)

              	
                any issue of
      equity share capital where the issue of such equity share capital results
      or would, but for the provisions of paragraph


              


      

       

       

      
        
          
          

        

        
          130

          
            

          

        

        
          
          

           

          
            	
                     
      

                  	
                  	
                    4(f)
      relating to roundings and minimum adjustments or the carry forward of
      adjustments or, where comprising Ordinary Shares, the fact that the
      consideration per Ordinary Share receivable therefor is at least 95 per
      cent. of the Current Market Price per Ordinary Share, otherwise result in
      an adjustment of the Conversion Price; or

                  
	 	(vi)	
                    the
      conversion of Ordinary Shares into, or the issue of any Ordinary Shares
      in, uncertificated form (or the conversion of Ordinary Shares in
      uncertificated form to certificated form) or the amendment of the Articles
      to enable title to securities (including Ordinary Shares) to be evidenced
      and transferred without a written instrument or any other consequential
      related alteration to the Articles made in connection with the matters
      described in this paragraph 4(k)(ix);
    or

                  
	 	(vii)	
                    any issue of
      equity share capital or modification of rights attaching to the Ordinary
      Shares where prior thereto the Company shall have instructed an
      Independent Financial Adviser (acting as an expert) to determine what (if
      any) adjustments should be made to the Conversion Price as being fair and
      reasonable to take account thereof and such Independent Financial Adviser
      shall have determined in good faith either that no adjustment is required
      or that an adjustment to the Conversion Price is required and, if so, the
      new Conversion Price as a result thereof and the basis upon which such
      adjustment is to be made and, in any such case, the date on which the
      adjustment shall take effect (and so that the adjustment shall be made and
      shall take effect accordingly); or

                  
	 	(viii)	
                    the issue of
      the Dividend Access Share or the issue of further Class B Shares pursuant
      to paragraph 13 or the issue of further Class B Shares to any existing
      holders of Class B Shares or the issue of further dividend access shares
      to holders of Class B
Shares;

                  


          

        

      

       

      
        
          	
                  
                  

                	
                  (x)

                	
                  procure that
      no Securities (whether issued by the Company or any of the Company’s
      Subsidiaries or procured by the Company or any of the Company’s
      Subsidiaries to be issued or issued by any other person pursuant to any
      arrangement with the Company or any of the Company’s Subsidiaries) issued
      without rights to convert into, or exchange or subscribe for, Ordinary
      Shares shall subsequently be granted such rights exercisable at a
      consideration per Ordinary Share which is less than 95 per cent. of the
      Current Market Price per Ordinary Share at the close of business on the
      last dealing day preceding the date of the first public announcement of
      the proposed inclusion of such rights unless the same gives rise (or
      would, but for the provisions of paragraph 4(f) relating to
      roundings and minimum adjustments or the carry forward of adjustments,
      give rise) to an adjustment to the Conversion Price and that at no time
      shall there be in issue ordinary shares of differing nominal
      values;

                


        

      

       

      
        
          
          

        

        
          131

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  
                  

                	
                  (xi)

                	
                  not reduce
      the aggregate of its issued share capital, share premium account, capital
      redemption reserve, merger reserve, revaluation reserve or any other
      reserve including distributable reserves or any uncalled liability in
      respect thereof except:

                


        

      

       

      
        	
                 
      

              	
                (i)

              	
                  
      pursuant to the terms of issue of the relevant share capital;
      or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                by means of a
      purchase or redemption of share capital of the Company (subject always to
      paragraph 6); or

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                as permitted
      by Section 610 of the Companies Act;
or

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                where the
      reduction does not involve any distribution of assets;
  or

              


      

       

      
        	
                 
      

              	
                (v)

              	
                where the
      reduction results in (or would, but for the provisions of paragraph
      4(f) relating to
      roundings and minimum adjustments the carry forward of adjustments, result
      in) an adjustment to the Conversion Price or is otherwise taken into
      account for the purposes of determining whether such an adjustment should
      be made; or

              


      

       

      
        	
                 
      

              	
                (vi)

              	
                solely in
      relation to a change in the currency in which the nominal value of the
      Ordinary Shares is expressed; or

              


      

       

      
        	
                 
      

              	
                (vii)

              	
                pursuant to a
      Newco Scheme; or

              
	 	 	 
	 	
                (viii)

              	
                as a result
      of the accounting treatment under applicable generally accepted accounting
      principles of any redemption or refinancing of debt instruments;
      or

              


      

      
      

       

      
        	
                 
      

              	
                (ix)

              	
                the reduction
      is permitted by applicable law and the Company is advised by an
      Independent Financial Adviser, acting as an expert, that the interests of
      the holders of the Series 1 Class B Shares will not be materially
      prejudiced by such reduction; or

              


      

       

      
        	
                 
      

              	
                (x)

              	
                pursuant to
      the issue, transfer or purchase of equity share capital for the purpose of
      an Employee Share Scheme.

              


      

       

      
        	
                 
      

              	
                (l)

              	
                Adjustment of
      Relevant Amount on consolidation, redesignation or subdivision in relation
      to the Series 1 Class B Shares

              


      

       

      Upon the happening
of the event described below, the Relevant Amount shall be adjusted as
follows:

       

      If and whenever
there shall be a consolidation, redesignation or subdivision in relation to the
Series 1 Class B Shares, the Relevant Amount shall be adjusted by dividing the
Relevant Amount in force immediately prior to such consolidation, redesignation
or subdivision by the following fraction:

       

      
        A

        B

      

       

      where:

       

      
        	
                 
      

              	
                 
      A

              	
                is the
      aggregate number of Series 1 Class B Shares in issue immediately after,
      and as a result of, such consolidation, redesignation or subdivision, as
      the case may be; and

              


      

       

      
        
          
          

        

        
          132

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                 
      B

              	
                is the
      aggregate number of the Series 1 Class B Shares in issue immediately
      before such consolidation, redesignation or subdivision, as the case may
      be.

              


      

       

      Such adjustment
shall become effective on the date the consolidation, redesignation or
subdivision, as the case may be, takes effect.

       

       

      
        	
                5

              	
                Voting

              


      

       

      Holders of the
Series 1 Class B Shares will only be entitled to receive notice of and to attend
any general meeting of shareholders and to speak to or vote upon any resolution
proposed at such meeting if a resolution is proposed which either varies or
abrogates any of the rights and restrictions attached to the Series 1 Class B
Shares or proposes the winding up of the Company (and then in each such case
only to speak and vote upon any such resolution).

       

      If holders of the
Series 1 Class B Shares are entitled to vote upon a resolution proposed at a
general meeting of shareholders, on a show of hands every holder of Series 1
Class B Shares who is entitled to vote or any proxy or a corporate
representative for that holder, in each case who is present in person, will have
one vote. On a poll, each holder of Series 1 Class B Shares who is entitled to
vote and who is present in person, by proxy or by corporate representative, will
have two votes for each Series 1 Class B Share of which he or she is the
holder.

       

      Other provisions in
the Articles relating to voting procedures also apply to the Series 1 Class B
Shares.

       

       

      
        	
                6

              	
                Purchase
      of own shares

              


      

       

      For as long as any
Series 1 Class B Shares remain in issue the Company may not purchase or
otherwise acquire any of its Ordinary Shares or other Parity Securities (other
than the Series 1 Class B Shares) or any depositary or other receipts or
certificates representing Ordinary Shares or Parity Securities (other than the
Series 1 Class B Shares) other than any such purchases or acquisitions which are
made in connection with any Employee Share Scheme or which are made from HM
Treasury or its nominees.

       

       

      
        	
                7

              	
                Form
      and Denomination

              


      

       

      The Series 1 Class
B Shares will, when issued, be fully paid and, as such, will not be subject to a
call for any additional payment. For each Series 1 Class B Share issued, an
amount equal to its nominal value of £0.01 will be credited to the Company’s
issued share capital account.

       

      The Series 1 Class
B Shares will be issued in registered form.

       

      Title to Series 1
Class B Shares in certificated form will pass by transfer and registration on
the register of members of the Company in accordance with the Articles. The
Articles provide, amongst other matters, that transfers of the Series 1 Class B
Shares in certificated form are to be effected by an instrument of transfer in
any usual form or in any other form approved by the Board of Directors.
Instruments of transfer of the Series 

       

      
        
          
          

        

        
          133

          
            

          

        

        
          
          

        

      

       

      1 Class B Shares
must be signed by or on behalf of the transferor or executed in some other
legally valid way.

       

      See “Registrar”
below. Any registration of transfer will be effected without charge to the
person requesting the registration, but the requesting person will be required
to pay any related taxes, stamp duties or other governmental charges (except to
the extent that the same are required to be paid by any other person, including
the Company, pursuant to paragraph 4(h) above or otherwise
pursuant to the terms of issue of the Series 1 Class B Shares).

       

       

      
        	
                8

              	
                Variation
      of Rights

              


      

       

      The rights,
preferences and privileges attached to Series 1 Class B Shares may be varied or
abrogated in accordance with the Articles (including Article 6). In addition,
the Company may make such changes to the terms of issue of the Series 1 Class B
Shares as it, in its sole discretion, deems necessary in order to ensure that
the Series 1 Class B Shares continue to count as core tier 1 capital for the
purposes of regulatory requirements applicable to it, and such changes may be
made without the consent of holders of the Series 1 Class B Shares. The Company
will notify holders of the Series 1 Class B Shares in accordance with paragraph
9 if it makes any such changes.

       

      Subject as provided
in paragraph 13 and without prejudice to any requirement to make adjustments
under paragraph 4(b),
the rights attached to the Series 1 Class B Shares will not be deemed to be
varied by the creation or issue of (a) Further Series 1 Class B Shares, any
further Class B Shares, any other Parity Securities or any other share capital
ranking equally with or junior to the Series 1 Class B Shares or (b) any
preference shares, in each case whether carrying identical rights or different
rights in any respect, including as to dividend, premium or entitlement on a
return of capital, redemption or conversion and whether denominated in sterling
or any other currency. Any further Class B Shares, any other Parity Securities
or any other share capital ranking equal with or junior to the Series 1 Class B
Shares may either carry identical rights in all respects with the Series 1 Class
B Shares or carry different rights.

       

       

      
        	
                9

              	
                Notices

              


      

       

      Notices given by
the Company will be given by the Registrar on its behalf unless the Company
decides otherwise. A notice may be given by the Company to any holder of Series
1 Class B Shares in certificated form by sending it by post to the holder’s
registered address. Service of the notice shall be deemed to be effected by
properly addressing, prepaying and posting a letter by first class post
containing the notice, and to have been effected on the day after the letter
containing the same is posted. Where a holder’s registered address is outside
the United Kingdom, all notices shall be sent to him by air mail
post.

       

      A notice may be
given by the Company to the joint holders of Series 1 Class B Shares by giving
the notice to the joint holder first named in the register.

       

      A notice may be
given by the Company to the extent permitted by the Companies Act and the UK
Listing Authority by electronic communication, if so requested or authorised by
the holder, the holder having notified the Company of an e-mail address to which
the Company may send electronic communications, and having agreed to receive
notices and other documents from the Company by electronic communication. If a
holder 

       

      
        
          
          

        

        
          134

          
            

          

        

        
          
          

        

      

       

      notifies the
Company of an e-mail address, the Company may send the holder the notice or
other document by publishing the notice or other document on a website and
notifying the holder by e-mail that the notice or other document has been
published on the website. The Company must also specify the address of the
website on which it has been published, the place on the website where the
notice may be accessed and how it may be accessed, and where the notice in
question is a notice of a meeting, the notice must continue to be published on
that website throughout the period beginning with the giving of that
notification and ending with the conclusion of the meeting, save that if the
notice is published for part only of that period then failure to publish the
notice throughout that period shall not invalidate the proceedings of the
meeting where such failure is wholly attributable to circumstances which it
would not be reasonable to have expected the Company to prevent or
avoid.

       

      Notices to holders
of the Series 1 Class B Shares in uncertificated form, including notices for
general meetings of holders of Series 1 Class B Shares, will be published in
accordance with the operating procedures for the time being of CREST and the
Regulations.

       

      In addition, if and
for so long as the Series 1 Class B Shares are listed and admitted to trading on
any stock exchange, notices shall be given in accordance with any requirements
of such exchange.

       

      
        	
                10

              	
                Additional
      Amounts

              


      

       

      If at any time the
Company is required by a tax authority to deduct or withhold taxes from payments
made by the Company with respect to the Series 1 Class B Shares, the Company
will not pay additional amounts. As a result, the net amount received from the
Company by each holder of a Series 1 Class B Share, after the deduction or
withholding, will be less than the amount the holder would have received in the
absence of the deduction or withholding

       

      
        	
                11

              	
                Governing
      Law

              


      

       

      The creation and
issuance of the Series 1 Class B Shares and the rights attached to them shall be
governed by and construed in accordance with the laws of Scotland.

       

      
        	
                12

              	
                Registrar

              


      

       

      Computershare
Investor Services PLC located at The Pavilions, Bridgwater Road, Bristol BS99
6ZZ will maintain the register and will act as Registrar.

       

      The Company
reserves the right at any time to appoint an additional or successor registrar.
Notice of any change of registrar will be given to holders of the Series 1 Class
B Shares.

       

      
        	
                13

              	
                Further
      Issues

              


      

       

      Subject to the
adjustment provisions in paragraph 4, the Company may, at any time and from time
to time, and without any consent or sanction of the holders of the Series 1
Class B Shares, create or issue further Class B Shares (whether Series 1 or
otherwise) or other share capital ranking equal with or junior to the Series 1
Class B Shares, save that for so long as HM Treasury is the holder of any Series
1 Class B Share the 

       

      
        
          
          

        

        
          135

          
            

          

        

        
          
          

        

      

       

      Company may not
create or issue further Class B Shares or other share capital ranking equally
with the Series 1 Class B Shares (other than Ordinary Shares, the Dividend
Access Share and Further Series 1 Class B Shares issued to HM Treasury or to
holders of Series 1 Class B Shares in accordance with their terms) without the
prior written consent of HM Treasury.

       

      
        	
                14

              	
                Definitions

              


      

       

      “Additional Ordinary Shares”
has the meaning provided in paragraph 4(c);

       

      “Articles” means the articles
of association of the Company;

       

      “Board of Directors” means the
Board of Directors of the Company or a duly authorised committee of such Board
of Directors;

       

      “Business Day” means a day on
which banks are open for business in London;

       

      “business day” means, in
relation to any place, a day (other than a Saturday or Sunday) on which
commercial banks and foreign exchange markets are open for business in that
place;

       

      “Capital Distribution” has the
meaning provided in paragraph 4(b)(iii);

       

      “Capitalisation Issue Shares”
has the meaning provided in paragraph 4(a);

       

      “Class B Share Capital” means
that part of the Company’s share capital represented by Class B
Shares;

       

      “Class B Shares” means Class B
Shares (of whatever series) in the capital of the Company;

       

      “Companies Act” means the
Companies Act 2006 (as amended from time to time);

       

      “Company” means The Royal Bank
of Scotland Group plc;

       

      “Conversion Date” has the meaning provided in paragraph
4(h);

       

      “Conversion
Notice” has the meaning provided in paragraph
4(h);

       

      “Conversion
Period” has the meaning provided in paragraph
4(a);

       

      “Conversion
Price” means £0.50 per
Ordinary Share, subject to adjustment from time to time as provided in paragraph
4(b);

       

      “Conversion Right” has the
meaning provided in paragraph 4(a);

       

      “CREST” means the system for
the paperless settlement of trades and holding of uncertificated securities
operated by Euroclear UK & Ireland Limited, the operator of CREST (in
accordance with the Regulations) (or any successor), or any other relevant
system under the Regulations;

       

      “Current Market Price” means,
in respect of an Ordinary Share at a particular date, the average of the daily
Volume Weighted Average Price of an Ordinary Share on each of the five
consecutive dealing days ending on the dealing day immediately preceding such
date; provided that if at any time during the said five-dealing-day period the
Volume Weighted Average 

       

      
        
          
          

        

        
          136

          
            

          

        

        
          
          

        

      

       

      Price shall have
been based on a price ex-Dividend (or ex- any other entitlement) and during some
other part of that period the Volume Weighted Average Price shall have been
based on a price cum-Dividend (or cum- any other entitlement, including for this
purpose any Ordinary Share Bonus Issue), then:

       

      
        	
                 
      

              	
                (a)

              	
                if the
      Ordinary Shares to be created, issued or transferred and delivered do not
      rank for the Dividend (or entitlement) in question, the Volume Weighted
      Average Price on the dates on which the Ordinary Shares shall have been
      based on a price cum-Dividend (or cum- any other entitlement) shall for
      the purpose of this definition be deemed to be the amount thereof reduced
      by an amount equal to the Fair Market Value of any such Dividend or
      entitlement per Ordinary Share as at the date of the first public
      announcement of such Dividend or entitlement, in any such case, determined
      on a gross basis and disregarding any withholding or deduction required to
      be made on account of tax, and disregarding any associated tax credit;
      or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                if the
      Ordinary Shares to be created, issued or transferred and delivered do rank
      for the Dividend (or entitlement) in question, the Volume Weighted Average
      Price on the dates on which the Ordinary Shares shall have been based on a
      price ex-Dividend (or ex- any other entitlement) shall for the purpose of
      this definition be deemed to be the amount thereof increased by an amount
      equal to the Fair Market Value of any such Dividend or entitlement per
      Ordinary Share as at the date of the first public announcement of such
      Dividend or entitlement, in any such case, determined on a gross basis and
      disregarding any withholding or deduction required to be made on account
      of tax, and disregarding any associated tax
  credit,

              


      

       

      and provided
further that if on each of the said five dealing days the Volume Weighted
Average Price shall have been based on a price cum-Dividend (or cum- any other
entitlement) in respect of a Dividend (or other entitlement) which has been
declared or announced but the Ordinary Shares to be created, issued or
transferred and delivered do not rank for that Dividend (or other entitlement)
the Volume Weighted Average Price on each of such dates shall for the purposes
of this definition be deemed to be the amount thereof reduced by an amount equal
to the Fair Market Value of any such Dividend or entitlement per Ordinary Share
as at the date of the first public announcement of such Dividend or entitlement,
in any such case, determined on a gross basis and disregarding any withholding
or deduction required to be made on account of tax, and disregarding any
associated tax credit,

       

      and provided
further that, if the Volume Weighted Average Price of an Ordinary Share is not
available on one or more of the said five dealing days (disregarding for this
purpose the proviso to the definition of Volume Weighted Average Price), then
the average of such Volume Weighted Average Prices which are available in that
five-dealing-day period shall be used (subject to a minimum of two such prices)
and if only one, or no, such Volume Weighted Average Price is available in the
relevant period the Current Market Price shall be determined in good faith by an
Independent Financial Adviser (acting as an expert);

       

      “dealing day” means a day on
which the Relevant Stock Exchange or relevant market is open for business and on
which Ordinary Shares, Securities or Spin-Off Securities (as the case may be)
may be dealt in (other than a day on which the Relevant Stock Exchange or
relevant market is scheduled to or does close prior to its regular weekday
closing time);

       

      
        
          
          

        

        
          137

          
            

          

        

        
          
          

        

      

       

      “Directors” means the executive
and non-executive directors of the Company who make up its board of
directors;

       

      “Dividend” means, in relation
to the Ordinary Shares, any dividend or distribution to Shareholders (including
a Spin-Off) whether of cash, assets or other property, and however described and
whether payable out of share premium account, profits, retained earnings or any
other capital or revenue reserve or account, and including a distribution or
payment to holders upon or in connection with a reduction of capital (and for
these purposes a distribution of assets includes without limitation an issue of
Ordinary Shares or other Securities credited as fully or partly paid up by way
of capitalisation of profits or reserves), provided that:

       

      
        	
                 
      

              	
                (a)

              	
                where a
      Dividend in cash is announced which is to be, or may at the election of a
      Shareholder or Shareholders be, satisfied by the issue or delivery of
      Ordinary Shares or other property or assets, or where a capitalisation of
      profits or reserves is announced which is to be, or may at the election of
      a Shareholder or Shareholders be, satisfied by the payment of cash, then
      the Dividend in question shall be treated as a Dividend in cash of the
      greater of (i) such cash amount and (ii) the Current Market Price of such
      Ordinary Shares or, as the case may be, the Fair Market Value of such
      other property or assets (as at the date of the first public announcement
      of such Dividend or capitalisation (as the case may be) or, if later, the
      date on which the number of Ordinary Shares (or amount of property or
      assets, as the case may be) which may be created. issued or transferred
      and delivered is determined);

              


      

       

      
        	
                 
      

              	
                (b)

              	
                any Ordinary
      Share Bonus Issue shall be disregarded;
and

              


      

       

      (c)       any
issue of Ordinary Shares falling within paragraph 4(b)(ii) shall be
disregarded;

       

      “Dividend Access Share” means
the Series 1 Dividend Access Share of 1 pence in the capital of the
Company;

       

      “Effective Date” has, for the
purpose of any paragraph in which such expression is used, the meaning given in
the relevant paragraph;

       

      “Effective Date relating to such
Dividend or entitlement” means (for the purposes of the definition of
“Current Market Price”) the first date on which the Ordinary Shares are traded
ex- the relevant Dividend or entitlement on the Relevant Stock
Exchange;

       

      “Employee Share Scheme” means a
scheme for encouraging or facilitating the holding of shares in or debentures of
the Company or any Subsidiary by or for the benefit of: (a) the bona fide
employees or former employees of the Company or any other member of the Group
(including ABN AMRO Holding N.V. and its subsidiaries from time to time) or (b)
the spouses, civil partners, surviving spouses, surviving civil partners, or
minor children or step-children of such employees or former
employees;

       

      “equity share capital” means,
in relation to any entity, its issued share capital excluding any part of that
capital which, neither as respects dividends nor as respects capital, carries
any right to participate beyond a specific amount in a
distribution;

       

      “Fair Market Value” means, with
respect to any property on any date, the fair market value of that property as
determined in good faith by an Independent Financial Adviser (acting as an
expert) provided that (i) the Fair Market Value of a Dividend in cash shall be
the amount of such cash; (ii) the Fair Market Value of any other cash amount
shall be 

       

      
        
          
          

        

        
          138

          
            

          

        

        
          
          

        

      

       

      the amount of such
cash; (iii) where Securities, Spin-Off Securities, options, warrants or other
rights are publicly traded in a market of adequate liquidity (as determined by
an Independent Financial Adviser, acting as an expert), the Fair Market Value
(a) of such Securities or Spin-Off Securities shall equal the arithmetic mean of
the daily Volume Weighted Average Prices of such Securities or Spin-Off
Securities and (b) of such options, warrants or other rights shall equal the
arithmetic mean of the daily closing prices of such options, warrants or other
rights, in the case of both (a) and (b) during the period of five dealing days
on the relevant market commencing on such date (or, if later, the first such
dealing day such Securities, Spin-Off Securities, options, warrants or other
rights are publicly traded) or such shorter period as such Securities, Spin-Off
Securities, options, warrants or other rights are publicly traded; (iv) where
Securities, Spin-Off Securities, options, warrants or other rights are not
publicly traded (as aforesaid) or if the fair market value of such publicly
traded securities cannot be determined as provided in (iii) after a period of 15
calendar days following the relevant date, the Fair Market Value of such
Securities, Spin-Off Securities, options, warrants or other rights shall be
determined in good faith by an Independent Financial Adviser (acting as an
expert), on the basis of a commonly accepted market valuation method and taking
account of such factors as it considers appropriate, including the market price
per Ordinary Share, the dividend yield of an Ordinary Share, the volatility of
such market price, prevailing interest rates and the terms of such Securities,
Spin-Off Securities, options, warrants or other rights, including as to the
expiry date and exercise price (if any) thereof. Such amounts shall, in the case
of (i) above, be translated into the Relevant Currency (if declared or paid or
payable in a currency other than the Relevant Currency) at the rate of exchange
used to determine the amount payable to Shareholders who were paid or are to be
paid or are entitled to be paid the Dividend in cash in the Relevant Currency;
and in any other case, shall be translated into the Relevant Currency (if
expressed in a currency other than the Relevant Currency) at the Prevailing Rate
on that date. In addition, in the case of (i) and (ii) above, the Fair Market
Value shall be determined on a gross basis and disregarding any withholding or
deduction required to be made on account of tax, and disregarding any associated
tax credit;

       

      “FSA” means the Financial
Services 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 supervisory authority over the Group
in respect of any banking business carried on;

       

      “Further Series 1 Class B
Shares” means any further Series 1 Class B Shares issued pursuant to
paragraph 13 and consolidated and forming a single series with the then Series 1
Class B Shares in issue;

       

      “Group” means the Company and
its subsidiary undertakings;

       

      “HM Treasury” means The
Commissioners of Her Majesty’s Treasury of, as at the Issue Date, 1 Horse Guards
Road, London SW1A 2HQ;

       

      “in certificated form” means a
share or other security which is not in uncertificated form;

       

      “Independent Financial Adviser”
means an independent financial institution of international repute appointed at
its own expense by the Company and, to the extent that HM Treasury or its
nominee is a holder of more than 50% of the outstanding Series 1 Class B Shares
at the relevant time, approved in writing by HM Treasury (such approval not to
be unreasonably withheld or delayed);

       

      
        
          
          

        

        
          139

          
            

          

        

        
          
          

        

         

      

      “Issue Date” means [●] 2009
and, as applicable, any other date on which Further Series 1 Class B Shares may
be issued;

       

      “London Stock Exchange” means
the London Stock Exchange plc;

       

      “Newco Scheme” means a scheme
of arrangement or analogous proceeding (“Scheme of Arrangement”) which
effects the interposition of a limited liability company (“Newco”) between the
Shareholders of the Company immediately prior to the Scheme of Arrangement (the
“Existing Shareholders”)
and the Company; provided that (i) only ordinary shares of Newco or depositary
or other receipts or certificates representing ordinary shares of Newco are
issued to Existing Shareholders; (ii) immediately after completion of the Scheme
of Arrangement the only shareholders of Newco or, as the case may be, the only
holders of depositary or other receipts or certificates representing ordinary
shares of Newco are Existing Shareholders; (iii) immediately after completion of
the Scheme of Arrangement, Newco is (or one or more wholly-owned Subsidiaries of
Newco are) the only shareholder of the Company; (iv) all Subsidiaries of the
Company immediately prior to the Scheme of Arrangement (other than Newco, if
Newco is then a Subsidiary of the Company) are Subsidiaries of the Company (or
of Newco) immediately after the Scheme of Arrangement; and (v) immediately after
completion of the Scheme of Arrangement the Company (or Newco) holds, directly
or indirectly, the same percentage of the ordinary share capital and equity
share capital of those Subsidiaries as was held by the Company immediately prior
to the Scheme of Arrangement;

       

      “Non-Cash Dividend” has the
meaning provided in paragraph 4(b)(iii);

       

      “Non-Voting Deferred Share Series
B” has the meaning provided in paragraph 4(a);

       

      “Ordinary Share Bonus Issue”
means, in relation to the Ordinary Shares, an issue of Ordinary Shares credited
as fully paid to the relevant Shareholders by way of capitalisation of profits
or reserves and where such Ordinary Shares are, or are expressed to be, issued
in lieu of a dividend (whether a cash dividend equivalent or other amount is
announced or would otherwise be payable to Shareholders, whether at their
election or otherwise);

       

      “Ordinary Shares” means the
ordinary shares of the Company of 25 pence nominal each as at the Issue
Date;

       

      “Parity Securities” means (i)
the Ordinary Shares of the Company and (ii) any other securities of the Company
or any other member of the Group ranking or expressed to rank pari passu with the Ordinary
Shares and/or the Series 1 Class B Shares on a return of capital or distribution
of assets on a winding-up, either issued by the Company or, where issued by
another member of the Group, where the terms of the securities benefit from a
guarantee or support agreement entered into by the Company which ranks or is
expressed to rank pari
passu with the Ordinary Shares and/or the Series 1 Class B Shares on a
return of capital or distribution of assets on a winding-up;

       

      “Prevailing Rate” means, in
respect of any currencies on any day, the spot rate of exchange between the
relevant currencies prevailing as at or about 12 noon (London time) on that date
as appearing on or derived from the Relevant Page or, if such a rate cannot be
determined at such time, the rate prevailing as at or about 12 noon (London
time) on the immediately preceding day on which such rate can be so
determined;

       

      “record date” means, in respect
of any entitlement to receive a dividend or other distribution declared, paid or
made, or any rights granted, the record date or other due date for the
establishment of the relevant entitlement;“Reference Date” means, in


       

      
        
          
          

        

        
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      relation to a
Retroactive Adjustment, the date as of which the relevant Retroactive Adjustment
takes effect or, if that is not a dealing day, the next following dealing
day;

       

      “Registrar” is Computershare
Investor Services PLC;

       

      “Regulations” means the
Uncertificated Securities Regulations 2001 (SI 2001 No. 2001/3755);

       

      “Relevant Amount” means £0.50
per Series 1 Class B Share, subject to adjustment from time to time as provided
in paragraph 4(l);

       

      “Relevant Currency” means
sterling or, if at the relevant time or for the purposes of the relevant
calculation or determination, the London Stock Exchange is not the Relevant
Stock Exchange, the currency in which the Ordinary Shares are quoted or dealt in
on the Relevant Stock Exchange at such time;

       

      “Relevant Page” means the
relevant page on Bloomberg or such other information service provider selected
by the Company that displays the relevant information;

       

      “Relevant Shares” means such
Series 1 Class B Shares as are due to be converted on any Conversion Date and
excludes any Capitalisation Issue Shares;

       

      “Relevant Stock Exchange” means
the London Stock Exchange or, if at the relevant time the Ordinary Shares are
not at that time listed and admitted to trading on the London Stock Exchange,
the principal stock exchange or securities market on which the Ordinary Shares
are then listed, admitted to trading or quoted or dealt in;

       

      “Retroactive Adjustment” has
the meaning provided in paragraph 4(c);

       

      “Scheme of Arrangement” has the
meaning provided in the definition of “Newco Scheme”;

       

      “Securities” means any
securities including, without limitation, Ordinary Shares, or options, warrants
or other rights to subscribe for or purchase or acquire Ordinary
Shares;

       

      “Series 1 Class B Dividend” has
the meaning provided in paragraph 2.1;

       

      “Series 1 Class B Shares” means
the 51,000,000,000 Series 1 Class B Shares of the Company with a nominal value
of £0.01 each, together with any Further Series 1 Class B Shares issued by the
Company from time to time;

       

      “Series 1 Class B Dividend Trigger
Event” has the meaning given to such term in the terms of issue of the
Dividend Access Share;

       

      “Shareholders” means the
person(s) in whose name(s) Ordinary Shares are for the time being registered in
the register of Ordinary Share ownership maintained by or on behalf of the
Company;

       

      “Specified Date” has, for the
purpose of any paragraph in which such expression is used, the meaning given in
the relevant paragraph;

       

      “Spin-Off” means:

                  

      
        	 	(a)	
                a distribution of Spin-Off
      Securities by the Company to Shareholders as a class; 

                 

                or

              
	 	 	 
	
                 
      

              	
                (b)

              	
                any issue,
      transfer or delivery of any property or assets (including cash or shares
      or securities of or in or issued or allotted by any entity) by any entity
      (other than 

              


      

       

      
        
          
          

        

        
          141

          
            

          

        

        
          
          

        

         

      

      the Company) to
Shareholders as a class, or in the case of or in connection with a Newco Scheme,
Existing Shareholders as a class (but excluding the issue and allotment of
ordinary shares by Newco to Existing Shareholders as a class), pursuant in each
case to any arrangements with the Company or any of its
Subsidiaries;

       

      “Spin-Off Securities” means
equity share capital of an entity other than the Company or options, warrants or
other rights to subscribe for or purchase equity share capital of an entity
other than the Company;

       

      “sterling” means the lawful
currency of the United Kingdom from time to time;

       

      “Subsidiary” has the meaning
provided in Section 1159 of the Companies Act;

       

      “subsidiary undertaking” has
the meaning provided in Section 1162 of the Companies Act;

       

      “UK Listing Authority” means
the Financial Services Authority in its capacity as competent authority for the
purposes of the Financial Services and Markets Act 2000;

       

      “uncertificated form” or “in uncertificated form” means,
when used in relation to shares, shares recorded on the relevant register as
being held in uncertificated form in CREST and title to which, by virtue of the
Regulations, may be transferred by means of CREST;

       

      “Volume Weighted Average Price”
means, in respect of an Ordinary Share, Security or, as the case may be, a
Spin-Off Security on any dealing day, the order book volume-weighted average
price of an Ordinary Share, Security or, as the case may be, a Spin-Off Security
published by or derived (in the case of an Ordinary Share) from Bloomberg page
RBS LN EQUITY VAP or (in the case of a Security (other than Ordinary Shares) or
Spin-Off Security) from the principal stock exchange or securities market on
which such Securities or Spin-Off Securities are then listed or quoted or dealt
in, if any, or, in any such case, such other source as shall be determined to be
appropriate by an Independent Financial Adviser (acting as an expert) on such
dealing day, provided that, if on any such dealing day such price is not
available or cannot otherwise be determined as provided above, the Volume
Weighted Average Price of an Ordinary Share, Security or a Spin-Off Security, as
the case may be, in respect of such dealing day shall be the Volume Weighted
Average Price, determined in good faith by an Independent Financial Adviser
(acting as an expert); and

       

      “Winding Up Ratio” has the
meaning provided in paragraph 3.

       

      References to any
issue or offer or grant to Shareholders “as a class” or “by way of rights” shall be
taken to be references to an issue or offer or grant to all or substantially all
Shareholders, other than Shareholders to whom, by reason of the laws of any
territory or requirements of any recognised regulatory body or any other stock
exchange or securities market in any territory or in connection with fractional
entitlements, it is determined not to make such issue or offer or
grant.

       

      In making any
calculation or determination of Current Market Price or Volume Weighted Average
Price, such adjustments (if any) shall be made as an Independent Financial
Adviser considers appropriate to reflect any consolidation or sub-division of
the Ordinary Shares or any issue of Ordinary Shares by way of capitalisation of
profits or reserves, or any like or similar event.

       

      
        
          
          

        

        
          142

          
            

          

        

        
          
          

        

      

       

      For the purposes of
paragraphs 4(a), (b), (c), (i), (j) and (k) only, (a) references to
the “issue” of Ordinary
Shares or Ordinary Shares being “issued” shall include the
transfer and/or delivery of Ordinary Shares, whether newly issued and allotted
or previously existing or held by or on behalf of the Company or any of its
Subsidiaries, and (b) Ordinary Shares held by or on behalf of the Company or any
of its respective Subsidiaries (and which, in the case of paragraph 4(b)(iv) and (vi), do not rank
for the relevant right or other entitlement) shall not be considered as or
treated as “in issue” or
“issued” or entitled to
receive the relevant Dividend, right or other entitlement.

       

      References to
listing on the London Stock Exchange (or like or similar references) shall be
construed as admission to the Official List of the UKLA and admission to trading
on the EEA Regulated Market of the London Stock Exchange (being a market as
defined by Article 4.1(14) of Directive 2004/39/EC of the European Parliament
and of the Council on markets in financial instruments).

       

      
        
          
          

        

        
          143

          
            

          

        

        
          
          

        

      

      


       

      


       

      SCHEDULE
7

       

      DIVIDEND
ACCESS SHARE TERMS

       

      Terms
of Issue of the RBSG Series 1 Dividend Access Share

       

       

      
        	
                1

              	
                General

              


      

       

      The Series 1
Dividend Access Share will have a nominal value of £0.01 and will be fully paid
up at issue. The Series 1 Dividend Access Share will be issued in registered
form and will be held in certificated form. Temporary documents of title in
relation to the Series 1 Dividend Access Share in certificated form will not be
issued pending despatch by post of a definitive certificate. Capitalised terms
used and not otherwise defined herein shall have the respective meanings
ascribed thereto in paragraph 16 below.

       

       

      
        	
                2

              	
                Series
      1 Dividend Access Share Dividends

              


      

       

      
        	
                2.1

              	
                Subject to
      the discretions, limitations and qualifications set out herein,
      non-cumulative dividends on the Series 1 Dividend Access Share will be
      payable from the date the Company issues the Series 1 Dividend Access
      Share in respect of the period up to and including the Series 1 Class B
      Dividend Stop Date (if any). The Company will pay dividends when, as and
      if declared by the Board of Directors. Subject to the discretions,
      limitations and qualifications set out herein, the Series 1 Dividend
      Access Share shall entitle the holder thereof to receive out of the
      distributable profits of the Company a non-cumulative dividend (the “Dividend Access Share
      Dividend”), in priority to the payment of any dividend to the
      holders of any class of Ordinary Share or Class B Shares and pari passu in such
      regard with the holders of any other Dividend Access Shares then in
      issue.

              


      

       

      The Board of
Directors shall, by 31 October in each financial year of the Company, decide
whether or not to pay an interim dividend on the Ordinary Shares or make an
interim Ordinary Share Bonus Issue in that financial year. If it is decided that
an interim dividend on the Ordinary Shares or an interim Ordinary Share Bonus
Issue is to be paid or made in any financial year, the corresponding semi-annual
(hereinafter referred to as “first semi-annual”) Dividend
Access Share Dividend or Bonus Issue on the Series 1 Dividend Access Share in
the same financial year will be paid or made at the time set out below. The
record date for any first semi-annual Dividend Access Share Dividend or Bonus
Issue on the Series 1 Dividend Access Share shall be the same as the record date
for any interim dividend on the Ordinary Shares or interim Ordinary Share Bonus
Issue in the relevant financial year or otherwise shall be three Business Days
before 31 October in each year. If paid or made, the first semi-annual Dividend
Access Share Dividend or Bonus Issue on the Series 1 Dividend Access Share in a
financial year will be paid or made on the same date that the corresponding
interim dividend on the Ordinary Shares is paid or interim Ordinary Share Bonus
Issue is made. If it is decided that no such interim dividend on the Ordinary
Shares or interim Ordinary Share Bonus Issue will be paid or made in a financial
year, the first semi-annual Dividend Access Share Dividend or Bonus Issue on the
Series 1 Dividend Access Share in such financial year will, if to be paid or
made, be so paid or made on 31 October in such financial year (commencing in
2010). Any first semi-annual Dividend Access Share Dividend will only


       

      
        
          
          

        

        
          144

          
            

          

        

        
          
          

        

      

       

      be paid if (to the
extent legally required) profits are available for distribution and are
permitted by law to be distributed.

       

      The Board of
Directors shall, by 31 May in each financial year of the Company, decide whether
or not to recommend a dividend on the Ordinary Shares or make an Ordinary Share
Bonus Issue which
is expressed to be a final dividend for the immediately
preceding financial year. If it is decided that such a dividend on the Ordinary
Shares or Ordinary Share Bonus Issue is to be recommended and is subsequently
approved by Shareholders, the corresponding semi-annual (hereinafter referred to
as “second semi-annual”)
Dividend Access Share Dividend or Bonus Issue on the Series 1 Dividend Access
Share expressed to be for the corresponding period will be paid at the time set
out below. The record date for any second semi-annual Dividend Access Share
Dividend or Bonus Issue on the Series 1 Dividend Access Share shall be the same
as the record date for any final dividend on the Ordinary Shares or final
Ordinary Share Bonus Issue for the relevant financial year or otherwise shall be
three Business Days before 31 May in each year. If paid or made, the second
semi-annual Dividend Access Share Dividend or Bonus Issue on the Series 1
Dividend Access Share in a financial year will be paid or made on the same date
that the corresponding final dividend on the Ordinary Shares is paid or final
Ordinary Share Bonus Issue is made. If it is decided that no such final dividend
on the Ordinary Shares or Ordinary Share Bonus Issue will be paid or made in any
year (the “current
year”) for the immediately preceding financial year, any second
semi-annual Dividend Access Share Dividend or Bonus Issue on the Series 1
Dividend Access Share expressed to be for the corresponding period will, if to
be paid or made, be so paid or made on 31 May in the current year (commencing in
2010). Any second semi-annual Dividend Access Share Dividend will only be paid
if (to the extent legally required) profits are available for distribution and
are permitted by law to be distributed.

       

      If paid or made,
the first semi-annual Dividend Access Share Dividend on the Series 1 Dividend
Access Share shall be equivalent to (A) the greater of:

       

      (1) 7 per
cent. of the Reference Amount multiplied by the actual number of days in the
period from (but excluding) the immediately preceding Relevant Date or, if none,
the Issue Date to (and including) the current Relevant Date or, if there has
occurred prior to such current Relevant Date a Series 1 Class B Dividend Stop
Date in respect of any Series 1 Class B Shares, then in respect of those Series
1 Class B Shares, to (and including) such earlier Series 1 Class B Dividend Stop
Date, divided by 365 (or 366 in a leap year) and

       

      (2) if a cash
dividend or cash dividends on the Ordinary Shares or Ordinary Share Bonus
Issue(s) is/are paid or made in the period from (but excluding) the immediately
preceding Relevant Date or, if none, the Issue Date to (and including) the
current Relevant Date or, if there has occurred prior to such current Relevant
Date a Series 1 Class B Dividend Stop Date in respect of any Series 1 Class B
Shares, then in respect of those Series 1 Class B Shares, to (and including)
such earlier Series 1 Class B Dividend Stop Date, 250 per cent. (as adjusted
from time to time as provided below, the “Participation Rate”) of the
aggregate Fair Market Value of such cash dividend(s) or Ordinary Share Bonus
Issue(s) per Ordinary Share multiplied by the then Reference Series 1 Class B
Shares Number. Where a dividend in cash is announced which may at the election
of a Shareholder or Shareholders be satisfied by the issue or delivery of
Ordinary Shares in an Ordinary Share Bonus Issue, or where an Ordinary Share
Bonus Issue is announced which may at the election of a Shareholder or
Shareholders be satisfied by the payment of cash, then the Fair Market Value of
such dividend or 

       

      
        
          
          

        

        
          145

          
            

          

        

        
          
          

        

      

       

      Ordinary Share
Bonus Issue shall be deemed to be the amount of the dividend in cash or of the
payment in cash (as the case may be),

       

      less (B) the Fair
Market Value of the aggregate amount of any dividend or distribution paid or
made on the Series 1 Class B Shares and/or on any Ordinary Shares issued on
conversion of the Series 1 Class B Shares (regardless of who holds such Series 1
Class B Shares or Ordinary Shares at the relevant time) in the period from (but
excluding) the immediately preceding Relevant Date or, if none, the Issue Date
to (and including) the current Relevant Date (or, if there has occurred prior to
such current Relevant Date a Series 1 Class B Dividend Stop Date in respect of
any Series 1 Class B Shares, then in respect of those Series 1 Class B Shares to
(and including) such earlier Series 1 Class B Dividend Stop Date), provided that
the first semi-annual Dividend Access Share Dividend shall never be less than
zero.

       

      If paid or made,
the second semi-annual Dividend Access Share Dividend on the Series 1 Dividend
Access Share shall be equivalent to (A) the greater of:

       

      (1) 7 per cent. of
the Reference Amount multiplied by the actual number of days in the period from
(but excluding) the Relevant Date falling on (or nearest to) one year prior to
the current Relevant Date or, if none, the Issue Date to (and including) the
current Relevant Date or, if there has occurred prior to such current Relevant
Date a Series 1 Class B Dividend Stop Date in respect of any Series 1 Class B
Shares, then in respect of those Series 1 Class B Shares, to (and including)
such earlier Series 1 Class B Dividend Stop Date, divided by 365 (or 366 in a
leap year) and

       

      (2) if a cash
dividend or cash dividends on the Ordinary Shares or Ordinary Share Bonus
Issue(s) is/are paid or made in the period from (but excluding) the Relevant
Date falling on (or nearest to) one year prior to the current Relevant Date or,
if none, the Issue Date to (and including) the current Relevant Date or, if
there has occurred prior to such current Relevant Date a Series 1 Class B
Dividend Stop Date in respect of any Series 1 Class B Shares, then in respect of
those Series 1 Class B Shares, to (and including) such earlier Series 1 Class B
Dividend Stop Date, the Participation Rate of the aggregate Fair Market Value of
such cash dividend(s) or Ordinary Share Bonus Issue(s) per Ordinary Share
multiplied by the then Reference Series 1 Class B Shares Number. Where a
dividend in cash is announced which may at the election of a Shareholder or
Shareholders be satisfied by the issue or delivery of Ordinary Shares in an
Ordinary Share Bonus Issue, or where an Ordinary Share Bonus Issue is announced
which may at the election of a Shareholder or Shareholders be satisfied by the
payment of cash, then the Fair Market Value of such dividend or Ordinary Share
Bonus Issue shall be deemed to be the amount of the dividend in cash or of the
payment in cash (as the case may be),

       

      less (B) the Fair
Market Value of the aggregate amount of any dividend or distribution paid or
made on the Series 1 Class B Shares and/or on any Ordinary Shares issued on
conversion of the Series 1 Class B Shares (regardless of who holds such Series 1
Class B Shares or Ordinary Shares at the relevant time) in the period from (but
excluding) the Relevant Date falling on (or nearest to) one year prior to the
current Relevant Date or, if none, the Issue Date to (to including) the current
Relevant Date (or, if there has occurred prior to such current Relevant Date a
Series 1 Class B Dividend Stop Date in respect of any Series 1 Class B Shares,
then in respect of those Series 1 Class B Shares to (and including) such earlier
Series 1 Class B Dividend Stop Date)and less the Fair Market Value of the
immediately preceding first semi-annual Dividend Access Share 

       

      
        
          
          

        

        
          146

          
            

          

        

        
          
          

        

      

       

      Dividend or Bonus
Issue paid or made (if any), provided that the second semi-annual Dividend
Access Share Dividend shall never be less than zero.

       

      If the
Participation Rate is adjusted during the course of a financial year, the amount
of the semi-annual Dividend Access Share Dividend in such financial year, if
determined by reference to the Participation Rate, shall itself be adjusted in
such manner as the Independent Financial Adviser (acting as an expert) considers
appropriate to take account of the date(s) on which the adjustment(s) to the
Participation Rate become effective. A written opinion of the Independent
Financial Adviser in respect thereof shall be conclusive and binding on all
parties, save in the case of manifest error.

       

      The initial
Participation Rate is 250 per cent. Upon the happening of any of the events in
respect of which the Series 1 Class B Share Conversion Price or the Series 1
Class B Share Relevant Amount shall be adjusted as provided in:

       

      (i) sub-paragraphs
4(b)(i) to (x)
(inclusive) of the Series 1 Class B Share Terms (subject to  the
provisions of the last paragraph of paragraph 4(a) of the Series 1 Class B
Share Terms), the Participation Rate shall also be adjusted at the same time as
follows:

       

      

       

      and

       

      (ii) paragraph
4(l) of the Series 1
Class B Share Terms (subject to paragraph 4(a) of the Series 1 Class B
Share Terms), the Participation Rate shall also be adjusted at the same time as
follows:

       

      

       

      where:

       

      NPR means the new
Participation Rate, following such adjustment;

       

      OPR means the old
Participation Rate, immediately prior to such adjustment;

       

      NCP means the new
Series 1 Class B Share Conversion Price following such adjustment;

       

      OCP means the old
Series 1 Class B Share Conversion Price, immediately prior to such
adjustment;

       

      NRA means the new
Series 1 Class B Share Relevant Amount following such adjustment;
and

       

      ORA means the old
Series 1 Class B Share Relevant Amount, immediately prior to such
adjustment

       

      
        	
                2.2

              	
                The Company
      shall, upon determining any dividend pursuant to this paragraph 2, cause
      the amount thereof to be notified to the holders of Series 1 Dividend
      Access Share in accordance with paragraph
11.

              


      

       

      
        
          
          

        

        
          147

          
            

          

        

        
          
          

        

      

       

      
        	
                2.3

              	
                In the event
      of a change to the accounting reference date of the Company, the
      references in this paragraph 2 to (i) 31 May shall be deemed to be changed
      to such date as falls five months after the new accounting reference date
      and (ii) 31 October shall be deemed to be changed to such date as falls
      ten months after the new accounting reference
  date.

              


      

       

      In the event of a
change in accounting reference date from 31 December, the Company shall make
such other changes to the dividend payment arrangements described above as,
following consultation with an Independent Financial Adviser (acting as an
expert), it determines are fair and reasonable to take account of any initial
stub period(s) when the new accounting reference date is
introduced.

       

      In the event of a
change in the frequency of dividend payments on the Ordinary Shares such that
they are not paid semi-annually consistent with the payment of Dividend Access
Share Dividends on the Series 1 Dividend Access Share, the Company shall make
such changes to the Dividend Access Share Dividend payment arrangements
described in this paragraph 2 as, following consultation with the Independent
Financial Adviser (acting as an expert), it determines are fair and reasonable
to take account of such changed frequency.

       

      
        	
                2.4

              	
                Non-cumulative
      dividends on the Series 1 Dividend Access Share are payable in respect of
      the period up to and including the Series 1 Class B Dividend Stop Date (if
      any). After the Series 1 Class B Dividend Stop Date (if any) the right of
      the holder of this Dividend Access Share to Dividend Access Share
      Dividends in respect of any Series 1 Class B Shares in issue during each
      of the 30 consecutive dealing days during which the Series 1 Class B
      Dividend Trigger Event occurs shall cease, but this is without prejudice
      to the right to Dividend Access Share Dividends in respect of any Series 1
      Class B Shares not in issue on each such
day.

              


      

       

      
        	
                2.5

              	
                If any doubt
      shall arise as to the appropriate amount of any Dividend Access Share
      Dividend, and following consultation between the Company and an
      Independent Financial Adviser, a written opinion of such Independent
      Financial Adviser in respect thereof shall be conclusive and binding on
      all parties, save in the case of manifest or proven
  error.

              


      

       

       

      
        	
                3

              	
                Payment
      of Dividend Access Share Dividends
Discretionary

              


      

       

      If, in the opinion
of the Board of Directors, the distributable profits of the Company are
sufficient to cover the payment, in full, of the Dividend Access Share Dividend
on the relevant Dividend Access Share Dividend payment date and also the payment
in full of all other dividends and other amounts stated to be payable on such
date on any Parity Securities in issue (other than the Ordinary Shares and the
Series 1 Class B Shares), the Board of Directors may:

       

      
        	
                 
      

              	
                (a)

              	
                pay in full
      the Dividend Access Share Dividend on the relevant Dividend Access Share
      Dividend payment date; or

              


      

       

      
        	
                 
      

              	
                (b)

              	
                in their sole
      and absolute discretion resolve at least 10 Business Days prior to the
      relevant Dividend Access Share Dividend payment date that no Dividend
      Access Share Dividend shall be paid or that a Dividend Access Share
      Dividend shall be paid only in
part.

              


      

       

      
        
          
          

        

        
          148

          
            

          

        

        
          
          

        

         

      

      The Board of
Directors shall not be bound to give their reasons for exercising their
discretion under this sub-paragraph. The Board of Directors may exercise their
discretion in respect of a dividend notwithstanding the previous setting aside
of a sum to provide for payment of that dividend to the extent that, in the
opinion of the Board of Directors (i) there are insufficient distributable
profits to cover the payment, in full, of the Dividend Access Share Dividend on
the relevant Dividend Access Share payment date and also the payment in full of
all other dividends and other amounts stated to be payable on such date on any
Parity Securities in issue (other than the Ordinary Shares and the Series 1
Class B Shares) or (ii) the payment of the Dividend Access Share Dividend would
breach or cause a breach of the capital adequacy requirements applicable to the
Company.

       

      If, at least 10
Business Days prior to a Dividend Access Share Dividend payment date, the Board
of Directors considers that the distributable profits of the Company are
insufficient to cover the payment in full of the Dividend Access Share Dividend
and also the payment in full of all other dividends or other amounts stated to
be payable on such Dividend Access Share Dividend payment date on any Parity
Securities (other than the Ordinary Shares and the Series 1 Class B Shares),
then the Board of Directors may pay a reduced Dividend Access Share Dividend.
This will be paid in proportion to the dividends and other amounts which would
have been due on the Series 1 Dividend Access Share and any other shares and
other instruments of the Company (other than the Ordinary Shares and the Series
1 Class B Shares) on such Dividend Access Share Dividend payment date which are
expressed to rank equally with the Series 1 Dividend Access Share as regards
participation in profits if there had been sufficient profit.

       

      The Board of
Directors may in its discretion decide that the Dividend Access Share Dividend
in any financial year will not be paid at all or will be paid only in part even
when distributable profits are available for distribution. If the Board of
Directors decides not to pay the Dividend Access Share Dividend in respect of a
period or determines that it shall be paid only in part, then the right of the
holder of the Series 1 Dividend Access Share to receive the relevant Dividend
Access Share Dividend in respect of that period will be lost either entirely or
as to the part not paid, as applicable, and the Company will have no obligation
in respect of the amount of Dividend Access Share Dividend not paid either to
pay the relevant Dividend Access Share Dividend in respect of that period or to
pay interest thereon, whether or not Dividend Access Share Dividends are paid in
respect of any future financial period.

       

      As soon as
practicable after resolving that no Dividend Access Share Dividend shall be paid
or that it shall be paid only in part, the Board of Directors shall give notice
thereof to the holder of the Series 1 Dividend Access Share in accordance with
paragraph 11.

       

      
        	
                4

              	
                Payment
      of Dividend Access Share Dividends

              


      

       

      Subject to these
terms of issue, the Company will, if to be paid, pay Dividend Access Share
Dividends out of its distributable profits in sterling. Dividend Access Share
Dividends may be paid by the Company by crediting any account which the holder
of the Series 1 Dividend Access Share, or in the case of joint holders, the
holder whose name stands first in the register in respect of the Series 1
Dividend Access Share, has with the Company, whether in the sole name of such
holder or the joint names of such holder and another person or person, unless
the Company has received not less than one 

       

      
        
          
          

        

        
          149

          
            

          

        

        
          
          

        

      

       

      month’s notice in
writing from such holder or joint holders directing that payment be made in
another manner permitted by the Articles.

       

      Any such Dividend
Access Share Dividend may be paid by any bank or other funds transfer system or,
if agreed by the Company, such other means and to or through such person, in
each case as the holder or joint holders may in writing direct.

       

      If payment in
respect of the Series 1 Dividend Access Share into any such bank account is to
be made on a Dividend Access Share Dividend payment date which is not a Business
Day, then payment of such amount will be made on the next succeeding Business
Day, without any interest or payment in respect of such delay.

       

      Payments in respect
of amounts payable by way of Dividend Access Share Dividend will be subject in
all cases to any applicable fiscal or other laws and other
regulations.

       

      If the Board of
Directors decides to pay a Dividend Access Share Dividend and either (i) no
dividend has been paid on the Ordinary Shares and/or distribution made thereon
in respect of the corresponding period or (ii) a dividend has been paid and/or a
distribution has been made on the Ordinary Shares otherwise than in cash in
respect of the corresponding period, the Board of Directors may in its
discretion determine that such Dividend Access Share Dividend shall be paid in
whole or in part by the Company issuing Series 1 Class B Shares, credited as
fully paid, to the holder of the Series 1 Dividend Access Share. The number of
such Series 1 Class B Shares to be issued to the holder shall be such number of
Series 1 Class B Shares as shall be certified by the Independent Financial
Adviser (acting as an expert) to be as nearly as possible equal to (but not
greater than) the cash amount (disregarding any tax credit) of such semi-annual
Dividend Access Share Dividend or part thereof otherwise payable to such holder
of the Series 1 Dividend Access Share, based on the Fair Market Value of a
Series 1 Class B Share at the time of such determination. A written opinion of
the Independent Financial Adviser in respect thereof shall be conclusive and
binding on all parties, save in the case of manifest error.

       

      The basis of
allotment in accordance with the immediately preceding paragraph shall be such
that the holder of the Series 1 Dividend Access Share may not receive a fraction
of a Series 1 Class B Share (for this purpose calculating entitlements on the
basis of a holder’s entire holding of Series 1 Class B Shares). The Board of
Directors may make such provisions as they think fit for any fractional
entitlements, including provisions whereby, in whole or in part, fractional
entitlements are disregarded or the benefit thereof accrues to the Company
and/or under which fractional entitlements are accrued and/or
retained.

       

      The Series 1 Class
B Shares so allotted shall rank pari passu in all respects
with the fully paid Series 1 Class B Shares then in issue save only as regards
participation in any dividend on the Series 1 Class B Shares payable by
reference to a record date falling on or prior to the date of issue of the
Series 1 Class B Shares so allotted.

       

      The new Series 1
Class B Shares issued in respect of the whole (or some part) of the relevant
dividend declared in respect of the Series 1 Dividend Access Share shall be in
certificated form unless the Company and a holder agree otherwise.

       

      The Board of
Directors may undertake and do such acts and things as they may consider
necessary or expedient for the purpose of giving effect to the provisions of
this paragraph 4.

       

      
        
          
          

        

        
          150

          
            

          

        

        
          
          

        

      

       

      
        	
                5

              	
                Restrictions
      on Dividends and Redemption

              


      

       

      If any Dividend
Access Share Dividend is not declared and paid in full in cash or otherwise, the
Company:

       

      
        	
                 
      

              	
                (i)

              	
                may not, and
      shall procure that no member of the Group shall, declare or pay dividends
      or other distributions upon any Parity Securities (whether in cash or
      otherwise, and whether payable on the same date as the relevant Dividend
      Access Share Dividend or subsequently) or make any Ordinary Share Bonus
      Issue (whether to be made on the same date as the relevant Dividend Access
      Share Dividend or subsequently), and the Company may not, and shall
      procure that no member of the Group shall, set aside any sum for the
      payment of these dividends or distributions;
or

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                may not, and
      shall procure that no member of the Group shall, redeem, purchase or
      otherwise acquire (whether on the same date as the relevant Dividend
      Access Share Dividend is payable or subsequently) for any consideration
      any of its Parity Securities or any depository or other receipts or
      certificates representing Parity Securities (other than any such purchases
      or acquisitions which are made in connection with any Employee Share
      Scheme), and (save as aforesaid) the Company may not, and shall procure
      that no member of the Group shall, set aside any sum or establish any
      sinking fund (whether on the same date as the relevant Dividend Access
      Share Dividend is payable or subsequently) for the redemption, purchase or
      other acquisition of Parity Securities or any depository or other receipts
      or certificates representing Parity
Securities,

              


      

       

      in each case until
such time as Dividend Access Share Dividends are no longer payable or payment of
Dividend Access Share Dividends in cash or otherwise has resumed in full, as the
case may be.

       

      
        	
                6

              	
                Rights
      upon Liquidation

              


      

       

      On a winding-up or
liquidation, voluntary or otherwise, the holder of the Series 1 Dividend Access
Share will rank in the application of the assets of the Company available to
shareholders: (1) equally in all respects with holders of Ordinary Shares and
Series 1 Class B Shares and any other class of shares or securities of the
Company in issue or which may be issued by the Company which rank or are
expressed to rank equally with the Series 1 Dividend Access Share, the Ordinary
Shares or the Series 1 Class B Shares on a winding-up or liquidation and (2)
junior to all other shareholders and all creditors of the Company.

       

      In such event the
holder of the Series 1 Dividend Access Share will be deemed to hold one (as
adjusted from time to time as provided below, the “Winding Up Ratio”) Ordinary
Share and will be entitled to receive out of the surplus assets of the Company
remaining after payment of all prior-ranking claims, a sum equal to that payable
to a holder of one (as adjusted) Ordinary Share in such event.

       

      The initial Winding
Up Ratio is one. Upon each adjustment of the Series 1 Class B Share Winding Up
Ratio in accordance with the Series 1 Class B Share Terms (or, if there are no
Series 1 Class B Shares outstanding at the relevant time, upon any event that
would have led to such an adjustment if there had been Series 1 Class B Shares


       

      
        
          
          

        

        
          151

          
            

          

        

        
          
          

        

      

       

      outstanding at such
time), the Winding Up Ratio shall also be adjusted at the same time and to the
same extent.

       

       

      
        	
                7

              	
                Voting

              


      

       

      The holder of the
Series 1 Dividend Access Share will only be entitled to receive notice of and to
attend any general meeting of shareholders and to speak to or vote upon any
resolution proposed at such meeting if a resolution is proposed which either
varies or abrogates any of the rights and restrictions attached to the Series 1
Dividend Access Share or proposes the winding up of the Company (and then in
each such case only to speak and vote upon any such resolution).

       

      If the holder of
the Series 1 Dividend Access Share is entitled to vote upon a resolution
proposed at a general meeting of shareholders, on a show of hands the holder of
the Series 1 Dividend Access Share or any proxy or a corporate representative
for the holder, in each case who is present in person, will have one vote. On a
poll, the holder of the Series 1 Dividend Access Share who is entitled to vote
and who is present in person, by proxy or by corporate representative, will have
one vote.

       

      Other provisions in
the Articles relating to voting procedures also apply to the Series 1 Dividend
Access Share.

       

      
        	
                8

              	
                Purchase
      of own shares

              


      

       

      For as long as the
Dividend Access Share remains in issue and the Reference Amount is greater than
zero, the Company may not purchase or otherwise acquire any of its Ordinary
Shares or other Parity Securities (other than the Series 1 Class B Shares) or
any depositary or other receipts or certificates representing Ordinary Shares or
Parity Securities (other than the Series 1 Class B Shares) other than any such
purchases or acquisitions which are made in connection with any Employee Share
Scheme or which are made from HM Treasury or its nominees.

       

      
        	
                9

              	
                Form
      and Denomination

              


      

       

      The Series 1
Dividend Access Share will, when issued, be fully paid and, as such, will not be
subject to a call for any additional payment. An amount equal to the nominal
value of £0.01 of the Series 1 Dividend Access Share will be credited to the
Company’s issued share capital account.

       

      The Series 1
Dividend Access Share will be issued in registered form to HM Treasury or its
nominee. The Series 1 Dividend Access Share shall not be
transferable.

       

      Title to the Series
1 Dividend Access Share will be evidenced by registration on the register of
members of the Company in accordance with the Articles.

       

      See “Registrar”
below.

       

       

      
        	
                10

              	
                Variation
      of Rights

              


      

       

      The rights,
preferences and privileges attached to the Series 1 Dividend Access Share may be
varied or abrogated in accordance with the Articles (including Article 6). In
addition, the Company may make such changes to the terms of issue of the Series
1 Dividend Access Share as it, in its sole discretion, deems necessary in order
to ensure that the Series 1 

       

      
        
          
          

        

        
          152

          
            

          

        

        
          
          

        

      

       

      Dividend Access
Share continues to count as core tier 1 capital for the purposes of regulatory
requirements applicable to it, and such changes may be made without the consent
of the holder of the Series 1 Dividend Access Share. The Company will notify the
holder of the Series 1 Dividend Access Share in accordance with paragraph 11 if
it makes any such changes.

       

      Subject as provided
in paragraph 15, the rights attached to the Series 1 Dividend Access Share will
not be deemed to be varied by the creation or issue of (a) any further Dividend
Access Shares or any other Parity Securities or any other share capital ranking
equally with or junior to the Series 1 Dividend Access Share or (b) any
preference shares, in each case whether carrying identical rights or different
rights in any respect, including as to dividend, premium or entitlement on a
return of capital, redemption or conversion and whether denominated in sterling
or any other currency. Any further Dividend Access Shares, any other Parity
Securities or any other share capital ranking equal with or junior to the
Dividend Access Share may either carry identical rights in all respects with the
Series 1 Dividend Access Share or carry different rights.

       

      
        	
                11

              	
                Notices

              


      

       

      Notices given by
the Company will be given by the Registrar on its behalf unless the Company
decides otherwise.

       

      A notice may be
given by the Company to the holder of the Series 1 Dividend Access Share in
certificated form by sending it by post to the holder’s registered address.
Service of the notice shall be deemed to be effected by properly addressing,
prepaying and posting a letter by first class post containing the notice, and to
have been effected on the day after the letter containing the same is posted.
Where the holder’s registered address is outside the United Kingdom, all notices
shall be sent to him by air mail post.

       

      A notice may be
given by the Company to the joint holders of the Series 1 Dividend Access Share
by giving the notice to the joint holder first named in the register. A notice
may be given by the Company to the extent permitted by the Companies Act by
electronic communication, if so requested or authorised by the holder, the
holder having notified the Company of an e-mail address to which the Company may
send electronic communications, and having agreed to receive notices and other
documents from the Company by electronic communication. If the holder notifies
the Company of an e-mail address, the Company may send the holder the notice or
other document by publishing the notice or other document on a website and
notifying the holder by e-mail that the notice or other document has been
published on the website. The Company must also specify the address of the
website on which it has been published, the place on the website where the
notice may be accessed and how it may be accessed, and where the notice in
question is a notice of a meeting, the notice must continue to be published on
that website throughout the period beginning with the giving of that
notification and ending with the conclusion of the meeting, save that if the
notice is published for part only of that period then failure to publish the
notice throughout that period shall not invalidate the proceedings of the
meeting where such failure is wholly attributable to circumstances which it
would not be reasonable to have expected the Company to prevent or
avoid.

       

      
        
          
          

        

        
          153

          
            

          

        

        
          
          

        

      

       

      
        	
                12

              	
                Additional
      Amounts

              


      

       

      If at any time the
Company is required by a tax authority to deduct or withhold taxes from payments
made by the Company with respect to the Series 1 Dividend Access Share, the
Company will not pay additional amounts. As a result, the net amount received
from the Company by the holder of the Series 1 Dividend Access Share, after the
deduction or withholding, will be less than the amount the holder would have
received in the absence of the deduction or withholding.

       

      
        	
                13

              	
                Governing
      Law

              


      

       

      The creation and
issuance of the Series 1 Dividend Access Share and the rights attached to it
shall be governed by and construed in accordance with the laws of
Scotland.

       

      
        	
                14

              	
                Registrar

              


      

       

      Computershare
Investor Services PLC located at The Pavilions, Bridgwater Road, Bristol BS99
6ZZ will maintain the register and will act as Registrar.

       

      The Company
reserves the right at any time to appoint an additional or successor registrar.
Notice of any change of registrar will be given to the holder of the Series 1
Dividend Access Share.

       

      
        	
                15

              	
                Further
      Issues

              


      

       

      The Company may, at
any time and from time to time, and with the consent of HM Treasury, create or
issue further Dividend Access Shares.

       

      
        	
                16

              	
                Definitions

              


      

       

      “Articles” means the articles
of association of the Company;

       

      “Board of Directors” means the
Board of Directors of the Company or a duly authorised committee of such Board
of Directors;

       

      “Bonus Issue” means, in
relation to the Series 1 Dividend Access Share, an issue of Series 1 Class B
Shares to the holder of the Series 1 Dividend Access Share by way of
capitalisation of profits or reserves;

       

      “Business Day” means a day on
which banks are open for business in London;

       

      “Class B Shares” means Class B
Shares (of whatever series) in the capital of the Company;

       

      “Companies Act” means the
Companies Act 2006 (as amended from time to time);

       

      “Company” means The Royal Bank
of Scotland Group plc;

       

      “current year” has the meaning
provided in paragraph 2.1;

       

      “dealing day” means a day on
which the Relevant Stock Exchange or relevant market is open for business and on
which Ordinary Shares, Securities or Spin-Off Securities (as the case may be)
may be dealt in (other than a day on which the Relevant Stock 

       

      
        
          
          

        

        
          154

          
            

          

        

        
          
          

        

      

       

      Exchange or
relevant market is scheduled to or does close prior to its regular weekday
closing time);

       

      “Directors” means the executive
and non-executive directors of the Company who make up its board of
directors;

       

      “Dividend” shall have the
meaning given in paragraph 14 of the Series 1 Class B Share Terms;

       

      “Dividend Access Share
Dividend” has the meaning provided in paragraph 2.1;

       

      “Dividend Access Shares” means
Dividend Access Shares (of whatever series) in the capital of the
Company;

       

      "Employee Share Scheme” means a
scheme for encouraging or facilitating the holding of shares in or debentures of
the Company or any Subsidiary by or for the benefit of: (a) the bona fide
employees or former employees of the Company or any other member of the Group
(including ABN AMRO Holding N.V. and its subsidiaries from time to
time)  or (b) the spouses, civil partners, surviving spouses,
surviving civil partners, or minor children or step-children of such employees
or former employees;

       

      “Fair Market Value” means, with
respect to any property on any date, the fair market value of that property as
determined in good faith by an Independent Financial Adviser (acting as an
expert) provided that (i) the Fair Market Value of a dividend in cash shall be
the amount of such cash; (ii) the Fair Market Value of any other cash amount
shall be the amount of such cash; (iii) where Securities, Spin-Off Securities,
options, warrants or other rights are publicly traded in a market of adequate
liquidity (as determined by an Independent Financial Adviser, acting as an
expert), the Fair Market Value (a) of such Securities or Spin-Off Securities
shall equal the arithmetic mean of the daily Volume Weighted Average Prices of
such Securities or Spin-Off Securities and (b) of such options, warrants or
other rights shall equal the arithmetic mean of the daily closing prices of such
options, warrants or other rights, in the case of both (a) and (b) during the
period of five dealing days on the relevant market commencing on such date (or,
if later, the first such dealing day such Securities, Spin-Off Securities,
options, warrants or other rights are publicly traded) or such shorter period as
such Securities, Spin-Off Securities, options, warrants or other rights are
publicly traded; (iv) where Securities, Spin-Off Securities, options, warrants
or other rights are not publicly traded (as aforesaid) or if the fair market
value of such publicly traded securities cannot be determined as provided in
(iii) after a period of 15 calendar days following the relevant date, the Fair
Market Value of such Securities, Spin-Off Securities, options, warrants or other
rights shall be determined in good faith by an Independent Financial Adviser
(acting as an expert), on the basis of a commonly accepted market valuation
method and taking account of such factors as it considers appropriate, including
the market price per Ordinary Share, the dividend yield of an Ordinary Share,
the volatility of such market price, prevailing interest rates and the terms of
such Securities, Spin-Off Securities, options, warrants or other rights,
including as to the expiry date and exercise price (if any) thereof. Such
amounts shall, in the case of (i) above, be translated into the Relevant
Currency (if declared or paid or payable in a currency other than the Relevant
Currency) at the rate of exchange used to determine the amount payable to
Shareholders who were paid or are to be paid or are entitled to be paid the
dividend in cash in the Relevant Currency; and in any other case, shall be
translated into the Relevant Currency (if expressed in a currency other than the
Relevant Currency) at the Prevailing Rate on that date. In addition, in the case
of (i) and (ii) above, the Fair Market Value shall be determined on a gross
basis and 

       

      
        
          
          

        

        
          155

          
            

          

        

        
          
          

        

      

       

      disregarding any
withholding or deduction required to be made on account of tax, and disregarding
any associated tax credit;

       

      “first semi-annual” has the
meaning provided in paragraph 2.1;

       

      “FSA” means the Financial
Services 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 supervisory authority over the Group
in respect of any banking business carried on;

       

      “Further Series 1 Class B
Shares” means any further Series 1 Class B Shares issued from time to
time and consolidated and forming a single series with the then Series 1 Class B
Shares in issue;

       

      “Group” means the Company and
its subsidiary undertakings;

       

      “HM Treasury” means The
Commissioners of Her Majesty’s Treasury of, as at the Issue Date, 1 Horse Guards
Road, London SW1A 2HQ;

       

      “in certificated form” means a
share or other security which is not in uncertificated form;

       

      “Independent Financial Adviser”
means an independent financial institution of international repute appointed at
its own expense by the Company and approved in writing by HM Treasury (such
approval not to be unreasonably withheld or delayed);

       

      “Issue Date” means [●]
2009;

       

       “London Stock Exchange” means
the London Stock Exchange plc;

       

      “Ordinary Share Bonus Issue”
means, in relation to the Ordinary Shares, an issue of Ordinary Shares credited
as fully paid to the relevant Shareholders by way of capitalisation of profits
or reserves and where such Ordinary Shares are, or are expressed to be, issued
in lieu of a dividend (whether a cash dividend equivalent or other amount is
announced or would otherwise be payable to Shareholders, whether at their
election or otherwise);

       

      “Ordinary Shares” means the
ordinary shares of the Company of 25 pence nominal each as at the Issue
Date;

       

      “Parity Securities” means (i)
the Ordinary Shares and the Series 1 Class B Shares of the Company and (ii) any
other securities of the Company or any other member of the Group ranking or
expressed to rank pari
passu with the Ordinary Shares and/or the Series 1 Class B Shares and/or
the Series 1 Dividend Access Share on a return of capital or distribution of
assets on a winding-up, either issued by the Company or, where issued by another
member of the Group, where the terms of the securities benefit from a guarantee
or support agreement entered into by the Company which ranks or is expressed to
rank pari passu with
the Ordinary Shares and/or the Series 1 Class B Shares and/or the Series 1
Dividend Access Share on a return of capital or distribution of assets on a
winding-up;

       

      “Parity Value” means, in
respect of any dealing day, the sterling amount calculated as
follows:

       

      PV   =    N
x VWAP

       

      where:

       

      
        
          
          

        

        
          156

          
            

          

        

        
          
          

        

      

       

            

       

      
        	 	
                 
      PV

              	
                = 

              	the Parity
      Value
	 	 	 	 
	
                 
      

              	
                 
      N

              	
                =

              	
                the number of
      Ordinary Shares determined by dividing £0.50 by the Series 1 Class B Share
      Conversion Price in effect on such dealing day rounded down, if necessary,
      to the nearest whole number of Ordinary Shares

              
	 	 	 	 
	 	
                 
      WAP

              	
                = 

              	
                the Volume
      Weighted Average Price of an Ordinary Share on such dealing day, provided
      that if on any such dealing day the Ordinary Shares shall have been quoted
      cum-Dividend or cum-any other entitlement (including, for the avoidance of
      doubt, any Ordinary Share Bonus Issue), the Volume Weighted Average Price
      of an Ordinary Share on such dealing day shall be deemed to be the amount
      thereof reduced by an amount equal to the Fair Market Value of any such
      Dividend or entitlement (including, for the avoidance of doubt, any
      Ordinary Share Bonus Issue) per Ordinary Share as at the date of first
      public announcement of such Dividend or entitlement (or, if that is not a
      dealing day, the immediately preceding dealing
  day);

              


      

       

      “Participation Rate” has the
meaning provided in paragraph 2.1;

       

      “Prevailing Rate” means, in
respect of any currencies on any day, the spot rate of exchange between the
relevant currencies prevailing as at or about 12 noon (London time) on that date
as appearing on or derived from the Relevant Page or, if such a rate cannot be
determined at such time, the rate prevailing as at or about 12 noon (London
time) on the immediately preceding day on which such rate can be so
determined;

       

      “record date” means, in respect
of any entitlement to receive a dividend or other distribution declared, paid or
made, or any rights granted, the record date or other due date for the
establishment of the relevant entitlement;

       

      “Reference Amount” means
£25,500,000,000 plus the aggregate Series 1 Class B Share Relevant
Amount of any Further Series 1 Class B Shares issued by the Company to HM
Treasury after the Issue Date and before the record date for the relevant
Dividend Access Share Dividend, less the aggregate Series 1 Class B Relevant
Amount of any Series 1 Class B Shares which were in issue during the 30
consecutive dealing days during which a Series 1 Class B Dividend Trigger Event
occurred;

       

      “Reference Series 1 Class B Shares
Number” means the Reference Amount divided by the Series 1 Class B Share
Relevant Amount;

       

      “Relevant Currency” means
sterling or, if at the relevant time or for the purposes of the relevant
calculation or determination, the London Stock Exchange is not the Relevant
Stock Exchange, the currency in which the Ordinary Shares are quoted or dealt in
on the Relevant Stock Exchange at such time;

       

      “Relevant Date” means, in
respect of any semi-annual Dividend Access Share Dividend or Bonus Issue, the
date on which the Company pays or makes the same or, subject to paragraph 2.3,
if the same is not paid or made, means 31 October of the relevant year in the
case of a first semi-annual Dividend Access Share Dividend or Bonus Issue, and
31 May of the relevant year in the case of a second semi-annual Dividend Access
Share Dividend or Bonus Issue;

       

      “Relevant Page” means the
relevant page on Bloomberg or such other information service provider selected
by the Company that displays the relevant information;

       

      
        
          
          

        

        
          157

          
            

          

        

        
          
          

        

         

      

      “Relevant Stock Exchange” means
the London Stock Exchange or, if at the relevant time the Ordinary Shares are
not at that time listed and admitted to trading on the London Stock Exchange,
the principal stock exchange or securities market on which the Ordinary Shares
are then listed, admitted to trading or quoted or dealt in;

       

      “second semi-annual” has the
meaning provided in paragraph 2.1;

       

      “Securities” means any
securities including, without limitation, Ordinary Shares, or options, warrants
or other rights to subscribe for or purchase or acquire Ordinary
Shares;

       

      “Series 1
Class B Share Conversion
Price” means the Conversion
Price as defined in paragraph 4(a) of the Series 1 Class B Share
Terms;

       

      “Series 1 Class B Dividend Stop
Date” means the date falling 20 days after the Series 1 Class B Dividend
Trigger Event;

       

      “Series 1 Class B Dividend Trigger
Event” means in relation to Series 1 Class B Shares in issue at the
relevant time, the Parity Value for 20 or more dealing days in any period of 30
consecutive dealing days equals or exceeds £0.65 and, for the avoidance of
doubt, there can be more than one such event based on the time of issue of the
relevant Series 1 Class B Shares;

       

      “Series 1
Class B Share Relevant Amount” means
£0.50 per Series 1 Class B Share, subject to adjustment as provided in paragraph
4(l) of the Series 1 Class B Share
Terms;

       

      “Series 1 Class B Shares” means the
51,000,000,000 Series 1 Class B Shares of £0.01 each in the capital of the
Company issued on the Issue Date, together with any Further Series 1 Class B
Shares (as such term is defined in the Series 1 Class B Share Terms) issued by
the Company from time to time;

       

      “Series 1
Class B Share Terms” means the terms
of the Series 1 Class B Shares approved by the
Board of Directors on [●] 2009;

       

      “Series 1
Class B Share Winding Up Ratio”
means the Winding Up Ratio as defined in paragraph 3 of the Series 1 Class B Share Terms;

       

      “Series 1 Dividend Access
Share” means the Series 1 Dividend Access Share of the Company with a
nominal value of £0.01 issued by the Company on the Issue Date;

       

      “Shareholders” means the
person(s) in whose name(s) Ordinary Shares are for the time being registered in
the register of Ordinary Share ownership maintained by or on behalf of the
Company;

       

      “Specified Date” has, for the
purpose of any paragraph in which such expression is used, the meaning given in
the relevant paragraph;

       

      “Spin-Off Securities” means
equity share capital of an entity other than the Company or options, warrants or
other rights to subscribe for or purchase equity share capital of an entity
other than the Company;

       

      “sterling” means the lawful
currency of the United Kingdom from time to time;

       

      “Subsidiary” has the meaning
provided in Section 1159 of the Companies Act 2006;

       

      “subsidiary undertaking” has
the meaning provided in Section 1162 of the Companies Act 2006;

       

      
        
          
          

        

        
          158

          
            

          

        

        
          
          

        

      

       

      “Volume Weighted Average Price”
means, in respect of an Ordinary Share, Security or, as the case may be, a
Spin-Off Security on any dealing day, the order book volume-weighted average
price of an Ordinary Share, Security or, as the case may be, a Spin-Off Security
published by or derived (in the case of an Ordinary Share) from Bloomberg page
RBS LN EQUITY VAP or (in the case of a Security (other than Ordinary Shares) or
Spin-Off Security) from the principal stock exchange or securities market on
which such Securities or Spin-Off Securities are then listed or quoted or dealt
in, if any, or, in any such case, such other source as shall be determined to be
appropriate by an Independent Financial Adviser (acting as an expert) on such
dealing day, provided that, if on any such dealing day such price is not
available or cannot otherwise be determined as provided above, the Volume
Weighted Average Price of an Ordinary Share, Security or a Spin-Off Security, as
the case may be, in respect of such dealing day shall be the Volume Weighted
Average Price, determined in good faith by an Independent Financial Adviser
(acting as an expert); and

       

      “Winding Up Ratio” has the
meaning provided in paragraph 6.

       

      References to any
issue or offer or grant to Shareholders “as a class” or “by way of rights” shall be
taken to be references to an issue or offer or grant to all or substantially all
Shareholders, other than Shareholders to whom, by reason of the laws of any
territory or requirements of any recognised regulatory body or any other stock
exchange or securities market in any territory or in connection with fractional
entitlements, it is determined not to make such issue or offer or
grant.

       

      In making any
calculation or determination of Volume Weighted Average Price, such adjustments
(if any) shall be made as an Independent Financial Adviser considers appropriate
to reflect any consolidation or sub-division of the Ordinary Shares or any issue
of Ordinary Shares by way of capitalisation of profits or reserves, or any like
or similar event.

       

      
        
          
          

        

        
          159

          
            

          

        

        
          
          

        

        

          SCHEDULE
8

           

          TERMINATION
EVENT

           

          A
“Termination Event” will
occur if:

           

          
            	
                    1.

                  	
                    an
      administrator, bank administrator, liquidator, receiver, administrative
      receiver, compulsory manager or other similar officer is appointed in
      respect of the Company or any Material Subsidiary or any material part of
      their assets, provided always that the appointment of an administrator,
      liquidator, bank administrator, receiver, administrative receiver,
      compulsory manager or other similar officer in respect of any other Group
      Company shall not cause a Termination Event to occur;

                  
	 	 
	
                    2.

                  	
                    any order is
      made by a competent court or a resolution is passed for the winding up or
      dissolution of the Company or any Material Subsidiary;

                  
	 	 
	
                    3.

                  	
                    an
      administration order is made in relation to the Company or any Material
      Subsidiary;

                  
	 	 
	
                    4.

                  	
                    the Company
      or any Material Subsidiary enters into a composition, compromise,
      assignment, assignation or arrangement (including a company voluntary
      arrangement or a scheme of arrangement) with any class of its financial
      creditors or makes a general assignment or assignation for the benefit of
      its creditors or takes any other action intended to prevent the
      enforcement of creditors’ rights unless the prior written consent of HM
      Treasury has been obtained to that composition, compromise, assignment,
      assignation or arrangement,

                  
	 	 


          

          or, in the case of
paragraphs 1, 2, 3 or 4 above, any analogous procedure or step is taken in any
jurisdiction;

           

          
            	
                    5.

                  	
                    the Company
      or any Material Subsidiary admits in writing that it is insolvent or
      unable to pay its debts as they fall due; or

                  
	 	 
	
                    6.

                  	
                    the Company
      or any Material Subsidiary stops payment of its obligations generally or
      ceases to carry on its business or substantially all thereof, except that
      a solvent winding up or stopping of payment or cessation of business for
      the purpose of a reconstruction, union, transfer, merger or amalgamation
      of the Company or any Material Subsidiary shall not constitute a
      Termination Event as long as the Company or any Material Subsidiary, as
      the case may be, is not at the time of such stopping of payment or
      cessation of business unable to pay its debts within the meaning of
      section 123(1) or 123(2) of the Insolvency Act 1986 and does not become so
      as a result of stopping or payment of cessation of
    business.

                  
	 	 


          

          In
this Schedule 8, references to the Company and any Material Subsidiary shall be
deemed to include a reference to any holding company of any such companies from
time to time.

           


          
            
               


            

            
              160

              
                

              

            

            
               


            

          


          SCHEDULE
9

           

          FORM
OF PAYMENT PROPOSAL NOTICE

           

          [Note:
Notice to be served on HM Treasury by the Company in accordance with clause
14.11 (Notices) of the Agreement]

           

          [Note:
Insert date]

           

          Dear
Sirs,

           

          Acquisition and Contingent
Capital Agreement – Payment Proposal Notice

           

          
            	
                    1.

                  	
                    We refer to
      the “Acquisition and Contingent Capital Agreement” entered into by The
      Commissioners of Her Majesty’s Treasury and The Royal Bank of Scotland
      Group PLC on [●] November 2009 (the “Agreement”). Any word or
      expression defined in the Agreement shall have the same meaning below in
      this notice.

                  
	 	 
	
                    2.

                  	
                    We refer to
      the Annual Premium payable on [    ]. [Note: Insert Payment
      Date]. We propose that:

                  


          

           

          
            	 
      	
                    (a)

                  	
                    £[   ]
      of such Annual Premium will be paid in cash;

                  
	 	 	 
	 
      	
                    (b)

                  	
                    £[   ]
      of such Annual Premium will be paid in cash and HM Treasury will apply the
      same amount in acquiring further B Shares; and

                  
	 	 	 
	 
      	
                    (c)

                  	
                    £[   ]
      of such Annual Premium will be paid by foregoing tax relief, and for this
      purpose we propose that the relevant Tax Asset(s) is/are as
      follows:

                  


          

          


           

          


           

          
            	
                    Tax Asset
      Company:

                  	
                    [Note: Insert the name of the
      company in which the Tax Asset is claimed to have arisen] (the
      “Tax Asset
      Company”)

                  
	
                    Taxpayer
      reference number:

                  	
                    [Note: Insert the UK taxpayer
      reference number of the Tax Asset Company]

                  
	
                    Amount of Tax
      Asset:

                  	
                    [Note: Insert the claimed
      amount of the Tax Asset]

                  
	
                    Nature of Tax
      Asset:

                  	
                    [Note: Specify the nature of
      the claimed Tax Asset. For example, trading
  losses]

                  
	
                    Accounting
      Period:

                  	
                    [Note: Specify the most recent
      Accounting Period of the Tax Asset Company in which the Tax Asset is
      claimed to be available to the Tax Asset
  Company]

                  


          

           

          [Note: If more than one Tax Asset is
proposed to be used for this purpose, insert the above information for each
relevant Tax Asset. For the avoidance of doubt, it is not necessary for all of
the specified Tax Assets to arise in the same company.]

           

          [Note: None of the amounts referred
to in paragraph 2(a), (b) or (c) may be negative, and the aggregate of such
amounts must be equal to the aggregate amount of such Annual
Premium.]

           

           

          Yours
faithfully,

          
            
              	 	 	 	 	 
	
                      /s/

                    	 	 	
                       

                    	 
	
                      Name

                    	 	 	
                       

                    	 
	
                      Title 

                    	 	 	
                       

                    	 


            

          

           

          [Note: To be validly executed by the
Company]

           


          
            
               


            

            
              161

              
                

              

            

            
               


            

          


          SCHEDULE
10

           

          NON-VOTING
DEFERRED SHARE TERMS

           

          1. Notwithstanding any
other provision of the Articles, a Non-Voting Deferred Share Series
B:

           

          
            	 
      	
                    (A)

                  	
                    does not
      entitle its holder to receive any dividend or distribution declared, made
      or paid or any return of capital (save as provided in Article 4G(1)(b) and
      does not entitle its holder to any further or other right of participation
      in the assets of the Company;

                  
	 	 	 
	 
      	
                    (B)

                  	
                    entitles its
      holder to participate on a return of assets on a winding up of the
      company, such entitlement to be limited to the repayment of the amount
      paid up or credit as paid up on such share and shall be paid only after
      the holders of any and all Ordinary Shares and B Shares then in issue
      shall have received (a) payment in respect of such amount as is paid up or
      credited as paid up on those Ordinary Shares and/or B Shares held by them
      at that time plus (b) the payment in cash or in specie of £10,000,000 on
      each such Ordinary Share and/or B Shares;

                  
	 	 	 
	 
      	
                    (C)

                  	
                    does not
      entitle its holder to receive a share certificate in respect of his or her
      shareholding, save as required by law;

                  
	 	 	 
	 
      	
                    (D)

                  	
                    does not
      entitle its holder to receive notice of, nor attend, speak or vote at, any
      general meeting of the company; and

                  
	 	 	 
	 
      	
                    (E)

                  	
                    shall not be
      transferable at any time other than with the prior written consent of the
      directors;

                  
	 	 
	
                    2.

                  	The Company
      shall have the irrevocable authority to authorise and instruct the
      Secretary of the Company (or any other person appointed for the purpose by
      the Board of Directors) as agent for the holders of Non-Voting Deferred
      Shares Series B to surrender the Non-Voting Deferred Shares Series B to
      the Company for no consideration and to execute on behalf of such holders
      such documents as are necessary in connection with such surrender without
      obtaining the sanction of the holder or holders thereof, and pending such
      surrender to retain the certificates, to the extent issued, for such
      Non-Voting Deferred Shares Series B.
	 	 
	
                    3.

                  	Any request
      by the Company to surrender the Non-Voting Deferred Shares Series B may be
      made by the Directors depositing at the registered office of the Company a
      notice addressed to such person as the Directors shall have nominated on
      behalf of the holders of the Non-Voting Deferred Shares Series
  B.
	 	 
	
                    4.

                  	The Company
      shall have the irrevocable authority to appoint a single holder or any
      other person on behalf of all holders of Non-Voting Deferred Shares Series
      B to exercise any vote to which holders of Non-Voting Deferred Shares
      Series B may be entitled in any circumstances or for any other matter
      connected to the Non-Voting Deferred Shares Series
B


          

           

          
            
              
              

            

            
              162

              
                

              

            

            
              
              

            

          

          
            	 	 
	
                    5.

                  	The rights
      attached to the Non-Voting Deferred Shares Series B shall not be deemed to
      be varied or abrogated by the creation or issue of any new shares ranking
      in priority to or pari passu with or subsequent to such shares, any
      amendment or variation of the rights of any other class of shares of the
      Company, the Company reducing its share capital or the surrender, or
      purchase of any share, whether a Non-Voting Deferred Shares Series B or
      otherwise.
	 	 
	
                    6.

                  	The Company
      shall have the irrevocable authority to cancel any Non-Voting Deferred
      Shares Series B without making any payment to the holder and such
      cancellation shall not be deemed to be a variation or abrogation of the
      rights attaching to such Non-Voting Deferred Shares Series
  B.


          

          



          
            
               


            

            
              163

              
                

              

            

            
               


            

          


          IN
WITNESS WHEREOF this agreement has been entered into as of the date which first
appears on page 1 of this agreement on the dates which appear
below.

           

          


           

          
            	
                    SIGNED for
      and on behalf of

                    THE
      ROYAL BANK OF SCOTLAND 

                    GROUP
      PLC

                     

                    Date:

                  	
                    )

                    )

                    )

                  	 
      
	 	 	 


          

          


           

          
            	
                    SIGNED by two
      of

                    THE
      COMMISSIONERS OF HER 

                    MAJESTY’S
      TREASURY

                     

                    Date:

                  	
                    )

                    )

                    )

                    )

                  	 
      
	 	 	 


          

        

      

       

      164