Exhibit 4.1





Exhibit 4.1




Dated 1 April 2010




THE ROYAL BANK OF SCOTLAND GROUP PLC




and




BANCO SANTANDER, S.A.




and




THE STATE OF THE NETHERLANDS




and




RFS HOLDINGS B.V.




RESTATED CONSORTIUM AND SHAREHOLDERS’ AGREEMENT









LINKLATERS LLP

One Silk Street

London EC2Y 8HQ




Telephone (44-20) 7456 2000

Facsimile (44-20) 7456 2222




Ref M. Middleditch





 


 









 







Table of Contents




	 	 	 	 	 
	Contents	 	Page	 
	 
	 	 	 	 
	1 Definitions and Interpretation
	 	 	4	 
	2 Restatement
	 	 	15	 
	3 Conditions and Effectiveness
	 	 	15	 
	4 Share Capital of the Company
	 	 	16	 
	5 Acquired Business Transfers
	 	 	19	 
	6 The Retained Group
	 	 	24	 
	7 Governance
	 	 	24	 
	8 Termination
	 	 	27	 
	9 Determinations
	 	 	28	 
	10 Representations and Warranties
	 	 	30	 
	11 Provision of Information and Preparation of Accounts
	 	 	30	 
	12 Transfer Restrictions for the Investors
	 	 	31	 
	13 Further Capital and Funding
	 	 	32	 
	14 New Shareholders
	 	 	39	 
	15 Distributions and Repurchases
	 	 	40	 
	16 Confidentiality and Announcements
	 	 	41	 
	17 Advisers and Costs
	 	 	41	 
	18 Supremacy of this Agreement
	 	 	41	 
	19 Entire Agreement and Non Reliance
	 	 	42	 
	20 General
	 	 	43	 
	21 Notices
	 	 	46	 
	22 Choice of law and arbitration
	 	 	46	 
	Schedule 1 – Part 1 Transfer of the Acquired Businesses
	 	 	48	 
	Schedule 1 – Part 2 The Acquired Businesses
	 	 	60	 
	Schedule 1 – Part 3 The Retained Businesses
	 	 	63	 






 


i









 





	 	 	 	 	 
	Contents	 	Page	 
	 
	 	 	 	 
	Schedule 1 – Part 4 Employment
	 	 	67	 
	Schedule 1 – Part 5 Pensions
	 	 	72	 
	Schedule 1 – Part 6 Intellectual Property
	 	 	76	 
	Schedule 1 – Part 7 Real Estate
	 	 	78	 
	Schedule 1 – Part 8 Regulatory Matters
	 	 	81	 
	Schedule 1 – Part 9 Tax Matters
	 	 	83	 
	Schedule 2 The Retained Business
	 	 	91	 
	Schedule 3 Corporate Governance
	 	 	100	 
	Schedule 4 Representations and Warranties
	 	 	108	 
	Schedule 5 Form of Deed of Accession
	 	 	109	 
	Schedule 6 Permitted Disclosure
	 	 	112	 
	Schedule 7 Governance Clearances
	 	 	113	 
	Schedule 8 Other State Acquired Businesses
	 	 	117	 
	Schedule 9 Charging Basis for Management of the Retained Business
	 	 	120	 
	Schedule 10 4.95% Term Sheet
	 	 	122	 
	Schedule 11 Operation of ID&J India
	 	 	127	 
	Schedule 12 Worked Example for the purposes of Clause 13
	 	 	136	 







 


ii









 







This Agreement is made on 1 April 2010 between:




	(1)	 	THE ROYAL BANK OF SCOTLAND GROUP PLC, a company incorporated in Scotland (registered no.
SC45551), whose registered office is at 36 St Andrew Square, Edinburgh, EH2 2YE (“RBS”);







	(2)	 	BANCO SANTANDER, S.A., a company incorporated in Spain (registered at the Cantabria
Commercial Registry), whose registered office is at Paseo de Pereda 9-12, Santander, Spain
(“Santander”);







	(3)	 	THE STATE OF THE NETHERLANDS (De Staat der Nederlanden) having its seat at The Hague, The
Netherlands, represented by the Minister of Finance, Korte Voorhout 7, The Hague, The
Netherlands (the “State”); and







	(4)	 	RFS HOLDINGS B.V., a company incorporated in the Netherlands (registered no. 34273228), whose
registered office is at Strawinskylaan 3105, 1077 ZX Amsterdam, The Netherlands (the
“Company”).






Recitals:




	(A)	 	In October 2007, the Investors invested in the Company, a limited company that was newly
incorporated for the purpose of making an offer to acquire the whole of the issued share
capital of RBS Holdings (which was at the time named ABN AMRO Holding N.V.). The Offer was
declared unconditional on 10 October 2007 and, following completion of the squeeze out
procedure, the Company now owns 100 per cent. of RBS Holdings.







	(B)	 	The Original CSA regulated the relationship between the Investors and between the Investors
and the Company, set out the terms on which the Investors were willing to acquire Shares in
the Company and on which the Investors and the Company effected the Offer, and governed the
ongoing management of the Company, before and after 10 October 2007.







	(C)	 	Since 10 October 2007, when the Offer was declared unconditional, many of the Acquired
Businesses have been transferred to the Investors as contemplated by the Original CSA. The
Investors have also reached agreements in relation to various aspects of the assets and
liabilities of the RBS Holdings Group, how they will be managed and how they will be shared
between the Investors.







	(D)	 	In particular, the parties have agreed that RBS shall ultimately be the sole owner of the
Company and that RBS shall acquire its Acquired Businesses either by the transfer of such
businesses to RBS (or a member of its Group), or to a third party at RBS’ discretion or by
becoming the sole shareholder of the Company following the Final Completion Date.







	(E)	 	Accordingly, the parties have agreed to amend and restate the Original CSA in the form of
this Agreement to reflect the restructuring of the RBS Holdings Group since 10 October 2007.
Therefore this Agreement regulates the relationship between the Investors and between the
Investors and the Company, sets out the terms on which the remaining Acquired Businesses will
be managed and ultimately transferred to the Investors.







	(F)	 	This Agreement also provides for certain amendments to the share capital and governance of
the Company, such changes to take effect upon obtaining the requisite regulatory and other
approvals.





 


3









 










It is agreed as follows:




	1	 	Definitions and Interpretation

	 
	1.1	 	Definitions







“ABN AMRO Bank” means ABN AMRO Bank N.V. (formerly named ABN AMRO II N.V.) a company
incorporated in the Netherlands (registered no. 34334259), whose registered office is at
Gustav Mahlerlaan 10, 1082 PP Amsterdam, The Netherlands);




“Acquired Business(es)” in the case of each Investor, means the businesses which were to be
or which have been acquired directly or indirectly by that Investor or a member of its Group
pursuant to the Original CSA (unless otherwise reallocated to another Investor with the
consent of the relevant Investors), or which are to be acquired directly or indirectly by
that Investor or a member of its Group pursuant to this Agreement, as described in Part 2 of
Schedule 1, in each case including the Acquired Business Assets relevant to that business
but subject to the Liabilities, to the extent that such Liabilities relate to such business;




“Acquired Business Assets” in the case of each Acquired Business, means the Business Assets
of that business;




“Acquired Business Transfers” means the transfers of Acquired Businesses contemplated
pursuant to Clause 5.1 or 5.3, but excluding any transfer of the Assigned IP;




“Acquired Companies” in the case of each Investor, means the members of the RBS Holdings
Group which were to be or which have been acquired by that Investor or a member of its Group
pursuant to the Original CSA (unless otherwise reallocated to another Investor with the
consent of the relevant Investors), or which are to be acquired by that Investor or a member
of its Group pursuant to this Agreement, including any companies established within the RBS
Holdings Group for the purposes of acquiring Acquired Business Assets prior to their
transfer to an Investor or a member of the relevant Investor’s Group, and “Acquired Company”
shall mean any one of such members;




“Acquired Company Shares” means such of the shares in the Acquired Companies as are held by
any member of the RBS Holdings Group or in which any member of the RBS Holdings Group is
interested;




“Adjusted Consortium Proportions” means:




	 	(a)	 	with respect to RBS, 53.0988%; and

	 
	 	(b)	 	with respect to the State, 46.9012%,







subject to adjustment in the event that there is an adjustment to the Consortium
Proportions;




“Affiliate” means in relation to any person, its connected persons and any company which is
its subsidiary or holding company or another subsidiary of any such holding company from
time to time;




“Articles” means the current articles of association of the Company or, following their
adoption in accordance with Clause 4.2, the New Articles or as the articles of association
of the Company may be subsequently altered from time to time in accordance with this
Agreement, and references in this Agreement to an “Article” shall be construed accordingly;




“Assigned IP” has the meaning given to it in Clause 5.3.6;


 


4









 






“Bank of Spain” means Banco de Espana;




“Board” means the board of directors of the Company;




“Board Reserved Matters” means those matters listed in Schedule 3 Part E;




“Business Assets” means, in the case of any Acquired Business or the Retained Business, that
business and the assets, rights, benefits and other property owned by any member of the RBS
Holdings Group which were exclusively or principally used, and accounted for, by that
business as at 10 October 2007 (including the goodwill attached to such business and
including the shares of each member of the RBS Holdings Group the activities of which
exclusively or principally involve the carrying on of that business) and any other assets,
rights, benefits and other property which have been exclusively or principally used, and
accounted for, by that business since 10 October 2007;




“Business Employees” means, in the case of each Acquired Business or the Retained Business
and at any particular time, those employees of members of the RBS Holdings Group who are
exclusively or principally engaged in that business at the relevant time;




“Business Day” means a day (other than a Saturday, Sunday or a public holiday) on which
banks generally are open for business in London, Amsterdam and Madrid;




“Business Unit” means a business unit through which the RBS Holdings Group carried or
carries on business, as described in the RBS Holdings Accounts;




“Capital Buffer” has the meaning given to it in Clause 13.4.1(i);




“Challenge” has the meaning given to it in Clause 12.1.4(i);




“Cohabitation Agreements” means the cohabitation agreements between RBS NV and ABN AMRO Bank
dated 1 April 2010 in respect of the international diamond and jewellery business in Hong
Kong and 1 April 2010 in respect of the international diamond and jewellery business in
United Arab Emirates, each of which sets out certain principles for the management of the
relevant State Acquired Business whilst it is part of the RBS Holdings Group;




“Companies Act” means the Companies Act 2006;




“Completed Restructuring” means the transactions carried out pursuant to Clause 5 and
Schedule 3 of the Original CSA prior to the date of this Agreement pursuant to which certain
State Acquired Businesses or Santander Acquired Businesses or assets and liabilities
attributable thereto have been acquired directly or indirectly by the State or Santander, or
parties nominated by them (as applicable) and any related transactions;




“Completion” means, in the case of each transfer of all or part of an Acquired Business or
Acquired Company hereunder, Completion of that transfer pursuant to the provisions of
paragraph 4 of Schedule 1 – Part 1;




“Completion Date” means, in respect of any Completion, the date on which such Completion
takes place, being the effective date of any Legal Demerger or, in the case of a transfer of
all or part of any Acquired Business by way of sale and purchase, the date agreed between
the parties for such completion;


 


5









 






“Consortium Proportions” means:




	 	(a)	 	with respect to RBS, 38.2780%;

	 
	 	(b)	 	with respect to Santander, 27.9117%; and

	 
	 	(c)	 	with respect to the State, 33.8103%.







“Deed of Accession” means a deed substantially in the form set out in Schedule 5;




“Default Interest Rate” means a rate equal to 3-month EURIBOR plus 250 basis points;




“Defaulting Investor” has the meaning given to it in Clause 13.2.2;




“Deferred Tax Assets” means the State Deferred Tax Assets, the Santander Deferred Tax Assets
and/or the Retained Business Deferred Tax Assets;




“Director” means a director of the Company;




“DNB” means De Nederlandsche Bank (the Netherlands Central Bank);




“D Shares” means the unissued D Shares in the Company, the rights of which are as set out in
the Articles and which will be as set out in the New Articles, which as at the date of this
document are owned by the Company (having been repurchased);




“Effective Notice” has the meaning given in Clause 3.2.1;




“Encumbrance” means a mortgage, charge, pledge, lien, option, restriction, right of first
refusal, right of pre-emption, third party right or interest, other encumbrance or security
interest of any kind or another type of agreement or arrangement having similar effect;




“EURIBOR” means:




	 	(a)	 	the percentage rate per annum determined by the Banking Federation of the
European Union for the relevant period; or







	 	(b)	 	(if no such rate is available for the relevant currency or relevant period) the
rate as supplied to the parties at their request quoted by Barclays Bank plc to leading
banks in the European interbank market,







in either case, calculated on a daily basis;




“F Shares” means the F Shares in the Company, the rights of which are as set out in the
Articles and which as will be set out in the New Articles, and which as at the date of this
Agreement are owned by the State;




“Final Completion Date” has the meaning given in Clause 4.3.1;




“FSA” means the Financial Services Authority;




“Further Restructuring” means Legal Separation and the transactions to be carried out
pursuant to this Agreement, including the Acquired Business Transfers, the Retained Business
Wind Down, the final transfers and the reorganisation of the share capital of the Company
pursuant to Clause 4, by virtue of which the State shall acquire directly or indirectly the
State Acquired Businesses, Santander shall acquire directly or indirectly the Santander
Acquired Businesses, RBS shall acquire 100 per cent. ownership of the Company and therefore
the RBS Acquired Businesses, and the Retained Business shall be sold or wound down, and any
transactions ancillary thereto;




“Governance Amendments” means the amendments to the share capital of the Company, the
amendment of the Articles (by adopting the New Articles) and the changes to the management
of the Company as contemplated by Clauses 4.1, 4.2 and 7.2, respectively;


 


6









 






“Governance Clearances” means the anti-trust and regulatory consents, notifications and
approvals which must be obtained in connection with the Governance Amendments, as set out in
Schedule 7 ;




“Group” means, in relation to any company, its holding companies, subsidiaries and
subsidiary undertakings and subsidiaries or subsidiary undertakings of such holding
companies from time to time (but, in the case of RBS, shall exclude the Company and its
subsidiaries and subsidiary undertakings and, in the case of the Company, shall exclude RBS
and its Group, and in the case of the State, shall mean the State, ABN AMRO Bank and its
holding companies, subsidiaries and subsidiary undertakings from time to time);




“holding company” means a holding company as defined in section 1159 of the Companies Act;




“ICC” means the International Chamber of Commerce;




“ID&J India” has the meaning given in Clause 5.1.2(i);




“ID&J SPAs” means the substantially agreed form sale and purchase agreements pursuant to
which the State Acquired Businesses listed in Clause 5.1.2 will be transferred to the State
(or a member of its Group);




“Independent Accountants” has the meaning given in Clause 9.1;




“Independent Tax Advisers” has the meaning given in Clause 9.1;




“Investor” means any one of RBS, Santander and the State (which pursuant to the deed of
accession dated 24 December 2008 assumed the obligations of Fortis under the Original CSA
with effect as if it had been an Investor from the date of the Original CSA) and “Investors”
means two or more of them as the context requires;




“Investor Group” means, in relation to an Investor, that Investor and the members of its
Group and “member of an Investor Group” shall be construed accordingly;




“L Shares” means the L Shares in the Company, the rights of which are set out in the
Articles, and which will be as set out in the New Articles, which as at the date of this
Agreement are owned by RBS;




“Leasing Principles and Treatment of Property Stranded Costs Principles” means the document
agreed by the parties entitled “Leasing Principles and Treatment of Property Stranded Costs
Principles” version 12 dated 9 June 2008;




“Legal Demerger” means a division by acquisition in accordance with Article 2 and/or 25 of
the Sixth Company Law Directive;




“Legal Demerger Agreement” means the agreement dated 5 February 2010 pursuant to which,
inter alia, RBS NV agreed to transfer certain of the State Acquired Businesses to ABN AMRO
Bank;




“Legal Separation” means the transfer of ABN AMRO Bank to ABN AMRO Group N.V. which took
place on or around the date hereof in accordance with the sale and purchase agreement
between RBS Holding N.V. and ABN AMRO Group N.V.;




“Liabilities” means losses, liabilities, costs, charges, actions, proceedings, claims,
demands, duties and obligations of every description, including fines and penalties, whether
deriving from contract, common law, statute or otherwise, whether present or future, actual
or contingent, known or unknown, ascertained or unascertained, claimed or
unclaimed, disputed or acknowledged and whether related to contracts or other obligations
which have been wholly or partly completed or performed and whether owed or incurred
severally or jointly and whether owed as principal or surety and, in each case, whether
incurred before or after Completion (including, without limitation, accrued tax liabilities
and regulatory fines);


 


7









 






“LIBOR” means:




	 	(a)	 	the British Bankers Association Interest Settlement Rate for Sterling and for a
period most closely approximating the period for which a LIBOR rate is required
displayed on the appropriate page of the Telerate screen, provided that if such page is
replaced or the Telerate service ceases to be available, the parties may agree another
page or service displaying the appropriate rate; or







	 	(b)	 	(if no such rate is available for the relevant currency or relevant period) the
rate as supplied to the parties at their request quoted by Barclays Bank plc to leading
banks in the London interbank market;







“Litigation Management Agreement” means the agreement dated 5 February 2010 between RBS,
Santander, the State, RBS Holdings, RBS NV, ABN AMRO Bank and the Company relating to, inter
alia, how litigation pertaining to the RBS Holdings Group will be managed;




“Minimum Equity Ratio” has the meaning given to it in Clause 13.4.1(i);




“Minimum Funding Requirement” has the meaning given to it in Clause 13.4.1(iii);




“Minimum Ratios” has the meaning given to it in Clause 13.4.1;




“Net Funding Shortfall” has the meaning given to it in Clause 13.2.4;




“Net Funding Surplus” has the meaning given to it in Clause 13.2.5;;




“New Articles” means the articles of association of the Company proposed to be adopted in
accordance with Clause 4.2;




“New Company” means the Company and any company formed as part of or pursuant to the
Acquired Business Transfers or the Retained Business Wind Down or (where the context
requires) as part of or pursuant to the Completed Restructuring;




“New Shareholder” has the meaning given to it in Clause 14.1;




“Non Defaulting Investors” has the meaning given to it in Clause 13.2.2;




“O Shares” means the O Shares in the capital of the Company, the rights of which are as set
out in the Articles and which will be as set out in the New Articles, and which as at the
date of this Agreement are owned by RBS, the State and Santander in the Consortium
Proportions;




“Offer” means the offer which was made by the Company for all of the issued and to be issued
 shares in the capital of RBS Holdings (which at the time was named ABN AMRO Holding N.V.) as
contemplated by the Original CSA;




“Original CSA” means the consortium and shareholders’ agreement originally dated 27 May 2007
(as supplemented and amended by the supplemental consortium and shareholders’ agreement
dated 17 September 2007, the amendment agreement dated 26
August 2008 and the deed of accession dated 24 December 2008) which has been amended and
restated by this Agreement;


 


8









 






“Overfunded Business” has the meaning given to it in Clause 13.6.1;




“Paraguayan Escrow Amount” means the US$753,891.98 currently held in an escrow account with
HSBC in the name of RBS NV and which relates to the sale of the Paraguayan branch of RBS NV
to Banco Regional S.A.;




“Paraguayan Tax Amounts” means any amounts which are received by RBS NV in respect of tax
credits sold to Banco Regional S.A. as purchaser of the RBS NV Paraguayan branch;




“Permitted Disclosure” means any disclosure set out in Schedule 6;




“Proceeding” means any proceeding, suit or action arising out of or in connection with this
Agreement or any other Transaction Document;




“Purchaser” means an Investor or any member of an Investor Group which that Investor
nominates to be the company which is to acquire all or any part of any Acquired Business to
be acquired pursuant to this Agreement by such Investor (or a member of its Group);




“R Shares” means the R Shares in the capital of the Company, the rights of which are set out
in the Articles and will be as set out in the New Articles, and which owned by RBS;




“RBI” has the meaning given to it in Clause 5.3.3(i);




“RBS Acquired Businesses” means the Acquired Businesses, as set out in Part 2 of Schedule 1
which (i) have prior to the date of this Agreement been acquired by RBS, a member of its
Group or a third party; (ii) RBS, a member of its Group or a third party will directly or
indirectly acquire, or (iii) RBS will indirectly own through its ownership of the Company;




“RBS Acquired Companies” means the companies forming part of the RBS Acquired Business which
RBS or a member of its Group (i) has acquired; (ii) has sold to a third party (including any
sale by the RBS Holdings Group on behalf of RBS); (iii) will acquire directly or indirectly
hereunder, or (iv) will indirectly acquire through its 100 per cent. ownership of the
Company;




“RBS Holdings” means RBS Holdings N.V. (formerly named ABN AMRO Holding N.V.);




“RBS Holdings Accounts” means the audited consolidated accounts of the RBS Holdings Group
for the year ended 31 December 2006;




“RBS Holdings Combined Group” means the RBS Holdings Group and any former subsidiaries or
subsidiary undertakings of RBS Holdings which have been transferred directly or indirectly
to the State or Santander pursuant to the Completed Restructuring and “RBS Holdings Combined
Group Company” shall be construed accordingly;




“RBS Holdings Group” means RBS Holdings and its subsidiaries and subsidiary undertakings and
“RBS Holdings Group Company” shall be construed accordingly;




“RBS NV” means The Royal Bank of Scotland N.V. (formerly ABN AMRO Bank N.V.);




“Regulators” means DNB, Bank of Spain, FSA and any other central bank or regulatory
authority having the responsibility for regulatory oversight over any member of the RBS
Holdings Group or an Investor;


 


9









 






“Residual Acquired Business” means any State Acquired Business or Santander Acquired
Business which is part of the RBS Holdings Group as at 30 June 2011;




“Retained Business” means, as described in Part 3 of Schedule 1, the assets and Liabilities
of RBS Holdings and each member of the RBS Holdings Group other than the assets and
Liabilities which form part of the Acquired Businesses, including shares in the members of
the Retained Group, but subject to such Liabilities as relate to such assets or
undertakings;




“Retained Business Blue Book” means the monthly management financial information that is
provided by RBS NV to Investors and relating to the Retained Business, to be provided in the
form as provided for the month ended 28 February 2010 unless otherwise agreed by each of the
Retained Business Representatives;




“Retained Business Deferred Tax Assets” means Tax Reliefs within Clause 5.3 and 5.4 of the
Separation Tax Agreement which have been agreed by the parties as forming part of the
Retained Business;




“Retained Business Net Funding Shortfall Proportion” has the meaning given to it in Clause
13.2.4;




“Retained Business Tier 2 Shortfall Proportion” has the meaning given to it in Clause
13.2.3;




“Retained Business Representatives” means the persons nominated pursuant to paragraph 14.1
of Schedule 2;




“Retained Business Wind Down” means the process of selling, winding down or liquidating all
of the assets forming part of the Retained Business, the reduction of any unallocated costs
forming part of the Retained Business to zero and the full satisfaction of all Liabilities
forming part of the Retained Business, each as contemplated by Schedule 2;




“Retained Group” means the RBS Holdings Group, excluding the Acquired Companies;




“S Shares” means the S Shares in the capital of the Company, the rights of which are as set
out in the Articles and which will be as set out in the New Articles, and which as at the
date of this Agreement are owned by Santander;




“Santander Acquired Businesses” means the Acquired Businesses, as set out in Part 2 of
Schedule 1, which (i) have prior to the date of this Agreement been acquired by Santander, a
member of its Group or a third party; or (ii) Santander, a member of its Group will acquire
directly or indirectly hereunder;




“Santander Acquired Companies” means the companies forming part of the Santander Acquired
Business which Santander or a member of its Group (i) has acquired; (ii) has sold to a third
party (including any sale by the RBS Holdings Group on behalf of Santander); or (iii) will
directly or indirectly acquire hereunder;




“Santander Deferred Tax Assets” means Tax Reliefs in respect of Dutch corporate income tax
within Clause 5.3 of the Separation Tax Agreement which have been agreed by the parties as
forming part of the Santander Acquired Businesses;




“SEC” means the US Securities and Exchange Commission;




“Separation Tax Agreement” means the tax agreement dated on or around the date hereof
between RBS, Santander, the State, the Company, RBS Holdings, RBS NV and
ABN AMRO Bank relating to the allocation of certain tax liabilities related to the Dutch
businesses and certain other matters in relation thereto;


 


10









 






“Shareholder” means a holder of Shares from time to time;




“Shares” means the F Shares, R Shares, S Shares, O Shares, L Shares and/or D Shares, as the
context may require;




“Solution Agreement” means the solution agreement between ABN AMRO Bank and RBS NV dated 29
March 2010;




“State Acquired Businesses” means the Acquired Businesses, as set out in Part 2 of Schedule
1, which (i) have prior to the date of this Agreement been acquired by the State, a member
of its Group or a third party; or (ii) the State, a member of its Group will acquire
directly or indirectly hereunder;




“State Acquired Companies” means the companies forming part of the State Acquired Business
which the State or a member of its Group (i) has acquired; (ii) has sold to a third party
(including any sale by the RBS Holdings Group on behalf of the State); or (iii) will acquire
directly or indirectly hereunder, ;




“State Deferred Tax Assets” means Tax Reliefs in respect of Dutch corporate income tax
within Clause 5.4 of the Separation Tax Agreement which have been agreed by the parties as
forming part of the State Acquired Businesses and Tax Reliefs in respect of any Tax in any
other jurisdiction which are agreed between RBS and the State as forming part of the State
Acquired Businesses;




“subsidiary” means a subsidiary as defined in section 1159 of the Companies Act;




“subsidiary undertaking” means a subsidiary undertaking as defined in section 1162 of the
Companies Act;




“Super Board Majority” means in respect of a meeting of the Board or a committee of the
Board held prior to the date of the Effective Notice, a decision agreed by at least one
Director appointed by RBS, one Director appointed by Santander and one Director appointed by
the State;




“Support” has the meaning given to it in Clause 13.4.1;




“Support Notification” has the meaning given to it in Clause 13.4.2;




“Taxation” or “Tax” means all forms of taxation whether direct or indirect and whether
levied by reference to income, profits, gains, net wealth, asset values, turnover, added
value or other reference and statutory, governmental, state, provincial, local governmental
or municipal impositions, duties, contributions, rates and levies (including without
limitation social security contributions and any other payroll taxes), whenever and wherever
imposed (whether imposed by way of a withholding or deduction for or on account of tax or
otherwise) and in respect of any person and all penalties, charges, costs and interest
relating thereto;




“Tax Agreements” means the Separation Tax Agreement, the Tax Segregation Agreement and the
other agreements relating to Tax entered into or to be entered into as referred to in
Schedule 1 Part 9 some of which agreements may contain provisions relating to the Tax
affairs of State Acquired Businesses which remain part of the RBS Holdings Group following
the date of this Agreement;


 


11









 






“Tax Audit” means any audit or investigation of a similar nature carried out by a Tax
Authority;




“Tax Authority” means any taxing or other authority competent to impose any liability in
respect of Tax or responsible for the administration and/or collection of Tax or enforcement
of any law in relation to Taxation;




“Tax Correspondence” means computations and returns relating to Taxation, claims, elections,
surrenders, disclaimers, notices and consents for Taxation purposes and any correspondence
with any Tax authority in relation thereto;




“Tax Dispute” means any contention by a Tax authority (including by way of the issuance of
any assessment or correspondence) that a liability to Tax may arise or that a Tax Relief may
not be available;




“Tax Documents” means claims, elections, surrenders, disclosures, notices and consents for
Tax purposes;




“Tax Relief” includes any relief, loss, allowance, exemption, set-off, deduction or credit
in computing or against profits or Taxation and any right to repayment of Taxation;




“Tax Returns” means computations, returns and documents of a similar nature relating to any
Tax;




“Tax Segregation Agreement” means the tax agreement dated on or around the date hereof
between RBS, the State, ABN AMRO Bank, RBS NV, RBS Holdings and the Company relating to the
allocation of certain tax assets and liabilities related to the segregation of the Dutch
businesses and certain other matters in relation thereto;




“Tier 2 Shortfall” has the meaning given to it in Clause 13.2.3;




“Total Capital Ratio” has the meaning given to it in Clause 13.2.3;




“Transaction” means the Governance Amendments, the Acquired Business Transfers and the
Retained Business Wind Down pursuant to this Agreement;




“Transaction Documents” means this Agreement, the Articles, the Tax Agreements, the Trade
Mark Licenses, the Legal Demerger Agreement, the Litigation Management Agreement, the ID&J
SPAs, the Cohabitation Agreements and any other agreements entered into pursuant to such
Agreements;




“Transitional Plan” means the plan ordered by the Managing Board of RBS NV for (i) the
reorganisation of the RBS Holdings Group to achieve the allocation of businesses as intended
by the Investors, (ii) the Acquired Business Transfers and (iii) the Retained Business Wind
Down;




“Transfer” means, in relation to any share, loan note or other security or any legal or
beneficial interest in any share, to:




	 	(a)	 	sell, assign, transfer or otherwise dispose of it;

	 
	 	(b)	 	create or permit to subsist any Encumbrance over it;







	 	(c)	 	direct (by way of renunciation or otherwise) that another person should, or
assign any right to, receive it;







	 	(d)	 	enter into any agreement in respect of the votes or any other rights attached
to the share other than by way of proxy for a particular shareholder meeting; or

	 
	 	(e)	 	agree, whether or not subject to any condition precedent or subsequent, to do
any of the foregoing,





 


12









 











and “Transferred”, “Transferor” and “Transferee” shall be construed accordingly;




“Transfer Conditions” means the conditions set out in paragraph 1 of Part 1 of Schedule 1,
being the conditions precedent to the Acquired Business Transfers;




“Transfer Taxes” means stamp duties and taxes, stamp duty reserve tax, real estate transfer
taxes, registration duties and taxes and duties of a similar nature payable in respect of a
direct or indirect transfer of assets or shares;




“Undercapitalised or Underfunded Business” has the meaning given to it in Clause 13.4.1;




“Valuation Range” means the range for the fair market value of a business as determined in
accordance with paragraph 13 of Schedule 2;




“Valuer” has the meaning given to it in paragraph 13 of Schedule 2;




“VAT” means within the European Community such tax as may be levied in accordance with (but
subject to derogations from) the Directive 2006/112/EC and outside the European Community
any tax levied by reference to added value or sales;




“Wider RBS Group” means, in relation to RBS, its holding companies, subsidiaries and
subsidiary undertakings and subsidiaries or subsidiary undertakings of such holding
companies from time to time; and




“Wrong Box Asset or Liability” means a Business Asset or Liability which is indentified in
accordance with paragraph 7.3 of Part 1 of Schedule 1 by the parties at any time following
the date of this Agreement but prior to 30 June 2011 as being owned by a member of the
Retained Group but which is an asset or liability which is exclusively or principally used,
and accounted for, by an Acquired Business (and accordingly should be an Acquired Business
Asset) or which is so indentified as being owned by an Acquired Company acquired or to be
acquired by one Investor but which is exclusively or principally used, and accounted for, by
an Acquired Business of another Investor or by the Retained Business (and accordingly should
be an asset of such Acquired Business or the Retained Business as the case may be) or which
is newly identified and which prior to its identification had never been allocated to or
accounted for by an Acquired Business or the Retained Business.




	1.2	 	Interpretation







In this Agreement, save where the context otherwise requires:




	 	1.2.1	 	the singular includes the plural and vice versa and reference to any gender
includes a reference to all other genders;

	 
	 	1.2.2	 	headings and the use of bold typeface shall be ignored;







	 	1.2.3	 	references to any enactment shall include references to such enactment as it
may, after the date of this Agreement, from time to time be amended, supplemented or
re-enacted save where any amendment or modification to such enactment increases any
liability under this Agreement or imposes obligations which are additional hereto;





 


13









 











	 	1.2.4	 	unless otherwise expressly provided, expressions defined in the Companies Act
have the meanings there given to them;







	 	1.2.5	 	a reference to a “party” is to a party to this Agreement for the time being
and a reference to the “parties” is, unless otherwise stated to the contrary, a
reference to all parties to this Agreement for the time being;







	 	1.2.6	 	“including” and similar expressions are not to be construed as words of
limitation;







	 	1.2.7	 	references to times of the day are to London time (unless otherwise
specified);







	 	1.2.8	 	a person shall be deemed to be connected with another if that person is
connected with another within the meaning of Section 839 ICTA 1988;







	 	1.2.9	 	if a period of time is specified as from a given day, or from the day of an
act or event, it shall be calculated exclusive of that day;







	 	1.2.10	 	any English legal term for any action, remedy, method of judicial proceeding, legal
document, legal status, court, official or any legal concept or thing shall in respect
of any jurisdiction other than England be deemed to include what most nearly
approximates in that jurisdiction to the English legal term and a reference to any
English statute shall be construed so as to include equivalent or analogous laws of any
other jurisdiction;







	 	1.2.11	 	a specific Transaction Document is a reference to that document as amended, varied,
novated, supplemented or replaced from time to time (other than in breach of the
provisions of this Agreement) or the relevant Transaction Document;







	 	1.2.12	 	a document in the “agreed form” is a reference to a document in a form approved and
for the purposes of identification initialled by or on behalf of the Investors and the
Company;







	 	1.2.13	 	in this Agreement, the terms “Group”, “holding company” and other terms of similar
import, when used in connection with the State, shall be construed as if the State were
a company;







	 	1.2.14	 	for the purposes of this Agreement, De Nederlandsche Bank and the Dutch tax
authorities do not form part of the State. Accordingly, obligations assumed by the
State in this Agreement are not also assumed by De Nederlandsche Bank and/or the Dutch
tax authorities. In addition, where the State undertakes a procurement obligation, such
obligation does not imply a requirement to cause De Nederlandsche Bank or the Dutch tax
authorities to take, or omit to take, any particular action, and requires the State to
use only its powers as shareholder in the Company and not its legislative or other
powers; and







	 	1.2.15	 	any reference in this Agreement to RBS as an Investor acquiring an RBS Acquired
Business shall include RBS acquiring ownership of that Acquired Business by becoming
the sole shareholder of the Company as contemplated by Clause 4.







	1.3	 	The Schedules are part of this Agreement and shall have effect accordingly, and terms defined
therein and not in the main body of this Agreement shall have the meanings given to them in
such Schedules.







	1.4	 	References to this Agreement are to this Agreement as varied or supplemented from time to
time.





 


14









 











	2	 	Restatement







This Agreement amends and restates the Original CSA with effect from the date hereof in
accordance with the terms of this Agreement. Unless otherwise stated herein, the amendment
and restatement of the Original CSA shall be without prejudice to any rights or obligations
accrued or incurred by any of the parties prior to the date of this Agreement.




	3	 	Conditions and Effectiveness

	 
	3.1	 	Regulatory Approvals for Governance Amendments







The parties shall cooperate and consult together to the extent necessary in seeking the
Governance Clearances and shall use their respective reasonable endeavours to ensure that
the Governance Clearances are obtained and/or made so as to enable the Governance Amendments
to be implemented as soon as reasonably practicable following the date of this Agreement. In
such connection, each of the Investors will:




	 	3.1.1	 	promptly provide each other Investor and the Company with such information
(which shall be complete and accurate in all material respects) as is required to
complete any application for a Governance Clearance or to make any necessary filing in
connection with the Governance Amendments (such information to be provided on a
confidential basis and on a lawyer to lawyer basis if necessary);







	 	3.1.2	 	ensure by sharing required information that all applications for Governance
Clearances and all necessary filings are made on a consistent basis;







	 	3.1.3	 	cooperate in responding to any enquiries made by any relevant government,
anti-trust, tax or regulatory authority or any relevant stock exchange or listing
authority, in particular so as to ensure that such responses are made on a consistent
basis; and







	 	3.1.4	 	notify the other Investors and the Company as soon each Governance Clearance
is obtained.







No Investor shall be required to share or otherwise provide information to the other
Investors that it reasonably believes is competitively sensitive or proprietary but such
information shall if relevant for any Governance Clearance be supplied to the relevant
authority on a confidential basis.




The parties agree that RBS shall be responsible for managing the process of seeking the
Governance Clearances and that all costs incurred in relation to obtaining the Governance
Clearances shall be borne by the Company and shall be borne indirectly by the Investors in
the Consortium Proportions.




	3.2	 	Notification of all Governance Clearances







	 	3.2.1	 	Immediately following receipt of all Governance Clearances set out in Part A
of Schedule 7, RBS shall be entitled to serve written notice on the other Investors and
the Company that all necessary Governance Clearances have been received (or waived in
accordance with Clause 3.2.2) (the “Effective Notice”) and the Governance Amendments
shall take effect with effect from the date of such notice.







	 	3.2.2	 	If each of the Investors agrees, any Governance Clearance that is required as
a condition to implementing the Governance Amendments may be waived by the Investors.





 


15









 











	4	 	Share Capital of the Company

	 
	4.1	 	Initial alterations of the share capital of the Company







	 	4.1.1	 	The parties agree that, conditional only on the issue of the Effective Notice
in accordance with Clause 3.2.1, their intention is to amend and reduce the share
capital of the Company such that:







	 	(i)	 	Santander owns 100 S Shares;

	 
	 	(ii)	 	the State owns 100 F Shares;







	 	(iii)	 	the number of O Shares in issue is the minimum required to
ensure that the Investors hold the O Shares in the Consortium Proportions; and

	 
	 	(iv)	 	the L Shares are reclassified as R Shares.







	 	4.1.2	 	The parties agree that RBS will continue to own the R Shares.







	 	4.1.3	 	To achieve the objective set out in Clause 4.1.1, each of the Investors and
the Company severally agree to take such actions and execute such documents as are
reasonably necessary to cancel such number of F Shares and S Shares as would result in
Santander owning 100 S Shares and the State owning 100 F Shares and such number of O
Shares such that the remaining number of O Shares in issue would be the minimum
required to ensure that the Investors hold O Shares in the Consortium Proportions,
including without limitation:







	 	(i)	 	passing a resolution of the Shareholders to cancel all the F
Shares save for 100 F Shares and all the S Shares save for 100 S Shares;







	 	(ii)	 	passing a resolution of the holders of the F Shares approving
the proposed cancellation of the F Shares as contemplated by Clause 4.1.1(ii)
above;







	 	(iii)	 	passing a resolution of the holders of the S Shares approving
the proposed cancellation of the S Shares as contemplated by Clause 4.1.1(i)
above;







	 	(iv)	 	passing a resolution of the Shareholders to cancel such number
of the O Shares such that, following the cancellation, RBS will hold 382,780 O
Shares, Santander will hold 279,117 O Shares and the State will hold 338,103 O
Shares;







	 	(v)	 	passing a resolution of the holders of the O Shares approving
the proposed cancellation of the O Shares as contemplated by Clause 4.1.1(iii)
above;







	 	(vi)	 	passing a resolution of the shareholders to adopt the New
Articles, including a re-classification of the L Shares as R Shares;







	 	(vii)	 	filing each of the resolutions referred to in (i) to (vi)
above with the Dutch Trade Register, to the extent required under Dutch law;
and







	 	(viii)	 	announcing the proposed cancellations of F Shares, S Shares and O Shares in a
Dutch national newspaper.





 


16









 











	 	4.1.4	 	For the avoidance of doubt, the parties hereby confirm that Santander is and
remains entitled to the contribution of EUR138,345,000 effected by Santander on or
around 31 March 2010 — as share premium O and in payment of the nominal value of EUR
0.01 of one new O share issued to Santander — in order to maintain the minimum equity
that Santander is required to leave in RBS NV to fund (its part
of) the Retained Business. Such part of this amount will not be repaid to Santander
upon the cancellation of a number of its O shares referred to in this Clause as is,
at the time of such cancellation, required for funding of Santander’s part of the
Retained Business. To the extent required and unless otherwise agreed, RBS and the
State waive any rights to (the amount of) such contribution for the purposes of this
Clause 4.1.







	 	4.1.5	 	The Investors and the Company agree that any resolutions passed pursuant to
Clause 4.1.3 shall be conditional upon obtaining the Governance Clearances set out in
Part A of Schedule 7 and that any cancellation proposed pursuant to Clause 4.1.3 shall
not become effective until the New Articles become effective.







	4.2	 	Adoption of the New Articles







	 	4.2.1	 	Following the date of this Agreement the parties shall negotiate in good faith
and use all reasonable endeavours to agree the form of the New Articles such that they
reflect the terms of this Agreement.







	 	4.2.2	 	The parties agree that the New Articles shall be substantially the same as the
Articles save for any amendments as are necessary to reflect the terms of this
Agreement, in particular Clauses 4 and 7. The parties agree that Santander and the
State shall under the New Articles continue to have rights afforded to them pursuant to
article 27.3 of the Articles.







	 	4.2.3	 	The Investors shall procure that all Shareholders adopt a written resolution
to amend the Articles and execute a deed of amendment of the Articles before a Dutch
civil law notary, implementing the agreed form of the New Articles conditional only
upon RBS serving the Effective Notice. Such written resolution shall include a power of
attorney to employees of that Dutch civil law notary to have the deed of amendment of
the New Articles executed. On the date that Effective Notice is served, the Investors
shall take such action (including filing any documents with the Dutch Trade Register)
as is necessary to give effect to the New Articles.







	4.3	 	Subsequent alterations of the share capital of the Company







	 	4.3.1	 	The Investors have agreed that, as soon as reasonably practicable following
completion of the Acquired Business Transfers (excluding any transfer or use of or
payment for any Deferred Tax Assets) and the Retained Business Wind Down (excluding any
transfer or use of or payment for any Retained Business Deferred Tax Assets) (the
“Final Completion Date”), RBS will become the sole owner of the Company, RBS Holdings
and RBS NV.







	 	4.3.2	 	Accordingly, and subject to applicable law and regulation (including obtaining
all necessary anti-trust and regulatory approvals), the parties agree as soon as
reasonably practicable following the Final Completion Date to take such actions and
execute such documents as are necessary to:







	 	(i)	 	cancel or have the Company repurchase or to transfer the S
Shares, the F Shares and the O Shares; or







	 	(ii)	 	otherwise ensure that RBS is the sole shareholder of the
Company,





 


17









 











provided that (i) if O Shares are repurchased or cancelled, each Investor shall have
its Consortium Proportion of O Shares cancelled or repurchased and (ii) the parties
shall negotiate in good faith to agree a process which is as efficient for all
parties
and the RBS Holdings Group as is reasonably practicable from a Tax, regulatory,
financial and timing perspective, taking into account (in the case of Tax) the
principles in Part 9 of Schedule 1. If agreement cannot be reached under this Clause
4.3.2, the matter shall be resolved by the respective Chief Financial Officers of
the Investors (which shall be the Minister of Finance in the case of the State) (or
such persons as they each may nominate).




	 	4.3.3	 	Notwithstanding Clause 4.3.2, the parties agree that if prior to the Final
Completion Date:







	 	(i)	 	the State Acquired Businesses (excluding for this purpose any
State Deferred Tax Assets) have been transferred in accordance with this
Agreement, if so requested by RBS and subject to any anti-trust or other
regulatory approvals, as soon as reasonably practicable after such transfer the
parties shall take such steps as are necessary to remove the F Shares from the
capital of the Company, by cancellation or otherwise, or to transfer for nil
consideration such Shares to the Company or RBS;







	 	(ii)	 	the Santander Acquired Businesses have been transferred in
accordance with this Agreement, if so requested by RBS and subject to any
anti-trust or other regulatory approvals, as soon as reasonably practicable
after such transfer the parties shall take such steps as are necessary to
remove the S Shares from the capital of the Company, by cancellation or
otherwise, or to transfer for nil consideration such Shares to the Company or
RBS; or







	 	(iii)	 	the Retained Business Wind Down has been completed (excluding
for this purpose any use or transfer of or payment for any Retained Business
Deferred Tax Assets), if so requested by RBS and subject to any anti-trust or
other regulatory approvals, as soon as reasonably practicable after such
completion the parties shall take such steps as are necessary to remove the O
Shares from the capital of the Company, by cancellation or otherwise, or to
transfer for nil consideration such Shares to the Company or RBS.







	 	4.3.4	 	Without prejudice to Clause 5.3.1 and paragraphs 10.1.1 and 10.2 of Schedule
2, the cancellation or repurchase of the S Shares, F Shares and O Shares or the removal
of such Shares from the capital of the Company as referred to in Clauses 4.3.2 and
4.3.3 shall be effected for no consideration or, to the extent applicable, for no
consideration other than for any amounts due to the relevant holders of such Shares in
respect of their entitlement to any part of the State Acquired Business, the Santander
Acquired Business or the Retained Business and taking into account Clause 4.1.4.







	 	4.3.5	 	The cancellation or repurchase of S Shares, F Shares and O Shares or the
removal of such Shares from the capital of the Company as referred to in Clauses 4.3.2
and 4.3.3 shall be without prejudice to Clause 5.3.5.





 


18









 











	4.4	 	No Opposition







Each of the Investors severally undertakes that it shall not exercise its rights as a
shareholder or creditor of the Company or through its nominee directors of the Company to
prevent any Investor or the Company from exercising its rights to enforce the obligations of
the Investors and/or the Company to alter the share capital of the Company as set out in
this Agreement. Notwithstanding any other provision of this Agreement or any agreement
or document to be entered into in connection with it, the parties agree that: (i) upon RBS
issuing the Effective Notice in accordance with Clause 3.2.1 their respective obligations
under Clauses 4.1 and 4.2 shall be unconditional and irrevocable; and (ii) from the Final
Completion Date their respective obligations under Clause 4.3 shall be unconditional
(subject to any anti-trust, regulatory or other approvals that are required) and
irrevocable.




	5	 	Acquired Business Transfers

	 
	5.1	 	Acquired Business Transfers Terms and Intentions







	 	5.1.1	 	This Clause 5 and Schedule 1 set out the principles and terms on which those
Acquired Businesses which have not already been transferred to the relevant Investor
are proposed to be acquired from the RBS Holdings Group directly or indirectly by
Santander and the State or members of their respective Groups. The parties acknowledge
that the overriding principle of this Agreement and the basis on which the
shareholdings in the Company of each Investor have been determined is that each
Investor shall acquire the assets and Liabilities attributable to its Acquired
Businesses as described in Part 2 of Schedule 1. The provisions of this Agreement shall
be construed in accordance with this overriding principle.







	 	5.1.2	 	The parties agree that as of the date of this Agreement the following
businesses have been identified as State Acquired Businesses which shall transfer to
ABN AMRO (as the entity nominated by the State to be the transferee of the relevant
State Acquired Businesses) in accordance with this Agreement and the ID&J SPAs
(provided that where there is an inconsistency between this Agreement and the relevant
ID&J SPA, the relevant ID&J SPA shall prevail) as soon as reasonably practicable
following the date of this Agreement, taking into account the intention to maximise the
efficiency of the Acquired Business Transfers from a Tax, regulatory, human resources,
financial and operational point of view, while minimising the impact on any other
Investor or its Acquired Business or the Retained Group, as well as with the aim to
maximise so far as reasonably practicable value to each Investor and its shareholders:







	 	(i)	 	the international diamond and jewellery business in India which
forms part of BU Private Clients (“ID&J India”);







	 	(ii)	 	the international diamond and jewellery business in Hong Kong
which forms part of BU Private Clients;







	 	(iii)	 	the international diamond and jewellery business in Japan
which forms part of BU Private Clients; and







	 	(iv)	 	the international diamond and jewellery business in United Arab
Emirates which forms part of BU Private Clients.





 


19









 











	 	5.1.3	 	In addition to those assets and liabilities set out at clause 5.1.2, the
parties have agreed that the assets and liabilities set out in Schedule 8 are assets
and liabilities forming part of the State Acquired Business. The parties have agreed
that in relation to each of these assets and liabilities the actions set out in
Schedule 8 shall be taken with a view to transferring such assets and liabilities to
the State (or a member of its Group) prior to 30 June 2011 and that the assets and
liabilities shall remain within RBS NV until the relevant Completion on the basis set
out in Schedule 8. The parties have also agreed that if such transfers do not take
place prior to 30 June 2011, the actions set out in column 5 of Schedule 8 shall be taken
in relation to such assets and liabilities. The parties agree that as at the date of
this Agreement the assets of the RBS Holdings Group which have been identified as
assets forming part of the State Acquired Businesses include the State Deferred Tax
Assets. The parties acknowledge that ABN AMRO Bank shall receive payments in respect
thereof in accordance with Clause 5 of the Separation Tax Agreement (or the
equivalent provisions of any other applicable Tax Agreement in the case of Tax
Reliefs other than Tax Reliefs in respect of Dutch corporate income tax).







	 	5.1.4	 	Subject to 5.1.2, pursuant to the Legal Demerger Agreement, RBS NV, ABN AMRO
Bank and RBS Holdings have agreed that certain specified State Acquired Businesses
(referred to in the Legal Demerger Agreement as the “Identified Non-Transferring Assets
and Liabilities”) will transfer to ABN AMRO Bank in accordance with Clause 5.9 of the
Legal Demerger Agreement. Such transfers will take place in accordance in with the
terms of the Legal Demerger Agreement and the principles set out in this Agreement (in
particular this Clause 5 and Schedule 1), provided that prior to 30 June 2011 to the
extent that there is any inconsistency between the terms of this Agreement and the
Legal Demerger Agreement, the terms of the Legal Demerger Agreement shall prevail.







	 	5.1.5	 	The parties agree that as of the date of this Agreement the following assets
of RBS Holding Group have been identified as assets forming part of the Santander
Acquired Businesses:







	 	(i)	 	the Santander Deferred Tax Assets, in respect of which the
parties acknowledge Santander shall receive payment in accordance with Clause 5
of the Separation Tax Agreement;

	 
	 	(ii)	 	the Paraguayan Escrow Amount; and

	 
	 	(iii)	 	the Paraguayan Tax Amounts.







	 	5.1.6	 	The parties agree that the client relationship and loans made to Amsterdam
Office B.V., which as at the date of this Agreement are owned by ABN AMRO Bank, will be
transferred to RBS NV pending receipt of the requisite client consents and agreement
between RBS NV and ABN AMRO as to the level of compensation payable to RBS NV if losses
arise in relation to such loans. The parties agree that the transfer is expected to
take place by 30 June 2010.







	 	5.1.7	 	The parties acknowledge and agree that they will negotiate in good faith, and
will use commercially reasonable efforts to apply the principles set out in this
Agreement (and in particular this Clause 5.1), to resolve all issues between them
arising out of or in connection with the Acquired Business Transfers.







	 	5.1.8	 	The intention of the parties is that the acquisition by the individual
Investors or members of their respective Groups of the Acquired Businesses (which have
not already been acquired) should be implemented in a manner that is:







	 	(i)	 	consistent with the principles set out in Schedule 1; and







	 	(ii)	 	as efficient for all parties and the RBS Holdings Group as is
reasonably practicable from a Tax, regulatory, human resources, financial and
operational point of view taking into account (in the case of Tax) the
principles in Part 9 of Schedule 1.





 


20









 











	5.2	 	Definitive Documents for the Acquired Business Transfers







Pursuant to the agreement, acknowledgments and intentions set out in or contemplated by
Clause 5.1, the applicable parties shall:




	 	5.2.1	 	as soon as reasonably practicable after the date of this Agreement and subject
to Clause 5.3 below, negotiate in good faith to finalise definitive agreements for:







	 	(i)	 	the Acquired Business Transfers;







	 	(ii)	 	(to the extent not already agreed by the parties) the provision
of transitional or ongoing services between all or any of the Acquired
Businesses and the Retained Business or between two or more Acquired Businesses
(including, without limitation, information technology, operations and
infrastructure support services) which are reasonably necessary to conduct the
Acquired Businesses and the Retained Business on terms and in a manner which is
in accordance with Clause 5.5 and Schedule 1;







	 	(iii)	 	if so required, the allocation of Taxes and Tax Relief and
dealing with Tax Correspondence and Tax Disputes, as provided for in Part 9 of
Schedule 1, to the extent not already finalised prior to the date of this
Agreement or otherwise agreed by the parties; and







	 	(iv)	 	the implementation of such other matters as the parties
consider appropriate,







in each case on terms which are consistent with the intention and principles set out
in this Clause 5 and Schedule 1.




	5.3	 	Failure to complete the Acquired Business Transfers







	 	5.3.1	 	If any Acquired Business Transfer has not been completed by 30 June 2011, RBS
shall have the right at its discretion:







	 	(i)	 	by written notice to the relevant Investor, to deem that the
Transfer Conditions in relation to any Residual Acquired Business cannot be
satisfied such that paragraph 1.4.1 of Schedule 1 Part 1 shall apply to that
Residual Acquired Business(es); or







	 	(ii)	 	subject to payment to the State and/or Santander (as the case
may be) of the fair market value of the relevant businesses (as determined
below), to determine that any Residual Acquired Businesses shall not be
acquired by the State or Santander (as the case may be) but shall be acquired
by the Wider RBS Group (either by reallocating such businesses as RBS Acquired
Businesses, save for the purposes of paragraph 7.1 of Schedule 1 of this
Agreement, or by purchasing such businesses, in each case for consideration
which is greater than or equal to the lowest point of the Valuation Range as
determined by the Valuer in accordance with the principles set out in paragraph
13 of Schedule 2 mutatis mutandis. RBS may only acquire a Residual Acquired
Business of the State for a consideration of less than the lowest point of the
Valuation Range with the consent of the State. RBS may only acquire a Residual
Acquired Business of Santander for a consideration of less than the lowest
point of the Valuation Range with the consent of Santander.





 


21









 











	 	5.3.2	 	If RBS exercises its rights under Clause 5.3.1, for the purposes of Clause
4.3.1 the completion of the Acquired Business Transfers shall be the date that the
final Residual Acquired Business is sold in accordance with paragraph 1.4 of Schedule 1
Part 1 or allocated to or purchased by RBS (or a member of the Wider RBS Group) in
accordance with Clause 5.3.1(ii).

	 
	 	5.3.3	 	Notwithstanding Clause 5.3.1, in relation to ID&J India, if:







	 	(i)	 	on or immediately prior to 30 June 2011 the State produces to
RBS written evidence from the Reserve Bank of India (the “RBI”) confirming that
the RBI is considering the licence application(s) made by ABN AMRO Bank in
respect of the transfer of ID&J India; or







	 	(ii)	 	the RBI has on or shortly prior to 30 June 2011 confirmed in a
meeting with RBS NV and ABN AMRO Bank that it is considering the licence
application(s) made by ABN AMRO Bank in respect of the transfer of ID&J India,







the time period for transfer of ID&J India shall be extended to the earlier of (i)
30 June 2012 or (ii) the date that the RBI informs ABN AMRO Bank, the Company, RBS
NV or any Investor that it will not grant the requisite licence(s). If the requisite
licence(s) is granted prior to 30 June 2012, the timeframe for the transfer of ID&J
India shall be extended by RBS to permit the transfer to the State or a member of
its Group provided that the Completion must take place prior to 31 December 2012. If
on or immediately prior to 30 June 2012 the RBI has not granted the requisite
licence(s) but has confirmed in writing to ABN AMRO Bank (as evidenced by ABN AMRO
Bank to RBS NV) that it will do so within six months, RBS shall grant a further
extension to ABN AMRO Bank to 31 December 2012. If any extension is granted in
accordance with this Clause 5.3.3, the provisions of Clause 5.3.1 shall not apply to
ID&J India until the end of the time period granted by RBS in accordance with this
Clause. Any extension granted pursuant to this Clause 5.3.3 in relation to ID&J
India shall not affect the rights of RBS under Clause 5.3.1 in relation to any other
Residual Acquired Business.




	 	5.3.4	 	If the Transfer of ID&J India has not taken place by the end of the time
period set by RBS in accordance with the Clause 5.3.3, Clause 5.3.1 shall apply to ID&J
India mutatis mutandis.







	 	5.3.5	 	Notwithstanding Clauses 5.3.1 and 5.3.2, the parties acknowledge that pursuant
to the provisions of Clause 5 of the Separation Tax Agreement (and/or, in the case of
the State, the equivalent provisions of any other applicable Tax Agreement), Santander
and/or ABN AMRO Bank may not have become entitled to receive payment in respect of all
or part of the relevant Deferred Tax Assets by 30 June 2011 (or in the case of ID&J
India, 30 June 2012 or 31 December 2012 as applicable). The parties also acknowledge
that the Tax affairs of members of the RBS Holdings Group in respect of periods covered
by a Tax Agreement or by Part 9 of Schedule 1 to this Agreement may not be finalised by
30 June 2011 (or in the case of ID&J India, 30 June 2012 or 31 December 2012 as
applicable) such that certain Tax-related Liabilities attributable to a State Acquired
Business or a Santander Acquired Business may remain in the relevant member of the RBS
Holdings Group after 30 June 2011 (or in the case of ID&J India, 30 June 2012 or 31
December 2012 as applicable). The parties therefore acknowledge that





 


22









 











completion may not have occurred in relation to such Assets and Liabilities
attributable to the State Acquired Businesses and Santander Acquired Businesses by
30 June 2011 (or in the case of ID&J India, 30 June 2012 or 31 December 2012 as
applicable) and the provisions of the Tax Agreements and Part 9 of Schedule 1 to
this Agreement may remain in force in respect of such Assets and Liabilities after
30 June 2011 (or in the case of ID&J India, 30 June 2012 or 31 December 2012 as
applicable). For the avoidance of doubt, the fact that any Deferred Tax Assets may
not have been utilised prior to 30 June 2011 (or in the case of ID&J India, 30 June
2012 or 31 December 2012 as applicable) shall not prevent the Final Completion Date
from occurring for the purpose of Clause 4.3.




	 	5.3.6	 	Notwithstanding Clause 5.3.1, in respect any intellectual property which has
been allocated by the Investors to an Acquired Business and for which an assignment of
such Intellectual Property has been signed prior to 30 June 2011, the provisions of
Clause 5.3.1 shall not apply to such intellectual property (the “Assigned IP”). The
Assigned IP shall transfer to the relevant Investor (or member of its Group, or in the
case of RBS, the Wider RBS Group) in accordance with the relevant assignment.







	5.4	 	Accounting between the Parties







The parties acknowledge that the operation of this Clause 5 and Schedule 1 may lead to a
number of adjustments and payments between the parties which, in the absence of agreement
between the Investors, shall be determined in accordance with Clause 9. The parties will put
in place reasonable arrangements to record such adjustments and the liability to make such
payments on the basis that, in order to avoid numerous de minimis matters having to be dealt
with, the Investors will settle such Liabilities between themselves on a monthly basis
(unless otherwise agreed). Paragraph 1.1.8 of Schedule 1 Part 9 shall apply as regards the
manner of making such payments and adjustments.




	5.5	 	Intra Group Arrangements







	 	5.5.1	 	Subject to Clause 5.5.2, if following the date of this Agreement any Acquired
Company or any of the Acquired Businesses to be acquired by any one Investor (or a
member of its Group) is found to be using any assets, facilities or services (including
the management and allocation of credit default swaps and other derivatives exposure)
of any member of the Retained Group or any Acquired Company or Acquired Business to be
acquired by any other Investor (or a member of its Group) or if any member of the
Retained Group uses any assets, facilities or services (including as aforesaid) of any
Acquired Company or Acquired Business the Investors shall, and the Company shall
procure that the Retained Group shall use their respective reasonable endeavours to
procure that such arrangements are continued on the same basis as prevailing at the
time the need for further arrangements is identified (or otherwise on such terms as the
Investors agree) to the extent necessary to enable the relevant companies or businesses
using such assets, facilities or services (including as aforesaid) to carry on their
business in the manner in which it is carried on at the time that the need for further
arrangements contemplated by this Clause 5.5 is identified.







	 	5.5.2	 	Save with the written consent of all parties, no arrangement may be entered
into pursuant to Clause 5.5.1 if to do so would be inconsistent with intra group
arrangements that have as at the date of this document been agreed by the parties.





 


23









 











	5.6	 	Allocation of Capital







For the avoidance of doubt and notwithstanding Clause 2, the parties agree that all
discussion and agreements on the allocation of capital of the RBS Holdings Group have been
completed and recorded in the term sheet and covering letter agreed by the respective Chief
Financial Officers of the Investors on 28 September 2009 in Appendix 7 of the document
entitled “ABN AMRO Restructuring: Agreed Package of Solutions for pre-NL Demerger Filing
Issues” (the “4.95 Term Sheet” as set out in Schedule 10 to this Agreement). Accordingly,
the provisions of Part 11 of Schedule 3 of the Original CSA shall terminate and shall have
no further effect in accordance with the 4.95 Term Sheet. Once so terminated no party shall
have any claim under those provisions, whether such claim purportedly relates to events
prior to or following the date of this Agreement.




	6	 	The Retained Group







Each of the parties agrees that, with respect to the Retained Group and the Retained
Business, the terms of Schedule 2 shall apply.




	7	 	Governance

	 
	7.1	 	Appointment of Directors of the Company prior to the Effective Notice







	 	7.1.1	 	Until the New Articles become effective in accordance with Clause 4.2, the
Board shall comprise four Directors, who shall, subject to Clause 7.7, be nominated for
appointment by the Investors as follows:







	 	(i)	 	RBS — two Directors (including the Chairman);

	 
	 	(ii)	 	Santander — one Director; and

	 
	 	(iii)	 	the State — one Director.







	 	7.1.2	 	Until the New Articles become effective in accordance with Clause 4.2, any
Director may be proposed for appointment, suspension or removal by the relevant
Investor by written notice served on the Company and the other Investors. In such
event, the Investors and the Company shall promptly take such steps as may be necessary
to effect any such appointment, suspension or removal, including but not limited to
procuring that all Shareholders shall (i) exercise their voting rights in a general
meeting of Shareholders of the Company or adopt a resolution in writing to appoint,
suspend or remove the relevant Investor Director and (ii) abstain from exercising their
voting rights in the general meeting of Shareholders of the Company or adopt a
resolution in writing in respect of the appointment, suspension or removal of an
Investor Director other than in accordance with a proposal to that effect in accordance
with this Clause 7 by the relevant Investor.







	 	7.1.3	 	A Director may appoint another Director as his proxy for any specified meeting
of the Board. In the case of the Directors appointed by the State and Santander, such
proxy shall not be resident for Tax purposes in the United Kingdom. Such proxy may
attend the specified meeting and exercise the votes of the Director who has appointed
him and such appointing Director may direct his replacement on how to exercise such
votes.





 


24









 











	 	7.1.4	 	The parties agree that:







	 	(i)	 	no Director appointed upon nomination of the State shall be
resident for Tax purposes in the United Kingdom; and







	 	(ii)	 	no Director appointed upon nomination of Santander shall be
resident for Tax purposes in the United Kingdom.







	 	7.1.5	 	Until the New Articles become effective in accordance with Clause 4.2, the
parties agree that, subject always to the need to comply with all applicable legal and
regulatory requirements and with the fiduciary obligations of each Director and of the
Board of the Company, unless otherwise provided in this Agreement, Board decisions
shall be taken by majority vote and so as to be consistent with the provisions of this
Agreement.







	7.2	 	Appointment of Directors of the Company following the Effective Notice







	 	7.2.1	 	From the time that the New Articles become effective, the Board shall comprise
such number of Directors as may be determined by RBS, who shall each be nominated for
appointment by RBS.







	 	7.2.2	 	The Investors and the Company shall promptly take such steps as may be
necessary to effect any appointment, suspension or removal of a Director required in
order to implement Clause 7.2.1, including but not limited to procuring that all
Shareholders shall exercise their voting rights in a general meeting of Shareholders of
the Company or adopt a resolution in writing to appoint any persons nominated for
appointment by RBS or to suspend or remove any Director appointed upon nomination by
the State or Santander. A Director appointed upon nomination of the State or Santander
that is removed shall be granted a release from liability for his management of the
Company both upon removal and upon adoption of the annual accounts of the financial
year during which the removal occurred, insofar as the exercise of his duties is
reflected in the financial statements which have been made available to the general
meeting or otherwise disclosed to the general meeting, unless release from liability
cannot reasonably be expected to be granted for reasons of improper exercise of duties.







	 	7.2.3	 	From the time that RBS provides the Effective Notice in accordance with Clause
3.2, the parties agree that, subject to Clause 7.7, RBS shall in its absolute
discretion determine the governance policies and practices of the Company and the RBS
Holdings Group.







	7.3	 	Appointment of the Chairman







The Chairman shall be appointed by RBS from amongst the Directors appointed by RBS. The
Chairman shall have a casting vote.




	7.4	 	Agreements in relation the Acquired Businesses







	 	7.4.1	 	Pursuant to the Cohabitation Agreements and ID&J SPAs, RBS NV and ABN AMRO
Bank have agreed certain matters in relation to the State Acquired Businesses set out
in Clause 5.1.2 that are owned by RBS NV at the date of this Agreement until such time
as they are transferred to the State (or such member of the State’s Group as is
nominated by the State). RBS and the State agree to take such action as is required to
give effect to the Cohabitation Agreements and ID&J SPAs in relation to the operation
of such State Acquired Businesses. Upon the reasonable request by RBS and the State,
Santander shall take such action is
required to give effect to the Cohabitation Agreements and ID&J SPAs in relation to
the management of such State Acquired Business.





 


25









 











	 	7.4.2	 	Pursuant to the Legal Demerger Agreement, RBS NV and ABN AMRO Bank have agreed
certain matters in relation to the State Acquired Businesses that are identified prior
to or following the date of this Agreement until such time as they are transferred to
the State (or such member of the State’s Group as is nominated by the State), such
businesses being referred to in the Legal Demerger Agreement as “Non-Transferring
Assets and Liabilities”. RBS and the State agree to take such action as is required to
give effect to the Legal Demerger Agreement in relation to the operation of such State
Acquired Businesses. Upon the reasonable request by RBS and the State, Santander shall
take such action as is required to give effect to the Legal Demerger Agreement in
relation to the management of such State Acquired Businesses.







	 	7.4.3	 	RBS and the State have agreed that ID&J India shall be governed in accordance
with Schedule 11. RBS shall take such action as is required to procure that RBS NV
shall adhere to the provisions of Schedule 11.







	 	7.4.4	 	Subject to Clause 5.3, the parties agree that any State Acquired Businesses
and any Santander Acquired Businesses may only be sold by RBS NV if the prior written
consent of the State or Santander, respectively, is provided to RBS.







	7.5	 	Regulation of Board Meetings







	 	7.5.1	 	Until the New Articles become effective in accordance with Clause 4.2, Board
meetings of the Company shall be conducted in accordance with the provisions in Part A
and Part C of Schedule 3 and other matters relating to the Board shall be regulated in
accordance with Part D of Schedule 3.







	 	7.5.2	 	From the time that the New Articles become effective, subject only to Clause
7.7, RBS shall in its absolute discretion determine the conduct of Board meetings of
the Company and Parts A, C and D of Schedule 3 shall have no effect in relation to
Board meetings of the Company.







	 	7.5.3	 	Until the New Articles become effective in accordance with Clause 4.2, the
Company undertakes for the benefit of each Investor that none of the Board Reserved
Matters shall be carried out without the approval of the Super Board Majority.
Following the date of the Effective Notice, the Board Reserved Matters and Super Board
Majority shall have no effect for the purposes of this Agreement.







	7.6	 	Regulation of Shareholder Meetings







General meetings shall be conducted in accordance with the provisions in Part B and Part C
of Schedule 3.




	7.7	 	Tax Matters







The Investors agree that they will use all reasonable endeavours to ensure that the Company
is resident for Tax purposes in the Netherlands and not in any other jurisdiction.




	7.8	 	Conduct of Directors







Each Investor shall procure that the Directors nominated by it shall act in accordance and
in a manner consistent with the terms of this Agreement (subject only to them not being in
breach of their fiduciary duties as a result), including but not limited to exercising their
voting rights in meetings of the Board or otherwise.


 


26









 






	7.9	 	Voting Trust







The parties shall procure that the Shareholders shall at all times exercise their voting
rights in the general meeting of Shareholders of the Company so as to ensure, or shall
otherwise procure, that full effect is given to the terms of this Agreement.




	7.10	 	Accounting Policies







The accounting policies of the Company and its Group for use in the Company’s own accounts
and in its Group consolidated accounts shall be determined by the Board.



7.11 Waiver of certain rights





	 	7.11.1	 	RBS hereby unconditionally and irrevocably waives any and all of its rights as
shareholder of the Company to initiate:







	 	(i)	 	statutory squeeze out procedures pursuant to Section 2:201a of
the Dutch civil code against the State and Santander for the purpose of
obtaining 100% of the issued and outstanding shares in the capital of the
Company; and







	 	(ii)	 	statutory dispute settlement proceedings pursuant to Section
2:336 of the Dutch civil code against the State and/or Santander for the
purpose of requesting that the State and/or Santander transfer their Shares to
RBS.







	 	7.11.2	 	In addition, each of RBS, the State and Santander hereby unconditionally and
irrevocably vis-a-vis each other waive any and all of their rights to initiate
statutory dispute settlement proceedings pursuant to Section 2:343 of the Dutch civil
code against each other for the purpose of requesting that their Shares are taken over
by one or both of the other Shareholders.







	8	 	Termination







Save as specified in this Agreement, this Agreement shall terminate only:




	 	(i)	 	with the unanimous written consent of the Investors;







	 	(ii)	 	with respect to Santander with immediate effect without notice if all the S
Shares and O Shares held by Santander are cancelled, repurchased, acquired by RBS (or a
member of its Group) or otherwise such that Santander no longer holds any Shares;







	 	(iii)	 	with respect to the State with immediate effect without notice if all the F
Shares and O Shares held by the State are cancelled, repurchased, acquired by RBS (or a
member of its Group) or otherwise such that the State no longer holds any Shares; or







	 	(iv)	 	with immediate effect without notice if all of the Shares are legally owned by
one Investor or members of its Group.





 


27









 











The following provisions of this Agreement shall survive termination of this Agreement:
Clause 1, Clause 2, Clause 11 (but only to the extent required by Investors for their
regulatory compliance, tax and other legal requirements relating to (i) the Financial Year
in which this Agreement is terminated or (ii) the Financial Year prior to the Financial Year in
which this Agreement is terminated), Clauses 18 to 22 and paragraph 7 of Part 1 of Schedule
1 and Part 9 of Schedule 1 (save to the extent otherwise agreed). The provisions of the Tax
Agreements shall also survive termination of this Agreement save to the extent otherwise
agreed. Termination shall not affect a party’s rights and obligations which have accrued as
at the date of such termination.




	9	 	Determinations







	9.1	 	Any matter which this Agreement expressly states shall be determined in accordance with this
Clause 9 shall first be referred for agreement to the Chief Executive of each Investor (or
such persons as they may nominate for the purpose). If agreement is not reached within 40
Business Days of such referral the matter will, on the application of any Investor, be
determined by the Independent Accountants or, in the case of any dispute relating to Schedule
1 Part 9, by independent tax advisers. For the purposes of this Agreement, the Independent
Accountants shall be a firm of independent chartered accountants of international repute,
selected as soon as reasonably practicable by a unanimous decision of the Investors (acting
reasonably and without delay) for the purposes of this Clause 9, or failing such agreement
within 10 Business Days, nominated on the application of any Investor by the President for the
time being of the Institute of Chartered Accountants in England and Wales (the “Independent
Accountants”). For the purposes of this Agreement, the independent tax advisers shall be a
firm of independent tax advisers of international repute, selected as soon as reasonably
practicable by a unanimous decision of the Investors (acting reasonably and without delay) for
the purposes of this Clause 9, or failing such agreement within 10 Business Days, nominated on
the application of any Investor by the President for the time being of the Institute of
Taxation (the “Independent Tax Advisers”).







	9.2	 	The Independent Accountants or the Independent Tax Advisers (as the case may be) shall be
fully briefed by the Investors as to their intended role as soon as reasonably practicable
after their appointment and shall be engaged by the Company to deal with all matters referred
to them in accordance with this Clause 9. The parties shall use all reasonable endeavours to
agree the terms of engagement of the Independent Accountants or the Independent Tax Advisers
(as the case may be) and shall not unreasonably withhold consent to the entry into by the
Company of an engagement letter with the Independent Accountants or the Independent Tax
Advisers (as the case may be) on normal market terms, (including provisions relating to the
indemnification by the Company of the Independent Accountants or the Independent Tax Advisers
(as the case may be) against Liabilities arising out of their engagement and the exclusion of
liability of the Independent Accountants or the Independent Tax Advisers (as the case may be)
for their acts or omissions, subject in both cases to exceptions).







	9.3	 	In making any determination pursuant to this Agreement, the Independent Accountants or the
Independent Tax Advisers (as the case may be) shall act as experts and not arbitrators and
their determination shall be final and binding in the absence of manifest error. The fees and
costs of the Independent Accountants or the Independent Tax Advisers (as the case may be)
incurred in connection with this Agreement shall be borne as they shall direct or, failing
such direction, equally between the Investors which are parties to the determination.





 


28









 











	9.4	 	For the purpose of the Company and the Investors (including any matter between two or more
Investors) agreeing any matter pursuant to this Agreement or for the purposes of any
determination of any matter by the Independent Accountants or the Independent Tax Advisers
(as the case may be), each Investor and the Company shall procure that the other(s),
its/their advisers and (where applicable) the Independent Accountants or the Independent Tax
Advisers (as the case may be) shall be given reasonable access at reasonable times to the
books and records relating to such matter which are in its possession or control, or the
possession or control of any of its subsidiaries, and shall procure that the other(s),
its/their advisers and (where applicable) the Independent Accountants or the Independent Tax
Advisers (as the case may be) are allowed to take copies of such books and records and the
Company shall procure that RBS NV takes such actions as are necessary for the Company or an
Investor to comply with its obligations under this Clause 9.4.







	9.5	 	Except to the extent that the parties agree otherwise, the Independent Accountants or the
Independent Tax Advisers (as the case may be) shall determine their own procedure, but:







	 	9.5.1	 	shall make their determination pursuant to the provision of this Agreement as
soon as is reasonably practicable;







	 	9.5.2	 	the procedure of the Independent Accountants or the Independent Tax Advisers
(as the case may be) shall:







	 	(i)	 	give the relevant parties a reasonable opportunity to make
written and oral representations to them;







	 	(ii)	 	require that the relevant parties supply each other with a copy
of any written representations at the same time as they are made to the
Independent Accountants or the Independent Tax Advisers (as the case may be);
and







	 	(iii)	 	permit each relevant party to be present while oral
submissions are being made by any other party (save to the extent that the
Independent Accountants or the Independent Tax Advisers (as the case may be)
determine that this would lead to a breach of confidence or the divulging of
business secrets by any party).







	9.6	 	The determination of the Independent Accountants or the Independent Tax Advisers (as the case
may be) pursuant to Clause 9.1 shall be made in writing and made available for collection by
the parties at the offices of the Independent Accountants at such time as they shall determine
and, unless otherwise agreed by the parties, include reasons for each relevant determination.







	9.7	 	The parties shall co-operate with the Independent Accountants or the Independent Tax Advisers
(as the case may be) and comply with their reasonable requests made in connection with the
carrying out of their duties under this Agreement.







	9.8	 	Subject to Clause 9.9, nothing in this Clause 9 shall entitle a party or the Independent
Accountants or the Independent Tax Advisers (as the case may be) access to any information or
document which is protected by legal professional privilege, or which has been prepared by the
other party or its accountants and other professional advisers with a view to assessing the
merits of any claim or argument.







	9.9	 	A party shall not be entitled by reason of Clause 9.8 to refuse to supply such part or parts
of documents as contain only the facts on which the relevant claim or argument is based.





 


29









 











	9.10	 	Each party and the Independent Accountants or the Independent Tax Advisers (as the case may
be) shall, and shall procure that its and their advisers shall, keep all information and
documents provided to them pursuant to this Clause 9 confidential and shall not use the same
for any purpose, except for use in connection with the proceedings of the Independent
Accountants or the Independent Tax Advisers (as the case may be) or another matter arising out
of this Agreement or in defending any claim or argument or alleged claim or argument relating
to this Agreement or its subject matter.







	9.11	 	The Independent Accountants or the Independent Tax Advisers (as the case may be) shall be
entitled to obtain financial, legal, actuarial or other specialist advice as they may consider
necessary or desirable for the purpose of fulfilling their obligations hereunder and the costs
of obtaining such advice shall be met as provided in Clause 9.3.







	9.12	 	Any challenge to a determination by Independent Accountants or the Independent Tax Advisers
(as the case may be) on the basis of manifest error shall be resolved by arbitration in
accordance with Clause 22.







	10	 	Representations and Warranties







	10.1	 	Each of the Investors represents and warrants to each of the other parties on the terms set
out in Schedule 4 as at the date of this Agreement.







	10.2	 	RBS hereby represents and warrants to the State, ABN AMRO Bank and Santander (and not to any
other person) that, so far as it is aware and based on the facts, and circumstances known as
at the date of this Agreement and on the applicable law and other regulation as at the date of
this Agreement, the distributions or repurchases of Shares by the Company as contemplated by
Clauses 4.3.2(i) and 15 do not contravene any agreement between RBS and the EC Commission.







	11	 	Provision of Information and Preparation of Accounts







	11.1	 	Pursuant to the Cohabitation Agreements, RBS NV and ABN AMRO Bank have agreed that certain
information relating to the State Acquired Businesses the subject thereof shall be provided by
RBS NV to ABN AMRO Bank. RBS and the State shall procure that such information is provided in
accordance with the Cohabitation Agreements.







	11.2	 	RBS shall procure that information relating to the Retained Business is provided in
accordance with Schedule 2.







	11.3	 	An Investor may pass information on to those persons to whom the Investors are entitled to
pass information under Clause 16.







	11.4	 	Each of the Investors shall ensure that information provided to it relating to any Acquired
Business (other than the Acquired Businesses to be acquired by it) is used only for the
purpose of implementing the provisions of this Agreement (including Clause 5 and Schedule 1)
or for compliance with applicable legal or regulatory obligations.






 


30









 










	11.5	 	The Company shall prepare such audited consolidated financial information in relation to the
Company and its Group as is determined by the Board to be required for the purposes of
complying with RBS’, the Company’s and the Company’s Group’s obligations to prepare statutory
accounts in accordance with Dutch generally accepted accounting principles and/or
International Financial Reporting Standards (with the latter in any event being
applied in relation to the Company’s Group’s audited consolidated financial information) and
for the purposes of the accounts of the Company and its Group being consolidated into the
consolidated accounts of RBS. In addition, the Company shall prepare such financial
information as the Investors require for their consolidated accounts as set out in Clause
11.6 below.







	11.6	 	The Board shall procure the production and distribution to the Investors of such accounting
information relating to the affairs of the Company and its Group as Investors may reasonably
request for their own regulatory compliance, tax and other legal requirements, provided that
the Company shall be reimbursed by the relevant Investor in respect of any costs in producing
such information.







	11.7	 	Notwithstanding any other provision of this Clause 11, the rights of the Investors under this
Clause shall be subject to the duties of the Managing Board of RBS Holdings and shall not be
exercised so as to cause any interruption in the business of the RBS Holdings Group or any
breach of applicable law or regulation by the Wider RBS Group.







	11.8	 	Provided that the Company or its Group provides an invoice in respect of such costs, to the
extent that any reasonable costs are incurred by the Company or its Group in producing
information for Santander or the State under this Clause 11 which would not otherwise have
been incurred by the Company or its Group, such costs shall be charged to the Santander
Acquired Business or the State Acquired Business, respectively.







	11.9	 	Pursuant to the Tax Agreements, certain of the parties thereto have agreed to provide to
certain other parties information relating to the Tax affairs of certain companies. RBS, the
State and (in the case of the Separation Tax Agreement only) Santander shall procure that such
information is provided in accordance with the Tax Agreements.







	12	 	Transfer Restrictions for the Investors

	 
	12.1	 	General Restrictions







	 	12.1.1	 	Notwithstanding any provision to the contrary in this Agreement or the Articles, each
Investor undertakes to each of the other Investors and to the Company that it shall not
at any time during the life of this Agreement Transfer Shares, unless:







	 	(i)	 	the Transfer is permitted by Clause 12.1.2 or has been approved
by the Investors in writing (such approval not to be unreasonably withheld);







	 	(ii)	 	the proposed Transferee has entered into a Deed of Accession to
this Agreement, in the form required by this Agreement and delivered this to
the Company;







	 	(iii)	 	the Company and the Investors have received from the proposed
Transferee a legal opinion addressed to each of them in a form approved by the
Board confirming that the Transferee has capacity and authority to enter into
the document referred to in Clause 12.1.1(ii) and that such document, this
Agreement and the Articles will constitute legal, valid and binding obligations
on the Transferee (or their successors and assigns), which are enforceable in
accordance with their terms; and







	 	(iv)	 	it (or the Transferee, as the case may be) has obtained any
necessary third party and regulatory consents.





 


31









 











	 	12.1.2	 	Notwithstanding Clause 12.1.1(i), an Investor may transfer Shares to a wholly owned
member of its Group provided that the Transferee undertakes to the Company that if the
Transferee is to cease to be a wholly-owned member of its Group of the relevant
Investor, all its Shares in the Company will, before the cessation, be Transferred to
the original Investor (but only if such Investor would not have been in breach of this
clause had that Investor continued to hold the Shares) or one of its wholly-owned Group
members. Each of the Investors shall procure that its Investor Directors shall exercise
their voting rights in meetings of the Board or otherwise to approve any Transfer of
Shares in accordance with this Clause 12.1.2.







	 	12.1.3	 	Following a transfer of Shares under this Clause 12.1, the original transferring
Investor (but not a subsequent Transferor in a series of transfers to wholly-owned
Group members) shall remain party to this Agreement and shall be jointly and severally
liable with the Transferee under this Agreement as a Shareholder in respect of the
transferred Shares.

	 
	 	12.1.4	 	Each Investor acknowledges and undertakes as follows:







	 	(i)	 	it shall not challenge the validity or enforceability of the
restrictions in this Clause 12 either as a matter of law or otherwise
(“Challenge”); and







	 	(ii)	 	in the event of a Challenge, the Investor making such Challenge
shall indemnify and keep indemnified each other Investor and the Company
against each loss, liability and cost which such other Investor or the Company
may incur arising out of or in connection with a Challenge including each loss,
liability and cost reasonably incurred as a result of settling or defending a
Challenge.







	12.2	 	Intermediate Changes of Control







Except as otherwise expressly provided in this Agreement:




	 	12.2.1	 	RBS undertakes to procure that the Shares owned by it at the date of this Agreement
and any further Shares issued to it or to one of its wholly-owned Group members are,
subject to Clause 4, at all times held and beneficially owned by a wholly-owned member
of its Group;







	 	12.2.2	 	Santander undertakes to procure that the Shares owned by it at the date of this
Agreement and any further Shares issued to it or one of its wholly-owned Group members
are, subject to Clause 4, at all times held and beneficially owned by a wholly-owned
member of its Group; and







	 	12.2.3	 	the State undertakes to procure that the Shares owned by it at the date of this
Agreement and any further Shares issued to it or one of its wholly-owned Group members
are, subject to Clause 4, at all times held and beneficially owned by a wholly-owned
member of its Group.







	13	 	Further Capital and Funding

	 
	13.1	 	General







Subject to the remainder of this Clause 13 and the provisions of any Tax Agreement, the
Investors shall not have any obligation to provide any capital, funding or liquidity to
either
the Company or any member of the RBS Holdings Group, nor any guarantee, collateral or
security in respect thereof.


 


32









 






	13.2	 	Agreed principles relating to further Capital and Funding







	 	13.2.1	 	The Investors have agreed that any regulatory Tier 1 capital requirements (including
an appropriate Capital Buffer (as defined below)) of the RBS Holdings Group shall be
satisfied by the Investors providing ordinary equity share capital to the Company or,
in the case of the State Acquired Business only, the State may satisfy its obligation
by procuring the provision of a perpetual loan (which, in either case, the Company
shall contribute to RBS Holdings in the form of ordinary equity share capital).







	 	13.2.2	 	In the event that any capital, liquidity, funding requirement or guarantee,
collateral or security, or any other related cost is due to be contributed by an
Investor (the “Defaulting Investor”) pursuant to Clause 13.3, but such Investor does
not meet such obligation on time or at all, then the remaining Investors (the “Non
Defaulting Investors”) shall be entitled, at their sole discretion and upon receiving
any request from the Board in accordance with Clause 13.3, to fulfil such obligation on
behalf of the Defaulting Investor, and the Defaulting Investor shall (i) indemnify and
keep indemnified the Non Defaulting Investors in respect thereof and (ii) make
compensatory contributions as set out in Clause 13.5.







	 	13.2.3	 	The Investors have agreed that to the extent that any State Acquired Business,
Santander Acquired Business and/or Retained Business does not meet the total capital
ratio set by a Regulator (the ”Total Capital Ratio” and the deficit to the Total
Capital Ratio being a “Tier 2 Shortfall”), RBS shall satisfy the Tier 2 Shortfall on
behalf of the relevant Investor, provided that:







	 	(i)	 	the relevant Investor(s) will pay interest to RBS (or the RBS
Acquired Business if so requested by RBS) on (a) the Tier 2 Shortfall in
relation to a Tier 2 Shortfall on its Acquired Business and (b) on its Retained
Business Tier 2 Shortfall Proportion in relation to a Tier 2 Shortfall on the
Retained Business, in each case calculated at a rate of *** for the period that
the Tier 2 Shortfall exists or until RBS issues a Support Notification in
respect of the Tier 2 Shortfall; and







	 	(ii)	 	upon the issue of a Support Notification in respect of the Tier
2 Shortfall, the relevant Investor(s) shall provide Support in respect of the
Tier 2 Shortfall in accordance with Clause 13.4.







The relevant Investor(s) for the purposes of any Tier 2 Shortfall in the Retained
Business shall be (i) the State if and to the extent that the total capital in the
Retained Business that is attributable to the State is less than the State’s
Consortium Proportion of the total capital required to ensure the Retained Business
meets the Total Capital Ratio for the Retained Business and/or (ii) Santander if and
to the extent that the total capital in the Retained Business that is attributable
to Santander is less than Santander’s Consortium Proportion of the total capital
required to ensure the Retained Business meets the Total Capital Ratio for the
Retained Business. The amount by which the total capital in the Retained Business
that is attributable to an Investor is less than that Investor’s Consortium
Proportion
of the total capital required to ensure the Retained Business meets the Total
Capital Ratio for the Retained Business shall be the “Retained Business Tier 2
Shortfall Proportion” for that Investor.


 






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




 


33









 










	 	13.2.4	 	The Investors have agreed that to the extent that total assets less intracompany
funding receivables (“Third Party Assets”) attributable to any State Acquired Business,
Santander Acquired Business and/or Retained Business are greater than the equity
capital and total liabilities excluding intracompany funding payables (“Third Party
Liabilities”) attributable to that Business (the “Net Funding Shortfall”) RBS shall
satisfy the Net Funding Shortfall on behalf of the relevant underfunded Investor,
provided that:







	 	(i)	 	the relevant Investor(s) will pay interest to RBS (or the RBS
Acquired Business if so requested by RBS) on (a) the Net Funding Shortfall in
relation to a Net Funding Shortfall on its Acquired Business and (b) on its
Retained Business Net Funding Shortfall Proportion in relation to a Net Funding
Shortfall on the Retained Business, in each case calculated at *** for the
period that the Net Funding Shortfall exists or until RBS issues a Support
Notification in respect of the Net Funding Shortfall; and







	 	(ii)	 	upon the issue of a Support Notification in respect of the Net
Funding Shortfall, the relevant Investor(s) shall provide Support in respect of
the Net Funding Shortfall in accordance with Clause 13.5.







The relevant underfunded Investor(s) for the purposes of any Net Funding Shortfall
in the Retained Business shall be (i) the State if and to the extent that the
Funding of the State (as defined in clause 13.4.1) in the Retained Business is less
than the State’s corresponding Minimum Funding Requirement (as defined in clause
13.4.1) and/or (ii) Santander if and to the extent that the Funding of Santander in
the Retained Business is less than Santander’s corresponding Minimum Funding
Requirement. Such Funding shortfalls shall be the “Retained Business Net Funding
Shortfall Proportion” for that Investor.




	 	13.2.5	 	Subject to Clause 13.6, the Investors have agreed that to the extent that in relation
to any Acquired Business or the Retained Business the Funding attributable to an
Investor exceeds that Investor’s Minimum Funding Requirement (the “Net Funding
Surplus”) RBS shall pay interest (or will procure that interest is paid) to the
relevant Acquired Business or in the case of the Retained Business for the benefit of
the relevant Investor (as the case may be) on the Net Funding Surplus calculated at ***
for the period that the Net Funding Surplus exists.







	 	13.2.6	 	RBS shall ensure that the RBS Acquired Business meets the applicable Minimum Ratios
and will ensure that it maintains capital and funding in the Retained Business equal to
at least the RBS Consortium Proportion of the capital and funding required for the
Retained Business to meet the Minimum Ratios.







	 	13.2.7	 	For such time as the US$250 million Tier 2 Instrument (as referred to in Schedule 8)
remains part of the State Acquired Business, such instrument shall be counted as Tier 2
capital of the State Acquired Business for the purposes of this Clause 13.







	 	13.2.8	 	The Investors have agreed that as from the date of this Agreement, in respect of the
Retained Businesses, cash shall be provided by the Investors in the form of
equity capital or debt finance that is at least equal to the Investor’s share
(expressed in Consortium Proportions) of all third party liabilities. A worked
example of the principles set out in this Clause 13 is set out at Schedule 12.





 







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




 


34









 










	13.3	 	Determinations by Regulators







	 	13.3.1	 	Notwithstanding Clauses 13.2 and 13.4, in the event that any relevant Regulator
requires the Company or any part of the RBS Holdings Group to be provided with further
capital, liquidity or other funding, or for any guarantee, collateral or security to be
provided in respect thereof, the Board shall notify the Investors of full details of
the requirement as soon as possible after the Company becomes aware of the requirement.







	 	13.3.2	 	To the extent that, prior to Completion, any further capital, liquidity, funding,
guarantee, collateral or security requirement notified to the Investors by the Board
under Clause 13.3.1 concerns or arises in respect of an Acquired Business, the relevant
Investor which is to acquire that business shall either:







	 	(i)	 	contribute to the relevant Acquired Business such funding,
capital or liquidity, or provide such guarantee, collateral or security as is
required by the relevant Regulator on the terms required by such Regulator
(such capital, funding, liquidity, guarantee, collateral or security to be
provided directly for the benefit of the relevant Acquired Business); or







	 	(ii)	 	with the written consent of RBS (such consent not to be
unreasonably withheld), co-operate with the Board and the other Investors in
taking or ensuring that such action is taken (at the cost of the relevant
Investor, and including such action as may be required to limit the scope of
operations of the relevant Acquired Business) as is required in order to
reverse the requirement for such additional funding, capital, liquidity,
guarantee, collateral or security,







in either case provided that the capital, liquidity, funding, guarantee, collateral
or security is provided, or the requisite action is taken (as the case may be) by no
later than the earlier of (i) the date specified by the relevant Regulator or (ii)
60 Business Days following the date on which the Board notifies the Investors
pursuant to Clause 13.3.1.




	 	13.3.3	 	To the extent that any further capital, funding, liquidity, guarantee, collateral or
security requirement notified to the Investors by the Board under Clause 13.3.1
concerns or arises in respect of the Retained Business Assets, each of the Investors
undertakes to work with each other Investor and with the Board in order to either:







	 	(i)	 	contribute such capital, funding, liquidity or provide such
guarantee, collateral or security as is required by the relevant Regulator on
the terms required by such Regulator; or







	 	(ii)	 	take or ensure that such action is taken (including such action
as may be required to limit the scope of the operations that have resulted in
the additional requirement) as is required in order to reverse the requirement
for such additional capital, liquidity, funding, guarantee, collateral or
security,
as may be agreed between the Investors (acting reasonably) in any such case.





 


35









 











Any capital, liquidity or funding requirement or other directly attributable cost
incurred or any guarantee, collateral or security provided by the Investors pursuant
to this Clause 13.3.3 shall be met by the Investors in the Consortium Proportions by
no later than the earlier of (i) the date specified by the relevant Regulator or
(ii) 60 Business Days following the date on which the Board notifies the Investors
pursuant to Clause 13.3.1.




	 	13.3.4	 	If the DNB or any other Regulator increases the capital, liquidity or other funding
requirement of RBS, or requires an additional guarantee, collateral or security to be
provided in respect thereof and such requirement arises in whole or in part in relation
to a State Acquired Business or Santander Acquired Business, RBS and the State or
Santander, respectively, will in good faith and acting reasonably consider what actions
should be taken to meet the DNB or other Regulator’s requirement or otherwise alleviate
the problem. Such actions could include the provision of additional capital, liquidity
or other funding by the State to the State Acquired Business, by Santander to the
Santander Acquired Business or, subject to the agreement of terms including as to the
return of such capital, liquidity or other funding (such agreement not to be
unreasonably withheld), the provision by the relevant Investor of additional capital,
liquidity or other funding to RBS.







	13.4	 	Minimum Ratios and Capital and Funding Requirements







	 	13.4.1	 	If at any time (i) an Investor’s interest in the Retained Business or (ii) any
Acquired Business (the “Undercapitalised or Underfunded Business”) does not, or is
expected, on the basis of then current capital, funding and/or other projections, in
the foreseeable future not to exceed the Minimum Ratios (as defined below), RBS shall
notify the State (if the Undercapitalised or Underfunded Business is a State Acquired
Business), Santander (if the Undercapitalised or Underfunded Business is a Santander
Acquired Business) and/or the State and Santander (if the Undercapitalised or
Underfunded Business is the Retained Business) and provide details of the funding,
capital or liquidity that must be provided (the “Support”) to ensure that the
Undercapitalised or Underfunded Business is in compliance with the Minimum Ratios. In
the case of the Retained Business, compliance with the Minimum Ratios shall be
determined for each Investor on the basis of that Investor’s share of the total assets,
liabilities, and risk weighted assets of the Retained Business (determined in
Consortium Proportions) and the equity capital and funding provided by the Investor.
The Minimum Ratios are defined as follows:







	 	(i)	 	in the case of Tier 1 equity capital, satisfies the Tier 1
capital ratio set by the relevant Regulator (the “Minimum Equity Ratio”) plus
25 per cent. of the Tier 1 equity capital required under the Minimum Equity
Ratio for the Undercapitalised or Underfunded Business (the “Capital Buffer”);







	 	(ii)	 	in the case of Tier 2 capital, satisfies the Total Capital
Ratio, provided that if the Undercapitalised or Underfunded Business has
sufficient Tier 1 equity capital in excess of the Minimum Equity Ratio to meet
the Total Capital Ratio, no further Support shall be required; and





 


36









 











	 	(iii)	 	has Funding, defined as the sum of equity capital and Third
Party Liabilities, that is at least equal to the Third Party Assets
attributable to that Underfunded or Undercapitalised Business (the “Minimum
Funding
Requirement”). For the avoidance of doubt, in the case of the Retained
Business, the Minimum Funding Requirement of each Investor shall be
determined based on the Funding position of each Investor and that
Investor’s share (based on Consortium Proportions) of the Third Party Assets
of the Retained Business.







the Minimum Equity Ratio, the Total Capital Ratio and the Minimum Funding
Requirement being together the “Minimum Ratios”. In the case of any Support
in respect of the Retained Business, the notice shall set out the Support
that is required from each Investor to ensure that the aggregate
requirements of the Retained Business as to capital, funding and liquidity
are shared in the Consortium Proportions.




	 	13.4.2	 	At the time of or following notification under Clause 13.4.1, RBS may, if it
determines that the prevailing circumstances are such that it cannot provide the
Support in accordance with the principles set out in Clauses 13.2.3 and 13.2.4, by
giving notice to the relevant Investor(s) (such notice being a “Support Notification”),
require the Investor that is required to acquire the Undercapitalised or Underfunded
Business (if the Undercapitalised or Underfunded Business is an Acquired Business) or
each Investor in the Consortium Proportions (if the Undercapitalised or Underfunded
Business is part of the Retained Business) to contribute Support directly or
indirectly, in a form that qualifies as regulatory capital as determined by the
Regulators in the case of Support required in connection with the Minimum Equity Ratio,
to the Undercapitalised or Underfunded Business to enable it to meet the relevant
Minimum Ratios.







	 	13.4.3	 	In respect of any additional Support to be provided to an Undercapitalised or
Underfunded Business pursuant to Clause 13.4, such Support shall be provided by the
relevant Investor within 60 Business Days of receipt of the Support Notification unless
otherwise agreed by the relevant Investor and RBS.







	13.5	 	Terms on which Further Capital and / or Funding will be provided







If an Investor is required to provide further funding, capital or liquidity pursuant to
Clause 13.3 or 13.4, the relevant Investor shall be required to contribute or provide the
following amounts in addition to any funding, liquidity or capital to be provided pursuant
to Clauses 13.3 or 13.4, such additional funding, liquidity or capital to be provided to the
RBS Acquired Business:




	 	13.5.1	 	in respect of ordinary equity share capital, interest on the amount to be provided
calculated at a rate of *** for the first 60 days from the notification of the equity
capital requirement (either pursuant to Clause 13.3.1 or by a Support Notification) and
at a rate of *** for any period thereafter, in each case to the date that the capital
is provided;

	 
	 	13.5.2	 	in respect of Tier 2 capital:







	 	(i)	 	interest on the amount to be provided calculated at a rate of
*** from the notification of the Tier 2 requirement (either pursuant to Clause
13.3.1 or by a Support Notification) to the date that the Tier 2 capital is
provided; plus







	 	(ii)	 	any interest due under Clause 13.2.3(i); and





 







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




 


37









 










	 	13.5.3	 	in respect of funding or liquidity:







	 	(i)	 	interest on the amount to be provided calculated at *** from
the notification of the funding or liquidity requirement (either pursuant to
Clause 13.3.1 or by a Support Notification) to the date that the funding or
liquidity is provided; plus

	 
	 	(ii)	 	any interest due under Clause 13.2.4(i).







	13.6	 	Repatriations of Funding, Capital and Liquidity







	 	13.6.1	 	RBS will inform Santander and the State on a monthly basis whether their respective
Acquired Businesses or the Retained Business has liquidity, capital or funding that
exceeds the Minimum Ratios (an “Overfunded Business”). If the Overfunded Business
exceeds:







	 	(i)	 	the Minimum Equity Ratio plus the Capital Buffer by €1,000,000
or more, the Company and the Investors shall use their reasonable endeavours to
repatriate any excess equity capital to the State (after settlement of the
Company’s obligations under any perpetual loan advanced to the Company by ABN
AMRO Bank as contemplated in clause 13.2.1) if the Overfunded Business is a
State Acquired Business, to Santander if the Overfunded Business is a Santander
Acquired Business or the State and Santander in their respective Consortium
Proportions if the Overfunded Business is the Retained Business, as soon as
reasonably practicable after such notification and subject to applicable law
and regulation, provided that such repatriation does not result in a breach of
the Minimum Funding Requirement; and







	 	(ii)	 	the Minimum Funding Requirement by €1,000,000 or more, the
Company and the Investors shall use their reasonable endeavours to repay any
excess funding to the State if the Overfunded Business is a State Acquired
Business, Santander if the Overfunded Business is a Santander Acquired Business
or the State and Santander in their respective Consortium Proportions if the
Overfunded Business is the Retained Business, as soon as reasonably practicable
after such notification and subject to applicable law and regulation, provided
that such repayment does not result in a breach of the Minimum Equity Ratio or
Total Capital Ratio.







	 	13.6.2	 	The amount repatriated to the State and/or Santander shall be increased as follows:







	 	(i)	 	in respect of equity capital, interest on the amount to be
repatriated calculated at a rate of *** for the first 60 days from the date the
amount of equity capital exceeded the Minimum Equity Ratio plus the Capital
Buffer by €1,000,000 or more and at a rate of *** for any period thereafter, in
each case to the date that the Tier 1 equity capital is repatriated; and







	 	(ii)	 	in respect of funding or liquidity, interest on the amount to
be repaid calculated at *** from the date the level of funding exceeded the
Minimum Funding Requirement to the date that the funding or liquidity is
repaid,
provided that interest payable in respect of any excess shall only be
payable pursuant to this Clause 13.6.2(ii) or 13.2.5, not both.





 







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




 


38









 













	 	13.6.3	 	For the purposes of this Clause 13.6, references to “repatriations” shall include
distributions and/or dividends to Investors directly or indirectly in accordance with
Clause 15 or and references to “repayments” shall include repayment of loans as may be
appropriate.







	 	13.6.4	 	In relation to any repatriation for the purposes of this Clause 13.6 and only to the
extent that RBS Holdings is unable or not permitted by law or regulation to provide the
Company with the requisite funds to meet its obligations of this Clause 13.6, RBS
undertakes to use reasonable endeavours to procure that the Company is funded such that
it can make repatriations as contemplated by this Clause 13.6, provided that:







	 	(i)	 	if RBS provides the Company with the requisite capital,
liquidity or funding, the corresponding excess liquidity, funding or capital in
the RBS Holdings Group is reallocated from the Overfunded Business to the RBS
Acquired Business;







	 	(ii)	 	RBS shall not be required to take any action pursuant to this
Clause 13.6 which would give rise to any obligation on RBS to seek approval of
its shareholders for the proposed transaction in accordance with the Listing
Rules made by the FSA under Part VI of the Financial Services and Markets Act
2000 (as amended from time to time); and







	 	(iii)	 	RBS shall not be required to take any action if such action
would be contrary to any applicable regulation, law, or directions from
Regulators.







	 	13.6.5	 	For the avoidance of doubt, an Investor’s entitlement to any excess equity or funding
under this Clause 13.6 shall not expire until such excess no longer exists or
repatriation of such excess has been effected.







	13.7	 	Discussions with Investors







In event of request for additional funding or capital (or likewise) under this Clause 13,
RBS shall, immediately after it or the Company notifies the Investors of the request in
accordance with this Clause 13, arrange a meeting of the relevant representatives of the
Investors to discuss the background to the need for such funding.




	14	 	New Shareholders







	14.1	 	Each of the parties undertakes to procure that no shares in the capital of the Company shall
be allotted, issued or Transferred to or otherwise acquired by a person who is not already a
party to this Agreement (a “New Shareholder”) unless the New Shareholder has executed and
delivered a deed of accession in the form set out in Schedule 6. The Company will, to the
extent permitted by law, not enter the New Shareholder in the register of members unless this
Clause 14 has been complied with in all respects.







	14.2	 	The form of the deeds of accession set out in Schedule 6 and the requirements of this Clause
14 may be varied in a manner approved in writing by the Shareholders.







	14.3	 	All executed deeds of accession shall be delivered to and held by the Company (for both
itself and the other parties to this Agreement).





 


39









 











	14.4	 	Subject to Clause 14.5, no party may assign, Transfer or create any trust in respect of, or
purport to assign, Transfer, or create any trust in respect of, any of its rights or
obligations under this Agreement without having first obtained the consent of the
Shareholders, together with all relevant third party and regulatory consents.







	14.5	 	An Investor may assign all or any proportionate part of its rights under this Agreement
(including its proportionate part of the benefit of the warranties) to a person to whom it
Transfers Shares in the capital of the Company in accordance with this Agreement, and any
other Transaction Document as appropriate. No such assignment shall release any such Investor
of its obligations hereunder for which it shall be jointly and severally liable with such
assignee and provided that if such assignee ceases to be a wholly owned member of its Group of
the relevant Investor such Investor shall procure that such assignee immediately reassigns
such rights and obligations to it or to another of its wholly owned Group members (such
further assignee being itself subject to the provisions of this clause).







	14.6	 	Subject to Clauses 14.5 and 14.7, a person who has entered into a Deed of Accession pursuant
to this Agreement shall have the benefit of and be subject to the burden of all the provisions
and continuing obligations of this Agreement as if it had been an original party in the
capacity designated in the deed of accession and this Agreement shall be interpreted
accordingly. Without limiting the general nature of this Clause 14.6, where the person is
designated as an Investor in a Deed of Accession, it shall be entitled to the benefit of all
representations, covenants, warranties and undertakings which this Agreement contemplates are
given to the Investors, and “Investors” shall be construed accordingly.







	14.7	 	Nothing in this Clause 14 shall affect a party’s accrued rights and obligations under this
Agreement or shall be construed as requiring any party to perform again any obligation or
discharge again any liability already performed or discharged, or as entitling any party to
receive again any benefit already enjoyed.







	15	 	Distributions and Repurchases

	 
	15.1	 	Power of Board to pay dividends







Subject to any additional legal requirements, the payment or declaration of any dividend or
other distribution on account of shares in the capital of the Company (including the timing
and amounts of any such payments) shall be decided by the Board provided that no dividend or
other distribution shall be paid on any class of Shares without the consent of the
Investor(s) holding such Shares and that if any decision to pay or make a dividend or other
distribution is made it shall be made in accordance with the rights attaching to the Shares.




	15.2	 	Repurchases of Shares







Subject to any legal requirements, the Investors may agree that, rather than returning any
Business Assets of Acquired Businesses or the Retained Businesses to the relevant Investor
by way of dividends, any Business Assets (or cash equal to the value of the Business Assets)
shall be returned to Investors by the repurchase by the Company of Shares or the purchase of
Shares by RBS (or a member of the RBS Group), in either case for consideration equal to the
value of the Business Assets to be returned to the relevant Investor.


 


40









 






	16	 	Confidentiality and Announcements

	 
	16.1	 	General Restrictions







None of the parties shall, at any time, whether before or after the termination of this
Agreement, divulge or permit its officers, employees, agents, advisers or contractors to
divulge to any person (other than to any respective officers or employees of a party or a
person to whom, in each case, disclosure of information is permitted by this Agreement and
who require the same to enable them properly to carry out their duties):




	 	16.1.1	 	any of the contents of any of the Transaction Documents or the Investors’ shared
strategy with respect to the Transaction;







	 	16.1.2	 	any information which it may have or acquire (whether before or after the date of
this Agreement) relating to the business and/or any customers of or suppliers to the
business, or otherwise to the business, assets or affairs of the Acquired Businesses
which have been or which are to be acquired by any other party hereunder or, in each
case, of the Retained Group;







	 	16.1.3	 	any information which, in consequence of the negotiations relating to this Agreement
or of being a party being involved in the business in any manner whatsoever (including
as an Investor and as a nominator of a Director) or performing or exercising its rights
and obligations under this Agreement, any party may have acquired (whether before or
after the date of this Agreement) with respect to the customers, business, assets or
affairs of any other party.







	16.2	 	Excluded Information







The restrictions imposed by Clause 16.1 shall be subject to Schedule 6 and shall not apply
in respect of any information:




	 	16.2.1	 	which now or hereafter comes into the public domain otherwise than as a result of a
breach of such undertaking of confidentiality;







	 	16.2.2	 	which is obtained by the receiving party from a person who is not party to this
Agreement (other than any Investor’s Group member) and who is not subject to a
confidentiality obligation to any other party to this Agreement in respect of the
information being provided; or







16.2.3 which is obtained or transmitted by any party by virtue of a Permitted Disclosure.




	17	 	Advisers and Costs







Subject to the provisions of each Tax Agreement, each Investor shall pay its own costs
incurred in connection with the Transaction and the preparation, execution and
implementation of the Transaction Documents, save the extent that the Investors agree that
such costs should be borne by the Company.




	18	 	Supremacy of this Agreement







	18.1	 	If there is any conflict or inconsistency between the provisions of this Agreement and the
Articles then for the purposes of giving effect to the letter or spirit of this Agreement,
this Agreement shall prevail to the extent legally permitted. Each Investor shall use its
rights
and powers to procure that the Articles are amended, to the extent legally permitted, so as
to accord with and give effect to the provisions of this Agreement.





 


41









 











	18.2	 	In relation to the subject matter of the Litigation Management Agreement, to the extent there
is any conflict or inconsistency between the provisions of this Agreement and the Litigation
Management Agreement, the provisions of the Litigation Management Agreement shall prevail to
the extent legally permitted.







	18.3	 	In relation to the subject matter of any Tax Agreement, paragraph 1.3 of Part 9 of Schedule 1
shall apply in the case of any conflict or inconsistency between the provisions of this
Agreement and the relevant Tax Agreement.







	19	 	Entire Agreement and Non Reliance

	 
	19.1	 	Entire Agreement







This Agreement and each Transaction Document constitute the entire agreement and, subject to
Clause 2, supersede any previous agreements between the parties relating to the subject
matter of this Agreement.




	19.2	 	Non Reliance







Each party acknowledges and represents that it has not relied on or been induced to enter
into this Agreement by a representation, warranty or undertaking (whether contractual or
otherwise) given by any other party other than those set out in Clause 10 and Schedule 4, or
otherwise as expressly set out in this Agreement or in a Transaction Document.




	19.3	 	Exclusion of Liability







Save as provided in Clause 10, no party is liable to another party (in equity, contract or
tort (including negligence) for a representation, warranty or undertaking that is not set
out expressly in this Agreement or in a Transaction Document.




	19.4	 	Further acknowledgements







Each of the Investors acknowledges, represents and agrees that:




	 	19.4.1	 	(i) other than as set out in this Agreement, it has not relied on or been induced to
enter into this Agreement by any representation, warranty, recommendation, advice or
undertaking (whether contractual or otherwise) given by any member of another Investor
Group and (ii) no member of an Investor Group shall have any liability to any other
Investor or to any member of an Investor Group (in equity, contract or tort (including
negligence)) for a representation, warranty or undertaking that is not expressly set
out in this Agreement or in any other Transaction Document;







	 	19.4.2	 	it has made its own investigations into, and appraisals and assessment of, the
Company, each member of the RBS Holdings Group and the business of the RBS Holdings
Group and will continue to do so for so long as it is the holder of, or otherwise
interested in, Shares, and no other Investor and no member of that Investor Group shall
have any liability to it in connection with its decision to enter into the transactions
contemplated by this Agreement and the other Transaction Documents (as applicable);







	 	19.4.3	 	save to the extent otherwise agreed in writing by any other Investor or by a member
of that Investor Group, it is owed no duty of care or other obligation by any
other Investor or by any member of that Investor Group in connection with its
decision to enter into the transactions contemplated by this Agreement and the other
Transaction Documents (as applicable);





 


42









 











	19.5	 	Fraud etc.







Nothing in this Clause 19 shall have the effect of restricting or limiting any liability
arising as a result of any fraud, wilful misconduct or wilful concealment.




	20	 	General

	 
	20.1	 	Counterparts







This Agreement may be executed in any number of counterparts, each of which when executed
and delivered is an original and all of which together evidence the same agreement.




	20.2	 	Variations







A variation of this Agreement is only valid if it is in writing and signed by or on behalf
of each of the Investors and the Company.




	20.3	 	Waiver







The failure to exercise or delay in exercising a right or remedy provided by this Agreement
or by law does not impair or constitute a waiver of the right or remedy or an impairment of
or a waiver of other rights or remedies. No single or partial exercise of a right or remedy
provided by this Agreement or by law prevents further exercise of the right or remedy or the
exercise of another right or remedy. 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 to be a waiver of any subsequent
breach.




	20.4	 	Release







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




	20.5	 	Continuing Obligations







Except to the extent that they have been performed and except where this Agreement provides
otherwise, the warranties, representations, obligations and undertakings contained in this
Agreement remain in force after Completion.




	20.6	 	No Partnership







Nothing contained in this Agreement (and no action taken by a party pursuant to its terms)
is to be construed as creating a partnership or (unless expressly stated otherwise) agency
relationship between any of the parties.


 


43









 






	20.7	 	Illegality







If any provision in this Agreement shall be held to be illegal, invalid or unenforceable, in
whole or in part, under the law of any jurisdiction, the legality, validity or
enforceability of such provision or part under the law of any other jurisdiction and the
legality, validity and enforceability of the remainder of this Agreement shall not be
affected.




	20.8	 	Successors and Permitted Assigns







The provisions of this Agreement shall be binding upon the parties’ respective successors
and permitted assigns, but such persons shall not be entitled to the benefit of its
provisions unless they have entered into a deed of accession.




	20.9	 	Several and not joint or joint and several obligations







Except where expressly stated otherwise in this Agreement, all obligations, undertakings and
statements in this Agreement are several and not joint or joint and several.




	20.10	 	Further Assurance







	 	20.10.1	 	Each of the parties (subject to applicable laws and regulation) agrees to take all
such action or procure that all such action is taken as is reasonable in order to
implement the terms of this Agreement or any transaction, matter or thing contemplated
by this Agreement. Every representation, warranty, undertaking or indemnity in this
Agreement which is expressed to be given to the Investors is given to each Investor
separately and each Investor shall have a separate claim and right of action in respect
of every breach.







	 	20.10.2	 	Each Investor shall exercise its respective voting rights in a general meeting of
the Company in such a manner so as to be consistent with the intentions of the parties
set out in this Agreement or with any provision of this Agreement including, without
limitation, to procure that all resolutions required to facilitate the declaration or
payment by any Group Company of dividends consistent with Clause 15.1 are duly passed.







	 	20.10.3	 	Notwithstanding any other provision of this Agreement, none of the parties or any
members of their respective Groups shall be required to take any action or do or omit
to do anything which causes any of the other parties, any member of their respective
Groups or any member of the RBS Holdings Group to breach any applicable law or
regulatory requirement. Each party will and shall procure that each member of its Group
shall co-operate with each other party with a view to ensuring (insofar as it is
reasonably able and subject to applicable law and regulations and the provisions of
this Agreement) that for as long as any Acquired Business, Retained Business and/or RBS
Holdings Group Company is the subject of clauses 5 and 6 of this Agreement, such
business and/or company will conduct its affairs in compliance with the applicable
regulatory requirements of each relevant Regulator.







	20.11	 	Third Party Rights







	 	20.11.1	 	The obligations of each Investor under the terms of this Agreement expressed to be
owed to any member of the Retained Group may be enforced by each relevant member of the
Retained Group whilst such member remains part of the Retained Group from time to time.





 


44









 











	 	20.11.2	 	Obligations of the Company under the terms of this Agreement expressed to be owed to
an Investor (or members of its Group and in the case of RBS, the Wider RBS Group) may
be enforced by that Investor or members of its Group (including, with effect from 10
October 2007, its Acquired Companies whilst such Acquired Companies remain part of the
RBS Holdings Group or the relevant Investor’s Group and, in the case of RBS, the Wider
RBS Group).







	 	20.11.3	 	The obligations of each Investor expressed to be owed to another Investor (or
members of its Group and in the case of RBS, the Wider RBS Group) may be enforced by
the relevant Investor or by members of its Group (including, with effect from 10
October 2007, its Acquired Companies whilst such Acquired Companies remain part of the
RBS Holdings Group or the relevant Investor’s Group and, in the case of RBS, the Wider
RBS Group).







	 	20.11.4	 	Except where expressly provided otherwise in this Agreement, 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, but this does not affect any right or
remedy of a third party which exists or is available apart from that Act.







	 	20.11.5	 	Where, pursuant to the terms of this Agreement, a third party has been expressly
granted rights under the Contracts (Rights of Third Parties) Act 1999, the consent of
such third party shall not be required for the variation of this Agreement or the
waiver of any provision in it.







	 	20.11.6	 	Enforcement of third party rights in relation to this Agreement shall be in
accordance with the provisions of Clause 22.2.







	20.12	 	Unlawful fetters







The Company shall not be bound by any provision of this Agreement to the extent that it
would constitute an unlawful fetter on any of its statutory powers, but that provision shall
remain valid and binding as regards the other parties to this Agreement to which it is
expressed to apply.




	20.13	 	Default Interest







If any party fails to pay any amount due and payable by it under this Agreement or under any
judgment in connection with this Agreement (save for any payments due under Clause 13, for
which the provisions of Clause 13.4 shall apply), such party shall pay to the party or
parties to whom the same was due, interest on such overdue amount from the due date until
the date of actual payment, both before and after a judgment, at the Default Interest Rate.


 


45









 






	21	 	Notices







	21.1	 	Save as set out in paragraph 14 of Schedule 2, any notice or other document to be given under
this Agreement shall be in writing in English and shall be deemed duly given if delivered to
the recipient as its fax number or address set out below or any other fax number or address
notified to the parties for the purposes of this Agreement, if left at or sent by (i) airmail
or express or other fast postal service or (ii) facsimile transmission or other means of
telecommunication in permanent written form to the following address or number:







	 	21.1.1	 	RBS






	 	 	 
	Address

	 	House G
	 

	 	RBS Gogarburn
	 

	 	Edinburgh
	 

	 	EH12 1HQ
	 
	 	 
	Fax No.

	 	+44 131 626 2997







For the attention of Group General Counsel




	 	21.1.2	 	Santander






	 	 	 
	Address

	 	Cuidad Grupo Santander
	 

	 	28660 Boadilla del Monte
	 

	 	Madrid
	 

	 	Spain
	 
	 	 
	Fax No.

	 	+34 91 257 1524







For the attention of General Counsel




	 	21.1.3	 	the State






	 	 	 
	Address

	 	Ministry of Finance
	 

	 	Korte Voorhout 7/P.O. Box 20201
	 

	 	2500 EE The Hague
	 
	 	 
	Fax No.

	 	+31 70342 79 33







For the attention of the Director of Financieringen (at the time of this Agreement,
Wouter Raab) and the Director of Bureau Financiele Instellingen (at the time of this
Agreement, Rens Bröcheler)




	 	21.1.4	 	Company






	 	 	 
	Address

	 	Strawinskylaan 3105
	 

	 	1077ZX Amsterdam
	 

	 	The Netherlands







	21.2	 	Any notice shall be delivered by hand or sent by fax or by express or other fast means of
postal service. Any notice shall be deemed to have been received on the next working day in
the place to which it is sent if sent by fax or 72 hours from the time of posting if sent by
post.







	22	 	Choice of law and arbitration

	 
	22.1	 	Governing Law







This Agreement and the documents to be entered into pursuant to it, save as expressly
referred to therein, and any non-contractual obligations arising out of or in connection
with this Agreement, shall be governed by and construed in accordance with English law.


 


46









 






	22.2	 	Arbitration







	 	22.2.1	 	Subject to Clause 9 (as varied where applicable in accordance with the Schedules to
this Agreement), any dispute arising out of or connected with this Agreement, including
a dispute as to the validity or existence of this Agreement and/or this Clause 22.2,
shall be resolved by arbitration in Paris, France conducted in English
by three arbitrators pursuant to the rules of the ICC, save that, unless the parties
agree otherwise, the third arbitrator, who shall act as chairman of the tribunal,
shall be chosen by the two arbitrators appointed by or on behalf of the parties. If
he is not chosen and nominated to the ICC for appointment within 30 days of the date
of confirmation by the ICC of the later of the two party-appointed arbitrators to be
confirmed, he shall be chosen by the ICC.







	 	22.2.2	 	All the parties irrevocably submit to the non-exclusive jurisdiction of the courts of
England to support and assist the arbitration process pursuant to Clause 22, including
if necessary the grant of interlocutory relief pending the outcome of that process.







	 	22.2.3	 	The substantive law of the arbitration shall be English law.





 


47









 










Schedule 1 – Part 1

Transfer of the Acquired Businesses




	 
	Introduction








	1	 	The Transfer Conditions







	1.1	 	Completion of the transfer of any Acquired Business under this Agreement shall in all
respects be conditional on the fulfilment of the following conditions:







	 	1.1.1	 	all authorisations, orders, grants, recognitions, confirmations, consents,
clearances, certificates, licences, permissions and approvals necessary or reasonably
considered by the relevant Investor and any other affected Investor to be necessary or
appropriate for or in respect of the relevant transfer having been obtained, in terms
and in a form reasonably satisfactory to that Investor and to any other affected
Investor;







	 	1.1.2	 	no order having been issued (and remaining in effect) by any court or other
governmental authority, and no statute, rule, regulation, executive order, decree or
other order of any kind existing or having been enacted, entered or enforced by any
governmental or regulatory authority, which (in any such case to an extent which is
material in the context of the relevant sale and purchase) prohibits, restrains or
restricts Completion of the sale of the relevant Acquired Business;







	 	1.1.3	 	to the extent reasonably necessary for the transfer of such Acquired Business,
negotiation or determination of any relevant definitive agreements as referred to in
Clauses 5.2 and 9.







	1.2	 	Each of the parties shall use its reasonable endeavours to procure the fulfilment of the
Transfer Conditions as soon as possible.







	1.3	 	Each Investor may waive in whole or in part any of the Transfer Conditions set out in
paragraphs 1.1.2 to 1.1.4 provided that such waiver does not:







	 	1.3.1	 	result in any breach by any other Investor, the Company or any member of their
respective Groups of any legal or regulatory requirement; or







	 	1.3.2	 	result in any material financial detriment to any other Investor, the Company
or any member of their respective Groups unless such persons are indemnified to their
reasonable satisfaction against all Liabilities arising out of or in connection with
such waiver; or







	 	1.3.3	 	result in any material non financial detriment to any other Investor, the
Company or any member of their respective Groups.





 


48









 











	1.4	 	If any of the Transfer Conditions attaching to the transfer of an Acquired Business becomes
incapable of being satisfied (and, if the Transfer Condition is capable of being waived, the
relevant party or parties refuse, when they are entitled to do so, to waive the Transfer
Condition), all obligations of the parties under this Agreement in respect of such transfer
shall terminate and the parties shall not have any claim against the others in respect thereof
except for any prior breach of paragraph 1.2. To the extent that any asset is incapable of
being transferred to an Investor (the “Relevant Investor”) or a member of its
Group as a result of a Transfer Condition failing to be satisfied, the following provisions shall apply:







	 	1.4.1	 	unless paragraph 1.4.2 applies such asset shall be sold on terms that:







	 	(i)	 	RBS NV shall obtain a Valuation Range for the Acquired Business
in accordance with the principles set out in paragraph 13 of Schedule 2,
mutatis mutandis;







	 	(ii)	 	such sale shall be conducted (which shall include the
negotiation of any terms of such sale) by the Managing (and, if appropriate,
Supervisory) Board(s) of RBS NV unless otherwise required by any relevant
regulatory or anti trust authority (in which event such sale shall be conducted
in accordance with such requirements);







	 	(iii)	 	the net proceeds of sale shall be applied for the benefit of,
and the Liabilities arising out of or in connection with such sale (including,
without limitation, professional costs, Taxation and any Liabilities associated
with any warranties or indemnities given in connection with such sale) shall be
for the account of the Relevant Investor; and







	 	(iv)	 	the Investors (other than the Relevant Investor) shall be
entitled to match any third party offer for the relevant Acquired Business on
the terms of paragraph 11 of Schedule 2 mutatis mutandis;







	 	(v)	 	RBS NV shall not sell the relevant Acquired Business for
consideration which is less than the lowest point of the Valuation Range less
7.5 per cent. without the prior written consent of the Relevant Investor (such
consent not to be unreasonably withheld taking into account, inter alia, the
number of potential purchasers for the Acquired Business, any restrictions on
the transfer of the relevant business imposed by a Regulator and any other
applicable impediments to transfer); or







	 	1.4.2	 	if all of the Investors so agree (and on such terms as they may agree), such
asset shall be treated as and deemed part of the Retained Business.







	2	 	Transfer of the Acquired Businesses







	2.1	 	Subject to the Transfer Conditions being satisfied or waived in accordance with paragraph 1,
and in each case as at Completion of the relevant transfer, the Company shall procure that RBS
Holdings or the relevant members of its Group shall transfer and each of the State and
Santander shall directly or indirectly acquire (or procure the acquisition by a member of its
Group of):







	 	2.1.1	 	in the case of the State, the State Acquired Businesses; and

	 
	 	2.1.2	 	in the case of Santander, the Santander Acquired Businesses.







	2.2	 	The intention of the parties is that RBS will either acquire the RBS Acquired Businesses in
accordance with the principles of Clause 5 and Schedule 1, that it will sell the RBS Acquired
Businesses to third parties or that it will acquire indirect ownership of the RBS Acquired
Businesses by becoming the sole owner of the Company in accordance with Clause 4.





 


49









 











	2.3	 	Each Investor shall accept without enquiry, requisition or objection such title in the
Acquired Business to be acquired by it (or a member of its Group), as RBS Holdings or the
relevant member of the RBS Holdings Group may have and the Acquired Business Assets shall be
transferred without the benefit of any undertakings, warranties, representations or other
assurances whatsoever except insofar as they are contained in this Agreement, the Tax
Agreements or as otherwise agreed by the Investors.







	2.4	 	All companies, businesses and assets the transfer of which is required to be procured
hereunder shall be transferred in the condition, in the place in which or to which they are
situate and subject to all benefits, burdens, rights and restrictions to which they are
subject at the time when the obligation to effect the transfer shall have become unconditional
(subject to any other provisions of this Agreement).







	2.5	 	No representation or warranty is given by any party as to the nature, condition, fitness for
purpose, merchantability or suitability of any company, business or asset.

	 
	2.6	 	The provisions of:







	 	2.6.1	 	Part 4 of this Schedule shall have effect in relation to employment matters;

	 
	 	2.6.2	 	Part 5 of this Schedule shall have effect in relation to pensions matters;

	 
	 	2.6.3	 	Part 6 of this Schedule shall have effect in relation to intellectual property;

	 
	 	2.6.4	 	Part 7 of this Schedule shall have effect in relation to real estate;

	 
	 	2.6.5	 	Part 8 of this Schedule shall have effect in relation to regulatory matters; and







	 	2.6.6	 	Part 9 of this Schedule and any Tax Agreements entered into between the
parties shall have effect in relation to tax matters.







	3	 	Consideration for Acquired Business Transfers







	3.1	 	Unless otherwise agreed, the consideration for the sale and purchase of the relevant assets
shall be the payment by the relevant Investor, or such persons as it may procure, in cash
(unless otherwise agreed by the Investors) on Completion of the appropriate proportion
(determined in accordance with paragraph 3.2 below) of the fair market value of its Acquired
Business (subject to adjustment as provided in this Schedule) to RBS Holdings or such persons
as the Company may direct.







	3.2	 	The Investors shall endeavour to agree in good faith the fair market value among the Acquired
Business Assets of their respective Acquired Businesses that are to be transferred in
accordance with Clause 5, in the period following execution of this Agreement, failing which
such apportionment of the fair market value shall be determined in accordance with Clause 9 of
this Agreement. If any cash consideration is received hereunder by RBS Holdings in respect of
any of the Acquired Businesses, it shall be received by RBS Holdings on behalf of the Investor
or members of the RBS Holdings Group who are the beneficial owners of the shares or assets to
which it relates.







	3.3	 	Payment of the appropriate proportion of any fair market value pursuant to paragraph 3.1
shall be a good discharge of each Investor’s obligations to pay the consideration due in
respect of all and any of the Acquired Business Assets to be acquired by it and the Investors
shall have no obligation to enquire into the application thereof.





 


50









 











	4	 	Completion







	4.1	 	Subject as provided in paragraph 6, Completion of any transfer of any Acquired Business or
part thereof, shall take place at such location outside the United Kingdom as the parties
shall agree (taking into account the possible imposition of Transfer Taxes) on the
Completion Date applicable to that Completion when the parties shall do such things and
execute such documents as may reasonably be required by any other party to complete the
relevant transfer including complying with the terms of any agreement relating to the
implementation of any Legal Demerger or if the transfer is taking place by means of a sale
and purchase by implementation of the following:







	 	4.1.1	 	the Company shall procure that at Completion the RBS Holdings Group will
procure the delivery to the relevant Investor, at such location or locations as each
Investor may reasonably specify not later than 2 Business Days prior to the Completion
Date, of:







	 	(i)	 	undated transfers (to the extent required) in respect of such
of the relevant Acquired Company Shares as are registered, duly executed by or
on behalf of the registered holder and completed in favour of the relevant
Investor or as it may direct, together with any certificates in respect of such
Acquired Company Shares (to the extent required, duly endorsed in blank or in
the name of the relevant Investor);







	 	(ii)	 	share warrants to bearer in respect of such of the relevant
Acquired Company Shares as are not in registered certificated form; and







	 	(iii)	 	such other documents, notarial deeds or certificates,
transfers or written consents as may be required to give a good title to such
Acquired Company Shares or of the relevant Acquired Business Assets and (where
appropriate) to enable the relevant transferee to become the registered holders
thereof;







	 	4.1.2	 	the Company shall procure that any transfers referred to above be duly
registered to the extent required (subject only to their being duly stamped where
applicable);







	 	4.1.3	 	the Company shall procure the RBS Holdings Group to make available for
collection at the normal location at which they are held, used or stored and give
physical possession to each Investor or as it may direct of such of the Acquired
Business Assets as are transferable by delivery and deliver to the transferee company
under the relevant Legal Demerger or, on a sale and purchase, to the relevant Investor
or as it may direct such documents of title or other records establishing title to the
relevant Acquired Business Assets as are within its possession or control;







	 	4.1.4	 	if the transfer is being effected by means of a sale and purchase, the
relevant Investor shall pay, or procure the payment by electronic funds transfer (for
value on the day of transfer) to such bank account or accounts as the Company may
specify, not later than 2 Business Days prior to the relevant Completion Date the
relevant proportion of the fair market value applicable to the assets being transferred
on the relevant Completion (determined in accordance with paragraph 3.2).





 


51









 











	5	 	Third Party consents and approvals and pre-emption rights







	5.1	 	Where any consent, approval or agreement of any third party is required prior to the
acquisition by a Purchaser of shares in any Acquired Company or any of the Acquired Business
Assets to be transferred to it pursuant to this Agreement and such consent, approval or
agreement has not been obtained at or before the due date for Completion of
the transfer, the relevant shares or assets shall not be transferred to a Purchaser,
notwithstanding Completion, until the consent, approval or agreement has been
unconditionally obtained and the parties shall, and shall procure that their subsidiaries
shall, use their respective reasonable endeavours to obtain such consent, approval or
agreement and shall provide each other with all such assistance and co-operation as may
reasonably be required in seeking any such consent, approval or agreement, provided that no
person shall be under any obligation to make any payments (in money or moneys worth) to, or
release any right against, any other party for the purpose of obtaining any such consent,
approval or agreement.







	5.2	 	Subject to Clause 5.3, if any such consent, approval or agreement as is referred to in
paragraph 5.1 which is required prior to the acquisition by a Purchaser of any shares in any
Acquired Company or any of the Acquired Business Assets hereunder has not been obtained within
12 months of Completion, unless the parties otherwise agree, the relevant shares or assets
shall be excluded from the transfer, and paragraph 1.4 shall apply to the relevant assets as
if the Transfer Conditions are incapable of being satisfied.







	5.3	 	Save in relation to transfers under the Legal Demerger Agreement (to which the provisions of
the Legal Demerger Agreement shall apply and subject to Part 9 of Schedule 1, pending the
receipt of such consent, approval or agreement as is required for the transfer to the relevant
Investor, or as it may direct, of any of the Acquired Business Assets as provided in paragraph
5.1:







	 	5.3.1	 	the Company shall procure that RBS Holdings shall, or shall procure that the
member of the Retained Group holding the relevant assets shall, in each case to the
extent permissible under any relevant law and subject to the requirements of any
relevant Regulator:







	 	(i)	 	hold all such assets as agent for the relevant Investor, at all
times deal therewith in accordance with that Investor’s instructions and not
take any step or do anything in relation thereto without that Investor’s prior
consent;







	 	(ii)	 	promptly account to that Investor, or as it may direct, for all
amounts received by it in respect of or relating to such assets;







	 	(iii)	 	to the extent that the relevant asset comprises one or more
companies or businesses, deliver to that Investor at the end of each month
unaudited management accounts comprising a profit and loss account, cash flow
statement and balance sheet showing the results of such Acquired Company or
Business for the month to which they relate and, on a cumulative basis, for the
period since Completion, prepared as if the Acquired Company or Business was a
separately incorporated member of the RBS Holdings Group and complying with
generally accepted accounting principles in the jurisdiction in which the
relevant Acquired Company or Acquired Business operates; and







	 	5.3.2	 	the relevant Investor shall promptly reimburse each member of the Retained
Group all costs and expenses and shall indemnify each member of the Retained Group
against all Liabilities incurred by it in relation to such Acquired Company or Acquired
Business Assets or in relation to any of the Business Employees (or any persons who
would have been Business Employees if the relevant Acquired Business had been
transferred at Completion) other than any costs, expenses or Liabilities incurred as a
result, direct or indirect, of any step, act or omission in
breach of paragraph 5.1 which was not consented to or caused (directly or
indirectly) by the Investor and other than Tax which shall be dealt with in
accordance with Part 9 of this Schedule 1 or the relevant Tax Agreement.





 


52









 











	5.4	 	Where any third party is entitled to be offered or to elect to acquire any shares of any
Acquired Company or any Acquired Business Assets before such shares or assets may be
transferred to an Investor or as it may direct (and has not waived that right) then, unless
the relevant procedures by which such third party is entitled to be offered or to elect to
acquire all or any of such shares or assets have been completed and the relevant offer period
or periods have expired prior to Completion, such shares or assets shall not be transferred,
notwithstanding Completion, until the relevant procedures have been completed and the relevant
periods have expired.







	5.5	 	If any such third party as is referred to in paragraph 5.3 exercises its right to acquire all
or any shares in an Acquired Company or Acquired Business Assets then such shares or assets
shall be excluded from the relevant sale and, within 3 Business Days of receipt thereof, the
Company shall procure that the relevant member of the RBS Holdings Group shall, pay or procure
payment to the relevant Investor, or as it may direct, by way of repayment of the appropriate
proportion of the fair market value, an amount equal to the amount actually received from such
third party as consideration for the acquisition of such shares or assets less any third party
costs incurred by RBS Holdings or any member of the RBS Holdings Group in connection
therewith. Any Taxation incurred in connection with such sale shall be dealt with in
accordance with Part 9 of this Schedule 1 or the relevant Tax Agreement.







	5.6	 	Notwithstanding paragraphs 5.1 to 5.4 above, an Investor may elect to proceed with a transfer
of an Acquired Business Asset notwithstanding that any required consents, approvals or
agreements have not been received or that any third party is entitled to be offered or to
elect to acquire such asset as referred to in paragraph 5.4, subject to the conditions set out
in paragraphs 1.3.1 to 1.3.3 of this Part 1 (which shall apply mutatis mutandis as if such an
election were a waiver of a Transfer Condition) being satisfied.







	5.7	 	Any amount payable to an Investor, or as it may direct, pursuant to paragraphs 5.2 or 5.5
shall be paid together with interest thereon at the rate per annum equal to LIBOR from time to
time, calculated on a daily basis in respect of the period from and including the date of
receipt of the relevant payment from the third party to and including the date of payment.







	6	 	Post-Completion obligations, further assurances







	6.1	 	Save in relation to any transfer pursuant to the ID&J SPAs or the Legal Demerger Agreement,
for which transfers the relevant provisions of the ID&J SPAs or the Legal Demerger Agreement,
respectively, shall apply, both before and after (and notwithstanding) Completion, each
Investor shall, and the Company shall procure that RBS Holdings shall, at each Investor’s own
expense use reasonable endeavours to ensure the smooth transition into new ownership of the
Acquired Businesses as agreed by the relevant Investors.







	6.2	 	The Company shall procure that RBS Holdings shall, subject to all applicable regulations, use
all reasonable endeavours to secure as soon as practicable after the date of this Agreement
the release of each Acquired Company to be acquired by any Investor, without cost to it, from
all guarantees and other contingent Liabilities given or undertaken by it to secure or support
the obligations of any member of the Retained Group and pending such release shall procure
that RBS Holdings or such member of the Retained Group shall
indemnify and keep indemnified the relevant Acquired Company against all actions,
proceedings, losses, costs, claims, damages, Liabilities and expenses which any of them may
suffer or incur in respect of any claim made under any such guarantees or other contingent
Liabilities after 10 October 2007.





 


53









 











	6.3	 	Each Investor shall, subject to all applicable regulations, use all reasonable endeavours to
secure as soon as practicable after the date of this Agreement the release of each member of
the Retained Group, and each Acquired Company to be acquired by any other Investor, without
cost to them, from all guarantees or other contingent Liabilities given or undertaken by them
to serve or support the obligations of any Acquired Company or Acquired Business to be
acquired by such Investor (including, if required, offering its own guarantee or liability on
the same terms, mutatis mutandis, as and in substitution for the existing guarantee or other
liability) and pending such release shall indemnify the Retained Group and each such Acquired
Company and keep them indemnified against all actions, proceedings, losses, costs, claims,
damages, Liabilities and expenses which any of them may suffer or incur in respect of any
claim made under or in respect of any such guarantees or other contingent Liabilities after 10
October 2007.







	6.4	 	Without prejudice to any other provision of this Agreement, each of the parties shall in good
faith, and so far as is permitted by applicable law (and subject to the requirements of any
relevant Regulator):







	 	6.4.1	 	use all reasonable endeavours to secure the carrying out of the transactions
contemplated by this Agreement in accordance with the terms and the spirit of this
Agreement; and







	 	6.4.2	 	co-operate with one another to that end and negotiate with a view to resolving
any issues which may arise in connection with the implementation of the terms and
spirit of this Agreement.







	7	 	Indemnification and Wrong Box Assets or Liabilities







	7.1	 	Each Investor shall indemnify each member of the Retained Group (whilst such member remains
part of the Retained Group) and each of the other Investors and members of their respective
Groups (being, for this purpose, in the case of RBS, the Wider RBS Group) (including, for this
purpose, with effect from 10 October 2007, their Acquired Companies whilst such Acquired
Companies are members of the RBS Holdings Group or the relevant Investor’s Group); against all
Liabilities whensoever incurred, including, without limitation, Liabilities incurred:







	 	7.1.1	 	prior to 10 October 2007 and remaining outstanding at 10 October 2007;

	 
	 	7.1.2	 	after 10 October 2007; or

	 
	 	7.1.3	 	otherwise,







to the extent that the same relate to any of the first named Investor’s Acquired Business
Assets and not to the Retained Business or to the Acquired Business Assets of any other
Investor.




For the avoidance of doubt, the terms of this paragraph 7.1 of Schedule 1 – Part 1 shall not
prevent any member of the Retained Group (whilst such member remains part of the Retained
Group), an Investor or any member of its Group — being, for this purpose, in the case of
RBS, the Wider RBS Group — from making a claim under this paragraph 7.1 of Schedule 1 – Part
1 in circumstances where it has disposed of a member of the Retained
Group or part of the Retained Business or of an Acquired Company or any Acquired Business
Assets to a third party and suffers a Liability under the terms of that disposal to the
extent that the same relates to the Acquired Business Assets of another Investor.


 


54









 






	7.2	 	Each Investor shall, save to the extent that there is/are sufficient cash in or assets (which
can be immediately realised) of the Retained Business in order to meet such Liabilities,
severally indemnify each member of the Retained Group (whilst such member remains part of the
Retained Group and the Wider RBS Group) and each of the other Investors and members of their
respective Groups — being for this purpose, in the case of RBS, the Wider RBS Group -
(including, for this purpose, with effect from 10 October 2007, their Acquired Companies
whilst such Acquired Companies are members of the RBS Holdings Group or the relevant
Investor’s Group) in their Consortium Proportions against all Liabilities whensoever incurred,
including, without limitation, Liabilities incurred:







	 	7.2.1	 	prior to 10 October 2007 and remaining outstanding at 10 October 2007;

	 
	 	7.2.2	 	after 10 October 2007; or

	 
	 	7.2.3	 	otherwise,







to the extent that the same relate to the Retained Business.




For the avoidance of doubt, the terms of this paragraph 7.2 of Schedule 1 – Part 1 shall not
prevent any member of the Retained Group (whilst such member remains part of the Retained
Group and the Wider RBS Group), an Investor or any member of its Group — being, for this
purpose, in the case of RBS, the Wider RBS Group — from making a claim under this paragraph
7.2 of Schedule 1 – Part 1 in circumstances where it has disposed of a member of the
Retained Group or part of the Retained Business or an Acquired Company or any Acquired
Business Assets to a third party and suffers a Liability under the terms of that disposal to
the extent that the same relates to the Retained Business.




	7.3	 	At any time prior to 30 June 2011 an Investor may (i) contend that an Acquired Business or
the Retained Business contains a Wrong Box Asset or Liability, or (ii) identify a new asset or
Liability which has never been allocated to or accounted for by an Acquired Business or the
Retained Business, and, in default of agreement as to the classification of any such asset
company or Liability, the matter shall be determined in accordance with Clause 9 of this
Agreement. So far as permitted by law and subject to the receipt of all relevant regulatory
approvals, any such asset or Liability in an Acquired Business shall be reallocated to another
Acquired Business or to the Retained Business and vice versa, as the case may be, and, if
necessary and if completion of the transfer of such asset or Liability shall have taken place,
transferred to a member of the Retained Group or to the relevant Investor or, in either case,
as it may direct and any such asset or Liability in the Retained Group shall be transferred to
the relevant Investor or as it may direct. The consideration for the reallocation or transfer
shall be nil unless otherwise agreed in connection with the Legal Demerger Agreement (if
applicable). The tax consequences of the operation of this paragraph 7.3 will be dealt with in
accordance with Part 9 of this Schedule 1. RBS and the State acknowledge that RBS NV and ABN
AMRO have agreed in the Legal Demerger Agreement that certain wrong box transfers may take
place at any point prior to 5 February 2012. Without prejudice to any transfers that may take
place under the Legal Demerger Agreement between 1 July 2011 and 5 February 2012, no
reallocation under this paragraph 7.3 shall be permitted after 30 June 2011.





 


55









 











	8	 	Conduct of Claims







	8.1	 	The provisions of this paragraph 8 shall apply in respect of all indemnities expressed to be
given under this Agreement and to the conduct of negotiations and proceedings where any party
hereto has a claim against any other under such an indemnity or otherwise under this
Agreement, provided that:







	 	8.1.1	 	they shall not apply to matters relating to any Third Party Claim (as defined
in paragraph 8.3) where such Third Party Claim is or may be covered by a policy of
insurance and the relevant insurer requires the Indemnified Party or the Indemnifying
Party to act in a manner contrary to the provisions of this clause;







	 	8.1.2	 	if RBS or the State is the Principal Indemnifying Party, this paragraph 8
shall not apply if the Third Party Claim is “Relevant Litigation” for the purposes of
the Solution Agreement and Schedule 4 of the Solution Agreement shall apply instead;
and







	 	8.1.3	 	to the extent that any provisions of this paragraph 8 are inconsistent with
the Litigation Management Agreement or the Tax Agreements, the provisions of the
Litigation Management Agreement or the relevant Tax Agreement shall prevail.







	8.2	 	Definitions







In this paragraph 8:




	 	8.2.1	 	Indemnified Party means any party (or other person pursuant to Clause 20.11)
who has any claim under an indemnity or otherwise under this Agreement;







8.2.2 Indemnifying Party means the party against whom any such claim is made; and




	 	8.2.3	 	Principal Indemnifying Party means, in respect of any Third Party Claim (as
defined below) the Indemnifying Party or in the event that there is more than one
Indemnifying Party in respect of a particular Third Party Claim, the Indemnifying Party
with the largest allocation in respect of that particular Third Party Claim (as
determined under the Litigation Management Agreement).







	8.3	 	Third Party Claim







	 	8.3.1	 	If an Indemnified Party becomes aware of any third party claim, potential
claim, matter or event (a “Third Party Claim”) which might lead to a claim being made
under this Agreement against the Principal Indemnifying Party, the Indemnified Party
shall procure that notice of such Third Party Claim is given as soon as reasonably
practicable to the Principal Indemnifying Party and, subject to being fully indemnified
(on an after tax basis if appropriate in accordance with the principles in Schedule 1,
Part 9) to its reasonable satisfaction by the Principal Indemnifying Party against all
reasonable out-of-pocket costs and expenses incurred by the Indemnified Party, and
otherwise subject at all times to this paragraph 8:







	 	(i)	 	shall not make and shall procure that is not made any admission
of liability, agreement or compromise with any person, body or authority nor
consent to the entry of any judgement or final order in relation to any such
Third Party Claim except with prior consultation with, and the prior agreement
(not to be unreasonably withheld or delayed) of, the Principal Indemnifying
Party;





 


56









 











	 	(ii)	 	shall take such action as the Principal Indemnifying Party may
reasonably request after consultation with the Indemnified Party to avoid,
dispute, resist, appeal, compromise or defend such Third Party Claim or any
adjudication in respect of that Third Party Claim; and







	 	(iii)	 	if so required by the Principal Indemnifying Party in writing
shall ensure that the Principal Indemnifying Party is placed in a position to
take on or take over the day-to-day conduct of all proceedings or negotiations
of whatever nature arising in connection with the Third Party Claim in question
(by transferring the proceedings to the Principal Indemnifying Party if so
required and where reasonably possible to do so, subject as set out below,
through the provision of a power of attorney, or otherwise) and provide (or, if
relevant, procure that there is provided) such information and assistance as
the Principal Indemnifying Party may reasonably require in connection with the
preparation for and conduct of such proceedings or negotiations provided that
the Principal Indemnifying Party shall keep the Indemnified Party informed of
the progress of any proceedings and shall consult with the Indemnified Party
prior to taking any action which may affect the Indemnified Party, or any
business or asset of the Indemnified Party.







Nothing in this paragraph 8.3.1 shall oblige the Indemnified Party to grant a power
of attorney to the Principal Indemnifying Party in respect of the Third Party Claim.




	 	8.3.2	 	The Indemnified Party shall be at liberty, without reference to the Principal
Indemnifying Party and without prejudice to its rights against the Principal
Indemnifying Party or against any other Indemnifying Party, to admit, compromise,
settle, discharge or otherwise deal with any Third Party Claim:







	 	(i)	 	if no response is received from the Principal Indemnifying
Party within a reasonable period (in respect of the situation) in relation to
any communication from the Indemnified Party notifying the Principal
Indemnifying Party that the Indemnified Party intends to admit, compromise,
settle, discharge or otherwise deal with that Litigation; or







	 	(ii)	 	if the Indemnified Party is not indemnified as required by
paragraphs 7 and 8.3.1 above.







	 	8.3.3	 	The Principal Indemnifying Party, or RBS (on behalf of the Investors) (should
the largest allocation of the Third Party Claim in question be to the Retained
Business), shall keep any other Indemnifying Party or Parties to whom the Third Party
Claim in question has been allocated informed of significant developments in the Third
Party Claim and shall provide updates as reasonably requested by such other
Indemnifying Party or Parties.







	 	8.3.4	 	In the event that there is more than one Indemnifying Party in respect of a
particular Third Party Claim:







	 	(i)	 	the Indemnifying Parties shall be severally, but not jointly,
liable to indemnify the Indemnified Party in the proportions in which the Third
Party Claim has been allocated to their respective Acquired Businesses; and







	 	(ii)	 	to the extent that the Third Party Claim is allocated to the
Retained Business, the Investors shall severally indemnify the Indemnified
Party in their Consortium Proportions.





 


57









 











	8.4	 	Upon any claim under this Agreement being made, or notification pursuant to paragraph 8.1
above of any Third Party Claim which might lead to such a claim being made, the Indemnified
Party shall, subject to being fully indemnified (on an after-tax basis if appropriate in
accordance with the principles in Schedule 1, Part 9) to its reasonable satisfaction by the
Indemnifying Parties against all reasonable out-of-pocket costs and expenses incurred by such
Indemnified Party:







	 	8.4.1	 	make available to accountants and other professional advisers appointed by the
Principal Indemnifying Party such access to the personnel of the Indemnified Party and
to any relevant records and information as the Principal Indemnifying Party reasonably
requests in connection with such claim or Third Party Claim;







	 	8.4.2	 	use reasonable endeavours to procure that the auditors (both past and current)
of the Indemnified Party make available their audit working papers in respect of audits
of the Indemnified Party’s accounts for any relevant accounting period in connection
with such claim or Third Party Claim.







	8.5	 	Where any Indemnified Party is entitled (whether by reason of insurance or payment discount
or otherwise) to recover from some other person any sum in respect of any Liability which is
or could be the subject of a claim under this Agreement (and whether before or after the
Indemnifying Parties have made payment thereunder), the Indemnified Party shall (or, as
appropriate, shall procure that the other Indemnified Party shall) unless the Indemnified
Party shall waive its claim against the Indemnifying Parties and refund any amounts repaid:







	 	8.5.1	 	promptly notify the Principal Indemnifying Party and provide such information
as the Principal Indemnifying Party may reasonably require relating to such Liability
or dispute and steps taken or to be taken by the Indemnifying Party in connection with
it;







	 	8.5.2	 	if so required by the Principal Indemnifying Party (subject to each
Indemnified Party being fully indemnified on an after-tax basis (if appropriate in
accordance with the principles in Schedule 1 Part 9) to its reasonable satisfaction by
the Indemnifying Parties against all reasonable out-of-pocket costs and expenses
incurred by such Indemnified Party) take all steps (whether by way of a claim against
its insurance or otherwise, including but without limitation, proceedings) as the
Principal Indemnifying Party may reasonably require to enforce such recovery including
rights equivalent to those in paragraph 8.3.1; and







	 	8.5.3	 	keep the Principal Indemnifying Party informed of the progress of any action
taken.





 


58









 











	8.6	 	Notwithstanding any other provision of this Agreement where any Indemnified Party may have a
right to claim (in respect of any Liability in respect of which it is indemnified by the
Indemnifying Party) against any third party, the obligation of the Indemnifying Parties shall
be limited (in addition to any other limitations on the liability of the Indemnifying Parties
referred to in this Agreement) to the amount by which the loss or damage suffered by the
Indemnified Party as a result of such matter shall exceed any amounts recovered by the
Indemnified Party from a third party and the reasonable out-of-pocket costs and expenses and
Taxation incurred by the Indemnified Party in obtaining such recovery. If any amounts shall be
recovered by an Indemnified Party from a third party following the payment of any amount or
amounts hereunder by the Indemnifying Parties in respect of the same Liability, the
Indemnified Party shall forthwith return to the Indemnifying Parties, an amount equal to the
lesser of:







	 	8.6.1	 	the amount recovered from the third party less the reasonable out-of-pocket
costs and expenses of such recovery and any Taxation incurred in connection with such
recovery; and







	 	8.6.2	 	the amount or amounts previously paid to the Indemnified Party by the
Indemnifying Parties in respect of such Liability.







	8.7	 	Where any indemnity contained in this Agreement is expressed to be “on an after-tax basis”,
then in calculating the liability of the Indemnifying Parties there shall be taken into
account:







	 	8.7.1	 	the amount by which any liability to Taxation of the Indemnified Party or the
relevant Acquired Company or member of the Retained Group (as the case may be) is
actually reduced or extinguished as a result of the matter giving rise to the indemnity
claim; and







	 	8.7.2	 	the amount by which any liability to Taxation of the Indemnified Party or the
relevant Acquired Company or member of the Retained Group (as the case may be) is
actually increased as a result of the payment by the Indemnifying Parties in respect of
the matter giving rise to the indemnity claim.







	8.8	 	In a Third Party Claim in respect of which it is entitled to be indemnified pursuant to
paragraphs 7 and 8.3.1, the Indemnified Party:







	 	8.8.1	 	is not required to seek, or comply with, the requirements of the Principal
Indemnifying Party under this paragraph 8 to the extent necessary to avoid the
Indemnified Party or the relevant Investor breaching any criminal or regulatory laws,
orders, regulations or equivalent;







	 	8.8.2	 	may instead conduct that Third Party Claim (including any negotiations of
whatsoever nature arising in connection with it) in such manner as it considers
appropriate so as to avoid breaching any criminal or regulatory laws, orders,
regulations or equivalent; and







	 	8.8.3	 	shall remain entitled to be indemnified pursuant to paragraph 7 provided that
(subject to paragraph 8.9) the Indemnified Party or the relevant Investor provides
immediate written notice to the Principal Indemnifying Party of relying on this
paragraph, such notice to specify all relevant details of the Third Party Claim and the
manner in which this paragraph is being relied upon.







	8.9	 	If the giving of notice pursuant to paragraph 8.8.3 would, in the reasonable opinion of the
Indemnified Party or its relevant Investor, involve the Indemnified Party or relevant Investor
breaching any criminal or regulatory laws, orders, regulations or equivalent in respect of
that Third Party Claim, such notification may be made as soon as it would no longer involve
such breach, and the liability of the Indemnifying Parties to indemnify the Indemnified Party
in respect of that Third Party Claim shall be unaffected.







	8.10	 	Where the Indemnified Party is a member of the Retained Group, RBS (on behalf of the
Investors) shall be considered to be its relevant Investor for the purposes of paragraphs 8.8
to 8.10.





 


59









 










Schedule 1 – Part 2

The Acquired Businesses




The assets of, and Liabilities attributable to, Business Units or any business comprise, subject to
Clause 5 and the remaining provisions of this Schedule 2, those Business Assets and Liabilities
reflected in the RBS Holdings Accounts as being assets and Liabilities of such Business Unit or
business.




	1.	 	RBS Acquired Businesses






The Business Assets of the following businesses and Business Units of the RBS Holdings Group:



BU North America (pages 111 to 113 of the RBS Holdings Accounts)



BU Global Clients (pages 53, 117 to 119 and 158 of the RBS Holdings Accounts,
excluding the Brazil Global Clients Business).



BU Asia (pages 115 to 117 of the RBS Holdings Accounts) excluding the interest
in Saudi Hollandi



BU Europe (excluding Antonveneta) (pages 109 to 111 of the ABN AMRO Accounts,
excluding the Antonveneta profit and loss account and balance sheet)



Former Dutch Wholesale Clients (reported under BU Netherlands, pages 107 to 109
of the RBS Holdings Accounts, in the RBS Holdings Accounts, as explained on
page 106 of the RBS Holdings Accounts and the RBS Holdings press release of 7
April 2006).



Former WCS Clients outside Brazil within BU Latin America (reported under BU
Latin America, pages 113 to 115 of the RBS Holdings Accounts, as explained in
the RBS Holdings press release of 7 April 2006).



Private Clients India and Private Clients Indonesia



Interest in Prime Bank, Pakistan



Where:




“Brazil Global Clients Business” means the RBS BU Global Clients business (as defined above)
as carried on in Brazil, to the extent that such business is comprised of:




	 	(a)	 	the domestic revenues generated and booked in Brazil by Brazilian-domiciled
global clients;







	 	(b)	 	the off-shore booked revenues generated in Brazil by Brazilian-domiciled global
clients and by Brazilian-domiciled subsidiaries of non-Brazilian-domiciled global
clients; and







	 	(c)	 	the domestic revenues generated and booked in Brazil by Brazilian-domiciled
subsidiaries of non-Brazilian-domiciled global clients,







but for the avoidance of doubt does not include BU Global Clients business revenues
generated outside Brazil by Brazilian-domiciled global clients or Brazilian-domiciled
subsidiaries of non-Brazilian-domiciled global clients.


 


60









 






	2.	 	Santander Acquired Businesses






The Business Assets of the following businesses and Business Units of the RBS Holdings Group:



BU Latin America (excluding all former WCS Clients outside of Brazil) (pages
113 to 115 of RBS Holdings Accounts)



BU Antonveneta (pages 109 to 111 of RBS Holdings Accounts, excluding everything
but the Antonveneta accounts)



Interbank and DMC Consumer Finance, Netherlands (reported under BU Netherlands
in pages 107 to 109 of the RBS Holdings Accounts).



Brazil Global Clients Business



Asset Management Brazil



Where:




“Asset Management Brazil” means ABN AMRO Asset Management Distibuidora de Titulos e Valores
Mobiliarios S.A. less the Carve-out Assets (as defined in a Heads of Agreement between
Santander and Fortis dated 26 February 2008).




	3.	 	State Acquired Businesses






The Business Assets of the following businesses and Business Units of the RBS Holdings Group:



BU Private clients (excluding Latin America) (pages 119 to 120 of the RBS
Holdings Accounts, excluding the private banking business LatAM and excluding
Private Clients India and Private Clients Indonesia)



BU Netherlands (excluding former Dutch Wholesale Clients and Interbank and DMC
Consumer Finance) (pages 107 to 109 of RBS Holdings Accounts, excluding former
Dutch Wholesale Clients and Interbank Consumer Finance)



BU Asset Management (excluding Asset Management Brazil) (pages 121 to 122 of RBS
Holdings Accounts)



The ABN AMRO Trade Marks (as defined in paragraph 1 of Part 6 of this Schedule 2)


 


61









 





Part 4. Re- Allocations




The following list of Business Assets which are reflected in the Acquired Businesses have been
re-allocated from the different Acquired Businesses and the Retained Businesses respectively with
an effective date for the purpose of the allocation as set out below. The parties agree that this
list of reallocations is a non-exhaustive list:



	 	 	 	 	 	 	 
	Business Asset	 	From	 	To	 	Effective date
	Private Clients India and Indonesia

	 	State Acquired Business
	 	RBS Acquired Business
	 	1 January 2008
	Interest in Prime Bank

	 	Retained Business
	 	RBS Acquired Business
	 	10 October 2007
	Brazil Global Clients

	 	RBS Acquired Business
	 	Santander Acquired Business
	 	10 October 2007
	Asset Management Brazil

	 	State Acquired Business
	 	Santander Acquired Business
	 	10 October 2007
	Infrastructure Capital Management

	 	RBS Acquired Business
	 	State Acquired Business
	 	1 April 2008
	AA Interfinance

	 	State Acquired Business
	 	Santander Acquired Business
	 	The Completion date of the transfer
	Sterrebeeck B.V.

	 	State Acquired Business
	 	Santander Acquired Business
	 	1 January 2008





 


62









 





Schedule 1 – Part 3

The Retained Businesses





	1.	 	Retained Businesses






RBS Holdings interest in Capitalia



BU Private Equity



RBS Holdings interest in Saudi Hollandi



The costs of eliminating central group functions and, if any, unallocated
property and unallocated costs



Unallocated pension fund deficit or surplus, to the extent not otherwise
allocated to an Acquired Business under Part 5 of Schedule 2



Other unallocated assets and Liabilities (including unallocated contingent
Liabilities)




For the effective date of certain re-allocations of Business Assets out of the Retained
Businesses to certain Acquired Businesses a reference is made to Schedule 1 – Part 2.




	2.	 	Agreed course of action in relation to certain assets forming part of the Retained Business







As at the date of this document, and following the sale of certain assets comprising the
Retained Business, the parties have agreed that the following actions will be taken in
relation to the following assets which form part of the Retained Business, provided that
following 30 June 2011 RBS NV shall be free, subject to the provisions of Schedule 2 and
Clause 5.3.5, to take such actions in relation to the Retained Business as it determines in
its absolute discretion:



	 	 	 
	 	 	Proposed action to be taken as
	 	 	part of the Retained Business
	Name of asset within the Retained Business	 	Wind Down
	AA Capital Nordic Fund II B.V.

	 	Awaiting Liquidation
	AA PE Fund LP

	 	Awaiting Liquidation
	AAB Media & Telecom 2005 B.V.

	 	Awaiting Liquidation
	AAC Capital NEBO NL Feeder B.V.

	 	Awaiting Liquidation
	AAC Spanish BOF 2005 B.V.

	 	Shared Asset held for sale
	AACBOF Italy B.V.

	 	In liquidation
	AACBOF NEBO B.V.

	 	Shared Asset held for sale
	AAV Italy B.V.

	 	In liquidation
	AAV NEBO B.V.

	 	Shared Asset held for sale






 


63









 





	 	 	 
	 	 	Proposed action to be taken as
	 	 	part of the Retained Business
	Name of asset within the Retained Business	 	Wind Down
	ABN AMRO Asia Capital Investment Limited

	 	Awaiting Liquidation
	ABN AMRO Capital (Belgium) N.V.

	 	Awaiting Liquidation
	ABN AMRO Capital BO Funds II B.V.

	 	Awaiting Liquidation
	ABN AMRO Capital Limited

	 	Awaiting Liquidation
	ABN AMRO Capital Management (Australia) Pty Limited

	 	In liquidation
	ABN AMRO Capital S.p.A.

	 	In liquidation
	ABN AMRO Corporate Investments Management B.V.

	 	Awaiting Liquidation
	ABN AMRO Danube Ventures B.V.

	 	Awaiting Liquidation
	ABN AMRO Participaties B.V.

	 	Awaiting Liquidation
	ABN AMRO Private Equity B.V.

	 	Awaiting Liquidation
	ABN AMRO Ventures (Jersey) Limited

	 	Awaiting Liquidation
	ABN AMRO Ventures II B.V.

	 	Awaiting Liquidation
	Achmea Holding N.V.

	 	Awaiting Liquidation
	Alcover A.G.

	 	Awaiting Liquidation
	Alsecure Insurance PCC Limited Transcred 1 Cell

	 	Awaiting Liquidation
	B2 Seller Agent Pty Limited

	 	Awaiting Liquidation
	Benedenwindse Offshore Bouw-en Exploitatie
Maatschappiij

	 	Awaiting Liquidation
	Bodycare International Group B.V.

	 	Under investigation
	C.C.M. Central Commercial Management N.V.

	 	Awaiting Liquidation
	Closenes SL

	 	In liquidation
	DIBU Administratie & Consultancy B.V.

	 	Awaiting Liquidation
	Escaline sarl

	 	Sale process
	Euroclear plc

	 	Pending confirmation
	Exody E-business Intelligence GmbH

	 	In liquidation
	Expomedia Group Plc

	 	In liquidation
	Forbion Capital Fund II C.V.

	 	Split among R, N and S in process
	Fourth Channel, Inc

	 	Under investigation
	Future Ventures B.V.

	 	In liquidation
	Gesytas 2005 S.L.

	 	In liquidation
	Global Intranet B.V.

	 	Sale process
	I2C S.A.

	 	In liquidation






 


64









 





	 	 	 
	 	 	Proposed action to be taken as
	 	 	part of the Retained Business
	Name of asset within the Retained Business	 	Wind Down
	Impulsora del Fondo Mexico SA de CV

	 	Sale process
	IMX, Inc

	 	Under investigation
	Jan Everaers Beheer B.V. (in liquidation)

	 	To be liquidated
	Jill Equity Participation B.V.

	 	To be liquidated
	Lange Voorhout Investments B.V.

	 	Awaiting Liquidation
	Mandrakeoft SA

	 	Shared Asset held for sale
	Multi M.Retirement N.V.

	 	Awaiting Liquidation
	Nexwave Inc.

	 	In liquidation
	Nicator / Nicator New Holding AB

	 	In liquidation
	Niksun, Inc.

	 	Loan note, not for sale
	Nortel Inversora S.A.

	 	Listed, but B-share not trade able
	Nueva Terrain S.L.

	 	Shared Asset held for sale
	PGAM Advanced Technologies AG

	 	In liquidation
	RBS Capital (USA) LLC

	 	Awaiting Liquidation
	Retained Business Deferred Tax Assets

	 	To be paid for in accordance with the Separation Tax Agreement if utilised by an RBS Acquired Company
	Silita S.L.

	 	In liquidation
	Swyx Solutions GmbH

	 	In liquidation
	Tavve Software Company Inc.

	 	Sale process
	Telesystems International Wireless Inc

	 	Sale process
	The second ABN AMRO LBO Fund

	 	Awaiting Liquidation
	Saudi Hollandi Bank

	 	Held for sale
	Saudi Hollandi Capital

	 	Held for sale
	Viking Strip Finance Limited

	 	In liquidation
	Westchester Holdings Limited (in liquidation)

	 	In liquidation
	Wielkamp B.V.

	 	In liquidation
	Yellowbrix Inc

	 	Sale process






 


65









 






	3.	 	Certain assets of the Retained Business which have been sold







The parties agree that as at the date of this document, the following entities forming part
of the Retained Business have been sold:



	 	 	 
	Name of entity which have been sold	 	 
	ABN AMRO Capital Australia Fund II (ABN AMRO) B.V.

	 	 
	Acer IP Fund One LP
	 	 
	Corpfin Capital Fund II B.V.
	 	 
	F.V.E. II LP
	 	 
	Favonius Ventures Europe LP
	 	 
	Freecom Technologies B.V.
	 	 
	Integral Development Corporation
	 	 
	iRex Technologies B.V.
	 	 
	Monash IVF Pty Limited
	 	 
	Monash IVF Pty Limited
	 	 
	Siam Investment Fund II L.P.
	 	 
	Siennax International B.V.
	 	 






 


66









 





Schedule 1 – Part 4

Employment





	1	 	Prior to the date of this Agreement, the parties agreed the allocation of employees to each
of the Acquired Businesses which have been transferred to a relevant Investor and how
liabilities relating to those employees would be borne by the relevant Investors. Such
agreements are reflected in, inter alia, the Co-habitation Agreements and the Legal Demerger
Agreement.







	2	 	In respect of any of the Acquired Businesses which have not, as at the date of this
Agreement, been transferred to a relevant Investor, the principles set out below in Part 4 of
this Schedule determine how any employees relating to any such business (and any associated
Liabilities, including but not limited to retention and termination costs) will be allocated
as between Investors.







	3	 	The parties will each nominate appropriate representative(s) to agree the matters which are
required to be agreed pursuant to Part 4 of this Schedule 1, including determining how
employees who do not work exclusively or principally in one of the Acquired Businesses or the
Retained Business should be allocated between the RBS Acquired Business, the Santander
Acquired Business, the State Acquired Business and the Retained Business (as the case may be).
The parties will use reasonable endeavours to provide to the other parties information in
their possession which might reasonably help facilitate this process through to the Final
Completion Date.







Once appropriate allocations to a particular business have been made then no Appropriate
Steps shall be taken in relation to the affected employee(s) without the agreement of the
relevant Investor or the Company (as the case may be), such agreement not to be unreasonably
withheld or delayed.




Where any intra-group services are provided by any part of an Acquired Business to part of
another Acquired Business or by any part of an Acquired Business to part of the Retained
Business (or vice versa) the parties will take into account any continuing requirements to
provide such services in making any necessary determinations in accordance with this part 4
of Schedule 1.




	4	 	The parties shall use their respective reasonable endeavours to ensure that employees who are
engaged exclusively or principally in the RBS Acquired Business, the Santander Acquired
Business, the State Acquired Business or the Retained Business (as the case may be) shall
continue to be so engaged immediately after the relevant Completion and shall take such
Appropriate Steps as are necessary in the circumstances.







In this Schedule 1, part 4, “Appropriate Steps” may include, but shall not be limited to:




	 	•	 	taking such steps, if any as are necessary to move the employee to the relevant
Acquired Business or Retained Group, as appropriate, which may be the making of an
offer of employment or a transfer of their employment under any relevant local law;







	 	•	 	undertaking appropriate consultation with employees and/or bodies representing
employees;





 


67









 











	 	•	 	ensuring that an employee is released from any obligations to his current employer
in order to facilitate the change of employer proposed; and







	 	•	 	taking such steps as are reasonable in the circumstances to mitigate any Liability
associated with, as the case may be, the termination or change of employer (for
example, moving the employee immediately prior to the relevant Completion rather than
after that Completion).







	5	 	Where:







	5.1	 	an employee who is exclusively or principally engaged in one of the RBS Acquired Business,
Santander Acquired Business or State Acquired Business (as the case may be) is a director or
employee of a member of the Retained Group or of an Acquired Company acquired by another
Investor; or







	5.2	 	an employee who is exclusively or principally engaged in the Retained Business is a director
or employee of an Acquired Company, subject to there being no adverse effect upon the ability
of any relevant company to maintain any regulatory approval, the relevant employee shall cease
as soon as reasonably practicable after the relevant Completion to be a director or employee
of the relevant company and the parties shall take Appropriate Steps to offer such employee
employment by a company carrying on part of the Acquired Business or Retained Business in
which he is engaged provided that the relevant Investor in respect of whose business the
employee is principally or exclusively engaged (or the Company as the case may be) has
approved the Appropriate Steps (such approval not to be unreasonably withheld or delayed). The
parties shall use reasonable endeavours including taking any of the approved Appropriate Steps
to minimise any Liabilities which may arise as a result of such cessation. If any Liabilities
do arise then such Liabilities shall, in respect of an employee engaged exclusively or
principally in the RBS, Santander or State Acquired Business (as the case may be) be borne by
the relevant Investor (which Investor shall indemnify the Retained Group, the Company and the
other Investors accordingly) and, in respect of an employee engaged exclusively or principally
in the Retained Business, shall be borne by the Retained Group (and, accordingly, indirectly
by the Investors in the Consortium Proportions).







	6	 	The parties acknowledge that as a consequence of the transactions contemplated by this
agreement, the requirements of the Retained Business and the Acquired Businesses in relation
to employees may change or diminish and, as a consequence, it may be necessary to terminate
the employment of certain employees. In effecting any such terminations, the parties will use
reasonable endeavours, including taking the Appropriate Steps, to minimise any Liabilities
which arise as a consequence.







Where the employment of an employee of a member of the Retained Group is terminated where
that person is exclusively or principally engaged in an Acquired Business, the relevant
Investor which is to buy that Acquired Business will bear the cost (if any) of such
termination and will indemnify the appropriate member of the Retained Group against any
Liability accordingly. Such termination will not be effected without the prior approval of
the relevant Investor who will bear the cost (such approval not to be unreasonably withheld
or delayed).


 


68









 






Where the employment of an employee of an Acquired Company acquired by one Investor is
terminated where that person is exclusively or principally engaged in the Acquired Business
acquired by another Investor, that other Investor will bear the cost (if any) of such
termination and will indemnify the first-mentioned Investor against any Liability
accordingly. Such termination will not be effected without the prior approval of the
relevant Investor who will bear the cost (such approval not to be unreasonably withheld or
delayed).




Where the employment of an employee of an Acquired Company is terminated where that person
is exclusively or principally engaged in the Retained Business, then the Retained Group
(that is, indirectly, the Investors in the Consortium Proportions) will bear the cost (if
any) of such termination and shall indemnify the Acquired Company against any Liability
accordingly. Such termination will not be effected without the prior approval of the Company
(such approval not to be unreasonably withheld or delayed).




Where any employee whose employment would otherwise have been terminated (because the
further requirement for his or her services has changed or diminished) becomes employed by a
“mobility organisation” or some other local equivalent (such that the employee becomes
engaged by an employer other than a company in either one of the Acquired Businesses or the
Retained Business) the principles set out above shall continue to apply in respect of any
Liabilities relating to that employee’s employment by the mobility organisation or the
termination of his or her employment by such organisation notwithstanding that such
termination may occur at a later date.




	7	 	Where an employee is seconded from an Acquired Business to the Retained Business or vice
versa the parties shall consult with a view to agreeing when the secondment shall end having
regard to their respective business needs and whether or not an offer should be made to that
employee so that he or she should cease to be an employee of an Acquired Company or (as the
case may be) a member of the Retained Group and become an employee of a member of the Retained
Group or (as the case may be) of an Acquired Company. Where the relevant parties agree such an
offer is to be made, the parties will take such of the Appropriate Steps as are reasonably
necessary to effect the change of employer of the employee concerned and to minimise any
Liabilities associated with the termination of any such secondment arrangements. Any such
Liabilities will be allocated according to the principles set out in paragraph 5 of this Part
4.







	8	 	Where an employee is seconded from one Acquired Business to an Acquired Business to be bought
by another Investor the relevant Investors shall consult with a view to agreeing when the
secondment shall end having regard to their respective business needs and whether or not an
offer should be made to that employee so that he or she should cease to be an employee of one
Acquired Company and become an employee of a different Acquired Company. Where the relevant
parties agree such an offer is to be made, the parties will take such of the Appropriate Steps
as are reasonably necessary to effect the change of employer of the employee concerned and to
minimise any Liabilities associated with the termination of any such secondment arrangements.
Any such Liabilities will be allocated according to the principles set out in paragraph 5 of
this Part 4.







	9	 	Where the parties are unable to agree a resolution under paragraph 7 or 8, the employee will
continue to be governed by the terms of his or her secondment agreement and shall return to
the company by which he or she is employed at the end of the secondment agreement or otherwise
in accordance with its terms.







	10	 	In the case of those employees not covered by paragraphs 4, 5, 6, 7 and 8 of this Part 4 the
parties shall consult with each other as required, with a view to determining (as soon as
reasonably practicable):







	10.1	 	whether or not all or any of such employees should become employees of an Acquired Company or
a member of the Retained Group; and






 


69









 










	10.2	 	what arrangements should be made to ensure that an Investor or the Retained Group, as the
case may be, does not suffer as a result of certain employees not becoming its employees,







and the parties shall use their reasonable endeavours to give effect to such determination.




Once the parties have determined which employees should be employed by a member of an
Acquired Group or the Retained Group (as the case may be), each Investor (in relation to its
Acquired Group) and the Company (in relation to the Retained Group) shall procure that such
Appropriate Steps as are agreed (such agreement not to be unreasonably withheld or delayed)
are taken in relation to each relevant employee and the other parties shall procure a
release of such employee’s obligations in order that the employee is able to accept such an
offer of employment made to him as an Appropriate Step.




	11	 	It is the intention of the parties, save (i) as provided otherwise in this Part 4; and (ii)
as otherwise agreed between the parties; that all Liabilities in respect of an employee
(whether relating to their employment prior to the relevant Completion, to steps taken to move
their employment to a company carrying on the appropriate Acquired Business or to a company in
the Retained Group or to the termination of their employment) shall be borne:







	11.1	 	in respect of employees exclusively or principally engaged in the RBS, the State or Santander
Acquired Businesses, as the case may be, by RBS, the State or Santander (respectively); and







	11.2	 	in respect of employees exclusively or principally engaged in the Retained Business, by the
Retained Group; and







	11.3	 	where it is not possible to determine in accordance with the procedure set out in paragraph 3
above where such employees were engaged, between the Retained Group and the relevant
Investor(s) or between the relevant Investors (as the case may be) having regard to (i) the
proportion of the employee’s duties prior to the relevant Completion which related to each
such entity; or (ii) to such other principles as the parties, acting reasonably, agree.







	12	 	If the sale and purchase of any Acquired Business, or any act or omission after the relevant
Completion by an Investor or a member of its Group or by a member of the Retained Group shall
entitle any employee to treat his or her employment as terminated or otherwise to bring an
action against any Acquired Company or any member of the Retained Group (as the case may be)
in respect of his or her employment, the parties shall consult with a view to reducing or
mitigating any Liabilities. To the extent that such Liabilities do arise, the costs in respect
of an employee exclusively or principally engaged in the RBS, the State or Santander Acquired
Businesses, as the case may be, shall be borne by RBS, the State or Santander (respectively)
and the costs in respect of an employee exclusively or principally engaged in the Retained
Business shall be borne by the Retained Group.







If it is not possible to determine that the relevant employee is exclusively or principally
engaged in one or more of the RBS, the State or Santander Acquired Businesses or the
Retained Business, the Liabilities shall be borne between the Retained Group, and the
relevant Investor(s) or between the relevant Investors (as the case may be) having regard
to (i) the proportion of the employee’s duties prior to any relevant Completion which relate
to each such entity; or (ii) such other principles as the parties, acting reasonably agree.


 


70









 






	13	 	Without prejudice to Clause 5.5 of this Agreement, prior to any relevant Completion, any
Investor may provide management and other services to one or more of the other Acquired
Businesses and/or the Retained Business on such terms (including appropriate charges) as may
be agreed between the parties.







	14	 	For the avoidance of doubt, all pension Liabilities in relation to employees and former
employees of the Acquired Businesses and Retained Business will be dealt with in accordance
with Part 5 of Schedule 1. Hence, this Part 4 relates only to non-pension Liabilities in
respect of such employees.







	15	 	Where an employee is allocated to an Investor in accordance with the terms of Part 4 of this
Schedule 1, that Investor shall, in relation to employees allocated to it, take custody of (or
if appropriate, retain custody of) any data which is held by the employer for the purpose of
the employment relationship (“HR Data”) and will at all times treat such data in accordance
with that Investor’s internal data protection policies and any applicable laws. Similarly, any
Liability for failure to comply with any relevant data protection laws will fall on the
Investor to whom that employee is allocated.







	16	 	If the parties cannot, acting reasonably, determine (i) that an employee is exclusively or
principally engaged in a particular Acquired Business or the Retained Business; or (ii) how
Liabilities for any employee are allocated pursuant to this Part 4; any party affected by such
failure to make a determination can escalate the issue in question, via its normal internal
governance routes, to such party’s Head of HR, who will raise that issue with any other
affected party/parties. For these purposes, the relevant Heads of HR are Tony Williams in
respect of RBS, Alexandra Philippi in respect of State and Sinead O’Connor in respect of
Santander and references to the relevant Head of HR shall include their successors from time
to time.







	17	 	Any dispute not covered by paragraph 16 shall if not resolved by agreement between the
parties within 60 business days of such dispute arising, be determined in accordance with
Clause 9 of the Agreement.





 


71









 










Schedule 1 – Part 5

Pensions





	1	 	As soon as reasonably practicable and subject to applicable legal and regulatory provisions,
the Investors will in relation to each pension plan negotiate in good faith and enter into
detailed agreements consistent with the following principles.

	 
	2	 	The Investors acknowledge that the general principles in respect of pensions are that:







	 	(a)	 	all pension Liabilities and pension costs in respect of employees will be borne
by the appropriate Acquired Businesses or Retained Business on the same basis as all
Liabilities of an employee will be allocated under paragraph 9 of Schedule 2 – Part 4
(Employment) of this Agreement; and







	 	(b)	 	the pension Liabilities and pension costs in respect of former employees will
be borne by the appropriate Acquired Businesses or Retained Business by applying, to
the extent possible and having regard to paragraphs 11 and 12 of this Part of this
Schedule, the principles of allocation of Liabilities under paragraph 9 of Schedule 2 –
Part 4 (Employment) of this Agreement but with reference to the employment those former
employees had at the time of termination of their employment agreement.







	3	 	The Investors will, subject to applicable legal and regulatory provisions and having regard
to the history and circumstances of the plan, agree whether following Completion each plan
should continue as:







	 	(a)	 	a multi-employer plan; or

	 
	 	(b)	 	a single employer plan.






Multi-employer plans





	4	 	Where the Investors agree that following the relevant date of Completion a current plan
should continue as a multi-employer plan, the relevant companies within the Acquired
Businesses and the Retained Business will continue to participate in the plan on such other
terms and conditions as are agreed by the Investors from time to time, provided that those
terms and conditions, together with, where appropriate, any compensations agreed between the
Acquired Businesses and the Retained Business, accord with the general principles stated in
paragraph 2 of this Part of this Schedule.






Single employer plans





	5	 	Where the Investors agree that following the relevant date of Completion a plan should
continue as or be converted to a single employer plan, subject to applicable legal and
regulatory provisions, the Investors will agree who will be the principal sponsoring employer.
This could be a company within one of the Acquired Businesses or the Retained Business. This
will normally be the company which is currently the principal sponsoring employer, but may be
changed by agreement if the current membership of the plan is inconsistent with this. To the
extent that this results in one Acquired Business or the Retained Business taking
responsibility for Liabilities for former employees of another Acquired Business or the
Retained Business (as the case may be), a valuation adjustment amongst the involved Acquired
Business(es) and/or the Retained Business will be made in accordance with the financial
position of the plan on an IAS19 basis (including allowance
for discretionary benefits where this has been incorporated previously in the IAS19
valuation).





 


72









 










Cessation of participation





	6	 	If a company within the Acquired Businesses or the Retained Business ceases to participate in
a plan, the Investors will use reasonable endeavours to procure that a transfer value is paid
from that plan to a new plan for employees of that Acquired Business or Retained Business or
company within that business (in respect of current employees and/or former employees). The
Investors will agree a proposed transfer value basis to be put to the trustees or managers of
the plan.







	7	 	To the extent that the transfer value actually paid differs from the value of the Liabilities
transferred on an IAS19 basis multiplied by the funding level of the plan on the IAS19 basis,
a cash adjustment will be due between the Acquired Businesses and/or Retained Business which
accords with the general principles stated in paragraph 2 of this Part of this Schedule. The
Investors will cooperate to ensure that any adjustments are applied in as tax efficient manner
as possible.







	8	 	The Investor which either is or owns the continuing principal sponsoring employer of any
pension plan will indemnify and hold harmless in full each member of the Retained Group
(whilst such member remains part of the Retained Group) and each of the other Investors and
members of their respective Groups — being, for this purpose, in the case of RBS, the Wider
RBS Group — (including, for this purpose their Acquired Companies whilst such Acquired
Companies are members of the ABN AMRO Group or the relevant Investor’s Group in respect of any
actions, proceedings, costs, claims and demands, incurred by any of those other Investors and
members of their Groups (including their Acquired Companies), in relation to any liability
arising in respect of that pension plan. The Investors agree that any liability incurred as a
result of the indemnity in this paragraph 8 will not constitute a liability that is
recoverable under paragraph 7.1 of Part 1 of Schedule 1 in respect of pension liabilities
relating to any of the pension plans and each such Investor undertakes not to seek to rely on
the indemnity under paragraph 7.1 of Part 1 of Schedule 1 in respect of such liabilities.







	9	 	Where a company within the Acquired Business or Retained Business ceases to participate in a
plan, it will procure alternative pension provision for future service if it is required to do
so by applicable legal or regulatory provisions.






Defined contribution plans and unfunded pension liabilities




	10	 	The principles stated in this Part of this Schedule will be modified as appropriate as follows:







	 	(c)	 	the general principles stated above apply mutatis mutandis to defined
contribution plans and, where possible, unfunded pension Liabilities;







	 	(d)	 	to the extent that any unfunded pension Liabilities or any excess of funding in
any plan cannot be allocated to any Acquired Businesses and/or the Retained Business by
applying the foregoing principles, such unfunded pension Liabilities or any excess of
funding will be allocated to the Retained Business and shared by the Investors in
accordance with their participation in the Retained Business; and





 


73









 











	 	(e)	 	to the extent that the Investors agree that defined contribution and unfunded
pension Liabilities will be transferred under such general principles, the Investors
will agree the appropriate transfer amount to be paid within a reasonable period.






General





	11	 	The Investors acknowledge that attributing Liabilities precisely for former employees to each
Investor may be difficult or impossible and will use suitable approximations where
appropriate, having regard to cost.







	12	 	The Investors acknowledge that transfers of former employees between plans may be contentious
or potentially contentious in some cases, and will cooperate to ensure that former employees
may remain in their existing plan where this is appropriate and accords with the general
principles stated in paragraph 2 of this Part of this Schedule.







	13	 	The Investors agree that if any dispute arises in respect of pensions then it shall be
determined in accordance with Clause 9 of this Agreement save that the Investors may agree
that the dispute will be determined by an independent actuary instead of an Independent
Accountant, in which case references in Clause 9 to Independent Accountants shall be read as
references to an independent actuary and references in Clause 9 to the President of the
Institute of Chartered Accountants shall be read as references to the President of the
Institute of Actuaries.







	14	 	This paragraph 14 of this Part of this Schedule applies in respect of all pension plans in
relation to which payments had not yet been made in accordance with paragraph 5 and (where
applicable) paragraph 7 of this Part of this Schedule before the effective date of the Dutch
legal demerger (afsplitsing) of certain assets and liabilities of RBS NV to ABN AMRO Bank,
which occurred on 6 February 2010 (such pension plans the “Outstanding Plans”). The provisions
in paragraphs 1 to 13 of this Part 5 of this Schedule 1 apply to the Outstanding Plans with
the following exceptions:







	14.1	 	In respect of the Outstanding Plans, no valuation adjustment shall be carried out in
accordance with paragraph 5 of this Part of this Schedule and no cash adjustment will be due
in accordance with paragraph 7 of this Part of this Schedule. Instead, in accordance with and
pursuant to a “Pensions Unbundling and Settlement Deed” entered into by RBS, Santander, the
State, the Company, ABN AMRO Bank and Fortis Investment Management N.V. dated 1 April 2010
(the “Pensions Unbundling and Settlement Deed”), RBS and Santander shall each make the
following one-off payments to ABN AMRO Bank:







	 	14.1.1	 	a compensation payment in respect of future administration expenses of the Dutch
Outstanding Plans equal to the following amounts:







	 	(i)	 	RBS: EUR 14.1 million; and

	 
	 	(ii)	 	Santander: EUR 1.5 million;







	 	14.1.2	 	a compensation payment in respect of the future cost of purchasing annuities in
respect of liabilities relating to the Dutch Outstanding Plans equal to the following
amounts:







	 	(i)	 	RBS: EUR 21.1 million; and

	 
	 	(ii)	 	Santander: EUR 1.8 million.





 


74









 











	14.2	 	In respect of the Dutch Outstanding Plans, where the Investors or any of members of their
Groups (including their Acquired Companies) cease participating in such pension plans, the
relevant party will use reasonable endeavours to procure that a transfer value is paid from
that Dutch Outstanding Plan to a new plan for relevant employees who participated in the Dutch
Outstanding Plan (in respect of current employees and/or former employees) and that the
relevant Investor or member of its Group (including their Acquired Companies) will apply the
“opt-out mechanism” in respect of the Dutch Outstanding Plans, so that all relevant individual
members will be informed that their accrued pension will be transferred to the new plan,
unless they object within a certain specified period.







	14.3	 	The policy of the trustees of the Dutch Outstanding Plans in the case of a transfer value
basis referred to under paragraph 6 of this Part of this Schedule is to transfer assets that
are the multiplication of the liabilities on an FTK-basis (Financieel ToetsingsKader) with, as
a minimum, the lower of its funding ratio (calculated on the same FTK- basis) and the funding
ratio of the receiving fund. In any event, the minimum transfer value will be at least as
great as that which is required under the Decree on the implementation of the Pension Act and
the Act on Compulsory Membership of an Occupational Pension Scheme (both Acts in the
Netherlands, “Besluit uitvoering Pensioenwet en Wet verplichte beroepspensioenregeling”). If
the transfer value calculated by the trustees of the Dutch Outstanding Plans is lower than the
minimum transfer value set out in this paragraph 14.3 of this Part of this Schedule,
notwithstanding the obligation on RBS under paragraph 6 of this Part of this Schedule, RBS may
refuse to accept a transfer from the relevant Dutch Outstanding Plan. For the avoidance of
doubt, a refusal by RBS to accept a transfer in accordance with this paragraph 14.3 of this
Part of this Schedule will not lead to an obligation to pay compensation in excess of the
compensation referred to in paragraph 14.1.1 and 14.1.2 of this Part of this Schedule.







	14.4	 	With the exception of the payment obligations under the Pensions Unbundling and Settlement
Deed and payment of any transfer value in accordance with paragraph 6 of this Part of this
Schedule, the Investors agree that none of the Investors or members of their Groups (including
their Acquired Companies) shall have any further liability to make any payment, valuation
adjustment or cash adjustments to any other Investor or members of their respective Groups
(including their Acquired Companies) in respect of any of the Outstanding Plans.







	14.5	 	To the extent that there is any conflict between this Agreement and the Pensions Unbundling
and Settlement Deed then the wording in the Pensions Unbundling and Settlement Deed shall
prevail over this Agreement. For the avoidance of doubt, to the extent that the provisions of
the Pensions Unbundling and Settlement Deed do not relate in any way to any provision of this
Agreement, the Pensions Unbundling and Settlement Deed and this Agreement shall not be deemed
to conflict.





 


75









 










Schedule 1 – Part 6

Intellectual Property





	1	 	In this Agreement:







“ABN AMRO Trade Marks” shall have the meaning given to it in the RBS Transitional Trade Mark
Licence;




“ABN AMRO Device Trademark” shall have the meaning given to it in the Santander Transitional
Trade Mark Licence;




“Intellectual Property” means trade marks, service marks, trade names, logos, domain names,
get-up, patents, inventions, design rights, copyrights, neighbouring rights and moral
rights, know-how, semi-conductor topography rights, database rights and all other similar
rights which may subsist in any part of the world, whether or not such rights are
registered, including, without limitation, any registrations of such rights and applications
and rights to apply for such registrations;




“RBS Transitional Trade Mark Licence” means the transitional trade mark licence entered into
between RBS NV and ABN AMRO Bank on 5 February 2010, as amended from time to time; and




“Santander Transitional Trade Mark Licence” means the transitional trade mark licence
entered into between Santander, Banco Santander (Brasil) S.A. and ABN AMRO Bank on 5
February 2010.




	2	 	The parties recognise that as part of the transfer of the Acquired Businesses to the
Investors the Acquired Business Assets for each Acquired Business shall include the
Intellectual Property assets and related contracts which are exclusively or principally used
by that Acquired Business. Nothing in this Part of this Schedule shall affect the ownership of
these assets or the validity of the related contracts.







	3	 	At any time a party may make a written request for a licence to use a particular item of
Intellectual Property owned by another party and in existence as at 10 October 2007 (other
than the ABN AMRO Trade Marks to which the RBS Transitional Trade Mark Licence shall apply and
the ABN AMRO Device Trademark to which the Santander Transitional Trade Mark Licence shall
apply) and the relevant parties agree that within 90 days following such notice that they
shall negotiate in good faith and use their best endeavours to agree any such request — with
consent not being unreasonably withheld — with the intention that each of the RBS, Santander
and State Acquired Businesses and the Retained Business shall be able to continue to operate
without hindrance and for no additional consideration in the manner in which they operated
immediately prior to the relevant Completion Date. Unless agreed otherwise the licence shall
be non-exclusive, royalty-free, world-wide and perpetual, so far as the licensor is able to
grant such a licence at no additional cost.







	4	 	The parties acknowledge that much of the know-how owned or used by the RBS Holdings Group and
Acquired Businesses is and will remain of a confidential nature and agree to take reasonable
and appropriate steps to ensure that confidentiality is preserved following the transfer of
the Acquired Business Assets and in the future conduct of the businesses to be carried on by
the Acquired Group and the Retained Group.





 


76









 











	5	 	Any dispute in respect of the matters in this Part of this Schedule which is not resolved by
agreement between the parties within 60 Business Days of such dispute arising (such 60
Business Days to commence, for the purposes of any dispute pursuant to paragraph 4 of this
Part of this Schedule, on expiry of the 90-day period referred to in that paragraph) shall
be determined in accordance with Clause 9 of this Agreement save that:







	 	(a)	 	references in Clause 9 to the Independent Accountants shall, for the purposes
of this Schedule, be read as references to a single QC who is an expert in Intellectual
Property in London, England, or, if the relevant parties jointly consider it to be more
appropriate, an expert of equivalent seniority in the jurisdiction in which the
Intellectual Property asset in question subsists; and







	 	(b)	 	references in Clause 9 to the President of the Institute of Chartered
Accountants shall be read as references to the President of the Law Society.







The objective of the expert determination pursuant to this paragraph, (i) in the case of a
Wrong Box Asset claim relating to Intellectual Property, shall be to determine which
business has the strongest claim to ownership of the relevant Intellectual Property on a
worldwide basis, taking into account which business has invested the most in creating,
developing and promoting the relevant Intellectual Property to date, and, (ii) in the case
of a request for a licence under paragraph 4 of this Part of this Schedule, shall be to
determine fair and reasonable terms for such licence.




	6	 	Without prejudice to Clause 20.10 of this Agreement, each party shall, and the Company shall
use its reasonable endeavours to procure that any relevant third party shall, do all such
things and execute all such documents as may reasonably be requested by any other party for
the purposes of giving full legal effect to the provisions of this Part of this Schedule,
including in order to vest or perfect title to any Intellectual Property, to record such title
with any relevant registry or to apply for registration in respect of any new Intellectual
Property at any registry.





 


77









 










Schedule 1 – Part 7

Real Estate





	1	 	The parties shall use their reasonable endeavours to agree that the rights transferred
pursuant to Clause 5 and the remaining provisions of this Schedule relating to real estate
(including licenses, easements, rights of way and other similar rights) are sufficient to
enable each of the Acquired Businesses and the Retained Business to be carried on in the
ordinary course.







	2	 	Until such time as specific real estate is allocated between the Acquired Businesses and/or
to the extent that premises or real estate rights are shared between Acquired Businesses or
between one or more Acquired Businesses and the Retained Business, both the costs and the
benefits of such premises, or rights of such premises, shall be shared or allocated between
the relevant Investors or members of the RBS Holdings Group in accordance with the principles
set out in Clause 5 of this Agreement and in the Leasing Principles and Treatment of Property
Stranded Costs Principles.







	3	 	Without limitation, the parties shall use their reasonable endeavours to agree the following
in addition to but following the general principles set out in paragraphs 1 and 2 of this
Schedule 1 Part 7:







	3.1	 	where premises are shared, which Acquired Business will retain ownership of the property or
relevant lease and the basis of occupation of the other Acquired Businesses including any rent
or licence fee to be paid for such occupation by the other Acquired Businesses, how long such
occupation will last and the other terms of such occupation;







	3.2	 	where premises are shared, how existing services provided in respect of the relevant property
are to be provided to all the relevant Acquired Businesses;







	3.3	 	if any properties are held by a specific real estate holding company, which Acquired Business
will own such entity and how the other Acquired Businesses will continue to occupy;







	3.4	 	how guarantees already in place from one Acquired Business in respect of the occupation of
real estate by another Acquired Business are to be dealt with;







	3.5	 	which Acquired Business will be responsible for historic liabilities (including, but not
limited to, environmental and regulatory liabilities) in respect of which properties;







	3.6	 	that transfers of any properties or interests in any properties are carried out in the most
tax efficient way for the Acquired Businesses involved; and







	3.7	 	where the Acquired Businesses are controlled by, or consolidated into, any of the Investors,
or otherwise leave the RBS Holdings Group, and this results in breaches of existing leases or
licences, or adversely affects any ongoing occupations or ongoing disposals (by termination or
otherwise), how this is to be dealt with.





 


78









 











	4	 	Subject to paragraph 5 of this Schedule 2 Part 8, any dispute in respect of the matters in
this Part of this Schedule which is not resolved by agreement between the parties within 60
Business Days of such dispute arising shall be determined in accordance with Clause 9 of the
Agreement, but for the purposes of determining disputes where real estate assets are the
primary disputed assets:







	 	4.1	 	in England and Wales, the relevant parties shall appoint a chartered surveyor in
the relevant jurisdiction or (in relation to legal issues) a single QC well versed in
real estate law who shall determine any dispute arising as an expert and not as an
arbitrator and in the absence of any agreement as to such a chartered surveyor or QC,
the parties shall refer that appointment to the President of the Royal Institution of
Chartered Surveyors or the President of the Law Society in London (as the case may be)
who shall be substituted for the reference in Clause 9 of the Agreement to the
“Independent Accountants”;

	 
	 	4.2	 	in a jurisdiction other than England and Wales, the relevant parties shall
appoint the local (national) nearest equivalent to either a chartered surveyor in the
relevant jurisdiction or (in relation to legal issues) a single QC well versed in real
estate law in the relevant jurisdiction who shall determine any dispute arising as an
expert and not as an arbitrator and in the absence of any agreement as to such a
equivalent to a chartered surveyor or QC, the parties shall refer that appointment to
the local national equivalent to the president or chairman of the Royal Institution of
Chartered Surveyors or the president or chairman of the Law Society (by way of example:







	 	4.2.1	 	equivalents to the Law Society of England and Wales are:







	 	(i)	 	in Spain, the Colegio de Abogados de Madrid;

	 
	 	(ii)	 	in Italy, the Consiglio Nazionale Forense;

	 
	 	(iii)	 	in Brazil, the Ordem dos Advogados do Brasil; and

	 
	 	(iv)	 	in the Netherlands, the Nederlandse Orde van Advocaten;







and




	 	4.2.2	 	an equivalent to the Royal Institute of Chartered Surveyors in
London in Spain is the Colegio Oficial de Aparejadores y Arquitectores Tecnicos
de Madrid)







who shall be substituted for the reference in Clause 9 of the Agreement to the
“Independent Accountants”; or




	 	4.3	 	across more than one jurisdiction, this shall be determined in accordance with
Clause 9 of this Agreement.







	5	 	Any dispute where real estate assets are the primary subject matter of the dispute, and the
circumstances involve operations from one or more real estate assets being significantly
adversely affected; and/or may result in any Investor being seriously reputationally adversely
affected; shall be dealt with as follows:







	 	5.1	 	immediately an Investor is aware of a dispute or the potential of a dispute, it
shall notify the other Investors of all relevant facts of the dispute of which it is
aware (acting in good faith), such notice to be served following the requirements of
Clause 21;







	 	5.2	 	following service of notice on all Investors under paragraph 5.1 of this Schedule
2 Part 8, the Investors shall use all reasonable endeavours to resolve the dispute
within 2 Business Days in a just and equitable manner;





 


79









 











	 	5.3	 	failing agreement being reached under paragraph 5.2 of this Schedule 2 Part 8,
the dispute shall be immediately referred to:







	 	5.3.1	 	in the case of RBS, the Chief Administrative Officer of the RBS
Group;

	 
	 	5.3.2	 	in the case of State, the Director of Financieringen; and







	 	5.3.3	 	in the case of Santander, Chief Technology and Operations
Officer, reporting directly to the Chief Executive of Santander;







which shall use all reasonable endeavours to resolve the dispute within 2 Business
Days in a just and equitable manner;




	 	5.4	 	failing agreement being reached under paragraph 5.3 of this Schedule 2 Part 8,
the dispute shall be immediately referred to the Chief Executive of each Investor which
shall use all reasonable endeavours to resolve the dispute within 2 Business Days in a
just and equitable manner.







	 	5.5	 	if agreement is still not reached under paragraph 5.4 of this Schedule 2 Part 8,
then the dispute shall be resolved in accordance with paragraph 4 of this Schedule 2
part 8 in all respects, except that the first part of paragraph 4 shall be replaced with
the following words







“any dispute in respect of the matters in this Part of this Schedule shall be
determined in accordance with Clause 9 of the Agreement, but for the purposes of
determining disputes where real estate assets are the primary disputed assets:




[and the remainder of paragraph 4, being 4.1 ...4.3, are read in full, unchanged]”




and for the avoidance of doubt the parties shall in this circumstance not wait 60
Business Days before referring the matter for determination under Clause 9 (with the
amended references to Clause 9 provided for under paragraph 4 of this Schedule 2 Part
8).


 


80









 





Schedule 1 – Part 8

Regulatory Matters





	1	 	The parties agree that RBS will take lead responsibility for running the RBS Holdings Group.







	2	 	For the avoidance of doubt and notwithstanding any other provision of this Agreement (other
than Clause 13), each of the Investors acknowledges that (subject to paragraph 3 below) the
Company shall be governed and operated in accordance with the governance, risk management and
systems and controls policies and procedures reasonably determined by RBS from time to time to
be necessary or desirable to ensure that the Company, RBS Holdings Group and each RBS Holdings
Group Company are managed in accordance with the regulatory requirements applying under
applicable laws and regulations (including, in particular that RBS Holdings, RBS NV and ABN
AMRO Bank are Dutch companies regulated by DNB).







	3	 	Without prejudice to the provision of paragraph 2 above and to the extent acceptable to the
DNB and any other Regulator and solely to the extent applicable to any State Acquired
Businesses or Santander Businesses that are owned by the RBS Holdings Group, RBS shall have
regard to the governance, risk management and systems and controls requirements which apply to
the Investors and their respective Groups under applicable laws and regulations and which are
notified from time to time in writing to RBS by the State and Santander, respectively. In
addition, the Investors acknowledge that groups of Regulators may from time to time reach
understandings in relation to the management of the Company and the RBS Holdings Group. The
Investors agree to use all reasonable endeavours to ensure that all such understandings
communicated to the Company are properly implemented.







	4	 	In exercising its rights and fulfilling its duties under or pursuant to this Agreement with
respect to the RBS Holdings Group, the Company will act, and the Investors shall procure that
the Company shall act, in accordance with the policies and procedures determined by RBS
pursuant to paragraph 2 above.







	5	 	None of the parties shall do or omit to do anything which causes any of the other parties,
any member of their respective Groups or any member of the RBS Holdings Group to breach any
applicable law or regulatory requirement. Each party will co-operate with each other party
with a view to ensuring (insofar as it is reasonably able and subject to applicable law and
regulations and the provisions of this Agreement) that for as long as any Acquired Business,
Retained Business and/or RBS Holdings Group Company is the subject of clauses 5 and 6 of the
Agreement, such company will conduct its affairs in compliance with the applicable regulatory
requirements of each relevant Regulator.







	6	 	Each party will co-operate with each other party with a view to ensuring (insofar as it is
reasonably able and subject to applicable law and regulations and the provisions of this
Agreement) that any information relating to the Company or any RBS Holdings Group Company
which is required under applicable laws and regulations, or is requested by a relevant
Regulator, to be provided by an Investor or a member of its Group to a relevant Regulator is
made available to that Investor for it or the relevant member of its Group to provide to that
Regulator.





 


81









 











	7	 	Subject to applicable laws and regulations and the following provisions of this paragraph 7:







	7.1	 	the Company shall notify each of the Investors of any communication received by it from any
relevant Regulator in relation to the latter’s regulation of the RBS Holdings Group as soon as
reasonably practicable after receipt thereof;







	7.2	 	each of the Investors shall be entitled to make representations to the Company to assist it
in responding to any such communication; and







	7.3	 	none of the Investors shall object to the other Investors (or their representatives)
attending at any meeting or on any call between the Company and a relevant Regulator.







	8	 	Notwithstanding the foregoing, each Investor acknowledges that it shall not be entitled to
receive notice of any communication under paragraph 7.1 above, or to make representations
pursuant to paragraph 7.2 above, or to attend or participate at any meeting or on any call
between the Company and any Regulator, if (i) that Regulator objects (for whatever reason), or
(ii) the Investor has no material interest in the specific subject matter which is the subject
of the communication, meeting or call.





 


82









 










Schedule 1 – Part 9

Tax Matters





	1	 	Tax Agreements







	1.1	 	The parties acknowledge that the following Tax Agreements have been or will be entered into
between the parties and that certain matters that would otherwise fall within the scope of the
provisions of this Schedule 1 — Part 9 may be covered by such Tax Agreements:







	 	(i)	 	the Separation Tax Agreement;

	 
	 	(ii)	 	the Tax Segregation Agreement;







	 	(iii)	 	the Global Tax Agreement between RBS, the State, RBS NV and ABN AMRO Bank
relating to the allocation of certain tax liabilities related to certain relevant
Acquired Businesses and certain other Tax matters in relation thereto; and







	 	(iv)	 	other Tax Agreements relating to the allocation of Tax liabilities related to
Acquired Businesses in particular jurisdictions (including Luxembourg, Belgium,
Singapore, Germany, Hong Kong, Japan and the USA) and certain other Tax matters in
relation thereto.







The parties further acknowledge that further Tax Agreements may be entered into following
the date of this Agreement.




	1.2	 	The parties acknowledge that in relation to the Completed Restructuring, the provisions of
the Original CSA applied in respect thereof (subject to the provisions of any Tax Agreement
where relevant) and that the amendment and restatement of the Original CSA is without
prejudice to the rights and obligations of the parties under the Original CSA or any Tax
Agreement in relation to the Completed Restructuring.







	1.3	 	In the case of conflict between the relevant provisions of any Tax Agreement and the relevant
provisions of this Agreement (or the Original CSA where applicable), the relevant Tax
Agreement shall prevail in respect of matters covered by the relevant Tax Agreement, unless
explicitly agreed otherwise in this Agreement or the relevant Tax Agreement. In the case of
any matter which has not been agreed for the purpose of a Tax Agreement, the principles in
this Part 9 shall apply.







	2	 	Tax efficiency







	 	2.1	 	The parties acknowledge that Clause 5 requires the Further Restructuring to be
implemented in a manner that is as efficient for all parties and the RBS Holdings Group
as is reasonably practicable from a tax point of view (subject to other non-Tax
constraints and considerations) and the parties also acknowledge that the same
principles applied to the Completed Restructuring. The parties acknowledge that this
shall involve using all reasonable endeavours to:







	 	2.1.1	 	minimise the total Taxes (including not incurring such Taxes)
which may arise on the Further Restructuring (including Transfer Taxes);







	 	2.1.2	 	subject to Clause 2.1.1, maximise the availability and benefit
of Tax Reliefs (taking into account the ability of the parties to utilise such
Tax Reliefs and any other benefits which may be available);





 


83









 











	 	2.1.3	 	subject to Clause 2.1.1, procure that transfers of businesses
pursuant to the Further Restructuring are not subject to VAT (for example by
endeavouring to ensure that any applicable conditions for such transfers to be
treated as transfers of going concerns for VAT purposes are satisfied);







	 	2.1.4	 	facilitate the distribution of cash (in the case of assets that
have been sold for cash pursuant to the Further Restructuring) from the Company
and RBS Holdings Group Companies in a tax-efficient manner;







	 	2.1.5	 	facilitate the making of distributions pursuant to clause 15 of
this Agreement in a tax efficient manner;







	 	2.1.6	 	to the extent possible and consistent with the other principles
in this Agreement, maximise deductions for costs attributable to the Retained
Business (in particular head office costs), including by way of recharging such
costs where appropriate;







	 	2.1.7	 	procure that indemnity payments, adjustments and allocations in
connection with this Agreement and the Tax Agreements are structured in a
tax-efficient manner to the extent possible.







	3	 	Allocation of Taxes







The cost of the following Taxes shall be allocated between the Investors as follows, subject
to any agreement between the parties to the contrary:




	 	3.1	 	Taxes payable or suffered by a RBS Holdings Group Company or a New Company in
connection with the direct or indirect transfer of any Retained Company or Retained
Business or part thereof pursuant to the Further Restructuring, and any distribution of
proceeds in connection with any cash sale of a Retained Business or Retained Company
shall be allocated in Consortium Proportions.







	 	3.2	 	Taxes payable or suffered by a RBS Holdings Group Company or a New Company in
connection with the direct or indirect transfer of any Santander Acquired Company or
Santander Acquired Business to Santander or a member of its Group or to a New Company to
be acquired by Santander pursuant to the Further Restructuring, and any distribution of
proceeds in connection with any cash sale of a Santander Acquired Business or Santander
Acquired Company shall be allocated to Santander.







	 	3.3	 	Taxes payable or suffered by a RBS Holdings Combined Group Company or a New
Company in connection with the direct or indirect transfer of any State Acquired Company
or State Acquired Business to the State or a member of its Group or to a New Company to
be acquired by the State pursuant to the Acquired Business Further Restructuring, and
any distribution of proceeds in connection with any cash sale of a State Acquired
Business or State Acquired Company shall be apportioned between the State and RBS in the
Adjusted Consortium Proportions subject to adjustment to reflect any breach by the State
or RBS of their obligations under Clause 2 above.







	 	3.4	 	Taxes payable or suffered by an RBS Holdings Group Company or a New Company in
connection with the direct or indirect transfer of any RBS Acquired Company or RBS
Acquired Business to RBS or a member of its Group or to a New Company to be acquired by
RBS pursuant to the Further Restructuring, and any distribution of proceeds in
connection with any cash sale of a RBS Acquired Business or RBS
Acquired Company shall be apportioned between the State and RBS in the Adjusted
Consortium Proportions subject to adjustment to reflect any breach by RBS or the
State of their obligations under Clause 2 above.





 


84









 











	 	3.5	 	Tax payable or suffered by an RBS Holdings Group Company or a New Company in
connection with any transfer of assets contemplated by paragraph 7.3 of Schedule 1 Part
1 shall be allocated to the transferee.







	 	3.6	 	Subject to Paragraph 3.7, Taxes payable by an Investor or a member of the
Investor’s Group (excluding for the avoidance of doubt any RBS Holdings Combined Group
Company or any New Company) in the jurisdiction in which such person is resident for Tax
purposes (including Taxes payable in respect of the Further Restructuring including the
distribution of assets or cash to them pursuant to Clause 15 of this Agreement or the
Further Restructuring) shall be borne by the relevant Investor (or Group member).







	 	3.7	 	Taxes arising in connection with payments pursuant to indemnity and adjustment
provisions in this Agreement (including paragraph 7 of Schedule 1 Part 1 other than
paragraph 7.3 in respect of which paragraph 2.6 applies) or pursuant to the Tax
Agreement shall be allocated to the party making the payment where such payment is made
pursuant to Paragraph 7.1 of Schedule 1 Part 1 or under the Tax Agreement or otherwise
relates to a Liability of the paying party or is attributable to a breach or other
default of such party. In other cases, such Taxes shall be allocated on a basis which it
is agreed or determined produces a fair and reasonable result in accordance with the
general principles in this Agreement.

	 
	 	3.8	 	Other Taxes shall be allocated as follows:-







	 	•	 	in the case of Taxes that relate solely to the RBS Acquired Business, to RBS;







	 	•	 	in the case of Taxes that relate solely to the State Acquired Business, to
the State;







	 	•	 	in the case of Taxes that relate solely to the Santander Acquired Business,
to Santander;







	 	•	 	in the case of Taxes that relate solely to the Retained Business (which the
parties agree shall include Taxes that relate to activities which have been
terminated but which cannot be attributed to the Acquired Business of one or
more Investors), in the Consortium Proportions;







	 	•	 	in the case of Taxes payable or suffered by a company which has carried on
more than one Acquired Business or an Acquired Business and Retained Business,
where such Taxes cannot be attributed solely to one Acquired Business or
Retained Business, to the relevant Investors in appropriate proportions
determined by reference to the extent to which the relevant company carried on
each business;







	 	•	 	in the case of Taxes which cannot be attributed to any Acquired Business or
Retained Business (the parties having used best efforts to so attribute such
Taxes), in the Consortium Proportions.





 


85









 











Unless otherwise agreed, it shall be assumed that Taxes payable in respect of
transactions which are taken into account in the profit and loss account of a
particular business relate to that business, save in the case of transactions
effected on non-arm’s length terms between businesses acquired by different
Investors. In the case of Dutch corporate income tax, the parties acknowledge that,
except as already agreed in a Tax Agreement, the relevant profit and loss account is
the segmental profit and loss account maintained for the RBS Holding corporate income
tax fiscal unity adjusted for Dutch corporate income tax purposes for each relevant
taxable period and that such profit and loss account will be used to determine
whether there are any Taxes for the relevant period that relate to the Acquired
Businesses of the respective Investors which form part of the fiscal unity.




	 	3.9	 	In relation to certain Taxes within Clause 3.8 above and certain Reliefs within
Clause 5 below, the parties acknowledge that certain specific principles and agreements
for allocating certain Taxes and Tax Reliefs have been agreed between the Investors
(including allocations of specific Taxes and Tax risks which have been identified prior
to the date hereof and agreed in accordance with the procedure in Clause 9 of this
Agreement). The parties acknowledge that Clause 3.5 above and the provisions of any
relevant Tax Agreement shall be interpreted in accordance with such principles and
agreements. The parties also acknowledge that the provisions of paragraph 3.8 and
paragraph 4 below shall apply only in the case of Taxes and Tax Reliefs which are not
covered by a Tax Agreement.







	 	3.10	 	For the avoidance of doubt, to the extent that any RBS Acquired Company is
subject to Tax on any profits attributable to a State Acquired Company (such that the
relevant Tax falls to be allocated to the State in accordance with Paragraph 3.8) in
circumstances where (i) no Tax Reliefs attributable to a State Acquired Business are
available to the relevant RBS Acquired Company to eliminate or reduce such liability to
Tax and (ii) no Tax Reliefs attributable to a RBS Acquired Business can be used to
eliminate or reduce such liability to Tax in accordance with the provisions of Paragraph
4 below, the State shall fund, or procure the funding of, the relevant liability to Tax
by procuring that there is paid to the relevant RBS Acquired Company (or otherwise at
RBS’s direction), an amount equal to the profits in question multiplied by the relevant
statutory Tax rate applicable to those profits.







	 	3.11	 	Interest shall be dealt with on the following basis (unless otherwise agreed for
the purpose of a specific Tax Agreement):







	 	3.11.1	 	where a cash payment is made to the relevant Tax Authority which has included
Interest, such interest will be allocated on the same basis as the Tax to which
it relates.







	 	3.11.2	 	where an Investor or any of its Acquired Companies or members of its Group
settles a liability to Tax by way of payment to the relevant Tax Authority and
such Tax falls to be allocated to another Investor in accordance with the
principles above, the former Investor shall notify the latter Investor
accordingly and the adjustments to be made between the Investors shall include
interest on the amount paid at 3-month EURIBOR on a daily compounding basis from
the date of payment of the Tax liability (or the date of notification in
accordance with this paragraph 3.10.2 in a case where such notification is not
made within 10 Business Days of payment) until such time as settlement between
the Investors has occurred.





 


86









 











	 	3.11.3	 	Any interest that is received from a Tax Authority shall be allocated on the
same basis as the Tax repayment to which it relates.







	 	3.12	 	The parties acknowledge that any payment of interest on Capital and interest on
GALM between the Investors shall be made net of Dutch tax at the agreed rate.







	4	 	Tax Reliefs







	 	4.1	 	It is acknowledged that the Further Restructuring may give rise to Tax Reliefs
for an Investor (the “Relevant Investor”) or member of its Group or New Company or RBS
Holdings Group Company which it is to acquire. Such Tax Reliefs shall be for the benefit
of the Relevant Investor, save to the extent that the transaction giving rise to the Tax
Relief also resulted in a Tax Liability which is to be borne or shared by another
Investor in accordance with paragraph 3 hereof. In the latter case, the amount to be
allocated in accordance with paragraph 3 shall be the amount by which the Tax liability
exceeds the net present value of the Tax Relief and the balance shall be borne by the
Relevant Investor. For the avoidance of doubt, any step up in the base cost of an asset
which a party obtains as a result of the Further Restructuring shall not constitute a
Tax Relief for this purpose. Further, any Tax Reliefs which arise as a result of any
transaction effected by an Investor or a member of its Group after the acquisition by it
of the relevant Acquired Business shall not fall within this paragraph but shall be for
the benefit of such Investor.







	 	4.2	 	Subject to paragraph 4.3 below, any Tax Reliefs arising to any RBS Holdings Group
Company in respect of periods beginning on or before the date of completion of the
Further Restructuring (other than Tax Reliefs falling within Clause 4.1 above) shall be
dealt with as follows:-







	 	4.2.1	 	To the extent any such Tax Relief can be used to reduce Tax
liabilities which would otherwise arise on the Further Restructuring (in
circumstances where the use of such Tax Relief for this purpose is in accordance
with the principles in Clause 2 above), such Tax Relief shall first be used for
that purpose. As between RBS and the State and in the case of any Tax Relief
within paragraph 4.2.6 below, no adjustments shall be made in respect thereof.
As between Santander on the one hand and the State and RBS on the other hand,
save in the case of Tax Reliefs within Paragraph 4.2.6 below, adjustments shall
be made between the parties to compensate the party that would otherwise have
been entitled to the Tax Relief (or the value thereof) in accordance with
paragraphs 4.2.2 to 4.2.5 below (the “Affected Party”) for the loss of such Tax
Relief. The amount of the payment shall equal the value of the Tax Relief to the
Affected Party. The remaining provisions of this paragraph shall apply to Tax
Reliefs which are not used in this way.







	 	4.2.2	 	To the extent that any such Tax Relief relates to a particular
Acquired Business and such Tax Relief can be transferred with the relevant
Acquired Business pursuant to the Further Restructuring or otherwise made
available to the Relevant Investor (or any member of its Group or RBS Holdings
Group Company acquired by it) without increased Tax costs, such Tax Relief shall
be so transferred or made available.





 


87









 











	 	4.2.3	 	To the extent that any such Tax Relief relates to a particular
Acquired Business and such Tax Relief cannot be transferred with the relevant
Acquired Business pursuant to the Further Restructuring or otherwise made
available to the Relevant Investor (or any member of its Group or RBS
Holdings Group Company acquired by it) but can be used by another Investor
or member of its Group or RBS Holdings Group Company acquired by it, except
as already agreed in a Tax Agreement, the relevant Investors shall, prior to
the relevant Tax Relief being utilised, discuss in good faith with a view to
agreeing the fair and reasonable amount to be paid for the utilisation of
such Tax Relief. Absent agreement, no party shall be entitled or required to
use any Tax Relief or tax capacity attributable to another Investor. The
parties acknowledge that specific agreement has been reached in respect of
the amount to be paid for the use of Tax Reliefs in certain jurisdictions
and this is reflected in the relevant Tax Agreement.







	 	4.2.4	 	To the extent that any such Tax Relief is lost as a result of
the acquisition of RBS NV by the Company or as a result of the Further
Restructuring, no payments or adjustments shall be made between the Investors.







	 	4.2.5	 	To the extent that any such Tax Relief relates to more than one
Acquired Business, it shall be allocated between the relevant Investors in
appropriate proportions and paragraphs 4.2.2 and 4.2.3 shall apply accordingly.







	 	4.2.6	 	To the extent that any such Tax Relief does not relate to a
particular Acquired Business (and cannot be allocated as described at paragraph
4.2.5, the parties having used best efforts to so allocate it) it shall be
treated as an asset of the Retained Business. In the event that such Tax Relief
can be used by an Investor or a member of its Group (whether the Investor which
acquires the relevant RBS Holdings Group Company or any other Investor to whom
such Tax Relief is made available pursuant to Clause 4.2.7),the principles in
Clause 4,2,3 shall apply to determine the adjustments to be made between the
Investors for the use of such Tax Reliefs, with any such adjustments being made
on the basis of the Consortium Proportions.







	 	4.2.7	 	In the event that a Tax Relief arises or has arisen to a RBS
Holdings Combined Group Company acquired or to be acquired directly or
indirectly by one Investor (the “Former Investor”) or a member of its Group and
such Tax Relief can be made available to an RBS Holdings Combined Group Company
acquired or to be acquired directly or indirectly by another Investor (the
“Latter Investor”) or a member of its Group or vice versa, the Latter Investor
shall be entitled to procure that such Tax Relief is so made available to it in
priority to any third party (and the Investors will co-operate in completing any
procedural formalities to facilitate this). Subject to paragraph 4.2.6, the
principles in Clause 4.2.3 shall apply to determine the amount to be paid for
such Tax Reliefs.





 


88









 











	 	4.2.8	 	In the event that a transaction has been entered into between a
RBS Holdings Combined Group Company acquired or to be acquired directly or
indirectly by one Investor (the “Former Investor”) or a member of its Group and
a RBS Holdings Combined Group Company acquired or to be acquired directly or
indirectly by another Investor (the “Latter Investor”) or a member of its Group
(other than a transaction falling within paragraph 5.2.9 below) and it is
subsequently determined that for any Tax purpose such transaction
was not regarded as having been effected on arm’s length terms such that the
Former Investor or a member of its Group is subject to Tax (or is subject to
an increased amount of Tax) or is denied a Tax Relief (or is entitled to a
reduced Tax Relief) in respect of such transaction, the Latter Investor
shall procure that, where possible, a corresponding Tax Relief is claimed.
Where such Tax Relief is claimed and can be made available to the Former
Investor or a member of its Group, such Tax Relief shall be so made
available. Where the Tax Relief is obtained but cannot be made available,
the Latter Investor shall indemnify the Former Investor in respect of such
Tax liability up to an amount equal to the net present value of the Tax
Relief to the Latter Investor. Where no Tax Relief can be claimed or where
the Tax liability exceeds the amount of Tax Relief that is made available or
the net present value of any Tax Relief that is claimed (as appropriate),
the excess shall be dealt with in accordance with the principles in
paragraph 2.







	 	4.2.9	 	Where under this Agreement or (prior to the date hereof) the
Original CSA, it is contemplated that any member of the Retained Group or any
Acquired Company or Acquired Business to be acquired by any one Investor or a
member of its Group (the “Recipient”) should be supplied or should use or
continue to be supplied or use assets, facilities or services of any member of
the Retained Group or any Acquired Company or Acquired Business to be acquired
by any other Investor or member of its Group (the “Provider”) and it is
determined by any Tax authority that such provision is not made on arm’s length
terms such that the Provider is subject to Tax (or to an Increased amount of
Tax) or the Recipient is denied a Tax Relief (or is entitled to reduced Tax
Relief) in respect thereof or vice versa such adjustments shall be made between
the affected Investors to compensate for such Tax or loss of Tax Relief as is
determined to be fair and reasonable.







	5	 	Withholding Tax and VAT







	 	5.1	 	All payments to be made under any indemnity, adjustment or allocation provision
shall be made without deduction or withholding for or on account of Tax unless required
by law. If any deductions or withholding are required by law, the party making the
payment shall be obliged to pay to the other party such sum as will after such deduction
or withholding has been made leave the other party with the same amount as it would have
been entitled to receive in the absence of any such requirement to make a withholding or
deduction, but only in circumstances where the party making such payment would be
required to bear the cost of any tax payable by the recipient on receipt of the payment
in accordance with paragraph 3.7. In other cases no additional amount shall be payable
and the cost of the withholding tax shall be allocated in accordance with the principles
in paragraph 3.7.







	 	5.2	 	In a case where an additional amount is paid pursuant to paragraph 6.1 and the
recipient of the relevant payment receives a credit for or refund of any Tax payable by
it or similar benefit by reason of any deduction or withholding for or on account of Tax
then it shall reimburse to the other party such part of such additional amounts paid to
it pursuant to paragraph 6.1 above as the recipient of the payment certifies to the
other party will leave it (after such reimbursement) in no better and no worse
position than it would have been if the other party had not been required to make
such deduction or withholding.





 


89









 











	 	5.3	 	Where under the terms of this Agreement one party is liable to indemnify or
reimburse another party in respect of any costs, charges or expenses, the payment shall
include an amount equal to any VAT thereon not otherwise recoverable by the other party
in respect of which it is reasonable to conclude that the other party is not entitled to
credit or repayment in respect of such VAT from the relevant Tax Authority, subject to
that party using all reasonable endeavours to recover such amount of VAT as may be
practicable.







	 	5.4	 	If any payment under or contemplated by this Agreement constitutes the
consideration for a taxable supply for VAT purposes, then in addition to that payment
the payer shall pay any VAT due.







	6	 	Tax Correspondence and Tax Disputes







The parties acknowledge that each Tax Agreement will contain provisions for dealing with Tax
Correspondence and Tax Disputes in relation to Taxes within the scope of the relevant Tax
Agreement. In the case of Taxes not covered by a specific Tax Agreement (and save in the
case of India in respect of which Schedule 11 to this Agreement shall apply), Clause 6 of
the Separation Tax Agreement shall apply (with appropriate modifications) for dealing with
Tax Correspondence and Tax Disputes in relation to such Taxes.




	7	 	Disputes







Any requirement in this Schedule for any matter to be determined between the parties shall
be determined in accordance with Clause 9 of this Agreement unless otherwise agreed.


 


90









 





Schedule 2

The Retained Business





	1	 	The Company shall procure that the Retained Business shall be managed by RBS NV for the
benefit of all the Investors. Save as otherwise expressly provided in this Agreement
(including in particular Clause 5.5 of this Agreement), all transactions and dealings between
the Retained Business and any Acquired Business shall be on arm’s length terms. The parties
have agreed that in relation to the assets listed in paragraph 2 of Schedule 1 Part 3, the
management of the Retained Business by RBS NV prior to 30 June 2011 shall involve taking the
actions set out in the table in relation to each of the relevant assets.







	2	 	Reasonable costs incurred by RBS NV through the performance of its duties to manage the
Retained Business shall be charged to the Retained Business in accordance with Part B of
Schedule 9, unless otherwise approved by the Investors (such approval not to be unreasonably
withheld). Any costs charged to the Retained Business pursuant to this paragraph 2 shall be
Liabilities of the Retained Business for the purposes of paragraph 6 below.







	3	 	Having regard to the prevailing market conditions and subject always to all applicable legal
or other regulatory requirements, the Board shall use reasonable endeavours to sell, liquidate
or otherwise manage all assets forming part of the Retained Business to maximise the value
realised on the sale or liquidation of or other process relating to such assets including, in
relation to the assets listed in paragraph 2 of Part 3 of Schedule 1, taking such action as is
set out in paragraph 2 of Schedule 1 Part 3. Subject to the foregoing and the further
provisions of this Schedule 2, RBS NV shall determine the timing and manner of any sale,
liquidation or other process. Prior to 30 June 2011, Investors shall be entitled to
participate in any auctions of assets to be sold in the manner contemplated in this Schedule
2. Following 30 June 2011, Investors shall be entitled to participate in any auctions of
assets to be sold in accordance with paragraphs 11 and 12.







	4	 	Direct costs borne centrally in accordance with Part A of Schedule 9 shall be borne by RBS NV
and shall be accounted for as part of the Retained Business. The paragraph shall have effect
subject to the provisions of Schedule 1 to the extent that they provide for the bearing of
costs in a different manner.







	5	 	The intention of the parties is to complete the actions set out in paragraph 3 above by 30
June 2011.







	6	 	Without prejudice to paragraph 7.2 of Part 1 of Schedule 1, Liabilities (including, without
limitation, any direct costs borne by the RBS NV in accordance with paragraph 4 and any
charged under paragraph 2 above) of the Retained Business shall be borne by the Retained Group
(and therefore, indirectly, by the Investors in their respective Consortium Proportions). If
and to the extent that additional funding is required to meet the Liabilities of the Retained
Business, the Company shall procure, to the greatest extent possible, that Liabilities of the
Retained Business are funded first by available cash accounted for as part of the Retained
Business, and if insufficient, by further funding provided by RBS, Santander and the State in
accordance with Clause 13.





 


91









 











	7	 	The Board shall procure that Santander, the State and RBS are notified promptly of all
material and relevant events relating to the Retained Business, including (without
limitation):







	7.1	 	any request from Saudi Hollandi Bank for further funding;

	 
	7.2	 	any decision by Saudi Hollandi Bank to cease trading;

	 
	7.3	 	any insolvency proceedings being threatened against Saudi Hollandi Bank;

	 
	7.4	 	any funding requests or commitments relating to the Retained Business;







	7.5	 	the identification of any previously unidentified material liabilities within the Retained
Business, and any material increase in the liabilities identified within the Retained Business
as at the date of this Agreement;







	7.6	 	any other event or information relating to the Retained Business, which the Company or RBS NV
considers (in their respective reasonable discretions, but taking into account any matters
notified to the Company and RBS NV as being relevant for this paragraph 7.6) to be material in
the context of Retained Business; and







	7.7	 	such other information as may reasonably be requested by an Investor, provided that the
Investor pays any additional reasonable costs incurred by the Company and/or RBS NV in
producing such information which not otherwise have been incurred,







provided that the rights of the Investors under this paragraph 7 shall be subject to the
duties of the Managing Board of RBS Holdings and shall not be exercised so as to cause any
disruption in the business of the RBS Holdings Group or any breach of applicable law or
regulation by the RBS Holdings Group.




	8	 	Notwithstanding paragraph 1 of this Schedule 2 but subject always to any applicable law,
regulation and Clause 13, the Company undertakes for the benefit of each Investor to procure
that RBS NV shall not carry out any of the following in relation to the Retained Business
without the approval of all of the Retained Business Representatives (such approval not to be
unreasonably withheld):







	8.1	 	the taking of steps in respect of any member of the Company’s Group which is a member of the
Retained Group to:







	 	8.1.1	 	wind up or dissolve such Group Company;

	 
	 	8.1.2	 	obtain an administration order in respect of such Group Company;

	 
	 	8.1.3	 	invite any person to appoint a receiver or receiver and manager of the whole
or any part of the business or assets of such Group Company;







	 	8.1.4	 	make a proposal for a creditors’ voluntary arrangement in respect of such
Group Company; and







	 	8.1.5	 	do anything similar or analogous to those steps referred to in paragraphs
8.1.1 to 8.1.4 above, in any other jurisdiction;







	8.2	 	any capital expenditure in excess of *** (in respect of an individual item or a series of
related items);







	8.3	 	the entry into, termination or variation of any material contract or arrangement between any
member of the Retained Business and an Investor or an Investor Group member, other than (i) as
expressly provided for in this Agreement; or (ii) a contract on arm’s length terms in the
ordinary course of business;





 







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




 


92









 










	8.4	 	the entry into of any joint venture, partnership, consortium or other similar arrangement
other than in the ordinary course of business;







	8.5	 	save as provided in the Litigation Management Agreement, or the Separation Tax Agreement, the
commencement or settlement of any single litigation, arbitration or other proceedings with an
individual value or expected value of greater than or equal to €250,000 (excluding costs) or
the commencement or settlement of any series of related litigations, arbitrations or other
proceedings with an aggregate value or expected value of greater than or equal to €500,000
(excluding costs) or such other litigation if an Investor has notified the Company and the
other Investors that the litigation is of material importance to that Investor as a result of
reputational or political sensitivities;







	8.6	 	the acquisition of any individual company or undertaking for consideration in excess of
€250,000 or any series of related acquisitions where the aggregate consideration is in excess
of €500,000, provided that if such acquisition is in the ordinary course of business for the
relevant Retained Business and would not require approval by RBS NV as part of the internal
management and risk policies of the RBS Holdings Group, no consent shall be required pursuant
to this paragraph 8. Where such acquisition is a transaction with an Investor or a member of
an Investor’s Group, the approval of each Shareholder will be required irrespective of the
consideration;







	8.7	 	(i) the sale or disposal of any individual company or undertaking for consideration or with a
book value in excess of €250,000 or any series of related disposals where the aggregate
consideration is in excess of €500,000, provided that if such sale or disposal is in the
ordinary course of business for the relevant Retained Business, and the internal management
and risks policies of the RBS Holdings Group would not require RBS NV to approve the disposal,
no consent shall be required pursuant to this paragraph 8 or (ii) the sale or disposal of any
individual company or undertaking to an Investor or a member of an Investor’s Group;







	8.8	 	save as provided in the Litigation Management Agreement, or the Separation Tax Agreement, any
agreement, settlement or other compromise of any liability in the Retained Business, except
where the agreement, settlement or other compromise is equal to or less than a provision made
in the accounts of the Retained Business and where such provision has been previously approved
by the board of RBS NV;







	8.9	 	any decision of RBS NV which would give rise to a requirement for further capital, liquidity,
funding, guarantee, collateral or security in relation to the Retained Business; and







	8.10	 	the entry into any contract which is (i) outside the course of the Retained Business Wind
Down; (ii) not on arm’s length terms; or (iii) material in the context of the Retained
Business. For the purposes of this paragraph 8.10, “material” shall mean any individual
contract the value of which is greater than or equal to €250,000 per annum or any series of
related contracts the value of which is greater than or equal to €500,000 in aggregate and any
contract which has a term of more than one year,







provided that in relation to any proposed action which has been agreed by the parties as set
out in paragraph 2 of Schedule 1 Part 3 in respect of the assets specified therein
(excluding any proposed sales which are not, as at the date of this Agreement, agreed by RBS
NV with a third party), no approval of the Retained Business Representatives under this
paragraph 8 shall be required prior to RBS taking such action and provided that if consent
is granted in relation to any matter in accordance with this Schedule, only one
consent shall be required notwithstanding that more than one sub-paragraph of this paragraph
8 may apply to that matter;


 


93









 






	9	 	In relation to the Retained Business, and subject to any regulatory or other legal
requirements, the information to be provided pursuant to Clause 11.2 shall comprise:

	 
	9.1	 	the Retained Business Blue Book;







	9.2	 	a comprehensive overview of the capital and funding position of each Investor in relation to
the Retained Business, as contemplated by Clause 13; and







	9.3	 	update packs that are prepared from time-to-time by RBS NV for the purposes of updating the
Managing Board of RBS NV or delegates of that board on the progress of unwinding the Retained
Business Wind Down.







	10	 	If the Retained Business Wind Down has not completed by 30 June 2011, paragraph 8 of this
Schedule shall cease to have effect to the extent necessary (as determined by RBS NV acting
reasonably) to implement the Retained Business Wind Down and RBS NV shall be entitled to
conduct the Retained Business Wind Down as it sees fit, including without limitation taking
the actions set out in paragraphs 10.1 and 10.2, but subject always to paragraphs 10.3, 10.4
and 10.5:







	10.1	 	to sell all or part of the Retained Business to one or more third parties, provided that,
subject to applicable law and regulations:







	 	10.1.1	 	RBS NV accounts for any net proceeds of sales of assets forming part of the Retained
Business (after satisfying any Liabilities of the Retained Business, including any
arising out of or in connection with such sales, including, without limitation,
professional costs and any Liabilities associated with any warranties or indemnities
given in connection with such sale) to the Investors in the Consortium Proportions in
accordance with Clause 15 and any Tax liabilities arising on such sales shall be dealt
with in accordance with Part 9 of Schedule 1; and

	 
	 	10.1.2	 	the provisions of paragraph 11 are adhered to;







	10.2	 	to determine that all or part of the Retained Businesses shall not be sold for value to a
third party but shall be acquired by the Wider RBS Group (either by reallocating the Retained
Business as RBS Acquired Businesses, save for the purposes of paragraphs 7.1 and 7.2 of
Schedule 1 Part 1 of this Agreement or by purchasing all or part of the Retained Business),
provided that:







	 	10.2.1	 	RBS obtains a Valuation Range for the Retained Business (or part thereof) in
accordance with paragraph 13;







	 	10.2.2	 	either RBS (i) offers a price greater than the lowest point of the Valuation Range or
(ii) with the consent of the State and Santander (such consent not to be unreasonably
withheld taking into account, inter alia, the number of potential purchasers for the
Retained Business (or part thereof), any restrictions on the transfer of the relevant
business imposed by a Regulator and any other applicable impediments to transfer),
offers a price less than the lowest point of the Valuation Range; and







	 	10.2.3	 	RBS pays to the State and Santander their respective Consortium Proportions of the
consideration offered pursuant to paragraph 10.2.2;





 


94









 











	10.3	 	in relation to Saudi Hollandi Bank, RBS NV shall only be entitled to sell its interest in
Saudi Hollandi with the prior written consent of the other Investors, such consent not to be
unreasonably withheld taking into account, inter alia:







	 	10.3.1	 	the number of third parties that have expressed an interest in acquiring Saudi
Hollandi Bank since 10 October 2007;







	 	10.3.2	 	any restrictions that the local regulator of Saudi Hollandi Bank is likely to place
on the sale of Saudi Hollandi Bank; and







	 	10.3.3	 	any impediments to the transfer of the interest in Saudi Hollandi Bank as a result of
the other shareholders in Saudi Hollandi Bank;







	10.4	 	RBS NV may only carry out any matter which would fall under paragraphs 8.3, 8.8, 8.9 or
8.10(ii) with the consent of the Retained Business Representatives, save that any action which
is carried out in accordance with paragraphs 10.1, 10.2, 11 and/or 12 of this Schedule shall
not require consent from the Retained Business Representatives under this paragraph, provided
however that the consent of the State’s Retained Business Representative shall be required in
the circumstances contemplated in paragraph 10.5 below; and







	10.5	 	if RBS NV proposes to carry out any action in accordance with paragraphs 10.1, 10.2, 11
and/or 12 of this Schedule, to the extent that such action would give rise to a requirement
for the State to provide further capital, liquidity, funding, guarantee, collateral or
security in relation to the Retained Business the amount of which is in excess of the
aggregate of:







	 	10.5.1	 	the capital, funding or liquidity in the Retained Business attributable to the State
that is in excess of the State’s Consortium Proportion of the capital, funding or
liquidity required pursuant to the Minimum Ratios;

	 
	 	10.5.2	 	€150,000,000; and







	 	10.5.3	 	the aggregate amount of any repatriations made to the State in respect of the
Retained Business pursuant to Clause 13.6,







(the aggregate of 10.5.1, 10.5.2 and 10.5.3 from time to time being the “Consent Threshold”)
the prior consent of the State’s Retained Business Representative will be required. For the
avoidance of doubt, any action in accordance with paragraphs 10.1, 10.2, 11 or 12 of this
Schedule which gives rise to a requirement for the State to provide further funding,
capital, liquidity, guarantee, collateral of security in relation to the Retained Business
the amount of which is less than or equal to the Consent Threshold shall not require the
approval of the State’s Retained Business Representative.




	11	 	In exercising its right pursuant to paragraph 10.1 to sell all or part of the Retained
Business to a third party (the “Sale Business”):







	11.1	 	RBS NV shall keep Santander and the State informed of material developments relating to the
sale process of the Sale Business, including any indications from third parties that may be
interested in acquiring the Sale Business;







	11.2	 	prior to any sale, RBS shall obtain a Valuation Range for the Sale Business in accordance
with paragraph 13. RBS may not, without the prior written consent of the Investors (such
consent not to be unreasonably withheld) sell the Sale Business for a consideration which is
less than the lowest point of the Valuation Range less 7.5 per cent.;





 


95









 











	11.3	 	if at any point prior to the sale of the Sale Business, Santander or the State wish to
acquire the Sale Business, they shall be entitled to make an offer to RBS NV for the
acquisition of the Sale Business (an “Investor Offer”). An Investor Offer shall be irrevocable
once made;







	11.4	 	if RBS NV considers (to its reasonable satisfaction) that the Investor Offer can be completed
within a reasonable time period (which shall be no greater than 6 months from the date of the
Investor Offer) and provided that:







	 	11.4.1	 	the Investor Offer is at a consideration that is greater than or equal to the higher
of (i) any third party offers or indicative offers received by RBS NV for the Sale
Business and (ii) the lowest point of the Valuation Range less 7.5 per cent.; and







	 	11.4.2	 	otherwise on substantially the same terms and conditions as any third party offer
that has been received,







RBS NV shall sell the Sale Business to the relevant Investor on the terms of the Investor
Offer and otherwise in accordance with paragraph 10.1 above; and




	11.5	 	if RBS NV determines that the Investor is incapable of completion within 6 months or that a
higher consideration for the Retained Business can be achieved from a third party purchaser
(in the latter case having discussed the Investor Offer with the Investor and concluded that
the relevant Investor is not prepared to increase its Investor Offer), RBS NV shall be
entitled to sell the Retained Business to a third party in accordance with paragraph 10.1
above. Without prejudice to the first sentence of this paragraph 11.5, if a third party
indicative offer as contemplated by paragraph 11.4 does not result in a binding agreement for
the Sale Business at a consideration higher than an Investor Offer, RBS NV shall sell the Sale
Business to the relevant Investor at the consideration in the Investor Offer, provided such
consideration is greater than the lowest point of the Valuation Range less 7.5 per cent. and
provided further that RBS NV considers (to its reasonable satisfaction) that the Investor
Offer can be completed within a reasonable time period (which shall be no greater than 6
months from the date of the Investor Offer). If RBS NV considers that the Investor Offer
cannot be so completed, it shall be entitled to conduct the Retained Business Wind Down in
relation to the Sale Business in accordance with paragraph 10.







	12	 	If RBS exercises its right pursuant to paragraph 10.2 to acquire all or part of the Retained
Businesses:







	12.1	 	RBS shall provide a written notice to each of Santander and the State (the “Buy Out Notice”)
setting out the identity of the Retained Business (or part thereof) that RBS is prepared to
acquire (the “Auction Business”), the consideration that RBS is prepared to pay for the
Auction Business and the determination of fair market value in accordance with paragraph 13 of
the Auction Business (including, if applicable, the breakdown of the values of its relevant
constituent businesses in accordance with paragraph 13.3);







	12.2	 	Santander and/or the State shall be entitled within 5 Business Days of the date of the Buy
Out Notice to elect to notify RBS, the Company and the other Investor that it wishes to bid
for the Auction Business (or part thereof) by serving written notice on the Company and the
other Investors (a “Buy Out Counter Notice”) setting out the business to which the Buy Out
Counter Notice relates (which may be all of the Auction Business or any one or more of its
constituent businesses (the “Buy Out Business”). Once served, a Buy Out Counter Notice shall
be irrevocable;





 


96









 











	12.3	 	If:







	 	12.3.1	 	RBS and the Company have not received a Buy Out Counter Notice within 5 Business Days
of the Buy Out Notice; or







	 	12.3.2	 	if RBS and the Company have received written notices from each of Santander and the
State that they will not be exercising their respective rights under paragraph 12.2; or







12.3.3 the Buy Out Counter Notice is in relation to part only of the Auction Business,




RBS shall be entitled to acquire or reallocate the Auction Business (if a Buy Out Counter
Notice is not given) or that part of the Auction Business which is not Buy Out Business (if
a Buy Out Counter Notice is given in respect of less than all of the Auction Business), in
accordance with paragraph 10.2;




	12.4	 	if a Buy Out Counter Notice is served, each of RBS, Santander and the State shall be entitled
to make a sealed bid for the Buy Out Business by sending their sealed bid to the Valuer
appointed under paragraph 13 within 10 Business Days of the last received Buy Out Counter
Notice (the “Auction Period”), provided that a sealed bid will only be valid if the
consideration to be offered is greater than the lowest point of the Valuation Range. The
Valuer shall notify the Company and the Investors in writing of the Investor that has offered
the highest consideration for the Buy Out Business (the “Successful Investor”) immediately
following the end of the Auction Period or, if earlier, within 1 Business Day of the last
received sealed bid. The Successful Investor (or such person as is nominated by it) shall be
obliged to acquire the Buy Out Businesses as soon as reasonably practicable following such
notification, provided RBS NV considers (to its reasonable satisfaction) that the Successful
Investor (or such person as is nominated by it) will be capable of completing the acquisition
of the Buy Out Business within a reasonable time period (which shall be no greater than 6
months);







	12.5	 	if RBS NV does not consider (to its reasonable satisfaction) that the Successful Investor (or
such person as is nominated by it) will be capable of acquiring the Buy Out Business within 6
months, RBS NV shall be entitled:







	 	12.5.1	 	to sell the Buy Out Business to the Investor that provided the next highest sealed
bid pursuant to paragraph 12.4 (as confirmed by the Valuer), provided that RBS NV
considers (to its reasonable satisfaction) that Investor will be capable of completing
the acquisition of the Buy Out Businesses within a reasonable time period (which shall
be no greater than 6 months); or







	 	12.5.2	 	failing that, to sell or reallocate the Buy Out Business to RBS in accordance with
paragraph 10.2 (or at the price offered by RBS in its sealed bid (if applicable)).







	13	 	For the purposes of determining the fair market value of all or part of the Retained
Business, RBS NV shall appoint an independent investment bank of international repute or an
independent firm of chartered accountants of international repute (the “Valuer”), provided
that no appointment can be made without the consent of Santander and the State, such consent
not to be unreasonably withheld. If the Investors cannot agree on a Valuer within 10 Business
Days, the matter shall be resolved by the respective Chief Financial Officers of the 





 


97









 







Investors
(or such person as they nominate). If the Valuer is still not agreed after a further 5
Business Days, the President for the time being of the Institute of Chartered Accounts in
England and Wales shall select the Valuer to be appointed. Such decision shall be final and
binding on the Investors. Any cost incurred in association with the appointment of the Valuer
shall be borne by the Retained Business and allocated to the
Investors in Consortium Proportions. In determining fair market value, each Valuer shall
make its determination of fair market value on the basis of the following:









	13.1	 	an assumption that the Retained Business (or relevant part thereof) is to be sold on an arm’s
length sale between a willing seller and a willing buyer who are acting knowledgeably,
prudently and without compulsion;







	13.2	 	if the Retained Business (or a part thereof) is then carrying on business as a going concern,
on the assumption that it will continue to do so;







	13.3	 	if one or more constituent businesses of the Retained Business is being valued, the Valuer
shall include in their valuation a breakdown of the values of each of the constituent
businesses;







	13.4	 	a Valuer may take into account any other factors which it reasonably believes may affect the
fair market value; and







	13.5	 	if a Valuer encounters any difficulty in applying any of the assumptions or bases set out in
this paragraph 13 then it shall resolve that difficulty in such manner as it shall in its
absolute discretion think fit.







The range of values for the fair market value, as determined by the Valuer, shall be the
“Valuation Range”.




	14	 	For the purposes of consenting to any matter as required by paragraphs 8, 10.4 or 10.5 of
this Schedule 2:







	14.1	 	Each Investor shall nominate one representative to be its “Retained Business Representative”
by notifying the other Investors, RBS NV and the Company of its proposed representative,
together with fax and/or email contact details of such person. Each Investor may from time to
time nominate a new Retained Business Representative by providing notice to the other
Investors, RBS NV and the Company;







	14.2	 	if the consent of the Retained Business Representatives is required pursuant to paragraphs 8,
10.4 or 10.5, RBS NV shall notify the Retained Business Representatives of summary details of
the proposed transaction (the “Consent Matter”) together with a notice requesting approval for
the Consent Matter. Such information shall be sent to the contact details notified by the
Investors in accordance with paragraph 14.1. Any notice sent by fax or by email shall be
deemed to have been received on the next Business Day in the place to which it is sent;







	14.3	 	no Retained Business Representative shall unreasonably withhold its approval to any Consent
Matter, taking into account the intentions of the parties in relation to the Retained Business
as set out in paragraphs 3 and 5;







	14.4	 	subject to paragraph 14.6, if any Retained Business Representative wishes to withhold its
approval it shall, within 10 Business Days of receiving the notice under paragraph 14.2 send a
notice to the Company and RBS NV (by sending notice in accordance with Clause 21 to RBS NV’s
registered office) confirming such;





 


98









 











	14.5	 	if RBS NV and the Company do not receive a notice from any of the Retained Business
Representatives pursuant to paragraph 14.3 within the specified timeframe, the approval of all
the Retained Business Representatives shall be deemed to have been given for the purposes of
paragraph 8, 10.4 and 10.5. If each Retained Business Representative approves the Consent
Matter by notifying the Company and RBS NV of its approval, or if
such consent is deemed to have been given in accordance with this paragraph 14, RBS NV may
proceed with the Consent Matter; and







	14.6	 	if the Consent Matter, in the discretion of RBS NV acting reasonably, is a matter which, for
legal or regulatory reasons, requires an urgent response (a “Critical Consent Matter”), RBS NV
shall notify the Investors of that fact in the notice provided pursuant to Clause
paragraph 14.2. For the purposes of any Critical Consent Matter, the relevant time period for
the purposes of paragraph 14.4 above shall be three Business Days.







	15	 	Notwithstanding any provision of paragraphs 10 to 13 of this Schedule 2, RBS shall not be
required to take any action which would give rise to any obligation on RBS to seek approval of
its shareholders for the proposed transaction in accordance with the Listing Rules made by the
FSA under Part VI of the Financial Services and Markets Act 2000 (as amended from time to
time).





 


99









 










Schedule 3

Corporate Governance




Part A

Proceedings at Board Meetings until the date of the Effective Notice





	1	 	Convening a Meeting







The Chairman of the Board shall procure that a Board meeting is convened and held when
reasonably requested by any Director.




	2	 	Quorum







	2.1	 	No business shall be transacted at any meeting of the Board unless a quorum of eligible
Directors is present at the time when the meeting proceeds to business and remains present
during the transaction of business. The quorum necessary for the transaction of the business
of the Board shall be the presence of three Directors or their duly appointed proxies,
including at least one Director appointed by RBS, one Director appointed by Santander and one
Director appointed by the State (or their respective proxies). A meeting of the Board shall
not be quorate if a majority of the Directors present are resident for tax purposes in the
United Kingdom.







	2.2	 	Should a quorum not be constituted at a Board meeting, the relevant meeting shall be
adjourned for not less than 3 Business Days and upon resumption the quorum shall be the
presence of three Directors (or their respective proxies), including at least one Director
appointed by RBS (or his proxy).







	3	 	Notice







Not less than 2 Business Days’ notice of any (including an adjourned) meeting shall be given
to all Directors.




	4	 	Voting







At any meeting of the Directors or of a committee of Directors, each Director (or his proxy)
shall be entitled to one vote and in the case of an equality of votes, the Chairman of the
Board shall have a second or casting vote.




	5	 	Delegation to committees







	5.1	 	The Board may appoint standing and/or ad hoc committees from among its members, which are
charged with tasks specified by and shall be composed as determined by the Boards from time to
time, provided that:







	 	(i)	 	such committee comprises (unless otherwise agreed) one Director appointed by
RBS, one Director appointed by Santander and one Director appointed by the State (or
their respective proxies);







	 	(ii)	 	the Director appointed by RBS or his proxy, shall be the chairman of such
committee and shall have a casting vote;





 


100









 











	 	(iii)	 	no more than half of the members of such a committee shall be resident for tax
purposes in the United Kingdom; and







	 	(iv)	 	the proceedings of such a committee shall be conducted in accordance with
Schedule 5 Part C.







	5.2	 	The Board remains collectively responsible for decisions made by committees. A committee may
only exercise such powers as are explicitly attributed or delegated to it and may never
exercise powers beyond those exercisable by the Board as a whole.







	5.3	 	Each committee must inform the Board in a clear and timely way of the manner in which it has
used delegated authority and of any major development in the area of its responsibilities. All
Board members have unrestricted access to all committee meetings and records. The Board shall
receive a report from each committee of its deliberations and findings.





 


101









 










Part B

Proceedings at General Meetings





	1	 	Convening a Meeting







	1.1	 	The Board shall, and any of the Directors shall be authorised to, immediately following
notice from an Investor, procure:







	 	1.1.1	 	the convening and holding of a general meeting of Shareholders of the Company
at such place and time as such Investor shall reasonably determine subject to
paragraphs 2 and 3 of Part C of this Schedule; and







	 	1.1.2	 	that any resolution required by such Investor shall be proposed at that
meeting.







	2	 	Quorum







	2.1	 	No business shall be transacted at any general meeting of Shareholders unless a quorum of
Shareholders is present at the time when the meeting proceeds to business and remains present
during the transaction of business. The quorum necessary for the transaction of business at a
general meeting of Shareholders shall be three Shareholders (including at least one member of
the RBS Group, one member of the Santander Group and one member of the State Group), present
in person or by proxy or a representative duly authorised.

	 
	2.2	 	If there is a tie in voting, the proposal shall be deemed to have been rejected.







	2.3	 	If within half an hour of the time appointed for a meeting a quorum is not present, a second
meeting may be convened and, subject to paragraph 3 of Part C of this Schedule, held no
earlier than 15 days after and no later than 30 days later than the first meeting. In this
second meeting, the items tabled for the first meeting can be adopted by a simple majority of
the votes cast and the quorum for such second meeting shall be any one Shareholder. In the
notice of the new meeting it must be stated that this concerns a second meeting as referred to
in this paragraph 2.3 and explained that a resolution can be adopted with a quorum of one
Shareholder.







	3	 	Voting







	3.1	 	All voting shall take place orally. The chairperson of the general meeting of Shareholders
is, however, entitled to decide that votes be cast by a secret ballot. If it concerns the
holding of a vote on persons, anyone present at the meeting with voting rights may demand a
vote by a secret ballot. Votes by secret ballot shall be cast by means of secret, unsigned
ballot papers.

	 
	3.2	 	Blank and invalid votes shall not be counted as votes







	3.3	 	Resolutions may be adopted by acclamation if none of the persons with voting rights present
at the meeting objects.





 


102









 











	3.4	 	The Chairman’s decision at the meeting on the result of a vote shall be final and conclusive.
The same shall apply to the contents of an adopted resolution if a vote is taken on an
unwritten proposal. However, if the correctness of such decision is challenged immediately
after it is pronounced, a new vote shall be taken if either the majority of the persons with
voting rights present at the meeting or, where the original vote was not taken
by roll call or in writing, any person with voting rights present at the meeting, so
demands. The legal consequences of the original vote shall be made null and void by the new
vote.







	3.5	 	The Chairman of any meeting of the Company shall not be entitled in any circumstances to a
second or casting vote in addition to any other vote he, if any, may have.

	 
	3.6	 	Notwithstanding the forgoing the Investors agree to procure that:







	 	3.6.1	 	no resolution shall be proposed or voted in favour of by any Shareholder that
is part of their Group at any Shareholders meeting of the Company without the prior
written consent of RBS; and







	 	3.6.2	 	no resolution relating to a Board Reserved Matter shall be passed at any
Shareholders meeting of the Company without the unanimous approval of all Shareholders.





 


103









 










Part C

Administration of Board until the date of the Effective Notice and Shareholder Meetings





	1	 	All meetings of the Board, the Board Committees and the Shareholders shall be held in the
Netherlands.







	2	 	A minimum of 5 Business Days’ notice of meetings of the Board and a minimum of 15 days’
notice of meetings of the general meeting of Shareholders, accompanied by details of the venue
for such meeting (taking into account the requirements of paragraph 1 and an agenda of the
business to be transacted (together with, where practicable, all papers to be circulated or
presented to the same), shall be given to all the Directors or Shareholders(as appropriate).
Where either (i) the Chairman of the Board or any Shareholder determines (acting reasonably)
that urgent business has arisen, or (ii) with the prior consent of any two Investors, notice
of meetings of the Board may be reduced to 2 Business Days.







	3	 	A meeting of the Board or of the general meeting of Shareholders may be held at shorter
notice than set out above or without notice with the unanimous consent of the Directors or the
Shareholders (as appropriate), provided that in case of a general meeting of Shareholders,
valid resolutions of the General Meeting may only be adopted if all of the Company’s issued
capital is represented.







	4	 	Subject to paragraph 1, a meeting of the Directors may consist of a conference call between
Directors some or all of whom are in different places provided that each Director who
participates in the meeting is able:

	 
	4.1	 	to hear each of the other participating Directors addressing the meeting; and

	 
	4.2	 	if he so wishes, to address each of the other participating Directors simultaneously,







whether directly, by conference telephone or by any other form of communication equipment or
by a combination of such methods and provided that the majority of the Directors present is
physically present in the Netherlands and resident for tax purposes outside the United
Kingdom. A quorum shall be deemed to be present if those conditions are satisfied in respect
of at least the number and designation of Directors required to form a quorum. Subject to
paragraph 1, a meeting held in this way shall be deemed to take place at the place in the
Netherlands where the largest group of Directors is assembled or, if no such group is
readily identifiable, at the place in the Netherlands from where the chairman of the meeting
participates at the start of the relevant meeting.




Notwithstanding the foregoing, no Director shall be entitled to participate in any
conference call or other form of communication equipment as aforesaid from the United
Kingdom.


 


104









 





Part D

Other Board Matters until the date of the Effective Notice





	1	 	Directors’ Insurance







Each Investor shall, for and on behalf of the Company, at all times maintain or procure the
maintenance of indemnity insurance in respect of any Directors appointed by that Investor to
the Board or to the board of directors of any other member of the Group pursuant to this
Agreement, on ordinary commercial terms.




	2	 	Remuneration







No Director shall be entitled to remuneration from, or reimbursement of expenses by, the
Company unless otherwise determined and agreed by each of the Shareholders.




	3	 	Interested Parties







	3.1	 	Subject to the provisions of applicable law and save as notified to the contrary by a
majority of the other Directors present at a meeting of the Board, provided that he has
disclosed to the Board the nature and extent of any material interest of his, a Director
notwithstanding his office:







	 	(i)	 	may be a party to, or otherwise interested in, any transaction or arrangement
with the Company or a member of the Group, or in which the Company or a member of its
Group is otherwise interested; and







	 	(ii)	 	may be a director or other officer of, or employed by, or a party to any
transaction or arrangement with, or otherwise interested in, any body corporate
promoted by the Company or a member of the Group or in which the Company or a member of
its Group is otherwise interested; and







	 	(iii)	 	shall not, by reason of his office, be accountable to the Company or a member
of the Group for any benefit which he derives from any such office or employment or
from any such transaction or arrangement or from any interest in any such body
corporate and no such transaction or arrangement shall be liable to be avoided on the
ground of any such interest or benefit.







	3.2	 	Subject to the provisions of applicable law, provided that it has disclosed to the Investors
the nature and extent of any material interest, an Investor may exercise its rights as a
shareholder (including its voting rights) in respect of any transaction or arrangement which
both the Investor and the Company or a member of their Groups may be a party to, or otherwise
interested.

	 
	3.3	 	For the purposes of paragraphs 3.1 and 3.2:







	 	(i)	 	a general notice given to the Board or the Investors that a Director or
Investor, respectively, is to be regarded as having an interest of the nature and
extent specified in the notice in any transaction or arrangement in which a specified
person or class of persons is interested shall be deemed to be a disclosure that the
Director or Investor has an interest in any such transaction of the nature and extent
so specified; and







	 	(ii)	 	an interest of which a Director or Investor has no actual knowledge shall not
be treated as his or its interest.





 


105









 










Part E

Board Reserved Matters until the date of the Effective Notice




For the purposes of this Schedule 3 Part E, any reference to the “Group” shall be construed as a
reference to the Company and its Group.




	1	 	Share Capital







	 	1.1	 	Any variation, creation, increase, re-organisation, consolidation, sub division,
conversion, reduction, redemption, repurchase, re-designation or other alteration of the
authorised or issued share or loan capital of the Company or any member of its Group or
the variation, modification, abrogation or grant of any rights attaching to any such
share or loan capital except, in each case, as may be required by or permitted under
this Agreement.







	 	1.2	 	The entry into or creation by the Company or any member of its Group of any
agreement, arrangement or obligation requiring the creation, allotment, issue, Transfer,
redemption or repayment of, or the grant to a person of the right (conditional or not)
to require the creation, allotment, issue, Transfer, redemption or repayment of, a share
in the capital of any member of the Company’s Group (including an option or right of pre
emption or conversion) except, in each case, to a member of the Company’s Group or as
may be required by or permitted under this Agreement or as provided for or contemplated
in the Business Plan.







	 	1.3	 	Other than as expressly required by the Articles, the reduction, capitalisation,
repayment or distribution of any amount standing to the credit of the share capital, any
share premium account, capital redemption reserve or any other reserve of any member of
the Company’s Group (other than a wholly-owned subsidiary undertaking of the Company),
or the reduction of any uncalled liability in respect of partly paid shares of any
member of the Company’s Group.

	 
	 	1.4	 	Any amendment to the Articles.







	2	 	Winding Up







	 	2.1	 	To the extent within the powers of the board, the taking of steps in respect of
any member of the Company’s Group to:







	 	2.1.1	 	wind up or dissolve such Group Company;

	 
	 	2.1.2	 	obtain an administration order in respect of such Group Company;







	 	2.1.3	 	invite any person to appoint a receiver or receiver and manager
of the whole or any part of the business or assets of such Group Company;







	 	2.1.4	 	make a proposal for a creditors’ voluntary arrangement in
respect of such Group Company;







	 	2.1.5	 	do anything similar or analogous to those steps referred to in
paragraphs 2.1.1 to 2.1.4 above, in any other jurisdiction.





 


106









 











	3	 	Capital Expenditure







Any capital expenditure in excess of *** (in respect of an individual item or a series of
related items).




	4	 	Related Party Contracts







The entry into, termination or variation of any material contract or arrangement between any
member of the Group and an Investor or an Investor Group member, other than (i) as expressly
provided for in this Agreement; or (ii) a contract on arm’s length terms in the ordinary
course of business.




	5	 	Joint Venture Agreements







The entry into of any joint venture, partnership, consortium or other similar arrangement
other than in the ordinary course of business.




	6	 	Acquired Businesses and Retained Business

	 
	 	 	Any material change in the nature of any Acquired Business or the Retained Business.

	 
	7	 	Litigation







The commencement or settlement of any litigation, arbitration or other proceedings which are
material in the context of the RBS Acquired Business, the Fortis Acquired Business, the
Santander Acquired Business or the Retained Business (as the case may be).




	8	 	Acquisitions

	 
	 	 	The acquisition of any company or undertaking.

	 
	9	 	Contracts







The entering into or termination of any contract which is not in the ordinary course of
business and which is material in the context of the RBS Acquired Business, the Fortis
Acquired Business, the Santander Acquired Business or the Retained Business (as the case may
be).


 







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




 


107









 









Schedule 4

Representations and Warranties





	1	 	Capacity







The Investor has capacity and power to carry on its activities as now carried on and as
proposed to be carried on, to own its property and other assets and sue and be sued in its
own name and to execute, deliver and perform its obligations under this Agreement, the
Transaction Documents (as applicable) and the transactions contemplated by this Agreement.




	2	 	Authority







Except as provided in Clause 8.2, the Investor has taken all necessary action to authorise
the execution, delivery and performance of its obligations under this Agreement and the
Transaction Documents (as applicable).




	3	 	Legal, Valid and Binding







	3.1	 	The Agreement and the Transaction Documents (as applicable) once executed by the Investor
will constitute legal, valid and binding obligations of such party enforceable in accordance
with their terms.







	3.2	 	No authorisation, approvals or consents from any governmental or other authorities is
necessary for the execution and delivery by the Investor of this Agreement or the Transaction
Documents (as applicable) or, except to the extent set out in Clause 8.2 and/or reflected in
the conditions to the Offer, the exercise of its rights and the performance of its obligations
under this Agreement and the Transaction Documents (as applicable) including, the making of
all payments due or to become due from it and to render the same legal, valid, enforceable and
admissible in evidence. The execution, delivery and performance by it of this Agreement, the
Transaction Documents (as applicable) and the transactions contemplated by this Agreement will
not contravene any existing law, regulation, ordinance, decree or authorisation to which it is
subject, or contravene any provision of its memorandum and articles of association or any
equivalent documents in any jurisdiction where it is formed.







	4	 	No Encumbrances







Neither the Investor’s execution nor its performance of this Agreement will result in the
creation of, or oblige it to create or permit to subsist, an Encumbrance over any of its
present or future assets or revenues.


 


108









 





Schedule 5

Form of Deed of Accession




THIS DEED is made on [•] 20[•]




BY [•], a company incorporated under the laws of [•] having its [registered] office at [•]
(“New Shareholder”).



Whereas:





	(A)	 	The New Shareholder has agreed to [purchase] [subscribe for] Shares in the capital of the
Company in the capital of the Company as described in the Schedule (the “[Transferred]
[Issued] Interest”) subject to and in accordance with the terms and conditions of [an
agreement] [a notarial deed of [transfer] [issuance]] to be dated [date of
Transfer/Subscription Agreement or Deed of Transfer/Issuance] and made between [ ] (the
“[Transferor] [Company]”) and the New Shareholder (the “[Transfer Agreement] [Subscription
Agreement [Deed of Transfer] [Deed of Issuance]”) and the Amended and Restated Consortium and
Shareholders’ Agreement dated [•] 20010 as amended, amended and restated or otherwise modified
from time to time between, amongst others, the Company and the Investors (the “Shareholders’
Agreement”).






Now this Deed witnesseth and it is hereby agreed with and for the benefit of each party to the
Shareholders’ Agreement and each party who becomes a party to the Shareholders’ Agreement after the
date of this Deed:




	1	 	Definitions and Interpretations

	 
	1.1	 	Definitions







In this Deed (including the Recitals and Schedule hereto), unless the subject or context
otherwise requires, words defined in the Shareholders’ Agreement shall have the same
meanings when used herein and:




“Closing” means the closing of the [Sale and Transfer] [Issuance] of the [Transferred]
[Issued] Interest to take place at the offices of [•] on [date];




“Closing Date” has the meaning ascribed thereto in Clause 2.




	1.2	 	Interpretation







The provisions of Clause 1 of the Shareholders’ Agreement shall apply to this Deed mutatis
mutandis.




	1.3	 	Headings

	 
	 	 	Headings shall be ignored in the construction of this Deed.





 


109









 





	2	 	Undertakings of the New Shareholder







In consideration of the agreement of the [Transferor to Transfer the Transferred Interest]
[Company to issue the Issued Interest] to the New Shareholder, the New Shareholder
undertakes, for the benefit of each party to the Shareholders’ Agreement, that it will with
effect from the date of Transfer by the Transferor] [issue by the Company] to the New
Shareholder of the [Transferred] [Issued] Interest (the “Closing Date”) and without
prejudice to or assuming any liability of the Transferor in respect of any breach by it of
obligations under the Shareholders’ Agreement prior to the Closing Date], assume, perform
and comply with each of the obligations of [the Transferor] [an Investor] under the
Shareholders’ Agreement as if it had been a party to the Shareholders’ Agreement at the date
of execution thereof and been named in it as an Investor. Each other party to the
Shareholders’ Agreement may enforce the terms of this Clause 2.




	3	 	Rights of the New Shareholder







There shall be accorded to the New Shareholder with effect from the Closing Date all the
rights [of the Transferor] [of a Shareholder] with respect to the [Transferred Interest (in
each case without prejudice to the accrued rights of the Transferor under the Shareholders’
Agreement in respect of any breach by any other party thereto of its obligations thereunder
at any time prior to the Transfer Date)] [Issued Interest] as if the New Shareholder had
been a party to the Shareholders’ Agreement at the date of execution thereof and had been
named in it as an Investor and, with effect from the Closing Date, the Transferor shall
cease to be entitled to those rights.




	4	 	Notices







The address and facsimile number designated by the New Shareholder for the purposes of
Clause 21 (Notices) of the Shareholders’ Agreement are:




Address:




Fax:




For the attention of:




	5	 	Assignment and Transfer







The New Shareholder hereby acknowledges and agrees that it shall have no right to assign,
transfer or in any way dispose of the benefit (or any part thereof) or the burden (or any
part thereof) of this Deed without the prior consent of all the other parties to the
Shareholders’ Agreement.




	6	 	Third Party Rights







Except where expressly stated otherwise in this Deed, other than by any party to the
Shareholders Agreement and by any person that is entitled from time to time to enforce from
the Shareholders Agreement pursuant to Clause 20.11 of the Shareholders Agreement, no term
of this Deed is enforceable under the Contracts (Rights of Third Parties) Act 1999 by a
person who is not a party to this Deed.


 


110









 






	7	 	General Provisions







The provisions of Clauses [10 (representations and warranties)], 16 (Confidentiality and
Announcements), [19 Entire Agreement and Non Reliance], 20 (General) and 22
(Governing Law and Arbitration) of the Shareholders’ Agreement shall apply (mutatis
mutandis) to this Deed as if expressly set out herein.



In witness whereof this Deed has been entered into the day and year first before written.


 


111









 





Schedule 6

Permitted Disclosure




Clause 16.1 shall not prevent:




	1	 	any disclosure which is required by law or regulation to be disclosed to any person who is
authorised by law or regulation to receive the same;







	2	 	any disclosure which is required by the regulations of any exchange upon which the share
capital of the disclosing party is or is proposed to be from time to time listed or dealt in
provided that such disclosure is, where practicable, discussed with the other relevant parties
hereto before being made;







	3	 	any disclosure which is made to a court, arbitrator or administrative tribunal in the course
of proceedings before it to which the disclosing party is a party in a case where such
disclosure is required by such proceedings or is necessary in connection with enforcing any
right, power or remedy it may have under a document to which it is a party;







	4	 	any disclosure which is made to any professional advisers of the disclosing party who are
bound to the disclosing party by a duty of confidence which applies to any information
disclosed;







	5	 	any disclosure which is made to an Affiliate who is bound to the disclosing party by a duty
of confidence which applies to any information disclosed;







	6	 	any disclosure which is made to any person appointed as an Investor Director or Alternate
Director; or







	7	 	any disclosure which is made to an Investor’s or the Group’s bankers and financiers or
proposed bankers and financiers from time to time;







	8	 	any disclosure required by law, a governmental, taxation or other authority with relevant
powers or professional standards body to which the party making the disclosure is subject or
submits;

	 
	9	 	any disclosure which is made pursuant to the terms of this Agreement.







 


112









 







Schedule 7

Governance Clearances




Part A




Regulatory Approvals




	 	 	 	 	 
	No.	 	Jurisdiction	 	Regulator
	1.

	 	Australia
	 	Federal Reserve via Foreign Investment Review Board
	2.

	 	Chile
	 	Superinten-dencia de Bancos e Instituciones Financieras
	3.

	 	Finland
	 	Finnish Financial Supervision Authority
	4.

	 	Italy
	 	Bank of Italy
	5.

	 	Malaysia
	 	Minister of Finance
	6.

	 	Netherlands
	 	De Nederlandsche Bank
	7.

	 	New Zealand
	 	Overseas Investment Office
	8.

	 	Romania
	 	National Bank of Romania
	9.

	 	Russia
	 	Governmental Commission
	10.

	 	Russia
	 	Central Credit Institutions Licensing & Financial Rehabilitation Department
	11.

	 	Singapore
	 	Monetary Authority of Singapore
	12.

	 	Singapore
	 	Singapore Exchange Securities Trading Limited
	13.

	 	Thailand
	 	Ministry of Finance and Bank of Thailand
	14.

	 	UK
	 	Financial Services Authority
	15.

	 	Uzbekistan
	 	Central Bank of Uzbekistan






 


113









 





Regulatory Pre-completion Notifications




	 	 	 	 	 
	No.	 	Jurisdiction	 	Regulator
	1.

	 	Venezuela
	 	Superintendencia de Bancos y Otras Instituciones Financieras
	2.

	 	Singapore
	 	Monetary Authority of Singapore
	3.

	 	Canada
	 	Ontario Securities Commission
	4.

	 	UAE
	 	Dubai Financial Services Authority
	5.

	 	Ireland
	 	Irish Stock Exchange
	6.

	 	Indonesia
	 	Employees of local entity
	7.

	 	Australia
	 	Australian Prudential Regulation Authority
	8.

	 	Belgium
	 	Works Council
	9.

	 	Canada
	 	Investment Industry Regulatory Organization of Canada
	10.

	 	Cayman Islands
	 	Cayman Islands Monetary Authority
	11.

	 	Finland
	 	Finnish Financial Supervision Authority
	12.

	 	India
	 	Reserve Bank of India
	13.

	 	Italy
	 	Bank of Italy
	14.

	 	Malaysia
	 	Bank Negara Malaysia






 


114









 





	 	 	 	 	 
	No.	 	Jurisdiction	 	Regulator
	15.

	 	Malaysia
	 	Securities Commission
	16.

	 	Netherlands
	 	De Nederlandsche Bank
	17.

	 	South Africa
	 	Registrar of Banks
	18.

	 	South Africa
	 	Registrar of Financial Service Providers
	19.

	 	South Africa
	 	South African Reserve Bank
	20.

	 	Switzerland
	 	FINMA
	21.

	 	UK
	 	Financial Services Authority






Anti-trust Approvals




	 	 	 
	No.	 	Jurisdiction
	1.

	 	Indonesia
	2.

	 	Japan
	3.

	 	Russia
	4.

	 	USA






 


115









 





Part B




Post-completion notifications




	 	 	 	 	 
	No.	 	Jurisdiction	 	Regulator
	1.

	 	Argentina
	 	Central Bank of the Republic of Argentina
	2.

	 	Argentina
	 	Argentine Securities Commission and MAE
	3.

	 	Canada
	 	Office of the Superintendent of Financial Institutions Canada
	4.

	 	Canada
	 	Ontario Securities Commission.
	5.

	 	Columbia
	 	Superintendency of Finance
	6.

	 	Finland
	 	Finnish Financial Supervision Authority
	7.

	 	Hong Kong
	 	Securities and Futures Commission
	8.

	 	Indonesia
	 	Bank Indonesia
	9.

	 	Indonesia
	 	Indonesian Stock Exchange
	10.

	 	Italy
	 	Bank of Italy
	11.

	 	Italy
	 	Commissione Nazionale per le Società e la Borsa
	12.

	 	Malaysia
	 	Minister of Finance
	13.

	 	Malaysia
	 	Bank Negara Malaysia
	14.

	 	Malaysia
	 	Securities Commission
	15.

	 	New Zealand
	 	Overseas Investment Office
	16.

	 	Singapore
	 	Monetary Authority of Singapore
	17.

	 	Singapore
	 	Singapore Exchange Securities Trading Limited
	18.

	 	South Korea
	 	Financial Supervisory Service of Korea
	19.

	 	UK
	 	Financial Services Authority
	20.

	 	USA
	 	The Board of Governors of the Federal Reserve System
	21.

	 	Vietnam
	 	State Bank of Vietnam (Central Bank)







 


116









 







Schedule 8

Other State Acquired Businesses




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(3)	 	 	 	 	 	 
	 	 	 	 	Estimated	 	 	 	 	 	 
	 	 	(2)	 	fair market	 	(4)	 	(5)	 	 
	 	 	Proposed	 	value at the	 	Proposed Transfer	 	Proposed Mechanism	 	(6)
	(1)	 	Transfer	 	date of this	 	Mechanism prior to 30	 	following 30 June	 	Other agreed actions or comments in relation to
	Asset/Liability	 	Date	 	Agreement	 	June 2011	 	2011	 	the Asset / Liability
	USD250 million
7.75% subordinated
lower tier 2 notes
2023 ISIN:
US00077TAA25

	 	As soon as possible
following the date
of this Agreement
	 	Face value of
USD250m
	 	***
	 	***
	 	The instrument shall remain as a State Acquired
Business


All risks and rewards, including litigation
risk, in respect of the instrument remain with
ABN AMRO Bank and the State Acquired Businesses
(as previously agreed by the CFOs in agreement
#2). As such, any costs (including any
reasonable costs incurred by RBS NV), liability
and litigation risk that occurs as a result of
***.
	 
	 	 	 	 	 	 	 	 	 	 
	CDS 2003 with AIG
and Radion

	 	AIG:
Mid-April 2010


Radion: End of
April 2010
	 	 	 	Novation
	 	In accordance with
Clause 5.3
	 	AIG and Radian are reviewing latest drafts of
novation agreement and transfer agreement. RBS
awaits outcome of Portfolio & Investment
Committee on 30 March 2010. Following that a
further approval of the Asset Protection Agency
is required, which will take 5 working days.
	 
	 	 	 	 	 	 	 	 	 	 
	Natixis interest 

rate swaps

	 	1 May 2010
	 	EUR 850,000
	 	SWAP needs to be
novated from RBS
N.V. to ABN AMRO
Bank N.V.
	 	In accordance with
Clause 5.3
	 	N/A




 






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





 


117









 





	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(3)	 	 	 	 	 	 
	 	 	 	 	Estimated	 	 	 	 	 	 
	 	 	(2)	 	fair market	 	(4)	 	(5)	 	 
	 	 	Proposed	 	value at the	 	Proposed Transfer	 	Proposed Mechanism	 	(6)
	(1)	 	Transfer	 	date of this	 	Mechanism prior to 30	 	following 30 June	 	Other agreed actions or comments in relation to
	Asset/Liability	 	Date	 	Agreement	 	June 2011	 	2011	 	the Asset / Liability
	Trades to be novated
(with 12 counter
parties)

	 	1 May 2010
	 	SGD 11.3 million
HKD 394 million
	 	By client’s signing
of the novation
agreement the
contract is legally
binding and are
trades novated.
	 	In accordance with
Clause 5.3
	 	ABN AMRO Bank and RBS have both signed the 12
novation agreements. The counter parties of the
agreements still need to sign.


Operational execution may take till 30 June 2010.
	 
	 	 	 	 	 	 	 	 	 	 
	Collateral of
N-Share client
Stichting Mooiland

	 	15 April 2010
	 	EUR 9,420,000
	 	Collateral needs to
be transferred from
RBS N.V. London
branch to ABN AMRO
Bank N.V.
	 	In accordance with
Clause 5.3
	 	N/A
	 
	 	 	 	 	 	 	 	 	 	 
	RALs

	 	Within 3 months
after separation
	 	EUR 150-220 million
	 	Replacement by

external bank

guarantee or

refinancing
	 	In accordance with
Clause 5.3
	 	The total amount in column (3) may vary
depending on the solution agreed in individual
cases with respect to continuation of facilities
by RBS for its own account. The number of RALs
left is as at 31 March 2010 approximately 90. No
risk for RBS NV as the existing RAL will stay in
place as agreed in the Partnerbank Agreement.
	 
	 	 	 	 	 	 	 	 	 	 
	Security rights 

under foreign law

	 	Within 3 months
after separation
	 	EUR 10 million
	 	Transfer of security
rights via
assignment or
transfer
documentation. Note
that the exact
transfer mechanism
may vary per
country.
	 	In accordance with
Clause 5.3
	 	In case ABN AMRO Bank identifies a security
right under foreign law after 30 June 2010 that
has not been identified and transferred at an
earlier stage, RBS NV will cooperate to transfer
such security rights and finalise the assignment
or transfer documentation. Currently 8 remaining
files (Belgium, Denmark, Ireland, Malta,
Slovakia, UK, USA, Sweden).






 


118









 





	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	(3)	 	 	 	 	 	 
	 	 	 	 	Estimated	 	 	 	 	 	 
	 	 	(2)	 	fair market	 	(4)	 	(5)	 	 
	 	 	Proposed	 	value at the	 	Proposed Transfer	 	Proposed Mechanism	 	(6)
	(1)	 	Transfer	 	date of this	 	Mechanism prior to 30	 	following 30 June	 	Other agreed actions or comments in relation to
	Asset/Liability	 	Date	 	Agreement	 	June 2011	 	2011	 	the Asset / Liability
	Shares held by RBS
NV in Visa, Inc.

	 	30 June 2010
	 	 	 	Transfer of shares
to ABN AMRO Bank
	 	In accordance with
Clause 5.3
	 	The transfer cannot take place until ABN AMRO
Bank has appropriate arrangements to settle and
trade the shares.
	 
	 	 	 	 	 	 	 	 	 	 
	International 

Diamond & Jewellery 

business Taiwan

	 	17 April 2010
	 	Approximately

$4,000,000
	 	SPA
	 	In accordance with
Clause 5.3
	 	Business is to be sold to a third party
purchaser. SPA is agreed.
	 
	 	 	 	 	 	 	 	 	 	 
	Germany Residential
Fund Managing
Director BV,
Germany Residential
Fund II Managing
Director BV and
Germany Residential
Fund III Managing
Director BV

	 	By 30 June 2011
	 	Approximately

€5,000 in aggregate
	 	Transfer by SPA
	 	In accordance with
Clause 5.3
	 	Transfer was delayed pending agreement on
valuation.









 


119









 







Schedule 9

Charging Basis for Management of the Retained Business




RBS NV, as part of its fiduciary responsibility to control and consolidate the Retained Business,
will incur costs to perform this duty and therefore is entitled to reimbursement of these costs.
The following sets forth a distinction to be made between the direct costs of the Retained
Business, in so far those services will be provided by RBS NV or other outside service providers,
and the costs to be considered a general “Management Fee”.



Part A: Direct Costs




RBS NV shall use its best endeavours to accrue specific costs related to operating, liquidating or
distributing the Retained Business directly to the Retained Business. This would include out of
pocket professional fees (e.g. legal, external audit, investment banking, insurance etc.) as well
as services provided by other Investors under service level agreements agreed between the Investors
or members of their respective Groups.



It may be required for legal services to be provided and sourced from RBS in-house counsel when
considered more effective and efficient to external counsel. Similarly there maybe in-house
internal audit preferred to external audit. When sourced in-house the charge will be settled with
the Retained Business for its total absorbed cost plus 25%.



Costs shall be settled quarterly with a specification from RBS NV subject to pre-approval and
review by the business manager responsible for the Retained Business .



The parties acknowledge that the Retained Business currently has €1.7 million budgeted for legal
fees in 2010.



Part B: General Management Fee




The following table reflects the current best estimate of the components of an Annual General
Management Fee:



	 	 	 	 	 	 
	Component	 	Description of Fully Absorbed Cost	 	Cost (€)	 
	 	 	 	 	 
	 
	Business Management	 	50% of the time of the fully loaded
costs of one senior member of the
RBS NV management team. Includes
consultative time spent from other
senior members of the RBS NV
management team.
	 	400,000	 
	Treasury & Funding Administration

	 	25% of the time of one experienced staff member and 10% supervisory time.
	 	200,000	 
	Accounting and administration
	 	1.5 FTE to perform the monthly financial accounting and administration. Results in delivery of the monthly management information package (e.g. Blue Book).
	 	200,000	 
	 	 	 
	 	 	 
	Subtotal	 	 
	 	800,000	 
	 	 	 
	 	 	 
	Cost plus factor 25%	 	200,000	 
	 	 	 
	 	 	 
	Annual General Management Fee	 	1,000,000	 
	 	 	 
	 	 	 





 


120









 





The Annual General Management Fee will be settled quarterly (by charging the Retained Business) and
reviewed annually. No costs charged under Part A as Direct Costs shall be charged as part of the
Annual General Management Fee. The parties acknowledge that, as at the date of this Agreement, the
Investors have provided in aggregate €24,327,000 to the Retained Business in Consortium Proportions
to meet the future costs of the Retained Business.


 


121









 





Schedule 10

4.95% Term Sheet




[LETTERHEAD OF THE STATE OF THE NETHERLANDS]




Mr Miller McLean

General Counsel

The Royal Bank of Scotland Group PLC

House G

RBS Gogarburn

Edinburgh

EH12 1HQ




Mr Ignacio Benjumea Cabeza de Vaca

General Counsel

Banco Santander S.A.

Ciudad Grupo Santander

28660 Boadilla del Monte

Madrid

Spain




Mr Peter Goes

Secretary

RFS Holdings B.V.

Strawinskylaan 3105

1077 ZX Amsterdam

The Netherlands




[•] 2009




Dear Sirs,




Allocation of Capital: Notice in relation to the Consortium and Shareholders Agreement — Schedule 3
Part 11 and Clause 2.9 of the Deed of Accession



We refer to the consortium and shareholders agreement between RBS, Santander, Fortis N.V. and
Fortis SA/NV (together “Fortis”) and RFS Holdings B.V. dated 28 May 2007. That agreement was
acceded to by Fortis Bank Nederland (Holding) N.V. (“FBNH”) on 26 July 2007, and was amended on 17
September 2007 and further amended on 26 August 2008.



Pursuant to a deed of accession dated 24 December 2008 as between RBS, Santander, the State, FBNH
and RFS Holdings B.V. (the “Deed of Accession”), the State agreed to assume the rights and
obligations of Fortis and FBNH under the consortium and shareholders agreement as amended,
including as amended by the Deed of Accession itself.



For the purpose of this Letter, the terms of the aforementioned agreements, as between RBS,
Santander, the State, FBNH and RFS Holdings B.V., shall be referred to as the “Consortium and
Shareholders Agreement.”



Save as otherwise defined in this letter, capitalised terms shall have the meanings given to them
in the Consortium and Shareholders Agreement (as defined above).


 


122









 





Under Schedule 3 — Part 11 of the Consortium and Shareholders Agreement (“Schedule 3 — Part 11”),
certain agreements were reached as to the allocation of core tier 1 capital of the ABN AMRO Group
as between the Investors.



Under Clause 2.9 of the Deed of Accession (“Clause 2.9”), it was further acknowledged and agreed
that in relation to the State’s rights under Schedule 3 — Part 11, the parties would apply the
principles established out of discussions amongst the Chief Financial Officers of the State, RBS
and Santander and/or their delegates as recorded in the minutes of the meetings amongst the Chief
Financial Officers and/or their delegates dated 6 November 2008, 12 November 2008, 27 November
2008, 4 December 2008, 11 December 2008 and 17 December 2008.



Further to Clause 2.9, the State, RBS and Santander have now agreed a term sheet attached at
Appendix 1 to this Letter (the “Term Sheet”), which is intended to form the basis of an
underwriting agreement to be entered into by (a) relevant member(s) of the Wider RBS Group on
behalf of RBS, (a) relevant member(s) of the Santander Group on behalf of Santander and, as
relevant, one or more of the State’s Acquired Companies (which, for the avoidance of any doubt,
shall be defined in this Letter as per clause 5.1 of the Deed of Accession and shall include all
successors in title from time to time) (the “Underwriting Agreement”).



The State hereby specifically acknowledges and agrees, on behalf of both itself and its Acquired
Companies, that:




	(A)	 	the terms of the Term Sheet shall apply with effect from (and not before) the Commencement
Date (as defined below);







	(B)	 	with effect from and including the Cutoff Date (as defined below), irrespective of whether or
not an Underwriting Agreement has been entered into, all of the rights and obligations of the
Investors pursuant to Schedule 3 — Part 11 and Clause 2.9 and the Term Sheet shall terminate
(and have no further effect), and none of the Investors thereafter shall have any further
rights or obligations of any kind pursuant to Schedule 3 — Part 11 and Clause 2.9 and the Term
Sheet,

	 
	 	 	SAVE and EXCEPT that if the State gives written notice to the Investors not less than one
calendar month prior to the Cutoff Date (as defined below) that the relevant parties should
enter into an Underwriting Agreement on the basis of the Term Sheet, then:







	 	(i)	 	the parties shall negotiate in good faith such Underwriting Agreement on the
basis of the Term Sheet with the intention of executing the Underwriting Agreement
within 3 months of such notice (the “Negotiation Period”) and if the parties (acting
reasonably and in good faith) fail to execute the Underwriting Agreement within the
Negotiation Period, any Investor may, by giving written notice to the Investors, refer
the matter to an independent Investment Bank of international repute selected by
unanimous decision of the Investors (and in the event of a failure by the Investors to
agree, appointed by the Chairman of the International Chamber of Commerce from time to
time) (a “Qualifying Expert”) to assist the parties in reaching agreement on the terms
of the Underwriting Agreement; and







	 	(ii)	 	if no agreement is reached on the terms of the Underwriting Agreement within 3
months of the appointment of the Qualifying Expert, the Qualifying Expert himself will
decide on the items that are still outstanding; and







	 	(ii)	 	subject to (C) below, Schedule 3 – Part 11 and Clause 2.9 and the Term Sheet will
continue to apply; and





 


123









 











	(C)	 	upon the execution of such Underwriting Agreement as agreed (at any time) all of the rights
and obligations of the Investors pursuant to Schedule 3 — Part 11 and Clause 2.9 and the Term
Sheet shall terminate (and have no further effect), and thereafter none of the Investors shall
have any further rights or obligations of any kind pursuant to Schedule 3 – Part 11, Clause
2.9 and the Term Sheet.






For the purposes of this letter:



“Commencement Date” means the date upon which the later of the following Restructuring steps are
completed:




	(a)	 	the State has acquired (directly or indirectly) ownership of the shares in ABN AMRO II N.V.
(or such other entity which may own the BU NL business of ABN AMRO); and







	(b)	 	a capital repatriation or repatriations are made to Santander of an amount equal to (i) the
capital in ABN AMRO relating to the S-Shares as adjusted for necessary retentions for
Santander’s share of the Retained Business1, plus (ii) the amounts relating to
Santander in RFS Holdings B.V. with respect to GALM pursuant to the Deed of
Accession2 as adjusted for Appendix 6 (GALM and other Treasury Issues) to the
Agreed Package dated 28 September 2009 and for the necessary agreements between the Investors
in the outstanding discussions in relation to taxes.






“Cutoff Date” means the date falling two years after the Commencement Date.



The provisions of Clauses 16 (Confidentiality and Announcements), 19 (Entire Agreement and Non
Reliance), 20 (General) and 22 (Governing Law and Arbitration) of the Consortium and Shareholders
Agreement (in each case, for the avoidance of all doubt, as amended by the terms of the Deed of
Accession) shall apply (mutatis mutandis) to this letter as if expressly set out herein.



Yours faithfully,




[•]




The State of the Netherlands acting by its duly authorised signatories




Acknowledged and Agreed:



[•]




The Royal Bank of Scotland Group PLC acting by its duly authorised signatories




[•]




Banco Santander S.A. acting by its duly authorised signatories




[•]




RFS Holdings B.V. acting by its duly authorised signatories



 






	 	 	 
	1	 	In accordance with the “Shared Assets capital –
proposal for discussion” memo from Ms Hofste to the CFOs Investors and CFO
delegates dated 21 September 2009, amount was equal to €8,902 m.

	 
	2	 	In accordance with the “Unwinding shared assets – GALM
DTA effect” memo from Mr de Mik to the Tax Working Group and CFO delegates
dated 14 September 2009 this was equal to an amount of €744m






 


124












 




Appendix 1




N shall have the right but not the obligation to avail itself of the underwriting commitment
described below.



	 	 	 
	Issuer:

	 	[Aurora]3
	Listing:

	 	[Luxembourg Stock Exchange /
Dublin Stock Exchange / London

Stock Exchange / Euronext Amsterdam]
	Lead managers:

	 	[Aurora]

The Royal Bank of Scotland

Banco Santander
	Underwriter(s):

	 	The Royal Bank of Scotland 60% of the placement and
Banco Santander 40% of the placement.
	Status:

	 	Subordinated, Other Tier 1 (Hybrid)

Must meet debt accounting requirements

Must be tax deductible

Must meet DNB / CEBS draft and current requirements

Tier 1 treatment at the time of issue
	Currency:

	 	EUR
	Amount:

	 	Up to ***
	Pricing Date:

	 	Settlement date  — 2
	Settlement Date:

	 	No later than the Cutoff Date as defined in the letter
from the Dutch State relating to this termsheet
	Maturity Date:

	 	Perpetual
	Call:

	 	5 years after settlement and annually thereafter. Step
up in line with the market and regulations for Tier 1.
	Coupon:

	 	Determined by reference to a corresponding
benchmark4 publicly or privately placed,
preference share transaction by Aurora, or a publicly
or privately placed proportion of this transaction.
	Coupon Payments:

	 	Annual based on an ACT/ACT basis until 3 October 2019,
quarterly based on an ACT/365 thereafter
	Non cumulative: 



	 	Non cumulative.

Subject to regulatory approval and to ratios below
minimum levels agreed with or required by regulator

	Voting Rights:

	 	None
	Coupon Deferral / Dividend Pusher

	 	Coupons must be paid in the event that regulatory
ratios are above prescribed minimum levels (specified
in the transaction documentation in line with Aurora’a
publicly announced target and specified capital
ratios).
	Coupon Payment Dates:

	 	Quarterly
	Issue / Reoffer Price:

	 	[tba]
	Benchmark Reference Price:

	 	[   ] %
	Benchmark Reference Yield:

	 	[   ]
	Underwriting fees:

	 	Nil





 







	 	 	 
	3	 	Aurora is a working name given to the legal entity in
which the asset and liabilities of N-share will be demerged. The legal entity
name will be determined prior to legal segregation.

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

	 
	4	 	“Benchmark” will mean a minimum size of €200 — 250m and
distribution to be agreed between the Issuer and the Underwriters (both parties
acting reasonably)




 


125









 





	 	 	 
	Lead Management Fees

	 	 Nil
	All-in Price:

	 	 [tba]
	Net Proceeds

	 	 Up to ***
	Redemption:

	 	 100.00%
	Transaction Expenses:

	 	 For the account of the Issuer
	Business Days:

	 	 TARGET, Amsterdam
	Governing Law:

	 	 Dutch Law
	Denominations:

	 	 EUR 1,000, 10,000, 100,000
	Lock up period:

	 	 Transferability restricted as follows:






	 	 	 	 	 	 	 
	 	 	Period after	 	 	 
	 	 	settlement date	 	Maximum Transferability	 
	 
	 	 	 	 	 	 
	 
	 	6 months	 	 	50	%
	 
	 	1 year	 	 	75	%
	 
	 	18 months	 	no restriction	 
	 	 	on the amount allotted to each of The Royal Bank of
Scotland and Banco Santander






	 	 	 
	Minimum Credit Rating:

	 	The securities will have a minimum rating by Moodys
and S&P the same as or higher than RBS equivalent debt
capital securities.
	Optional redemption date

	 	Tax change and regulatory change, subject to approval
of regulator.
	Optional Issuance:

	 	Aurora is under no obligation to issue this instrument.





 






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




 


126









 









Schedule 11

Operation of ID&J India




The purpose of this Schedule is to document the allocation of the ID&JG business conducted by RBS
NV in India to the State and the intention of the State for such business to be transferred to ABN
AMRO Bank, subject to all regulatory approvals needed to establish a branch and obtain local
licences in India and to complete all such other arrangements as are necessary (including technical
separation) to acquire the ID&JG business in India from RBS NV. Such requirements for licenses and
arrangements for ABN AMRO Bank to acquire the ID&JG Business in India from RBS NV being hereinafter
referred to as the “Acquisition Requirements”.



In this Schedule, “parties” means RBS, the State and the Company. Santander shall have no
obligation arising out of or in respect of this Schedule. However, upon the reasonable request by
RBS and the State, Santander shall take such action is required to give effect to this Schedule.



Until ABN AMRO Bank has completed the Acquisition Requirements, the parties have agreed to put in
place arrangements to enable the ID&JG business in India to continue to operate as part of RBS NV
while protecting all commercial, legal and regulatory interests of ABN AMRO Bank in the ID&JG
business in India, subject to the terms of this Schedule.



Definitions and Interpretation




	1	 	Definitions







	1.1	 	In this Schedule, unless the subject or context otherwise requires, words defined in the CSA
shall have the same meanings when used herein and:







“Business Head” means the person specified in paragraph 3.1 of this Schedule;




“Completion” means the date on which the ID&JG Business is transferred from RBS NV to the
Purchaser in accordance with the CSA;




“CSA” means the restated Consortium and Shareholders Agreement dated 1 April 2010 (as
supplemented and amended from time to time);




“Expert” has the meaning given to it in paragraph 12.3 of this Schedule;




“Legal Separation Date” means the date on which the shares in ABN AMRO Bank are transferred
by AAH to ABN AMRO Group N.V. being an entity directly owned by the State;




“Ordinary Course” means the conduct of the ID&JG Business in accordance with normal
day-to-day customs, practices and procedures and consistent with past practice but subject
to compliance with all Regulatory Requirements;




“ID&JG” means the international diamond and jewellery business group;




“ID&JG Business” means the ID&JG business in India which has been allocated to the State
under the CSA and which will remain in the RBS NV branch in India until Completion;




“ID&JG Cost Centre” means in relation to the ID&JG Business the cost centre assigned to the
ID&JG Business and recorded in Magnitude consolidation system;


 


127









 






“Regulatory Requirements” means all requirements applicable in relation to the arrangements
detailed in this Agreement and activities of ABN AMRO Bank and/or RBS
NV, as the case may be, arising from any law, enactment, order, regulation, regulatory
policy, guideline or industry code, in any applicable jurisdiction including but not limited
to those of a Regulator in India and in particular but without limitation the Basel II
capital adequacy requirements in relation to Pillar 1, Pillar 2 and Pillar 3 as outlined by
the RBI from time to time; and




“Relevant Employee” means the employees working exclusively or principally within the ID&JG
Business.




	2	 	CSA and Effect of the Schedule







	2.1	 	If the provisions of this Schedule do not specifically provide for or govern any matter
relating to the management of the ID&JG Business, the parties agree to apply the principles
set out in the CSA. In the event that this Schedule conflicts with any provision of the CSA
(other than Part 9 of Schedule 1 in relation to Tax matters) this Schedule shall prevail.







	2.2	 	ABN AMRO Bank and RBS NV agree that in the event that the CSA is amended (including but not
limited to any amendment to the operative provisions relating to the governance and management
of the AAH Group or the provision of information and preparation of accounts), and any such
amendment has an impact on the governance, management or operations of the ID&JG Business
within RBS NV, they will negotiate, in good faith, an amendment to this Schedule to ensure
that the principles of the CSA as at the date of this Schedule and the specific provisions of
this Schedule continue to apply to the ID&JG Business until Completion.







	2.3	 	In the event that either RBS NV or ABN AMRO Bank is required to obtain the approval of a
Regulator with respect to the arrangements detailed in this Schedule (or any part thereof),
the parties agree to co-operate and take all reasonable measures in good faith to achieve such
requisite approval, provided, however, that no party shall be bound to take any action that
is, in the reasonable opinion of a party, likely to breach its Regulatory Requirements. Should
any Regulator (including but not limited to the Reserve Bank of India) require any change to
be made to this Schedule or the principles expressed herein, the parties shall procure that
this Schedule is amended in order to reflect such requirements.







	2.4	 	Nothing in this Schedule shall be construed as in any way excluding, limiting or overriding
the Regulatory Requirements or the respective obligations and responsibilities of RBS NV or
ABN AMRO Bank there under.







	3	 	Business Head







	3.1	 	ABN AMRO Bank shall designate a Business Head, being Biju Patnaik, or such alternative person
assigned by ABN AMRO Bank with the agreement of RBS NV, such consent not to be unreasonably
withheld or delayed. The Business Head shall be an employee of RBS NV working within the ID&JG
Business. The parties agree that if the Business Head is replaced under an agreement between
the same parties relating to other international diamond and jewellery businesses remaining in
RBS NV then the Business Head will be deemed to be replaced under this Schedule.





 


128









 











	3.2	 	Subject to paragraph 6 of this Schedule in relation to Tax matters, the parties agree that
the Business Head shall be responsible for the management and oversight of the ID&JG Business
from the Legal Separation Date to Completion, including but not limited to:







	 	(i)	 	managing the ID&JG Business on a day-to-day basis;

	 
	 	(ii)	 	developing the ID&JG Business plan within the boundaries of the overall
strategy of ABN AMRO Bank;







	 	(iii)	 	driving revenues and growth for the ID&JG Business as well as setting the
budget for the ID&JG Business and ensuring costs are maintained under control;

	 
	 	(iv)	 	approving any expenditure (which is to be recharged to the ID&JG Cost Centre);

	 
	 	(v)	 	approving any credit and/or market risk limits for the ID&JG Business;

	 
	 	(vi)	 	approving the entry into any contract or agreement exclusively or principally
supporting the ID&JG Business;







	 	(vii)	 	settling any claims, actions, arbitrations, disputes or other proceedings
relating to the ID&JG Business;

	 
	 	(viii)	 	managing the ID&JG Business relationship managers and commercial support teams;

	 
	 	(ix)	 	the hiring of any new employees or contractors to support the ID&JG Business;

	 
	 	(x)	 	the dismissal of any Relevant Employee; and







	 	(xi)	 	the setting of remuneration or the payment of any bonus for Relevant Employees
and/or any changes to the terms and conditions of employment of any Relevant Employee
(including but not limited to benefit plans),







in each case in accordance with AIM and the Regulatory Requirements of RBS NV.




	3.3	 	Unless prohibited by Regulatory Requirements and subject to paragraph 3.5 of this Schedule,
where the ID&JG Business has its own dedicated control functions and services support,
including but not limited to risk management, finance, compliance, human resources, legal,
audit, IT and operations (“Functions and Services”), the heads of such Functions and Services
shall have a direct reporting line to the Business Head as well as a functional reporting line
to the relevant RBS NV line management.







	3.4	 	The Business Head shall have a direct reporting line to the Chairman of the RBS NV Managing
Board, in addition to the in country reporting line to the country executive of RBS NV in
India.







	3.5	 	The general risk framework, including the authorities for approving general risk limits, for
the AAB business (including the ID&JG Business) will be reviewed and approved by the relevant
risk and control committees of RBS NV. The Business Head will be jointly responsible for the
risk framework for the ID&JG Business. Any decisions taken by the relevant risk and control
committees of RBS NV impacting the ID&JG Business will also need the approval of the Business
Head.







	4	 	Operation of the ID&JG Business







	4.1	 	RBS NV undertakes that during the period from the Legal Separation Date to Completion, RBS NV
shall operate the ID&JG Business in the Ordinary Course under the management
and direction of the Business Head (save insofar as agreed in writing by ABN AMRO Bank, such
consent not to be unreasonably withheld or delayed).





 


129









 











	4.2	 	RBS NV agrees to record all revenues and costs relating to the ID&JG Business separately in
the ID&JG Cost Centre such that the ID&JG Business remains clearly identifiable from RBS NV’s
other businesses consistent with past practice.







	4.3	 	RBS NV will continue to apply the policies and procedures currently in place as at the date
of this Schedule, in relation to the operation of the ID&JG Business, including but not
limited to the ID&JG CAAML policies. In the event that RBS NV wishes to change a policy such
changes shall, save where a change is necessary to comply with Regulatory Requirements, be
agreed between RBS NV and the Business Head before implementation.







	4.4	 	The parties agree that in the event that the ID&JG Business is supported by hardware,
equipment, software and/or other electronics, computer and telecommunications devices and
equipment (“System”) which have already transferred from RBS NV to ABN AMRO Bank, that
(subject to obtaining any necessary consents) a transitional service level agreement will be
entered into between RBS NV and ABN AMRO Bank to ensure the continued support by such System
to the ID&JG Business. RBS NV shall not be liable for any failure by ABN AMRO Bank to provide
such on-going support. In the event that either RBS NV or ABN AMRO Bank is required to obtain
the approval of a Regulator with respect to such service level arrangements, the parties agree
to co-operate and take all reasonable measures in good faith to achieve such requisite
approval.







	4.5	 	From the Legal Separation Date until the Completion, RBS NV shall to the extent that it is
lawfully able to do so without breaching any Regulatory Requirement:







	 	(i)	 	provide ABN AMRO Bank with a copy of any internal or external audit reports
relating to the ID&JG Business;







	 	(ii)	 	notify ABN AMRO Bank of any adverse findings relating to the ID&JG Business or
the functions and services supporting the ID&JG Business highlighted during any
internal or external audit of the RBS NV branch in India; and







	 	(iii)	 	if requested by ABN AMRO Bank, conduct, at the cost of ABN AMRO Bank, an
internal audit of the ID&JG Business and provide the findings of such audit to ABN AMRO
Bank.







	5	 	Provision of Financial Information and Reporting







Subject to paragraph 6 of this Schedule in relation to Tax matters, RBS NV shall supply ABN
AMRO Bank, at the reasonable cost of ABN AMRO Bank, with such information relating to, and
such access to, the ID&JG Business (including, for the avoidance of doubt, information
relating to the capital, liquidity and funding requirements of the ID&JG Business) as it may
reasonably require but not to the extent that any such sharing of such information is in
breach of any Regulatory Requirement.




Either at or shortly before Completion, RBS NV undertakes to provide ABN AMRO Bank with the
following systems and materials necessary for ABN AMRO Bank to maintain Basel II host
compliance in India post Completion:




	 	•	 	complete (and updated) documentation on Basel II regulations in India;







	 	•	 	complete set of RBI reporting templates with any accompanying explanations provided
by RBI;






 


130









 










	 	•	 	a copy of the Centralized Standardized Solution (CSS) for India host reporting
(incl. calculator software, defined Business Objects reports, thorough and up-to-date
technical documentation on the sourcing and the functionality of the calculator, and
specifications of the Business Objects reports), reflecting all the updates in India
host reporting regulations up to date;







	 	•	 	documentation reflecting the implementation choices for the host RWA calculation and
the relation between the regulatory requirements and the implemented functionality (if
the documentation of the CSS solution does not sufficiently reflect them);







	 	•	 	a copy of the data used during the last run month for India including booking system
extracts (SAFEGATE/CUID files), log files (specifying enrichments, defaulting rules,
etc), CSS inbound and outbound data, reference data domains and other datasets used for
enrichment of CSS input data (including but not limited to reference data domains and
extracts from credit offer approval systems RAPID-IRD) and produced Business Objects
reports;







	 	•	 	local ICAAP and/or any other Pillar 2 documentation, if required by and submitted to
RBI. RBS shall also inform ABN AMRO Bank of the feedback received from RBI on local
ICAAP and SREP, where such feedback is relevant for ABN AMRO Bank;







	 	•	 	Information relating to any upcoming changes in India Basel II related regulations,
of which RBS are aware.







	6	 	Tax Matters







	6.1	 	The parties acknowledge that for Indian Tax purposes the ID&JG Business forms part of RBS
NV’s Indian operations and no separate Tax Returns are required to be or can be filed in
respect of it. The parties acknowledge that Part 9 of Schedule 1 to the CSA shall apply for
the purpose of allocating Tax liabilities of RBS NV to the ID&JG Business. The parties also
acknowledge that RBS NV or its duly authorised agents shall be responsible for preparing,
submitting and dealing with all Tax Returns relating to the Indian Tax affairs of RBS NV
together with all associated Tax Documents and correspondence, enquiries disputes,
negotiations and settlements in relation thereto, and that it shall not be required to act
under the direction of the Business Head in this regard. The parties acknowledge that the
Indian Tax affairs of RBS NV shall be dealt with under the direction of the Head of Tax of RBS
NV and that neither the State nor ABN AMRO Bank nor the Business Head shall be entitled to
review any such Tax Return or related Tax Documents and correspondence, subject to Paragraph
6.2 below.







	6.2	 	In the event that RBS NV becomes aware of any Tax Audit or other informal request or
investigation which relates specifically and predominantly to the ID&JG Business it shall
ensure that the Business Head and the Head of Tax of RBS NV are informed and consulted in
respect thereof. In respect of any such matter, RBS NV shall take such action as may be
reasonably requested by the Business Head in consultation with the Head of Tax of RBS NV to
deal with such matter, save that RBS NV shall not be obliged to take any action consisting of
contesting any matter before a court or tribunal which will be heard in public or the judgment
in respect of which may be published and available to the public otherwise than on an
anonymous basis unless an opinion is obtained from a leading tax
adviser to the effect that, in his or her opinion, it is more likely than not that the
outcome will be successful and (if required by RBS NV) that such action should not be
materially prejudicial to the business interests or reputation of RBS NV, RBS or any other
member of the RBS Group. Further, if RBS reasonably considers that any action that RBS NV is
requested to take pursuant hereto could be materially prejudicial to its business interests
or reputation or those of RBS NV or any other member of the RBS Group,





 


131









 





	 	 	it will notify the
Business Head of such concern. If the Business Head nevertheless wishes RBS NV to proceed
with such action, the matter shall immediately be referred to the State CFO and RBS CFO, who
shall have 21 Business Days, or such longer period as unanimously agreed by the CFOs, to
agree whether such action could be materially prejudicial and, if so, whether such action
shall be taken, which agreement shall be final and binding, save in the case of fraud or
manifest error. If no agreement can be reached, the procedure in Clause 9 of this Agreement
shall apply to determine whether such action should be taken.







	6.3	 	The parties acknowledge that the costs to be debited to the ID& JG Cost Centre shall include
a contribution of €3,500 per accounting period towards the costs of dealing with RBS NV’s Tax
Returns and other Tax affairs. In the event that the Business Head requests any action to be
taken under paragraph 6.2 of this Schedule, any associated external costs will also be debited
to the ID&JG Cost Centre.







	7	 	Funding for ID&JG Business







ABN AMRO Bank shall undertake all and any measures necessary to ensure that the ID&JG
Business (including assets, liabilities, contingent liabilities and off balance sheet items)
that remain in RBS NV comply with all internal and regulatory requirements in respect of
capital, liquidity and funding on a segmental basis (where any internal requirements will be
determined in accordance with current AAH Group practice as amended by migration to Basel II
(or other arrangements in relation to Basel II agreed with the relevant regulator(s)) and
shall correct any breaches thereof within seven days of becoming aware of or having received
a formal notification of any such breach. Such measures shall be taken at the level of RFS
Holdings B.V.




	8	 	Liability







RBS NV will not be liable for any loss of revenue, profits, business, goodwill or loss of
value relating to the ID&JG Business as a result of its continued operation of the ID&JG
Business in the RBS NV branch in India during the term of this Schedule, except to the
extent such losses arise from fraud, wilful misconduct or gross negligence of RBS NV but
only where such losses are not caused by the ID&JG Business, any State Acquired Business ,
any Relevant Employee or any employee, contractor, officer or agent of any State Acquired
Business. ABN AMRO Bank also agrees that, save in the case of fraud, wilful misconduct or
gross negligence of RBS NV other than fraud or wilful misconduct of the ID&JG Business, any
State Acquired Business, any Relevant Employee or any employee, contractor, officer or agent
of any State Acquired Business, RBS NV will not be liable for any breach of this Schedule by
RBS NV other than any breach of paragraph 10.1 or paragraph 14 of this Schedule.




	9	 	Intellectual Property







All Intellectual Property rights belonging to a party prior to the signing of this Schedule
will remain vested in that party.


 


132









 






	10	 	Non-Solicitation







	10.1	 	RBS NV agrees that during the period of this Schedule and for a period of one year after the
Completion, it will not, and will ensure that no member of its Group knowingly solicit the
customers of the ID&JG Business for the purpose of offering services which may be considered
similar to the services offered by ID&JG Business to such customers.







	10.2	 	ABN AMRO Bank agrees that during the period of this Schedule and for a period of one year
after Completion, it will not, and will ensure that no member of its Group knowingly solicit
the customers of the RBS NV branch in India who are not customers of the ID&JG Business for
the purpose of offering services which may be considered similar to the services offered by
RBS NV to such customers.







	10.3	 	RBS NV shall not at any time during the term of this Schedule, induce or seek to induce or
entice or seek to entice away from being employed or hired by ABN AMRO Bank upon Completion,
any Relevant Employee. The placement of an advertisement in the public domain and the
recruitment of a person through an employment agency shall not constitute a breach of this
paragraph 10.3 provided that no member of RBS NV encourages or advises such agency to approach
any Relevant Employee. Appointments to such role will be on terms and conditions of employment
as appropriate to that role and that bank and terms and conditions will not be protected, and
protection of continuity of service is at the discretion of RBS NV.







	10.4	 	ABN AMRO Bank shall not at any time during the term of this Schedule, induce or seek to
induce or entice or seek to entice away from RBS NV any employee of RBS NV (other than a
Relevant Employee at Completion). The placement of an advertisement in the public domain and
the recruitment of a person through an employment agency shall not constitute a breach of this
paragraph 10.4 provided that no member of ABN AMRO Bank encourages or advises such agency to
approach any such employees. Appointments to such role will be on terms and conditions of
employment as appropriate to that role and that bank and terms and conditions will not be
protected, and protection of continuity of service is at the discretion of ABN AMRO Bank.







	11	 	Term and Termination







Subject to earlier termination in accordance with its terms this Schedule shall terminate on
Completion.




	12	 	Completion







Upon fulfilment of Acquisition Requirements the ID&JG Business will be transferred to ABN
AMRO Bank in accordance with the CSA provisions.



13 Escalation and Dispute Resolution





	13.1	 	In the event that there is a dispute in relation to any aspect of, or failure to agree any
matter arising in relation to the conduct or operation of the ID&JG Business between RBS NV
and the Business Head with respect to cannot be resolved at a local level, the Business Head
will escalate the matter to the Chairman of the Managing Board of RBS NV. If the Business Head
and the Chairman of the Managing Board of RBS NV cannot resolve the matter within ten Business
Days of the matter being referred to the Chairman of the Managing Board of RBS NV, then the
Chairman of the Managing Board of RBS NV will attempt to resolve the matter informally through
discussion with the Chairman of the Managing Board of ABN AMRO Bank.





 


133









 











	13.2	 	In the event that there is a dispute between RBS NV and ABN AMRO Bank in relation to any
aspect of, or failure to agree any matter arising in relation to, this Schedule or any
document agreed or contemplated as being agreed pursuant to this Schedule by the parties first
attempting to resolve any dispute informally through discussion by the following individuals:







	 	(a)	 	the Chief Administrative Officer of RBS NV on behalf of RBS NV and the Chief
Executive Officer of the International Diamond & Jewellery Group on behalf of ABN AMRO
Bank, who will meet to resolve the dispute and if they cannot resolve the dispute
unanimously within five Business Days of the dispute being referred to them then;







	 	(b)	 	the dispute shall promptly be referred to the Chairman of the Managing Board of
RBS NV and the Chairman of the Managing Board of ABN AMRO Bank.







	13.3	 	Any dispute or any matter which is not resolved by agreement between the parties in
accordance with Clauses 13.1 or 13.2 above, within 10 Business Days of such dispute being
referred to the Chairman of the Managing Board of RBS NV and the Chairman of the Managing
Board of ABN AMRO Bank, shall be determined in accordance with Clause 9 of the CSA, save that
references in Clause 9 of the CSA to Independent Accountants shall be read as references to a
relevant Expert and references to the President of the Institute of Chartered Accountants
shall be read as references to the President of the relevant governing body to which such
expert is a member.







For the purpose of this Schedule “Expert” shall mean a person agreed by RBS NV and ABN AMRO
Bank as a suitably qualified person as they determine appropriate having regard to the
nature of the dispute. Failing such agreement within ten Business Days of the expiry of the
period set out above, the Expert shall be the person nominated on the application of either
RBS NV or ABN AMRO Bank (as the case may be) by the President for the time being of the
Institute of Chartered Accountants in England and Wales.




	14	 	Confidentiality







In the event that RBS NV elects to sell all or any part of its business and assets, RBS NV
undertakes that it will not, without the written consent of ABN AMRO Bank, such consent not
to be unreasonably withheld or delayed, disclose confidential information relating to the
ID&JG Business or ABN AMRO Bank to any potential buyer notwithstanding that any such
potential buyer may have signed a confidentiality agreement.


 


134









 






	15	 	Notices







	15.1	 	Any notice or other document to be given under this Schedule shall be in writing in English
and shall be deemed duly given if delivered to the recipient at its fax number, email or
address set out below or any other fax number, email or address notified to the parties for
the purposes of this Schedule, if left at or sent by (i) airmail or express or other fast
postal service or (ii) facsimile transmission or other means of telecommunication in permanent
written form to the following address or number:







RBS NV



	 	 	 
	Address

	 	Head Office
	 

	 	Gustav Mahlerlaan 10
	 

	 	1082 PP Amsterdam
	Fax No.

	 	+ 31 206292163







For the attention of General Counsel




With a copy to:




The Royal Bank of Scotland Group plc



	 	 	 
	Address:

	 	Cutlers Exchange
	 

	 	123 Houndsditch
	 

	 	London EC3A 7BU
	 

	 	United Kingdom
	 
	 	 
	Fax No:

	 	+44 (0) 20 7857 9795







For the attention of Deputy Director, Group Legal




ABN AMRO Bank N.V.



	 	 	 
	Address

	 	Gustav Maherlaan 10
	 

	 	1082PP Amsterdam
	 

	 	The Netherlands
	 
	 	 
	Fax No.

	 	+ 31 20 3830710







For the attention of: General Counsel




With a copy to:



	 	 	 
	Address

	 	ABN AMRO Bank N.V
	

	 	International Diamonds & Jewellery Group
	

	 	Gustav Maherlaan 10
	

	 	1082PP Amsterdam
	

	 	The Netherlands







For the attention of: CEO, International Diamonds & Jewellery Group



	 	 	 
	Fax No.

	 	+ 31 20 6290867







Email: victor.van.de.kwast@nl.abnamro.com




	15.2	 	Any notice shall be delivered by hand or sent by fax or by express or other fast means of
postal service. Any notice shall be deemed to have been received on the next working day
in the place to which it is sent if sent by fax or 72 hours from the time of posting if sent by post.

	 
	16	 	Amendments







This Schedule may be amended by agreement between RBS NV and ABN AMRO Bank, without the
consent of the Investors provided that any change shall only be effective if made in writing
and signed by or on behalf of each of RBS NV and ABN AMRO Bank.




 


135









 







Schedule 12

Worked Example for the purposes of Clause 13




Consolidated balance sheet (assuming all “divisible” assets/liabilities transferred at separation)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	EUR million	 	 	 	 	 	R	 	 	MoF	 	 	S	 	 	Total	 	 	 	 	R	 	 	MoF	 	 	S	 	 	Total	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Retained assets
	 	 	 	 	 	 	307	 	 	 	271	 	 	 	224	 	 	 	802	 	 	Retained liabilities	 	 	205	 	 	 	181	 	 	 	149	 	 	 	535	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Intracompany receivable
	 	 	 	 	 	 	183	 	 	 	129	 	 	 	106	 	 	 	418	 	 	Tier 1 (equity)	 	 	190	 	 	 	219	 	 	 	139	 	 	 	548	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Tier 2	 	 	95	 	 	 	85	 	 	 	70	 	 	 	250	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Equity offset to tier 2	 	 	 	 	 	 	(85	)	 	 	(28	)	 	 	(113	)
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	 	 	 	 	490	 	 	 	400	 	 	 	330	 	 	 	1,220	 	 	Total	 	 	490	 	 	 	400	 	 	 	330	 	 	 	1,220	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Memo: overfunding position at
Separation
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Equity injection	 	 	190	 	 	 	219	 	 	 	139	 	 	 	548	 
	Intracompany receivable
	 	 	 	 	 	 	 	 	 	 	129	 	 	 	106	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Less: ‘rented’ Tier 2
	 	 	 	 	 	 	 	 	 	 	—	 	 	 	(42	)	 	 	 	 	 	Basel II equity tier 1 support	 	 	152	 	 	 	134	 	 	 	111	 	 	 	397	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted intracompany
receivable
	 	 	 	 	 	 	 	 	 	 	129	 	 	 	64	 	 	 	 	 	 	Buffer @ 25%	 	 	38	 	 	 	34	 	 	 	28	 	 	 	100	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Minimum equity required	 	 	190	 	 	 	168	 	 	 	139	 	 	 	497	 
	Indicative annualised P&L:
	 	Base	 	 	Margin	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	25	%	 	 	25	%	 	 	25	%	 	 	25	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Intra group depo @ ***
	 	 	***		 	 	***		 	 	***		 	 	***		 	 	 	 	 	Rented tier 2:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Rented’ tier 2 @ ***
	 	 	***		 	 	***		 	 	***		 	 	***		 	 	 	 	 	Tier 2 requirement	 	 	 	 	 	 	85	 	 	 	70	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total interest credit/(charge)
	 	 	 	 	 	 	 	 	 	 	***		 	 	***		 	 	 	 	 	Less: equity buffer	 	 	 	 	 	 	(34	)	 	 	(28	)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Less: excess equity over buffer	 	 	 	 	 	 	(51	)	 	 	—	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	‘Rented’ tier 2 capital	 	 	 	 	 	 	—	 	 	 	42	 	 	 	 	 






Note: MoF benefits from offset for qualifying tier 2 capital (USD250 million subordinated debt
2023) until exchange offer transfers this out of RBS NV when a rental requirement may be
triggered



 



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




 


136









 









In witness whereof this Agreement has been entered into the day and year first above
written.



	 	 	 
	SIGNED by                      on
behalf of

THE ROYAL BANK OF SCOTLAND GROUP PLC

	 	ü

ý

þ
	 
	 	 
	SIGNED by                      on
behalf of

BANCO SANTANDER, S.A.

	 	ü

ý

þ
	 
	 	 
	SIGNED by                      on
behalf of

THE STATE OF THE NETHERLANDS

	 	ü

ý

þ
	 
	 	 
	SIGNED by                      on
behalf of

RFS HOLDINGS B.V.

	 	ü

ý

þ