EXHIBIT 4.2


 







 



 


THE ROYAL BANK OF SCOTLAND GROUP PLC


 


as Company,


 


and


 


THE BANK OF NEW YORK MELLON ACTING
THROUGH ITS

LONDON BRANCH


 


as Trustee


 


 



 


FIRST SUPPLEMENTAL INDENTURE


 


dated as of August 10, 2015


 


to


 


CONTINGENT CONVERTIBLE SECURITIES INDENTURE


 


dated as of August 10, 2015


 


in respect of


 


$2,000,000,000 7.500% Perpetual Subordinated
Contingent Convertible





Additional Tier 1 Capital Notes


 









 




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TABLE
OF CONTENTS


__________________


 




Page


 








 


Article
1

Definitions


 


	Section 1.01.  Definition of Terms	2
	Section 1.02.  Separability Clause	18
	Section 1.03.  Benefits of Instrument	18
	Section 1.04.  Relation to Contingent Convertible Securities Indenture	18
	 	 


Article
2

The Contingent Capital Notes


 


	Section 2.01.  Form, Title, Terms and Payments	18
	Section 2.02.  Interest	20
	Section 2.03.  Interest Payments Discretionary	21
	Section 2.04.  Restrictions on Interest Payments	21
	Section 2.05.  Agreement to Interest Cancellation	22
	Section 2.06.  Notice of Interest Cancellation	22
	Section 2.07.  Payment of Principal, Interest and Other Amounts	23
	Section 2.08.  Optional Redemption	23
	Section 2.09.  Optional Tax Redemption	23
	Section 2.10.  Capital Disqualification Event Redemption	25
	Section 2.11.  Optional Repurchase	25
	Section 2.12.  Pre-conditions to Redemptions and Repurchases	25
	Section 2.13.  Notice of Redemption	26
	Section 2.14.  Cancelled Interest Not Payable upon Redemption	28
	Section 2.15.  Automatic Conversion upon Conversion Trigger Event	28
	Section 2.16.  Settlement Shares	32
	Section 2.17.  Settlement Shares Offer	32
	Section 2.18.  Settlement Procedure	34
	Section 2.19.  Failure to Deliver a Settlement Notice	36
	Section 2.20.  Delivery of ADSs	36
	Section 2.21.  Agreement with Respect to Exercise of U.K. Bail-in Power	37
	 	 


Article
3

Anti-Dilution


 


	Section 3.01.  Adjustment of Conversion Price	39
	Section 3.02.  Takeover Event	44
	Section 3.03.  Agreement with Respect to a Non-Qualifying Takeover Event	46
	 	 


 






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Article
4

Enforcement Events and Remedies


 


	Section 4.01.  Winding-up or Administration Event	48
	Section 4.02.  Non-Payment Event	48
	Section 4.03.  Limited Remedies for Breach of Performance Obligations	48
	Section 4.04.  No Other Remedies and Other Terms	49
	Section 4.05.  Waiver of Past Defaults	50
	 	 


Article
5

Subordination


 


	Section 5.01.  Subordination to Claims of Senior Creditors	50
	Section 5.02.  No Set-Off	52
	 	 


Article
6

Satisfaction and Discharge


 


	Section 6.01.  Satisfaction and Discharge of Indenture	52
	 	 


Article
7

Supplemental Indentures


 


	Section 7.01.  Amendments or Supplements without Consent of Holders	53
	Section 7.02.  Amendments or Supplements With Consent of Holders	53
	Section 7.03.  Holders’ Approval of Amendments	53
	Section 7.04.  PRA Consent	54
	 	 


Article
8

Amendments to the Contingent Convertible Securities Indenture applicable
to the Contingent Convertible Notes only


 


		 
	 Section 8.01.  Additional Amounts	54
	 	 


Article
9

Miscellaneous


 


	Section 9.01.  Effect of Supplemental Indenture	56
	Section 9.02.  Other Documents to Be Given to the Trustee	56
	Section 9.03.  Notices to, and Consents Required from, the PRA to Be Given to the Trustee	56
	Section 9.04.  Survival	57
	Section 9.05.  Confirmation of Indenture	57
	Section 9.06.  Concerning the Trustee	57
	Section 9.07.  Governing Law	57
	Section 9.08.  Counterparts	57







 




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This FIRST SUPPLEMENTAL INDENTURE (“First
Supplemental Indenture”), dated as of August 10, 2015, between, THE ROYAL BANK OF SCOTLAND GROUP PLC, a company incorporated
in Scotland with registered number SC045551, as issuer (the “Company”), having its registered office at 36 St
Andrew Square, Edinburgh EH2 2YB, United Kingdom and THE BANK OF NEW YORK MELLON, acting through its London Branch, a banking corporation
duly organized and existing under the laws of the State of New York as trustee under the Contingent Convertible Securities Indenture
(the “Trustee”), having its Corporate Trust Office at One Canada Square, London E14 5AL, United Kingdom.


 


WITNESSETH:


 


WHEREAS, the Company and the Trustee have
executed and delivered a Contingent Convertible Securities Indenture, dated as of August 10, 2015 (the “Contingent Convertible
Securities Indenture” and, together with this First Supplemental Indenture, the “Indenture”), to provide
for the issuance of the Company’s Contingent Convertible Securities (the “Securities”);


 


WHEREAS, the Company hereto desires to issue
a series of Securities to be known as the $2,000,000,000 7.500% Perpetual Subordinated Contingent Convertible Additional Tier 1
Capital Notes (the “Contingent Capital Notes”);


 


WHEREAS, the parties hereto desire to establish
that the Contingent Capital Notes shall be issued in the form of one of more Global Securities substantially in the form of Exhibit
A to this First Supplemental Indenture pursuant to Sections 2.01 and 3.01 of the Contingent Convertible Securities Indenture;


 


WHEREAS, Section 9.01(f) of the Contingent
Convertible Securities Indenture permits the Company and the Trustee to enter into a supplemental indenture to establish the forms
or terms of Securities of any series as permitted under Sections 2.01 and 3.01 of the Contingent Convertible Securities Indenture
without the consent of Holders;


 


WHEREAS, Section 9.01(d) of the Contingent
Convertible Securities Indenture permits the Company and the Trustee to add to, change or eliminate any provisions of the Contingent
Convertible Securities Indenture, subject to certain conditions, without the consent of Holders;


 


WHEREAS, this First Supplemental Indenture
shall amend and supplement the Contingent Convertible Securities Indenture but only with respect to the Contingent Capital Notes;
to the extent the terms of the Contingent Convertible Securities Indenture are inconsistent with such provisions of this First
Supplemental Indenture, the terms of this First Supplemental Indenture shall govern, but only with respect to the Contingent Capital
Notes;


 


WHEREAS, there are no Outstanding Securities
of any series created prior to the execution of this First Supplemental Indenture other than those established by the Second Supplemental
Indenture dated the date hereof;


 




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WHEREAS, the entry into of this First Supplemental
Indenture has been authorized pursuant to a Board Resolution, as required by Section 9.01 of the Contingent Convertible Securities
Indenture; and


 


WHEREAS, the Company has requested and does
hereby request that the Trustee execute and deliver this First Supplemental Indenture, and whereas all actions required by the
Company to be taken in order to make this First Supplemental Indenture a valid, binding and enforceable instrument in accordance
with its terms, have been taken and performed, and the execution and delivery of this First Supplemental Indenture has been duly
authorized in all respects,


 


NOW, THEREFORE, the Company and the Trustee
mutually covenant and agree as follows:


 


Article
1

Definitions


 


Section 1.01. 
Definition of Terms. For all purposes of this First Supplemental Indenture:


 



(a)
a term defined anywhere in this First Supplemental Indenture has the same meaning throughout;


 



(b)
capitalized terms used herein but not otherwise defined shall have the meanings assigned to
them in the Contingent Convertible Securities Indenture;


 



(c)
the singular includes the plural and vice versa;


 



(d)
headings are for convenience of reference only and do not affect interpretation;


 



(e)
for purposes of this First Supplemental Indenture and the Contingent Convertible Securities
Indenture, the term “series” shall mean the series of Securities designated as the Contingent Capital Notes
as defined in this First Supplemental Indenture;


 



(f)
the words “hereof”, “herein” and “hereunder” and words
of similar import, when used in this First Supplemental Indenture, refer to this First Supplemental Indenture as a whole and not
to any particular provision of this First Supplemental Indenture;


 



(g)
the terms “dollars” and “$” mean United States Dollars;


 



(h)
the terms “pounds sterling” and “£” mean British pounds sterling;


 



(i)
references herein to a specific Section, Article or Exhibit refer to Sections or Articles
of, or an Exhibit to, this First Supplemental Indenture;


 




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(j)
wherever the words “include”, “includes” or “including”
are used in this First Supplemental Indenture, they shall be deemed to be followed by the words “without limitation”;


 



(k)
the use of “or” is not intended to be exclusive unless expressly indicated otherwise;


 


(l)
for purposes of this First Supplemental Indenture, references therein to any act or statute
or any provision of any act or statute shall be deemed also to refer to any statutory modification or re-enactment thereof or
any statutory instrument, order or regulation made thereunder or under such modification or re-enactment; and


 



(m)
references to any issue or offer or grant to Shareholders “as a class” or “by
way of rights” shall be taken to be references to an issue or offer or grant to all or substantially all Shareholders, other
than Shareholders to whom, by reason of the laws of any territory or requirements of any recognized regulatory body or any other
stock exchange or securities market in any territory or in connection with fractional entitlements, it is determined not to make
such issue or offer or grant.


 


“Accrued Interest” means
any accrued and unpaid interest on the Contingent Capital Notes, excluding any interest which has been cancelled or deemed to be
cancelled as described in ‎Section 2.03 and ‎Section
2.04 hereof.


 


“Acquirer” means the
person which, following a Takeover Event, controls the Company.


 


“ADS” means the American
Depository Shares which are the subject of the ADS Deposit Agreement.


 


“ADS Deposit Agreement”
means the Amended and Restated Deposit Agreement among the Company, The Bank of New York Mellon and all holders from time to time
of American Depositary Receipts issued thereunder.


 


“ADS Depository” means
The Bank of New York Mellon, as the depositary under the Company’s ADS Deposit Agreement.


 


“Alternative Consideration”
means, in respect of each Contingent Capital Note and as determined by the Company (i) if all of the Settlement Shares to be issued
and delivered following Automatic Conversion are sold in the Settlement Shares Offer, the pro rata share of the cash proceeds from
the sale of such Settlement Shares attributable to such Contingent Capital Notes translated from sterling into U.S. dollars at
a then-prevailing exchange rate as determined by the Settlement Share Depository (less the pro rata share of any foreign exchange
transaction costs and an amount equal to the pro rata share of any taxes and duties (including, without limitation, any stamp duty,
stamp duty reserve tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax or duty)
that may arise or be paid in connection with the issue and delivery of Settlement Shares to the Settlement Share Depository pursuant
to the Settlement Shares Offer); (ii) if some but not all of such Settlement Shares to be issued


 




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and
delivered upon Automatic Conversion are sold in the Settlement Shares Offer, (x) the pro rata share of the cash proceeds from
the sale of such Settlement Shares attributable to such Contingent Capital Notes translated from sterling into U.S. dollars at
a then-prevailing exchange rate as determined by the Settlement Share Depository (less the pro rata share of any foreign exchange
transaction costs and an amount equal to the pro rata share of any taxes and duties (including, without limitation, any stamp
duty, stamp duty reserve tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax or
duty) that may arise or be paid in connection with the issue and delivery of Settlement Shares to the Settlement Share Depository
pursuant to the Settlement Shares Offer) and (y) the pro rata share of such Settlement Shares not sold pursuant to the Settlement
Shares Offer attributable to such Contingent Capital Notes rounded down to the nearest whole number of Settlement Shares; and
(iii) if no Settlement Shares are sold in the Settlement Shares Offer, the relevant number of Settlement Shares that would have
been received had the Company not elected that the Settlement Share Depository should carry out a Conversion Shares Offer.


 


“Approved Entity” means
a body corporate that is incorporated or established under the laws of an OECD member state and which, on the occurrence of the
Takeover Event, has in issue Relevant Shares.


 


“Assets” means the unconsolidated
gross assets of the Company, as shown in the latest published audited balance sheet of the Company, adjusted for subsequent events
in such manner as the directors of the Company may determine.


 


“Automatic Conversion”
means the irrevocable and automatic release of all of the Company’s obligations under the Contingent Capital Notes in consideration
of the Company’s issuance and delivery of the Settlement Shares at the Conversion Price on the Conversion Date to the Settlement
Share Depository (on behalf of the Holders and Beneficial Owners) in accordance with the terms of the Contingent Capital Notes.


 


“Banking Act” means the
UK Banking Act 2009, as has been or may be amended from time to time, whether pursuant to the UK Financial Services (Banking Reform)
Act 2013, secondary legislation or otherwise;


 


“Beneficial Owners” shall
mean (a) with respect to Global Securities, the owners of beneficial interests in the Securities prior to the occurrence of the
Final Cancellation Date and (b) with respect to definitive Securities, the Holders in whose names the Securities are registered
in the Contingent Convertible Security Register.


 


“Business Day” means
any weekday, other than one on which banking institutions are authorized or obligated by law, regulation or executive order to
close in London, England, or in New York City.


 


“Calculation Agent” means
The Royal Bank of Scotland plc, or its successor appointed by the Company pursuant to the Calculation Agent Agreement between the
Company and The Royal Bank of Scotland plc, dated as of the date hereof.


 




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“Cancellation Date” means
(i) with respect to any Contingent Capital Note for which a Settlement Notice is received by the Settlement Share Depository on
or before the Notice Cut-off Date, the applicable Settlement Date and (ii) with respect to any Contingent Capital Note for which
a Settlement Notice is not received by the Settlement Share Depository on or before the Notice Cut-off Date, the Final Cancellation
Date.


 


A “Capital Disqualification Event”
shall occur if the Company determines that, as a result of any amendment to, or change in the regulatory classification of the
Contingent Capital Notes under the Capital Regulations (or official interpretation thereof), in any such case becoming effective
on or after the Issue Date, the Contingent Capital Notes are, or are likely to be, fully excluded from the Tier 1 Capital (as defined
in the Capital Regulations) of the Company and/or the Tier 1 Capital of the Regulatory Group.


 


“Cash Component” means
that portion, if any, of the Alternative Consideration consisting of cash.


 


“Cash Dividend” means
any dividend or distribution in respect of the ordinary shares which is to be paid or made to the Shareholders as a class in cash
(in whatever currency) and however described and whether payable out of share premium account, profits, retained earnings or any
other capital or revenue reserve or account, and including a distribution or payment to the Shareholders upon or in connection
with a reduction of capital.


 


“CET1 Capital” means
the sum, expressed in pounds sterling, of all amounts that constitute Common Equity Tier 1 Capital of the Regulatory Group, less
any deductions from Common Equity Tier 1 Capital of the Regulatory Group required to be made, in each case as calculated by the
Company on a consolidated and fully loaded basis in accordance with the Capital Regulations applicable to the Regulatory Group
as at that point in time (which calculation shall be binding on the Trustee and the Holders).


 


“CET1 Ratio” means the
ratio of CET1 Capital to Risk Weighted Assets expressed as a percentage and on the basis that all measures used in such calculation
shall be calculated on a fully loaded basis.


 


“commencement” means,
in relation to the winding up of the Company, the date on which such winding up commences, or is deemed to commence, determined
in accordance with Section 86 or 129 of the Insolvency Act 1986.


 


“Common Equity Tier 1 Capital”
shall have the meaning ascribed to such term in CRD IV (as the same may be amended or replaced from time to time) as interpreted
and applied in accordance with the Capital Regulations then applicable to the Regulatory Group.


 


“control” means, for
the purposes of the definition of a Takeover Event:


 


		(a)	the acquisition or holding of legal or beneficial ownership of more than 50% of the issued ordinary shares of the Company;
or



 




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		(b)	the right to appoint and/or remove all or the majority of the members of the Board of Directors of the Company, whether obtained
directly or indirectly and whether obtained by ownership of share capital, contract or otherwise.



 


“Conversion Date” means
the date on which the Automatic Conversion shall take place as specified in the Conversion Trigger Notice, which shall occur without
delay upon, and in any event within one month of, the occurrence of a Conversion Trigger Event.


 


“Conversion Price” means
$3.606, subject to the anti-dilution provisions set forth under ‎Article
3.


 


“Conversion Trigger Event”
means any point in time at which the CET1 Ratio is less than 7.00%.


 


“Conversion Trigger Notice”
means the written notice to be delivered by the Company to the Trustee and the Holders of the Contingent Capital Notes in accordance
with Section 1.06 of the Contingent Convertible Securities Indenture and in the form of Exhibit B attached thereto following the
occurrence of a Conversion Trigger Event. The date on which the Conversion Trigger Notice shall be deemed to have been given shall
be the date on which it is dispatched by the Company to DTC (or if the Contingent Capital Notes are held in definitive form, to
the Holders of the Contingent Capital Notes directly). The Conversion Trigger Notice shall specify (i) that a Conversion Trigger
Event has occurred and the CET1 Ratio resulting in such Conversion Trigger Event, (ii) the Conversion Date, (iii) the then-prevailing
Conversion Price (which Conversion Price shall remain subject to any subsequent adjustment pursuant to ‎Article
3 up to the Conversion Date), (iv) the contact details of any Settlement Share Depository, or, if the Company has been unable to
appoint a Settlement Share Depository, such other arrangements for the issuance and/or delivery of the Settlement Shares, or, if
the Holder elects, ADSs or any Alternative Consideration to the Holders as it shall consider reasonable in the circumstances, (v)
that the Company has the option, at its sole and absolute discretion, to elect that a Settlement Shares Offer be conducted and
that, if the Company so elects, it will issue a Settlement Shares Offer Notice within ten Business Days following the Conversion
Date notifying the Holders of its election and (vi) the Suspension Date and that the Contingent Capital Notes shall remain in existence
for the sole purpose of evidencing the Holder’s right to receive Settlement Shares, or, if the Holder elects, ADSs or the
Alternative Consideration, as applicable, from the Settlement Share Depository and that the Contingent Capital Notes may continue
to be transferable until the Suspension Date.


 


“CRD IV” means the CRD
IV Directive and the CRD IV Regulation.


 


“CRD IV Directive” means
Directive 2013/36/EU of the European Parliament and of the Council of June 26, 2013 on access to the activity of credit institutions
and the prudential supervision of credit institutions and investment firms amending Directive


 




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2002/87/EC and repealing Directives 2006/48/EC
and 2006/49/EC, and any successor directive.


 


“CRD IV Regulation” means
Regulation (EU) No. 575/2013 of the European Parliament and of the Council of June, 26 2013 on prudential requirements for credit
institutions and investment firms amending Regulation (EU) No. 648/2012, and any successor regulation.


 


“CREST” means the relevant
system, as defined in the CREST Regulations, or any successor clearing system.


 


“CREST Regulations” means
the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended.


 


“Current Market Price”
means in respect of an ordinary share at a particular date, the average of the daily Volume Weighted Average Price of an ordinary
share on each of the five (5) consecutive Dealing Days ending on the Dealing Day immediately preceding such date; provided that,
if at any time during the said five (5) Dealing Day period the Volume Weighted Average Price shall have been based on a price ex-dividend
(or ex- any other entitlement) and during some other part of that period the Volume Weighted Average Price shall have been based
on a price cum-dividend (or cum-any other entitlement), then:


 


(i)if the ordinary shares to be created,
issued, transferred or delivered do not rank for the dividend (or entitlement thereto) in question, the Volume Weighted Average
Price on the dates on which the ordinary shares shall have been based on a price cum-dividend (or cum- any other entitlement),
shall, for the purposes of this definition, be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value
of any such dividend or entitlement per ordinary share as at the date of first public announcement relating to such dividend or
entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on
account of tax, and disregarding any associated tax credit; or


 


(ii)if the ordinary shares to be created,
issued, transferred or delivered do rank for the dividend (or entitlement) in question, the Volume Weighted Average Price on the
dates on which the ordinary shares shall have been based on a price ex-dividend (or ex- any other entitlement) shall, for the purposes
of this definition, be deemed to be the amount thereof increased by an amount equal to the Fair Market Value of any such dividend
or entitlement per ordinary share as at the date of first public announcement relating to such dividend or entitlement, in any
such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and
disregarding any associated tax credit;


 


and provided further that, if on each of
the said five (5) Dealing Days, the Volume Weighted Average Price shall have been based on a price cum-dividend (or cum- any other
entitlement) in respect of a dividend (or other entitlement) which has been declared or announced but the ordinary shares to be
issued and delivered do not rank for that


 




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dividend (or other entitlement), the Volume
Weighted Average Price on each of such dates shall, for the purposes of this definition, be deemed to be the amount thereof reduced
by an amount equal to the Fair Market Value of any such dividend or entitlement per ordinary share as at the date of first public
announcement relating to such dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding
or deduction required to be made on account of tax, and disregarding any associated tax credit;


 


and provided further that, if the Volume
Weighted Average Price of an ordinary share is not available on one or more of the said five (5) Dealing Days, (disregarding for
this purpose the proviso to the definition of Volume Weighted Average Price), then the average of such Volume Weighted Average
Prices which are available in that five (5) Dealing Day period shall be used (subject to a minimum of two such prices), and if
only one, or no, such Volume Weighted Average Price is available in the relevant period, the Current Market Price shall be determined
in good faith by an Independent Financial Adviser (acting as an expert).


 


“Dealing Day” means a
day on which the Relevant Stock Exchange or relevant stock exchange or securities market is open for business and on which ordinary
shares, Other Securities, options, warrants or other rights (as the case may be) may be dealt in (other than a day on which the
Relevant Stock Exchange or relevant stock exchange or securities market is scheduled to or does close prior to its regular weekday
closing time).


 


“Distributable Items”
means subject as otherwise defined in, and/or interpreted in accordance with, the Capital Regulations applicable to the Company
from time to time, the amount of the Company’s profits at the end of the latest financial year plus any profits brought forward
and reserves available for that purpose before distributions to holders of the Contingent Capital Notes, any Parity Securities
and Junior Securities less any losses brought forward, profits which are non-distributable pursuant to the Companies Act 2006 (UK)
(the “Companies Act”) or any other provisions of English law from time to time applicable to the Company or
the Company’s Memorandum and Articles of Association from time to time (together, the Company’s “Articles
of Association”) and sums placed to non-distributable reserves in accordance with the Companies Act or other provisions
of English law from time to time applicable to the Company or the Company’s Articles of Association, those losses and reserves
being determined on the basis of the Company’s individual accounts and not on the basis of the Company’s consolidated
accounts.


 


“DTC” means The Depository
Trust Company, or any successor clearing system.


 


“EEA Regulated Market”
means a market as defined by Article 4.1(14) of Directive 2004/39/EC of the European Parliament and of the Council on markets on
financial instruments.


 


“Enforcement Event” means
any of (i) a Winding-up or Administration Event prior to the occurrence of a Conversion Trigger Event, (ii) a Non-Payment Event,
or (iii) a breach of a Performance Obligation.


 




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“Equity Share Capital”
has the meaning provided in Section 548 of the Companies Act 2006.


 


“Extraordinary Dividend”
means any Cash Dividend that is expressly declared by the Company to be a capital distribution, extraordinary dividend, extraordinary
distribution, special dividend, special distribution or return of value to its Shareholders as a class or any analogous or similar
term, in which case the Extraordinary Dividend shall be such Cash Dividend.


 


“Fair Market Value” means,
with respect to any property on any date, the fair market value of that property as determined by an Independent Financial Adviser
in good faith, provided that (i) the Fair Market Value of a Cash Dividend shall be the amount of such Cash Dividend; (ii) the Fair
Market Value of any other cash amount shall be the amount of such cash; (iii) where Other Securities, options, warrants or other
rights are publicly traded on a stock exchange or securities market of adequate liquidity (as determined in good faith by an Independent
Financial Adviser), the Fair Market Value (a) of such Other Securities shall equal the arithmetic mean of the daily Volume Weighted
Average Prices of such Other Securities and (b) of such options, warrants or other rights shall equal the arithmetic mean of the
daily closing prices of such options, warrants or other rights, in the case of (a) and (b), during the period of five (5) Dealing
Days on the relevant stock exchange or securities market commencing on such date (or, if later, the first such Dealing Day such
Other Securities, options, warrants or other rights are publicly traded) or such shorter period as such Other Securities, options,
warrants or other rights are publicly traded; (iv) where Other Securities, options, warrants or other rights are not publicly traded
on a stock exchange or securities market of adequate liquidity (as aforesaid), the Fair Market Value of such Other Securities,
options, warrants or other rights shall be determined in good faith by an Independent Financial Adviser, on the basis of a commonly
accepted market valuation method and taking account of such factors as it considers appropriate, including the market price per
ordinary share, the dividend yield of an ordinary share, the volatility of such market price, prevailing interest rates and the
terms of such Other Securities, options, warrants or other rights, including as to the expiry date and exercise price (if any)
thereof. Such amounts shall, in the case of (i) above, be translated into the Relevant Currency (if declared, announced, made,
paid or payable in a currency other than the Relevant Currency, and if the relevant dividend is payable at the option of the Company
or a shareholder in any currency additional to the Relevant Currency, the relevant dividend shall be treated as payable in the
Relevant Currency) at the rate of exchange used to determine the amount payable to shareholders who were paid or are to be paid
or are entitled to be paid the Cash Dividend in the Relevant Currency; and, in any other case, shall be translated into the Relevant
Currency (if expressed in a currency other than the Relevant Currency) at the Prevailing Rate on that date. In addition, in the
case of (i) and (ii) above, the Fair Market Value shall be determined on a gross basis and disregarding any withholding or deduction
required to be made on account of tax, and disregarding any associated tax credit.


 


“Final Cancellation Date”
means the date, as specified in the Settlement Request Notice, on which the Contingent Capital Notes in relation to which no Settlement
Notice has been received by the Settlement Share Depository on or before the Notice Cut-off


 




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Date shall be cancelled, which date may be
up to twelve (12) Business Days following the Notice Cut-off Date.


 


“First Call Date” means
August 10, 2020.


 


“fully loaded” means,
in relation to a measure that is presented or described as being on a “fully loaded basis” that such measure is calculated
without applying the transitional provisions set out in Part Ten of the CRD IV Regulation (as may be amended from time to time).


 


“Governmental Entity”
means (i) the United Kingdom Government, (ii) an agency of the United Kingdom Government or (iii) a Person or entity (other than
a body corporate) controlled by the United Kingdom Government or any such agency referred to in clause (ii) of this definition.
If the Company is then organized in another jurisdiction, the references to “United Kingdom Government” shall be read
as references to the government of such other jurisdiction.


 


“Holder” means a Person
in whose name a Contingent Capital Note in global or definitive form is registered in the Contingent Convertible Security Register.


 


“Independent Financial Adviser”
means an independent financial institution of international repute appointed by the Company at its own expense.


 


“Interest Payment Date”
means March 31, June 30, September 30 and December 31 of each year, commencing on September 30, 2015.


 


“Issue Date” means August
10, 2015, being the date of the initial issue of the Contingent Capital Notes.


 


“Junior Securities” means
(i) any ordinary shares or other securities of the Company ranking, or expressed to rank, junior to the Contingent Capital Notes
in a Winding-up or Administration Event and/or (ii) any securities issued by any other member of the Group where the terms of such
securities benefit from a guarantee or support agreement entered into by the Company which ranks, or is expressed to rank, junior
to the Contingent Capital Notes in a Winding-up or Administration Event.


 


“Liabilities” means the
unconsolidated gross liabilities of the Company, as shown in the latest published audited balance sheet of the Company, adjusted
for contingent liabilities and prospective liabilities and for subsequent events in such manner as the directors of the Company
may determine.


 


“Mid-Market Swap Rate”
means the mid-market U.S. dollar swap rate Libor basis having a five-year maturity appearing on Bloomberg page “USD ISDA
05” (or such other page as may replace such page on Bloomberg, or such other page or service as may be nominated by the person
providing or sponsoring the information appearing on such page for purposes of displaying comparable rates) as at approximately
11:00 a.m. (New York time) on the Reset Determination Date, as determined by the Calculation Agent. If such swap rate does not
appear on such page (or such other page or service), the Mid-


 




    10 


     


    

Market Swap Rate shall instead be determined
by the Calculation Agent as being equal to the arithmetic mean expressed as a percentage and rounded, if necessary, to the nearest
0.001% (0.0005% being rounded upwards) of the quotations provided by the principal office of each of four major banks in the U.S.
dollar swap rate market (which banks shall be selected by the Calculation Agent with the prior agreement of the Company not less
than 20 calendar days prior to the Reset Determination Date) (the “Reference Banks”) of the rates at which swaps
in U.S. dollars are offered by it at approximately 11.00 a.m. (New York time) (or thereafter on the Reset Determination Date, with
the Calculation Agent acting on a best efforts basis) on the Reset Determination Date to participants in the U.S. dollar swap rate
market for a five-year period. If the Mid-Market Swap Rate is still not determined on the relevant Reset Determination Date in
accordance with the foregoing procedures, the Mid-Market Swap Rate shall be the mid-market U.S. dollar swap rate Libor basis having
a five-year maturity that appeared on the most recent Bloomberg page “USD ISDA 05” (or such other page as may replace
such page on Bloomberg, or such other page or service as may be nominated by the person providing or sponsoring the information
appearing on such page for purposes of displaying comparable rates) that was last available prior to 11.00 a.m. (New York time)
on the relevant Reset Determination Date, as determined by the Calculation Agent.


 


“New Conversion Condition”
shall be satisfied if by not later than seven calendar days following the occurrence of a Takeover Event where the Acquirer is
an Approved Entity, the Company shall have entered into arrangements to the Company’s satisfaction with the Approved Entity
pursuant to which the Approved Entity irrevocably undertakes to the Trustee, for the benefit of the Holders and Beneficial Owners,
to deliver the Relevant Shares to the Settlement Share Depository upon Automatic Conversion.


 


“New Conversion Condition Effective
Date” means the date with effect from which the New Conversion Condition shall have been satisfied.


 


“New Conversion Price”
means the amount determined by the Company in accordance with the following formula:


 


	NCP = ECP ×	VWAPRS 

VWAPOS


 


where:


 


		NCP	is the New Conversion Price.



 


		ECP	is the Conversion Price in effect on the Dealing Day immediately prior to the New Conversion Condition Effective Date.



 


		VWAPRS	means the average of the Volume Weighted Average Price of the Relevant Shares (translated, if necessary, into U.S. dollars
at the Prevailing Rate on the relevant Dealing Day) on each of the 10 Dealing Days ending on the Dealing Day prior to the date
the Takeover Event shall have occurred (and where references in the



 




    11 


     


    

definition of “Volume Weighted
Average Price” to “ordinary shares” shall be construed as a reference to the Relevant Shares and in the definition
of “Dealing Day”, references to the “Relevant Stock Exchange” shall be to the primary Regulated Market
on which the Relevant Shares are then listed, admitted to trading or accepted for dealing).


 


		VWAPOS	is the average of the Volume Weighted Average Price of the ordinary shares (translated, if necessary, into U.S. dollars at
the Prevailing Rate on the relevant Dealing Day) on each of the 10 Dealing Days ending on the Dealing Day prior to the date the
Takeover Event shall have occurred.



 


“Non-Payment Event” has
the meaning specified in ‎Section 4.02.


 


“Non-Qualifying Takeover Event”
means a Takeover Event that is not a Qualifying Takeover Event.


 


“Notice Cut-Off Date”
means the date specified as such in the Settlement Request Notice.


 


“Notional Preference Shares”
means an actual or notional class of preference shares in the capital of the Company having an equal right to return of assets
in the winding up or administration to, and so ranking pari passu with, the most senior class or classes of issued preference
shares with non-cumulative dividends (if any) in the capital of the Company from time to time and which have a preferential right
to a return of assets in the winding up or administration over, and so rank ahead of all other classes of issued shares for the
time being in the capital of the Company but ranking junior to the claims of Senior Creditors and junior to any notional class
of preference shares in the capital of the Company which is referenced in any instrument of the Company for the purposes of determining
a claim in the winding-up or administration of the Company, and, as so referenced, (i) is expressed to have a preferential right
to a return of assets in the Company’s winding-up or administration over the holders of all other classes of shares for the
time-being in the capital of the Company and (ii) is not expressed to rank junior to any other notional class of preference shares
in the capital of the Company.


 


“ordinary shares” means
the ordinary shares of the Company, with a nominal value of £1.00 each.


 


“Ordinary Share Capital”
has the meaning provided in Section 1119 of the Income and Corporation Taxes Act 2010.


 


“Other Securities” means
any securities including, without limitation, shares in the capital of the Company, or options, warrants or other rights to subscribe
for or purchase or acquire shares in the capital of the Company (and each an “Other Security”).


 


“Outstanding Amount”
has the meaning set forth in ‎Section 2.16(a).


 




    12 


     


    

“Parity Securities” means
(i) the most senior ranking class or classes of non-cumulative preference shares in the capital of the Company from time to time
and any other securities of the Company ranking, or expressed to rank, pari passu with the Contingent Capital Notes and/or
such preference shares following a Winding-up or Administration Event and/or (ii) any securities issued by any other member of
the Group where the terms of the securities benefit from a guarantee or support agreement entered into by the Company which ranks
or is expressed to rank pari passu with the Contingent Capital Notes and/or such preference shares following a Winding-up
or Administration Event.


 


“Performance Obligation”
has the meaning specified in ‎Section 4.03.


 


“Prevailing Rate” means,
in respect of any currencies on any day, the spot rate of exchange between the relevant currencies prevailing as at or about 12
noon (London time) on that date as appearing on or derived from the Relevant Page or, if such a rate cannot be determined at such
time, the rate prevailing as at or about 12 noon (London time) on the immediately preceding day on which such rate can be so determined
or, if such rate cannot be so determined by reference to the Relevant Page, the rate determined in such other manner as an Independent
Financial Adviser shall in good faith prescribe.


 


“Prospectus” means the
prospectus on Form F-3 related to the offering and sale of the Contingent Capital Notes dated March 31, 2015, as amended or supplemented.


 


“Prudential Regulation Authority”
or “PRA” means the Prudential Regulation Authority or such other authority having primary supervisory authority
with respect to the prudential regulation of the Company’s business.


 


“Qualifying Takeover Event”
means a Takeover Event where:


 


		(i)	the Acquirer is an Approved Entity; and



 


		(ii)	the New Conversion Condition is satisfied.



 


“Record Date” means the
15th calendar day preceding each Interest Payment Date, whether or not such day is a Business Day.


 


“Reference Banks” has
the meaning set forth in the definition of Mid-Market Swap Rate.


 


“Regular Record Date”
means, with respect to the payment of interest on the Contingent Capital Notes, the 15th calendar day (whether or not a Business
Day) preceding an Interest Payment Date.


 


“Regulated Market” means
an EEA Regulated Market or another regulated, regularly operating, recognized stock exchange or securities market in an OECD member
state.


 




    13 


     


    

“Regulatory Group” means
the Company, its subsidiary undertakings, participations, participating interests and any subsidiary undertakings, participations
or participating interests held (directly or indirectly) by any of its subsidiary undertakings from time to time and any other
undertakings from time to time consolidated with it for regulatory purposes, in each case in accordance with the rules and guidance
of the PRA then in effect.


 


“Relevant Currency” means
sterling or, if at the relevant time or for the purposes of the relevant calculation or determination the London Stock Exchange
is not the Relevant Stock Exchange, the currency in which the ordinary shares or the Relevant Shares (as applicable) are quoted
or dealt in on the Relevant Stock Exchange at such time.


 


“Relevant Page” means
the relevant page on Bloomberg or such other information service provider that displays the relevant information.


 


“Relevant Shares” means
Ordinary Share Capital of the Approved Entity that constitutes Equity Share Capital or the equivalent (or depositary or other receipts
representing the same) which is listed and admitted to trading on a Regulated Market.


 


“Relevant Stock Exchange”
means the London Stock Exchange or, if at the relevant time the ordinary shares are not at that time listed and admitted to trading
on the London Stock Exchange, the principal stock exchange or securities market on which the ordinary shares are then listed, admitted
to trading or quoted or accepted for dealing.


 


“relevant U.K. resolution authority”
means any authority with the ability to exercise a U.K. bail-in power.


 


“Reset Determination Date”
means the second Business Day immediately preceding each Reset Date.


 


“Reset Date” means the
First Call Date and every fifth anniversary thereafter.


 


“Risk Weighted Assets”
means the aggregate amount, expressed in pounds sterling, of the risk weighted assets of the Regulatory Group, as calculated by
the Company on a consolidated and fully loaded basis in accordance with the Capital Regulations applicable to the Regulatory Group
(which calculation shall be binding on the Trustee and the Holders) and where the term “risk weighted assets” means
the risk weighted assets or total risk exposure amount, as calculated by the Company in accordance with the Capital Regulations
applicable to the Regulatory Group as at that point in time.


 


“Senior Creditors” means
creditors of the Company (i) who are unsubordinated creditors, (ii) whose claims are, or are expressed to be, subordinated (whether
only in the event of a Winding-up or Administration Event or otherwise) to the claims of unsubordinated creditors of the Company
but not further or otherwise, or (iii) who are subordinated creditors of the Company (whether as aforesaid or otherwise), other
than those whose claims rank, or are expressed to rank, pari passu with, or junior to, the


 




    14 


     


    

claims of the Holders and/or pari passu
with or junior to any claims ranking pari passu with the claims of the Holders, in each case, in a Winding-up or Administration
Event occurring prior to a Conversion Trigger Event.


 


“Settlement Date” means:


 


(i)with respect to any Contingent Capital
Note in relation to which a Settlement Notice is received by the Settlement Share Depository on or before the Notice Cut-off Date
where the Company has not elected that the Settlement Share Depository will carry out a Settlement Shares Offer in accordance with
‎Section 2.17, the date that is two (2) Business Days after
the latest of (i) the Conversion Date, (ii) the date on which the Company announces that it will not elect for the Settlement Share
Depository to carry out a Settlement Shares Offer (or, if no such announcement is made, the last date on which the Company is entitled
to give a Settlement Shares Offer Notice), and (iii) the date on which the relevant Settlement Notice has been received by the
Settlement Share Depository;


 


(ii)with respect to any Contingent Capital
Note in relation to which a Settlement Notice is received by the Settlement Share Depository on or before the Notice Cut-off Date
where the Company has elected that the Settlement Share Depository will carry out a Settlement Shares Offer in accordance with
‎Section 2.17, the date that is the later of ‎(a)
two (2) Business Days after the day on which the Settlement Shares Offer Period expires or is terminated and ‎(b)
two (2) Business Days after the date on which such Settlement Notice has been so received by the Settlement Share Depository;
and


 


(iii)with respect to any Contingent
Capital Note in relation to which a Settlement Notice is not so received by the Settlement Share Depository on or before the Notice
Cut-off Date, the date on which the Settlement Share Depository delivers the relevant Settlement Shares, or, if the Holder elects,
ADSs or the Alternative Consideration, as applicable, to the relevant Holders or Beneficial Owners.


 


“Settlement Notice” means
a written notice (substantially in the form attached hereto as Exhibit F) to be delivered by a Holder or Beneficial Owner (or custodian,
broker, nominee or other representative thereof) to the Settlement Share Depository, with a copy to the Trustee, on or before the
Notice Cut-off Date containing the following information: (i) the name of the Holder or Beneficial Owner (or custodian, broker,
nominee or other representative thereof), (ii) the Tradable Amount of the book-entry interests in the Contingent Capital Notes
held by such Holder or Beneficial Owner (or custodian, broker, nominee or other representative thereof) on the date of such notice,
(iii) the name to be entered in the Company’s share register, (iv) whether Settlement Shares are to be delivered to the Holder
or Beneficial Owner or ADSs, if the Holder elects, are to be deposited with the ADS Depository on behalf of the Holder or Beneficial
Owner into the Company’s ADS facility, (v) the details of the CREST or other clearing system account (subject to the limitations
set out in ‎Section 2.18(i)), the details of the registered
account in the Company’s ADS facility or, if the Settlement Shares are not a participating security in CREST or another clearing
system, the address to which the Settlement Shares (or the Settlement Share Component, if any, of any Alternative


 




    15 


     


    

Consideration) and/or cash (if not expected
to be delivered through DTC) should be delivered and (vi) such other details as may be required by the Settlement Share Depository.


 


“Settlement Request Notice”
means the written notice (substantially in the form attached hereto as Exhibit E) to be delivered by the Company to the Trustee
directly and to DTC as the Holder of the Global Securities (or, if the Contingent Capital Notes are in definitive form, by the
Company to the Trustee directly and to the Holders at their registered addresses as shown on the Contingent Convertible Security
Register) on the Suspension Date requesting that Holders and Beneficial Owners complete a Settlement Notice and specifying (i)
the Notice Cut-off Date and (ii) the Final Cancellation Date.


 


“Settlement Share Component”
means that portion, if any, of the Alternative Consideration consisting of Settlement Shares.


 


“Settlement Share Depository”
means a reputable financial institution, depository entity, trust company or similar entity (which in each such case is wholly
independent of the Company) to be appointed by the Company on or prior to any date when a function ascribed to the Settlement Share
Depository in the Indenture is required to be performed, to perform such functions and which will be required to undertake, for
the benefit of the Holders and Beneficial Owners, to hold the Settlement Shares (and the Alternative Consideration, if any) on
behalf of such Holders and Beneficial Owners in one or more segregated accounts, unless otherwise required to be transferred out
of such accounts for the purposes of the Settlement Shares Offer on terms consistent with the Indenture.


 


“Settlement Shares” means
the ordinary shares credited as fully paid to be issued and delivered to the Settlement Share Depository by the Company on the
Conversion Date.


 


“Settlement Shares Offer”
has the meaning attributed to such term in ‎Section 2.17.


 


“Settlement Shares Offer Price”
has the meaning attributed to such term in ‎Section 2.17.


 


“Settlement Shares Offer Notice”
means the written notice (substantially in the form attached hereto as Exhibit D) to be delivered by the Company to the Trustee
directly and to the Holders at their addresses shown on the Contingent Convertible Security Register if the Company has elected
that a Settlement Shares Offer be made specifying (i) the Settlement Shares Offer Period, and (ii) the Suspension Date, if the
Suspension Date has not previously been specified in the Conversion Trigger Notice.


 


“Settlement Shares Offer Period”
means the period during which the Settlement Shares Offer may occur, which period shall end no later than forty (40) Business Days
after the delivery of the Settlement Shares Offer Notice.


 


“Shareholders” means
the holders of ordinary shares.


 




    16 


     


    

“Solvency Condition”
has the meaning set forth in ‎Section 5.01 hereof.


 


“Subsidiary” means a
subsidiary or a subsidiary undertaking as such terms are defined in Sections 1159 and 1162 of the UK Companies Act 2006.


 


“Suspension Date” means
the date specified in the Conversion Trigger Notice or Settlement Shares Offer Notice as the date on which DTC shall suspend all
clearance and settlement of transactions in the Contingent Capital Notes in accordance with its rules and procedures.


 


A “Takeover Event” shall
occur if, at any time after the Issue Date, any person or persons acting in concert (as defined in the Takeover Code of the United
Kingdom Panel on Takeovers and Mergers) acquires control of the Company.


 


“Takeover Event Notice”
has the meaning attributed to such term as set forth in ‎Section
3.02.


 


“Tax Event” has the meaning
specified in ‎Section 2.09.


 


“Tier 1 Capital” has
the meaning given to it by the PRA from time to time.


 


“Tier 2 Capital” has
the meaning given to it by the PRA from time to time.


 


“Tradable Amount” has
the meaning specified in ‎Section 2.01(m) hereof.


 


“U.K. bail-in power”
means any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating
to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom
in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such
laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive
or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit
institutions and investment firms and/or within the context of a U.K. resolution under the Banking Act, pursuant to which obligations
of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended,
transferred and/or converted into shares or other securities or obligations of the obligor or any other person.


 


“Volume Weighted Average Price”
means, in respect of an ordinary share or Other Security on any Dealing Day, the order book volume-weighted average price of an
ordinary share or Other Security published by or derived (in the case of an ordinary share) from the relevant Bloomberg page or
(in the case of Other Securities (other than ordinary shares), options, warrants or other rights) from the principal stock exchange
or securities market on which such Other Securities, options, warrants or other rights are then listed or quoted or dealt in, if
any, or, in any such case, such other source as shall be determined in good faith to be appropriate by an Independent Financial
Adviser on such Dealing Day, provided that if on any such Dealing Day such price is not available or


 




    17 


     


    

cannot otherwise be determined as provided
above, the Volume Weighted Average Price of an ordinary share, Other Security, option, warrant or other right, as the case may
be, in respect of such Dealing Day shall be the Volume Weighted Average Price, determined as provided above, on the immediately
preceding Dealing Day on which the same can be so determined or determined as an Independent Adviser might otherwise determine
in good faith to be appropriate.


 


“Winding-up or Administration Event”
means:


 


(i) an order is made, or an effective resolution
is passed, for the winding up of the Company (excluding in any such case a solvent winding-up solely for the purpose of a reconstruction,
amalgamation, reorganization, merger or consolidation of the Company, or the substitution in place of the Company of a successor
in business of the Company, the terms of which have previously been approved by the Trustee or in writing by Holders of not less
than 2/3 (two-thirds) in aggregate principal amount of the Contingent Capital Notes); or


 


(ii) an administrator of the Company is
appointed and such administrator gives notice that it intends to declare and distribute a dividend.


 


Section 1.02. 
Separability Clause. In case any provision in this First Supplemental Indenture or
the Contingent Capital Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


Section 1.03. 
Benefits of Instrument. Nothing in this First Supplemental Indenture, express or implied,
shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal
or equitable right, remedy or claim under the Indenture.


 


Section 1.04. 
Relation to Contingent Convertible Securities Indenture. This First Supplemental Indenture
constitutes an integral part of the Contingent Convertible Securities Indenture. Notwithstanding any other provision of this First
Supplemental Indenture, all provisions of this First Supplemental Indenture are expressly and solely for the benefit of the Holders
and Beneficial Owners and any such provisions shall not be deemed to apply to any other Securities issued under the Contingent
Convertible Securities Indenture and shall not be deemed to amend, modify or supplement the Contingent Convertible Securities Indenture
for any purpose other than with respect to the Contingent Capital Notes; provided that pursuant to and in accordance with Section
3.08 of the Contingent Convertible Securities Indenture, the duties of the Trustee under the Indenture shall extend only to Persons
deemed to be Holders.


 


Article
2

The Contingent Capital Notes


 


Section 2.01. 
Form, Title, Terms and Payments. The form of any Security that is designated as a Contingent
Capital Note shall be evidenced by one or more global notes


 




    18 


     


    

in registered form (each, a “Global
Note”) deposited with, or on behalf of, DTC on the Issue Date. The Global Notes shall be registered in the name of Cede
& Co. and executed and delivered in substantially the form attached hereto as Exhibit A. The terms of the Global Notes are
hereby incorporated herein by reference and made a part hereof as if set forth herein in full.


 



(a)
There is hereby established a new series of Securities designated as the 2020 Perpetual Subordinated
Contingent Convertible Additional Tier 1 Capital Notes (the “Contingent Capital Notes”).


 



(b)
The Contingent Capital Notes shall be issued in denominations of $200,000 principal amount
and integral multiples of $1,000 in excess thereof.


 



(c)
The Contingent Capital Notes shall be initially limited in aggregate principal amount to $2,000,000,000.
The Company may from time to time, without the consent of the Holders, issue additional Contingent Capital Notes having the same
ranking and same interest rate, interest cancellation terms, redemption terms, Conversion Price and other terms as the Contingent
Capital Notes described in this First Supplemental Indenture, except for the price to public and Issue Date. Any such additional
Contingent Capital Notes subsequently issued shall rank equally and ratably with the Contingent Capital Notes in all respects,
so that such further Contingent Capital Notes shall be consolidated and form a single series with the Contingent Capital Notes.



 



(d)
The Contingent Capital Notes shall be perpetual Securities and shall have no Stated Maturity
in respect of principal.


 



(e)
The Securities shall not have a sinking fund.


 



(f)
Any proposed transfer of an interest in the Contingent Capital Notes held in the form of a
Global Note shall be effected through the book-entry system maintained by DTC.


 



(g)
The interest rate on the Contingent Capital Notes is set forth in ‎Section 2.02
hereof. 


 



(h)
All references to Foreign Government Securities and U.S. Government Obligations in the Contingent
Convertible Securities Indenture shall be deleted in their entirety and be inapplicable to the Contingent Capital Notes, including
but not limited to the definition of “Outstanding” in the Contingent Convertible Securities Indenture and any references
to such terms in Sections 4.01, 4.02 and 4.03 of the Contingent Convertible Securities Indenture.


 



(i)
Payments in respect of the Contingent Capital Notes, including payments of principal and interest,
shall be subject to the conditions set forth under Sections ‎2.02, ‎2.03, ‎2.04, 2.12 and 2.14
hereof.


 




    19 


     


    


(j)
The Contingent Capital Notes shall be subject to Automatic Conversion following the occurrence
of a Conversion Trigger Event as provided in ‎Section 2.15 hereof and shall be subject to the Enforcement Events as
provided in ‎Article 4 hereof.


 



(k)
The Company may, subject to ‎Section 2.12 hereof, redeem or repurchase the Contingent
Capital Notes in accordance with Sections ‎2.08, ‎2.09, ‎2.10 and ‎2.11 hereof.


 


(l)
The Company shall undertake reasonable efforts to list the Contingent Capital Notes on the
Global Exchange Market of the Irish Stock Exchange on the Issue Date or as soon as practicable thereafter. The Company shall endeavor
to maintain such listing as long as the Contingent Capital Notes remain outstanding.


 


(m)
The denomination of each interest in a Global Note shall be the “Tradable Amount”
of such book-entry interest. Prior to the Automatic Conversion, the aggregate Tradable Amount of the interests in each Global
Note shall equal such Global Note’s outstanding principal amount. Following the Automatic Conversion, the principal amount
of each Contingent Capital Note shall equal zero, but the Tradable Amount of the book-entry interests in each Contingent Capital
Note shall remain unchanged as a result of the Automatic Conversion.


 


Section 2.02. 
Interest. 


 



(a)
From and including the Issue Date to but excluding the First Call Date, interest will accrue
on the Contingent Capital Notes at an initial rate equal to 7.500% per annum. From and including each Reset Date to but excluding
the next succeeding Reset Date (each such period, a “Reset Period”), interest will accrue on the Contingent
Capital Notes at a rate per annum equal to the sum of the then prevailing Mid-Market Swap Rate on the relevant Reset Determination
Date and 5.80% converted to a quarterly rate in accordance with market convention (rounded to two decimal places, with 0.005 rounded
down). Subject to Sections ‎ ‎2.03
and ‎2.04‎
and the last two sentences of this paragraph below, interest, if any, on the Contingent Capital Notes shall be payable in four
equal quarterly installments in arrear on each Interest Payment Date in the relevant Reset Period, provided that if such Interest
Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, and no further interest
or other payment shall be owed or made in respect of such delay. If any scheduled redemption date is not a Business Day, payment
of interest, if any, and principal shall be postponed to the next Business Day, but interest on that payment will not accrue during
the period from and after any scheduled redemption date. If any Reset Date is not a Business Day, the Reset Date shall occur on
the next succeeding Business Day. Subject to Sections ‎2.03
and ‎2.04‎
below, if any interest payment on the Contingent Capital Notes is to be made on a date other than on an Interest Payment Date,
including on any scheduled redemption date, it shall be computed by the Calculation Agent by applying the interest rate applicable
during the applicable Reset Period and multiplying the product by “30/360” and rounding the resulting figure to the
nearest cent (half a cent being rounded upwards). For this purpose “30/360” means in respect of any period, the number
of days in the relevant period, from and including the first day in such period to but


 




    20 


     


    

excluding the last day in such period, such
number of days being calculated on the basis of a 360 day year consisting of twelve (12) months of thirty (30) days, divided by
360.


 



(b)
In addition to any other restrictions on payments of principal and interest contained in this
First Supplemental Indenture, no payment of the principal amount of the Contingent Capital Notes following any proposed redemption
or payment of interest on the Contingent Capital Notes shall become due and payable after the exercise of any U.K. bail-in power
by the relevant U.K. resolution authority unless, at the time that such repayment or payment, respectively, is scheduled to become
due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom
and the European Union applicable to the Company and the Group.


 


Section 2.03. 
Interest Payments Discretionary. 


 



(a)
Interest on the Contingent Capital Notes shall be due and payable only at the full discretion
of the Company, and the Company shall have sole and absolute discretion at all times and for any reason to cancel (in whole or
in part) any interest payment that would otherwise be payable on any Interest Payment Date. If the Company does not make an interest
payment in respect of the Contingent Capital Notes on the relevant Interest Payment Date (or if the Company elects to make a payment
of a portion, but not all, of such interest payment), such non-payment shall evidence the Company’s exercise of its discretion
to cancel such interest payment (or the portion of such interest payment not paid), and accordingly such interest payment (or the
portion thereof not paid) shall not be or become due and payable. For the avoidance of doubt, if the Company provides notice to
cancel a portion, but not all, of an interest payment in respect of the Contingent Capital Notes, and the Company subsequently
does not make a payment of the remaining portion of such interest payment on the relevant Interest Payment Date, such non-payment
shall evidence the Company’s exercise of its discretion to cancel such remaining portion of such interest payment, and accordingly
such remaining portion of the interest payment shall also not be due and payable.


 



(b)
Interest on the Contingent Capital Notes shall only be due and payable on an Interest Payment
Date to the extent it is not cancelled or deemed cancelled (in each case, in whole or in part) in accordance with the provisions
set forth in ‎Section 2.02(b), Section 2.03(a), ‎Section 2.04, ‎Section 2.15(h) and ‎Section
5.01 hereof, respectively, and any interest cancelled or deemed cancelled (in each case, in whole or in part) pursuant to such
sections shall not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners shall
have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation
of interest in respect of the Contingent Capital Notes.


 


Section 2.04. 
Restrictions on Interest Payments. 


 



(a)
Without limitation on the provisions of ‎Section 2.03 and subject to the extent
permitted in paragraph ‎(b) below hereof in respect of partial interest payments 


 




    21 


     


    

in respect of the Contingent Capital Notes,
the Company shall not make an interest payment in respect of the Contingent Capital Notes on any Interest Payment Date (and such
interest payment shall therefore be deemed to have been cancelled and thus shall not be due and payable on such Interest Payment
Date) if:


 


   
(i) 
the Company has an amount of Distributable Items on any such scheduled Interest Payment Date
that is less than the sum of (i) all payments (other than redemption payments which do not reduce Distributable Items) made
or declared by the Company since the end of its latest financial year and prior to such Interest Payment Date on or in respect
of any Parity Securities, the Contingent Capital Notes and any Junior Securities and (ii) all payments (other than redemption payments
which do not reduce Distributable Items) payable by the Company on such Interest Payment Date (x) on the Contingent Capital Notes
and (y) on or in respect of any Parity Securities or any Junior Securities, in the case of each of (i) and (ii), excluding any
payments already accounted for in determining the Distributable Items, or


 


   
(ii) 
the Solvency Condition is not (or would not be) satisfied in respect of such interest payment.


 



(b)
The Company may, in its sole discretion, elect to make a partial interest payment in respect
of the Contingent Capital Notes on any Interest Payment Date, only to the extent that such partial interest payment may be made
without breaching the restriction in paragraph ‎(a) above.


 



(c)
For purposes of this First Supplemental Indenture, any interest cancelled pursuant to ‎Section
2.04(a) shall be “deemed cancelled” under the terms of the Contingent Capital Notes and the Indenture and shall not
be due and payable.


 


Section 2.05. 
Agreement to Interest Cancellation. By its acquisition of the Contingent Capital Notes,
each Holder and each Beneficial Owner shall be deemed to have acknowledged and agreed that:


 



(a)
interest is payable solely at the discretion of the Company, and no amount of interest shall
become due and payable in respect of the relevant interest period to the extent that it has been (x) cancelled (in whole or in
part) by the Company at the Company’s sole discretion and/or (y) deemed cancelled (in whole or in part) including as a result
of the Company having insufficient Distributable Items or failing to satisfy the Solvency Condition; and


 



(b)
a cancellation or deemed cancellation of interest (in each case, in whole or in part) in accordance
with the terms of the Indenture and the Contingent Capital Notes shall not constitute a default in payment or otherwise under the
terms of the Contingent Capital Notes or the Indenture.


 








Section 2.06. 
Notice of Interest Cancellation. Notwithstanding anything to the contrary in the Indenture (including Section
1.06 of the Contingent Convertible Securities Indenture), if practicable, the Company shall provide notice of any cancellation
or deemed cancellation of interest (in each case, in whole or in part) to the Holders of the






    22 


     


    

 


 


Contingent
Capital Notes through DTC (or, if the Contingent Capital Notes are held in definitive form, to the Holders directly at their addresses
shown in the Contingent Convertible Security Register) and to the Trustee directly on or prior to the relevant Interest Payment
Date. Failure to provide such notice shall have no impact on the effectiveness of, or otherwise invalidate, any such cancellation
or deemed cancellation of interest (and accordingly, such interest will not be due and payable), or give the Holders and Beneficial
Owners any rights as a result of such failure.


 


Section 2.07. 
Payment of Principal, Interest and Other Amounts.


 



(a)
Payments of principal of and interest, if any, on the Contingent Capital Notes shall be made in such coin or currency of
the United States of America as at the time of payment is legal tender for payment of public and private debts and such payments
on Contingent Capital Notes represented by a Global Note shall be made through one or more Paying Agents appointed under the Contingent
Convertible Securities Indenture to DTC or its nominee, as the Holder of the Global Note. Initially, the Paying Agent and the Security
Registrar for the Contingent Capital Notes shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL,
United Kingdom. The Company may change the Paying Agent without prior notice to the Holders of the Contingent Capital Notes, and
in such an event the Company may act as Paying Agent or Contingent Capital Securities Registrar.


 



(b)
Payments of principal, interest and other amounts in respect of the Contingent Capital Notes represented by a Global Note
shall be made by wire transfer of immediately available funds on the date such payment is scheduled to be paid.
The Company shall, on each date on which any payment in respect of the Contingent Capital Notes becomes due, transfer
to the Paying Agent such amount as may be required for the purposes of such payment.


 


Section 2.08. 
Optional Redemption. Subject to the satisfaction of the pre-conditions described in Sections 2.12 and 2.13 hereof,
the Company may, at the Company’s option and in its sole discretion, redeem the Contingent Capital Notes, in whole but not
in part, on the First Call Date or on any Reset Date thereafter at a redemption price equal to 100% of the principal amount of
the Contingent Capital Notes together with any Accrued Interest to (but excluding) the date of redemption.


 


Section 2.09. 
Optional Tax Redemption.Subject to the satisfaction of the pre-conditions described in ‎Section
2.12 and Section 2.13 hereof, if a Tax Event shall occur and be continuing the Company may at any time and at the Company’s
option and in its sole discretion redeem the Contingent Capital Notes, in whole but not in part, at a redemption price equal to
100% of the principal amount of the Contingent Capital Notes together with any Accrued Interest to (but excluding) the date of
redemption. A “Tax Event” will be deemed to have occurred with respect to the Contingent Capital Notes if, at
any time, the Company shall determine that, as a result of any change in, or amendment to, the laws or regulations of the U.K.
or any political subdivision or any authority thereof or therein having power to tax (including any treaty to which the U.K. or
any political subdivision or any authority thereof or therein is a party), or any change






    23 


     


    

 


 


in
the official application of such laws or regulations (including a decision of any court or tribunal or the application by any
tax authority), which change or amendment becomes effective or applicable, or, in the case of a change in or amendment to law,
where such change or amendment is enacted by a UK Act of Parliament or by a Statutory Instrument, if such UK Act of Parliament
or Statutory Instrument is enacted, on or after the Issue Date:


 



(a)
in making a payment under the Contingent Capital Notes in respect of interest, the Company has or will or would on the next
Interest Payment Date become obligated to pay Additional Amounts;


 



(b)
a payment of interest on the next Interest Payment Date in respect of any of the Contingent Capital Notes would be treated
as a “distribution” within the meaning of Section 1000 of the U.K. Corporation Tax Act 2010 (or any statutory modification
or re-enactment thereof for the time being);


 



(c)
the Company would not be entitled to claim a deduction in respect of a payment of interest payable on the next Interest
Payment Date in computing its U.K. taxation liabilities (or the value of such deduction to the Company would be materially reduced);


 



(d)
as a result of the Contingent Capital Notes being in issue, the Company would not be able to have losses or deductions (including
in respect of a payment of interest on the Contingent Capital Notes) set against the profits or gains, or profits or gains offset
by losses or deductions, of companies with which it is or would otherwise be grouped for applicable U.K. tax purposes (whether
under the group relief system current as at the date of issue of the Contingent Capital Notes or any similar system or systems
having like effect as may exist from time to time);


 



(e)
a future write-down of the principal amount of the Contingent Capital Notes or conversion of the Contingent Capital Notes
into ordinary shares would result in a U.K. tax liability, or income, profit or gain being treated for U.K. tax purposes as accruing,
arising or being received;


 



(f)
the Contingent Capital Notes would no longer be treated as loan relationships for U.K. tax purposes; or


 



(g)
the Contingent Capital Notes or any part thereof would be treated as a derivative or an embedded derivative for U.K. tax
purposes,


 


in each case, the effect of which cannot be
avoided by the Company taking reasonable steps available to it.


 


In any case where the Company shall determine
that as a result of a Tax Event, it is entitled to redeem the Contingent Capital Notes, it shall be required to deliver to the
Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized
standing (selected by the Company), in a form satisfactory to the Trustee confirming that the Tax Event has occurred.


 



    24 


     


    




Section 2.10. 
Capital Disqualification Event Redemption.Subject to the satisfaction of the pre-conditions described in ‎Section
2.12 and ‎Section 2.13 hereof, the Company may, at the Company’s option and
in its sole discretion, at any time redeem the Contingent Capital Notes, in whole but not in part, at a redemption price equal
to 100% of the principal amount of the Contingent Capital Notes together with any Accrued Interest to (but excluding) the date
fixed for redemption, if, at any time on or after the Issue Date, a Capital Disqualification Event has occurred and is continuing.


 


Section 2.11. 
Optional Repurchase. The Company may at any time and from time to time and to the extent not prohibited by CRD IV
repurchase beneficially or procure others to repurchase beneficially for its account the Contingent Capital Notes in the open market,
by tender or by private agreement, in any manner and at any price or at differing prices. Contingent Capital Notes purchased or
otherwise acquired by the Company may be (i) held, (ii) resold or (iii) at the Company’s sole discretion, surrendered to
the Trustee for cancellation (in which case all Contingent Capital Notes so surrendered will forthwith be cancelled in accordance
with applicable law and thereafter may not be reissued or resold). Any such purchases will be subject to the satisfaction of the
pre-conditions described in ‎Section 2.12 hereof.


 


Section 2.12. 
Pre-conditions to Redemptions and Repurchases. Contingent Capital Notes may be redeemed or repurchased by the Company
as provided under Sections ‎2.08, ‎2.09,
‎2.10, ‎2.11 and 2.13 of this First
Supplemental Indenture, provided that (except to the extent the PRA no longer so requires) the Company has met the following conditions:


 



(a)
the Company has notified the PRA of its intention to do so at least one month (or such other, longer or shorter period,
as the PRA may then require or accept) before the Company becomes committed to the proposed redemption or repurchase;


 



(b)
the PRA has granted permission for the Company to make any such redemption or repurchase of the Contingent Capital Notes
upon a satisfactory finding that either:


 



(i) 
on or before such redemption or repurchase of any of the Contingent Capital Notes, the Company replaces such Contingent
Capital Notes with own funds instruments (as defined by the Capital Regulations) of an equal or higher quality on terms that are
sustainable for its income capacity; or


 


(ii) 
the Company has demonstrated to the satisfaction of the PRA that its Tier 1 capital and Tier 2 capital (as defined by the
Capital Regulations) would, following such redemption or repurchase, exceed the capital ratios required under the CRD IV Regulation
and the combined buffer requirement defined in the CRD IV Directive by a margin that the PRA may consider necessary on the basis
set out in the CRD IV Directive for it to determine the appropriate level of capital of an institution;


 



(c)
no Conversion Trigger Notice has been delivered;


 



    25 


     


    





(d)
the Company has complied with any additional or alternative pre-conditions as set out in the relevant Capital Regulations
and/or required by the PRA as a prerequisite to its consent to such redemptions or repurchases, at the time; and


 



(e)
with respect to Sections 2.09 and 2.10 only, and except to the extent that the PRA no longer so requires, the Company may
only redeem the Contingent Capital Notes before five years after the Issue Date if, in addition to the conditions set out in (a),
(b), (c) and (d) above, the following conditions are met:


 


(i) 
in the case of a redemption due to a Tax Event pursuant to Section 2.09, the Company demonstrates to the satisfaction of
the PRA that the Tax Event relating to the Contingent Capital Notes is material and was not reasonably foreseeable at the time
of issuance of the Contingent Capital Notes; or


 


(ii) 
in the case of a redemption due to the occurrence of a Capital Disqualification Event pursuant to Section 2.10, (x) the
PRA considers such change to be sufficiently certain and (y) the Company demonstrates to the satisfaction of the PRA that the
Capital Disqualification Event was not reasonably foreseeable at the time of the issuance of the Contingent Capital Notes.


 


Section 2.13. 
Notice of Redemption.


 



(a)
Before the Company may redeem the Contingent Capital Notes pursuant to Sections ‎2.08, ‎2.09 or ‎2.10,
the Company shall deliver to DTC as the Holder of the Global Securities (or, if the Contingent Capital Notes are in definitive
form, to the Holders directly at their addresses shown on the Contingent Convertible Security Register) prior notice of not less
than thirty (30) days, nor more than sixty (60) days. The Company shall deliver written notice of such redemption of the Contingent
Capital Notes to the Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption is sent
to Holders (unless a shorter notice period shall be satisfactory to the Trustee). Such notice shall specify the Company’s
election to redeem the Contingent Capital Notes and the date fixed for such redemption and shall be irrevocable except in the limited
circumstances described in paragraphs ‎(b), ‎(c), ‎(d), (e), ‎(f) or ‎(g)
below.


 



(b)
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.13,
but the Solvency Condition is not satisfied immediately prior to, and immediately following, the date specified for redemption
in such notice, such redemption notice shall be automatically rescinded and shall be of no force and effect, and no payment in
respect of the redemption amount shall be due and payable.


 



(c)
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.13,
but prior to the payment of the redemption amount with respect to such redemption a Conversion Trigger Notice has been delivered
pursuant to ‎Section 2.15(b), such notice of redemption shall be automatically rescinded and shall be of no force and
effect, and no payment in respect of the redemption amount shall be due and payable.


 



    26 


     


    





(d)
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.13,
but prior to the payment of the redemption amount with respect to such redemption the relevant U.K. resolution authority exercises
its U.K. bail-in power with respect to the Company, the relevant redemption notice shall be automatically rescinded and shall be
of no force and effect, and no payment of the redemption amount shall be due and payable.


 



(e)
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.13,
but prior to the date of any such redemption the Company has not given notice to the PRA and/or the PRA has refused to grant permission
to the Company, as applicable, to redeem the relevant Contingent Capital Notes (in each case to the extent, and in the manner,
required by the relevant Capital Regulations), such notice of redemption shall be automatically rescinded and shall be of no force
and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.


 



(f)
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.13,
but in respect of any redemption proposed to be made prior to the fifth anniversary of the
Issue Date, if and to the extent then required under the Capital Regulations (A) in the case of redemption following the occurrence
of a Tax Event, the Company has not demonstrated to the satisfaction of the PRA that the Tax Event is material and was not reasonably
foreseeable as at the Issue Date, or (B) in the case of redemption following the occurrence of a Capital Disqualification Event,
the PRA does not consider such change to be sufficiently certain and/or the Company has not demonstrated to the satisfaction of
the PRA that the relevant change was not reasonably foreseeable as at the Issue Date; such notice of redemption shall be
automatically rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable,
shall be due and payable.


 



(g)
If the Company has delivered a notice of redemption pursuant to clause ‎(a) of this ‎Section 2.13,
but prior to the payment of the redemption amount with respect to such redemption the Company is not in compliance with any alternative
or additional pre-conditions required by the PRA as a pre-requisite to its consent to such redemption, such notice of redemption
shall be automatically rescinded and shall be of no force and effect, and no payment in respect of the redemption amount shall
be due and payable.


 


If any of the events specified
in paragraphs ‎(b), ‎(c),
‎(d), ‎(e),
‎(f) or ‎(g)
above occurs, the Company shall promptly deliver notice to DTC, as the Holder of the Global Securities (or, if the Contingent Capital
Notes are definitive Securities, to the Holders directly at their addresses shown on the Contingent Convertible Security Register)
and to the Trustee directly, specifying the occurrence of the relevant event.


 


Any notice of redemption shall
state:


 



(i) 
the redemption date;


 



    27 


     


    





(ii) 
that on the redemption date the redemption price will, subject to the satisfaction of the conditions set forth in the Indenture,
become due and payable upon each Contingent Capital Note being redeemed and that, subject to certain exceptions, interest will
cease to accrue on or after that date;


 



(iii) 
the place or places where the Contingent Capital Notes are to be surrendered for payment of the redemption price; and


 



(iv) 
the CUSIP, Common Code and/or ISIN number or numbers, if any, with respect to the Contingent Capital Notes being redeemed.


 


Section 2.14. 
Cancelled Interest Not Payable upon Redemption. Any interest payments that have been cancelled or deemed cancelled
pursuant to Sections ‎2.03 or ‎2.04
hereof shall not be payable if the Contingent Capital Notes are redeemed pursuant to Sections ‎2.08,
‎2.09 or ‎2.10 hereof.


 


Section 2.15. 
Automatic Conversion upon Conversion Trigger Event.


 



(a)
If a Conversion Trigger Event has occurred, then the Automatic Conversion shall occur on the Conversion Date and all of
the Company’s obligations under the Contingent Capital Notes shall be irrevocably and automatically released in consideration
of the Company’s issuance and delivery of the Settlement Shares to the Settlement Share Depository, and the principal amount
of the Contingent Capital Notes shall equal zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall
remain unchanged as a result of the Automatic Conversion). Under no circumstances shall such released obligations be reinstated.
If the Company has been unable to appoint a Settlement Share Depository, it shall effect, by means it deems reasonable in the circumstances
(including, without limitation, issuance of the Settlement Shares to another independent nominee or to the Holders of the Contingent
Capital Notes directly), the issuance and delivery of the Settlement Shares or any Alternative Consideration, as applicable, to
the Holders of the Contingent Capital Notes, and such issuance and delivery of the Settlement Shares or any Alternative Consideration,
as applicable, shall irrevocably and automatically release all of the Company’s obligations under the Contingent Capital
Notes as if the Settlement Shares had been issued and delivered to the Settlement Share Depository and, in which case, where the
context so admits, references in this First Supplemental Indenture and the Contingent Capital Notes to the issue and delivery of
Settlement Shares to the Settlement Share Depository shall be construed accordingly and apply mutatis mutandis. Where practicable,
the Company shall make such other arrangements to allow Holders, if they so elect, to take delivery of their Settlement Shares
in the form of ADSs.


 



(b)
Upon its determination that a Conversion Trigger Event has occurred, the Company shall ‎(a) immediately inform
the PRA of the occurrence of a Conversion Trigger Event, ‎(b) prior to the delivery of the Conversion Trigger Notice,
deliver to the Trustee an Officer’s Certificate substantially in the form attached hereto as Exhibit C, specifying that a
Conversion Trigger Event has occurred. The Trustee is entitled to conclusively rely on and accept such Officer’s Certificate
without any duty whatsoever of






    28 


     


    

 


further inquiry as sufficient and conclusive evidence of the occurrence of a Conversion Trigger Event, in which event such Officer’s
Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners, and (c) deliver a Conversion
Trigger Notice to the Trustee directly and to DTC as the Holder of the Global Securities without delay after the occurrence of
such Conversion Trigger Event (and in any event within such period as the PRA may require).


 



(c)
The date on which the Conversion Trigger Notice shall be deemed to have been given shall be the date on which it is dispatched
by the Company to DTC (or, if the Contingent Capital Notes are in definitive form, to the Holders and Beneficial Owners directly).


 



(d)
The Company shall request that DTC post the Conversion Trigger Notice on its Reorganization Inquiry for Participants System
pursuant to DTC’s procedures then in effect (or such other system as DTC uses for providing notices to holders of securities).
Within two (2) Business Days of its receipt of the Conversion Trigger Notice, the Trustee shall transmit the Conversion Trigger
Notice to the direct participants in DTC holding the Contingent Capital Notes at such time.


 



(e)
The Settlement Shares to be issued and delivered shall be so issued and delivered on terms permitting a Settlement Shares
Offer and shall, except where the Company has been unable to appoint a Settlement Share Depository and/or as otherwise provided
herein and by the Contingent Capital Notes, initially be registered in the name of the Settlement Share Depository, which, subject
to a Settlement Shares Offer, shall hold such Settlement Shares on behalf of the Holders and Beneficial Owners. By virtue of its
holding of any Contingent Capital Notes, each Holder and Beneficial Owner shall be deemed to have irrevocably directed the Company
to issue and deliver the Settlement Shares corresponding to the conversion of its holding of Contingent Capital Notes to the Settlement
Share Depository (or to such other relevant recipient).


 



(f)
The Settlement Share Depository (or the relevant recipient in accordance with this First Supplemental Indenture and the
terms of the Contingent Capital Notes, as applicable) shall hold the Settlement Shares (and the Alternative Consideration, if any)
on behalf of the Holders and Beneficial Owners. For so long as the Settlement Shares are held by the Settlement Share Depository,
each Holder and Beneficial Owner shall be entitled to direct the Settlement Share Depository or such other relevant recipient,
as applicable, to exercise on its behalf all rights of an ordinary Shareholder (including voting rights and rights to receive dividends);
provided, however, that Holders and Beneficial Owners shall not have any rights to sell or otherwise transfer such Settlement Shares
unless and until such time as the Settlement Shares have been delivered to the Holders or Beneficial Owners in accordance with
the procedures set forth under ‎Section 2.18 hereof.


 



(g)
Provided that the Company issues and delivers the Settlement Shares to the Settlement Share Depository (or the relevant
recipient in accordance with the terms of the Contingent Capital Notes) in accordance with the terms of the Contingent Capital
Notes, with effect from and on the Conversion Date, Holders and Beneficial Owners shall have






    29 


     


    

recourse
only to the Settlement Share Depository (or to such other relevant recipient, as applicable) for the delivery to them of Settlement
Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as the case may be, to which such Holders and Beneficial
Owners are entitled. Subject to the occurrence of a Winding-up or Administration Event on or following a Conversion Trigger Event,
if the Company fails to issue and deliver the Settlement Shares upon Automatic Conversion to the Settlement Share Depository on
the Conversion Date, the only right of Holders and Beneficial Owners shall be to claim to have such Settlement Shares so issued
and delivered.


 



(h)
Effective upon, and following, the occurrence of the Automatic Conversion, provided that the Company issues and delivers
the Settlement Shares to the Settlement Share Depository (or the relevant recipient in accordance with the terms of the Contingent
Capital Notes) in accordance with the terms of the Contingent Capital Notes, Holders and Beneficial Owners shall not have any rights
against the Company with respect to repayment of the principal amount of the Contingent Capital Notes or payment of interest or
any other amount on or in respect of such Contingent Capital Notes, which liabilities of the Company shall be automatically released,
and accordingly the principal amount of the Contingent Capital Notes shall equal zero at all times thereafter. Any interest in
respect of an interest period ending on any Interest Payment Date falling between the date of a Conversion Trigger Event and the
Conversion Date shall be deemed to have been cancelled pursuant to ‎Section 2.03 above upon the occurrence of such Conversion
Trigger Event and shall not be due and payable.


 



(i)
Notwithstanding any other provision herein, by its acquisition of the Contingent Capital Notes, each Holder and each Beneficial
Owner shall be deemed to have (i) agreed to all of the terms and conditions of the Contingent Capital Notes, including, without
limitation, to those related to (x) Automatic Conversion of its Contingent Capital Notes following a Conversion Trigger Event and
(y) the appointment of the Settlement Share Depository, the issuance of the Settlement Shares to the Settlement Share Depository
(or to the relevant recipient in accordance with the terms of this First Supplemental Indenture or the Contingent Capital Notes)
and the potential sale of the Settlement Shares pursuant to a Settlement Shares Offer and acknowledged that such events in (x)
and (y) may occur without any further action on the part of such Holders or Beneficial Owners or the Trustee, (ii) agreed that
effective upon, and following, the occurrence of the Automatic Conversion, no amount shall be due and payable to the Holders or
the Beneficial Owners under the Contingent Capital Notes and the liability of the Company to pay any such amounts (including the
principal amount of, or any interest in respect of, the Contingent Capital Notes) shall be automatically released, and the Holders
and the Beneficial Owners shall not have the right to give any direction to the Trustee with respect to the Conversion Trigger
Event and any related Automatic Conversion, (iii) waived, to the extent permitted by the Trust Indenture Act, any claim against
the Trustee arising out of its acceptance of its trusteeship under, and the performance of its duties, powers and rights in respect
of, the Indenture and in connection with the Contingent Capital Notes, including, without limitation, claims related to or arising
out of or in connection with a Conversion Trigger Event and/or any Automatic Conversion, and (iv) authorized, directed and requested
DTC and any direct participant in DTC or other intermediary through which it holds such Contingent Capital Notes to take


 






    30 


     


    

 


 


any
and all necessary action, if required, to implement the Automatic Conversion without any further action or direction on the part
of such Holder or Beneficial Owner or the Trustee.


 



(j)
The procedures set forth in this ‎Section 2.15 are subject to change to reflect changes in DTC practices, and
the Company may make changes to the procedures set forth in this ‎Section 2.15 to the extent reasonably necessary, in
the opinion of the Company, to reflect such changes in DTC practices. Any such changes shall be subject to the provisions of ‎Section
7.01.


 



(k)
Notwithstanding anything to the contrary contained in the Indenture or the Contingent Capital Notes, once the Company has
delivered a Conversion Trigger Notice following the occurrence of a Conversion Trigger Event, (i) subject to the right of Holders
and Beneficial Owners pursuant to ‎Section 4.03 in the event of a failure by the Company to issue and deliver any Settlement
Shares to the Settlement Share Depository on the Conversion Date, the Indenture shall impose no duties upon the Trustee whatsoever
with regard to an Automatic Conversion upon a Conversion Trigger Event and the Holders and Beneficial Owners shall have no rights
whatsoever under the Indenture or the Contingent Capital Notes to instruct the Trustee to take any action whatsoever, and (ii)
as of the date of the Conversion Trigger Notice, except for any indemnity and/or security provided by any Holder or by any Beneficial
Owner in such direction or related to such direction, any direction previously given to the Trustee by any Holders or by any Beneficial
Owners shall cease automatically and shall be null and void and of no further effect; except in each case of ‎(i) and
‎(ii) of this ‎Section 2.15(k), with respect to any rights of Holders or Beneficial Owners with respect to
any payments under the Contingent Capital Notes that were unconditionally due and payable prior to the date of the Conversion Trigger
Notice or unless the Trustee is instructed in writing by the Company to act otherwise.


 


(l)
All authority conferred or agreed to be conferred by each Holder and Beneficial Owner pursuant to this ‎Section
2.15, including the consents given by such Holder and Beneficial Owner, shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives of such Holder and Beneficial Owner.


 



(m)
The Trustee shall not be liable with respect to (i) the calculation or accuracy of the CET1 Ratio in connection with the
occurrence of a Conversion Trigger Event and the timing of such Conversion Trigger Event, (ii) the failure of the Company to post
or deliver the underlying CET1 Ratio calculations of a Conversion Trigger Event to DTC, the Holders or the Beneficial Owners, (iii)
any aspect of the Company’s decision to deliver a Conversion Trigger Notice or the related Automatic Conversion, (iv) the
adequacy of the disclosure of these provisions in the Prospectus or any other offering material in respect of the Contingent Capital
Notes or for the direct or indirect consequences thereof or (v) any other requirement of the Company contained herein related to
a Conversion Trigger Event or the Automatic Conversion.


 



    31 


     


    





(n)
Following the issuance and delivery of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient
in accordance with the terms of the Contingent Capital Notes) on the Conversion Date, the Contingent Capital Notes shall remain
in existence until the applicable Cancellation Date for the sole purpose of evidencing the Holders’ and Beneficial Owners’
right to receive Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as the case may be, from the
Settlement Share Depository (or such other relevant recipient, as applicable).


 



(o)
The Holders and Beneficial Owners shall not at any time have the option to convert the Contingent Capital Notes into Settlement
Shares.


 



(p)
The occurrence of the Automatic Conversion shall not constitute an Enforcement Event.


 


Section 2.16. 
Settlement Shares.


 



(a)
The number of Settlement Shares to be issued to the Settlement Share Depository on the Conversion Date shall equal the quotient
obtained by dividing the (i) aggregate principal amount of the Contingent Capital Notes Outstanding immediately prior to the Automatic
Conversion on the Conversion Date, (the “Outstanding Amount”) by (ii) the Conversion Price prevailing on the
Conversion Date. The number of Settlement Shares to be delivered to each Holder shall be rounded down, if necessary, to the nearest
whole number of Settlement Shares. Fractions of Settlement Shares will not be delivered to the Settlement Share Depository following
the Automatic Conversion and no cash payment shall be made in lieu thereof. The number of Settlement Shares to be held by the Settlement
Share Depository for the benefit of each Holder shall equal the number of Settlement Shares thus calculated multiplied by a fraction
equal to (i) the Tradable Amount of the book-entry interests in the Contingent Capital Notes held by such Holder on the Conversion
Date divided by (ii) the Outstanding Amount, rounded down, if necessary, to the nearest whole number of Settlement Shares.


 



(b)
The Settlement Shares issued following the Automatic Conversion shall be fully paid and non-assessable and shall in all
respects rank pari passu with the fully paid ordinary shares of the Company in issue on the Conversion Date, except in any
such case for any right excluded by mandatory provisions of applicable law, and except that the Settlement Shares so issued shall
not rank for (or, as the case may be, the relevant Holder or Beneficial Owner shall not be entitled to receive) any rights, the
record date for entitlement to which falls prior to the Conversion Date.


 



(c)
The procedures set forth in this ‎Section 2.16 are subject to change to reflect changes in DTC practices, and
the Company may make changes to the procedures set forth in this ‎Section 2.16 to the extent reasonably necessary, in
the opinion of the Company, to reflect such changes in DTC practices as provided under ‎Section 2.18(a) hereof. Any
such changes shall be subject to the provisions of ‎Section 7.01.


 


Section 2.17. 
Settlement Shares Offer.


 



    32 


     


    





(a)
Within ten (10) Business Days following the Conversion Date, the Company may, in its sole and absolute discretion, elect
that the Settlement Share Depository (or an agent on its behalf) make an offer of, in the Company’s sole and absolute discretion,
all or some of the Settlement Shares to, at the Company’s sole and absolute discretion, all or some of the Shareholders upon
Automatic Conversion (the “Settlement Shares Offer”), such offer to be at a cash price per Settlement Share
that will be no less than the Conversion Price (translated from U.S. dollars into pounds sterling at the then-prevailing rate as
determined by the Company in its sole discretion) and subject to certain adjustments as provided under ‎Article 3 of
this First Supplemental Indenture (the “Settlement Shares Offer Price”).


 



(b)
Any Settlement Shares Offer shall be made subject to applicable laws and regulations in effect at the relevant time and
shall be conducted, if at all, only to the extent that the Company, in its sole and absolute discretion, determines that the Settlement
Shares Offer is practicable. The Company reserves the right, in its sole and absolute discretion, to elect that the Settlement
Share Depository terminate the Settlement Shares Offer at any time during the Settlement Shares Offer Period. If the Company makes
such an election, it shall provide at least three (3) Business Days’ notice to the Trustee directly and to DTC as the Holder
of the Global Securities (or, if the Contingent Capital Notes are definitive Securities, by the Company to the Trustee directly
and to the Holders at their addresses shown on the Contingent Convertible Security Register) and if it does so, the Settlement
Share Depositary may, in its sole and absolute discretion, (including, without limitation, by changing the Suspension Date) take
steps to deliver to Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) of the Contingent
Capital Notes the Settlement Shares or, if the Holder elects, ADSs, as applicable, at a time that is earlier than the time at which
such Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) would have otherwise received
the Alternative Consideration, had the Settlement Shares Offer been completed.


 



(c)
Upon expiry of the Settlement Shares Offer Period, the Settlement Share Depository shall provide notice to the Holders of
the Contingent Capital Notes of the composition of the Alternative Consideration (and of the deductions to the Cash Component,
if any, of the Alternative Consideration (as set out in the definition of “Alternative Consideration” in ‎Section
1.01)) per $1,000 Tradable Amount of the Contingent Capital Notes. The Alternative Consideration will be held by the Settlement
Share Depository on behalf of the Holders and Beneficial Owners and will be delivered to Holders and Beneficial Owners pursuant
to the procedures set forth under ‎Section 2.18.


 



(d)
The Cash Component of any Alternative Consideration shall be payable by the Settlement Share Depository to the Holders and
Beneficial Owners (or the custodian, nominee, broker or other representative thereof) of the Contingent Capital Notes whether or
not the Solvency Condition is satisfied.


 



(e)
By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner, acknowledges and agrees that, if the
Company elects, in its sole and






    33 


     


    

 


absolute
discretion, that a Settlement Shares Offer be conducted by the Settlement Share Depository, such Holder or Beneficial Owner shall
be deemed to have (i) irrevocably consented to any Settlement Shares Offer and, notwithstanding that such Settlement Shares are
held by the Settlement Share Depository on behalf of Holders and Beneficial Owners, to the Settlement Share Depository’s
using the Settlement Shares delivered to it to settle any Settlement Shares Offer, (ii) irrevocably consented to the transfer
of the beneficial interest it holds in the Settlement Shares delivered upon Automatic Conversion to the Settlement Share Depository
or to one or more purchasers identified by the Settlement Share Depository in connection with the Settlement Shares Offer, (iii)
irrevocably agreed that the Company and the Settlement Share Depository may take any and all actions necessary to conduct the
Settlement Shares Offer in accordance with the terms of the Contingent Capital Notes, and (iv) irrevocably agreed that none of
the Company, the Trustee or the Settlement Share Depository shall, to the extent permitted by applicable law, incur any liability
to the Holders or Beneficial Owners in respect of the Settlement Shares Offer (except for the obligations of the Settlement Share
Depository in respect of the Holders’ and Beneficial Owners’ entitlement to, and subsequent delivery of, any Alternative
Consideration).


 


Section 2.18. 
Settlement Procedure.


 



(a)
Delivery of the Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as applicable, to the
Holders and Beneficial Owners shall be made in accordance with the procedures set forth in this ‎Section 2.18, which
remain subject to change to reflect changes in DTC practices and the Company may make changes to the procedures set forth in this
‎Section 2.18 to the extent necessary, in the opinion of the Company, to reflect such changes in DTC practices.


 



(b)
The Settlement Shares Offer Notice shall specify the Suspension Date, provided that the Suspension Date has not previously
been specified in the Conversion Trigger Notice.


 



(c)
On the Suspension Date, the Company shall deliver, to the Trustee directly and to DTC as the Holder of the Global Securities
(or, if the Contingent Capital Notes are in definitive form, to the Holders directly at their addresses shown on the Contingent
Convertible Security Register), a Settlement Request Notice, pursuant to which the Company shall request that Holders and Beneficial
Owners complete a Settlement Notice and shall specify the Notice Cut-off Date and the Final Cancellation Date.


 



(d)
Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) shall not receive delivery
of the relevant Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as applicable, unless such
Holders or Beneficial Owners (or the custodian, nominee, broker or other representative thereof) deliver the Settlement Notice
to the Settlement Share Depository on or before the Notice Cut-off Date; provided that, if such delivery is made after the end
of normal business hours at the specified office of the Settlement Share Depository, such delivery shall be deemed for all purposes
to have been made or given on the next following Business Day.


 



    34 


     


    





(e)
If the Contingent Capital Notes are held through DTC, the Settlement Notice must be given in accordance with the standard
procedures of DTC (which may include, without limitation, delivery of the notice to the Settlement Share Depository by electronic
means) and in a form acceptable to DTC and the Settlement Share Depository. With respect to any Contingent Capital Notes held in
definitive form, the Settlement Notice must be delivered to the specified office of the Settlement Share Depository together with
the relevant Contingent Capital Notes.


 



(f)
Subject to satisfaction of the requirements and limitations set forth in this ‎Section 2.18 and provided that
the Settlement Notice and the relevant Contingent Capital Notes, if applicable, are delivered on or before the Notice Cut-Off Date,
the Settlement Share Depository shall deliver the relevant Alternative Consideration or Settlement Shares (rounded down to the
nearest whole number of Settlement Shares) to, or shall deposit such relevant Settlement Shares with the ADS Depository on behalf
of, the relevant Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) of the relevant Contingent
Capital Notes completing the relevant Settlement Notice in accordance with the instructions given in such Settlement Notice or
its nominee on the applicable Settlement Date.


 



(g)
Each Settlement Notice shall be irrevocable. The Settlement Share Depository shall determine, in its sole and absolute discretion,
whether any Settlement Notice has been properly completed and delivered, and such determination shall be conclusive and binding
on the relevant Holder or Beneficial Owner. If any Holder or Beneficial Owner fails to properly complete and deliver a Settlement
Notice and the relevant Contingent Capital Notes, if applicable, the Settlement Share Depository shall be entitled to treat such
Settlement Notice as null and void.


 



(h)
Neither the Company nor any member of the Group shall pay any taxes or duties (including without limitation, any stamp duty,
stamp duty reserve tax, or any other capital issue, transfer, registration, financial transaction or documentary tax or duty) arising
upon Automatic Conversion or that may arise or be paid as a consequence of the issue and delivery of Settlement Shares to the Settlement
Share Depository or in connection with the issue of ADSs. A Holder or Beneficial Owner must pay any taxes or duties (including
without limitation, any stamp duty, stamp duty reserve tax, or any other capital issue, transfer, registration, financial transaction
or documentary tax or duty) arising upon Automatic Conversion in connection with the issue and delivery of the Settlement Shares
to the Settlement Share Depository and/or the issue of ADSs and such Holder or Beneficial Owner must pay all, if any, such taxes
or duties (including without limitation, any stamp duty, stamp duty reserve tax, or any other capital issue, transfer, registration,
financial transaction or documentary tax or duty) arising by reference to any disposal or deemed disposal of such Holders or Beneficial
Owner’s Contingent Capital Note or interest therein. Any taxes and duties (including without limitation, any stamp duty,
stamp duty reserves tax, or any other capital issue, transfer, registration, financial transaction or documentary tax or duty)
arising on delivery or transfer of Settlement Shares to a purchaser in any Settlement Shares Offer shall be payable by the relevant
purchaser of those Settlement Shares.


 



    35 


     


    




 
(i)
Except to the extent a Holder or Beneficial Owner has elected to receive ADSs, the Settlement Shares (and the Settlement
Share Component, if any, of any Alternative Consideration) shall not be available for delivery (i) to, or to a nominee for any
person providing a clearance service within the meaning of Section 96 of the Finance Act 1986 of the United Kingdom (which would
include delivery into Euroclear or Clearstream, Luxembourg, but not, subject to (iii) below, delivery into CREST) or (ii) to a
person, or nominee or agent for a person, whose business is or includes issuing depository receipts within the meaning of Section
93 of the Finance Act 1986 of the United Kingdom, in each case at any time prior to the “abolition day” as defined
in Section 111(1) of the Finance Act 1990 of the United Kingdom, or (iii) to the CREST account of such a person described in ‎(i)
or ‎(ii).


 


 
(j)
The Company may make changes to the procedures set forth in this ‎Section 2.18 to the extent such changes are
reasonably necessary, in the opinion of the Company, to effect the delivery of the Settlement Shares or, if the Holder elects,
ADSs, as applicable, to the Holders and Beneficial Owners.


 


Section 2.19. 
Failure to Deliver a Settlement Notice. If any Holder or Beneficial Owner (or custodian, nominee, broker or other
representative thereof) fails to deliver a Settlement Notice and the relevant Contingent Capital Notes, if applicable, to the Settlement
Share Depository on or before the Notice Cut-off Date, the Settlement Share Depository shall continue to hold the Settlement Shares
or Alternative Consideration in respect of such Holder or Beneficial Owner, until a Settlement Notice (and the relevant Contingent
Capital Notes, if applicable) are so delivered; provided, however, that the relevant Contingent Capital Notes shall
be cancelled on the Final Cancellation Date, and any Holder or Beneficial Owner (or custodian, nominee, broker or other representative
thereof) of Contingent Capital Notes delivering a Settlement Notice after the Notice Cut-off Date shall be required to provide
evidence of its entitlement to the relevant Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration,
as applicable, satisfactory to the Settlement Share Depository in its sole and absolute discretion in order to receive delivery
of such Settlement Shares, Alternative Consideration or ADSs (if so elected to be deposited with the ADS Depository on its behalf).
The Company shall have no liability to any Holder or Beneficial Owner of the Contingent Capital Notes for any loss resulting from
such Holder’s or Beneficial Owner’s failure to receive any Alternative Consideration, Settlement Shares or ADSs, or
from any delay in the receipt thereof, in each case as a result of such Holder or Beneficial Owner (or custodian, nominee, broker
or other representative thereof) failing to duly submit a Settlement Notice and the relevant Contingent Capital Notes, if applicable,
on a timely basis or at all.


 


Section 2.20. 
Delivery of ADSs. In respect of Settlement Shares for which Holders or Beneficial Owners elect to be converted into
ADSs as specified in the Settlement Notice, subject to the Company’s right to elect that a Settlement Shares Offer be made
in accordance with ‎Section 2.17(a), the Settlement Share Depository shall deposit
with the ADS Depository, the number of Settlement Shares to be issued upon Automatic Conversion of the relevant Contingent Capital
Notes, and the ADS Depository shall issue the corresponding number of ADSs to such Holders or Beneficial Owner (per the ADS-to-ordinary
share ratio in effect on the Conversion Date). Once deposited, the


 






    36 


     


    

 


 


ADS
Depository shall be entitled to the economic rights of a holder or beneficial owner of the Settlement Shares for the purposes
of any dividend entitlement and otherwise on behalf of the ADS holders, and the Holder or Beneficial Owner will become the record
holder of the related ADSs for all purposes under the ADS Deposit Agreement. However, the issuance of the ADSs by the ADS Depository
may be delayed until the depositary bank or the custodian receives confirmation that all required approvals have been given and
that the Settlement Shares have been duly transferred to the custodian and that all applicable depositary fees and payments have
been paid to the ADS Depository.


 


Section 2.21. 
Agreement with Respect to Exercise of U.K. Bail-in Power.


 



(a)
Notwithstanding any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner
of the Contingent Capital Notes, by its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner acknowledges,
accepts, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority
that may result in (i) the reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Contingent
Capital Notes, (ii) the conversion of all, or a portion of, the principal amount of, or interest on, the Contingent Capital Notes
into ordinary shares or other securities or other obligations of the Company or another person and/or (iii) the amendment of the
amount of interest due on the Contingent Capital Notes, or the dates on which interest becomes payable, including by suspending
payment for a temporary period; which U.K. bail-in power may be exercised by means of variation to the terms of the Contingent
Capital Notes solely to give effect to the above. With respect to (i), (ii) and (iii) above, references to principal and interest
shall include payments of principal and interest that have become due and payable, but which have not been paid, prior to the exercise
of any U.K. bail-in power. Each Holder and Beneficial Owner of the Contingent Capital Notes further acknowledges and agrees that
the rights of the Holders and/or Beneficial Owners under the Contingent Capital Notes are subject to, and will be varied, if necessary,
solely to give effect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. For the avoidance of
doubt, the potential conversion of the Contingent Capital Notes into ordinary shares, other securities or other obligations in
connection with the exercise of any U.K. bail-in power by the relevant U.K. resolution authority is separate and distinct from
the Automatic Conversion following a Conversion Trigger Event.


 



(b)
By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner:


 



(i) 
acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect
to the Contingent Capital Notes or cancellation or deemed cancellation of interest on the Contingent Capital Notes pursuant to
Sections ‎2.03 or ‎2.04 shall not give rise to a default for purposes of Section 315(b) (Notice
of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;


 


(ii) 
to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate
a suit against the Trustee in


 






    37 


     


    

respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes,
or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution
authority with respect to the Contingent Capital Notes;


 



(iii) 
acknowledges and agrees that, (A) upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority,
(a) the Trustee shall not be required to take any further directions from Holders or Beneficial Owners of the Contingent Capital
Notes under Section 5.12 of the Contingent Convertible Securities Indenture and (B) the Indenture shall impose no duties upon the
Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding
the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority,
the Contingent Capital Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial
write-down of the principal of the Contingent Capital Notes) then the Trustee’s duties under the Indenture shall remain applicable
with respect to the Contingent Capital Notes following such completion to the extent that the Company and the Trustee agree pursuant
to a supplemental indenture, unless the Company and the Trustee agree that a supplemental indenture is not necessary; and


 



(iv) 
shall be deemed to have (y) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice
by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Contingent Capital Notes and
(z) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such
Contingent Capital Notes to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power
with respect to the Contingent Capital Notes as it may be imposed, without any further action or direction on the part of such
Holder and such Beneficial Owner or the Trustee.


 



(c)
Each Holder or Beneficial Owner that acquires its Contingent Capital Notes in the secondary market shall be deemed to acknowledge
and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial
Owners that acquire the Contingent Capital Notes upon their initial issuance, including, without limitation, with respect to the
acknowledgement and agreement to be bound by and consent to the terms of the Contingent Capital Notes, including in relation to
interest cancellation, Automatic Conversion, the U.K. bail-in power, the Settlement Shares Offer, the write-down in the event of
a Non-Qualifying Takeover Event and the limitations on remedies specified in ‎Section 4.04 hereof.


 



(d)
No payment of the principal amount of the Contingent Capital Notes following any proposed redemption of the Contingent Capital
Notes or payment of interest on the Contingent Capital Notes shall become due and payable after the exercise of any U.K. bail-in
power by the relevant U.K. resolution authority unless, at the time that such repayment or payment, respectively, is scheduled
to become due, such


 






    38 


     


    

 


repayment
or payment would be permitted to be made by the Company under the laws and regulations of the U.K. and the EU applicable to the
Company and the Group.


 



(e)
Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Contingent Capital
Notes, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power
for purposes of notifying Holders and Beneficial Owners of such occurrence. The Company shall also deliver a copy of such notice
to the Trustee for information purposes.


 



(f)
The Company’s obligations to indemnify the Trustee in accordance with Section 6.07 of the Contingent Convertible Securities
Indenture shall survive any exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Contingent
Capital Notes and any Automatic Conversion hereunder.


 



(g)
The exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Contingent Capital
Notes shall not constitute an Enforcement Event.


 


Article
3

Anti-Dilution


 


Section 3.01. 
Adjustment of Conversion Price. Upon the occurrence of any of the events described below, the Conversion Price shall
be adjusted as follows:


 



(a)
If and whenever there shall be a consolidation, reclassification, redesignation or subdivision in relation to the ordinary
shares which alters the number of ordinary shares in issue, the Conversion Price shall be adjusted by multiplying the Conversion
Price in force immediately prior to such consolidation, reclassification, redesignation or subdivision by the following fraction:


 


	 	A

B


where:


 


		A	is the aggregate number of ordinary shares in issue immediately before such consolidation, reclassification, redesignation
or subdivision, as the case may be; and



 


		B	is the aggregate number of ordinary shares in issue immediately after, and as a result of, such consolidation, reclassification,
redesignation or subdivision, as the case may be.



 


Such adjustment shall become effective
on the date the consolidation, reclassification, redesignation or subdivision, as the case may be, takes effect.


 



    39 


     


    





(b)
If and whenever the Company shall issue any ordinary shares to Shareholders credited as fully paid by way of capitalization
of profits or reserves (including any share premium account or capital redemption reserve) other than (1) where any such ordinary
shares are or are to be issued instead of the whole or part of a Cash Dividend which the Shareholders would or could otherwise
have elected to receive, (2) where the Shareholders may elect to receive a Cash Dividend in lieu of such ordinary shares or (3)
where any such ordinary shares are or are expressed to be issued in lieu of a dividend (whether or not a Cash Dividend equivalent
or amount is announced or would otherwise be payable to the Shareholders, whether at their election or otherwise), the Conversion
Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue by the following fraction:


 


	 	A

B


where:


 


		A	is the aggregate number of ordinary shares in issue immediately before such issue; and



 


		B	is the aggregate number of ordinary shares in issue immediately after such issue.



 


Such adjustment shall become effective
on the date of issue of such ordinary shares.


 



(c)
If and whenever the Company shall pay any Extraordinary Dividend to its Shareholders, the Conversion Price shall be adjusted
by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:


 


	 	A – B

   A


where:


 


		A	is the Current Market Price of one ordinary share on the Effective Date; and



 


		B	is the portion of the aggregate Extraordinary Dividend attributable to one ordinary share, with such portion being determined
by dividing the aggregate Extraordinary Dividend by the number of ordinary shares entitled to receive the relevant Extraordinary
Dividend. If the Extraordinary Dividend shall be expressed in a currency other than the Relevant Currency, it shall be converted
into the Relevant Currency at the Prevailing Rate on the relevant Effective Date.



 


Such adjustment shall become effective
on the Effective Date.


 



    40 


     


    




“Effective Date” means,
in respect of this ‎Section 3.01(c), the first date on which
the ordinary shares are traded ex-the Extraordinary Dividend on the Relevant Stock Exchange.


 



(d)
If and whenever the Company shall issue ordinary shares to its Shareholders as a class by way of rights or the Company or
any member of the Group or (at the direction or request or pursuant to arrangements with the Company or any member of the Group)
any other company, person or entity, shall issue or grant to Shareholders as a class by way of rights, any options, warrants or
other rights to subscribe for or purchase ordinary shares, or any Other Securities which by their terms of issue carry (directly
or indirectly) rights of conversion into, or exchange or subscription for, any ordinary shares (or shall grant any such rights
in respect of existing Other Securities so issued), in each case at a price per ordinary share which is less than 95% of the Current
Market Price per ordinary share on the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price
in force immediately prior to the Effective Date by the following fraction:


 


	 	A + B

A + C


where:


 


		A	is the number of ordinary shares in issue on the Effective Date;



 


		B	is the number of ordinary shares which the aggregate consideration (if any) receivable for the ordinary shares issued by way
of rights, or for the Other Securities issued by way of rights, or for the options or warrants or other rights issued by way of
rights and for the total number of ordinary shares deliverable on the exercise thereof, would purchase at such Current Market Price
per ordinary share on the Effective Date; and



 


		C	is the number of ordinary shares to be issued or, as the case may be, the maximum number of ordinary shares which may be issued
upon exercise of such options, warrants or rights calculated as at the date of issue of such options, warrants or rights or upon
conversion or exchange or exercise of rights of subscription or purchase in respect thereof at the initial conversion, exchange,
subscription or purchase price or rate.



 


provided that if, on the Effective Date, such
number of ordinary shares is to be determined by reference to the application of a formula or other variable feature or the occurrence
of any event at some subsequent time, then for the purposes of this ‎Section
3.01(d), “C” shall be determined by the application of such formula or variable feature or as if the relevant event
occurs or had occurred as at the Effective Date and as if such conversion, exchange, subscription, purchase or acquisition had
taken place on the Effective Date.


 



    41 


     


    




Such adjustment shall become effective on
the Effective Date.


 


“Effective Date” means,
in respect of this ‎Section 3.01(d), the first date on which
the ordinary shares are traded ex-rights, ex-options or ex-warrants on the Relevant Stock Exchange.


 


For the purpose of any calculation of the
consideration receivable or price pursuant to this ‎Section
3.01(d), the following provisions shall apply:


 


		(i)	the aggregate consideration receivable or price for ordinary shares issued for cash shall be the amount of such cash;



 


		(ii)	(x) the aggregate consideration receivable or price for ordinary shares to be issued or otherwise made available upon the conversion
or exchange of any Other Securities shall be deemed to be the consideration or price received or receivable for any such Other
Securities and (y) the aggregate consideration receivable or price for ordinary shares to be issued or otherwise made available
upon the exercise of rights of subscription attached to any Other Securities or upon the exercise of any options, warrants or rights
shall be deemed to be that part (which may be the whole) of the consideration or price received or receivable for such Other Securities
or, as the case may be, for such options, warrants or rights which are attributed by the Company to such rights of subscription
or, as the case may be, such options, warrants or rights or, if no part of such consideration or price is so attributed, the Fair
Market Value of such rights of subscription or, as the case may be, such options, warrants or rights as at the relevant Effective
Date, plus in the case of each of (x) and (y) above, the additional minimum consideration receivable or price (if any) upon the
conversion or exchange of such Other Securities, or upon the exercise of such rights of subscription attached thereto or, as the
case may be, upon exercise of such options, warrants or rights and (z) the consideration receivable or price per ordinary share
upon the conversion or exchange of, or upon the exercise of such rights of subscription attached to, such Other Securities or,
as the case may be, upon the exercise of such options, warrants or rights shall be the aggregate consideration or price referred
to in (x) or (y) above (as the case may be) divided by the number of ordinary shares to be issued upon such conversion or exchange
or exercise at the initial conversion, exchange or subscription price or rate;



 


		(iii)	if the consideration or price determined pursuant to (i) or (ii) above (or any component thereof) shall be expressed in a currency
other than the Relevant Currency, it shall be converted into the Relevant Currency at the Prevailing Rate on the relevant Effective
Date;



 


		(iv)	in determining the consideration or price pursuant to the above, no deduction shall be made for any commissions or fees (howsoever
described) or any expenses paid or incurred for any underwriting, placing 



 



    42 


     


    




 


or management of the issue of the relevant ordinary shares
or Other Securities or options, warrants or rights, or otherwise in connection therewith; and


 


		(v)	the consideration or price shall be determined as provided above on the basis of the consideration or price received, receivable,
paid or payable, regardless of whether all or part thereof is received, receivable, paid or payable by or to the Company or another
entity.



 



(e)
Notwithstanding provisions of Sections ‎3.01(a) through ‎(d) above:


 



(i) 
where the events or circumstances giving rise to any adjustment to the Conversion Price have already resulted or will result
in an adjustment to the Conversion Price or the events or circumstances giving rise to any adjustment arise by virtue of any other
events or circumstances that have already given or will give rise to an adjustment to the Conversion Price or where more than one
event which gives rise to an adjustment to the Conversion Price occurs within such a short period of time that, in the opinion
of the Company, a modification to the adjustment provisions is required to give the intended result, such modification shall be
made to the operation of the provisions of ‎Section 3.01(a) to ‎Section 3.01(d) as may be determined
in good faith by an Independent Financial Adviser to be in its opinion appropriate to give the intended result;


 


(ii) 
such modification shall be made to the operation of the provisions of ‎Section 3.01(a) to ‎Section
3.01(d) as may be determined in good faith by an Independent Financial Adviser to be in its opinion appropriate (x) to ensure
that an adjustment to the Conversion Price or the economic effect thereof shall not be taken into account more than once, (y)
to ensure that the economic effect of an Extraordinary Dividend is not taken into account more than once, and (z) to reflect a
redenomination of the issued ordinary shares for the time being into a new currency;


 



(iii) 
other than provided under paragraphs (i) and (ii) above, if any doubt shall arise as to whether an adjustment falls to be
made to the Conversion Price or as to the appropriate adjustment to the Conversion Price, the Company may at its discretion appoint
an Independent Financial Adviser and, following consultation between the Company and such Independent Financial Adviser, a written
opinion of such Independent Financial Adviser in respect thereof shall be conclusive and binding on the Company, the Holders and
the Beneficial Owners, save in the case of manifest error;


 



(iv) 
no adjustment will be made to the Conversion Price where ordinary shares or Other Securities (including rights, warrants
and options) are issued, offered, exercised, allotted, purchased, appropriated, modified or granted to, or for the benefit of,
employees or former employees (including directors holding or formerly holding executive office or the personal service company
of any such person) or their spouses or relatives, in each case, of the Company or






    43 


     


    

 


 


any of its Subsidiaries or any associated company
or to a trustee or trustees to be held for the benefit of any such person, in any such case pursuant to any share or option scheme;


 


(v) 
on any adjustment, if the resultant Conversion Price has more decimal places than the initial Conversion Price, it shall
be rounded to the same number of decimal places as the initial Conversion Price (with 0.005 being rounded down). No adjustment
shall be made to the Conversion Price where such adjustment (rounded down if applicable) would be less than 1% of the Conversion
Price then in effect. Any adjustment not required to be made pursuant to the above, and/or any amount by which the Conversion
Price has been rounded down, shall be carried forward and taken into account in any subsequent adjustment, and such subsequent
adjustment shall be made on the basis that the adjustment not required to be made had been made at the relevant time and/or, as
the case may be, that the relevant rounding down had not been made;


 



(vi) 
notice of any adjustments to the Conversion Price shall be given by the Company to DTC as the Holder of the Global Securities
(or, if the Contingent Capital Notes are in definitive form, via the Trustee) promptly after the determination thereof;


 



(vii) 
any adjustment to the Conversion Price shall be subject to such Conversion Price not being less than the U.S. dollar equivalent
of the nominal amount of an ordinary share at such time (currently £1.00). The Company undertakes that it shall not take
any action, and shall procure that no action is taken, that would otherwise result in an adjustment to the Conversion Price to
below such nominal value then in effect; and


 


(viii) 
references to the Conversion Price shall be deemed to include the Settlement Shares Offer Price. References to the Conversion
Price and ordinary shares shall be deemed to include any New Conversion Price and any Relevant Shares, such that any New Conversion
Price shall be subject to price adjustments upon the occurrence of the events of set forth in Sections ‎3.01(a)
through ‎(d) above, subject to any modifications as an Independent Financial Adviser shall determine to be appropriate.


 


Section 3.02. 
Takeover Event.


 



(a)
Within ten (10) days following the occurrence of a Takeover Event, the Company shall give notice thereof to the Holders
and Beneficial Owners by means of a “Takeover Event Notice”, with a copy to the Trustee.


 



(b)
The Takeover Event Notice shall specify:


 


		(i)	the identity of the Acquirer;



 


		(ii)	whether the Takeover Event is a Qualifying Takeover Event or a Non-Qualifying Takeover Event;



 



    44 


     


    




		(iii)	if it is a Qualifying Takeover Event, the New Conversion Price; and



 


		(iv)	in the case of a Non-Qualifying Takeover Event, unless the Conversion Date shall have occurred prior to the date of the Non-Qualifying
Takeover Event, that, following such Non-Qualifying Takeover Event, outstanding Contingent Capital Notes shall not be subject to
Automatic Conversion at any time notwithstanding that a Conversion Trigger Event may have occurred or may occur subsequently but
that, instead, upon any subsequent Conversion Trigger Event (or where the Conversion Date occurs on or after the date of the Non-Qualifying
Takeover Event), the principal amount of each Contingent Capital Note will be automatically written down to zero, the Contingent
Capital Notes will be cancelled, the Holders and Beneficial Owners will be automatically deemed to have irrevocably waived their
right to receive, and no longer have any rights against the Company with respect to repayment of the aggregate principal amount
of the Contingent Capital Notes so written down and all Accrued Interest and any other amounts payable on the Contingent Capital
Notes shall be automatically cancelled, irrespective of whether such amounts have become due and payable prior to the occurrence
of the Conversion Trigger Event.



 



(c)
If a Qualifying Takeover Event occurs, the Contingent Capital Notes shall, where the Conversion Date (if any) falls on or
after the New Conversion Condition Effective Date, be converted on such Conversion Date into Relevant Shares of the Approved Entity,
mutatis mutandis as provided under Section 2.15 above, at a Conversion Price that shall be the New Conversion Price. Such
conversion shall be effected by the delivery by the Company of such number of Settlement Shares as set forth under Section 2.15
above to, or to the order of, the Approved Entity. Such delivery shall irrevocably discharge and satisfy all of the Company’s
obligations under the Contingent Capital Notes, but shall be without prejudice to the rights of the Trustee and the Holders and
Beneficial Owners against the Approved Entity in connection with its undertaking to deliver Relevant Shares as provided in the
definition of “New Conversion Condition”. Such delivery shall be in consideration of the Approved Entity irrevocably
undertaking for the benefit of the Holders and Beneficial Owners to deliver the Relevant Shares to the Settlement Share Depository.
For the avoidance of doubt, the Company may elect that a Settlement Shares Offer be made by the Settlement Share Depository in
respect of the Relevant Shares.


 



(d)
The New Conversion Price shall be subject to adjustment in the circumstances provided for under Sections ‎3.01(a)
through ‎3.01(d) above (if necessary with such modifications as an Independent Financial Adviser acting in good faith
shall determine to be appropriate), and the Company shall give notice to the Holders of the New Conversion Price and of any such
modifications thereafter.


 



(e)
In the case of a Qualifying Takeover Event:


 



    45 


     


    





(i) 
the Company shall, on or prior to the New Conversion Condition Effective Date, enter into such agreements and arrangements
(including, without limitation, supplemental indentures to the Indenture and amendments and modifications to the terms and conditions
of the Contingent Capital Notes and the Indenture) as may be required to ensure that, effective upon the New Conversion Condition
Effective Date, the Contingent Capital Notes shall (following the occurrence of a Conversion Trigger Event) be convertible into,
or exchangeable for, Relevant Shares of the Approved Entity, mutatis mutandis in accordance with, and subject to, the provisions
of Sections 2.15 of this First Supplemental Indenture (as may be supplemented or amended), at the New Conversion Price; and


 


(ii) 
subject as set out above, the Company shall, where the Conversion Date falls on or after the New Conversion Condition Effective
Date, procure (to the extent within its control) the issue and/or delivery of the relevant number of Relevant Shares mutatis
mutandis in the manner provided under ‎Section 2.16 of this First Supplemental Indenture (as may be supplemented
or amended).


 



(f)
Upon a Conversion Trigger Event occurring subsequently to a Non-Qualifying Takeover Event, the Company shall provide a written
notice to DTC as soon as practicable regarding the automatic write-down to zero of the Contingent Capital Notes for purposes of
notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.


 


Section 3.03. 
Agreement with Respect to a Non-Qualifying Takeover Event.


 



(a)
By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner:


 



(i) 
acknowledges and agrees that in the case of a Non-Qualifying Takeover Event, unless the Conversion Date shall have occurred
prior to the date of the Non-Qualifying Takeover Event, following such Non-Qualifying Takeover Event, outstanding Contingent Capital
Notes shall not be subject to Automatic Conversion at any time notwithstanding that a Conversion Trigger Event may have occurred
or may occur subsequently but that, instead, upon any subsequent Conversion Trigger Event (or where the Conversion Date occurs
on or after the date of a Non-Qualifying Takeover Event), the principal amount of each Contingent Capital Note will be automatically
written down to zero, the Contingent Capital Notes will be cancelled, it will be automatically deemed to have irrevocably waived
its right to receive, and no longer have any rights against the Company with respect to repayment of the aggregate principal amount
of the Contingent Capital Notes so written down and all Accrued Interest and any other amounts payable on the Contingent Capital
Notes shall be automatically cancelled, irrespective of whether such amounts have become due and payable prior to the occurrence
of the Conversion Trigger Event;


 



    46 


     


    




(ii) 
acknowledges and agrees that a write-down of the Contingent Capital Notes upon the occurrence of a Conversion Trigger Event
following a Non-Qualifying Takeover Event with respect to the Contingent Capital Notes shall not give rise to a default for purposes
of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust
Indenture Act;


 



(iii) 
to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate
a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action taken by the Trustee
or which the Trustee abstains from taking, in either case in connection with the write-down to zero of the Contingent Capital Notes
following the occurrence of a Conversion Trigger Event subsequently to any Non-Qualifying Takeover Event;


 



(iv) 
acknowledges and agrees that, (A) in connection with the write-down to zero of the Contingent Capital Notes following the
occurrence of a Conversion Trigger Event subsequently to any Non-Qualifying Takeover Event, (a) the Trustee shall not be required
to take any further directions from Holders or Beneficial Owners of the Contingent Capital Notes under Section 5.12 of the Contingent
Convertible Securities Indenture and (B) the Indenture shall impose no additional duties upon the Trustee whatsoever in connection
with the write-down to zero of the Contingent Capital Notes following the occurrence of a Conversion Trigger Event subsequently
to any Non-Qualifying Takeover Event;


 


(v) 
shall be deemed to have authorised, directed and requested DTC and any direct participant in DTC or other intermediary through
which it holds such Contingent Capital Notes to take any and all necessary action, if required, to implement the write-down to
zero of the Contingent Capital Notes, without any further action or direction on the part of such Holders and such Beneficial Owners
of the Contingent Capital Notes or the Trustee;


 



(b)
A write-down of the Contingent Capital Notes upon the occurrence of a Conversion Trigger Event following a Non-Qualifying
Takeover Event with respect to the Contingent Capital Notes will not constitute an Enforcement Event.


 


Article
4

Enforcement Events and Remedies


 


With respect to the Contingent Capital Notes
only, ‎‎Section 5.01 of the Contingent Convertible Securities
Indenture shall be amended and restated in its entirety as follows in ‎Section
4.01 hereof, ‎Section 5.02 of the Contingent Convertible Securities
Indenture shall be amended and restated in its entirety as follows in Sections ‎4.02
and ‎4.03 hereof, Section 5.03(a) of the Contingent Convertible
Securities Indenture shall be amended and restated in its entirety as follows in ‎Section
4.04 hereof, Section 5.03(b) of the Contingent Convertible Securities Indenture shall be amended and restated in its entirety as
follows in ‎Section 5.02 hereof, Section 5.13 of the Contingent
Convertible Securities Indenture


 






    47 


     


    

 


 


shall
be amended and restated in its entirety as follows in ‎Section
4.05 hereof, and references in the Contingent Convertible Securities Indenture to such Sections shall be to such Sections as amended
and restated in their entirety by this First Supplemental Indenture. Section 5.07 and Section 5.10 of the Contingent Convertible
Securities Indenture shall apply to the Contingent Capital Notes subject to the limitations on remedies specified in this ‎Article
4.


 


Section 4.01. 
Winding-up or Administration Event. If a Winding-up or Administration Event occurs prior to the occurrence of a Conversion
Trigger Event, subject to the subordination provisions of ‎Article 5, the principal amount of the Contingent Capital
Notes shall become immediately due and payable, without the need of any further action on the part of the Trustee, the Holders
or any other Person, including the declaration by the Trustee, the Holders or any other Person that the principal amount of the
Contingent Capital Notes will become immediately due and payable.


 


Section 4.02. 
Non-Payment Event. If the Company does not make payment of principal in respect of the Contingent Capital Notes for
a period of fourteen (14) calendar days or more after the date on which such payment is due (a “Non-Payment Event”),
then the Trustee, on behalf of the Holders and Beneficial Owners, may, at its discretion, or shall at the direction of Holders
of 25% of the aggregate principal amount of Outstanding Contingent Capital Notes, subject to any applicable laws, institute proceedings
for the winding up of the Company. In the event of a winding-up or liquidation of the Company, whether or not instituted by the
Trustee, the Trustee may prove the claims of the Holders, Beneficial Owners and the Trustee in the winding up proceeding of the
Company and/or claim in the liquidation of the Company, such claims as set out in ‎Section 5.01 hereof. For the avoidance
of doubt, the Trustee may not declare the principal amount of any outstanding Contingent Capital Notes to be due and payable and
may not pursue any other legal remedy, including a judicial proceeding for the collection of the sums due and unpaid on the Contingent
Capital Notes.


 


Section 4.03. 
Limited Remedies for Breach of Performance Obligations. In the event of a breach of any term, obligation or condition
binding upon the Company under the Contingent Capital Notes or the Indenture (other than any payment obligation of the Company
under or arising from the Contingent Capital Notes or the Indenture, including payment of any principal or interest, including
any damages awarded for breach of any obligation) (such obligation, a “Performance Obligation”), the
Trustee may without further notice institute such proceedings against the Company as it may deem fit to enforce the Performance
Obligation, provided that the Company shall not by virtue of the institution of any such proceedings be obliged to pay any sum
or sums, in cash or otherwise (including damages) earlier than the same would otherwise have been payable under the Contingent
Capital Notes or the Indenture. For the avoidance of doubt, any breach by the Company of any Performance Obligation shall not confer
upon the Trustee (acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Contingent Capital Notes any
claim for damages and, in the event of such a breach of a Performance Obligation, the sole and exclusive remedy that the Trustee
(acting on behalf of the Holders) and/or the Holders or Beneficial Owners of the Contingent Capital Notes may seek under the Contingent
Capital Notes and the Indenture is specific performance


 






    48 


     


    

 


 


under
the laws of the State of New York. By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner of the
Contingent Capital Notes acknowledges and agrees (i) that such Holder and Beneficial Owner shall not seek, and shall not direct
the Trustee (acting on their behalf) to seek, any claim for damages against the Company in respect of any breach by the Company
of a Performance Obligation, and (ii) that the sole and exclusive remedy that such Holder and Beneficial Owner and/or the Trustee
(acting on their behalf) may seek under the Contingent Capital Notes and the Indenture for a breach by the Company of a Performance
Obligation is specific performance under the laws of the State of New York.


 


Section 4.04. 
No Other Remedies and Other Terms.


 



(a)
Other than the limited remedies specified in this ‎Article 4, and subject to paragraph ‎(c) below,
no remedy against the Company shall be available to the Trustee (acting on behalf of the Holders) or to the Holders and Beneficial
Owners, whether for the recovery of amounts owing in respect of such Contingent Capital Notes or under the Indenture, or in respect
of any breach by the Company of any of the Company’s obligations under or in respect of the terms of such Contingent Capital
Notes or under the Indenture in relation thereto; provided, however, that the Company’s obligations to the
Trustee under, and the Trustee’s lien provided for in, Section 6.07 of the Contingent Convertible Securities Indenture and
the Trustee’s rights to have money collected applied first to pay amounts due to it under such Section pursuant to Section
5.06 of the Contingent Convertible Securities Indenture shall not be limited or impaired by this Article 4 or otherwise and expressly
survive any Enforcement Event and are not subject to the subordination provisions of ‎Section 5.01 of this First Supplemental
Indenture.


 



(b)
For purposes of the Contingent Convertible Securities Indenture, “Event of Default” shall mean an “Enforcement
Event” as defined in this First Supplemental Indenture, except that the term “Event of Default” as used in Article
8 of the Contingent Convertible Securities Indenture shall mean “Winding-up or Administration Event” and as used in
Article 5.08 of the Contingent Convertible Securities Indenture shall mean “Non-Payment Event”.


 



(c)
Notwithstanding the limitations on remedies specified in this ‎Article 4, (i) the Trustee shall have such powers
as are required to be authorized to it under the Trust Indenture Act in respect of the rights of the Holders and Beneficial Owners
under the provisions of the Indenture, and (ii) nothing shall impair the right of a Holder or Beneficial Owner of the Contingent
Capital Notes under the Trust Indenture Act, absent such Holder’s or Beneficial Owner’s consent, to sue for any payment
due but unpaid with respect to the Contingent Capital Notes as provided for in Section 5.08 of the Contingent Convertible Securities
Indenture; provided that, in the case of (i) and (ii) above, any payments in respect of, or arising from, the Contingent Capital
Notes, including any payments or amounts resulting or arising from the enforcement of any rights under the Trust Indenture Act
in respect of the Contingent Capital Notes, shall be subject to the subordination provisions set forth in ‎Section 5.01
of this First Supplemental Indenture.


 



    49 


     


    





(d)
In furtherance of Section 6.01 of the Contingent Convertible Securities Indenture:


 


(i) For purposes of Sections 315(a) and
315(c) of the Trust Indenture Act, the term “default” is hereby defined to mean an Enforcement Event which has occurred
and is continuing.


 


(ii) Notwithstanding anything contained
in the Contingent Convertible Securities Indenture to the contrary, the duties and responsibilities of the Trustee under this Indenture
shall be subject to the protections, exculpations and limitations on liability afforded to an indenture trustee under the provisions
of the Trust Indenture Act.


 


Section 4.05. 
Waiver of Past Defaults.


 



(a)
Holders of not less than a majority in aggregate principal amount of the Outstanding Contingent Convertible Securities may
on behalf of the Holders of all of the Contingent Capital Notes waive any past Enforcement Event that results from a breach by
the Company of a Performance Obligation. Holders of a majority of the aggregate principal amount of the Outstanding Contingent
Capital Notes shall not be entitled to waive any past Enforcement Event that results from a Winding-up or Administration Event
or a Non-Payment Event.


 



(b)
Upon the occurrence of any waiver permitted by paragraph ‎(a) above, such Enforcement Event shall cease to exist,
and any Enforcement Event with respect to the Contingent Capital Notes arising therefrom shall be deemed to have been cured and
not to have occurred for every purpose of the Contingent Convertible Securities Indenture, but no such waiver shall extend to any
subsequent or other Enforcement Event or impair any right consequent thereon.


 


Article
5

Subordination


 


Section 5.01. 
Subordination to Claims of Senior Creditors.


 



(a)
With respect to the Contingent Capital Notes only, and pursuant to Section 12.01(a) of the Contingent Convertible Securities
Indenture, the extent and manner in which the payment of principal of (and premium, if any) and interest, if any, on the Contingent
Convertible Securities is subordinated to the claims of the holders of certain other present or future obligations of the Company
shall be determined as set out in this ‎Section 5.01. References in the Contingent Convertible Securities Indenture
to Section 12.01(a) thereof shall be to ‎Section 5.01 hereof. For the avoidance of doubt, no provision of Article 12
of the Contingent Convertible Securities Indenture other than replacing Section 12.01(a) with this Section 5.01 shall be amended
by this First Supplemental Indenture.


 



(b)
The Contingent Capital Notes shall constitute the Company’s direct, unsecured and subordinated obligations, ranking
pari passu without any preference


 






    50 


     


    

 


 


among
themselves. The rights and claims of the Holders and Beneficial Owners in respect of or arising from the Contingent Capital Notes
(including any damages, if payable) shall be subordinated to the claims of Senior Creditors.


 



(c)
If a Winding-up or Administration Event occurs before the date on which a Conversion Trigger Event occurs, there shall be
payable by the Company in respect of each Contingent Capital Note (in lieu of any other payment by the Company) such amount, if
any, as would have been payable to a Holder or Beneficial Owner if, on the day prior to the commencement of the winding-up of the
Company or the notice by the administrator and thereafter, such Holder or Beneficial Owner were the holder of one of a class of
Notional Preference Shares on the assumption that the amount that such Holder or Beneficial Owner was entitled to receive in respect
of such Notional Preference Shares, on a return of assets in such Winding-up or Administration Event, was an amount equal to the
principal amount of the relevant Contingent Capital Note, together with any Accrued Interest and any damages (if payable), regardless
of whether the Solvency Condition is satisfied on the date upon which the same would otherwise be due and payable.


 



(d)
If a Winding-up or Administration Event occurs on or after the date on which a Conversion Trigger Event occurs but the Settlement
Shares to be issued and delivered to the Settlement Share Depository on the Conversion Date have not been so delivered, there shall
be payable by the Company in respect of each Contingent Capital Note (in lieu of any other payment by the Company) such amount,
if any, as would have been payable to the Holder or Beneficial Owner of such Contingent Capital Note in a Winding-up or Administration
Event if the Conversion Date in respect of an Automatic Conversion had occurred immediately before the occurrence of a Winding-up
or Administration Event (and, as a result, such Holder or Beneficial Owner were the holder of such number of the Company’s
ordinary shares as such Holder or Beneficial Owner would have been entitled to receive on the Conversion Date, ignoring for this
purpose the Company’s right to make an election for a Settlement Shares Offer to be effected pursuant to‎Section
2.17 hereof), regardless of whether the Solvency Condition is satisfied on the date upon which the same would otherwise be due
and payable.


 


(e)
Other than in the event of a Winding-up or Administration Event of the Company as described in paragraph ‎(c)
and ‎(d) above, or in relation to the Cash Component of any Alternative Consideration in any Settlement Shares Offer,
payments in respect of or arising under the Contingent Capital Notes (including any damages for breach of any obligations thereunder)
shall, in addition to the right of the Company to cancel payments of interest pursuant to ‎Section 2.03 or ‎2.04
hereof, be conditional upon the Company’s being solvent at the time of payment by the Company, in that no principal, interest
or other amount payable shall be due and payable in respect of or arising from the Contingent Capital Notes except to the extent
that the Company could make such payment and still be solvent immediately thereafter (such condition referred to herein as the
“Solvency Condition”). For purposes of determining whether the Solvency Condition is met, the Company shall
be considered to be solvent at a particular point in time if (i) it is able to pay its debts as they fall due and (ii) its Assets
are at least equal to its Liabilities. An Officer’s Certificate (which shall only






    51 


     


    

 


 


be
required if the Company at the relevant time has not satisfied the Solvency Condition and is relying on that fact as the basis
for not making a payment on the Contingent Capital Notes) as to the Company’s solvency shall, unless there is manifest error,
be treated and accepted by the Company, the Trustee and any Holder as correct and sufficient evidence that the Solvency Condition
is not satisfied. If the Company fails to make a payment because the Solvency Condition is not satisfied, such payment shall not
be or become due and payable and shall be deemed cancelled.


 


Section 5.02. 
No Set-Off. Subject to applicable law, the Trustee (acting on behalf of the Holders) and the Holders of the Contingent
Capital Notes by their acceptance thereof will be deemed to have waived any right of set-off, counterclaim or combination of accounts
with respect to the Contingent Capital Notes, this First Supplemental Indenture or the Contingent Convertible Securities Indenture
(or between the Company’s obligations under or in respect of the Contingent Capital Notes and any liability owed by a Holder
to the Company) that they (or the Trustee acting on their behalf) might otherwise have against the Company, whether before or during
any Winding-up or Administration Event. Notwithstanding the above, if any of such rights and claims of any such Holder (or the
Trustee acting on behalf of such Holders) against the Company are discharged by set-off, such Holder (or the Trustee acting on
behalf of such Holders) will immediately pay an amount equal to the amount of such discharge to the Company or, in the event of
any Winding-up or Administration Event, the liquidator or administrator (or other relevant insolvency official), as the case may
be, to be held on trust for the Senior Creditors and until such time as payment is made will hold a sum equal to such amount on
trust for the Senior Creditors and accordingly such discharge shall be deemed not to have taken place.


 


Article
6

Satisfaction and Discharge


 


Section 6.01. 
Satisfaction and Discharge of Indenture. For purposes of the Contingent Capital Notes, ‎Section
4.01 of the Contingent Convertible Securities Indenture shall be amended and restated in its entirety and shall read as follows:


 


This Indenture shall upon Company Request cease to
be of further effect with respect to the Contingent Capital Notes (except as to any surviving rights of registration of transfer
of the Contingent Capital Notes herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of the Indenture with respect to the Contingent Capital Notes when:


 



(a)
all Contingent Capital Notes theretofore authenticated and delivered (other than Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 3.06 of the Contingent Convertible Securities Indenture)
have been delivered to the Trustee for cancellation;


 



    52 


     


    





(b)
the Company has paid or caused to be paid all other sums payable hereunder (including Accrued Interest, if any) by the Company
with respect to the Contingent Capital Notes; and


 



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


 


Notwithstanding any satisfaction
and discharge of the Indenture, the obligations of the Company to the Trustee under Section 6.07 of the Contingent Convertible
Securities Indenture, the obligations of the Trustee to any Authenticating Agent under Section 6.14 of the Contingent Convertible
Securities Indenture and the obligations of the Trustee under ‎Section
4.02 of the Contingent Convertible Securities Indenture and the last paragraph of Section 10.03 of the Contingent Convertible Securities
Indenture shall survive such satisfaction and discharge.


 


Article
7

Supplemental Indentures


 


Section 7.01. 
Amendments or Supplements without Consent of Holders. In addition to any permitted amendment or supplement to the
Contingent Convertible Securities Indenture pursuant to ‎Section 9.01 of the Contingent
Convertible Securities Indenture, the Company and the Trustee may amend or supplement the Indenture or the Contingent Capital Notes
without notice to or the consent of any Holder of the Contingent Capital Notes (i) to conform this First Supplemental Indenture
and the form or terms of the Contingent Capital Notes to the section entitled “Description of the Contingent Capital Notes”
as set forth in the Prospectus, (ii) to reflect changes to the procedures set forth in ‎Section
2.15 or ‎Section 2.16 above or (iii) pursuant to ‎Section
2.21(b)(iii).


 


Section 7.02. 
Amendments or Supplements With Consent of Holders. The Company and the Trustee may amend the Contingent Capital Notes
and the Indenture with respect to the Contingent Capital Notes as provided in ‎Section
9.02 of the Contingent Convertible Securities Indenture. Notwithstanding the foregoing provision and in addition to the provisions
of ‎Section 9.02 of the Contingent Convertible Securities Indenture, without the
consent of each Holder of an outstanding Security affected thereby, no amendment or waiver may make any change that adversely affects
the conversion rights of any of the Contingent Capital Notes.


 


Section 7.03. 
Holders’ Approval of Amendments. The consent of the Holders is not necessary under the Indenture to approve
the particular form of any proposed amendment, supplement or waiver, but it will be sufficient if such consent approves the substance
of such proposed amendment, supplement or waiver. After an amendment, supplement or waiver becomes effective, the Company shall
give to the Holders affected by such amendment, supplement or waiver a notice in accordance with the Indenture






    53 


     


    

 


 


briefly
describing such amendment, supplement or waiver. The Company shall mail supplemental indentures to Holders upon request. Any failure
of the Company to mail such notice, or any defect in such notice, will not, however, in any way impair or affect the validity
of any such supplemental indenture or waiver.


 


Section 7.04. 
PRA Consent. No modification shall be effected to this First Supplemental Indenture or in relation to the Contingent
Capital Notes, unless the Company has received any consent (or indication of no objection) from the PRA as may be required under
the Capital Regulations. The Trustee is entitled to request and rely on an Officer’s Certificate as to the satisfaction of
this condition precedent to any modification without further enquiry.


 


Article
8

Amendments
to the Contingent Convertible Securities Indenture applicable to the Contingent Capital Notes only


 


Section 8.01. 
Additional Amounts. With respect to the Contingent Capital Notes only, Section 10.04 of the Contingent Convertible
Securities Indenture is amended and restated in its entirety and shall read as follows:


 


Section 10.04. Additional
Amounts. All amounts of principal and interest, if any, on the Contingent Capital Notes will be paid by the Company
without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed
by or on behalf of the United Kingdom or any political subdivision or any authority thereof or therein having the power to
tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law.


 


If deduction or withholding of
any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing
Jurisdiction, the Company will pay such additional amounts in respect of the payment of any interest on (but not, for the avoidance
of doubt, in respect of the payment of the principal amount of) the Contingent Capital Notes (“Additional Amounts”)
as may be necessary in order that the net amounts in respect of any interest paid to the Holders of the Contingent Capital Notes,
after such deduction or withholding, shall equal the amount of any interest which would have been payable in respect of such Contingent
Capital Notes had no such deduction or withholding been required; provided, however, that the foregoing will not
apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding that would not have been payable or due but for
the fact that:


 



(i) 
the Holder or the beneficial owner of the Contingent Capital Note is a domiciliary, national or resident of, or engaging
in business or maintaining a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise has some connection
with the Taxing Jurisdiction other than the mere holding or ownership of a Contingent






    54 


     


    

 


 


Capital Note, or the collection of any payment
of (or in respect of) any interest on the Contingent Capital Notes


 


(ii) 
except in the case of a winding up of the Company in the United Kingdom, the Contingent Capital Note is presented (where
presentation is required) for payment in the United Kingdom,


 



(iii) 
the Contingent Capital Note is presented (where presentation is required) for payment more than 30 days after the date payment
became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional
Amount on presenting (where presentation is required) the Contingent Capital Note for payment at the close of such 30 day period,


 



(iv) 
the Holder or the beneficial owner of the Contingent Capital Note or the beneficial owner of any payment of (or in respect
of) any interest on such Contingent Capital Note failed to comply with a request of the Company or its liquidator or other authorized
Person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such
beneficial owner or (y) to make any declaration or other similar claim, which in the case of (x) or (y), is required or imposed
by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption or relief
from all or part of such deduction or withholding,


 



(v) 
the withholding or deduction is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of
savings income or any Directive amending, supplementing or replacing such Directive, or any law implementing or complying with,
or introduced in order to conform to, such Directive or Directives,


 



(vi) 
the withholding or deduction is required to be made pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue
Code, any agreement with the U.S. Treasury entered into with respect thereto, any U.S. Treasury regulation issued thereunder or
any other official interpretations or guidance issued with respect thereto; any intergovernmental agreement entered into with respect
thereto, or any law, regulation, or other official interpretation or guidance promulgated pursuant to such an intergovernmental
agreement,


 



(vii) 
the Contingent Capital Note is presented (where presentation is required) for payment by or on behalf of a Holder who would
have been able to avoid such withholding or deduction by presenting (where presentation is required) the Contingent Capital Note
to another paying agent in a Member State of the European Union, or


 


(viii) 
any combination of subclauses (i) through (vii) above,


 



    55 


     


    




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


 


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


 


Article
9

Miscellaneous


 


Section 9.01. 
Effect of Supplemental Indenture. Upon the execution and delivery of this First Supplemental Indenture by each of
the Company and the Trustee, the Contingent Convertible Securities Indenture shall be supplemented and amended in accordance herewith,
and this First Supplemental Indenture shall form a part of the Contingent Convertible Securities Indenture for all purposes in
respect of any Contingent Capital Notes.


 


Section 9.02. 
Other Documents to Be Given to the Trustee. As specified in ‎Section
9.03 of the Contingent Convertible Securities Indenture and subject to the provisions of Section 6.03 of the Contingent Convertible
Securities Indenture, the Trustee shall be entitled to receive an Officer’s Certificate stating the recitals contained in
‎Section 1.02 of the Contingent Convertible Securities Indenture have been complied
with and an Opinion of Counsel stating that this First Supplemental Indenture is permitted by the Contingent Convertible Securities
Indenture, conforms to the requirements of the Trust Indenture Act, and (subject to ‎Section
1.03 of the Contingent Convertible Securities Indenture) constitutes valid and binding obligations of the Company enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally,
concepts of reasonableness and equitable principles of general applicability. The Trustee shall be entitled to rely on such Officer’s
Certificate and Opinion of Counsel as conclusive evidence that this First Supplemental Indenture complies with the applicable provisions
of the Contingent Convertible Securities Indenture.


 


Section 9.03. 
Notices to, and Consents Required from, the PRA to Be Given to the Trustee. The Trustee shall be entitled to receive,
and shall be fully protected in relying upon without any investigation, a copy of all notifications provided to, and prior consents
required from, the PRA pursuant to the Indenture.


 



    56 


     


    




Section 9.04. 
Survival. Anything herein to the contrary notwithstanding, for purposes of the Contingent Capital Notes, Section
6.08 of the Contingent Convertible Securities Indenture is hereby amended in its entirety as follows: The Trustee’s right
to payment of its fees, reimbursement and indemnity under, and in its lien provided for in, Sections 5.06 and 6.07 of the Contingent
Convertible Securities Indenture shall survive the payment in full of the Contingent Capital Notes, the satisfaction and discharge
of the Indenture, the Automatic Conversion upon a Conversion Trigger Event, the resignation or removal of the Trustee, the termination
for any reason of the Indenture and any exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect
to the Contingent Capital Notes.


 


Section 9.05. 
Confirmation of Indenture. The Contingent Convertible Securities Indenture, as supplemented and amended by this First
Supplemental Indenture, is in all respects ratified and confirmed, and the Contingent Convertible Securities Indenture and this
First Supplemental Indenture shall, in respect of any Contingent Capital Notes, be read, taken and construed as one and the same
instrument. This First Supplemental Indenture constitutes an integral part of the Contingent Convertible Securities Indenture with
respect to the Contingent Capital Notes. In the event of a conflict between the terms and conditions of the Contingent Convertible
Securities Indenture and the terms and conditions of this First Supplemental Indenture, the terms and conditions of this First
Supplemental Indenture shall prevail with respect to the Contingent Capital Notes.


 


Section 9.06. 
Concerning the Trustee. The Trustee does not make any representations as to the validity or sufficiency of this First
Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and not the Trustee. In entering
into this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Contingent Convertible
Securities Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.


 


Section 9.07. 
Governing Law. This First Supplemental Indenture and the Contingent Capital Notes shall be governed by and construed
in accordance with the laws of the State of New York, except that (i) Sections 5.01 and 5.02 of this First Supplemental Indenture
(other than the Trustee’s own rights, duties or immunities thereunder) shall be governed by and construed in accordance with
the laws of Scotland and (ii) the authorization and execution by the Company of this First Supplemental Indenture and the Contingent
Capital Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the jurisdiction of
the Company.


 


Section 9.08. 
Entire Agreement. With respect to Contingent Capital Notes issued pursuant to this First Supplemental Indenture,
any agreements, arrangements or understandings between the Company and any Holder and Beneficial Owner of the Contingent Capital
Notes with respect to the Contingent Capital Notes must be entered into in accordance with the terms of the Indenture.


 


Section 9.09. 
Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall
be an original, but such counterparts shall together constitute but one and the same instrument.


 



    57 


     


    




[Signature Pages Follow]


 




    58 


     


    

IN WITNESS WHEREOF, the parties hereto have
caused this First Supplemental Indenture to be duly executed as of the date first written above.


 


	THE ROYAL BANK OF SCOTLAND GROUP PLC, as Company
	 
	 
	By:	/s/ John Cummins
	 	Name:John Cummins
	 	Title:RBS Treasurer




 


 


	THE BANK OF NEW YORK MELLON, as Trustee
	 
	 
	By:	/s/ Robert Timmons
	 	Name: Robert Timmons
	 	Title: Vice President
	 	 
	 	 



[Signature Page to First Supplemental
Indenture]


 




    59 


     


    




EXHIBIT A


 


FORM OF GLOBAL NOTE


 


THIS SECURITY IS A GLOBAL REGISTERED SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR
IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.


 


THE RIGHTS OF THE HOLDER OF THIS SECURITY
ARE, TO THE EXTENT AND IN THE MANNER SET FORTH IN SECTION 12.01 OF THE INDENTURE, SUBORDINATED TO THE CLAIMS OF OTHER CREDITORS
OF THE COMPANY, AND THIS SECURITY IS ISSUED SUBJECT TO THE PROVISIONS OF THAT SECTION 12.01, AND THE HOLDER OF THIS SECURITY, BY
ACCEPTING THE SAME, AGREES TO AND SHALL BE BOUND BY SUCH PROVISIONS. THE PROVISIONS OF SECTION 12.01 OF THE INDENTURE AND THE TERMS
OF THIS PARAGRAPH ARE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF SCOTLAND.


 


This Security is one of a duly authorized
issue of securities of the Company (as defined below) (herein called the “Securities” and each, a “Security”)
issued and to be issued in one or more series under and governed by the Contingent Convertible Securities Indenture, dated as of
August 10, 2015 (the “Contingent Convertible Securities Indenture”), as supplemented by the First Supplemental
Indenture, dated as of August 10, 2015 (the “First Supplemental Indenture” and, together with the Contingent
Convertible Securities Indenture, the “Indenture”). Capitalized terms used herein but not otherwise defined
shall have the meaning ascribed to them in the First Supplemental Indenture.


 


The rights of the Holder and Beneficial
Owners of this Security are, to the extent and in the manner set forth in Section 5.01 of the First Supplemental Indenture (which
amends in its entirety Section 12.01(a) of the Contingent Convertible Securities Indenture), subordinated to the claims of other
creditors of the Company, and this Security is issued subject to the provisions of that Section 5.01, and the Holder (and Beneficial
Owners) of this Security, by accepting the same, agrees to, and shall be bound by, such provisions. The provisions of Sections
5.01 and 5.02 of the First Supplemental Indenture and the terms of this paragraph are governed by, and shall be construed in accordance
with, Scots law.


 


The rights of the Holder of this Security
are subject to Section 2.15 of the First Supplemental Indenture. Effective upon, and following, the occurrence of the Automatic
Conversion, provided that the Company issues and delivers the Settlement Shares to the Settlement Share Depository (or the relevant
recipient in accordance with this Security or


 




    1 


     


    

the First Supplemental Indenture), Holders and Beneficial Owners
shall not have any rights against the Company with respect to repayment of the principal amount of this Security or payment of
interest or any other amount on or in respect of this Security, which liabilities of the Company shall be irrevocably and automatically
released, and accordingly the principal amount of this Security shall equal zero at all times thereafter.


 


Notwithstanding any other agreements, arrangements,
or understandings between the Company and any Holder or Beneficial Owner of the Contingent Capital Notes, by its acquisition of
the Contingent Capital Notes, each Holder and Beneficial Owner of the Contingent Capital Notes, acknowledges, accepts, agrees to
be bound by and consents to the exercise of any UK bail- in power by the relevant UK resolution authority that may result in the
(i) reduction or cancellation of all, or a portion, of the principal amount of, or interest on, the Contingent Convertible Securities,
(ii) the conversion of all, or a portion of, the principal amount of, or interest on, the Contingent Convertible Securities into
ordinary shares or other securities or other obligations of the Company or another person and/or (iii) the amendment of the amount
of interest due on the Contingent Capital Notes, or the dates on which interest becomes payable, including by suspending payment
for a temporary period; which U.K. bail-in power may be exercised by means of variation to the terms of the Contingent Convertible
Securities, solely to give effect to the above. With respect to (i), (ii) and (iii) above, references to principal and interest
shall include payments of principal and interest that have become due and payable, but which have not been paid, prior to the exercise
of any U.K. bail-in power. By its acquisition of the Contingent Capital Notes, each Holder and Beneficial Owner further acknowledges
and agrees that the rights of the Holders and/or Beneficial Owners under the Contingent Capital Notes are subject to, and will
be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.


 


THE ROYAL BANK OF SCOTLAND
GROUP PLC

$[     ] []% Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes

(Callable August 10, 2020 and Every Five Years Thereafter)


 


	No. [    ]	$[    ]
	 	CUSIP NO. []
	 	ISIN NO. []
	 	 


THE ROYAL BANK OF SCOTLAND GROUP plc (herein
called the “Company”, which term includes any successor Person under the Indenture (as defined on the reverse
hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assignees, the principal sum of $[] ([] Dollars),
if and to the extent due, and to pay interest thereon, if any, in accordance with the terms hereof and the Indenture. The Contingent
Capital Notes shall have no fixed maturity or fixed redemption date. From (and including) the Issue Date to (but excluding) August
10, 2020 (the “First Call Date”), the interest rate on the Contingent Capital Notes shall be []% per annum.
From and including the First Call Date and each fifth anniversary date thereafter (each such date, a “Reset Date”),
to (but excluding) the next following Reset Date, the applicable


 




    2 


     


    

per annum rate shall be equal to the sum of the applicable Mid-Market
Swap Rate on the Reset Determination Date and []% converted to a quarterly rate in accordance with market convention. Subject to
the provisions on the reverse of this Security relating to cancellation and deemed cancellation of interest and to Sections 2.03,
2.04, 2.15(h) and 5.01 of the First Supplemental Indenture and to the two last sentences of this paragraph, interest, if any, shall
be payable in four equal quarterly installments in arrear on [], [], [] and [] of each year (each, an “Interest Payment
Date”). The first date on which interest may be paid will be [], 2015. Subject to the limitations specified on the reverse
of this Security, if any interest payment is to be made in respect of the Contingent Capital Notes on any other date, including
on any scheduled redemption date, it shall be calculated by the Calculation Agent by applying the interest rate as described above
and multiplying the product by 30/360 and rounding the resulting figure to the nearest cent (half a cent being rounded upwards).
For this purpose “30/360” means, in respect of any period, the number of days in the relevant period, from and
including the first day in such period to but excluding the last day in such period, such number of days being calculated on the
basis of a 360 day year consisting of 12 months of 30 days each, divided by 360.


 


The “Mid-Market Swap Rate”
is the mid-market U.S. dollar swap rate Libor basis having a five-year maturity appearing on Bloomberg page “USD ISDA 05”
(or such other page as may replace such page on Bloomberg, or such other page or service as may be nominated by the person providing
or sponsoring the information appearing on such page for purposes of displaying comparable rates) as at approximately 11:00 a.m.
(New York time) on the Reset Determination Date, as determined by the Calculation Agent. If such swap rate does not appear on such
page (or such other page or service), the Mid-Market Swap Rate shall instead be determined by the Calculation Agent as being equal
to the arithmetic mean expressed as a percentage and rounded, if necessary, to the nearest 0.001% (0.0005% being rounded upwards)
of the quotations provided by the principal office of each of four major banks in the U.S. dollar swap rate market (which banks
shall be selected by the Calculation Agent with the prior agreement of the Company not less than 20 calendar days prior to the
Reset Determination Date) (the “Reference Banks”) of the rates at which swaps in U.S. dollars are offered by
it at approximately 11.00 a.m. (New York time) (or thereafter on the Reset Determination Date, with the Calculation Agent acting
on a best efforts basis) on the Reset Determination Date to participants in the U.S. dollar swap rate market for a five-year period.
If the Mid-Market Swap Rate is still not determined on the relevant Reset Determination Date in accordance with the foregoing procedures,
the Mid-Market Swap Rate shall be the mid-market U.S. dollar swap rate Libor basis having a five-year maturity that appeared on
the most recent Bloomberg page “USD ISDA 05” (or such other page as may replace such page on Bloomberg, or such other
page or service as may be nominated by the person providing or sponsoring the information appearing on such page for purposes of
displaying comparable rates) that was last available prior to 11.00 a.m. (New York time) on the relevant Reset Determination Date,
as determined by the Calculation Agent. The “Reset Determination Date” shall be the second Business Day immediately
preceding each Reset Date.


 




    3 


     


    

If any Interest Payment Date is not a Business
Day, the Interest Payment Date shall be postponed to the next Business Day, and no further interest or other payment shall be owed
or made in respect of such delay.


 


If any scheduled redemption date is not
a Business Day, payment of interest, if any, and principal shall be postponed to the next Business Day, but interest on that payment
will not accrue during the period from and after any scheduled redemption date. If any Reset Date is not a Business Day, the Reset
Date shall occur on the next succeeding Business Day.


 


The interest, if any, so payable, and paid
or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this
Security is registered at the close of business on the Regular Record Date for such interest which shall be the 15th calendar day
preceding each Interest Payment Date, whether or not such day is a Business Day.


 


In addition to any other restrictions on
payments of principal and interest contained in this First Supplemental Indenture, no payment of the principal amount of this Security
following any proposed redemption or payment of interest on this Security shall become due and payable after the exercise of any
U.K. bail-in power by the relevant U.K. resolution authority unless, at the time that such repayment or payment, respectively,
is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations
of the U.K. and the European Union applicable to the Company and the Group.


 


Interest on the Contingent Capital Notes
shall be due and payable only at the full discretion of the Company, and the Company shall have sole and absolute discretion at
all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any Interest
Payment Date. If the Company elects not to make an interest payment in respect of the Contingent Capital Notes on the relevant
Interest Payment Date (or if the Company elects to make a payment of a portion, but not all, of such interest payment), such non-payment
shall evidence the Company’s exercise of its discretion to cancel such interest payment (or the portion of such interest
payment not paid), and accordingly such interest payment (or the portion thereof not paid) shall not be or become due and payable.


 


Any interest cancelled or deemed cancelled
(in each case, in whole or in part) pursuant to this Security shall not be due and shall not accumulate or be payable at any time
thereafter, and Holders and Beneficial Owners of the Contingent Capital Notes shall have no right to or claim against the Company
with respect to such interest amount. In addition, any such cancellation or deemed cancellation shall not constitute a default
under this Security and Holders and Beneficial Owners of this Security shall have no rights thereto or to receive any additional
interest or compensation as a result of such cancellation or deemed cancellation.


 


Without limitation on the foregoing paragraph,
the Company shall cancel any interest in respect of the Contingent Capital Notes (or, as appropriate, any part thereof) on any
Interest Payment Date (and such interest payment shall therefore be deemed to have


 




    4 


     


    

been cancelled and thus shall not be due and payable on such
Interest Payment Date) if in respect of such Interest Payment Date (a) the Company has an amount of Distributable Items on such
scheduled Interest Payment Date that is less than the sum of (i) all payments (other than redemption payments which do not reduce
Distributable Items) made or declared by the Company since the end of the Company’s latest financial year and prior to such
Interest Payment Date on or in respect of any Parity Securities, the Contingent Capital Notes and any Junior Securities and (ii)
all payments (other than redemption payments which do not reduce Distributable Items) payable by the Company on such Interest Payment
Date (x) on the Contingent Capital Notes and (y) on or in respect of any Parity Securities or any Junior Securities, in the case
of each of (i) and (ii), excluding any payments already accounted for in determining the Distributable Items, or (b) if the Solvency
Condition is not (or would not be) satisfied in respect of such amounts payable on such Interest Payment Date.


 


By its acquisition of the Contingent Capital
Notes, each Holder and each Beneficial Owner shall be deemed to have contracted and agreed that (i) interest is payable solely
at the discretion of the Company, and no amount of interest shall become due and payable in respect of the relevant interest period
to the extent that it has been (x) cancelled (in whole or in part) by the Company at the Company’s sole discretion and/or
(y) deemed cancelled pursuant to Section 2.04(a) of the First Supplemental Indenture, and (ii) a cancellation or deemed cancellation
of interest (in each case, in whole or in part) in accordance with the terms of the Indenture and the Contingent Capital Notes
shall not constitute a default in payment or otherwise under the terms of the Contingent Capital Notes or the Indenture.


 


Interest on the Contingent Capital Notes
shall only be due and payable on an Interest Payment Date to the extent it is not cancelled or deemed cancelled under the terms
of this Security and Sections 2.02(b), 2.03(a), 2.04, 2.15(h) and Section 5.01 of the First Supplemental Indenture. Any interest
cancelled or deemed cancelled (in each case, in whole or in part) in the circumstances described in this Security shall not be
due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Contingent Capital
Notes shall have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed
cancellation of interest in respect of the Contingent Capital Notes.


 


Payments of principal of and interest, if
any, on the Contingent Capital Notes shall be made in such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts and such payments on Contingent Convertible Securities represented by a
Global Note shall be made through one or more Paying Agents appointed under the Contingent Convertible Securities Indenture to
DTC or its nominee, as the Holder of this Security. Initially, the Paying Agent and the Security Registrar for the Contingent Capital
Notes shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom. The Company may change
the Paying Agent or the Security Registrar without prior notice to the Holders of the Contingent Capital Notes, and in such an
event the Company may act as Paying Agent or Security Registrar. Payments of principal of and interest on the Contingent Capital
Notes shall be made by wire transfer of immediately


 




    5 


     


    

available funds; provided, however, that in the
case of payments of principal, this Security is first surrendered to the Paying Agent.


 


This Security shall be governed by and construed
in accordance with the laws of the State of New York, irrespective of conflicts of laws principles, except as stated in Section
9.07 of the First Supplemental Indenture and as stated herein, and except that the authorization and execution of this Security
shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of the
Company and the Trustee, as the case may be.


 


Reference is hereby made to the further
provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect
as if set forth at this place.


 


All terms used in this Security which are
defined in the Indenture shall have the meanings assigned to them in the Indenture, as defined herein.


 


THIS SECURITY IS NOT A DEPOSIT AND IS NOT
INSURED BY THE UNITED STATES FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY OF THE UNITED STATES OR THE UNITED
KINGDOM.


 


Unless the certificate of authentication
hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual
signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory
for any purpose.


 


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




 



    6 


     


    




IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.


 


Date: [     ]


 


	THE ROYAL BANK OF SCOTLAND GROUP PLC
	 
	 
	By:	 
	 	Name:
	 	Title:





    7 


     


    

Trustee’s Certificate of Authentication


 


This is one of the Contingent Capital Notes
of the series designated herein referred to in the Indenture.


 


Date: [     ]


 


	THE BANK OF NEW YORK MELLON, 

as Trustee
	 
	 
	By:	 
	 	Authorized Signatory




    8 


     


    

(Reverse of Security)


 


This Security is one of a duly authorized
issue of securities of the Company (herein called the “Securities” and each, a “Security”)
issued and to be issued in one or more series under and governed by the Contingent Convertible Securities Indenture, dated as of
August 10, 2015 (herein called the “Contingent Convertible Securities Indenture”), between the Company and The
Bank of New York Mellon, London Branch, as Trustee (herein called the “Trustee,” which term includes any successor
trustee under the Contingent Convertible Securities Indenture), as supplemented and amended by the First Supplemental Indenture,
dated as of August 10, 2015 (the “First Supplemental Indenture” and, together with the Contingent Convertible
Securities Indenture, the “Indenture”), and reference is hereby made to the Indenture, the terms of which are
incorporated herein by reference, for a statement of the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee, the Holders of the Contingent Capital Notes and of the terms upon which the Contingent Capital Notes
are, and are to be, authenticated and delivered. Insofar as the provisions of the Indenture may conflict with the provisions set
forth in this Security, the former shall control for purposes of this Security.


 


This Security is one of the series designated
on the face hereof, limited to a principal amount of $[aggregate principal amount of series of Contingent Capital Notes],
which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Securities
of this series. References herein to “this series” mean the series designated on the face hereof.


 


All payments of principal and/or interest
to the Holders by or on behalf of the Company in respect of the Contingent Capital Notes shall be made without withholding or deduction
for or on account of any present or future tax, duty, assessment or governmental charge of whatsoever nature imposed, levied, collected,
withheld or assessed by or on behalf of the United Kingdom or any authority thereof or therein having power to tax, unless such
withholding or deduction is required by law. In that event, and in respect of withholding or deduction imposed in respect of interest
only (and not, for the avoidance of doubt, principal), the Company shall pay such additional amounts (“Additional Amounts”)
as will result (after such withholding or deduction) in receipt by the Holders of the sums which would have been receivable (in
the absence of such withholding or deduction) from it in respect of their Contingent Capital Notes; except that no such Additional
Amounts shall be payable with respect to any Contingent Capital Note in accordance with Section 10.04 of the Contingent Convertible
Securities Indenture (as amended and restated with respect to the Contingent Capital Notes only by Section 8.01 of the First Supplemental
Indenture).


 


Payments under the Contingent Capital Notes
will be subject in all cases to any applicable fiscal or other laws and regulations in the place of payment or other laws and regulations
to which the Company or its Paying Agents agree to be subject and the Company will not, save as provided under Section 10.04 of
the Contingent Convertible Securities Indenture (as amended and restated with respect to the Contingent Capital Notes only by Section
8.01 of the First Supplemental Indenture), be liable for any taxes


 




    9 


     


    

or duties of whatever nature imposed or levied by such laws,
regulations or agreements. No commission or expenses shall be charged to the Holders in respect of such payments.


 


Subject to the pre-conditions specified
below, the Company may, at the Company’s option and in its sole discretion, redeem the Contingent Capital Notes, in whole
but not in part, on the First Call Date or on any Reset Date thereafter at a redemption price equal to 100% of the principal amount
of the Contingent Capital Notes then outstanding, together with any Accrued Interest to (but excluding) the date fixed for redemption.


 


Subject to the pre-conditions specified
below, the Company may, at the Company’s option and in its sole discretion at any time, redeem the Contingent Capital Notes,
in whole but not in part at a redemption price equal to 100% of the principal amount of the Contingent Capital Notes then outstanding,
together with any Accrued Interest to (but excluding) the date fixed for redemption, if at any time the Company determines that
as a result of any amendment to, or change in the regulatory classification of the Contingent Capital Notes under the Capital Regulations
(or official interpretation thereof), in any such case becoming effective on or after the Issue Date, the Contingent Capital Notes
are, or are likely to be, fully excluded from the Tier 1 Capital (as defined in the Capital Regulations) of the Company and/or
the Regulatory Group (a “Capital Disqualification Event”).


 


Subject to the pre-conditions specified
below, on the occurrence of a Tax Event, the Company may, at the Company’s option and in its sole discretion, at any time
redeem all, but not some only, of the Contingent Capital Notes at 100% of their principal amount together with any Accrued Interest
to (but excluding) the date of redemption. A “Tax Event” will be deemed to have occurred with respect to the
Contingent Capital Notes if, at any time, the Company determines that, as a result of any change in, or amendment to, the laws
or regulations of the U.K. or any political subdivision or any authority thereof or therein having power to tax (including any
treaty to which the U.K. or any political subdivision or any authority thereof or therein is a party), or any change in the official
application of such laws or regulations (including a decision of any court or tribunal or the application by any tax authority),
which change or amendment becomes effective or applicable, or, in the case of a change in or amendment to law, where such change
or amendment is enacted by a UK Act of Parliament or by a Statutory Instrument, if such UK Act of Parliament or Statutory Instrument
is enacted on or after the Issue Date:


 


(a)  
in making a payment under the Contingent Capital Notes in respect of interest, the Company
has or will or would on the next Interest Payment Date become obligated to pay Additional Amounts;


 


(b)  
a payment of interest on the next Interest Payment Date in respect of any of the Contingent
Capital Notes would be treated as a “distribution” within the meaning of Section 1000 of the U.K. Corporation Tax
Act 2010 (or any statutory modification or re-enactment thereof for the time being);


 




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(c)  
the Company would not be entitled to claim a deduction in respect of a payment of interest
payable on the next Interest Payment Date in computing its U.K. taxation liabilities (or the value of such deduction to the Company
would be materially reduced);


 


(d)  
as a result of the Contingent Capital Notes being in issue, the Company would not be able
to have losses or deductions (including in respect of a payment of interest on the Contingent Capital Notes) set against the profits
or gains, or profits or gains offset by losses or deductions, of companies with which it is or would otherwise be grouped for
applicable U.K. tax purposes (whether under the group relief system current as at the date of issue of the Contingent Capital
Notes or any similar system or systems having like effect as may exist from time to time);


 


(e)  
a future write-down of the principal amount of the Contingent Capital Notes or conversion
of the Contingent Capital Notes into ordinary shares would result in a U.K. tax liability, or income, profit or gain being treated
for U.K. tax purposes as accruing, arising or being received;


 


(f)  
the Contingent Capital Notes would no longer be treated as loan relationships for U.K. tax
purposes; or


 


(g)  
the Contingent Capital Notes or any part thereof would be treated as a derivative or an embedded
derivative for U.K. tax purposes,


 


in each case, the effect of which cannot be avoided by the Company
taking reasonable steps available to it.


 


In any case where the Company shall determine
that as a result of a Tax Event, it is entitled to redeem the Contingent Capital Notes, it shall be required to deliver to the
Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized
standing (selected by the Company), in a form satisfactory to the Trustee confirming that the Tax Event has occurred.


 


Any interest payments that have been cancelled
or deemed cancelled pursuant to the terms of this Security and the Indenture shall not be payable if the Contingent Capital Notes
are redeemed pursuant to any of the preceding paragraphs.


 


Before the Company may redeem the Contingent
Capital Notes pursuant to any of the preceding paragraphs relating to the Company’s rights of redemption, the Company shall
deliver to DTC as the Holder of the Global Securities (or, if the Contingent Capital Notes are in definitive form, to the Holders
directly at their addresses shown on the Contingent Convertible Security Register) prior notice of not less than thirty (30) days,
nor more than sixty (60) days. The Company shall deliver written notice of such redemption of the Contingent Capital Notes to the
Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption is sent to the Holders (unless
a shorter notice period shall be satisfactory to the Trustee).


 




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Such notice shall specify the Company’s
election to redeem the Contingent Capital Notes and the date fixed for such redemption and shall be irrevocable except in the limited
circumstances described below.


 


Any notice of redemption shall state (i)
the redemption date, (ii) that on the redemption date the redemption price will, subject to the satisfaction of the conditions
set forth in the Indenture, become due and payable upon each Contingent Capital Note being redeemed and that, subject to certain
exceptions, interest will cease to accrue on or after that date, (iii) the place or places where the Contingent Capital Notes are
to be surrendered for payment of the redemption price, and (iv) the CUSIP, Common Code and/or ISIN number or numbers, if any, with
respect to the Contingent Capital Notes being redeemed.


 


If the Company has delivered a notice of
redemption, but the Solvency Condition is not satisfied immediately prior to, and immediately following, the date specified for
redemption in such notice, such redemption notice shall be automatically rescinded and shall be of no force and effect, and no
payment in respect of the redemption amount shall be due and payable.


 


If the Company has delivered a notice of
redemption, but prior to the payment of the redemption amount with respect to such redemption a Conversion Trigger Notice has been
delivered, such redemption notice shall be automatically rescinded and shall be of no force and effect, and no payment in respect
of the redemption amount shall be due and payable.


 


If the Company has delivered a notice of
redemption, but prior to the date of any such redemption the Company has not given notice to the PRA and/or the PRA has refused
to grant permission to the Company, as applicable, to redeem the relevant Contingent Capital Notes (in each case to the extent,
and in the manner, required by the relevant Capital Regulations), such notice of redemption shall be automatically rescinded and
shall be of no force and effect and no payment in respect of any redemption amount, if applicable, shall be due and payable.


 


If the Company has delivered a notice of
redemption but in respect of any redemption proposed to be made prior to the fifth anniversary
of the Issue Date, if and to the extent then required under the Capital Regulations (A) in the case of redemption following the
occurrence of a Tax Event, the Company has not demonstrated to the satisfaction of the PRA that the Tax Event is material and was
not reasonably foreseeable as at the Issue Date, or (B) in the case of redemption following the occurrence of a Capital Disqualification
Event, the PRA does not consider such change to be sufficiently certain or the Company has not demonstrated to the satisfaction
of the PRA that the relevant change was not reasonably foreseeable as at the Issue Date; such notice of redemption shall
be automatically rescinded and shall be of no force and effect and no payment in respect of any redemption amount, if applicable,
shall be due and payable.


 


If the Company has delivered a notice of
redemption but prior to the payment of the redemption amount with respect to such redemption the Company is not in


 




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compliance with any alternative or additional pre-conditions
required by the PRA as a prerequisite to its consent to such redemption, such notice of redemption shall be automatically rescinded
and shall be of no force and effect, and no payment in respect of the redemption amount shall be due and payable.


 


If any of the events specified in each of
the preceding five paragraphs occurs, the Company shall promptly deliver notice to DTC as the Holder of the Global Securities (or,
if the Contingent Capital Notes are definitive Securities, to the Holders directly at their addresses shown on the Contingent Convertible
Security Register) and to the Trustee directly, specifying the occurrence of the relevant event.


 


Subject to the pre-conditions set out below,
the Company may at any time and from time to time, and to the extent not prohibited by CRD IV, repurchase beneficially or procure
others to repurchase beneficially for its account the Contingent Capital Notes in the open market, by tender or by private agreement,
in any manner and at any price or at differing prices. Contingent Capital Notes purchased or otherwise acquired by the Company
may be (i) held, (ii) resold or (iii) at the Company’s sole discretion, surrendered to the Trustee for cancellation (in which
case all Contingent Capital Notes so surrendered will forthwith be cancelled in accordance with applicable law and thereafter may
not be reissued or resold).


 


Contingent Capital Notes may be redeemed
or repurchased by the Company as provided under Sections ‎2.08,
‎2.09, ‎2.10,
‎2.11 and ‎2.13
of the First Supplemental Indenture of the Contingent Convertible Securities Indenture, provided that (except to the extent the
PRA no longer so requires) the Company has met the following conditions:


 



(a)  
the Company has notified the PRA of its intention to do so at least one month (or such other,
longer or shorter period, as the PRA may then require or accept) before the Company becomes committed to the proposed redemption
or repurchase;


 


(b)  
the PRA has granted permission for the Company to make any such redemption or repurchase
of the Contingent Capital Notes upon a satisfactory finding that either:


 



(i) 
on or before such redemption or repurchase of any of the Contingent Capital Notes, the Company
replaces such Contingent Capital Notes with own funds instruments (as defined by the Capital Regulations) of an equal or higher
quality on terms that are sustainable for its income capacity; or


 



(ii) 
the Company has demonstrated to the satisfaction of the PRA that its Tier 1 capital and Tier
2 capital (as defined by the Capital Regulations) would, following such redemption or repurchase, exceed the capital ratios required
under the CRD IV Regulation and the combined buffer requirement defined in the CRD IV Directive by a margin that the PRA may consider
necessary on the basis set out in the CRD IV Directive for it to determine the appropriate level of capital of an institution;


 




    13 


     


    


(c)  
no Conversion Trigger Notice has been delivered; and


 


(d)  
the Company has complied with any alternative or additional pre-conditions as set out in the
relevant Capital Regulations and/or required by the PRA as a prerequisite to its consent to such redemptions or repurchases, at
that time; and


 



(e)  
with respect to Sections 2.09 and 2.10 of the First Supplemental Indenture only, and except
to the extent that the PRA no longer so requires, the Company may only redeem the Contingent Capital Notes before five years after
the Issue Date if, in addition to the conditions set out in (a), (b), (c) and (d) above, the following conditions are met:


 



(i) 
in the case of a redemption due to a Tax Event pursuant to Section 2.09 of the First Supplemental
Indenture, the Company demonstrates to the satisfaction of the PRA that the Tax Event relating to the Contingent Capital Notes
is material and was not reasonably foreseeable at the time of issuance of the Contingent Capital Notes; or


 



(ii) 
in the case of a redemption due to the occurrence of a Capital Disqualification Event pursuant
to Section 2.10 of the First Supplemental Indenture, (x) the PRA considers such change to be sufficiently certain and (y) the Company
demonstrates to the satisfaction of the PRA that the Capital Disqualification Event was not reasonably foreseeable at the time
of the issuance of the Contingent Capital Notes.


 


If a Conversion Trigger Event has occurred,
then the Automatic Conversion shall occur on the Conversion Date and all of the Company’s obligations under the Contingent
Capital Notes shall be irrevocably and automatically released in consideration of the Company’s issuance and delivery of
the Settlement Shares to the Settlement Share Depository, and the principal amount of the Contingent Capital Notes shall equal
zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall remain unchanged as a result of the Automatic
Conversion). Under no circumstances shall such released obligations be reinstated. If the Company has been unable to appoint a
Settlement Share Depository, it shall effect, by means it deems reasonable in the circumstances (including, without limitation,
issuance of the Settlement Shares to another independent nominee or to the Holders of the Contingent Capital Notes directly), the
issuance and delivery of the Settlement Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as applicable,
to the Holders of the Contingent Capital Notes, and such issuance and delivery shall irrevocably and automatically release all
of the Company’s obligations under the Contingent Capital Notes as if the Settlement Shares had been issued and delivered
to the Settlement Share Depository and, in which case, where the context so admits, references in the First Supplemental Indenture
and in this Security to the issue and delivery of Settlement Shares to the Settlement Share Depository shall be construed accordingly
and apply mutatis mutandis.


 


The procedures set forth in this Security
and Section 2.15 of the First Supplemental Indenture are subject to change to reflect changes in DTC practices, and the Company
may make changes to the procedures set forth in this Section 2.15 to the


 




    14 


     


    

extent reasonably necessary, in the opinion of the Company,
to reflect such changes in DTC practices. Any such changes shall be subject to the provisions of Section 7.01 of the First Supplemental
Indenture.


 


Notwithstanding anything to the contrary
contained in the Indenture or this Security, once the Company has delivered a Conversion Trigger Notice following the occurrence
of a Conversion Trigger Event, (i) subject to the right of the Holders and Beneficial Owners pursuant to Section 4.03 in the event
of a failure by the Company to issue and deliver any Settlement Shares to the Settlement Share Depository on the Conversion Date,
the Indenture shall impose no duties upon the Trustee whatsoever with regard to an Automatic Conversion upon a Conversion Trigger
Event and the Holders and Beneficial Owners shall have no rights whatsoever under the Indenture or the Contingent Capital Notes
to instruct the Trustee to take any action whatsoever, and (ii) as of the date of the Conversion Trigger Notice, except for any
indemnity and/or security provided by any Holder or by any Beneficial Owner in such direction or related to such direction, any
direction previously given to the Trustee by any Holder or by any Beneficial Owner shall cease automatically and shall be null
and void and of no further effect; except in each case of (i) and (ii) of this paragraph, with respect to any rights of the Holders
or Beneficial Owners with respect to any payments under the Contingent Capital Notes that were unconditionally due and payable
prior to the date of the Conversion Trigger Notice or unless the Trustee is instructed in writing by the Company to act otherwise.


 


All authority conferred or agreed to be
conferred by each Holder and Beneficial Owner pursuant to this Security, including the consents given by such Holder and Beneficial
Owner, shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives
of such Holder and Beneficial Owner.


 


The Trustee shall not be liable with respect
to (i) the calculation or accuracy of the CET1 Ratio in connection with the occurrence of a Conversion Trigger Event and the timing
of such Conversion Trigger Event, (ii) the failure of the Company to post or deliver the underlying CET1 Ratio calculations of
a Conversion Trigger Event to DTC, the Holders or the Beneficial Owners, (iii) any aspect of the Company’s decision to deliver
a Conversion Trigger Notice or the related Automatic Conversion, (iv) the adequacy of the disclosure of these provisions in the
Prospectus or any other offering material in respect of the Contingent Capital Notes or for the direct or indirect consequences
thereof, or (v) any other requirement of the Company contained herein related to a Conversion Trigger Event or the Automatic Conversion.


 


Following the issuance and delivery of the
Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance with the terms of the Contingent
Capital Notes, as applicable) on the Conversion Date, this Contingent Capital Note shall remain in existence until the applicable
Cancellation Date for the sole purpose of evidencing the Holders’ and Beneficial Owners’ right to receive Settlement
Shares, or, if the Holder elects, ADSs or the Alternative Consideration, as the case may be, from the Settlement Share Depository
(or such other relevant recipient, as applicable).


 




    15 


     


    

The Holders and the Beneficial Owners shall
not at any time have the option to convert the Contingent Capital Notes into Settlement Shares.


 


The occurrence of the Automatic Conversion
shall not constitute an Enforcement Event.


 


Notwithstanding any other provision herein,
by its acquisition of the Contingent Capital Notes, each Holder and each Beneficial Owner shall be deemed to have (i) agreed to
all of the terms and conditions of the Contingent Capital Notes, including, without limitation, to those related to (x) Automatic
Conversion of its Contingent Capital Notes following a Conversion Trigger Event and (y) the appointment of the Settlement Share
Depository, the issuance of the Settlement Shares to the Settlement Share Depository (or to the relevant recipient in accordance
with the terms of the First Supplemental Indenture or the Contingent Capital Notes) and the potential sale of the Settlement Shares
pursuant to a Settlement Shares Offer and acknowledged that such events in (x) and (y) may occur without any further action on
the part of such Holders or Beneficial Owners or the Trustee, (ii) agreed that effective upon, and following, the occurrence of
the Automatic Conversion, no amount shall be due and payable to the Holders or the Beneficial Owners under the Contingent Capital
Notes and the liability of the Company to pay any such amounts (including the principal amount of, or any interest in respect of,
the Contingent Capital Notes) shall be automatically released, and the Holders and the Beneficial Owners shall not have the right
to give any direction to the Trustee with respect to the Conversion Trigger Event and any related Automatic Conversion, (iii) waived,
to the extent permitted by the Trust Indenture Act, any claim against the Trustee arising out of its acceptance of its trusteeship
under, and the performance of its duties, powers and rights in respect of, the Indenture and in connection with the Contingent
Capital Notes, including, without limitation, claims related to or arising out of or in connection with a Conversion Trigger Event
and/or any Automatic Conversion, and (iv) authorized, directed and requested DTC and any direct participant in DTC or other intermediary
through which it holds such Contingent Capital Notes to take any and all necessary action, if required, to implement the Automatic
Conversion without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.


 


The Conversion Price shall be subject to
adjustment as provided in Article 3 of the First Supplemental Indenture.


 


In the Company’s sole and absolute
discretion, within ten (10) Business Days following the Conversion Date, the Company may elect that the Settlement Share Depository
(or an agent on its behalf) make an offer of all or some of the Settlement Shares to all or some of the Company’s Shareholders
upon Automatic Conversion, such offer to be at a cash price per Settlement Share that will be no less than the Conversion Price
(translated from U.S. dollars into pounds sterling at the then-prevailing rate as determined by the Company in its sole discretion)
(the “Settlement Shares Offer”).


 


If the Company elects, in its sole and absolute
discretion, that a Settlement Shares Offer be conducted by the Settlement Share Depository, each Holder or Beneficial Owner, by
its acquisition of the Contingent Capital Notes, shall be deemed to have: (i)


 




    16 


     


    

irrevocably consented to any Settlement Shares Offer and, notwithstanding
that such Settlement Shares are held by the Settlement Share Depository on behalf of the Holders and Beneficial Owners, to the
Settlement Share Depository’s using the Settlement Shares delivered to it to settle any Settlement Shares Offer in accordance
with the terms of the Contingent Capital Notes, (ii) irrevocably consented to the transfer of the beneficial interest it holds
in the Settlement Shares delivered upon Automatic Conversion to the Settlement Share Depository or to one or more purchasers identified
by the Settlement Share Depository in connection with the Settlement Shares Offer in accordance with the terms of the Contingent
Capital Notes, (iii) irrevocably agreed that the Company and the Settlement Share Depository may take any and all actions necessary
to conduct the Settlement Shares Offer in accordance with the terms of the Contingent Capital Notes, and (iv) irrevocably agreed
that none of the Company, the Trustee or the Settlement Share Depository shall, to the extent permitted by applicable law, incur
any liability to the Holders or Beneficial Owners in respect of the Settlement Shares Offer (except for the obligations of the
Settlement Share Depository in respect of the Holders’ and Beneficial Owners’ entitlement to, and subsequent delivery
of, any Alternative Consideration).


 


Following the occurrence of a Conversion
Trigger Event, subsequent to a Takeover Event having occurred, the Contingent Convertible Notes will be subject to conversion into
Relevant Shares of the Approved Entity in the case of a Qualifying Takeover Event, or write-down to zero in the case of a Non-Qualifying
Takeover Event, as provided in Section 3.02 of the First Supplemental Indenture.


 


Notwithstanding any other agreements, arrangements,
or understandings between the Company and any Holder or Beneficial Owner of the Contingent Capital Notes, by its acquisition of
the Contingent Capital Notes, each Holder and Beneficial Owner acknowledges, accepts, agrees to be bound by and consents to the
exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation
of all, or a portion, of the principal amount of, or interest on, the Contingent Capital Notes, (ii) the conversion of all, or
a portion of, the principal amount of, or interest on, the Contingent Capital Notes into ordinary shares or other securities or
other obligations of the Company or another person and/or (iii) the amendment of the amount of interest due on the Contingent Capital
Notes, or the dates on which interest becomes payable, including by suspending payment for a temporary period; which U.K. bail-in
power may be exercised by means of variation to the terms of the Contingent Capital Notes solely to give effect to the above. With
respect to (i), (ii) and (iii) above, references to principal and interest shall include payments of principal and interest that
have become due and payable, but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial
Owner of the Contingent Capital Notes further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under
the Contingent Capital Notes are subject to, and will be varied, if necessary, solely to give effect to the exercise of any U.K.
bail-in power by the relevant U.K. resolution authority. For the avoidance of doubt, the potential conversion of the Contingent
Capital Notes into ordinary shares, other securities or other obligations in connection with the exercise of any U.K. bail-in power
by the relevant U.K. resolution authority is separate and distinct from the Automatic Conversion following a Conversion Trigger
Event.


 




    17 


     


    

By its acquisition of the Contingent Capital
Notes, each Holder and Beneficial Owner (i) acknowledges and agrees that the exercise of the U.K. bail-in power by the relevant
U.K. resolution authority with respect to the Contingent Capital Notes or any cancellation or deemed cancellation of interest pursuant
to Sections 2.03 or 2.04 of the First Supplemental Indenture and the terms of this Security shall not give rise to a default for
purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the
U.S. Trust Indenture Act of 1939, (ii) to the extent permitted by the Trust Indenture Act, waives any and all claims against the
Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for,
any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in
power by the relevant U.K. resolution authority with respect to the Contingent Capital Notes, (iii) acknowledges and agrees that,
(a) upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, the Trustee shall not be required to
take any further directions from Holders or Beneficial Owners of the Contingent Capital Notes under Section 5.12 of the Contingent
Convertible Securities Indenture and (b) the Indenture shall impose no duties upon the Trustee whatsoever with respect to the exercise
of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing in (iii), if, following the
completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Contingent Capital Notes remain
outstanding, (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the
Contingent Capital Notes) then the Trustee’s duties under the Indenture shall remain applicable with respect to the Contingent
Capital Notes following such completion to the extent that the Company and the Trustee agree pursuant to a supplemental indenture,
unless the Company and the Trustee agree that a supplemental indenture is not necessary, and (iv) shall be deemed to have (y) consented
to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority
of its decision to exercise such power with respect to the Contingent Capital Notes and (z) authorized, directed and requested
DTC and any direct participant in DTC or other intermediary through which it holds such Securities to take any and all necessary
action, if required, to implement the exercise of any U.K. bail-in power with respect to the Contingent Capital Notes as it may
be imposed, without any further action or direction on the part of such Holder and such Beneficial Owner or the Trustee.


 


Each Holder and Beneficial Owner that acquires
its Contingent Capital Notes in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the
same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Contingent Capital Notes
that acquire the Contingent Capital Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement
and agreement to be bound by and consent to the terms of the Contingent Capital Notes, including in relation to interest cancellation,
Automatic Conversion, the Settlement Shares Offer, the U.K. bail-in power, the write-down in the event of a Non-Qualifying Takeover
Event and the limitations on remedies specified in this Security and Section 4.04 of the First Supplemental Indenture.


 


Upon the exercise of the U.K. bail-in power
by the relevant U.K. resolution authority with respect to the Contingent Capital Notes, the Company shall provide a


 




    18 


     


    

written notice to DTC as soon as practicable regarding such
exercise of the U.K. bail-in power for purposes of notifying Holders and Beneficial Owners of such occurrence. The Company shall
also deliver a copy of such notice to the Trustee for information purposes.


 


The Company’s obligations to indemnify
the Trustee in accordance with Section 6.07 of the Contingent Convertible Securities Indenture shall survive any exercise of the
U.K. bail-in power by the relevant U.K. resolution authority with respect to the Contingent Capital Notes and any Automatic Conversion.


 


The exercise of the U.K. bail-in power by
the relevant U.K. resolution authority with respect to the Contingent Capital Notes shall not constitute an Enforcement Event.


 


A “Winding-up or Administration
Event” shall result if (i) an order is made, or an effective resolution is passed, for the winding up of the Company
(excluding in any such case a solvent winding-up solely for the purpose of a reconstruction, amalgamation, reorganization, merger
or consolidation of the Company, or the substitution in place of the Company of a successor in business of the Company, the terms
of which have previously been approved by the Trustee or in writing by Holders of not less than 2/3 (two-thirds) in aggregate principal
amount of the Contingent Capital Notes); or (ii) an administrator of the Company is appointed and such administrator gives notice
that it intends to declare and distribute a dividend.


 


If a Winding-up or Administration Event
occurs prior to the occurrence of a Conversion Trigger Event, subject to the subordination provisions of Article 5 of the First
Supplemental Indenture, the principal amount of the Contingent Capital Notes shall become immediately due and payable, without
the need of any further action on the part of the Trustee, the Holders or any other Person, including the declaration by the Trustee,
the Holders or any other Person that the principal amount of the Contingent Capital Notes will become immediately due and payable.


 


Subject to Section 2.13 of the First Supplemental
Indenture, if the Company does not make payment of principal in respect of the Contingent Capital Notes for a period of fourteen
(14) calendar days or more after the date on which such payment is due (a “Non-Payment Event”), then the Trustee,
on behalf of the Holders and Beneficial Owners, may, at its discretion, or shall at the direction of Holders of 25% of the aggregate
principal amount of Outstanding Contingent Capital Notes, subject to any applicable laws, institute proceedings for the winding
up of the Company. In the event of a winding-up or liquidation of the Company, whether or not instituted by the Trustee, the Trustee
may prove the claims of the Holders, Beneficial Owners and the Trustee in the winding up proceeding of the Company and/or claim
in the liquidation of the Company, such claims as set out in ‎Section
5.01 of the First Supplemental Indenture. For the avoidance of doubt, the Trustee may not declare the principal amount of any outstanding
Contingent Capital Notes to be due and payable and may not pursue any other legal remedy, including a judicial proceeding for the
collection of the sums due and unpaid on the Contingent Capital Notes.


 




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In the event of a breach of any term, obligation
or condition binding upon the Company under the Contingent Capital Notes or the Indenture (other than any payment obligation of
the Company under or arising from the Contingent Capital Notes or the Indenture, including payment of any principal or interest
including any damages awarded for breach of any obligation) (such obligation, a “Performance Obligation”), the
Trustee may without further notice institute such proceedings against the Company as it may deem fit to enforce the Performance
Obligation, provided that the Company shall not by virtue of the institution of any such proceedings be obliged to pay any sum
or sums, in cash or otherwise (including damages) earlier than the same would otherwise have been payable. For the avoidance of
doubt, any breach by the Company of any Performance Obligation shall not confer upon the Trustee (acting on behalf of the Holders)
and/or the Holders or Beneficial Owners of the Contingent Capital Notes any claim for damages and, in the event of such a breach
of a Performance Obligation, the sole and exclusive remedy that the Trustee (acting on behalf of the Holders) and/or the Holders
or Beneficial Owners of the Contingent Capital Notes may seek under the Contingent Capital Notes and the Indenture is specific
performance under the laws of the State of New York. By its acquisition of the Contingent Capital Notes, each Holder and Beneficial
Owner of the Contingent Capital Notes acknowledges and agrees (i) that such Holder and Beneficial Owner shall not seek, and shall
not direct the Trustee (acting on their behalf) to seek, any claim for damages against the Company in respect of any breach by
the Company of a Performance Obligation, and (ii) that the sole and exclusive remedy that such Holder and Beneficial Owner and/or
the Trustee (acting on their behalf) may seek under the Contingent Capital Notes and the Indenture for a breach by the Company
of a Performance Obligation is specific performance under the laws of the State of New York.


 


Other than the limited remedies specified
in this Security and Article 4 of the First Supplemental Indenture, and subject to the second paragraph below, no remedy against
the Company shall be available to the Trustee (acting on behalf of the Holders) or to the Holders and Beneficial Owners, whether
for the recovery of amounts owing in respect of such Securities or under the Indenture, or in respect of any breach by the Company
of any of the Company’s obligations under or in respect of the terms of such Securities or under the Indenture in relation
thereto; provided, however, that the Company’s obligations to the Trustee under, and the Trustee’s lien
provided for in, Section 6.07 of the Contingent Convertible Securities Indenture and the Trustee’s rights to have money collected
applied first to pay amounts due to it under such Section pursuant to Section 5.06 of the Contingent Convertible Securities Indenture
expressly survive any Enforcement Event and are not subject to the subordination provisions of Section 5.01 of the First Supplemental
Indenture.


 


For purposes of the Contingent Convertible
Securities Indenture, “Event of Default” shall mean an “Enforcement Event” as defined in this First Supplemental
Indenture, except that the term “Event of Default” as used in Article 8 of the Contingent Convertible Securities Indenture
shall mean “Winding-up or Administration Event.”


 


Notwithstanding the limitations on remedies
specified in this Security and under Article 4 of the First Supplemental Indenture, (i) the Trustee shall have such powers as are
required to be authorized to it under the Trust Indenture Act in respect of the rights of


 




    20 


     


    

the Holders and Beneficial Owners of the Contingent Capital
Notes under the provisions of the Indenture, and (ii) nothing shall impair the right of a Holder or Beneficial Owner of the Contingent
Capital Notes under the Trust Indenture Act, absent such Holder’s or Beneficial Owner’s consent, to sue for any payment
due but unpaid with respect to the Contingent Capital Notes; provided that, in the case of (i) and (ii) above, any payments in
respect of, or arising from, the Contingent Capital Notes, including any payments or amounts resulting or arising from the enforcement
of any rights under the Trust Indenture Act in respect of the Contingent Capital Notes, shall be subject to the subordination provisions
set forth in Section 5.01 of the First Supplemental Indenture.


 


In furtherance of Section 6.01 of the Contingent
Convertible Securities Indenture:


 


(i) For purposes of Sections 315(a)
and 315(c) of the Trust Indenture Act, the term “default” is hereby defined to mean an Enforcement Event which has
occurred and is continuing.


 


(ii) Notwithstanding anything contained
in the Contingent Convertible Securities Indenture to the contrary, the duties and responsibilities of the Trustee under this Indenture
shall be subject to the protections, exculpations and limitations on liability afforded to an indenture trustee under the provisions
of the Trust Indenture Act.


 


With respect to the Contingent Capital Notes
only, and pursuant to Section 12.01(a) of the Contingent Convertible Securities Indenture, the extent and manner in which the payment
of principal of (and premium, if any) and interest, if any, on the Contingent Convertible Securities is subordinated to the claims
of the holders of certain other present or future obligations of the Company shall be determined as set out in ‎Section
5.01 of the First Supplemental Indenture. References in the Contingent Convertible Securities Indenture to Section 12.01(a) thereof
shall be to ‎Section 5.01 of the First Supplemental Indenture.
For the avoidance of doubt, no provision of Article 12 of the Contingent Convertible Securities Indenture other than replacing
Section 12.01(a) with Section 5.01 of the First Supplemental Indenture shall be amended by the First Supplemental Indenture.


 


The Contingent Capital Notes shall constitute
the Company’s direct, unsecured and subordinated obligations, ranking pari passu without any preference among themselves.
The rights and claims of the Holders and Beneficial Owners of the Contingent Capital Notes in respect of or arising from the Contingent
Capital Notes shall be subordinated to the claims of Senior Creditors.


 


If a Winding-up or Administration Event
occurs before the date on which a Conversion Trigger Event occurs, there shall be payable by the Company in respect of each Contingent
Capital Note (in lieu of any other payment by the Company) such amount, if any, as would have been payable to a Holder or Beneficial
Owner if, on the day prior to the commencement of the winding-up of the Company or the notice by the administrator and thereafter,
such Holder or Beneficial Owner were the holder of one of a class of Notional Preference Shares on the assumption that the amount
that such Holder or Beneficial Owner was entitled to receive in respect of such Notional Preference


 




    21 


     


    

Shares, on a return of assets in such Winding-up or Administration
Event, was an amount equal to the principal amount of the relevant Contingent Capital Note, together with any Accrued Interest
and any damages (if payable), regardless of whether the Solvency Condition is satisfied on the date upon which the same would otherwise
be due and payable.


 


In the paragraph above, “Notional
Preference Shares” means an actual or notional class of preference shares in the capital of the Company having an equal right
to return of assets in the winding up or administration to, and so ranking pari passu with, the most senior class or classes
of issued preference shares with non-cumulative dividends (if any) in the capital of the Company from time to time and which have
a preferential right to a return of assets in the winding up or administration over, and so rank ahead of all other classes of
issued shares for the time being in the capital of the Company but ranking junior to the claims of Senior Creditors and junior
to any notional class of preference shares in the capital of the Company which is referenced in any instrument of the Company for
the purposes of determining a claim in the winding-up or administration of the Company and, as so referenced, (i) is expressed
to have a preferential right to a return of assets in the Company’s winding-up or administration over the holders of all
other classes of shares for the time-being in the capital of the Company and (ii) is not expressed to rank junior to any other
notional class of preference shares in the capital of the Company. The terms “Parity Securities” and “Senior
Creditors” have the meaning given to such terms in the First Supplemental Indenture.


 


If a Winding-up or Administration Event
occurs on or after the date on which a Conversion Trigger Event occurs but the Settlement Shares to be issued and delivered to
the Settlement Share Depository on the Conversion Date have not been so delivered, there shall be payable by the Company in respect
of each Contingent Capital Note (in lieu of any other payment by the Company) such amount, if any, as would have been payable to
the Holder or Beneficial Owner of such Contingent Capital Note in a Winding-up or Administration Event if the Conversion Date in
respect of an Automatic Conversion had occurred immediately before the occurrence of a Winding-up or Administration Event (and,
as a result, such Holder or Beneficial Owner were the holder of such number of the Company’s ordinary shares as such Holder
or Beneficial Owner would have been entitled to receive on the Conversion Date, ignoring for this purpose the Company’s right
to make an election for a Settlement Shares Offer to be effected pursuant to Section 2.17 of the First Supplemental Indenture),
regardless of whether the Solvency Condition is satisfied on the date upon which the same would otherwise be due and payable.


 


Other than in the event of a Winding-up
or Administration Event of the Company, or in relation to the Cash Component of any Alternative Consideration in any Settlement
Shares Offer payments in respect of or arising under the Contingent Capital Notes (including any damages for breach of any obligations
thereunder) shall, in addition to the right of the Company to cancel payments of interest pursuant to the terms of the First Supplemental
Indenture or this Security, be conditional upon the Company’s being solvent at the time of payment by the Company, and in
that no principal, interest or other amount payable shall be due and payable in respect of or arising from the Contingent Capital
Notes except to the extent that the Company could make such payment and still


 




    22 


     


    

be solvent immediately thereafter (such condition referred to
herein as the “Solvency Condition”).


 


For purposes of determining whether the
Solvency Condition is met, the Company shall be considered to be solvent at a particular point in time if (i) it is able to pay
its debts as they fall due and (ii) its Assets are at least equal to its Liabilities.


 


Subject to applicable law, the Trustee (acting
on behalf of the Holders) and the Holders of the Contingent Capital Notes by their acceptance thereof will be deemed to have waived
any right of set-off, counterclaim or combination of accounts with respect to the Contingent Capital Notes, the First Supplemental
Indenture or the Contingent Convertible Securities Indenture (or between the Company’s obligations under or in respect of
the Contingent Capital Notes and any liability owed by a Holder to the Company) that they (or the Trustee acting on their behalf)
might otherwise have against the Company, whether before or during any Winding-up or Administration Event. Notwithstanding the
above, if any of such rights and claims of any such Holder (or the Trustee acting on behalf of such Holders) against the Company
are discharged by set-off, such Holder (or the Trustee acting on behalf of such Holder) will immediately pay an amount equal to
the amount of such discharge to the Company or, in the event of any Winding-up or Administration Event, the liquidator or administrator
(or other relevant insolvency official), as the case may be, to be held on trust for the Senior Creditors and until such time as
payment is made will hold a sum equal to such amount on trust for Senior Creditors, and accordingly such discharge shall be deemed
not to have taken place.


 


The Indenture permits, with certain exceptions
as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of
the Holders of the Contingent Capital Notes of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority in principal amount of the Contingent Capital Notes then outstanding
of each series to be affected.


 


With respect to Contingent Capital Notes
issued pursuant to the First Supplemental Indenture, any agreements, arrangements or understandings between the Company and any
Holder and Beneficial Owner of the Contingent Capital Notes with respect to the Contingent Capital Notes must be entered into in
accordance with the terms of the Contingent Convertible Securities Indenture and the First Supplemental Indenture.


 


Holders of not less than a majority in aggregate
principal amount of the Outstanding Contingent Capital Notes may on behalf of the Holders of all of the Contingent Capital Notes
waive any past Enforcement Event that results from a breach by the Company of a Performance Obligation. Holders of a majority of
the aggregate principal amount of the outstanding Contingent Capital Notes shall not be entitled to waive any past Enforcement
Event that results from a Winding-up or Administration Event or a Non-Payment Event.


 




    23 


     


    

As set forth in, and subject to, the provisions
of the Indenture, no Holder will have the right to institute any proceeding, judicial or otherwise, with respect to the Indenture,
or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder fulfils the requirements
of Section 5.07 of the Contingent Convertible Securities Indenture.


 


This Security, and any other Securities
of this series and of like tenor, are issuable only in registered form without coupons in initial denominations of $200,000 and
increments of $1,000 thereafter. The denominations cannot be changed without the consent of the Trustee. The denomination of each
interest in this Security shall be the “Tradable Amount” of such book-entry interest. Prior to the Automatic
Conversion, the aggregate Tradable Amount of the interests in this Security shall equal this Security’s outstanding principal
amount. Following the Automatic Conversion, the principal amount of this Security shall equal zero, but the Tradable Amount of
the book-entry interests in this Security shall remain unchanged as a result of the Automatic Conversion.


 


Prior to due presentment of this Security
for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose
name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the contrary.


 


This Security shall be governed by and construed in accordance
with the laws of the State of New York, except (i) as otherwise provided for pursuant to Section 1.12 of the Contingent Convertible
Securities Indenture and Section 9.07 of the First Supplemental Indenture, the subordination provisions referred to herein and
in Section 5.01 of the First Supplemental Indenture (which replaces in its entirety Section 12.01(a) of the Contingent Convertible
Securities Indenture) and the waiver of the right to set-off referred to herein and in Section 5.02 of the First Supplemental Indenture,
which are governed by, and construed in accordance with, Scots law (other than the Trustee’s own rights, duties or immunities
under Article 12 of the Contingent Convertible Securities Indenture, as amended by Section 5.01 of the First Supplemental Indenture,
or otherwise), and (ii) the authorization and execution by the Company of this Security shall be governed by (in addition to the
laws of the State of New York relevant to execution) the jurisdiction of the Company.


 




    24 


     


    

Exhibit B


 


Form of Conversion
Trigger Notice1


 


NOTICE TO DTC AND FOR
PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS


 


[RBS Letterhead]


 


	To:	The Depository Trust Company
	 	55 Water Street, 25th Floor
	 	New York, NY 10041-0099
	 	Attn: Mandatory Reorganization Department
	 	Fax: +1 (212) 855-5488
	 	Email: mandatoryreorgannouncements@dtcc.com
	 	 


	Cc:	
        The Bank of New York Mellon


        One Canada Square


        London E14 5AL


        United Kingdom


        Attn: [     ]


        Email:[     ]


        Fax:   [     ]


        Tel:   [     ]

	
        The Bank of New York Mellon


        One Wall Street


        New York, NY 10286


        United States of America


        Attn: [     ]


        Email:[     ]


        Fax:    [     ]


        Tel:    [     ]


	 	 	 


Re: The Royal Bank of Scotland Group plc
[$][     ] Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) – Notice to
DTC, Holders and Beneficial Owners of the Occurrence of a Conversion Trigger Event


 


This notice is in relation to The Royal
Bank of Scotland Group plc’s (the “Company”) [$][     ] Perpetual Subordinated Contingent Convertible Additional
Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2015 (the “Securities”) pursuant to the Contingent
Convertible Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon, London Branch, as
Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated August 10, 2015, between
the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus dated March 31, 2015.
Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.


 


The Company hereby notifies The Depository
Trust Company (“DTC”), the Holders and Beneficial Owners of the Contingent Capital Notes that a Conversion Trigger
Event has occurred with respect to the Contingent Capital Notes. Such Conversion Trigger Event has occurred because the Regulatory
Group’s CET1 Ratio as determined on [     ] was less than 7.00%.


 


 


_________________________













1Note:
Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to
changes in DTC (or successor clearing system) policies and procedures.





    25 


     


    

Upon the occurrence of the Conversion Trigger
Event, the terms of the Contingent Capital Notes provide for the Automatic Conversion of the Contingent Capital Notes into Settlement
Shares on the Conversion Date, which is expected to be [date], at the Conversion Price. Upon the Automatic Conversion, all of the
Company’s obligations under the Contingent Capital Notes shall be irrevocably and automatically released in consideration
of the Company’s issuance and delivery of Settlement Shares to the Settlement Share Depository (or other relevant recipient).
However, the terms of the Contingent Capital Notes provide that the Contingent Capital Notes shall remain in existence until the
applicable Settlement Date for the sole purpose of evidencing a right to receive Settlement Shares, or, if the Holder elects, ADSs
or Alternative Consideration, as applicable, from the Settlement Share Depository.


 


Accordingly, the Company hereby instructs
DTC to indicate to all participants that payments of principal and interest are no longer payable under the Contingent Capital
Notes as of the Conversion Date and that the Contingent Capital Notes will have no further entitlement to interest or principal
as of such date by making a note to that effect in its systems.


 


The Company further requests DTC to post
this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing notices to holders
of securities).


 


Should DTC, any Holder or any Beneficial
Owner of the Contingent Capital Notes have any inquiries, please contact either the Company at [Telephone, Fax, Email] or [Name]
or the Settlement Share Depository, at [Telephone, Fax, Email]2.


 


_________________________


2Insert contact details
of any Settlement Share Depository, or, if RBSG has been unable to appoint a Settlement Share Depository, any other details required
to set out the issuance and/or delivery procedures in respect of the Settlement Shares, ADSs or any Alternative Consideration
as to Holders and Beneficial owners as RBSG shall consider reasonable in the circumstances.




    26 


     


    

Exhibit C


 


Form of Conversion
Trigger Event Officer’s Certificate


 


THE ROYAL BANK OF SCOTLAND
GROUP PLC


 


Conversion Trigger Event
Officer’s Certificate


 


This Officer’s Certificate is being
delivered in relation to The Royal Bank of Scotland Group plc’s (the “Company”) [$][     ] Perpetual Subordinated
Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2015 (the “Securities”)
pursuant to the Contingent Convertible Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York
Mellon, London Branch, as Trustee (the “Trustee”), as amended and supplemented by the First Supplemental Indenture,
dated August 10, 2015, between the Company and the Trustee (together, the “Indenture”).


 


Capitalized terms used herein and not defined
herein shall have the respective meanings ascribed to such terms in the Indenture.


 


Pursuant to ‎Section
1.02 of the Contingent Convertible Securities Indenture and ‎‎Section
2.15(b) of the First Supplemental Indenture, the undersigned, being authorized signatory of the Company and authorized by the Company
to give this certificate, hereby certifies as follows:


 



(a)  
I have read all of the covenants and conditions in the Indenture, setting forth certain provisions
in respect of the occurrence of a Conversion Trigger Event, including ‎‎Section 2.15(b) of the First Supplemental Indenture,
and the definitions relating thereto;


 


(b)  
[Include a brief statement as to the nature and scope of the examination or investigation
upon which the statements contained in such certificate are based][I have reviewed such other documents as I have deemed necessary
as a basis for the opinion hereinafter expressed];


 



(c)  
I have made such other examinations and investigations as I have deemed necessary to enable
me to express an informed opinion as to (i) whether or not such covenants and conditions have been complied with, and (ii) the
matters set forth in ‎(d) below; and


 



(d)  
In my opinion, such conditions (including all conditions precedent) and covenants have been
complied with; and


 



(e)  
a Conversion Trigger Event has occurred with respect to the Contingent Capital Notes. Such
Conversion Trigger Event has occurred because the Regulatory Group’s CET1 Ratio, as determined on [     ], was less than 7.00%.


 




    27 


     


    

[Concurrently with][Immediately following]
the delivery of this Conversion Trigger Event Officer’s Certificate, the Company is delivering to The Depository Trust Company
(“DTC”) the Conversion Trigger Notice attached hereto as Exhibit A as a notice to DTC and for publication as
a notice to Holders and Beneficial Owners in the form set forth in Exhibit B to the First Supplemental Indenture.


 


The Trustee is entitled to conclusively
rely on and accept this Conversion Trigger Event Officer’s Certificate without any duty whatsoever of further inquiry as
sufficient and conclusive evidence of the occurrence of a Conversion Trigger Event, and this Conversion Trigger Event Officer’s
Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.


 


Dated: [     ]


 


	 
	 	 
	 	Name:
	 	Title:





    28 


     


    

Exhibit D


 


Form of Settlement
Shares Offer Notice3


 


NOTICE TO DTC AND
FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS


 


[RBS Letterhead]


 


	To:	
        The Depository Trust Company


        55 Water Street, 25th Floor


        New York, NY 10041-0099


        Attn: Mandatory Reorganization Department


        Fax: +1 (212) 855-5488


        Email: mandatoryreorgannouncements@dtcc.com

	
        

        

        


	 	 	 
	Cc:	
        The Bank of New York Mellon


        One Canada Square


        London E14 5AL


        United Kingdom


        Attn: [     ]


        Email:[     ]


        Fax:   [     ]


        Tel:    [     ]

	
        The Bank of New York Mellon


        One Wall Street


        New York, NY 10286


        United States of America


        Attn: [     ]


        Email:[     ]


        Fax:    [     ]


        Tel:    [     ]


	 	 	 


Re: The Royal Bank of Scotland Group plc
[$][     ] Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) – Notice to
DTC, Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer


 


This notice is in relation to The Royal
Bank of Scotland Group plc’s (the “Company”) [$][     ] Perpetual Subordinated Contingent Convertible Additional
Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2015 (the “Securities”) pursuant to the Contingent
Convertible Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon, London Branch, as
Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated August 10, 2015, between
the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus dated March 31, 2015
(the “Prospectus”). Capitalized terms used herein and not defined herein shall have the respective meanings
ascribed to such terms in the Indenture.


 


The Company hereby notifies The Depository
Trust Company (“DTC”), the Holders and the Beneficial Owners of the Contingent Capital Notes that it has elected
that


 


 


_________________________


 


3Note:
Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes
in DTC (or successor clearing system) policies and procedures.





    29 


     


    

the Settlement Share Depository conduct
a Settlement Shares Offer. The Settlement Shares Offer Period will extend from the date of this notice until [Date]4.


 


[In addition, the Company hereby notifies
DTC, the Holders and the Beneficial Owners of the Contingent Capital Notes that the Suspension Date shall be [Date]5.
Accordingly, the Company hereby instructs DTC to implement a “chill” on the clearance and settlement of the Contingent
Capital Notes on the Suspension Date. As described in the Prospectus, Holders and Beneficial Owners will not be able to settle
the transfer of any Contingent Capital Notes following the Suspension Date, and any sale or other transfer of the Contingent Capital
Notes that a Holder or Beneficial Owner may have initiated prior to the Suspension Date that is scheduled to settle after the Suspension
Date will be rejected by DTC and will not be settled within DTC.]6


 


The Royal Bank of Scotland Group plc further
requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing
notices to holders of securities).


 


Should DTC, any Holder or any Beneficial
Owner of the Contingent Capital Notes have any inquiries, please contact either the Company at [Telephone, Fax, Email] or [Name],
the Settlement Share Depository, at [Telephone, Fax, Email] 7


 


 


_________________________


4Note:
Insert the date that the Settlement Shares Offer expires, which shall be no later than forty (40) business days after the delivery
of this Settlement Shares Offer Notice.


 


5Note:
Insert the Suspension Date, which is the date on which DTC shall suspend all clearance and settlement of the Contingent Capital
Notes.


 


6Insert
information concerning the Suspension Date if such information has not previously been included in the Conversion Trigger Notice.


 


7Insert
contact details of any Settlement Share Depository, or, if RBSG has been unable to appoint a Settlement Share Depository, any other
details required to set out the issuance and/or delivery procedures in respect of the Settlement Shares, ADSs or any Alternative
Consideration as to Holders and Beneficial owners as RBSG shall consider reasonable in the circumstances.





    30 


     


    

Exhibit E


 


Form of Settlement
Request Notice8


 


NOTICE TO DTC AND FOR
PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS


 


[RBS Letterhead]


 


	To:	
        The Depository Trust Company


        55 Water Street, 25th Floor


        New York, NY 10041-0099


        Attn: Mandatory Reorganization Department


        Fax: +1 (212) 855-5488


        Email: mandatoryreorgannouncements@dtcc.com

	
        

        

        


	 	 	 
	Cc:	
        The Bank of New York Mellon


        One Canada Square


        London E14 5AL


        United Kingdom


        Attn: [     ]


        Email:[     ]


        Fax:   [     ]


        Tel:    [     ]

	
        The Bank of New York Mellon


        One Wall Street


        New York, NY 10286


        United States of America


        Attn: [     ]


        Email:[     ]


        Fax:   [     ]


        Tel:   [     ]


	 	 	 


Re: The Royal Bank of Scotland Group plc
[$][     ] Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) – Notice to
DTC, Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer


 


This notice is in relation to The Royal
Bank of Scotland Group plc’s (the “Company”) [$][     ] Perpetual Subordinated Contingent Convertible Additional
Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2015 (the “Securities”) pursuant to the Contingent
Convertible Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon, London Branch, as
Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated August 10, 2015, between
the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus dated March 31, 2015
(the “Prospectus”). Capitalized terms used herein and not defined herein shall have the respective meanings
ascribed to such terms in the Indenture.


 


The Company hereby requests that Holders
and Beneficial Owners of the Contingent Capital Notes provide notice to [Name of Settlement Share Depository (or


 


 


_________________________


8Note:
Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes
in DTC (or successor clearing system) policies and procedures.





    31 


     


    

other nominee)], as [Settlement Share Depository
]9, with a copy to the Trustee, in the
form provided in Exhibit F to the First Supplemental Indenture before [Date] (the “Notice Cut-off Date”).


 


If a Holder or Beneficial Owner of the Contingent
Capital Notes properly completes and delivers a Settlement Notice on or before the Notice Cut-off Date, the Settlement Share Depository
shall, in accordance with the terms of the First Supplemental Indenture, deliver to such Holder or Beneficial Owner the relevant
Settlement Shares (rounded down to the nearest whole number of Settlement Shares), ADSs or Alternative Consideration, as applicable,
[on the date which is the later of (a) two (2) Business Days after the date on which the Settlement Notice is received by the Settlement
Share Depository and (b) two (2) Business Days after [Date]10.]


 


If a Holder or Beneficial Owner of the Contingent
Capital Notes fails to properly complete and deliver a Settlement Notice before the Notice Cut-off Date, the Settlement Share Depository
shall continue to hold the relevant Settlement Shares or Alternative Consideration. However, the relevant Securities shall be cancelled
on the Final Cancellation Date, which shall be [Date],11
and any Holder or Beneficial Owner delivering a Settlement Notice after the Notice Cut-off Date will have to provide evidence of
its entitlement to the relevant Settlement Shares, ADSs or Alternative Consideration, as applicable, satisfactory to the Settlement
Share Depository in its sole and absolute discretion in order to receive delivery of such Settlement Shares, ADSs or Alternative
Consideration (if so elected to be deposited with the ADS Depository on its behalf). The Company shall have no liability to any
Holder or Beneficial Owner of the Contingent Capital Notes for any loss resulting from such Holder’s or Beneficial Owner’s
failure to receive any Alternative Consideration, Settlement Shares or ADSs, or from any delay in the receipt thereof, in each
case as a result of such Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) failing to
duly submit a Settlement Notice and the relevant Contingent Capital Notes, if applicable, on a timely basis or at all.


 


The Company further requests DTC to post
this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing notices to holders
of securities).


 


Should DTC, any Holder or any Beneficial
Owner of the Contingent Capital Notes have any inquiries, please contact either the Company at [Telephone, Fax, Email] or [Name],
the [Settlement Share Depository], at [Telephone, Fax, Email].


 


 


_________________________


9Note:
If RBSG has been unable to appoint a Settlement Share Depository, this should refer to the entity undertaking its functions.


 


10Note:
Date of expiry or termination of the Settlement Share offer period.


 


11Note:
The Final Cancellation Date may be up to twelve (12) business days following the Notice Cut-Off Date.





    32 


     


    

Exhibit F


 


Form of Settlement
Notice12

NOTICE TO THE [SETTLEMENT SHARES DEPOSITORY AND] DTC


 


	To:	
        The Depository Trust Company


        55 Water Street, 25th Floor


        New York, NY 10041-0099


        Attn: Mandatory Reorganization Department


        Fax: +1 (212) 855-5488


        Email: mandatoryreorgannouncements@dtcc.com

	
        

        

        


	 	 	 
	Cc:	
        The Bank of New York Mellon


        One Canada Square


        London E14 5AL


        United Kingdom


        Attn: [     ]


        Email:[     ]


        Fax:    [     ]


        Tel:   [     ]

	
        The Bank of New York Mellon


        One Wall Street


        New York, NY 10286


        United States of America


        Attn: [     ]


        Email:[     ]


        Fax:   [     ]


        Tel:   [     ]


	 	 	 


Re: The Royal Bank of Scotland Group plc
[$][     ] Perpetual Subordinated Contingent Convertible Additional Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) – Notice to
DTC, Holders and Beneficial Owners –Election to Conduct a Settlement Shares Offer


 


This notice is in relation to The Royal
Bank of Scotland Group plc’s (the “Company”) [$][     ] Perpetual Subordinated Contingent Convertible Additional
Tier 1 Capital Notes (CUSIP: [     ], ISIN: [     ]) issued on [     ], 2015 (the “Securities”) pursuant to the Contingent
Convertible Securities Indenture, dated August 10, 2015, between the Company and The Bank of New York Mellon, London Branch, as
Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated August 10, 2015, between
the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus dated March 31, 2015
(the “Prospectus”). Capitalized terms used herein and not defined herein shall have the respective meanings
ascribed to such terms in the Indenture.


 


 


 


_________________________


 


12Note:
Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes
in DTC and CREST (or successor clearing system) policies and procedures.




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INFORMATION OF THE
HOLDER OR BENEFICIAL OWNER FOR DELIVERY OF SETTLEMENT SHARES, ADSs OR ALTERNATIVE CONSIDERATION


 


Surname/Company Name:


 


First name:


 


Name to be entered in the share register
of The Royal Bank of Scotland Group plc:


 


Tradable Amount of the Contingent Capital
Notes held on the date hereof:


 


Securities to be delivered:


 


□ Settlement Shares


 


CREST participant ID:


 


CREST member account (if applicable):


 


[Account details of clearing system account]13


 


[Address to which any Settlement Shares
should be delivered]14


 


□ American Depositary Shares


 


Registered account in the Company’s
American Depositary Share facility:


 


Cash account details (if applicable):


 


YOU MUST DELIVER THE SETTLEMENT NOTICE
TO THE SETTLEMENT SHARE DEPOSITORY AND THE TRUSTEE VIA DTC BEFORE [DATE].


 


If you fail to properly complete and deliver
the Settlement Notice on or before the Notice Cut-off Date, the Settlement Share Depository shall continue to hold your Settlement
Shares or Alternative Consideration. However, your Contingent Capital Notes shall be cancelled on the Final Cancellation Date,
which shall be [Date],15 and you will
have to provide evidence of your entitlement to the relevant Settlement Shares, ADSs or Alternative Consideration, as applicable,
satisfactory to the Settlement Share Depository


 


 


_________________________


13Note:
To be included if the Settlement Shares will be delivered through a clearing system account other than CREST.


 


14Note:
To be included if the Settlement Shares are not a participating security in CREST or any another clearing system.


 


15Note:
The Final Cancellation Date may be up to twelve (12) Business Days following the Notice Cut-off Date.





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in its sole and absolute discretion in order
to receive delivery of such Settlement Shares, ADSs or Alternative Consideration.


 


 






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