Document:

Exhibit 10.9

 

EXECUTION COPY

 

HBOS PLC,

as Issuer

 

and

 

THE BANK OF NEW YORK,

as Trustee

 

SUPPLEMENTAL INDENTURE

 

 

Dated as of October 30, 2003

 

 

 

 

 

5.375% Undated Fixed to Floating Rate Subordinated
Notes

 

 

 

 

 

Milbank,
Tweed, Hadley & McCloy

London

 

     

     

    

SUPPLEMENTAL INDENTURE, dated as of October 30, 2003
(herein called the “Supplemental Indenture”), among HBOS PLC, a company incorporated in Scotland under the Companies
Act 1985 with registered number SC218813, having its registered office at The Mound, Edinburgh, Scotland EH1 1YZ (in its capacity as issuer
of Securities issued under the Original Indenture (as defined below) as amended and supplemented by this Supplemental Indenture, the “Issuer”)
and THE BANK OF NEW YORK, a banking corporation duly organized and existing under the laws of the State of New York, as Trustee (the “Trustee”),
having its Corporate Trust Office at 101 Barclay Street, New York, New York 10286.

 

RECITALS

 

The Issuer, The Governor and Company of the Bank
of Scotland and Scotland International Finance No. 2 B.V. have heretofore executed and delivered to the Trustee an Amended and Restated
Indenture, dated as of April 30, 2003, as amended and supplemented from time to time (hereinafter called the “Original
Indenture”), to provide for the issuance from time to time of certain of their respective unsecured subordinated debentures,
notes or other evidences of indebtedness (hereinafter called the “Securities”), the form and terms of which
are to be established as set forth in Sections 201 and 301 of the Original Indenture;

 

Section 901 of the Original Indenture provides, among
other things, that the Issuer and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things,
the purpose of changing the provisions of the Original Indenture;

 

The Issuer desires to create a series of the Securities
in an aggregate principal amount of up to $1,000,000,000 to be designated the “5.375% Undated Fixed to Floating Rate Subordinated
Notes” (the “Subordinated Notes”) and all action on the part of the Issuer necessary to authorize the
issuance of the Subordinated Notes under the Original Indenture and this Supplemental Indenture has been duly taken; and

 

All acts and things necessary have been done and
performed to make the Subordinated Notes (when executed by the Issuer and completed, authenticated and delivered by the Trustee as provided
in the Original Indenture, as amended and supplemented by this Supplemental Indenture) the valid and binding obligations of the Issuer
and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms;

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
That in consideration of the premises, the Issuer covenants and agrees with the Trustee, for the equal benefit of holders of the Subordinated
Notes, as follows:

 

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ARTICLE ONE

DEFINITIONS

 

Unless otherwise defined herein, the use of the terms
and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture and the form
of Subordinated Note attached hereto as Exhibit A.

 

ARTICLE TWO

TERMS AND ISSUANCE OF THE SUBORDINATED NOTES

 

Section 201. Issue of Subordinated Notes.
A series of Securities which shall be designated the “5.375% Undated Fixed to Floating Rate Subordinated Notes” shall be executed,
authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants
of the Original Indenture as amended and supplemented by this Supplemental Indenture (including the form of Subordinated Note set forth
as Exhibit A hereto). The aggregate principal amount of Subordinated Notes of the series created hereby which may be authenticated and
delivered under the Original Indenture on October30, 2003 shall not, except as permitted by the provisions of the Original Indenture,
exceed $1,000,000,000.

 

Section 202. Form of Subordinated Notes; Incorporation
of Terms. The form of the Subordinated Notes shall be substantially in the form of Exhibit A attached hereto. The terms of such Subordinated
Notes are herein incorporated by reference and are part of this Supplemental Indenture.

 

Section 203. Amendments. The Original Indenture
is hereby amended as it relates to the Subordinated Notes as follows. The Original Indenture is not amended as it relates to any other
series of Securities issued or to be issued thereunder.

 

(a) Section 107 is hereby deleted.

 

(b) Section
501 is amended and restated to read as follows:

 

‘“Event of Default”, wherever
used herein means the making of an order by a court having jurisdiction in the premises or the passing of a shareholders’ resolution
for the winding up (other than under or in connection with a scheme of amalgamation or reconstruction not involving bankruptcy or insolvency)
of the Issuer.’

 

(c) The second, third and fourth paragraphs of Section
503 are amended and restated to read as follows:

 

“The Issuer covenants that if (a)
any Event of Default shall occur and be continuing the Issuer will and (b) any Default shall occur and be continuing, upon demand of the
Trustee, the Issuer will, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest, if any, and interest on any overdue principal (and premium, if any)
and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue interest, at the rate or rates
prescribed therefor in such Securities; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

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If the Issuer fails to pay such amounts
forthwith upon such demand, the remedies of the Trustee, in its own name and as trustee of an express trust, shall be limited to petitioning
for the bankruptcy, liquidation or winding up of the Issuer and proving the amounts due and payable and claiming in such bankruptcy, liquidation
or winding up, provided  that the maturity of any of the outstanding Subordinated Notes may not be accelerated except as provided
in Section 502.

 

Upon the occurrence of an Event of Default
or Default with respect to Securities of a particular series, Holders of such Securities shall not at any time be entitled to exercise
any right of set-off or counterclaim which may be available to any such Holder against amounts owing by the Issuer in respect of such
Securities. If, notwithstanding the provisions of the preceding sentence, any of the rights and claims of any Holder of such Securities
is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the Issuer or, if applicable,
the liquidator or trustee or receiver in bankruptcy of such Issuer to be held on trust for the unsubordinated creditors of the Issuer
and until such time as payment is made will hold a sum equal to such amount in trust for the Issuer or, if applicable, the liquidator
or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not to have taken place.”

 

(d) The penultimate paragraph of Section 503 is hereby
deleted.

 

(e) Section 507 is hereby amended by adding the following
sentence at the end thereof:

 

“Notwithstanding the foregoing, the
remedies of the Holders of any Subordinated Notes shall be limited to petitioning for the bankruptcy, liquidation or winding up of the
Issuer and proving the amounts due and payable and claiming in such bankruptcy, liquidation or winding up, provided  that the maturity
of any of the outstanding Subordinated Notes may not be accelerated except as provided in Section 502.”

 

(f) Section 508 is hereby deleted.

 

(g) Section 510 is amended and restated to read as
follows:

 

“The rights and remedies conferred
upon or reserved to the Trustee or to the Holders by this Indenture are intended to be exclusive and shall preclude (to the extent lawful)
all other rights and remedies, provided that the assertion or employment of any right or remedy available under this Indenture shall not
prevent the assertion or employment of any other right or remedy under this Indenture.”

 

(h) Section 905 is hereby deleted.

 

(i)       Section
1006(d) is amended and restated to read as follows:

 

“(d)   Certain
Additional Limitations. In the event of the bankruptcy, liquidation or winding up of the Issuer, if any payment or distribution of
assets of the Issuer of any kind or character, whether in cash, property or securities, including any such payment or distribution which
may be payable or deliverable by reason of the payment of any other indebtedness of the Issuer being subordinated to the payment of the
Securities, shall be received by the Trustee or the Holders, before the claims of all Senior Creditors (as such term is defined in Section
1006(c)) of the Issuer have been paid in full, such payment or distribution shall be held in trust by the Trustee or such Holders, as
applicable, and shall be immediately returned by it or them to the liquidator or trustee or receiver in bankruptcy of the Issuer to be
held on trust for the unsubordinated creditors of the

 

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Issuer. Thereupon, such payment or distribution
will be deemed not to have been made or received. If any of the said rights and claims of any Holder against the Issuer is discharged
by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to the liquidator or trustee or receiver
in bankruptcy of the Issuer to be held on trust for the unsubordinated creditors of the Issuer and until such time as payment is made
will hold a sum equal to such amount in trust for the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such
discharge will be deemed not to have taken place.”

 

(j)Article 13 is deleted in its
entirety.

 

ARTICLE THREE

MISCELLANEOUS

 

Section 301. Execution of Supplemental Indenture.
This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided
in the Original Indenture, this Supplemental Indenture forms a part thereof.

 

Section 302. Effect of Headings. The Article
and Section headings herein are for convenience only and shall not affect the construction hereof.

 

Section 303. Successors and Assigns. All covenants
and agreements in this Supplemental Indenture by the Issuer shall bind their respective successors and assigns, whether so expressed or
not.

 

Section 304. Separability Clause. In case
any provision in this Supplemental Indenture or in the Subordinated 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 305. Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture or in the Subordinated Notes, 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 this Supplemental
Indenture.

 

Section 306. Governing Law. This Supplemental
Indenture and each Subordinated Note (except as stated in Section 203 and Section 205 of the Original Indenture and except for Section
1006 of the Original Indenture) shall be governed by, and construed in accordance with, the laws of the State of New York. Section 1006
of the Original Indenture shall be governed by, and construed in accordance with, the laws of England.

 

Section 307. Execution and Counterparts. This
Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

 

Section 308. Trustee Not Responsible for Recitals,
etc.. The recitals contained herein shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture. The Trustee
shall not be accountable for the use or application by the Issuer of the Notes or the proceeds thereof.

 

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

 

	 	HBOS PLC
	 	 
	 	By:	/s/ HBOS Plc
	 	Name:	 
	 	Title:	 

 

 

	 	THE BANK OF NEW YORK,
	 	as Trustee
	 	 
	 	By:	/s/ The Bank of New York
	 	Name:	 
	 	Title:	 

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EXHIBIT A

to Supplemental Indenture

 

[Form of Note]

 

[Form of Face of Note]

 

[If this Security is a Global Security, insert:]

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

IF THIS SECURITY IS A GLOBAL SECURITY AS INDICATED
ON THE FACE HEREOF, UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED UPON SUCH
TRANSFER OR EXCHANGE IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER PERSON AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY SUCH PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER PERSON, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

[If the Security is a Restricted Security, insert:]

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE
HEREOF, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY (1) ONLY IN MINIMUM PRINCIPAL AMOUNTS OF US$1,000 (OR THE EQUIVALENT
THEREOF IN ANOTHER CURRENCY OR COMPOSITE CURRENCY) AND (2) PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE ISSUER OR TO AN AGENT THAT IS A PARTY TO THE AMENDED AND RESTATED PRIVATE PLACEMENT AGREEMENT DATED APRIL
30, 2003, AS AMENDED (AN “AGENT”), (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE HAS BEEN GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR IS BEING MADE TO A PERSON OTHER THAN A U.S. PERSON AS DEFINED IN THE SECURITIES ACT
IN COMPLIANCE WITH

 

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REGULATION S UNDER THE SECURITIES ACT, AND A CERTIFICATE
IN THE FORM OF ANNEX A ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEROR TO THE TRUSTEE, (D) TO AN INSTITUTION THAT IS AN “ACCREDITED
INVESTOR” AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION AND A CERTIFICATE IN THE FORM OF ANNEX B ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE TRUSTEE, (E) THROUGH
AN AGENT TO AN INSTITUTIONAL PURCHASER THAT IS AN ACCREDITED INVESTOR (AS SO DEFINED) AND A CERTIFICATE IN THE FORM OF ANNEX A ATTACHED
TO THIS SECURITY IS DELIVERED BY SUCH AGENT TO THE TRUSTEE OR (F) PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AS CONFIRMED IN AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER.

 

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	REGISTERED	REGISTERED

 

HBOS PLC

(a corporation incorporated in Scotland under
the Companies Act 1985 

having its registered office at The Mound, Edinburgh,
Scotland EH1 1YZ)

 

No. U.S. HBOS 007-[01]

	CUSIP:	[Rule 144A Global Note:  4041A2AG9]
	 	[Regulation S Global Note: 4041A3AF9]
	ISIN:	[Rule 144A Global Note:  US4041A2AG96]
	 	[Regulation S Global Note: US4041A3AF96]
	Common Code:	[Rule 144A Global Note:  017938894]
	 	[Regulation S Global Note:  017938860]

 

MEDIUM-TERM SUBORDINATED NOTE 

(Undated Fixed to Floating Rate)

 

	
    PRINCIPAL AMOUNT AND CURRENCY OR
CURRENCY

    UNIT: USD [1,000,000,000]

     
	INTEREST RESET MONTH(S): February, May, August and November.
	DENOMINATIONS (if necessary): N/A	INTEREST RESET DATE(S): 1st of each such month.
	OPTION TO RECEIVE PAYMENTS IN SPECIFIED CURRENCY: N/A	INITIAL INTEREST RESET DATE: November 1, 2013 (the “First Call Date”)
	ORIGINAL ISSUE DATE: October 30, 2003	INTEREST DETERMINATION DATE(S): as provided below
	STATED MATURITY: N/A	
    REGULAR RECORD DATE(S):

     

    Until the First Call Date: April 15th
    and October 15th.

     

    After the First Call Date: January 15th,
    April 15th, July 15th and October 15th.

     

	
    COMPUTATION PERIOD:

     

    From the Original Issue Date until the
    First Call Date: 30/360.

     

    After the First Call Date: Actual/360

     
	REDEMPTION DATE(S): The First Call Date and each Interest Payment Date thereafter.
	INTEREST RATE (from the Original Issuer Date until the First Call Date): Fixed Rate of 5.375%  per annum (the “Initial Interest Rate”).	REDEMPTION PERCENTAGE(S): 100%
	INTEREST RATE (after the First Call Date (defined below): Floating Rate of USD 3-month LIBOR plus 1.7025%.	CALCULATION AGENT (if other than the Paying Agent): N/A
	INTEREST RATE BASIS: LIBOR	CALCULATION DATE: N/A
	INDEX MATURITY: 3 months	EXCHANGE RATE AGENT (if other than the Paying Agent): N/A
	SPREAD (PLUS OR MINUS): plus 1.7025%	UNLESS BOX IS CHECKED, SECURITY SHALL CONSTITUTE TIER 2 CAPITAL IN ACCORDANCE WITH AND SUBJECT TO THE REQUIREMENTS OF THE FINANCIAL SERVICES AUTHORITY IN EFFECT AT ORIGINAL ISSUE DATE:   [ ]
	ALTERNATE RATE EVENT SPREAD: N/A	ADDITIONAL BUSINESS DAYS (if necessary): N/A
	SPREAD MULTIPLIER: N/A	IF SECURITY IS GLOBAL SECURITY, CHECK BOX BELOW AND ATTACH “Schedule to Global Security”: [X]
	MAXIMUM INTEREST RATE, IF ANY: N/A	ORIGINAL ISSUE DISCOUNT SECURITY:
	MINIMUM INTEREST RATE, IF ANY: N/A	If applicable, the following will be completed solely for the purpose of applying the United States federal income tax original issue discount (“OID”) rules:

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    INTEREST PAYMENT PERIOD:

     

    Until the First Call Date: Semi-annual

     

    After the First Call Date: Quarterly

     
	TOTAL AMOUNT OF OID: N/A
	
    INTEREST PAYMENT MONTH(S):

     

    Until the First Cal Date: May and November

     

    After the First Call Date: February,
    May, August and November.

     
	OID AS PERCENTAGE OF PRINCIPAL AMOUNT: N/A
	INTEREST PAYMENT DATE(S): 1st of each such month.	YIELD TO MATURITY: N/A
	 	SHORT ACCRUAL PERIOD OID: N/A

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HBOS plc (herein called the “Issuer”,
which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay
to, or registered assigns, the principal amount specified above in the currency or currency unit so specified upon redemption hereof
as provided below and to pay interest thereon, from and including the Original Issue Date of this Security specified above (the “Original
Issue Date”) or from and including the most recent Interest Payment Date (as hereinafter defined) to which interest on this
Security (or any predecessor Security) has been paid or duly provided for, at a rate per annum equal to the Initial Interest Rate specified
above (the “Initial Interest Rate”) until the First Call Date and thereafter at a rate determined in accordance with
the provisions on the reverse hereof under the heading “Determination of LIBOR”, until the principal hereof is paid or made
available for payment. Such interest shall be payable by the Issuer quarterly or semi-annually as specified above under “Interest
Payment Period” and such interest shall be payable by the Issuer on the “Interest Payment Date(s)” specified above
of the month or months specified above under “Interest Payment Month(s)” in each year (or if any such day is not a Market
Day (as defined on the reverse hereof) with respect to this Security, on the next succeeding Market Day (as defined on the reverse hereof)
with respect to this Security or, following the First Call Date, if the next succeeding such Market Day falls in the next calendar month,
the immediately preceding such Market Day) (each date so specified above or, if none is so specified, determined as herein provided,
an “Interest Payment Date”) and upon redemption hereof, commencing on the first Interest Payment Date next succeeding
the Original Issue Date. The interest so payable, and punctually paid or duly provided for, on any such Interest Payment Date will be
paid to the person in whose name this Security (or one or more predecessor Securities) is registered at the close of business on the
“Regular Record Date” specified above (the “Regular Record Date”); provided that interest payable
upon redemption will be payable to the person to whom principal shall be payable. The interest payable hereon on any Interest Payment
Date will be the interest accrued from and including the Original Issue Date or from and including the most recent Interest Payment Date
to which interest has been paid or duly provided for, as the case may be, to but excluding such Interest Payment Date. Notwithstanding
the foregoing, the interest payable upon redemption will include interest accrued to but excluding the date of such redemption. Accrued
interest hereon shall be calculated by multiplying the face amount hereof by an accrued interest factor. Such accrued interest factor
shall be computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated.
The interest factor for each such day (expressed as a decimal rounded upwards, if necessary, as described below) shall be computed by
dividing the interest rate (expressed as a decimal rounded upwards, if necessary, as described below) applicable to such day by the number
of days in the “Computation Period” specified on the face hereof. Except as otherwise provided herein, all percentages resulting
from any calculation with respect to this Security will be rounded, if necessary, to the nearest one-hundred thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)
and 9.876544% (or .09876544) being rounded to 9.87654% (or .0987654)), and all dollar amounts and all amounts in Specified Currencies
used in or resulting from such calculations will be rounded to the nearest cent and unit, respectively (with one-half cent and one-half
unit being rounded upwards).

 

If this Security is a Global
Security as indicated on the face hereof, the Depositary for any Security of this series which is a Global Security shall be The Depository
Trust Company in New York City.

 

Payment of the principal of
and premium, if any, and interest on this Security will be made upon presentation or, upon redemption, surrender of this Security at the
corporate trust office of the Paying Agent (as defined on the reverse hereof), or such other office or agency of the Issuer maintained
by it for that purpose in the Borough of Manhattan, The City of New York 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; provided that if this Security is a Global Security as indicated
on the face hereof, payment to the Depositary may be made, by wire transfer to the account designated by the Depositary in writing; provided
that if this Security is not a Global Security, payment of the principal of and any premium and interest on this Security due upon redemption
will be made in immediately available funds at such corporate trust office or such other offices or agencies if this Security is presented
to the Paying Agent or any other paying agent in time for the Paying Agent or such other paying agent to make such payments in accordance
with its normal procedures; and provided, further, that, at the option of the Issuer, payment of interest (other than interest
payable upon redemption) may be made by check mailed to the address of the person entitled thereto as such address shall appear in the
Security Register (as defined on the reverse hereof) unless that address is in the Issuer’s country of incorporation or, if different,
country of tax residence; and, provided, further,

 

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that notwithstanding the foregoing, a holder of
US$10,000,000 or more in aggregate principal amount of Securities of this series having the same Interest Payment Date shall be entitled
to receive payments of interest, other than interest due upon redemption, by wire transfer of immediately available funds to an account
at a bank located in The City of New York (or other location consented to by the Issuer) if appropriate wire transfer instructions have
been received by the Paying Agent or such other paying agent in writing not less than 15 calendar days prior to the applicable Interest
Payment Date.

 

As provided in the Indenture,
any amounts to be paid by the Issuer under this Security shall be paid without deduction or withholding for any and all present and future
taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the country
of incorporation of the Issuer, or, in the event that a Subsidiary assumes the obligations of the Issuer (an “Assuming Party”)
in respect of the Securities of this series pursuant to the provisions of the Indenture, the country of incorporation of such Assuming
Party, and, if different, the country of tax residence of the Issuer or such Assuming Party or, in each case, any political subdivision
or taxing authority thereof or therein (the “Issuer Taxing Jurisdiction”), or if deduction or withholding of any such
taxes, levies, imposts or other governmental charges shall at any time be required by the Issuer Taxing Jurisdiction, the Issuer will
pay such additional amount in respect of principal, premium and interest as may be necessary in order that the net amounts paid to the
Holder hereof or to the Trustee, as the case may be, pursuant to the Indenture, after such deduction or withholding shall equal the respective
amounts of principal, premium and interest as specified herein to which such Holder or such Trustee would be entitled if no such deduction
or withholding had been made; provided that the foregoing shall not apply to any such tax, levy, impost or other governmental charge (i)
which would not be payable or due but for the fact that the beneficial owner or Holder hereof is a domiciliary, national or resident of,
or engaging in business (whether through a branch, agency or otherwise) or maintaining a permanent establishment or being physically present
in, the Issuer Taxing Jurisdiction or otherwise having some connection with the Issuer Taxing Jurisdiction other than the holding or ownership
of this Security, or receiving income herefrom, or the enforcement hereof, (ii) which would not be payable or due but for the failure
to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection
with the Issuer Taxing Jurisdiction required by any statute or regulation or by practice of the Issuer Taxing Jurisdiction as a condition
to or requirement of relief or exemption from such tax, levy, impost or other governmental charge, if compliance is possible pursuant
to the provisions of any statute or regulation or by practice of the Issuer Taxing Jurisdiction as a condition to or requirement of relief
or exemption from such tax, levy, impost or other governmental charge, (iii) which would not be payable or due but for the fact that this
Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later, except to the
extent that the Holder hereof would have been entitled to additional amounts on presenting the same for payment on or before the expiry
of such period of 30 days, or (iv) which would not have been imposed if the beneficial owner of this Security had been the Holder of this
Security or which, if the beneficial owner of this Security had been the Holder of this Security, would have been excluded pursuant to
clauses (i) through (iii) inclusive above.

 

The Securities of this series
may be redeemed as a whole at the option of the Issuer at any time at a redemption price equal to 100% of the principal amount hereof,
together with accrued interest to the date fixed for redemption, if, at any time, the Issuer shall determine that as a result of any change
in or amendment to the laws of the Issuer Taxing Jurisdiction or the United Kingdom or any political subdivision or taxing authority thereof
or therein affecting taxation, or change in an application or interpretation of such laws, which change, amendment, application or interpretation
becomes effective on or after the Original Issue Date or in the event that an Assuming Party assumes the obligations of the Issuer in
respect of the Securities of this series pursuant to the terms of the Indenture, the date of such assumption (the “Relevant Date”)
(i) in making any payment under the Securities or the Indenture, as the case may be, the Issuer would become obligated to pay additional
amounts with respect thereto as a result of any taxes, levies, imposts or other governmental charges whatsoever imposed (whether by way
of withholding or deduction or otherwise) by or for the account of the Issuer Taxing Jurisdiction or the United Kingdom or any political
subdivision or taxing authority thereof or therein, (ii) based upon an opinion of legal advisors to the Issuer as a result of any action
taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, the Issuer Taxing Jurisdiction or the
United Kingdom or any political subdivision thereof (whether or not such action was taken or brought with respect to the Issuer, which
action is taken or brought on or after the Relevant Date, there is a substantial probability that the circumstances described in clause
(i) would exist.

 

    6

     

    

If this Security constitutes
Tier 2 Capital in accordance with the requirements of the Financial Services Authority, any such redemption requires the prior consent
of the Financial Services Authority.

 

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.

 

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

 

    7

     

    

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

 

	Dated: _________, ____	HBOS PLC
	 	 
	 	By:	 
	 	Title:	 

 

AUTHENTICATING AGENT’S CERTIFICATE OF

AUTHENTICATION

 

This is one of the Securities

of the series designated

therein referred to in the

within-mentioned Indenture.

 

 

 

	By:	THE BANK OF NEW YORK,	 
	 	as Trustee	 
	 	 	 
	By:	CITIBANK, N.A., as Authenticating Agent	 
	 	 	 
	By:	 	 
	 	Authorized Signatory	 

 

    8

     

    

[FORM OF REVERSE OF SECURITY]

 

This Security is one of a duly
authorized issue of Medium-Term Notes of the Issuer (herein called the “Securities”), issued and to be issued in one
or more series under an Amended and Restated Indenture dated as of April 30, 2003 (herein called the “Indenture”) among
HBOS plc (the “Company”), The Governor and Company of the Bank of Scotland, Scotland International Finance No. 2 B.V.
(“SIF No. 2”) and The Bank of New York, as Trustee (herein called the “Trustee”, which term includes
any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Guarantors, the Trustee
and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. The series
designated as “Medium-Term Notes”, of which this Security forms part, is limited in aggregate principal amount (or in the
case of Original Issue Discount Securities or Securities with the amount payable in respect of principal or any premium or interest to
be determined by reference to the value, rate or price of one or more specified indices (“Indexed Securities”), aggregate
initial offering price) outstanding together with any other Medium-Term Notes issued by any issuer under the Indenture or the Amended
and Restated Indenture dated as of April 30, 2003 among HBOS plc, The Governor and Company of the Bank of Scotland and HBOS Treasury Services
plc (together with HBOS plc, The Governor and Company of the Bank of Scotland and Scotland International Finance No. 2 B.V. and any subsidiary
designated by HBOS plc, the “US MTN Issuers”) and the Trustee or instruments issued by any Issuer under the US MTN
Issuers’ and BOS International (Australia) Limited’s Euro Note Issuance Programme at any time up to US$65,000,000,000 on the
date such Issuer agreed to issue such Securities). The terms of individual Securities may vary with respect to interest rates, interest
rate formulas, issue dates, maturity dates, currencies or otherwise, all as provided in the Indenture. To the extent not inconsistent
herewith, the terms of the Indenture are hereby incorporated by reference herein.

 

The Issuer has appointed Citibank,
N.A. as the paying agent (the “Paying Agent”, which term includes any additional or successor Paying Agent appointed
by the Issuer) with respect to the Securities, and the Trustee has appointed Citibank, N.A. as the authenticating agent (the “Authenticating
Agent”, which term includes any additional or successor Authenticating Agent appointed by the Trustee) with respect to the Securities.

 

As used herein, the following
terms have the following meaning: “London Market Day” means any day on which deposits in U.S. dollars are transacted
in the London interbank market; “Market Day” means any day that is a Business Day in The City of New York.

 

This Security will not be subject
to any sinking fund and is not subject to redemption or repayment at the option of the Holder prior to maturity except for redemption
for the tax reasons specified on the face hereof and as otherwise provided on the face hereof in accordance with the provisions of the
following paragraph.

 

This Security may be redeemed
in whole or in part at the option of the Issuer (i) for the tax reasons specified on the face of this Security and (ii) on or after the
Redemption Dates (or ranges of Redemption Dates) specified on the face hereof at a Redemption Price determined as provided in the next
succeeding sentence, together with interest accrued and unpaid hereon to the Redemption Date (except as provided below). Unless otherwise
specified on the face hereof, the “Redemption Price” for any such redemption shall be the amount determined by multiplying
the Redemption Percentage specified on the face hereof with respect to the relevant Redemption Date (or ranges of such dates) by the portion
of the principal amount hereof. Notice of redemption shall be mailed to the registered holders of the Securities designated for redemption
at their addresses as the same shall appear on the Security Register not less than 30 nor more than 60 days prior to the date fixed for
redemption, subject to all the conditions and provisions of the Indenture. In the event of redemption of this Security in part only, a
new Security or Securities for the amount of the unredeemed portion hereof shall be issued in the name of the holder hereof upon the cancellation
hereof.

 

    9

     

    

The interest rate in effect
for the period from the Original Issue Date of this Security (or one or more predecessor Securities) to but excluding the first Interest
Reset Date will be the Initial Interest Rate specified on the face hereof. On and after the First Call Date, the rate of interest on this
Security will be reset quarterly (each date upon which interest is so reset as provided below being hereinafter referred to as an “Interest
Reset Date”), and the interest rate in effect on any day shall be (a) if such day is an Interest Reset Date, the interest rate
for such Interest Reset Date or (b) if such day is not an Interest Reset Date the interest rate for the immediately preceding Interest
Reset Date. Notwithstanding the foregoing, the interest rate hereon shall not be greater than the Maximum Interest Rate, if any, or less
than the Minimum Interest Rate, if any, specified on the face hereof and in no event shall be higher than the maximum rate permitted by
New York law, as the same may be modified by United States Federal law of general application. The Interest Reset Date with respect to
this Security will be the “Interest Reset Date(s)” of each “Interest Reset Month(s)” on the face hereof. If, pursuant
to the preceding sentence, any Interest Reset Date would otherwise be a day that is not a Market Day with respect to this Security, the
Interest Reset Date shall be the next succeeding day that is a Market Day with respect to this Security, except that if the immediately
succeeding such Market Day falls in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding such
Market Day. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date the rate of interest on
this Security shall be the rate determined in accordance with the provisions below.

 

Determination of LIBOR.
The interest rate with respect to this Security for any Interest Reset Date shall be determined by the Calculation Agent in accordance
with the following provisions:

 

(i)       On
the second London Market Day prior to such Interest Reset Date (a “LIBOR Interest Determination Date”), the Calculation
Agent will determine LIBOR on the basis of the offered rate for deposits of not less than U.S.$1,000,000 having the Index Maturity specified
on the face hereof, commencing on the second London Market Day immediately following such LIBOR Interest Determination Date, which appears
on the display designated as page 3740 or page 3750, as applicable on the Dow Jones Telerate Service (or such other page as may replace
any such page on that service for the purpose of displaying London interbank offered rates of major banks for deposits in U.S. dollars)
as of 11:00 A.M., London time, on that LIBOR Interest Determination Date, adjusted by the addition of the Spread specified on the face
hereof; provided that no such offered rate appears, LIBOR for such LIBOR Interest Determination Date will be determined as described in
(ii) below.

 

(ii)       If
on any LIBOR Interest Determination Date no rate appears on Telerate Page 3740 or 3750 as described in (i) above, the Calculation Agent
will request the principal London office of four major banks in the London interbank market, as selected by the Calculation Agent, to
provide the Calculation Agent with its quotation at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date of
the rate it offers to prime banks in the London interbank market for deposits in U.S. dollars having the Index Maturity shown on the face
hereof and in a principal amount equal to an amount of not less than U.S.$1,000,000 that in the Calculation Agent’s judgment is
representative for a single transaction in such market at such time. If at least two such quotations are provided, LIBOR for such LIBOR
Interest Determination Date will be the arithmetic mean, as calculated by the Calculation Agent, of such quotations, adjusted by the addition
or subtraction of the Spread, if any, specified on the face hereof, or by multiplication by the Spread Multiplier, if any, specified on
the face hereof. If fewer than two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean,
as calculated by the Calculation Agent, of the rates quoted at approximately 11:00 A.M., London time, on such LIBOR Interest Determination
Date by three major banks in London, England, selected by the Calculation Agent, for loans in U.S. dollars to leading European banks,
having the Index Maturity shown on the face hereof and in a principal amount equal to an amount of not less than U.S.$1,000,000 that in
the Calculation Agent’s judgment is representative for a single transaction in such market at such time, adjusted by the addition
of the Spread specified on the face hereof; provided that if the banks selected as aforesaid by the Calculation Agent are not quoting
as mentioned in this sentence, LIBOR will be the LIBOR in effect on such LIBOR Interest Determination Date.

 

Unless otherwise specified on
the face hereof, the Calculation Date pertaining to any Interest Determination Date shall be the first to occur of (a) such interest determination
date, and (b) the Market Day preceding the applicable Interest Payment Date (or the Redemption Date, if any) as the case may be. The Calculation
Agent shall calculate the interest rate hereon in accordance with the foregoing on or before each Calculation Date. At the request of
the Holder hereof, the Calculation Agent will provide to the Holder hereof the interest rate hereon then in effect and, if determined,
the interest rate which will become effective as of the next Interest Reset Date. Unless otherwise specified on the face hereof, the Calculation
Agent shall be the Paying Agent.

 

    10

     

    

In any case where any Interest
Payment Date or Redemption Date of this Security shall not be a Business Day at any place of payment, then payment of principal of and
premium or interest, if any, on this Security need not be made at such place of payment on such date, but may be made on the next succeeding
Business Day at such place of payment with the same force and effect as if made on the Interest Payment Date or Redemption Date and no
interest on such payment shall accrue for the period from and after such Interest Payment Date or Redemption Date and no interest on such
payment shall accrue for the period from and after such Interest Payment Date or Redemption Date, as the case may be, to such next succeeding
Business Day.

 

The indebtedness evidenced by
this Security is, to the extent, and in the manner provided in Section 1006 of the Indenture, subordinated and subject in right of payment
to the prior payment in full of the claims of all of the Senior Creditors (as defined in the Indenture) of the Issuer and this Security
is issued subject to said Section 1006 of the Indenture, and each Holder of this Security, by accepting the same, agrees to and shall
be bound by such provisions as provided in the Indenture. Amounts due and payable under the Securities shall be conditional (such condition
is referred to as the “Solvency Condition”) upon the Issuer being solvent at the time of payment by the Issuer and in that
no amount shall be payable under the Securities except to the extent that the Issuer could make such payment and still be solvent (whether
or not it is bankrupt, being liquidated or is in winding up) immediately thereafter. In such circumstances, no amounts payable in respect
of such amounts which would otherwise fall due for payment shall fall so due (subject always to the provisions of the parenthetical clause
in Section 503(1) of the Indenture), and instead, such payment shall become due for payment only if and when and to the extent that the
Issuer could make such payment in whole or in part and still be solvent (whether or not it is bankrupt or being liquidated or in winding
up) immediately thereafter. Interest will continue to accrue on this Security, payment of which is suspended pursuant to the provisions
of the immediately preceding sentence in accordance with the terms of this Security and the Indenture. For this purpose, the Issuer shall
be considered to be solvent if (A) it is able to pay its debts to Senior Creditors (as defined in the Indenture) as they fall due and
(B) its Assets (as defined in the Indenture) exceed its Liabilities (as defined in the Indenture) to Senior Creditors (as so defined).
Amounts representing interest in respect of which the Solvency Condition is not satisfied on the due date for the payment thereof shall,
so long as the same remains unpaid, constitute “Arrears of Interest” (to the extent described in the Indenture). Arrears of
Interest in respect of Undated Securities shall not bear interest. Without prejudice to the foregoing provisions, the Issuer shall not
be obliged to make payment of the interest accrued in respect of any period on the due date for the payment thereof (for the purposes
of this paragraph and the immediately succeeding paragraph, “Accrual Period” and “Payment Date” respectively)
if during the period of twelve months ending on such Payment Date no dividend or other Distribution (as defined in the Indenture) shall
have been declared, paid or made on any class of stock or share capital of the Issuer; and all interest not so paid shall, so long as
the same remains unpaid, constitute Arrears of Interest. The Issuer may, subject to the provisions of the immediately succeeding sentence,
at its option (upon the expiry of not less than seven days’ notice to the Holders of the Securities given in accordance with the
relevant provisions of the Securities) at any time pay all or part of the Arrears of Interest (being, if part only, the whole of the interest
accrued on all of such Securities during any one or more Accrual Periods) but so that, in the case of any such partial payment, the interest
accrued during any Accrual Period shall not be paid prior to that accrued during any earlier Accrual Period. If there are outstanding
more than one series of Undated Securities, then the Issuer may not pay all or part of the Arrears of Interest in respect of any such
series unless it pays all or (as near as practicable) an equivalent proportion of the Arrears of Interest in respect of each other series
of its Undated Securities then outstanding. All Arrears of Interest shall (subject to satisfaction of the Solvency Condition and subject
to Section 1006(c)(iv) of the Indenture) become due in full on the date on which any dividend or other Distribution (as defined in the
Indenture) is next declared, paid or made on any class of stock or share capital of the Issuer or, if earlier, the date set for any redemption
permitted under Section 1108 of the Indenture or any early redemption exercised at the option of the Issuer (other than a partial redemption)
in accordance with the terms of the Securities or the commencement of the bankruptcy, liquidation or winding up of the Issuer.

 

If, at any time, an order is
made for the liquidation or winding up of the Issuer or an effective resolution is passed for the winding up of the Issuer, this Security
shall become due and payable in accordance with the provisions of this paragraph and the Issuer shall, in lieu of any other payment on
this Security, but subject to satisfaction of the Solvency Condition, be obliged to pay, in respect of this Security, such amounts as
would have been payable if the Holder of this Security had, on the day preceding the commencement of such liquidation or winding up, become
a holder of preference stock or shares in the capital of the Issuer forming or being part of a class having a preferential right in the
liquidation or winding up over the holders of all other classes of stock and shares in the capital of the Issuer and entitled to receive
in such liquidation or winding up an amount equal to the Redemption Price and interest (if any) accrued since the Payment Date immediately
preceding or coinciding with the commencement of such liquidation or winding up to the date of such repayment and all Arrears of Interest
and/or, as the case may be, all such interest due but unpaid.

 

    11

     

    

In addition, in the event of
the bankruptcy, liquidation or winding up of the Issuer, if any payment or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Issuer being subordinated to the payment of the Securities, shall be received by the Trustee
or the Holders, before the claims of all Senior Creditors (as defined in the Indenture) of the Issuer have been paid in full, such payment
or distribution shall be held in trust by the Trustee or such Holders, as applicable, and shall be immediately returned by it or them
to the liquidator or trustee or receiver in bankruptcy of the Issuer to be held on trust for the unsubordinated creditors of the Issuer.
Thereupon, such payment or distribution will be deemed not to have been made or received. If any of the said rights and claims of any
Holder against the Issuer is discharged by set-off, such Holder will immediately pay an amount equal to the amount of such discharge to
the liquidator or trustee or receiver in bankruptcy of the Issuer and until such time as payment is made will hold a sum equal to such
amount in trust for the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will be deemed not
to have taken place.

 

The provisions of Section 1006
of the Indenture and the provisions of the three immediately preceding paragraphs relating to the subordination of the Securities shall
be governed by, and shall be construed in accordance with, the laws of England.

 

The Indenture contains provisions
for defeasance of the entire indebtedness of this Security.

 

If an Event of Default with
respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series shall, without any
act of the Trustee or the Holder hereof, become immediately due and payable without presentment, demand, protest or other notice of any
kind as provided in the Indenture.

 

If a Default with respect to
Securities of this series shall occur and be continuing, the Issuer will, upon demand of the Trustee pay to the Trustee, for the benefit
of the Holders of such Securities, the whole amount then due and payable on such Securities for principal, premium (if any) and interest
(if any). Upon the occurrence of a Default with respect to Securities of this series, the Holder of this Security shall not at any time
be entitled to exercise any right of set-off or counterclaim which may be available to any such Holder against amounts owing by the Issuer
in respect of this Security. If, notwithstanding the provisions of the immediately preceding sentence, any of the rights and claims of
the Holder of this Security is discharged by set-off, the Holder of this Security will immediately pay an amount equal to the amount of
such discharge to the Issuer or, if applicable, the liquidator or trustee or receiver in bankruptcy of the Issuer to be held on trust
for the unsubordinated creditors of the Issuer and until such time as payment is made will hold a sum equal to such amount in trust for
the Issuer or, if applicable, the liquidator or trustee or receiver in bankruptcy of the Issuer. Accordingly, such discharge will 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 Issuer and the
rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Issuer and the Trustee with
the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Securities at the time Outstanding of all series
to be affected (voting as a class). The Indenture also contains provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance
by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Security.

 

No reference herein to the Indenture
and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional,
to pay the principal of and premium and interest, if any, on and certain additional amounts in respect of this Security at the times,
place and rates, and in the coin or currency, herein prescribed.

 

    12

     

    

If this Security is a Global
Security as indicated on the face hereof, this Security shall be exchangeable for Securities registered in the names of Persons other
than the Depositary with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable
if (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for such series or at any time ceases
to be a clearing agency registered as such under the Securities Exchange Act, (ii) the Issuer executes and delivers to the Trustee an
Officer’s Certificate providing that this Security shall be so exchangeable or (iii) there shall have occurred and be continuing
a Default or an Event of Default with respect to the Securities of such series. Securities so issued in exchange for this Security shall
be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in authorized denominations
and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such Global
Security shall direct.

 

If this Security is a Global
Security as indicated on the face hereof, any Person having a beneficial interest in this Security may request the Depositary to instruct
the Paying Agent to exchange all or part of such interest for a definitive Security upon receipt by the Paying Agent of a certification
from such Person in the form of Annex A hereto, unless such Person is transferring such interest to an institution that is an “accredited
investor”, as defined in Regulation D under the Securities Act, in which case, upon receipt by the Paying Agent of a certification
from such transferee in the form of Annex B hereto. In the case of such exchanges, the Trustee will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Paying Agent, the aggregate principal amount of the Global Security
to be reduced (such reduction to be reflected on the Schedule hereto) and, following such reduction, the Issuer will execute, and the
Authenticating Agent will authenticate and deliver to such Person or such transferee, as the case may be, a definitive Security.

 

If this Security is a Global
Security as indicated on the face hereof, at such time as all interests in this Security have either been exchanged for definitive Securities,
redeemed, repurchased or cancelled, this Security shall be cancelled by the Paying Agent. At any time prior to such cancellation, if any
interest in this Security is exchanged for definitive Securities, redeemed, repurchased or cancelled, the principal amount of Securities
represented by this Security shall be reduced and the Paying Agent shall cause an endorsement to be made on the Schedule hereto to reflect
such reduction.

 

[If this Security is a Global
Security which is a Restricted Security, insert:] [Any Person having a beneficial interest in a Global Security which is a Restricted
Security may request the Trustee to exchange all or part of such interest for another Global Security upon receipt by the Trustee of a
certification from such Person in the form of Annex A to the Global Security to the effect that such transaction complies with the requirements
of Regulation S promulgated under the Securities Act. In the case of such exchanges, the Trustee will cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Trustee, the aggregate principal amount of the Global Security being
transferred to be reduced (such reduction to be reflected on the Schedule thereto) and, following such reduction, the aggregate principal
amount of the Global Security being purchased to be increased (such increase to be reflected in the Schedule thereto). If following such
increase the aggregate principal amount of the Global Security being purchased (as reflected in the Schedule thereto) exceeds the aggregate
face amount thereof, the Issuer will execute, and the Trustee will authenticate and deliver to the Depositary, a Global Security having
an aggregate face amount equal to such aggregate principal amount.]

 

[If this Security is a definitive
Security which is a Restricted Security, insert:] [This Security shall be exchangeable in whole or in part for a beneficial interest in
a Global Security registered in the name of the Depositary with respect to such series or its nominee if the Holder delivers this Security
to the Trustee and instructs the Trustee to exchange all or part of this Security for a beneficial interest in a Global Security; provided
that this Restricted Security may not be exchanged for a beneficial interest in a Global Security except upon receipt by the Trustee of
a certification by the Holder to the effect that (i) such Holder is, or believes such Holder’s transferee is, as the case may be,
a “Qualified Institutional Buyer”, as defined in Rule 144A promulgated under the Securities Act, or (ii) such transaction
complies with the requirements of Regulation S promulgated under the Securities Act, in each case substantially in the form of Annex A
hereto. In the case of such exchanges, the Trustee will cause, in accordance with the standing instructions and procedures existing between
the Depositary and the Trustee, the aggregate principal amount of the Global Security to be increased (such increase to be reflected on
the Schedule thereto). If necessary as a result of such an exchange, the Issuer will execute, and the Trustee will authenticate and

 

    13

     

    

deliver to such Holder or such transferee, a definitive
Security. If following such increase the aggregate principal amount of the Global Security (as reflected in the Schedule thereto) exceeds
the aggregate face amount thereof, the Issuer will execute and the Trustee will authenticate and deliver to the Depositary, a Global Security
having an aggregate face amount equal to such aggregate principal amount.]

 

The Paying Agent has been appointed
registrar (the “Security Registrar”) for the Securities, and the Paying Agent will maintain at its office in The City
of New York a register for the registration and transfer of the Securities (the “Security Register”). As provided in
the Indenture and subject to certain limitations therein set forth, the transfer of (if this Security is a Global Security as indicated
on the face hereof) a Security of the series of which this Security is a part or (if this Security is not a Global Security) this Security
is registrable in the Security Register, upon surrender of this Security for registration of transfer at the aforesaid office of the Paying
Agent, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar
duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series
and with identical terms, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee
or transferees.

 

The Securities of (if this Security
is a Global Security as indicated on the face hereof) the series of which this Security is a part or (if this Security is not a Global
Security) this series are issuable only in registered form without coupons in denominations of US$1,000 and in integral multiples of US$1,000
in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable
for a like aggregate principal amount of Securities of this series with identical terms of a different authorized denomination, as requested
by the Holder surrendering the same.

 

No service charge shall be made
for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 

Prior to due presentment of
this Security for registration of transfer, the Issuer, the Trustee, the Paying Agent and any agent of the Issuer or the Trustee or the
Paying Agent 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 Issuer, the Trustee, the Paying Agent 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.

 

All terms used in this Security
which are defined in the Indenture and not defined herein shall have the meanings assigned to them in the Indenture.

 

    14

     

    

__________________

 

ABBREVIATIONS

 

The following abbreviations,
when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable
laws or regulations.

 

	 	 	 	 	 
	 	TEN COM	-	as tenants in common	 
	 	 	 	 	 
	 	TEN ENT	-	as tenants by the entireties	 
	 	 	 	 	 
	 	JT TEN	-	as joint tenants with right of survivorship and not as tenants in common
	 	 	 	 	 
	 	 	 	 	 
	 	UNIF GIFT	 	 	 
	 	MIN ACT	-	 	Custodian
	 	 	 	(Custodian)	 
	 	 	 	 	 
	 	 	 	 	Under Uniform
	 	 	 	(Minor)	 
	 	 	 	 	 
	 	 	 	Gifts to Minors Act (________________)	 
	 	 	 	                                               (State)	 
	 	 	 	 	 

 

 

Additional abbreviations may also be used though
not in the above list.

 

__________________

 

    15

     

    

ASSIGNMENT

 

FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto

 

_____________________________________________________________

PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

_____________________________________________________________

PLEASE PRINT OR TYPEWRITE
NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE

 

_____________________________________________________________

 

 

_____________________________________________________________

 

the within Security and all rights thereunder,
hereby irrevocably constituting and appointing _____________________

 

attorney to transfer said Security on the books
of the Issuer, with full power of substitution in the premises.

 

Date:_______________    X                                    
 NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every
particular, without alteration or enlargement or any change whatever.

 

THIS SECURITY IS SUBJECT TO
THE TRANSFER RESTRICTIONS DESCRIBED IN THE LEGEND ON THE FACE HEREOF AND IN THE PROVISIONS SET FORTH ON THE REVERSE OF THIS SECURITY.
TRANSFERS OF THIS SECURITY IN WHOLE OR IN PART REQUIRE DELIVERY TO THE PAYING AGENT OF AN APPROPRIATELY COMPLETED AND EXECUTED CERTIFICATE
IN THE FORM OF EXHIBIT A OR EXHIBIT B TO THIS SECURITY, AS THE CASE MAY BE, AT THE ADDRESS SET FORTH IN SUCH CERTIFICATES.

 

    16

     

    

 

 

[INSERT EXHIBITS A AND B FROM U.S. OFFERING MEMORANDUM
AS ANNEX A AND ANNEX B, RESPECTIVELY, TO THIS NOTE]

 

    17

     

    

[IF THIS IS A GLOBAL SECURITY AS INDICATED ON
THE FACE HEREOF, THIS SCHEDULE FORMS PART OF THE SECURITY]

 

Schedule to Global Security

 

Interest, Principal Payments, Exchanges,

 

Redemptions and Purchases

 

The following payments of interest,
increases in this Global Security resulting from exchanges of all or portions of definitive Securities for interests herein, and decreases
in the principal amount hereof resulting from principal payments, redemptions, and exchanges of portions hereof for definitive Securities
and purchases of Securities represented hereby have been made:

 

	
    Date of payment, exchange, redemp-tions or purchase

    
	Amount
                                            of Interest Payment  

    
	
    Increase in principal amount of this Global Security resulting
    from exchange of all or portions of definitive Securities  

    
	
    Portion of principal amount of this Global Security paid or exchanged
    for definitive Bonds or redeemed or purchased  

    
	
    Aggregate outstanding principal amount of this Global Security
    following such payment, exchange, redemption purchase      

    
	
    Notation made by

    

	________	_________	____________	___________	______________	________
	________	_________	____________	___________	______________	________
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	________	_________	____________	___________	______________	________
	________	_________	____________	___________	______________	________

 

 

    1Exhibit 10.11

 

EXECUTION
VERSION

 

 

 

LLOYDS BANKING
GROUP PLC

 

as Issuer,

 

and

 

THE BANK OF
NEW YORK MELLON,

acting through its London Branch

 

as Trustee

 

 

 

 

FIFTH SUPPLEMENTAL
INDENTURE

 

dated as of November
14, 2016

 

to

 

THE SUBORDINATED
DEBT SECURITIES INDENTURE

 

dated as of November
4, 2014

 

 

 

     

     

    

table
of contents

 

 

 Page

 

	ARTICLE 1
	DEFINITIONS
	 
	Section 1.01.  Definition
    of Terms	2
	 	 
	ARTICLE 2
	FORM OF SECURITIES
	 
	Section 2.01.  Terms
    of the Securities	2
	 	 
	ARTICLE 3
	ADDITIONAL TERMS APPLICABLE TO THE SECURITIES
	 
	Section 3.01.  Addition
    of Definitions	4
	Section 3.02.  Amendment
    of Definition	5
	Section 3.03.  Deletion
    of Definitions	6
	Section 3.04.  Deletion
    of Deferred Payment Provisions	8
	Section 3.05.  Deletion
    of Exchange Provisions	9
	Section 3.06. Correction
    of Minor Defects in or Amendment of Subordinated Debt Securities	10
	Section 3.07.  Defaults;
    Collection of Indebtedness and Suits for Enforcement by Trustee	10
	Section 3.08.  Deletion
    of Satisfaction and Discharge Provisions	12
	Section 3.09. Unconditional
    Right of Holders to Receive Principal, Premium and Interest, if any	12
	Section 3.10.  Undertaking
    for Costs	12
	Section 3.11.  Redemption
    and Repurchases of Subordinated Debt Securities	13
	Section 3.12.  Exchanges
    Not Deemed Payment	16
	Section 3.13.  Exchange
    of Subordinated Debt Securities	16
	Section 3.14.  Events
    of Default. With respect to the Securities only:	16
	Section 3.15.  Compensation
    and Reimbursement	17
	Section 3.16.  Certain
    Rights of Trustee	18
	Section 3.17. Subordinated
    Debt Securities Subordinate to Claims of Senior Creditors	18
	Section 3.18.  Reliance
    on Judicial Order or Certificate of Liquidating Agent	19
	Section 3.19.  Additional
    Subordinated Debt Securities	19
	Section 3.20.  Agreement
    with Respect to Exercise of U.K. Bail-In Power	20
	 	 
	ARTICLE 4
	AMENDMENTS TO THE SUBORDINATED INDENTURE
	 
	Section 4.01.  Appointment
    of Agent for Service	22

 

i

     

     

    

 

	Section 4.02.  Notices
    to Trustee	23
	Section 4.03. Additional
    Amounts	24
	ARTICLE 5
	MISCELLANEOUS
	 
	Section 5.01.  Effect
    Of Supplemental Indenture	26
	Section 5.02.  Other
    Documents to be Given to the Trustee	26
	Section 5.03.  Confirmation
    Of Indenture	27
	Section 5.04.  Concerning
    The Trustee	27
	Section 5.05. Governing
    Law	27
	Section 5.06.  Separability	27
	Section 5.07.  Counterparts	27
	Section 5.08.  Concerning
    BRRD Liability	27

 

ii 

     

     

    

FIFTH
SUPPLEMENTAL INDENTURE (“Fifth Supplemental Indenture”), dated as of November 14, 2016, between LLOYDS BANKING GROUP
PLC, a corporation incorporated in Scotland with registered number 95000, and with its principal executive offices located at 25 Gresham
Street, London EC2V 7HN, United Kingdom, as issuer (the “Company”) and THE BANK OF NEW YORK MELLON, acting through
its London Branch, as trustee (the “Trustee”).

 

WITNESSETH

 

WHEREAS,
the Company and the Trustee have executed and delivered a Subordinated Debt Securities Indenture dated as of November 4, 2014 (the “Subordinated
Indenture,” and together with this Fifth Supplemental Indenture, the “Indenture”) to provide for the issuance
of the Company’s subordinated debt securities (the “Subordinated Debt Securities”), including the Securities
(as defined below).

 

WHEREAS,
Section 9.01(d) of the Subordinated Indenture permits the Company and the Trustee to add to, change or eliminate any provisions of the
Subordinated Indenture without the consent of Holders as permitted under Sections 2.01 and 3.01 of the Subordinated Indenture, subject
to certain conditions;

 

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

 

WHEREAS,
there are no debt securities Outstanding of any series created prior to the execution of this Fifth Supplemental Indenture which are
entitled to the benefit of the provisions set forth herein or would be adversely affected by such provisions;

 

WHEREAS,
the Board of Directors has authorized the entry into this Fifth Supplemental Indenture, as required by Section 9.01 of the Subordinated
Indenture;

 

WHEREAS,
the parties hereto desire to establish a series of Subordinated Debt Securities to be known as the $824,033,000 5.300% Subordinated Debt
Securities due 2045 (the “Securities”) pursuant to Sections 2.01 and 3.01 of the Subordinated Indenture. The Securities
may be issued from time to time and any Securities issued as part of this series will constitute a single series of Securities under
the Indenture and shall be included in the definition of “Securities” where the context requires;

 

WHEREAS,
the Company has requested that the Trustee execute and deliver this Fifth Supplemental Indenture and whereas all actions required by
it to be taken in order to make this Fifth 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 Fifth Supplemental Indenture has been duly authorized in
all respects; and

 

WHEREAS,
where indicated, this Fifth Supplemental Indenture shall amend and supplement the Subordinated Indenture; to the extent that the terms
of the Subordinated

 

     

     

    

Indenture
are inconsistent with such provisions of this Fifth Supplemental Indenture, the terms of this Fifth Supplemental Indenture shall govern.

 

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 Fifth Supplemental Indenture:

 

(a)       a
term defined anywhere in this Fifth 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 Subordinated Indenture;

 

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

 

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

 

(e)       for
the purposes of this Fifth Supplemental Indenture and the Subordinated Indenture, the term “series” shall mean a series of
Securities.

 

ARTICLE
2

FORM OF SECURITIES

 

Section
2.01. Terms of the Securities.

 

The following
terms relating to the Securities are hereby established pursuant to Section 3.01 of the Subordinated Indenture:

 

(a)       The
title of the Securities shall be: the 5.300% Subordinated Debt Securities due 2045 (the “Securities”);

 

(b)       The
aggregate principal amount of the Securities that may be authenticated and delivered under the Indenture shall not exceed $824,033,000,
except as otherwise provided in the Indenture;

 

(c)       Principal
on the Securities shall be payable on December 1, 2045;

 

(d)       The
Securities shall be issued in global registered form on November 14, 2016 and shall bear interest from June 1, 2016 payable semi-annually
in arrears on June 1 and December 1 (each, an “Interest Payment Date”), commencing December 1, 2016. The Securities
shall bear an annual interest rate of 5.300%.

 

    2 

     

    

Interest
on the Securities will be calculated on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an
incomplete month, the actual number of days elapsed in such period. The Regular Record Dates for the Securities will be 15 calendar days
immediately preceding the relevant Interest Payment Date, whether or not a Business Day;

 

(e)       No
premium, upon redemption or otherwise, shall be payable by the Company on the Securities;

 

(f)       Principal
of and any interest on the Securities shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company
having offices in London, United Kingdom;

 

(g)       The
Securities shall not be redeemable except as provided in Article 11 of the Subordinated Indenture, as supplemented by the Fifth Supplemental
Indenture;

 

(h)       The
Company shall have no obligation to redeem or purchase the Securities pursuant to any sinking fund or analogous provision;

 

(i)       The
Securities shall be issued only in denominations of $200,000 and in integral multiples of $1,000 in excess thereof;

 

(j)       The
principal amount of the Securities shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Subordinated
Indenture, as amended by this Fifth Supplemental Indenture;

 

(k)       Additional
Amounts in respect of the Securities shall be payable as set forth in the Subordinated Indenture, as supplemented by this Fifth Supplemental
Indenture;

 

(l)       The
Securities shall not be converted into or exchanged at the option of the Company;

 

(m)       The
Securities shall be denominated in, and payments thereon shall be made in, U.S. Dollars;

 

(n)       The
payment of principal of (and premium, if any) or interest, if any, on the Securities shall be payable only in the coin or currency in
which the Securities are denominated;

 

(o)       The
Securities will be issued in the form of one or more global securities in registered form, without coupons attached, and the initial
Holder with respect to each such global security shall be Cede & Co., as nominee of The Depository Trust Company;

 

(p)       The
Securities will not be initially issued in definitive form;

 

(q)       There
is no Calculation Agent for the Securities;

 

    3 

     

    

(r)       The
Events of Default on the Securities are as provided for in Section 5.01 of the Subordinated Indenture, as amended by the Fifth Supplemental
Indenture;

 

(s)       The
subordination terms of the Securities are as provided for in Article 12 of the Subordinated Indenture as amended by Section
3.17 of this Fifth Supplemental Indenture;

 

(t)       The
form of the Securities to be issued on the date hereof shall be substantially in the form of Exhibit A hereto; and

 

(u)       The
Company may issue additional Securities (“Additional Notes”) after the date hereof having the same ranking and same interest
rate, Maturity, redemption terms and other terms as the Securities except for the price to the public, issue date, first Interest Payment
Date and temporary CUSIP, ISIN and/or other identifying numbers, provided that such Additional Notes must be fungible with the outstanding
Securities for U.S. federal income tax purposes. Any such Additional Notes, together with the Securities will constitute a single series
of securities under the Indenture.

 

ARTICLE
3

ADDITIONAL TERMS APPLICABLE TO THE SECURITIES

 

Section
3.01. Addition of Definitions. With respect to the Securities only, Section 1.01 of the Subordinated Indenture is amended to include
the following definitions (which shall be deemed to arise in Section 1.01 in their proper alphabetical order):

 

“Beneficial
Owners” shall mean (a) if any Subordinated Debt Securities are in global form, the beneficial owners of the Subordinated Debt
Securities (and any interest therein) and (b) if the Subordinated Debt Securities are held in definitive form, the holders in whose names
the Subordinated Debt Securities are registered in the Subordinated Debt Security Register and any beneficial owners holding an interest
in such Subordinated Debt Securities held in definitive form.

 

“Electronic
Means” shall mean the following communications methods: S.W.I.F.T., e-mail, facsimile transmission, secure electronic transmission
containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified
by the Trustee as available for use in connection with its services hereunder.

 

“Group”
means the Company together with its subsidiaries and associated undertakings.

 

“Issue
Date” means November 14, 2016, being the date of the initial issue of the Securities.

 

“Maturity”
means December 1, 2045.

 

    4 

     

    

“Regulatory
Capital Requirements” means any applicable minimum capital or capital requirements specified for banks or financial groups
by the Relevant Regulator.

 

“Relevant
Regulator” means the U.K. Prudential Regulatory Authority or such other governmental authority in the United Kingdom (or if
the Company becomes domiciled in a jurisdiction other than the United Kingdom, in such other jurisdiction) having primary supervisory
authority with respect to the Company and/or the Group.

 

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

 

“U.K.
bail-in power” means any write-down and/or conversion power existing from time to time under any laws, regulations, rules or
requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in
the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including but not limited to any such
laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or
regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions
and investment firms and/or within the context of a U.K. resolution regime under the Banking Act 2009 as the same has been or may be
amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations
of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended,
transferred and/or converted into shares or other securities or obligations of the obligor or any other person.

 

Section
3.02. Amendment of Definition. With respect to the Securities only, the following definitions shall be amended in their entirety
in Section 1.01 of the Subordinated Indenture:

 

“Business
Day” shall mean any day, other than Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in the City of New York or in the City of London.

 

“Capital
Disqualification Event” shall be deemed to have occurred if at any time the Company determines that as a result of a change
(which has occurred or which the Relevant Regulator considers to be sufficiently certain) in the regulatory classification of the Securities
which becomes effective after the Issue Date, and that results, or would be likely to result, in the entire principal amount of the Securities
being excluded from the Tier 2 Capital of the Company.

 

    5 

     

    

“Executive
Officer” means any individual authorized or designated by the Board of Directors through a power of attorney or otherwise for
the purpose of executing this Subordinated Indenture and any other certificates, forms, notes and ancillary documents in connection therewith.

 

“Senior
Creditors” means in respect of the Company (i) creditors of the Company whose claims are admitted to proof in the winding-up
or administration of the Company and who are unsubordinated creditors of the Company and (ii) creditors of the Company whose claims are
or are expressed to be subordinated to the claims of other creditors of the Company (other than those whose claims constitute, or would,
but for any applicable limitation on the amount of such capital, constitute Tier 1 Capital or Tier 2 Capital of the Company, or whose
claims rank or are expressed to rank pari passu with, or junior to, the claims of holders of the Securities).

 

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

 

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

 

Section
3.03. Deletion of Definitions. With respect to the Securities only, the following definitions shall be deleted in their entirety
in Section 1.01 of the Subordinated Indenture:

 

“ADR
Custodian” means the custodian under the ADR Deposit Agreement.

 

“ADR
Deposit Agreement” means the deposit agreement between the Company and The Bank of New York Mellon (previously named The Bank
of New York) and the holders from time to time of American Depositary Receipts issued thereunder.

 

“ADR
Depositary” means the depositary under the ADR Deposit Agreement.

 

“Applicable
Banking Regulations” means, at any time, the laws, regulations, requirements, guidelines and policies relating to capital adequacy
then in effect in the United Kingdom including, without limitation to the generality of the foregoing, any delegated or implementing
acts (such as regulatory technical standards) adopted by the European Commission and any regulations, requirements, guidelines and policies
relating to capital adequacy adopted by the PRA, from time to time (whether or not such requirements, guidelines or policies are applied
generally or specifically to the Company or to the Company and its subsidiaries).

 

    6 

     

    

“Capital
Resources Requirement” and “Overall Financial Adequacy Rule” have the respective meanings given to such
terms in the Applicable Banking Regulations and shall include any successor terms from time to time equivalent thereto as agreed between
the Company and the Trustee.

 

“CRD
IV” means, taken together, (i) the CRD IV Directive, (ii) the CRD IV Regulation and (iii) applicable capital adequacy banking
regulations then in effect in the United Kingdom.

 

“CRD
IV Directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity
of credit institutions and the prudential supervision of credit institutions and investment firms amending Directive 2002/87/EC and repealing
Directives 2006/48/EC and 2006/49/EC, and any successor directive.

 

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

 

“Deferred
Amounts” means any Deferred Interest (including any interest amounts accrued thereon) and any amount of principal and/or premium
payment of which has been deferred pursuant to Section 3.07 (including any interest amounts accrued thereon) which has not been satisfied.

 

“Deferred
Interest” has the meaning specified in Section 3.07.

 

“Deferred
Payment Date” has the meaning specified in Section 3.07.

 

“Deferred
Record Date”, when used for the interest payable on any Deferred Payment Date on Subordinated Debt Securities of any series,
means the date specified for the purpose pursuant to Section 3.01.

 

“Exchange
Date”, when used with respect to any applicable series of Subordinated Debt Securities, has the meaning specified in Section
13.03.

 

“Exchange
Securities” means securities issued by the Company provided that such securities shall contain terms which comply with the
then current requirements of the PRA in relation to Tier 2 Capital or Tier 1 Capital).

 

“Foreign
Currency” means the euro or any currency issued by the government of any country (or a group of countries or participating
member states) other than the United States which as at the time of payment is legal tender for the payment of public and private debts.

 

“Foreign
Government Securities” means with respect to Subordinated Debt Securities of any series that are denominated in a Foreign Currency,
non-callable (i) direct obligations of the participating member state or government that

 

    7 

     

    

issued such Foreign
Currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of such participating member state or government, the payment of which obligations is unconditionally
guaranteed as a full faith and credit obligation of such participating member state or government. For the avoidance of doubt, for all
purposes hereof, euro shall be deemed to have been issued by each participating member state from time to time.

 

“Liquidator”
has the meaning specified in Section 12.06.

 

“U.S.
Government Obligations” means non-callable (i) direct obligations of the United States for which its full faith and credit
are pledged and/or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United
States, the payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian
with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation
held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by
the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government
Obligation evidenced by such depository receipt.

 

Section
3.04. Deletion of Deferred Payment Provisions. With respect to the Securities only, the following Sections of the Subordinated
Indenture are amended and restated in their entirety and shall read as follows:

 

Section
3.01. Amount Unlimited, Issuable in Series.

 

(d)       the
rate or rates, if any, at which the Subordinated Debt Securities of the series shall accrue interest or the manner of calculation of
such rate or rates, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest
shall be payable or the manner of determination of such Interest Payment Dates, if other than as specified in Section 3.07, and, in the
case of registered Subordinated Debt Securities, the Regular Record Date for the interest payable on any Interest Payment Date, and any
dates required to be established pursuant to Section 7.01;

 

Section 3.07.
Payment; Interest Rights Preserved. Except as otherwise provided as contemplated by Section 3.01 with respect to any series of
Subordinated Debt Securities, interest, if any, on any Subordinated Debt Securities which is payable, and is paid or duly provided for,
on any Interest Payment Date shall be paid, in the case of registered Subordinated Debt Securities, to the Person in whose name that
Subordinated Debt Security (or one

 

    8 

     

    

or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest or, in the case of Global Securities
held by any Holder, to the Holder including through a Paying Agent of the Company designated pursuant to Section 3.01 outside the United
Kingdom for collection by the Holder.

 

In the case
of registered Subordinated Debt Securities where payment is to be made in Dollars, payment at any Paying Agent’s office outside
The City of New York will be made in Dollars by check drawn on, or, at the request of the Holder, by transfer to a Dollar account maintained
by the payee with, a bank in The City of New York.

 

Section 11.06.
Subordinated Debt Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Subordinated
Debt Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and
from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such
Subordinated Debt Securities shall cease to accrue interest. Upon surrender of any such Subordinated Debt Security for redemption in
accordance with said notice, such Subordinated Debt Security shall be paid by the Company at the Redemption Price, together with accrued
but unpaid interest to the Redemption Date; provided, however, that with respect to any Subordinated Debt Securities in registered form,
unless otherwise specified as contemplated by Section 3.01, a payment of interest which is payable on an Interest Payment Date which
is the Redemption Date, shall be payable to the Holders of such Subordinated Debt Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Regular Record Date according to the terms of the Subordinated Debt Securities
and the provisions of Section 3.07. Subordinated Debt Securities in definitive form shall be presented for redemption to the Paying Agent.

 

If any Subordinated
Debt Security called for redemption shall not be so paid upon surrender thereof for redemption, the Subordinated Debt Security shall,
until paid, continue to accrue interest from and after the Redemption Date in accordance with its terms and the provisions of Section
3.07.

 

Section
3.05. Deletion of Exchange Provisions. With respect to the Securities only:

 

(i)       Sections
1.13 and 9.02(a) of the Subordinated Indenture is amended by deleting the reference to “Exchange Date” therein,

 

(ii)       Section
3.01(l) of the Subordinated Indenture is amended and restated in its entirety and shall read as follows:

 

(l)       [Reserved];

 

    9 

     

    

(iii)       Section
3.05 of the Subordinated Indenture is amended by deleting the following paragraph:

 

In the event that a Global Security
is surrendered for redemption or exchange for Preference Shares or Exchange Securities in part pursuant to Section 11.07 or Section 13.05,
the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge,
a new Global Security in a denomination equal to and in exchange for the unredeemed or unexchanged portion of the principal of the Global
Security so surrendered.

 

(iv)       Section
3.05(b) of the Subordinated Indenture is amended and restated in its entirety as follows:

 

(b)       Except
as otherwise specified pursuant to Section 3.01, Subordinated Debt Securities of any series may only be exchanged for a like aggregate
principal amount of Subordinated Debt Securities of such series of other authorized denominations containing identical terms and provisions.
Subordinated Debt Securities to be exchanged shall be surrendered at an office or agency of the Company designated pursuant to Section
10.02 for such purpose, and the Company shall execute, and the Trustee shall authenticate and deliver, in exchange therefor the Subordinated
Debt Security or Subordinated Debt Securities of the same series which the Holder making the exchange shall be entitled to receive.

 

Section
3.06. Correction of Minor Defects in or Amendment of Subordinated Debt Securities. With respect to the Securities only, Article
3 of the Subordinated Indenture is amended by adding Section 3.13, which shall read as follows:

 

Section 3.13.
Correction of Minor Defects in or Amendment of Subordinated Debt Securities. If the Company or the Trustee shall become aware
of any ambiguity, defect or inconsistency in any term of a Subordinated Debt Security or Global Security, as the case may be, or, with
respect to any Subordinated Debt Security (including any Global Security) issued on or after the date hereof, the Company and the Trustee
may amend such Subordinated Debt Security (including any Global Security) as contemplated by Section 9.01(h) (subject to Section 9.07)
and the parties hereto shall provide for the execution, authentication, delivery and dating of one or more replacement Subordinated Debt
Securities or Global Securities, as the case may be, pursuant to Section 3.03 hereto, provided, however, that such amendment is not materially
adverse to Holders of any Outstanding Subordinated Debt Securities.

 

Section
3.07. Defaults; Collection of Indebtedness and Suits for Enforcement by Trustee. With respect to the Securities only, to amend
the following sections of the Subordinated Indenture in part:

 

(i)       to
amend and restate, each in its entirety, Sections 5.03(a) and 5.03(b), which shall read as follows:

 

    10 

     

    

(a)       the
Company fails to pay any installment of interest on any Subordinated Debt Security of such series on or before its Interest Payment Date
and such failure continues for 14 days; or

 

(b)       the
Company fails to pay all or any part of the principal of any Subordinated Debt Security of such series on any date on which such principal
shall otherwise have become due and payable, whether upon redemption or otherwise, and such failure continues for seven days.

 

(ii)       to
amend and restate the second paragraph of Sections 5.03 in its entirety, which shall read as follows:

 

If a Default occurs, the Trustee
may commence a proceeding for the winding-up of the Company and/or prove in a winding-up of the Company or a Qualifying Administration,
provided that the Trustee may not declare the principal amount of any Outstanding Subordinated Debt Security to be due and payable.

 

(iii)       to
amend and restate the third paragraph of Sections 5.03 in its entirety, which shall read as follows:

 

Subject to applicable law, no Holder
may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention in respect of any amount
owed to it by the Company arising under or in connection with the Subordinated Debt Securities. The Holders of Subordinated Debt Securities
by their acceptance thereof will be deemed to have waived any right of set-off, counterclaim, combination of accounts, compensation and
retention with respect to the Subordinated Debt Securities or this Subordinated Indenture (or between the obligations under or in respect
of any Subordinated Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company,
whether before or during a winding-up, liquidation of the Company or a Qualifying Administration. Notwithstanding the above, if any of
such rights and claims of any such Holder against the Company are discharged by set-off, such Holder will immediately pay an amount equal
to the amount of such discharge to the Company or, in the event of the winding up of the Company or a Qualifying Administration, the
liquidator or administrator (or other relevant insolvency official), as the case may be, and until such time as payment is made will
hold a sum equal to such amount in trust for the Company or the liquidator or administrator (or other relevant insolvency official),
as the case may be, and accordingly such discharge shall be deemed not to have taken place.

 

(iv)       to
amend and restate the fifth paragraph of Sections 5.03 in its entirety, which shall read as follows:

 

Except as otherwise provided in
this Article 5, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Subordinated
Debt Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce
any

 

    11 

     

    

such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law, provided, however, that the Company shall not, as a result
of the bringing of such judicial proceedings, be required to pay any amount representing or measured by reference to the principal of,
or any interest on, the Subordinated Debt Securities prior to any date on which the principal of, or any interest on, the Subordinated
Debt Securities would have otherwise been payable by the Company.

 

(v)       to
add the following sentence at the end of Sections 5.03:

 

No remedy against the Company other
than as referred to in this Article 5 shall be available to the Trustee or the Holders, whether for the recovery of amounts owing in
respect of the Subordinated Debt Securities or under this Subordinated Indenture or in respect of any breach by the Company of any of
its other obligations under or in respect of the Subordinated Debt Securities or under this Subordinated Indenture, except that the Trustee
and the Holders shall have such rights and powers as they are required to have under the Trust Indenture Act.

 

(vi)       to
amend and restate Section 5.12(a) in its entirety, which shall read as follows:

 

(a)       such
direction shall not be in conflict with any rule of law or with this Subordinated Indenture or shall not expose the Trustee to undue
risk;

 

Section
3.08. Deletion of Satisfaction and Discharge Provisions. With respect to the Securities only, Article 4 of the Subordinated Indenture
is deleted in its entirety.

 

Section
3.09. Unconditional Right of Holders to Receive Principal, Premium and Interest, if any. With respect to the Securities only,
Section 5.08 of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

 

Section 5.08.
Unconditional Right of Holders to Receive Principal, Premium and Interest, if any. Subject to Section 12.01 in relation to subordination
of Subordinated Debt Securities, and notwithstanding any other provision in this Subordinated Indenture, the Holder of any Subordinated
Debt Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any)
and interest, if any, on such Subordinated Debt Security on the respective Stated Maturities as expressed in such Subordinated Debt Security
(or, in the case of redemption, on the Redemption Date) and, subject to Section 5.07, to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such Holder or holder.

 

Section
3.10. Undertaking for Costs. With respect to the Securities only, Section 5.14 of the Subordinated Indenture is amended and restated
in its entirety, which shall read as follows:

 

    12 

     

    

Section 5.14.
Undertaking for Costs. All parties to this Subordinated Indenture agree, and each Holder of any Subordinated Debt Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Subordinated Indenture, or in any suit against the Trustee for any action taken, suffered or omitted
by it as Trustee, the filing by any party litigant to such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of
this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder or group of Holders holding
in the aggregate more than 10% in principal amount of the Outstanding Subordinated Debt Securities of any series, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on any Subordinated Debt
Security on or after the respective Stated Maturities expressed in such Subordinated Debt Security (or, in the case of redemption, on
or after the Redemption Date).

 

Section
3.11. Redemption and Repurchases of Subordinated Debt Securities. With respect to the Securities only, Article 11 of the Subordinated
Indenture is amended by amending and restating Sections 11.01, 11.08, 11.09 and 11.10 in their entirety, and by adding Section 11.11,
each of which shall read as follows:

 

Section 11.01.
Applicability of Article. Subordinated Debt Securities of any series shall be redeemable in accordance with their terms and (except
as otherwise specified pursuant to Section 3.01 for Subordinated Debt Securities of any series) in accordance with this Article 11. Subordinated
Debt Securities of any series may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the
Regulatory Capital Requirements Regulations and Section 11.11 below. The Subordinated Debt Securities of any series may not be redeemed
in whole or in part at the option of the Holder thereof.

 

Section 11.08.
Optional Tax Redemption.

 

(a)       Unless
otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities and subject always to Section
11.11 below, the Company will have the option to redeem the relevant series of Subordinated Debt Securities, as a whole but not in part,
having given notice in accordance with Section 11.04 hereof, 100% of the principal amount of the Subordinated Debt Securities then outstanding,
together with any accrued interest to (but excluding) the date fixed for redemption, if at any time:

 

(i)       the
Company determines that as a result of a change in, or amendment to, the laws or regulations of the United Kingdom, or any political
subdivision or authority therein or thereof, having the power to tax, including any treaty to which the United Kingdom is a party, or
any change in any generally

 

    13 

     

    

published application
or interpretation of such laws, including a decision of any court or tribunal, or any change in the generally published application or
interpretation of such laws by any relevant tax authority or any generally published pronouncement by any tax authority, which change,
amendment or pronouncement (x) (subject to (y)) becomes, or would become, effective on or after the Issue Date, or (y) in the case of
a change in law, if such change is enacted by United Kingdom Act of Parliament or implemented by statutory instrument, on or after the
Issue Date (a “Tax Law Change”), the Company has paid or will or would on the next payment date be required to pay Additional
Amounts to any Holder of the Subordinated Debt Securities; and/or

 

(ii)       a
Tax Law Change would:

 

(A)       result
in the Company not being entitled to claim a deduction in respect of any payments in computing the Company’s taxation liabilities
or materially reducing the amount of such deduction;

 

(B)       prevent
the Subordinated Debt Securities from being treated as loan relationships for United Kingdom tax purposes;

 

(C)       as
a result of the Subordinated Debt Securities being in issue, result in the Company not being able to have losses or deductions set against
the profits or gains, or profits or gains offset by the losses or deductions, of companies with which it is or would otherwise be so
grouped for applicable United Kingdom tax purposes (whether under the group relief system current as of the date of issue of the Subordinated
Debt Securities or any similar system or systems having like effect as may from time to time exist);

 

(D)       result
in a United Kingdom tax liability, or the receipt of income or profit which would be subject to United Kingdom tax, in respect of a write-down
of the principal amount of the Subordinated Debt Securities or the conversion of the Subordinated Debt Securities into shares or other
obligations of the Company; or

 

(E)       result
in a Subordinated Debt Security or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes,

 

(each such Tax Law Change, a “Tax
Event”); provided, however, in each case that the Company could not avoid the consequences of the Tax Event by
taking measures reasonably available to it.

 

(b)       Prior
to the delivery of any such notice of redemption the Company shall deliver to the Trustee (i) a written legal opinion of independent
United Kingdom counsel of recognized standing (selected by the Company), in a form satisfactory to the Trustee, to the effect that a
Tax Event has occurred, and (ii) an Officer’s

 

    14 

     

    

Certificate confirming (1) that
all the conditions necessary for redemption have occurred and that the Company could not avoid the consequences of the Tax Event by taking
measures reasonably available to it, and (2) that the Relevant Regulator is satisfied that the relevant change or event is material and
was not reasonably foreseeable by the Company on the Issue Date. The Trustee is entitled to conclusively rely on and accept such opinion
and Officer’s Certificate without any duty whatsoever of further inquiry, in which event such opinion and Officer’s Certificate
shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

 

Section 11.09.
Optional Redemption Due to a Capital Disqualification Event. Unless otherwise provided as contemplated by Section 3.01 with respect
to any series of Subordinated Debt Securities and subject to the conditions set out in Section 11.11 below, the Subordinated Debt Securities
are redeemable, as a whole but not in part, at the option of the Company, on not less than 30 calendar days’ nor more than 60 calendar
days’ notice to each Holder of Subordinated Debt Securities to be redeemed, at any time, at a redemption price equal to 100% of
the principal amount, together with accrued but unpaid interest, if any, in respect of such series of Subordinated Debt Securities to,
but excluding, the date fixed for redemption if, immediately prior to the giving of the notice referred to above, a Capital Disqualification
Event has occurred.

 

Prior to the
giving of any notice of redemption, the Company must deliver to the Trustee an Officer’s Certificate stating that (i) a Capital
Disqualification Event has occurred, and (ii) the Company has demonstrated to the satisfaction of the Relevant Regulator that the relevant
change was not reasonably foreseeable by the Company as at the Issue Date. The Trustee shall be entitled to accept such Officer’s
Certificate without any further inquiry, in which event such Officer’s Certificate shall be conclusive and binding on the Trustee
and the Holders and Beneficial Owners.

 

Section 11.10.
Repurchases. Subject to the conditions set out in Section 11.11 below, the Company may from time to time purchase Subordinated
Debt Securities in the open market or by tender or by private agreement, in any manner and at any price or at differing prices. Subordinated
Debt Securities purchased or otherwise acquired by us may be (i) held, (ii) resold or (iii) at our sole discretion, surrendered to the
Trustee for cancellation (in which case all Subordinated Debt Securities so surrendered will forthwith be cancelled in accordance with
applicable law and thereafter may not be re-issued or resold).

 

Section 11.11.
Early Redemption or Repurchases – Relevant Regulator. Subordinated Debt Securities may be redeemed or purchased by the Company
prior to Maturity as provided under Article 11 of this Subordinated Indenture, subject to:

 

    15 

     

    

(a)       the
Company giving notice to the Relevant Regulator and the Relevant Regulator granting permission to the Company to redeem or purchase the
Subordinated Debt Securities; and

 

(b)       in
respect of any redemption of the Subordinated Debt Securities proposed to be made prior to the fifth anniversary of the date of issuance
of the Subordinated Debt Securities, if and to the extent then required under the relevant Regulatory Capital Requirements (A) in the
case of an optional redemption due to a Tax Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that
the relevant change or event is material and was not reasonably foreseeable by the Company as at the Issue Date or (B) in the case of
redemption following the occurrence of a Capital Disqualification Event, the Company having demonstrated to the satisfaction of the Relevant
Regulator that the relevant change was not reasonably foreseeable by the Company as at the Issue Date; and

 

(c)       if
and to the extent then required by the relevant Regulatory Capital Requirements (A) on or before the relevant redemption or purchase
date, the Company replacing the Subordinated Debt Securities with instruments qualifying as own funds of equal or higher quality on terms
that are sustainable for the income capacity of the Company; or (B) the Company demonstrating to the satisfaction of the Relevant Regulator
that its Tier 1 Capital and Tier 2 Capital would, following such redemption or purchase, exceed its minimum capital requirements by a
margin that the Relevant Regulator may consider necessary at such time based on the Regulatory Capital Requirements.

 

Notwithstanding the above conditions,
if, at the time of any redemption or purchase, the prevailing Regulatory Capital Requirements permit the repayment or purchase only after
compliance with one or more alternative or additional preconditions to those set out above, the Company shall comply with such other
and/or, as appropriate, additional pre-condition(s).

 

Section
3.12. Exchanges Not Deemed Payment. With respect to the Securities only, Section 12.10 of the Subordinated Indenture is deleted
in its entirety.

 

Section
3.13. Exchange of Subordinated Debt Securities. With respect to the Securities only, Article 13 of the Subordinated Indenture
is deleted in its entirety.

 

Section
3.14. Events of Default. With respect to the Securities only:

 

(i)       Section
5.01 of the Subordinated Indenture is amended by adding the following sentence at the end of the section:

 

The exercise of any U.K. bail-in
power by the relevant U.K. resolution authority shall not constitute a default or an Event of Default under this Section 5.01; and

 

(ii)       Section
5.02 of the Subordinated Indenture is amended in part to restate in its entirety the first paragraph of such section as follows:

 

    16 

     

    

Section 5.02.
Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs with respect to Subordinated Debt Securities
of any series and is continuing, then in every such case the Trustee or the Holder or Holders of not less than 25% in aggregate principal
amount of the Outstanding Subordinated Debt Securities of such series may declare the principal amount, together with accrued interest
(if any) and Additional Amounts (if any), payable on such Subordinated Debt Securities, of all the Subordinated Debt Securities of that
series to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders),
and upon any such declaration such amount shall become immediately due and payable.

 

(iii)       Section
5.02(a)(i) is hereby restated in its entirety as follows:

 

(i)       the
principal of, and premium, if any, on, any Subordinated Debt Securities of such series which have become due otherwise than by such declaration
of acceleration and any due and payable interest, if any, thereon at the rate or rates prescribed therefor in such Subordinated Debt
Securities,

 

(iv)       Section
5.02 of the Subordinated Indenture is amended in part to restate in its entirety the last paragraph of such section as follows:

 

If the Subordinated Debt Securities
become due and payable (whether pursuant to this Section 5.02 above or Article 11 below) and the Company fails to pay such amounts (or
any damages awarded for breach of any obligations in respect of the Subordinated Debt Securities or this Indenture) forthwith upon demand,
notwithstanding the continuing right of any Holder to receive payment of the principal of and interest on Subordinated Debt Securities,
or to institute suit for the enforcement of any such payment, each in accordance with Section 316(b) (Directions and Waivers by Bondholders;
Prohibition of Impairment of Holders’ Right to Repayment) of the Trust Indenture Act, the Trustee, in its own name and as trustee
of an express trust, may institute proceedings for the winding up of the Company, and/or prove in a winding up of the Company or in a
Qualifying Administration for all such due and payable amounts (including any damages awarded for breach of any obligations in respect
of the Subordinated Debt Securities or this Indenture) but no other remedy shall be available to the Trustee or the Holders.

 

Section
3.15. Compensation and Reimbursement. With respect to the Securities only, Section 6.07 of the Subordinated Indenture is amended
in part to:

 

(i)       restate
in its entirety Section 6.07(b) as follows:

 

except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Subordinated Indenture (including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or advance as shall

 

    17 

     

    

be determined in a final, non-appealable
order by a court of competent jurisdiction to have been caused by its own negligence or bad faith; and

 

(ii)       to
add the following sentence at the end of the section:

 

The Trustee’s right to reimbursement
and indemnity under this Section 6.07 shall survive the payment in full of the Subordinated Debt Securities, the discharge of this Subordinated
Indenture, the resignation or removal of the Trustee and any exercise of the U.K. bail-in power by the relevant U.K. resolution authority
with respect to the Subordinated Debt Securities.

 

Section
3.16. Certain Rights of Trustee. With respect to the Securities only, Section 6.03 of the Subordinated Indenture is amended in
part to add the following at the end of the section:

 

(m)       The
Trustee shall not be liable for errors in judgment made in good faith unless it was negligent in ascertaining the relevant facts; and

 

(n)       The
Trustee may hold funds uninvested without liability for interest in the absence of an agreement signed by the Trustee to the contrary.

 

Section
3.17. Subordinated Debt Securities Subordinate to Claims of Senior Creditors. With respect to the Securities only, Section 12.01
of the Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

 

Section 12.01.
Subordinated Debt Securities Subordinate to Claims of Senior Creditors.

 

(a)       Unless
otherwise provided as contemplated by Section 3.01 with respect to any series of Subordinated Debt Securities, the Company covenants
and agrees, and each Holder of Subordinated Debt Securities of each series, by his acceptance thereof, likewise covenants and agrees,
that, to the extent and in the manner hereinafter set forth in this Article 12, in the event of:

 

(i)       an
order being made, or an effective resolution being passed, for the winding-up of the Company (except, in any such case, a solvent winding-up
solely for the purposes of a reorganization, reconstruction or amalgamation of the Company, the terms of which reorganization, reconstruction,
or amalgamation do not provide that the Subordinated Debt Securities shall thereby become redeemable or repayable in accordance with
their terms); or

 

(ii)       a
Qualifying Administration,

 

the Holders
will have a right against the Company in respect of or arising under (including any damages awarded for breach of any obligations under)
the Subordinated Debt Securities and the Subordinated Indenture relating to them to claim for all amounts due to them in respect of the
Subordinated Debt Securities including the principal amount thereof (plus any premium) and any accrued but

 

    18 

     

    

unpaid interest
thereon. Such rights and claims will be subordinated to, and subject in right of payment to, the prior payment in full of, all claims
of all Senior Creditors. The rights and claims of the Holders of the Subordinated Debt Securities shall rank pari passu without
any preference among themselves and rank junior in right of payment to the claims of any existing and future unsecured and unsubordinated
indebtedness and shall rank at least pari passu with the claims of holders of all obligations of the Company which constitute,
or would but for any applicable limitation on the amount of such capital constitute, Tier 2 Capital of the Company and in priority to
(1) the claims of holders of all obligations of the Company which constitute Tier 1 Capital of the Company, (2) the claims of holders
of all undated or perpetual subordinated obligations of the Company and (3) the claims of holders of all share capital of the Company.

 

(b)       The
provisions of this Article 12 shall apply only to rights or claims payable under Section 12.01 (a) or to amounts payable pursuant thereto
and under any Subordinated Debt Securities of any series and nothing herein shall affect or prejudice the payment of the costs, charges,
expenses, liabilities, indemnity or remuneration of the Trustee, the first lien rights of the Trustee under Sections 5.03(a)(i) and 5.06
hereof, or the rights and remedies of the Trustee in respect thereof.

 

Section
3.18. Reliance on Judicial Order or Certificate of Liquidating Agent. With respect to the Securities only, Section 12.06 of the
Subordinated Indenture is amended and restated in its entirety, which shall read as follows:

 

Section 12.06.
Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 6.01, and the Holders of the Subordinated Debt Securities of the
series shall be entitled to rely upon (a) any order or decree entered by any court in which such winding-up of the Company or similar
case or proceeding, including a proceeding for the suspension of payments is pending, or (b) a certificate of the administrator of the
Company, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or
the Holders of such Subordinated Debt Securities, for the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the Senior Creditors and other claims against the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article 12.

 

Section
3.19. Additional Subordinated Debt Securities. With respect to the Securities only, Section 3.12 of the Subordinated Indenture
is amended and restated in its entirety, which shall read as follows:

 

Section 3.12.
Additional Subordinated Debt Securities. The Company may, from time to time, without the consent of the Holders of the Subordinated
Debt Securities of any series, issue additional Subordinated Debt Securities of one or more of the series of Subordinated Debt Securities
issued under this

 

    19 

     

    

Subordinated Indenture,
having the same ranking and same interest rate, Maturity, redemption terms and other terms, except for the price to the public, issue
date, first Interest Payment Date and temporary CUSIP, ISIN and/or other identifying numbers, as the Subordinated Debt Securities. Any
such additional Subordinated Debt Securities, together with the Subordinated Debt Securities of the applicable series, may constitute
a single series of Subordinated Debt Securities under this Subordinated Indenture and shall be included in the definition of “Subordinated
Debt Securities” in this Subordinated Indenture where the context requires; provided, however, that if the original Subordinated
Debt Securities are determined by the Company to be debt for U.S. federal income tax purposes and the additional Subordinated Debt Securities
are not fungible with the outstanding Subordinated Debt Securities for U.S. federal income tax purposes, the additional Subordinated
Debt Securities must have CUSIP, ISIN and/or other identifying numbers different from those used for the outstanding Subordinated Debt
Securities.

 

Section
3.20. Agreement with Respect to Exercise of U.K. Bail-In Power. The following provisions relate solely to the Securities established
pursuant to this Fifth Supplemental Indenture:

 

(a)       Notwithstanding
any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Securities, by tendering
or exchanging existing securities for, or otherwise purchasing or acquiring the Securities, each Holder (including each Beneficial Owner)
of the Securities 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 Securities; (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Securities into shares
or other securities or other obligations of the Company or another person; and/or (iii) the amendment or alteration of the maturity of
the Securities, or amendment of the amount of interest due on the Securities, 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 of the terms of the Securities
solely to give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. 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
(including principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in
power. Each Holder and Beneficial Owner of the Securities further acknowledges and agrees that the rights of the Holders and/or Beneficial
Owners under the Securities 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.

 

(b)       By
tendering or exchanging existing securities for, or otherwise purchasing or acquiring the Securities, each Holder and Beneficial Owner
of the Securities:

 

    20 

     

    

(i)       acknowledges
and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority in respect of the Securities shall not
give rise to a default or an Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the
Trustee in Case of Default) of the Trust Indenture Act;

 

(ii)       to
the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against
the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking,
in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the
Securities; and

 

(iii)       acknowledges
and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be
required to take any further directions from Holders of the Securities under Section 5.12 of the Subordinated Indenture, and (b) neither
the Subordinated Indenture nor this Fifth Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to
the exercise of any U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following the completion
of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, any of the Securities 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 Securities), then the Trustee’s
duties under the Indenture shall remain applicable with respect to the Securities following such completion to the extent that the Company
and the Trustee shall agree pursuant to a supplemental indenture or an amendment to this Fifth Supplemental Indenture.

 

(c)       By
tendering or exchanging existing securities for, or otherwise purchasing the Securities, each Holder and Beneficial Owner that acquires
its Securities 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 Securities that acquire the Securities 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 Securities related to the U.K. bail-in power.

 

(d)       By
its purchase or acquisition of the Securities, each Holder and Beneficial Owner shall also be deemed to have (i) consented to the exercise
of any U.K. bail- in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to
exercise such power with respect to the Securities and (ii) 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 Securities as it may be imposed, without any further action or direction on the part of
such Holder or Beneficial Owner or the Trustee.

 

    21 

     

    

(e)       No
repayment of the principal amount of the Securities or payment of interest on the Securities 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.

 

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

 

ARTICLE
4

AMENDMENTS TO THE SUBORDINATED INDENTURE

 

Section
4.01. Appointment of Agent for Service. With respect to any series of Subordinated Debt Securities issued under the Subordinated
Indenture, including the Securities, Section 1.14 of the Subordinated Indenture is amended and restated in its entirety and shall read
as follows:

 

Section 1.14.
Appointment of Agent for Service. The Company has designated and appointed the Chief U.S. Counsel, Lloyds Banking Group plc (or
any successor thereto), currently of 1095 Avenue of the Americas, 34th Floor, New York, NY 10036 as its authorized agent upon which process
may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York, arising
out of or relating to the Subordinated Debt Securities, this Subordinated Indenture or this Fifth Supplemental Indenture, but for that
purpose only, and agrees that service of process upon such authorized agent shall be deemed in every respect effective service of process
upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such
appointment shall be irrevocable so long as any of the Subordinated Debt Securities remain Outstanding until the appointment of a successor
by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee
of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing
of any and all such documents and instruments, as may be necessary to continue such designation and appointment of such authorized agent
in full force and effect so long as any of the Subordinated Debt Securities shall be Outstanding. The Trustee shall not be obligated
and shall have no responsibility with respect to any failure by the Company to take any such action. The Company and the Trustee each
hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding
is so instituted, and waives, to the extent it may effectively do so, any

 

    22 

     

    

right to trial by jury and
any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

 

Section
4.02. Notices to Trustee. With respect to any series of Subordinated Debt Securities issued under the Subordinated Indenture,
including the Securities, Section 1.05 of the Subordinated Indenture is amended and restated in its entirety to read as follows:

 

Section 1.05.
(a) Notices, Etc. to Trustee, Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders
or other document provided or permitted by the Subordinated Indenture or the Fifth Supplemental Indenture to be made upon, given or furnished
to, or filed with,

 

(i)       the
Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing (which may be via facsimile or e-mail) to the Trustee at its Corporate Trust Office and
the Trustee agrees to accept and act upon facsimile or electronic transmission of written instructions pursuant to the Subordinated Indenture
or the Fifth Supplemental Indenture; provided, however, that (x) the party providing such written instructions, subsequent to such transmission
of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (y)
such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions
or directions; or

 

(ii)       the
Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and (i) mailed, in the case of the Company, first-class postage prepaid, addressed to it at the address of its principal
office specified in the first paragraph of this Subordinated Indenture (unless another address has been previously furnished in writing
to the Trustee by the Company, in which case at the last such address) marked “Attention: Company Secretary”, or (ii) faxed
to +44 20 7158 3298/3299 marked “Attention: Company Secretary”.

 

(b) The Trustee shall have the right
to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to the Indenture
and delivered using Electronic Means; provided, however, that the Company shall provide to the Trustee evidence of the Executive Officers.
If the Company elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such
Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The Company understands and agrees
that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume
that directions that purport to have been sent by an Executive Officer have been sent by such Executive Officer. The Company shall be
responsible for ensuring that only Executive Officers transmit such Instructions to the Trustee and that the Company and all Executive
Officers are solely responsible to safeguard the use and

 

    23 

     

    

confidentiality of applicable user
and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses,
costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding
such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising
out of the use of Electronic Means to submit Instructions to the Trustee, and the risk of interception and misuse by third parties; (ii)
that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee
and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security
procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree
of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise
or unauthorized use of the security procedures.

 

Section
4.03. Additional Amounts. With respect to any series of Subordinated Debt Securities issued under the Subordinated Indenture,
including the Securities, Section 10.04 of the Subordinated Indenture is hereby amended and replaced in its entirety as follows:

 

Section 10.04.
Additional Amounts. Amounts to be paid on any series of Subordinated Debt Securities will be made without deduction or withholding
for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges or fees imposed,
levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein
having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If at
any time a Taxing Jurisdiction requires the Company to make such deduction or withholding, the Company will pay additional amounts with
respect to the principal of, interest and any other payment on, the Subordinated Debt Securities (“Additional Amounts”)
that are necessary in order that the net amounts paid to the Holders of Subordinated Debt Securities of the particular series, after
the deduction or withholding, shall equal the amounts which would have been payable on the Subordinated Debt Securities if the deduction
or withholding had not been required. However, this will not apply to any such tax, levy, impost, duty, charge or fee, which would
not have been deducted or withheld but for the fact that:

 

(i)       the
Holder or the Beneficial Owner of the Subordinated Debt Security 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 having some connection with the
Taxing Jurisdiction other than the holding or ownership of a Subordinated Debt Security, or the collection of any payment of, or in respect
of, principal of, or any interest or other payment on, any Subordinated Debt Security of the relevant series,

 

    24 

     

    

(ii)       except
in the case of winding-up in the United Kingdom, the relevant Subordinated Debt Security is presented (where presentation is required)
for payment in the United Kingdom,

 

(iii)       the
relevant Subordinated Debt Security 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 the Additional Amounts
on presenting the same for payment at the close of that 30-day period,

 

(iv)       the
Holder or the Beneficial Owner of the relevant Subordinated Debt Security or the Beneficial Owner of any payment of, or in respect of,
principal of, or any interest or other payment on, the Subordinated Debt Security 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 the Beneficial Owner or (y) to make any declaration or other similar claim to satisfy any requirement, which in the
case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as
a precondition to exemption from all or part of the tax, levy, impost, duty, charge or fee,

 

(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
relevant Subordinated Debt Security 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 the relevant Subordinated Debt Security to another paying agent,

 

(vii)       the
deduction or withholding is imposed by reason of Sections 1471- 1474 of the US Internal Revenue Code and the U.S. Treasury regulations
thereunder or any agreement with the U.S. Internal Revenue Service in connection with these sections and regulations (“FATCA”),
any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or
any law, regulation or other official guidance enacted in any jurisdiction implementing, or relating to, FATCA or any intergovernmental
agreement, or

 

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

 

nor shall Additional Amounts be
paid with respect to the principal of or any interest or other payment on, the Subordinated Debt Securities to any Holder who is a fiduciary
or partnership or any person other than the sole Beneficial Owner of such payment to the extent such payment would be required by the
laws of any

 

    25 

     

    

Taxing Jurisdiction to be included
in the income for tax purposes of a beneficiary or partner 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 Subordinated Indenture
there is mentioned, in any context, the payment of the principal of or any interest or other payments on, or in respect of, any Subordinated
Debt Security of any series 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. Upon request from the Trustee or a paying agent, the Company shall provide information reasonably necessary
and readily available in order to enable to the Trustee or paying agent to determine whether any withholding obligations under FATCA
apply. None of the Company, the Trustee or a paying agent shall have any liability in connection with the Company’s or Trustee’s
or paying agent’s compliance with any such withholding obligation under applicable law.

 

ARTICLE
5

MISCELLANEOUS

 

Section
5.01. Effect Of Supplemental Indenture. Upon the execution and delivery of this Fifth Supplemental Indenture by each of the Company
and the Trustee, and the delivery of the documents referred to in Section 5.02 herein, the Subordinated Indenture
shall be supplemented in accordance herewith, and this Fifth Supplemental Indenture shall form a part of the Subordinated Indenture for
all purposes in respect of the Securities or otherwise as applicable.

 

Section
5.02. Other Documents to be Given to the Trustee. The Trustee shall be entitled to receive an Officer’s Certificate and
an Opinion of Counsel stating the recitals contained in Section 1.02 of the Subordinated Indenture and, in the case of the Opinion of
Counsel, stating the Indenture is a legal, binding and valid obligation enforceable in accordance with its terms. As specified in Section
9.03 of the Subordinated Indenture and subject to the provisions of Section 6.03 of the Subordinated Indenture, the Trustee shall also
be entitled to receive an Opinion of Counsel stating that that this Fifth Supplemental Indenture is authorized or permitted by the Indenture,
and the Fifth Supplemental Indenture, and the Securities whose terms are incorporated by reference herein are each, subject to Section
1.03 of the Subordinated Indenture, a legal, valid and binding obligation of the Company enforceable in accordance with their terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting creditor’s rights generally, by equitable principles of general applicability and by possible judicial actions giving
effect to governmental actions or foreign laws affecting creditors’ rights, and the Fifth Supplemental Indenture is permitted under
the Indenture. The Trustee may rely on such

 

    26 

     

    

Officer’s Certificate and Opinion
of Counsel as conclusive evidence that this Fifth Supplemental Indenture complies with the applicable provisions of the Subordinated
Indenture.

 

Section
5.03. Confirmation Of Indenture. The Subordinated Indenture, as supplemented and amended by this Fifth Supplemental Indenture
with respect to the Securities or otherwise as applicable, is in all respects ratified and confirmed, and the Subordinated Indenture,
this Fifth Supplemental Indenture and all indentures supplemental thereto shall, in respect of the Securities or otherwise as applicable,
be read, taken and construed as one and the same instrument. This Fifth Supplemental Indenture constitutes an integral part of the Subordinated
Indenture and, where applicable, with respect to the Securities. In the event of a conflict between the terms and conditions of the Subordinated
Indenture and the terms and conditions of this Fifth Supplemental Indenture, the terms and conditions of this Fifth Supplemental Indenture
shall prevail where applicable.

 

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

 

Section
5.05. Governing Law. This Fifth Supplemental Indenture and the Securities shall be governed by and construed in accordance with
the laws of the State of New York, except that (i) the authorization and execution by the Company of this Fifth Supplemental Indenture
and the Securities 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 and (ii) Section 3.17 of this Fifth Supplemental Indenture
(other than the Trustee’s own rights, duties or immunities thereunder) and the third paragraph of Section 5.03 of the Subordinated
Indenture in relation to the waiver of any right of set-off or counterclaim with respect to the Securities or the Indenture shall be
governed by and construed in accordance with the laws of Scotland.

 

Section
5.06. Separability. In case any provision contained in this Fifth Supplemental Indenture shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section
5.07. Counterparts. This Fifth 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.

 

Section
5.08. Concerning BRRD Liability. Notwithstanding and to the exclusion of any other term of this Fifth Supplemental Indenture or
the Subordinated Indenture or any other agreements, arrangements, or understanding between the Company and the

 

    27 

     

    

Trustee, the Trustee acknowledges and
accepts that a BRRD Liability arising under this Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution
Authority, and acknowledges, accepts, and agrees to be bound by:

 

(a)       the
effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of the Company to the
Trustee under this Fifth Supplemental Indenture or the Subordinated Indenture, that (without limitation) may include and result in any
of the following, or some combination thereof:

 

(i)       the
reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;

 

(ii)       the
conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the Company or another person
(and the issue to or conferral on the Trustee of such shares, securities or obligations);

 

(iii)       the
cancellation of the BRRD Liability; and/or

 

(iv)       the
amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by
suspending payment for a temporary period; and

 

(b)       the
variation of the terms of this Fifth Supplemental Indenture, as deemed necessary by the Relevant Resolution Authority, to give effect
to the exercise of Bail-in Powers by the Relevant Resolution Authority.

 

“Bail-in Legislation”
means Part I of the UK Banking Act 2009 and any other law, regulation, rule or requirement applicable from time to time in the UK relating
to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through
liquidation, administration or other insolvency proceedings).

 

“Bail-in Powers”
means any Write-down and Conversion Powers as defined in relation to the Bail-in Legislation.

 

“BRRD” means Directive
2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.

 

“BRRD Liability”
means a liability in respect of which the relevant Write- down and Conversion Powers in the applicable Bail-in Legislation may be exercised.

 

“Relevant Resolution Authority”
means the resolution authority with the ability to exercise any Bail-in Powers in relation to the Company.

 

    28 

     

    

“Write-down and Conversion
Powers” means the powers under the Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or
investment firm or affiliate of a bank or investment firm, to cancel, reduce, modify or change the form of a liability of such a person
or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or
obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been
exercised under it or to suspend any obligation in respect of that liability.

 

[Signature
Pages Follow]

 

    29 

     

    

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

 

	 	LLOYDS BANKING GROUP PLC, as Issuer
	 	 
	 	 
	 	By:	/s/ Vishal Savadia
	 	 	Name:	Vishal Savadia
	 	 	Title:	Head of Capital Issuance & Structuring

 

[Signature
Page to Fifth Supplemental Indenture]

     

     

    

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

 

[Signature
Page to Fifth Supplemental Indenture]

 

     

     

    

EXHIBIT A

 

FORM OF GLOBAL
NOTE

 

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

 

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

 

     

     

    

CUSIP No. [●]

ISIN No. [●]

Common Code: [●]

 

LLOYDS BANKING GROUP
PLC

 

5.300% SUBORDINATED
DEBT SECURITIES DUE 2045

 

	No. [●]	$[●]

 

LLOYDS BANKING 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 assigns, the principal sum of $[●] ([spelled out] dollars) on
December 1, 2045 or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest
thereon semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2016, and ending on December 1, 2045
(each, a “Payment Date”). Interest so payable on any Payment Date shall be paid to the Holder in whose name this Subordinated
Note is registered on the 15th calendar day immediately preceding the relevant Payment Date, whether or not such day is a Business Day,
as defined in the Indenture (each a “Regular Record Date”). If (i) the Company fails to pay any installment of interest on
any Subordinated Note on or before its Payment Date and such failure continues for 14 days or (ii) the Company fails to pay all or any
part of the principal of any Subordinated Note on any date on which such principal shall otherwise have become due and payable, whether
upon redemption or otherwise, and such failure continues for seven days (each of (i) and (ii), a “Default”), the Trustee
may commence a proceeding for the winding up of the Company or a Qualifying Administration, provided that the Trustee may not, upon the
occurrence of a Default, declare the principal amount of any of the Outstanding Subordinated Notes to be due and payable.

 

Interest
shall accrue on this Subordinated Note from day to day from June 1, 2016 or from the most recent Payment Date at the rate of 5.300% per
annum, until the principal amount hereof is paid or made available for payment.

 

Payments
of interest on this Subordinated Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and,
in the case of an incomplete month, the actual number of days elapsed in such period.

 

Payment
of the principal amount of (and premium, if any) and any interest on, this Subordinated Note will be made in such coin or currency of
the United States of America as at the time of payment is legal tender for payment of public and private debts. Such payment shall be
made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder. If the date
for payment of the principal amount hereof (and premium, if any) or interest thereon is not a Business Day, then (subject as provided
in the Indenture) such payment shall be made on the next succeeding Business Day with the same force

 

     

     

    

and effect as if made on such date for
payment and without any interest or other payment in respect of such delay.

 

Prior
to due presentment of this Subordinated Note for registration of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Subordinated Note is registered as the owner of such Subordinated Note for the purpose
of receiving payment of principal and interest, if any, on such Subordinated Note and for all other purposes whatsoever, whether or not
such Subordinated Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected
by notice to the contrary.

 

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

 

Unless
the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this
Subordinated Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

The exercise
of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction or cancellation
of all, or a portion, of the principal amount of, or interest on, the Subordinated Notes; (ii) the conversion of all, or a portion, of
the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other obligations of the Company or
another person; and/or (iii) the amendment or alteration of the maturity of the Subordinated Notes, or amendment of the amount of interest
due on the Subordinated 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 of the terms of the Subordinated Notes solely to give effect to the exercise
by the relevant U.K. resolution authority of such U.K. bail-in power. 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 (including principal that has become due
and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in power. Each Holder and Beneficial owner
of the Subordinated Notes further acknowledges and agrees that the rights of the Holders and/or Beneficial Owners under the Subordinated
Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant
U.K. resolution authority.

 

For these
purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations,
rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated
in the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including but not limited to any such
laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or
regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions
and investment firms and/or within the context of a U.K. resolution regime under the Banking Act 2009 as the same has been or may be
amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary

 

     

     

    

legislation or otherwise), pursuant
to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced,
cancelled, amended, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and
a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

 

     

     

    

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

 

Dated: [●], 2016

 

	 	LLOYDS BANKING GROUP PLC
	 	 
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 

 

[Signature
Page to 2045 Global Note No. [●]]

 

     

     

    

CERTIFICATE OF AUTHENTICATION

 

This is
one of the Subordinated Notes of the series designated herein referred to in the within-mentioned Indenture.

 

Dated: [●], 2016

 

	 	THE BANK OF NEW YORK MELLON, 

    as Trustee
	 	 
	 	 
	 	By:	 
	 	 	Authorized Signatory

 

[Signature
Page to 2045 Global Note No. [●]]

 

     

     

    

[REVERSE OF SECURITY]

 

This Subordinated
Note is one of a duly authorized issue of securities of the Company (herein called the “Subordinated Notes”) issued and to
be issued in one or more series under a Subordinated Indenture, dated as of November 4, 2014 (herein called the “Subordinated Indenture”),
between the Company, as issuer, and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes
any successor trustee under the Subordinated Indenture), as supplemented by the Fifth Supplemental Indenture, dated as of November 14,
2016, between the Company and the Trustee (the “Fifth Supplemental Indenture, and, together with the Subordinated Indenture, the
“Indenture”) to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Subordinated Notes
and of the terms upon which the Subordinated Notes are, and are to be, authenticated and delivered.

 

This Subordinated
Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $824,033,000. The Company
may, from time to time, without the consent of the Holders of the Subordinated Notes, issue additional Subordinated Notes of one or more
of the series of Subordinated Notes issued under the Subordinated Indenture, having the same ranking and the same interest rate, Maturity,
redemption terms and other terms as the Subordinated Notes, except for the price to the public, issue date, first Interest Payment Date
and temporary CUSIP, ISIN and/or other identifying numbers, provided that such additional Subordinated Notes must be fungible with the
outstanding Subordinated Notes for U.S. federal income tax purposes. Any such additional Subordinated Notes, together with the Subordinated
Notes of the applicable series, may constitute a single series of Subordinated Notes under the Subordinated Indenture and shall be included
in the definition of “Securities” in the Subordinated Indenture where the context requires.

 

The Subordinated
Notes will constitute our direct, unconditional, unsecured and subordinated obligations ranking pari passu without any preference
among themselves and ranking junior in right of payment to the claims of any existing and future unsecured and unsubordinated indebtedness
of the Company.

 

The rights
of the Holders of the Subordinated Notes of this series are, to the extent and in the manner set forth in Section 12.01 of the Indenture,
subordinated to the claims of all Senior Creditors of the Company, and this series of Subordinated Notes is issued subject to the provisions
of that Section 12.01, and the Holders of this series of Subordinated Notes, by accepting the same, agree to and shall be bound by such
provisions. The provisions of Section 12.01 of the Indenture and the terms of this paragraph are governed by, and shall be construed
in accordance with, the laws of Scotland.

 

If an
Event of Default occurs with respect to Subordinated Notes of any series, then in every such case the Trustee or the Holder or Holders
of not less than 25% in aggregate principal amount of the Outstanding Subordinated Notes of this series may

 

     

     

    

declare the principal amount, together
with accrued interest (if any), and Additional Amounts (if any), payable on such Subordinated Notes, of all the Subordinated Notes to
be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holder or Holders), and upon
any such declaration such amount shall become immediately due and payable.

 

Except
as otherwise provided in Article 5 of the Indenture, the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the Holders of the Subordinated Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Subordinated Indenture
or in aid of the exercise of any power granted herein, or to enforce any other legal or equitable right vested in the Trustee by the
Subordinated Indenture or by law, provided, however, that the Company shall not, as a result of the bringing of such judicial proceedings,
be required to pay any amount representing or measured by reference to the principal of, or any interest on, the Subordinated Notes prior
to any date on which the principal of, or any interest on, the Subordinated Notes would have otherwise been payable by the Company.

 

If a Default
occurs, the Trustee may commence a proceeding for the winding-up of the Company and/or prove in a winding-up of the Company or a Qualifying
Administration, provided that the Trustee may not, upon the occurrence of a Default, declare the principal amount of any of the Outstanding
Subordinated Notes to be due and payable.

 

Failure
to make any payment in respect of this Subordinated Note shall not be a Default if such payment is withheld or refused and an Opinion
of Counsel is delivered to the Trustee concluding that such sums were not paid in order to comply with any fiscal or other law or regulation
or with the order of any court of competent jurisdiction, provided, however, that the Trustee may by notice to the Company require the
Company to take such action (including but not limited to proceedings for a declaration by a court of competent jurisdiction) as the
Trustee may be advised in an Opinion of Counsel, upon which opinion the Trustee may conclusively rely, is appropriate and reasonable
in the circumstances to resolve such doubt, in which case the Company shall forthwith take and expeditiously proceed with such action
and shall be bound by any final resolution of the doubt resulting therefrom. If any such action results in a determination that the relevant
payment can be made without violating any applicable law, regulation or order then the provisions of the preceding sentence shall cease
to have effect and the payment shall become due and payable on the expiration of 14 days (in the case of payments under clause 5.03(a)
of the Indenture) or seven days (in the case of payments under clause 5.03(b) of the Indenture) after the Trustee gives written notice
to the Company informing it of such resolution.

 

Subject
to applicable law, no Holder may exercise or claim any right of set-off, counterclaim, combination of accounts, compensation or retention
in respect of any amount owed to it by the Company arising under or in connection with the Subordinated Debt Securities. The Holders
of Subordinated Debt Securities by their acceptance thereof will be deemed to have waived any right of set-off, counterclaim, combination
of

 

     

     

    

accounts, compensation and retention
with respect to the Subordinated Debt Securities or this Subordinated Indenture (or between the obligations under or in respect of any
Subordinated Debt Securities and any liability owed by a Holder to the Company) that they might otherwise have against the Company.

 

No remedy
against the Company other than as referred to in Article 5 of the Indenture shall be available to the Trustee or the Holders, whether
for the recovery of amounts owing in respect of the Subordinated Notes or under the Indenture or in respect of any breach by the Company
of any of its other obligations under or in respect of the Subordinated Notes or under the Subordinated Indenture, except that the Trustee
and the Holders shall have such rights and powers as they are required to have under the Trust Indenture Act.

 

Amounts
to be paid on the Subordinated Notes will be made without deduction or withholding for, or on account of, any and all present and future
income, stamp and other taxes, levies, imposts, duties, charges or fees imposed, levied, collected, withheld or assessed by or on behalf
of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”),
unless such deduction or withholding is required by law. If at any time a Taxing Jurisdiction requires the Company to make such deduction
or withholding, the Company will pay additional amounts with respect to the principal of, interest and any other payment on, the Subordinated
Notes (“Additional Amounts”) that are necessary in order that the net amounts paid to the Holders of Subordinated Notes,
after the deduction or withholding, shall equal the amounts which would have been payable on the Subordinated Notes if the deduction
or withholding had not been required. However, this will not apply to any such tax, levy, impost, duty, charge or fee, which would not
have been deducted or withheld but for the fact that:

 

(i)       the
Holder or the Beneficial Owner of the Subordinated Note is a domiciliary, national or resident of, or engaging in business or maintaining
a permanent establishment or physically present in, the Taxing Jurisdiction or otherwise having some connection with the Taxing Jurisdiction
other than the holding or ownership of a Subordinated Note, or the collection of any payment of, or in respect of, principal of, or any
interest or other payment on, any Subordinated Note;

 

(ii)       except
in the case of winding-up in the United Kingdom, the relevant Subordinated Note is presented (where presentation is required) for payment
in the United Kingdom;

 

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

 

(iv)       the
Holder or the Beneficial Owner of the relevant Subordinated Note or the Beneficial Owner of any payment of, or in respect of, principal
of, or any interest or

 

     

     

    

other payment on, the Subordinated Note
failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information
concerning the nationality, residence or identity of the Holder or the Beneficial Owner or (y) to make any declaration or other similar
claim to satisfy any requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative
practice of the Taxing Jurisdiction as a precondition to exemption from all or part of the tax, levy, impost, duty, charge or fee;

 

(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
Subordinated Note is presented (where presentation is required) for payment by or on behalf of a Holder who would have been able to avoid
such withholding or deduction by presenting the Subordinated Note to another paying agent;

 

(vii)       the
deduction or withholding is imposed by reason of Sections 1471-1474 of the US Internal Revenue Code and the U.S. Treasury regulations
thereunder or any agreement with the U.S. Internal Revenue Service in connection with these sections and regulations (“FATCA”),
any intergovernmental agreement between the United States and the United Kingdom or any other jurisdiction with respect to FATCA, or
any law, regulation or other official guidance enacted in any jurisdiction implementing, or relating to, FATCA or any intergovernmental
agreement; or

 

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

 

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

 

Whenever
in the Indenture there is mentioned, in any context, the payment of the principal of or any interest or other payments on, or in respect
of, any Subordinated Notes of any series 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. Upon request from the Trustee or a paying agent, the Company shall provide information
reasonably necessary and readily available in order to enable to the Trustee or paying agent to determine whether any withholding obligations
under FATCA apply. None of the Company, the Trustee or a paying agent shall have any liability in connection

 

     

     

    

with the Company’s or Trustee’s
or paying agent’s compliance with any such withholding obligation under applicable law.

 

Subordinated
Notes may not be redeemed except in accordance with provisions of applicable law, applicable provisions of the Regulatory Capital Requirements
Regulations and except as provided in the Indenture. The Subordinated Notes may not be redeemed in whole or in part at the option of
the Holder thereof.

 

Subject
to the limitations specified below, the Company may, at the option of the Company, on not less than 30 nor more than 60 days’ notice,
redeem the Subordinated Notes, as a whole but not in part, at a redemption price equal to 100% of the principal amount, of the Subordinated
Notes then outstanding, together with any accrued interest to (but excluding) the date fixed for redemption, if at any time:

 

(i)       the
Company determines that as a result of a change in, or amendment to, the laws or regulations of the United Kingdom, or any political
subdivision or authority therein or thereof, having the power to tax, including any treaty to which the United Kingdom is a party, or
any change in any generally published application or interpretation of such laws, including a decision of any court or tribunal, or any
change in the generally published application or interpretation of such laws by any relevant tax authority or any generally published
pronouncement by any tax authority, which change, amendment or pronouncement (x) (subject to (y)) becomes, or would become, effective
on or after the Issue Date, or (y) in the case of a change in law, if such change is enacted by United Kingdom Act of Parliament or implemented
by statutory instrument, on or after the Issue Date (a “Tax Law Change”), the Company has paid or will or would on the next
payment date be required to pay Additional Amounts to any Holder of the Subordinated Notes; and/or

 

(ii)       a
Tax Law Change would:

 

(A)       result
in the Company not being entitled to claim a deduction in respect of any payments in computing the Company’s taxation liabilities
or materially reducing the amount of such deduction;

 

(B)       prevent
the Subordinated Notes from being treated as loan relationships for United Kingdom tax purposes;

 

(C)       as
a result of the Subordinated Notes being in issue, result in the Company not being able to have losses or deductions set against the
profits or gains, or profits or gains offset by the losses or deductions, of companies with which it is or would otherwise be so grouped
for applicable United Kingdom tax purposes (whether under the group relief system current as of the date of issue of the Subordinated
Notes or any similar system or systems having like effect as may from time to time exist);

 

     

     

    

(D)       result
in a United Kingdom tax liability, or the receipt of income or profit which would be subject to United Kingdom tax, in respect of a write-down
of the principal amount of the Subordinated Notes or the conversion of the Subordinated Notes into shares or other obligations of the
Company; or

 

(E)       result
in a Subordinated Note or any part thereof being treated as a derivative or an embedded derivative for United Kingdom tax purposes,

 

(each such Tax Law Change,
a “Tax Event”); provided, however, in each case that the Company could not avoid the consequences of the Tax
Event by taking measures reasonably available to it.

 

Prior
to the delivery of any such notice of redemption, the Company shall deliver to the Trustee (i) a written legal opinion of independent
United Kingdom counsel of recognized standing (selected by the Company), in a form satisfactory to the Trustee, to the effect that a
Tax Event has occurred, and (ii) an Officer’s Certificate confirming (1) that all the conditions necessary for redemption have
occurred and that the Company could not avoid the consequences of the Tax Event by taking measures reasonably available to it, and (2)
that the Relevant Regulator is satisfied that the relevant change or event is material and was not reasonably foreseeable by the Company
on the Issue Date. The Trustee is entitled to conclusively rely on and accept such opinion and Officer’s Certificate without any
duty whatsoever of further inquiry, in which event such opinion and Officer’s Certificate shall be conclusive and binding on the
Trustee, the Holders and the Beneficial Owners.

 

Subject
to the conditions set out below, the Subordinated Notes are redeemable, as a whole but not in part, at the option of the Company, on
not less than 30 calendar days’ nor more than 60 calendar days’ notice, at any time, at a redemption price equal to 100%
of the principal amount, together with accrued but unpaid interest, if any, in respect of Subordinated Notes to the date fixed for redemption
if, immediately prior to the giving of the notice referred to above, a Capital Disqualification Event has occurred.

 

Prior
to the giving of any notice of redemption, the Company must deliver to the Trustee an Officer’s Certificate stating that (i) a
Capital Disqualification Event has occurred, and (ii) the Company has demonstrated to the satisfaction of the Relevant Regulator that
the relevant change was not reasonably foreseeable by the Company as at the Issue Date. The Trustee shall be entitled to accept such
Officer’s Certificate without any further inquiry, in which event such Officer’s Certificate shall be conclusive and binding
on the Trustee and the Holders and Beneficial Owners.

 

Subject
to the conditions set out below, the Company may from time to time purchase Subordinated Notes in the open market or by tender or by
private agreement, in any manner and at any price or at differing prices. Subordinated Notes purchased or otherwise acquired by the Company
may be held, resold or at its sole discretion, surrendered to the Trustee for cancellation (in which case all Subordinated Notes so

 

     

     

    

surrendered will forthwith be cancelled
in accordance with applicable law and thereafter may not be re-issued or resold).

 

The Subordinated
Notes may be redeemed or purchased by the Company prior to Maturity as provided in the foregoing paragraphs, subject to:

 

(a)       the
Company giving notice to the Relevant Regulator and the Relevant Regulator granting permission to the Company to redeem or purchase the
Subordinated Notes;

 

(b)       in
respect of any redemption of the Subordinated Notes proposed to be made prior to the fifth anniversary of the date of issuance of the
Subordinated Notes, if and to the extent then required under the relevant Regulatory Capital Requirements (a) in the case of an optional
redemption due to a Tax Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that the relevant change
or event is material and was not reasonably foreseeable by the Company as at the Issue Date or (b) in the case of redemption following
the occurrence of a Capital Disqualification Event, the Company having demonstrated to the satisfaction of the Relevant Regulator that
the relevant change was not reasonably foreseeable by the Company as at the Issue Date; and

 

(c)       if
and to the extent then required by the relevant Regulatory Capital Requirements (A) on or before the relevant redemption or purchase
date, the Company replacing the Subordinated Debt Securities with instruments qualifying as own funds of equal or higher quality on terms
that are sustainable for the income capacity of the Company; or (B) the Company demonstrating to the satisfaction of the Relevant Regulator
that its Tier 1 Capital and Tier 2 Capital would, following such redemption or purchase, exceed its minimum capital requirements by a
margin that the Relevant Regulator may consider necessary at such time based on the Regulatory Capital Requirements.

 

Notwithstanding
the above conditions, if, at the time of any redemption or purchase, the prevailing Regulatory Capital Requirements permit the repayment
or purchase only after compliance with one or more alternative or additional preconditions to those set out above, the Company shall
comply with such other and/or, as appropriate, additional pre-condition(s).

 

If the
Company elects to redeem the Subordinated Notes, the Subordinated Notes will cease to accrue interest from the date of redemption, provided
the redemption price has been paid in accordance with the Indenture.

 

Upon payment
of (i) the amount of principal (and premium, if any) so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s
obligations in respect of the payment of the principal of (and premium, if any), and accrued and unpaid interest on, the Subordinated
Notes of this series shall terminate.

 

Notwithstanding
any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Subordinated Notes,
by accepting the Subordinated Notes or otherwise purchasing or acquiring the Subordinated

 

Notes,
each Holder (including each Beneficial Owner) of the Subordinated Notes acknowledges, accepts, agrees to be bound by and consents to
the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the reduction
or cancellation of all, or a portion, of the principal amount of, or interest on, the Subordinated

 

     

     

    

Notes; (ii) the conversion of all, or
a portion, of the principal amount of, or interest on, the Subordinated Notes into shares or other securities or other obligations of
the Company or another person; and/or (iii) the amendment or alteration of the maturity of the Subordinated Notes, or amendment of the
amount of interest due on the Subordinated 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 of the terms of the Subordinated Notes solely to
give effect to the exercise by the relevant U.K. resolution authority of such U.K. bail-in power. 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 (including
principal that has become due and payable at Maturity), but which have not been paid, prior to the exercise of any U.K. bail-in power.
Each Holder and Beneficial Owner of the Subordinated Notes further acknowledges and agrees that the rights of the Holders and/or Beneficial
Owners under the Subordinated Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K.
bail-in power by the relevant U.K. resolution authority.

 

For these
purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations,
rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated
in the United Kingdom in effect and applicable in the United Kingdom to the Company and the Group, including but not limited to any such
laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or
regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions
and investment firms and/or within the context of a U.K. resolution regime under the Banking Act 2009 as the same has been or may be
amended from time to time (whether pursuant to the Banking Reform Act 2013, secondary legislation or otherwise), pursuant to which obligations
of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, amended,
transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the
“relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

 

By accepting
the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder and Beneficial Owner of the Subordinated
Notes:

 

(i)       acknowledges
and agrees that the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Subordinated Notes
shall not give rise to a default or event of default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of
the Trustee in Case of Default) of the Trust Indenture Act; and

 

     

     

    

(ii)       to
the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against
the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking,
in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the
Subordinated Notes; and

 

(iii)       acknowledges
and agrees that, upon the exercise of any U.K. bail- in power by the relevant U.K. resolution authority, (a) the Trustee shall not be
required to take any further directions from Holders under Section 5.12 of the Subordinated Indenture, and (b) neither the Subordinated
Indenture nor the Fifth Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any
U.K. bail-in power by the relevant U.K. resolution authority. Notwithstanding the foregoing, if, following the completion of the exercise
of the U.K. bail-in power by the relevant U.K. resolution authority, the Subordinated Notes remain outstanding (for example, if the exercise
of the U.K. bail-in power results in only a partial write-down of the principal of the Subordinated Notes), then the Trustee’s
duties under the Subordinated Indenture shall remain applicable with respect to the Subordinated Notes following such completion to the
extent that the Issuer and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the Subordinated Indenture.

 

By accepting
the Subordinated Notes or otherwise purchasing or acquiring the Subordinated Notes, each Holder and Beneficial Owner that acquires its
Subordinated Notes in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions
specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Subordinated Notes that acquire the Subordinated
Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and
consent to the terms of the Subordinated Notes related to the U.K. bail-in power.

 

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

 

No repayment
of the principal amount of the Subordinated Notes or payment of interest on the Subordinated 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.

 

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

 

The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Subordinated Notes to be affected thereby by the Company and the Trustee with the consent
of the Holders of not less than two-thirds in principal amount of the Subordinated Notes at the time outstanding. The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal amount of the Outstanding Subordinated Notes, on behalf
of the Holders of all Subordinated Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Subordinated Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Subordinated Note and of any Subordinated Note issued in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made upon this Subordinated Note.

 

No reference
herein to the Indenture and no provision of this Subordinated Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay, if and when due and payable, the principal of (and premium, if any) and interest on, this
Subordinated Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As set
forth in, and subject to, the provisions of the Indenture, no Holder of any Subordinated Note of this series shall have any right to
institute any proceeding, judicial or otherwise, with respect to the Subordinated Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless such Holder fulfills the requirements of Section 5.07 under the Indenture.

 

No reference
herein to the Indenture and no provision of this Subordinated Note or of the Indenture shall alter or impair the right of the Holder
of this Subordinated Note, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and interest
on, this Subordinated Note when due and payable in accordance with the provisions of this Subordinated Note and the Indenture.

 

The Subordinated
Indenture, the Fifth Supplemental Indenture and the Subordinated Notes are governed by, and construed in accordance with, the laws of
the State of New York, except for the subordination and waiver of set-off provisions relating to the Subordinated Notes, which are governed
by, and construed in accordance with, the laws of Scotland.

 

     

     

    

Unless
otherwise defined herein, all terms used in this Subordinated Note which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.

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